Monopoly of the Air

...The result wss thst German pilots, probably Nazis, were operating planes under the control of the German born manager within an hour's flying time or less from the Panama Canal...

...Another instance in which the monopolistic character cif Pan-American operated to the detriment of the United States was in the development, or rather the delay in the development, of Trans-Atlantic airway traffic to the British Islands...

...The clash of interests between the American people and Pan-American in this respect was vividly dramatized during 1942 when German submarines made the Carribbean Sea and the Gulf of Mexico unsafe for our ' ships...

...Luce' always has and will act in the interest of Pan-American...

...of Pan-American and the interests of the United States as a whole are in conflict...

...He was attacked by Congress womno Clare Boo the Luce of Connecticut who demanded "sovereignty -of the air.* In its strict interpretation, sovereignty of the air would stop all air traffic with fortign countries...

...But so powerfully entrenched is PanAmerican in its monopoly position that (bos* (ieense* in nearly every oast are itiutd for the duration only...

...When Pan-American first broached the subject to the British they felt they were unable to inaugurate service en their pert, and were unwilling to grant to a monopolistic American concern the right to inaugurate service without some British competition...

...Mrs...

...However, this German born citizen refused to part with control of his company in thia msnner...

...Its growth has been built on Juan, Trippe's success in wangling exclusive landing contracts from South American countries, plus his ability te get subsidies in the form ef highly profitable air m*il contracts from the Post Office Department to carry sir mail to South America—all this of course backed up by Priestr's engineering and technical skill...

...But he was an operating expert not a monopolist, and had neglected the monopolist's precaution of getting exclnsive landing rights in those coun_ tries...

...This action of course was entirely contrary, to the best interests of the United States and of American business generally...

...Pan-American Airways got the Post Office air mail contracts by negotiation rather than by competitive bidding...

...Mrs...

...As a matter of fact Mrs...

...Yet this restricted right is what Pan-Amciican and its faithful representative in Congress Clare Booth* Luce are seeking...

...This is the doctrine and the government policy desired by Pan-American, since they have every reason to hope and expect that they would be the Americsn company which would get exclusive landing rights from foreign nations...

...A Germsn named Peter Pawl von Bauer became a naturalized Colombian citizen and opera-ted nn airplane line in Colombia...

...Pryor, the vice-president of Pan-American, is high in the circles of the Republican Party, though he has recently retired as Republican National Committeeman from Connecticut, and is in a position to help her political ambitions considerably...

...For example, the expense of buying new big transport planes required by the war effort, wss put on the government...

...A British subject named Lowell Yerex, who had been a pilot in the first world war, had built up a small but efficient network of air lines between the Central American cities...

...That is what Vice-President Wallace wanted when b* declared for freedom of the air, and what progress*'* student* of our aviation policy hope will be adopted •• our future policy...

...The very high mountains of Central America which present immense difficulties to travel by road together with the lack of railroads made transportation by air of both passengers and high cost freight necessary and profitable...

...When Roosevelt was elected, Congress begsn investigating air mail contracts seeking the possibility ef fraud...

...voting of the stock and therefore the control of the operation of the company (such things as selecting the pilots for example) eras left in his hands exclusively...

...The Civil Aviation Board has ruled that surface transportation companies can not own airplane transportation companies, and so American Export Airlines must be sold...

...But because its exclusive landing contracts and other devices to choke off competition had made it the only company in the field or that could get into the field, Uncle Sam had to bow to Juan Trippe, and PanAmerican was allowed to carry the air mail on a month to month basis...

...For the British could fly over practically all,the world without having to make stops on other than British territory, while we could not do the same...

...The maintenance of monopoly in foreign airplane service depends on "sovereignty of the air," that is the assertion by each nation of the exclusive right at all times to(control_ the air above its land boundaries...

...Clearly here too the interest...

...Pryor are all practically neighbors living not far from each other in the most exclusive residential section of the town of Greenwich...

...Naturally the tremendous expansion of war needs has caused an enormous development of aviation to all countries...

...the United States only one air line-connected us with the Central American Republics...

...The Post Office Department had to accept •heir terms or not have any air mail service to Latin America...

...Even after the war broke out the clash of interests between Pan-American and the United States continued...

...This freedom of the air doctrine is analagous to our historic policy of freedom of the seas, which allows the ships from any country friendly to us to dock at our ports and pick up or deliver cargo...

...It is just that monopoly ef the airways between the United States and foreign countries thst Pen-Amefican Airwsys is reaching out to seise...

...and in return no doubt that other nations would then restrict to only one American company similar rights to fly between the United States and that other country snd its colonies...

...Thus the doctrine of freedom of air would encourage healthy competition if we could get the other nations to adopt it in return for our adopting it...

...So obvious waa the clash of interest between the United States as a nation and Pan-American as n capitalistic monopoly that when Pan-American tried to obtain in Portugal its usual exclusive landing rights type ef contract before it would provide a Southern route across the North Atlantic, the State Department expressed its disapproval of the exclusive feature ef the contract...

...Luce, Juan Trippe, and Mr...

