Imperial Valley press., 1941-03-21
by Peter Edison -.
The Inside Track in Washinqto,,

WASHINGTON March 81. = A
row over whether the United States
should support second tranS-oce-
anic airline to Euproe has been
fought for a couple of fast rounds
lately. and it should be of interest
10 show how some things get done
in your nations capital. This par
ticular row may never reach the
floor of either the mouse OF Congress
for open debate, but it is typical
of the way some of the more i'm
portant issues get battled over in
committee.
This airline battle began when
the House of representatives Ap-
propriationS Committee turn e q
down a recent request for mere
million and a quarter dollars TO
set up a rump, one plane, twice-a-
month American Export Airlines
service to Europe in competition
with the existing Pan American
Airlines which pioneered the route,
now runs a three-times-a-Week
scheduled service, and is ready to
go to daily service when it gets
three planes ttIs summer.
PAN AMERICAN SPENT
MILLIONS BEFORE START
To get the background, you must
know first that American Export
Airlines is a subsidiary of American
Export Lines, a shipping company
which, operating under the U. S.
Maritime Commission, runs steam
ship service between American and
Mediterranean ports, and around
Africa to India. The Mediterranean
now being closed. the line operates
to Lisbon, Portugal. Export Lines
S. E. c. registration certificate
shows the company was formed
back in 1896 on capital structure
of $500. all that was necessary TO
buy voting control Of the old Export
Lines. With that as a starter, and
with government subsidies and pri-
yate loans, American Export Lines
ran its profits up to where they
reached So million in the first nine
months of last year.
Some time ago the company be-
came ambitious to start airline OPP
erations to Europe. The Maritime
Commission, however. ruled steam
ship line profits could not be used
for airline expansion and further
more asked the company to deposit
its surplus with the government,
to be drawn ON only for future
emergencies. such as ship losses.
With this ruling in effect, the
steamship company had to ask
the government for subsidy or gov
eminent loan to finance its air.
line program. To start this, Ameri-
can Export Airlines got a certificate
Of convenience and necessity from
Civil Aeronautics Board, author
izing it to begin service of one round
trip every two weeks. This certi-
ficate was signed by the President
last July, and American Export
AirlineS thereupon applied to the
government for a subsidy of S1,229,-
BOO to set it up in business for a
year running its one plane-a two
notored survey ship capable of
carrying mail and express, but no
passengers. Supported by the sub
3idy, however. the company pro-
posed to sell stock and Herewith
)rder more planes, enabling it to
inter into full competition with Pan
American Airlines.
Pan American, for its part, sank
ONE s6,000,000 of private capital
nto It's trans-oceanic operations :,
'efore its first commercial flight
0 Europe. This represented equip
nent, training of personnel, Sc
uring rights and building bases.
,eryice to Europe started three
1onthS before the war, and Pan
I'M. has since become the number
ne fast route to Europe for mail,
arrying all the Postoffice Depart
lent has loaded on. Pan Am.
oes receive subsidy in the form
I payment for carrying the mail.
nd it has offered TO provide the
lree extra flights to Europe, Civ
lg daily service, at an additional
Ost of Sl,529,000 a year, or only
0,000 more than American Ex-
ort airlines has requested for one ;
rip every two weeks.