The Big Four

Immediately after passage of the legislation, Brown summoned to Washington representatives from the major lines around the country, who assembled in the Postmaster General’s office on May 19, 1930. It was his belief, he said, that the mail should be carried by substantial, established air carriers, the vast majority of which fell within the ownership of the three largest holding com­panies, United Aircraft & Transport Corporation, North American Aviation, and Aviation Corpora­tion. He explained his master plan to them in con­junction with the expressed and unexpressed terms of the new law. He decreed that there could be no monopoly of transcontinental service, but that competition along that route would be required, to the dismay of United. Brown explained, in effect, that the country would be carved up among a few lines, with United flying the transcontinental route to San Francisco, another line flying the New York-Los Angeles route by way of Pittsburgh and St. Louis, and still another line proceeding from New York via Washington, Atlanta, and Dal­las, thence on to Los Angeles. He also outlined a north-south route along the east coast. He told the representatives in attendance that they should decide among themselves who would take which routes.

Brown brought in William P. MacCracken, aviation’s first regulator as head of the Bureau of Aeronautics in the Commerce Department in 1926, to monitor the ensuing meetings among the carrier representatives in attendance. Not surprisingly, the strong-willed leaders of the industrial and financial interests that controlled these carriers were unable to agree among them­selves, as directed by the Postmaster General, as to how the country should be split up. Represen­tatives of the carriers remained in Washington, attending meetings with each other, until June 4, 1930. On that date, the carriers reported to the Postmaster General that they were unable to agree on allocating the five major routes in the country, including the transcontinental routes, and submitted the issues back to Brown. The carriers advised the Postmaster General that they would agree to be bound by his decision as to the route awards.

During June and July 1930, negotiations and correspondence continued between the parties with a view toward an agreement that would be fair to all concerned and that would take care of smaller lines having some “equity” due to their “pioneering” efforts. Brown suggested that the central transcontinental route should go to the beleaguered TAT, the plane and train airline, which had been flying without airmail subsidy. TAT had no night flying experience, however, and was ineligible for consideration for the trans­continental route because Brown had added this experience requirement under his “discretion­ary” authority. Western Air Express, however, did have the requisite night flying experience. Brown, in effect, ordered the merger of TAT with Western Air Express. This merged airline was to be TWA, or Transcontinental and West­ern Air. As consolation for sacrificing its inde­pendence, Western Air Express was allowed to survive as an independent entity and retain its passenger service between San Diego and Los Angeles, and between Los Angeles and Salt Lake City.

United kept its New York-San Francisco route through Chicago, and was allowed to expand northwest. Eastern was assigned New York-Miami, along with Atlanta, New Orleans, and Houston. TWA got New York-Los Angeles through St. Louis and Kansas City. American would fly New York-Los Angeles via Nash­ville, Dallas, and points in the Southwest. Thus were the “Big Four” (United, Eastern, TWA, and American) born.

Although the smaller lines were not invited to the meetings in May, the Post Office-carrier conferences were no secret. The Post Office had even put out a press release about the whole affair. Representatives of several small operators showed up, including Southwest Air Fast Express (SAFE), owned by oilman Erie Halliburton, Pittsburgh Aviation Industries, U. S. Air Transport, Curtiss Flying Service, Delta Air Service, and Thompson Aeronautical Cor­poration. During the summer of 1930, prior to the request for bids being sent out by the Post Office, discussions and negotiations continued. The financial interests of some of the smaller lines were taken into consideration, like SAFE and Delta, and mergers and buyouts were agreed to between them and the larger carriers who would be serving the routes on which the smaller lines had “pioneered.” The parties even agreed that Walter Folger Brown would be the arbiter of the value of the stock transactions made to complete the arrangements. Some of the smaller operators received “extensions” of the major routes as additional consideration for the overall agreement.

