Political Compromise

When Pan American World Airways' President Juan Terry Trippe offered to buy American Overseas Airlines nearly two years ago, the deal was all set except for the simple question of whether the Civil Aeronautics Board would approve the merger. But by this summer Juan Trippe's proposal had stirred up the biggest snarl of bureaucratic confusion and political in-fighting that Washington has seen in many years.

Last December CAB's own examiner okayed the merger. The Justice Department rushed in crying "monopoly." Then Trans World Airlines, bitterly opposing the deal, hired ex-Presidential Counsel Clark Clifford to represent their interests.

Two months ago CAB vetoed the merger, 3 to 2, sent its verdict to the White House. Three weeks ago, Harry Truman sent word back that he approved the veto. With that, CAB Member Oswald Ryan, who had voted in favor of the merger, made a hurried visit to the White House and brought back word that Harry Truman had changed his mind. Thereupon, CAB Chairman Joseph J. O'Connell Jr. resigned from the Board (TIME, July 17).

Last week, on orders from the President, CAB started drafting a new decision declaring that the merger was "consistent with the public interest, and will not result in the creation of a monopoly and thereby restrain competition . . ."

Legal Eagle. But neither the President nor CAB had reckoned on the legal resourcefulness of James M. Landis, counsel for a group of American Overseas employees who wanted to block the merger to keep their jobs. As an ex-chairman of CAB, Landis knew all the ins & outs of the board's procedure. Getting wind of the board's impending decision one day last week, Landis whirled into action like a legal windmill. He hastily drafted an affidavit charging that under the Civil Aeronautics Act the board's original decision was binding, required no approval from the President, and the President's reversal of it was therefore illegal. By midnight Landis had his papers ready, but then had to scour the town to find a notary public.

Armed with his sworn affidavit, Landis sped to suburban Chevy Chase, where at 1:30 a.m. he rapped on the door of Federal District Court Judge Henry A. Schweinhaut. In pajamas and nightrobe, the judge sleepily listened to Landis' arguments, then signed a temporary restraining order. Pending a hearing, Judge Schweinhaut forbade CAB to issue its new decision. But Landis' victory was short-lived. This week Judge Schweinhaut lifted his temporary restraining order, and CAB issued its decision after all.

Flying Feathers. That decision, however, did a lot more than merely approve Pan Am's purchase of A.O.A. for $17.5 million. It authorized Pan Am to fly to Rome and Paris, which previously had been T.W.A.'s exclusive territory. It also threw a big plum to Clark Clifford's friends by giving T.W.A., for the first time, the right to stop at London and thus compete with Pan American World Airways on its most profitable single run.

The Administration, which had bitterly fought Juan Trippe's thesis that only a single U.S. flag carrier could hold supremacy over the growing state-subsidized foreign airlines on the Atlantic, had thus moved a step nearer Trippe's direction by trimming the three existing U.S. airlines to two. But it had forced the survivors to compete with each other, rather than primarily with foreign air transport lines. The decision appeared to have all the vices and few of the virtues of a makeshift political compromise, and it brought the U.S. no nearer to a clear, long-range international air policy.

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