First Papers for Taca

For three years, a mustachioed, one-eyed New Zealander named Lowell Yerex, freight-flyer extraordinary in Latin America, has tried to take out U.S. naturalization papers for his growing brood of airlines. Last week he made his third major try* on the Canadian side of Niagara Falls, ex-Barnstormer Yerex signed an agreement with his longtime friend, ex-Barnstormer Jack Frye, president of Transcontinental & Western Air. T.W.A. will buy a $1,350,000 piece in the top Yerex holding company, Inter-American Airways.

The Deal. Inter-American (whose name is to change back to Taca) is a complicated organism that includes, besides four little Tacas flying in six Central American republics, a 50.9% interest in Aerovias Brasil (T.W.A. is buying another 9% independently) and 40% of British West Indian Airways. These lines are now connected with the U.S. through Miami by for-the-duration landing permits from CAB. But Lowell Yerex wants his airways Americanized: 1) to make the U.S. links permanent, climb onto the Good Neighbor bandwagon; 2) to raise capital to finance new routes and to buy new planes.

Yerex' new bid for first papers for Taca should answer both prayers. At least as complex in detail as his current networks, in essence the plan is simple :

> Besides TWA, other 100%-American interests are arranging to buy into Yerex' airlines for a total of $900,000-worth of stock. First among them is Maryland Casualty Co.'s (and Taca's) Board Chair man Stewart McDonald, who is down for more than one-third of the total. The others: Adams Express, Time Inc. and Air Investors Inc. Besides this, a public offering of another 30-40% of Taca's new shares will bring the total U.S. ownership up to more than 70%, leaving only Yerex' 28% minority interest in "foreign" hands.

The Future. Since no single investor will have majority control of Taca, CAB has no veto power over the deal.

And Taca, B.W.I.A. and Aerovias Brasil, flying more freight than all U.S domestic airlines flew before the war, are profitably in the air. For the first seven months of 1943, the combination turned in an estimated net operating income of around $400.000 v. less than $360,000 for the full year 1942.

In August 1941 CAB refused to allow American Export Airlines to buy Yerex' 100% interest in Taca for a reputed $2,000,000; last year a voting-trust deal with U.S. investment bankers Schroder Rockefeller & Co. fell through because the U.S. Government thought that offshoot of London's J. Henry Schroder Banking Corp. was almost as British as Yerex.

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