AVIATION: Papa Won't Pay

Like a woman wistfully leafing through Harper's Bazaar, American Airlines, Inc. leafed through planemakers' blueprints. It saw more shiny new planes than it could afford. But it ordered them anyway—$96,000,000 worth, to be delivered before the end of 1948. American's total assets were then $46,000,000.

The bill went to the investing public fortnight ago in the form of American's new issues of $80,000,000 in 3½% preferred stock (at $102 a share) and 3% bonds. All airlines anxiously watched the issue. They too need money to pay for planes they have ordered (some $700,000,000 worth). Would the investing public pick up all the bills?

By last week, the airlines had part of their answer: investors who had recently snapped up many a new issue took two weeks to buy American's stock, and at week's end, underwriters still held half the bond issue, were arranging to cut the price. One trouble was that 'the stock market last week had its worst break in four months.

But American's Board Chairman C. R. Smith put most of the blame fdr the slow selling issue on the public's lack of faith in the future of aviation. He angrily blamed that on pessimists in the aviation industry. Said he: "This whole job [of raising capital] has been made more difficult by some people in our business. . . . Airplane manufacturers, including companies from whom we are buying airplanes, have expressed the opinion that the airline industry . . . has 'overbought'. ... It is unfortunate that some people in this business ... do not really believe in it."