Dust and Passengers

In Atlanta last week was completed one of the biggest airline underwritings ever handled by a single investment banker. Courts & Co., bossed by smart, wise Richard Winns Courts Jr., hung the "sold out" sign on 60,000 shares of Delta Air Corp. common, priced at $9.50 a share. To Courts & Co. this meant $75,000 commissions (plus $3,000 legal fees). To D.A.C. it meant $495,000 with which to bolster working capital, reduce debts, look ahead.

Delta started in June 1929, when gruff, farm-minded Collett Everman Woolman deserted his profitable crop-dusting business (done with Huff-Daland Dusters and other hedgehoppers) to ferry passengers between Dallas and Birmingham. For 16 months it looked like a good switch: passengers were more lucrative than insecticides, and safer. But in October 1930, postal officials pushed him off the airline map, gave a fat mail contract to rival American Airlines. Disgusted, Woolman sold his passenger equipment to American, went back to dusting.

But when Postmaster General Farley shook up the airmail contracts in 1934, Woolman saw his chance. With only two planes, 25 employes and more nerve than cash, he snagged the mail contract for the Dallas-Atlanta-Charleston, S.C. run. Meanwhile, 63-year-old ex-Newspaper Publisher Clarence Eugene Faulk, who made $500,000 when he sold his Monroe (La.) News-Star and Morning Post, was buying blocks of Delta at $5 a share. Later Delta stock went to $40 (then split 4-for-1) and Faulk went to the president's chair as finance overseer. Woolman became operating vice president.

Now Delta runs 20 flights daily over 1,584 miles between Savannah, Atlanta, Cincinnati and Dallas. In the nine months ending March, its five Douglas DC-3s (delivered in January) and four Lockheed Electras carried 39,444 passengers, more than 800% above the whole of 1935. Delta's gross from operations was $851,470 in the same period, of which about $50,000 still came from crop-dusting work. But depreciation and personnel-training costs went up so fast the line lost $31,116, first deficit since 1935.

This week, with new capital in the bank, its new Atlanta-Knoxville-Cincinnati run doing well, it looked as if Delta's growing pains were over.

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