...For the British Empire controls more of the earth's surface, than we do, and controls more of the strategically situated airplane lines...

...Its engineering and technical genius is a little heard of Holland-born expert named Andre Priestr...

...If both we and she insisted on keeping out altogether the airlines of the other country or restricted the right to lsnd to only one company from each nation we would suffer more than Great Britain...

...But PanAmerican is using all possible pressure-on the Civil Aviation Board to prevent the sale of American Export Airlines' planea and equipment to any other company, in order to protect its monopoly position in foreign sirline traffic...

...Rather our government would restrict tht right to fly across our lsnd and deliver or pick np cargo and passengers between foreign lends and United States territory to the planes of only one select favored company from any one foreign nation...

...This doctrine would allow airplanes from any foreign country whose government is friendly to deliver passengers and freight from abroad and pick up cargo and pas...

...The government is doing directly a considerable part of it and with good results...

...A* * result James Farley, then Postmaster General, recommended that the air mail contracts be canceled...

...American Airlines, a domestic airplane transportation company, has offered to buy American Export Airlines...

...Thus we csn establish a situation of healthy competition in foreign airplane service, which would greatly benefit our people and our commerce...

...The Republic of Colombia had a law restricting airplane lines to companies operated by Columbian citicens...

...senges at hading fields to the United States, or to fly over ear land if that waa the shortest way between their points ef origin end destination...

...Bat you can own the landing flelda from which you take off or come down from the air...

...If you can own and monopolise such fields, yew em own end control the air for aviation purposes...

...But Pan-American made the contract anyway for whatever it was worth...

...Vice-President Wallace ft)« speech in 1942 advocated the doctrine of fracases of the air...

...Until the war they succeeded in preventing TACA from getting any landing rights in the United States, so that Yerex could not fly freight to or from Central America and this country...

...Til K clash of* interests between Fan-American and the United States which waa most dangerous to our , national security was the method by Which Pan-Americsn got into the Republic of Colombia just South of Panama and the vital Panama Canal...

...LUCE as a Republican Congressman is glad to favor a doctrine which would give one favored company from other nations the right to land here, and in return other nations would give one favored American company the right to land within or fly over their territory...

...The opposite doctrine, which could be used to break1 down monopoly in the control .of aviation services to other' countries, is the doctrine of freedom of the air, or the right of innocent passage and innocent landing...

...the company offered only to lease the planes for operation...

...The doctrine of air sovereignty on the other hand provides an excellent basis for monopoly in foreign air transportation...

...Whether he wss willingly acting under orders of the Nazis, or whether he was afraid of what the Nazis might do to relatives of his in Germany, or whether he waa merely actuated by stubborness or avarice will probably never be known...

...For the air planes of one nation could not trespass on the air over another...

...Pan-American has grown in twenty years from a small concern with two planes but a monopoly contract from the Government of Cuba giving them exclusive landing rights in Cuba, to a world-girdling and profitable outfit...

...Even some private companies are operating airplanes to some parts of Latin America under license issued by the Civil Aviation Board...

...The American Export Lines, a steamship company, also built up an airplane line to Europe during the war known as American Export Airlines...

...Finally, however, he did agree to sell the majority of stock in the Columbia Company to Pan-America, but in order to secure his agreement, the contract contained a secret clause whereby the...

...Pan-American could not handle all of it of course...

...Its ruthlessness may be illustrated by its dealings wih a small company, Transposes Aereos Centro - Americanos (known as TACA) operating in Central America before Pan-American came into that field...

...Pan-American sought to get control of his company by buying ownership ef the majority of the stock...

...On the other hand, if we follow the policy of allowing the airplanes from any commercial company of a friendly nation to fly over and land on our soil we can by being willing to' grant that right get from the British and other nations such as the French and Dutch, similar rights for the airplanes ef any of our companies...

...In order to make foreign airplane traffic possible under the dottrine of sovereignty ef the sir, therefore, the United States government would not permit the commercial planea of any company from friendly nations to land en or fly across oar soil in return for similar rights for the planes of sny of our Americsn companies...

...Trippe and Pan-American wanted his landing rights, and after first unsuccessfully trying to buy him out, began to try to drive him out...

...They were doing this even after the European War broke out, and it had become apparent that the material interests of our country, our national safety, and our American .ideals were all threatened by the possible victory of Hitler...

...The British felt with some juetlsVetisn that, since they had no company ready to give adequate service, and since the American company with whom they were dealing wee n monopoly they would be subject to monopoly rates and control if they granted landing rights to Pan-American...

...Samuel F. Pryor, Jr., recently the Republican National Committeeman from Connecticut and still a power in the Republican Party, is vice-president and a atember of the board...

...Because Pan-American had succeeded in keeping TACA out of...

...Thus the company made a profit from operating the planes without having to bear the initial expense of building them or having to run the risk that they might be lost by enemy fire or landing accidents...

...Its business brains is Juan Trippe, a Yale graduate who while at Yale made friends with certain young men of commanding wealth who have backed him since...

...PaN-AMERICAN is a monopoly that has rot hesitated to pursue its aims even when those aims were not to the best interests of the United States...

...For Mr...