How Much Americanization?

For some years now elephantine Pan American Airways has been trying to slap down a persistent gadfly, New Zealand-born, onetime barnstormer, Lowell Yerex. But all that the slapping has accomplished so far is to make Yerex, founder and president of TACA (Transportes Aereos Centre Americanos), fly more and buzz louder (TIME, Sept. 28). Last week the buzzes crescendoed before a hearing of the Civil Aeronautics Board when Yerex appeared to ask for a license to fly scheduled routes in what Pan Am considers its exclusive territory--the Caribbean.

Behind Yerex' request lay good cause.

Already he is in fact flying both freight and passengers between Central America and Miami on a charter basis. Moreover, he has of late won support from under-airlined Brazil by flying strategic materials in and out of Rio (two months ago he formed a $500,000 subsidiary, one-third owned by Brazil's famed Taves family). In addition his year-old British West Indian Airways has relieved the hard-pressed West Indies by carrying an average load of 1,700 passengers, 15,000 Ib. of express, 2,300 Ib. of mail a month out of Port of Spain, Barbados, Tobago.

Moreover, Yerex' request for a license coincides with: 1) a Caribbean transport bottleneck so severe as to make it hard for CAB to turn down any airline equipped to fly there (and also hard for Pan Am to continue claiming that it could handle the job all alone); 2) a backlog of U.S. Army as well as South American good will for rush jobs he has been doing.

Nevertheless, Yerex still has one great stumbling block in his path. Since he is still a British subject (and TACA a Panamanian corporation) TACA must somehow be "Americanized" to suit the letter of the law. To CAB Yerex divulged a plan he had worked out to do just that: he wants to put all his TACA stock (over 85%) into a voting trust, to be engineered by Investment Bankers Schroder Rockefeller & Co. Over half the stock would be owned by Americans and all of the five voting trustees except Yerex himself would be U.S. citizens--among them Schroder Rockefeller Vice President Avery Rockefeller, whose second cousin Nelson is now officially the U.S.'s No. 1 good-neighbor man. Under this deal Yerex could be outvoted four to one by U.S. citizens.

This program would seem to wrap TACA up in the American flag for keeps. Nevertheless, whispers still flew about "sinister British influence." One whisper (that Schroder Rockefeller is controlled by London's famed banking firm of J. Henry Schroder & Co.) was not hard to answer. For under terms of the plan American individuals (not Schroder Rockefeller) would boss TACA. Another objection had more substance: Yerex would still own all of British West Indian Airways and one-third of TACA's Brazilian offshoot.

At week's end it still seemed possible that Yerex could work out a reorganization to meet this objection. But whether CAB would give him a license in the face of stiff Pan Am resistance remained to be seen. Only one thing was quite sure:

Yerex' planes will continue to fly and to rile Pan Am. For Yerex has already served the U.S. Army too well to be grounded--Americanized or not.

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