Spoils

CXIII

U.S. Contract Air Mail (CAM) routes in 1930

The Air Mail Fiasco began right after the Coolidge Administration left office. During the years of “Silent Cal’s” virtually regulation-free Presidency, most of the United States Foreign Air Mail routes (FAMs) had been awarded to Pan American Airways without any hoopla by Postmaster General Harry New and by his FAM Assistant Postmaster General Irving Glover. Pan Am provided topnotch service (albeit at the topnotch rate per mile plus costs) but nobody seemed to mind as long as the mails got through.  No one even minded that Pan Am charged foreign nations for carrying the same mail in their own foreign airspace. That just seemed like good business.

Contract Air Mail Routes (CAMs) or, less formally, domestic air mail routes, were far less well-organized. They were routinely given to the lowest bidders, and unlike responsible Pan Am in the foreign market, CAM carriers didn’t hold themselves to any standards. Some bidding airlines had no planes --- they assumed they’d buy them on credit when they got the CAM contract. The domestic carriers went in and out of business with depressing regularity, merged and split and re-merged in different combinations in ways and at times which the Post Office itself could not keep track of. Often the Postmaster General had no idea which company held which CAM route, or whether the same company that lifted off with the mail would be the one to deliver it. 

Frustrated by Great Britain’s onerous “Provision H” in its plan to establish a transatlantic air route, Pan American began to cast about for new horizons. Juan Trippe was not a cautious man by nature, and he ignored his Board of Directors when they advised him to hold fast and to build up the existing Latin American routes. No, Trippe told them, he wanted Pan Am to be America’s national carrier, and a proper national carrier needed domestic as well as international routes. 

No sooner had Juan Trippe put out tentative feelers in the direction of acquiring CAM routes than he was vehemently waved off by Herbert Hoover’s new Postmaster General, Walter Folger Brown. Nobody ever said no to Juan Trippe without a reason why, and a covert series of communications and meetings took place between Pan Am representatives and Post Office representatives. 

Neither Trippe nor Brown knew the whens and wherefores of the meetings, allowing each man to maintain plausible deniability later on.  

In short, the message was that the CAM system was in utter chaos, and it needed to be reworked. It would be better for everyone concerned if Pan Am kept its nose clean during what promised to be a messy shake up of the domestic air market. It was more than likely that no one would look too hard at the well-operated FAM routes, but the CAM routes were like fresh meat on the table for Congressional meddling.  As a matter of fact, it might not be a bad idea for Pan Am to divest itself of its few domestic routes just to wall itself off from any nosy subcommittee investigators.

Pan Am reacted quickly. In 1931, the airline had only three domestic CAM routes and it removed them from public consideration (it also had routes or potential routes to Alaska and Hawaii and the Philippines, but routes to U.S. Territories were not considered “domestic” for airmail purposes). 

The first and oldest was a branch line of Pan Am’s original 1927 Key West-to-Havana route (now its Dinner Key-to-Havana route). The branch led north to Palm Beach. At its busiest in 1929, the Palm Beach line had operated as little more than a feeder line for Juan Trippe’s rich friends in Palm Beach who wanted to fly down to Cuba for a day or two. After the move to Dinner Key and the phasing out of the Trimotors, it became increasingly vestigial. The Great Depression put a further crimp in it. Pan Am sold the route to a local Florida carrier with the proviso that Pan Am would subsidize the tickets of any passengers destined for Dinner Key. The route itself still operates, courtesy of Silver Air.  

The second was a feeder line from Brownsville, Texas along the U.S. Gulf Coast to Tampa and then on to Dinner Key. Established before Pan Am had air rights to operate in Mexican airspace, the line had become vestigial once Pan Am had purchased Compania Mexicana. By 1931, virtually the only flights that used the route were corporate flights carrying the Brownsville Regional Manager to Dinner Key for meetings. Pan Am announced it was dropping the route as a passenger-carrying line. 

The third line was the trickiest. Ostensibly it was an overseas route, from Port Washington, New York to a destination as-yet undetermined in Europe, but it also handled New York passengers who needed to make connections at Dinner Key. That included Juan Trippe and other Pan Am executives as well as paying passengers.  To avoid any problems, Pan Am announced that until further notice it would only be flying charters from Port Washington. The fact that they were regular and that their price was included in a ticket out of Dinner Key might have raised some Washington hackles, but, after all, the airline argued, it had to transport its own officers and directors anyway --- why not provide a courtesy shuttle to Florida-bound passengers coming from New York?     
 

The blockbuster news to come out of the secret USPS exchanges was the thus-far classified information that Congress was planning on cutting the fees on the CAM routes severely in response to lower revenues due to the Great Depression. Although this information was passed to Pan Am seemingly by way of dissuading the airline from entering the domestic market, it was also infinitely valuable inside information, since Pan Am’s officers, directors and investors were all deeply involved in every aspect of the aviation industry: C.V. “Sonny” Whitney not only sat on Pan Am’s Board, he owned a controlling interest in Pratt & Whitney aircraft engines; David Stinson Ingalls had an aircraft manufacturing company --- Stinson --- for a middle name; and so on.   

Postmaster General Brown had just given the men who ran Pan Am a green light to manipulate the future of American aviation, and the men who ran Pan Am were not fools. They moved forward, making millions in the process. 

The whipped cream on the cake came when Brown held a “Spoils Conference” divvying up the reworked CAM routes to airline companies in exchange for favors. Pan Am was not directly involved in the Spoils Conference, but the reshuffling put even more money in the hands of Brown’s chosen few. 

Juan Trippe though, was dissatisfied. He still wanted an entrée into the CAM routes and he kept casting about, looking for one airline he could buy on the quiet so that he could ultimately dominate the airspace of the Lower 48. It remained a dream of his for a very long time.