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Aviation History
1940
1940 - 0969.PDF
APRIL 4, 1940 303 EXIT CIVIL AVIATION? Financial Interests Concerned : The People in Control ': Aircraft Export Difficulties By "McANGUISH," A.F.RAe.S. We publish to-day the remaining instalment of this article dealing with the present deplorable condition into which civil aviation has been forced. The first part of it appeared on page 260 of our issue of March 21. Our correspondent takes a very pessimistic view of the state of civil aviation, and strongly criticises the framework of the organisation behind the overseas services. There may be others who do not agree with opinions expressed in his article, and if there is a silver lining to the dark cloud we are willing to reflect it by inviting contributions on this subject. While it may be impossible to publish all the letters received, those selected for publication will be as representative as possible.—ED. On the Track ^T HE Hillman's Airways share list showed that the capital was divided among over 1,400 holders. The name of Mr. Gerard Leo d'Erlanger is again among the directors. British Continental Airways also has its capital distributed widely among 56 small share- holders. Then I hied me to Parliament Street. No. 47 proved to be a worthy office building with only one plate outside, one of those solid plates built to outlast the centuries. It said simply, " S. Pearson and Son, Ltd., Whitehall Securities Corporation, Ltd." Back to Bush House again where Whitehall Securities was found to have an issued share capital of £4,000,000 in 400,000 shares of £10. Shareholders include the Hon. Give Pearson and Viscount Cowdray jointly, 200,000; the Hon. Give Pearson, 46,633 ; W. J. H. Macdonald, 153,057; J. L. Walsh, 106; and W. J. H. Hunter, 101. The Hon. Give Pearson heads the directors as chairman and has with him on the board all five shareholders. Erlangers, Ltd., also is on a sound financial footing, its balance sheet for December 31, 1939, showing £6,574,718 on the asset side while its issued share capital is given as £1,600,000. Only one name on the board of directors had been noticed before and that was Mr. W. C. Tomlinson. One of the assets is share capital in our almost forgotten Moorgate Nominees, one of the big shareholders in British Airways. Dazed by strings of naughts I sent myself to sleep that night by reading Who's Who. It said that the Hon. Give Pearson, son of Viscount Cowdray, was chairman of directors of S. Pearson and Son, Ltd., and a director of the Southern Railway, in addition to the other direc- torates already enumerated. Shipping Interest Mr. Irvine Geddes proved to be a director of Im- perial Airways and chairman of directors of the ship- ping firm of Anderson, Green and Co., managers of the Orient Steam Navigation, Ltd. Mr. Harold G. Brown is stated to be a director of the Debenture Corporation, Ltd., the Trustees Corpora- tion, Ltd., and other companies. The Hon. Leslie Runciman is a director of three com- panies at least, the Runciman Shipping Co., Ltd., Lloyds Bank, Ltd., and the L.N.E.R. A very repre- sentative group, including shipping, banking and rail- way interests. This "interlocking" of directorates between an air- line and other transport companies is something which is not allowed in America except with the specific permission of the Authority itself, given only after a detailed examination. No doubt there are good reasons for prohibiting it. The Civil Aeronautics Act of 1938 deals specifically with '' interlocking directorates '' and prohibits any air carrier having an officer, director, member or controlling stockholder who is a common carrier or is engaged in any phase of aeronautics. It also prohibits all officers of air carriers from being direc- tors or holding controlling interests in common carriers and all aeronautical enterprises. In fact, it prevents all interlocking relationships between air transport, air- craft manufacture and all other forms of transport. It also goes further and prohibits acquisition of control or merging between two or more air carriers and between an air carrier and any other common carrier, without specific permission. They are determined in America that '' Civil Aviation shall fly by itself," if " by itself " means, not " without subsidy," but "unaccompanied by the (probably) strangling control of the railways and shipping interests." In this country there is no law similar to the clauses of the Civil Aeronautics Act relating to inter- locking directorates. •:.''' ; '~r'. ; Interlocking Directorates I tried drawing a diagram of the interlocking director- ates I had found, but it became too complicated to com- plete. It all looked too much like a spider's web, any- way, and I dreamt that night that the Rapides and DH 86s of the independent operators had flown into it and were buzzing futilely, trying to get out, but all to no purpose. The roar of an Empire flying boat, as it, too, became entangled in the web, woke me. The man in the street has a hazy idea that the Govern- ment is '' taking over'' Imperial Airways and British Airways; that is, that the British Overseas Airways Cor- poration is going to be a State-owned air transport service. Such is far from the case, for the capital of the Corporation will all be private and this makes it a privately owned but State-guaranteed monopoly of the overseas services—and perhaps of the internal ser- vices, too, if events continue on their present course. Press reports of March 29 now reveal that the original shareholders of Imperial and British Airways will no longer own the capital. They are to be bought out with- out any option by financial interests who remain undis- closed. One wonders who they are. This thoroughly untidy arrangement has all the dis- advantages of capitalism and socialism and the advan- tages of neither. A monoply appears to be the most efficient way in which to organise the oversea services at the present time, and it likewise appears to be the very worst thing for the internal airlines. So let us have the internal routes run by the independent operators using private capital, and let the oversea services be a mono- poly by all means, but let it be a State-owned one, so that any losses or gains accrue to the State as a whole. Let it not be this arrangement whereby private capital is invested in the monopoly with dividends guaranteed by the State, which must foot the bill for any deficit,
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