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THE CHOSEN INSTRUMENT? RECONSIDERING THE EARLY RElATIONSHIP BETWEEN PAN AMERICAN AIRWAYS AND THE U.S. GOVERNMENT. Erik Benson Quachita Baptist University ABSTRACT During the late I 920s and early 1 930s, Pan American Airways became known as the U.S. “chosen instrument” for international commercial aviation. Most scholarly work about the U.S. government/Pan Am relationship presents the airline as the government’s instrument. This article challenges this traditional perspective. In certain ways Pan Am was an “instrument,” yet in others it defied such categorization. Thus, any notion that Pan Am was a “chosen instrument” merits qualification. Drawing upon the “corporatist” historical model, this study will present a more sophisticated account of this relation ship, one that considers the role of business elites in shaping U.S. policy. During the late 1 920s and early 1 930s, Pan American Airways built a vast airline network that dominated the western hemisphere. It did so with the exclusive financial and diplomatic support ofthe U.S. government. As a result, it became known as the U.S. chosen instrument for international commercial aviation. This relationship has been the subject of significant scholarly work, most notably Wesley Phillips Newton’s The Perilous Sky: US. Aviation Diplomacy and Latin America, 19191931.1 In this and other works, Pan Am has appeared as an instrument of the U.S. government.2 The implication, of course, is that U.S. officials exercised firm control over the airline and all policy concern ing it. This article seeks to challenge and refine this traditional perspective of the Pan Am! U.S. government relationship during this period. In certain ways Pan Am was a “chosen instrument,” most notably in being the sole beneficiary of the government’s support in international commercial aviation. Yet in other ways it defied such simple categorization. It enjoyed much greater independence than many of its European counterparts, whose governments exercised much tighter control over their chosen instruments. In fact, the airline seized the initiative in its relationship with the U.S. government and shaped U.S. policy to meet its needs. While this arrangement largely promoted U.S. interests, it placed the interests of the airline first, even at the expense of those of the government. Thus, any notion that Pan Am was an “instrument” merits qualification. This new perspective draws upon the corporatist model of American political economy. Historians have employed this model for decades. It has been particularly use ful to diplomatic historians, most notably Joan Hoff, Melvyn P. Leffler, and Michael Hogan. Using corporatist insights, these scholars have focused upon the role of func tional elites in foreign policy making. While still giving due consideration to influential 97 ESSAYS IN ECONOMIC AND BUSINESS HISTORY (2004) parties within the government, they also examine how those outside of government con tributed to the formation of foreign policy Of particular interest are figures such as American businessman Charles Dawes, who traveled to Europe in 1924 to deal with the economic and political crisis surrounding Germany’s default on World War One repara tion payments. While the State Department encouraged the mission, Dawes was not an official representative of the U.S. government. Moreover, his solution to the crisis, the Dawes Plan, provided loans to Germany from private American sources, most notably J.P. Morgan. In sum, parties outside the government directed the U.S. response to this crisis.3 In this and other instances, the corporatist approach has proven valuable to schol ars. Using this approach, this article will address how functional elites (in this case Pan Am) shaped U.S. policy for international commercial aviation in the late 1920s and early 1930s. In so doing, it will present a more sophisticated account of this subject, one that takes into consideration the role of business elites in shaping U.S. policy. Wesley Phillips Newton states that World War One “was the background for aviation’s growth from childhood to early adolescence.” During the great conflict, technical ad vances and operational experience made airplanes more reliable and useful. While far from maturity as a mode of transport, aviation now held some commercial potential. In addition to improving the quality of aviation, the war produced a glut of aircraft, pilots and support personnel. These factors fueled an interest in the development of commer cial airlines. For many of the world’s leading aviation powers, Latin America was a par ticularly attractive setting for such ventures. The nations there lacked their own aviation resources. Yet the potential demand for air travel was evident. The soaring mountains, vast deserts, and impenetrable jungles of Latin America divided and isolated nations both inter- and intra-nationally. The airplane could overcome these topographical barri ers and improve the speed and regularity of communication and transportation, thereby uniting the peoples of Latin America. Commercial aviation held much promise for both the region and the