Transport: Transatlantic Tussle

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At least one potential Pan American competitor has already announced that it was prepared to take advantage of such subsidies—American Export Lines. One of the few solvent U. S. ship lines, American Export, with 90 sailings a year and a highly-developed combination freight & passenger service, carries one-third of all U. S. goods except grain shipped to Mediterranean ports. Its chief competition is from the bigger and faster Italian ships—competition which it feels could be met with a supplementary air service. And a fortnight ago American Export's President W. H. Coverdale, in a neatly typed letter to every Senator and Congressman, blandly announced that he was ready to spend $25,000,000 on his Mediterranean service—$20,000,000 on new ships, $5,000,000 on airlines.* Neglecting to mention that most of this sum would have to be put up by the Maritime Commission because no U. S. ship line can raise $25,000,000 privately, Mr. Coverdale went on to say that after 18 months' investigation, American Export could put planes in, the air within a year and a half and within three years be operating planes carrying 125 passengers. But this would be done only if the Congressmen and Senators defeated the Lee-McCarran Bill, passed the Bland-Copeland Bill.

Swiftly Pan American rushed forth on a skillful bit of counter-publicity, asking U. S. plane makers for bids and specifications for as many as 24 super-colossal clippers capable of carrying 100 passengers on nonstop, 5,000-mi. flights at a cruising speed of at least 200 m. p. h. Neglecting to mention that it gets operating subsidies in the form of some $8,000,000 in airmail pay, Pan American underscored the fact that it did not need Government subsidies to build the planes. The bids were to be submitted to Charles Augustus Lindbergh. Pan American has been in business as an ocean airline operator since 1929, now has some 45,000 miles of route around Central and South America, across the Pacific and to Bermuda. Its 84 big aircraft have been flown with notable success, with scarcely an accident—and not even an incident in its 2,000,000 miles of flying over the Pacific, its 16 trips across the Atlantic. Its case is built on the sound claim to having the facilities, equipment, personnel and experience to keep U. S. ocean services safe for travelers and well ahead of the big foreign rivals, Great Britain's Imperial Airways, Germany's Lufthansa and Air France.

Though bested in this exchange of publicity shots, American Export lately got in some licks before the House Merchant Marine & Fisheries Committee, Vice President John E. Slater having raised the touchy diplomatic question of freedom of the air. To make his point he read the Senators portions of Pan American's contract with Portugal, by which it obtained exclusive rights for 15 years to land U. S. commercial planes on Portuguese seas or soil. It specifically provides, however, that the contract will lapse if Portugal makes any conflicting arrangement with the U. S. Government. Thus, the only means by which any U. S. airline except Pan American can get a foothold at this strategic point is to have the State Department intervene. And the State Department is a loyal Pan American booster largely because of the good will and prestige the airline has created in South America.