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The company which was soon to take the name of Pan American Airways Corporation was formed Oct. 3, 1927 to pool the international air line projects of three slightly older corporations.
Each of these organizations had formulated plans and taken some streps toward organizing an air line between Florida and Cuba. Between them, fortunately, they could assemble the basic elements required for such an enterprise. They held U.S. and Cuban mail contracts for the route and had gathered the nucleus of the needed planes, equipment and operating personnel. They held financial resources and connections vital to the project. The U.S. mail contract called for the first flight by Oct. 19. The infant company was hardly born then, when it was faced with the first of those Herculean tasks of airway building which have been such a feature of its history. A first flight was dispatched on Oct. 19 and the contract was saved. By Oct. 28 scheduled service was in full operation.
Thus was a tradition launched which is still characteristic of Pan American projects -- "It can be done!" And the factor which perhaps did most to make this Gulf Stream tri-
[CHART]
A Record of Swift Progress
Year/Miles of Route/Passengers Carried/Mail & Express Poundage/Number Employees
1928/251/9,500/270,155/118
1929/12,265/20,728/485,140/987
1930/17861/39,508/731,187/1,593
1931/20,664/46,079/819,657/1,667
1932/26,632/63,600/1,279,130/1,918
1933/30,982/80,636/1,562,361/2,292
1934/32,552/112,354/1,884,000/2,801
1935/40,006/142,630/2,092,644/3,176
1936/40,567/168,000/3,006,000/4,055
1937/50,695/214,000/4,000,000/4,700
1938/54,500/225,000/4,500,00/5,000

-umph still exists in Pan American's setup. Each of the three companies in the merger had been led by young men. They shared young Trippe's intense conviction of the potentialities of international air transport as a field for the investment of private capital.  Many of them personally had address to substantial financial resources. Ten of eleven of them were War-trained pilots in their own right with a highly realistic concept of the task they were undertaking. As these men became the directors and executives of the swiftly growing enterprise, this knowledge of their paid dividends beyond price in speed of decision, intelligence of direction and general cooperation between men in the office and men in the field.
The story of the infant's swift growth in told at some length in subsequent articles. Today its airline network covers every country in Latin America; bridges of the Pacific; gives a new tempo to travel in China and Alaska. Tomorrow it promises us new leadership of the North Atlantic.
Unlike Europe's heavily subsidized government-directed air trusts with our international air transport must compete, Pan American Airways is a private commercial enterprise. Its entire capital has come from private U.S. citizens and commercial organizations who have contributed an impressive $20,500,000 toward the establishment and operation of an international air transport service for the United States. Its measure of government aid has come entirely from revenue derives from contracts for the transportation of U.S. mails over certain of its main trunk air lines. And these contracts it won by the process of competitive budding again all comers. This revenue fixed under the old Freight Air Mail Act at a maximum of $2.00 per mile (and averaging well under this figure in actual payments) is not however borne entirely by the U.S. government. The Post Office, of course, gets a big direct return from postage. Also Pan American pays back to the U.S. Treasury all moneys received from foreign governments for the return of transportation of mails to the United States. In estimating actual costs of foreign air mail service to the U.S. then, one must subtract the difference between gross payments to the Company, and these returns to the government -- (about 49% for the year 1938). With this, Pan American has established rights for, surveyed, built, and equipped its own airways, developed its flight equipment, trained it personnel, prepared itself for greater and greater tasks ahead. The total payments received from the United States would not meet Pan American's payroll.
Of a total income of $14,730,000 reported by Pan American for 1937, an approximate $6,730,000 came from the U.S. government; $8,000,000 coming from the transport of its passengers and express and from other activities. Since this income exceeded expenditures by $510,416, Pan American that year earned a modest 2.5 per cent on its investment.
The picture presented by international air transport in Europe differs sharply. Almost without exception each nation has itself taken the initiative in combining all its potential international air carriers into one official national air carriers into one official national air line monopoly. In many cases heavy governmental subscriptions have been made to the capitals of such companies. Governments have retained large shares of control over company affairs. In some cases, such control is complete in every detail.
Liberal direct subsidies are guaranteed over long term periods and are adjusted frequently, if the companies cannot show a profit. Contracts for mail carrying call for payments to the air line over and above this direct aid. Almost invariably, any amounts paid by the outside nations for the transport of return mail are retained by their carriers. On top of all this, colonies or dominions, states or even cities served by the national company often make liberal additions to the federal payments. Weather and communication services costs are carried by the governments. So also, in most cases, are the big items required for developing new planes, for making survey flights of new routes, for conducting negotiations for new routes and facilities.
Under such circumstances, total governmental expenditures for international air transport are almost impossible to estimate and compare. But this much is certain; The United States is represented on the World's aerial trade route map by almost twice as many miles of line as its nearest competitor. Its top-flight planes do almost twice the flying. Yet the new cost of this priceless asset to the U.S. government is less than half the underwritten annually by any of its four or five leading competitors.