companies who chose to explore the possibilities.4 This promise was not overlooked. Various European aviation interests moved quickly into Latin America after the war. They dispatched men and materiel on publicity flights, sales trips, and training missions to promote their goods and services. Soon, they estab lished commercial airlines in the region. These ventures received extensive backing from their respective governments in Europe. This was in keeping with the practice of most European governments, which exercised close control over their airlines. This was most evident in their reliance on chosen instruments in international commercial aviation. Under this arrangement, the government designated one airline to handle its interna tional airline traffic, with the state owning and/or directly administering the enterprise. In the case of Britain’s Imperial Airways, for example, private shareholders held company stock, but the government appointed the airline’s administrators, oversaw its operations, and heavily subsidized its finances. Thus, the European governments held great sway over their nations’ airline ventures in Latin America.5 American efforts in Latin American aviation were few during these years. There were several individuals and groups that tried to encourage American involvement in the 98 THE CHOSEN INSTRUMENT? PAN AMERICAN AIRWAYS field. One of the foremost was the Aero Club of America. In 1919 it named the famous Brazilian flier Alberto Santos-Dumont chair of its “Committee on Pan American Aero nautics” and sent him on a tour of Latin America.6 Santos-Dumont returned brimming with enthusiasm about the possibilities aviation offered the continent. Mindful of the desired ties between the United States and Latin America, he asserted that the “Pan American Aeronautic movement.. .is making gigantic strides.” This and other appeals emphasized the potential demand in Latin America for U.S. equipment, personnel, and investment. If Pan-American unity and profit were not enough to motivate American business interests, there was always the threat of European influence. At a luncheon hosted by the Manufacturers Aircraft Association in 1920, the Assistant Director Gen eral of the Pan American Union warned that European interests “were bending all their efforts to get the Latin American market,” and declared that if the Americans did not want to be shut out, they had better act quickly. One American representative of the Curtiss aircraft company reported that he faced European competitors whose govern ments had “plentifully supplied” them with money and equipment in Latin America. Still, he claimed that Latin Americans preferred American equipment, and he was certain that American interests could “capture a great deal of business” if they took advantage of the opportunity7 Such appeals produced few results. Unlike their European counterparts, American aviation interests received little support from their government, which rebuffed sugges tions to send special missions to drum up business, and even blocked sales of some American equipment to Latin America. There were various reasons for this, from bu reaucratic inertia to military concerns. Ultimately, there was simply a lack of interest. Few U.S. officials saw much benefit in promoting American aviation in Latin America. This indifference manifested itself in a communiqué from the U.S. consul in Buenos Aires to the State Department in 1919. The consul urged American aviation companies not to waste his staff’s time with requests for diplomatic assistance since the Argentines were committed to French aviation interests.8 In sum, the U.S. government seemed to have little concern for Latin America’s airways. This complacency soon ended. In 1919, German émigrés in Colombia founded La Sociedad Colombo-Alemana de Transportes Aereos (SCADTA). According to Newton, this would be the first “enduring” airline in the Western hemisphere. Its survival was anything but certain in its infancy, as the enterprise struggled financially. Then, in 1921, an Austrian by the name of Peter Paul von Bauer joined the company. Using his own money, he paid off the airline’s debts, upgraded its equipment with Junker aircraft, and established a scientific branch that greatly advanced its operations. Under von Bauer’s control, SCADTA flourished, becoming a financial success and expanding throughout Colombia. Despite its foreign ownership, the Colombian people embraced the airline and claimed it as their own. To them, SCADTA was a symbol of Colombian progress. The company cultivated this sentiment by developing close ties with the government, performing various duties for the country and employing Colombian personnel.9 Expansion outside the borders of Colombia was a logical step, and SCADTA looked northward. In 1923, the airline began laying the groundwork for a prestigious and prof 99 ESSAYS IN ECONOMIC AND BUSINESS HISTORY (2004) itable service running from Colombia to the United States through Central America and the Caribbean. This required that von Bauer ask U.S. authorities for permission to fly over and land in the Canal Zone.

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