Sons of Eli

LXXXIII

It’s a murky history that accompanies the birth of Pan American Airways. According to James Trautman in Pan American Clippers: The Golden Age of Flying Boats, Pan Am was founded by one Captain J.K. Montgomery, who then approached Juan Trippe for operating capital. This rather ho-hum Creation Myth conveniently ignores the fact that Captain Montgomery was in the Air Corps. He may just have been an advance man for Arnold, Spaatz and Jouett, who were, of course, operating covertly as agents of Military Intelligence. So their Key West meeting with Juan Trippe officially never happened. Until it was declassified, that is. And for public consumption, it’s much nicer to present Pan Am as a Horatio Alger – type story than as a front for espionage. But it was both. 

Juan Trippe in 1927 (suit) talking to one of his aircrews. By this time, the Fokker Trimotors had arrived

Juan capitalized Pan American by going back to his investment banker days. He cold-called, among others, Cornelius Vanderbilt Whitney (whose family was investing in airplane engines along with the Pratts) and W. Averell Harriman (co-founder of Brown Brothers, Harriman, son of railroad baron E.H. Harriman, and employer of George Herbert Walker and Prescott Bush).  They funded Pan Am to the tune of $250,000.00 (about $3.3 million today) and Juan put in about $50,000.00 of his own money --- all in all, about $4,000,000.00 in 2016 value.  

The next stage in the development of the nascent Pan Am, the acquisition of the airmail contract to Havana, is even more murky. Several versions of what happened can be found in books, in films and online. Which is an acceptable truth all depends on whether someone wants to see Juan Trippe as a brilliant businessman or as an Air Pirate. Because he was both.  

The story of acquiring the airmail contract hinges on the fate of Florida Airways.

By some accounts, Florida Airways was a rinky-dink one-aircraft airline that was on the verge of being acquired by Eddie Rickenbacker and Eastern Air Lines when Juan Trippe came into the picture.

By other accounts, Florida Airways was running a busy intercity service between points in Florida. Swimming in red ink due to its fleet of new trimotors, it was being funded by Rickenbacker and Eastern Air Lines when Juan Trippe appeared. 

A plane belonging to Florida Airways

By yet other accounts, Florida Airways was on the verge of selling out to Stout Air Services (the future United Airlines) when Juan Trippe threw a monkey wrench into the deal. 

Why was everyone interested in Florida Airways? Because Florida Airways had acquired exclusive landing rights in Havana at a time when the Cuban government clearly was not air-savvy. Florida Airways had paid a song for the landing rights, and anybody who owned Florida Airways owned those rights, and those rights were absolutely necessary if an airline wanted to contract with the U.S. government for airmail services.

William Averell Harriman was a financier, a transportation baron, and the 48th Governor of New York State

Of course, an airline could just pay Cuba for landing rights, but that would be very expensive and much less fun than one-upping the competition.

Pan American got the landing rights in record time. How the airline did it is another story. Or stories, since there are several of them. 

In one story, Juan Trippe already owned Florida Airways through a straw man and was driving up the value of his stock by playing footsie with Eddie Rickenbacker in the dark.

In another story, Trippe was doing the same thing, but with William Bushnell Stout.

Cornelius Vanderbilt "Sonny" Whitney was a scion of both the Vanderbilt and Whitney families. He served as Undersecretary of Congress, among many other roles. He, like most of Pan Am’s early backers, was a Yale man and a member of the ultra-exclusive, ultra-secret Skull and Bones Society

In yet another story, Trippe just offered the flat-busted broke owners of Florida Airways an ungodly amount of cash for the landing rights. They took his offer, turning their backs on Eddie Rickenbacker who had invested a great deal of money and time in Florida Airways, and who was left with an essentially valueless local shuttle service. 

Or he did the same thing to Stout. 

Or, most deviously, on a test flight of the new Fokker Trimotor, he convinced Anthony Fokker (who was piloting) to hop down to Havana so he could pay a call on the President of Cuba, Gerardo Machado y Morales. He came away with landing rights virtually for free, this story goes, having impressed Machado with his business acumen, his U.S. military contacts, and because his name was Juan (Trippe soon discovered that his given name, a handicap among the country club set, was a calling card in Latin America). 

However it happened, Pan American got the landing rights, and for a time, they were exclusive. 

Juan Trippe had made some enemies in the process. Eddie Rickenbacker politely detested him, and William Bushnell Stout felt the same way, at least until he was mollified with Pan Am stock. 

Given his powerful backing from both the private and public sectors, Juan easily won the airmail contract. Whose arms were twisted may never be known. 

A thankful Juan Trippe made sure that the monies he used to pay for the government-required contract deposit were the monies he’d been given by Arnold, Spaatz, and Jouett (neatness counts, and the government had neatly paid itself back in Juan’s eyes). 

And then he’d nearly blown the whole thing waiting for the trimotors to arrive. La Niña saved the day. And his ass.

Juan Trippe was well on his way to becoming the “gangster with a Yale education” that Franklin Delano Roosevelt later described.

 

Juan Trippe with his friend, President Machado of Cuba