The Waterbury Democrat., 1941-03-18

1t is typical of
 the way some of Edson the more im- portant issues get battled over in committee. e.,
 This airline battle began when the House of Representatives Ap- propriations Committee turned down a request for 8 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 Air. lines which pioneered the route, now runs @ three week scheduled service and Is ready to go to daily service when 1t gets three planes this summer.
 PAN AMERICAN SPENT
 MILLIONS BEFORE START
 To get the background, you must know first that American Export Airlines is a subsidiary of Amer ican Export Lines, a shipping con- pany which, operating under the U. s. Maritime Commission, runs steamship service between American and Mediterranean ports, and around Africa to India. The Med- iterranean now being closed, the line, operates to Lisbon, Portugal. Export Lines s. E. 0. registration certificate shows the company was formed back in 1886 on capital structure of $500 all that was reces- sary to buy voting control of the Export Lines. With that as a starter, and with government subsidies and private loans, American Export Lines ran its profits up to where they reached $5 million in the first nine months of last year.
 Some time ago the company became ambitious to start airline, operations to Europe. The Mari- time Commission. however, ruled steamship line profits could not be used for airline expansion and furthermore asxed 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 government loan to finance It's air. line program. To start this, American Export Airlines got a certificate of convenience and necessity from Civil Aeronautics Board, authorizing 1t to begin service of one round trip every two weeks. This certificate was signed by the President last July, and America Export Airlines thereupon applied to the govern ment for a subsidy of $l,229 900 to set 1t up in business for year, running It's one plane -- a two- motored survey ship capable of carrying mail and express. but no. passengers. Supported by the subsidy, however, the company proposed to sell stock and there with order more planes, enabling 1t to enter into full competition with Pan American Airlines.
 Pan American, for its part, sank some $6 100000 of private capital into its trans oceanic operations before its first commercial flight to Europe. This represented equip ment, training of personnel, se- curing rights and building bases. Service to Europe began three months before the war, and Pan American has since become the number one fast route to Europe for mall, carrying all the Postoffice De- partment has loaded on. Pan Am- erican does receive subsidy in the form of payment for carrying the mail, and 1t has offered to provide the three extra flights to Europe, giving daily service, at an addition al cost of $1,529 900 Q year, or only $300,000 more than American Ex- port Airlines has requested for one trip every two weeks.
 EXPORT LINES GET
 G09e OF SHIPPING
 Confronted by these facts, the House Appropriation Committee turned down the American Export Airlines request with the comment: "The committee cannot divide the present mail pay on this route and make a successful operation for either company" Furthermore: Air carriers operated by foreign coun- tries are either government owned or heavily subsidized After the restoration of peace our prob- lem as a nation will not be the problem of trying to get competition between our own companies, but trying to keep a competent Amer ican concern going in foreign terri tory
 That decision obviously was not to the liking of American Export. The issue automatically going to the Senate Appropriatins Com mittee, pressure was put on to have the item restored to the treasury postoffice appropriation bill by Senate action.
 A series of letters went out to senators, enclosing clippings of newspaper articles presenting the case from American Exports point of view.
 John A. Slater, vice president of Export Airlines, asked the Sen- ate subcommittee to restore the appropriation in the interest of free competition.
 Juan Trippe, president of Pan American, admitting his company had a monopoly of air travel, con- tended American Export Lines had a monopoly on shipping and this was confirmed by Admiral Land, chairman of the Maritime Commission.
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