The airlines paid lip service to the require­ments of the Watres Act by going through the motions of competitive bidding with all of the carriers duly submitting bids. The only thing was, none of the Big Four submitted compet­ing bids on the routes that had been assigned by Brown to others. Lower bids on the assigned routes submitted by small carriers were rejected as “not responsible.” In this way, modern com­mercial aviation was born.

Hindsight will not compel a uniform judg­ment of Brown’s actions. It cannot be doubted that the struggling world of commercial avia­tion was given a mighty boost by the arrange­ments put in place, and that it evolved at a much accelerated pace over what would otherwise have been the case. At the end of Brown’s tenure in 1933, passenger traffic was rising, and the air­lines were competing on their transcontinental routes. The cost to the government was less than it had been 4 years before, down from an aver­age of $1.10 per mile in 1929 to half that in 1933, $.54 per mile. The airlines were in good shape financially. It is clear, therefore, that the public interest was served. As we shall see in the next chapter, the 1932 election of Franklin D. Roosevelt as President of the United States (he assumed office in 1933) would have a profound effect on the new commercial aviation com­munity. The allocation of airmail routes and the award of airmail contracts would be the subject of a political Congressional investigation, and Walter Folger Brown, himself, would be the sub­ject of intense scrutiny and criticism.

No evidence would be adduced that would even suggest any financial or material gain by Brown. His actions appear to have been the result of a sincere desire to promote aviation, and he did so with success. It is, however, beyond dis­pute that the procedures employed by Brown were outside of the requirements of the Watres Act. The Congress did not remove the require­ment of competitive bidding in 1930, yet that requirement was not observed. The bill that was passed by Congress had removed consideration being given to “pioneering” efforts of some of the operators, yet such consideration was given. But, with the aid of hindsight, it can be seriously argued that his vision for the future of aviation was far superior to any of his peers’.

Although the results of Brown’s actions would be undone at the beginning of the next administration, the reality is that the Big Four put in place by the Brown policy were still the Big Four for the ensuing 48 years, until deregulation in 1978, in fact. It was then, in 1978, that the country would finally have the chance to glimpse what might have happened during the 1930s had it not been for Walter Brown.

Endnotes

1. Sobel, Coolidge, An American Enigma, Regnery Publishing, Inc. 1998.

2. For a more detailed discussion of NACA, see Chapter 15.

3. See Appendix 4 for details of Lindbergh’s flight, including hourly log entries.

4. Lindbergh served as technical advisor to Pan American for 45 years.

5. See Appendix 5.

6. Moolman, Valerie, Women Aloft, Time Life Books, 1981.

7. By contrast, the around the world flight in 1938 by How­ard Hughes was 14,456 miles in length, incorporating the itinerary New York-Paris-Moscow-Omsk-Yakutsk-Fairbanks – Minneapolis-New York. Except for New York, Paris, and Minneapolis, all stops were above 55 degrees north latitude. Hughes’ flight set a new around the world speed record of 3 days, 19 hours, and 8 minutes, beating both of Wiley Post’s world records of 8 days and 16 hours in

1931 and 7 days 19 hours in 1933 along a route similar to that flown by Howard Hughes in 1938.

8. In 2012, the International Group for Historic Aircraft Recovery (TIGHAR) began its 11th expedition to Nikuma- roro (formerly Gardner Island) in search of evidence of Earhart’s aircraft. An underwater search of the waters off the western end of the island was conducted using unmanned submersibles. This coral atoll is about 400 miles southeast of Howland Island, which was Earhart’s intended destination. Although TIGHAR departed the area with no known positive results from their underwater search, in August 2012 TIGHAR announced that a review of high-definition video footage taken during the expedi­tion revealed aircraft parts similar to Earhart’s Lockheed Electra. Further analysis will be required to correlate this find definitively to Earhart.

9. An Account of Pratt & Whitney Aircraft Company 1925-1950, Frederick B. Rentschler, 1950, Pratt & Whitney Archives, East Hartford, CT.

10. See discussion of Pan American in Chapter 15.