Boeing and United Air Lines from Birth to Break Up, 1919-1934

  • By Walt Crowley
  • Posted 3/05/2003
  • Essay 5368
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The Boeing Airplane Company nearly collapsed following the end of World War I military orders. Pioneer pilot Eddie Hubbard (1889-1928) helped William E. Boeing (1881-1956) deliver the first bag of international airmail on March 3, 1919, and urged the company to pursue U.S. Air Mail contracts. A skeptical Boeing bid on and won the Chicago-San Francisco route in 1927, and quickly developed faster aircraft culminating in the Model 247, the first true airliner. Boeing developed or purchased airlines to build its own passenger system, United Air Lines. It also expanded its holdings to create the giant United Aircraft and Transportation Company, but federal anti-trust regulators broke up the combine in 1934. An embittered Bill Boeing quit the company and sold his stock that same year.

From Warplanes to Wardrobes

Within one month of the November 11, 1918, armistice ending World War I, Boeing's payroll plummeted from 337 workers to 80. In order to keep doors of its "Red Barn" Plant 1 open, company founder William E. Boeing built furniture, sea sleds, and powerboats (which proved popular with local bootleggers during Prohibition). On the brink of bankruptcy, the company was saved by a U.S. Army order to refurbish DH-4 biplanes.

Pioneer Boeing test pilot Eddie Hubbard believed that airmail offered an escape route. He and Bill Boeing flew to Vancouver, British Columbia, on March 3, 1919, and returned to Seattle's Lake Union with the nation's first bag of international airmail. The U.S. Post Office inaugurated domestic airmail two months later, using government aircraft and pilots. Hubbard won one of the first international airmail contracts in 1920, and shuttled mail between Seattle and Victoria in a Boeing-built B-1 flying boat.

Post Office Puts its Stamp on First Airlines

Following passage of the federal Kelly Act in 1925, the Post Office began contracting with private companies to carry airmail on designated routes, and more and more passengers begin hitching rides in "mail planes." Thus, these first postal franchises stimulated the early growth of the airline industry in much the same way that nineteenth century land grants supported development of transcontinental railroads.

Vern Gorst's Pacific Air Transport Company delivered Seattle's first bag of domestic airmail on September 15, 1926, landing next to Boeing's Plant 1 in a Ryan monoplane. Meanwhile, Boeing was finishing work on a powerful new mail plane, the Model 40. When the Post Office advertised bids for the Chicago-San Francisco route (CAM-18) on November 25, 1926, Hubbard persuaded a skeptical Boeing to make a proposal. The company won with a bargain rate of $1.50 per pound of mail and organized a new subsidiary, the Boeing Air Transport Corporation, or Boeing System.

Birth of Boeing Field

The Boeing System inaugurated service with two dozen Model 40As on July 1, 1927. Because of limited space at Boeing's Duwamish plant, the planes were finished at King County's Sand Point airfield. The following year, Boeing purchased Gorst's Pacific Air Transport and introduced larger Model 80 and 80A trimotors. Their cabins could hold up to 18 passengers, who were attended by registered nurses -- the nation's first "stewardesses."

The success of the Model 80 overwhelmed Boeing's limited air field on the Duwamish, and King County sold Sand Point to the U.S. Navy. The company threatened to relocate to Los Angeles unless local government built a new airport. King County responded by developing Boeing Field (now King County International Airport). When the new field was dedicated on July 26, 1928, Bill Boeing called it "just about the happiest day of my life."

United Aircraft Comes Together

Technological advances, funded in part by military contracts, led Boeing to develop all-metal monoplane designs in the late 1920s and early 1930s. In rapid succession, Boeing introduced the fast, low-wing Monomail, the famed P-26 Peashooter pursuit, and twin-engine B-9 bomber.

At the same time, Boeing began to assemble an industrial empire. On February 1, 1929, William Boeing and Fred Rentschler, president of Pratt & Whitney engines, incorporated United Aircraft and Transport, led by executives Claire Egtvedt (d. 1975) and Philip G. Johnson (d. 1944). United quickly acquired Hamilton and Standard propellers, Chance-Vought, Northrop, Sikorsky (a major seaplane builder before it pioneered helicopters), and Stearman, which established Boeing's future base in Wichita, Kansas.

United Air Lines and the 247 Take Wing

United's development was not slowed significantly by the Depression, due in large part to reorganization of federal airmail contracts under McNary-Watres Act of 1930. Herbert Hoover's Postmaster General, Walter Folger Brown, sought to cull the nation's flock of small competing airlines and convened a series of what later became known as "spoils conferences" to allocate major routes to the strongest companies. Boeing won the northern tier of the United States, American Airlines took the south, and Trans-Western Airlines (now TWA) was created to serve the middle.

On July 1, 1931, Boeing formally consolidated its own system with Varney, Stout, Pacific Air Transport, and National Air Transport to create United Air Lines. Boeing engineers were already at work on a revolutionary new design: the Model 247. This sleek, twin-engined all-metal monoplane could whisk 10 passengers from coast to coast in a mere 20 hours, including refueling stops.

The first Model 247 took off from Boeing Field on February 8, 1933, and set a new standard for airliner speed and comfort. TWA tried in vain to buy the plane for its own routes, but Boeing had reserved the first production aircraft for United. Frustrated, TWA commissioned Donald Douglas to design a comparable plane. This culminated in the famous DC-3, which surpassed the 247 in size and speed and rendered it obsolete within a few years.

What Goes Up ...

Boeing faced a different, more dangerous threat when the new Democratic Congress began investigating the Hoover Administration's regulation of airlines. On September 28, 1933, Senator (later Supreme Court Justice) Hugo Black opened highly publicized hearings on the Post Office "spoils conferences." William Boeing was subjected to a particularly withering examination by Black and his colleagues, who lambasted his "monopolistic" practices.

Amid the growing scandal, President Franklin Roosevelt (1882-1945) cancelled all airmail franchises on March 10, 1934, and turned the mails over to poorly equipped Army pilots. Ten perished during the following two weeks, and the Post Office quickly solicited new private carriers. In a move clearly aimed at Boeing, new Postmaster General James Farley and, later, Congress banned the award of the new contracts to any companies that also built aircraft.

Boeing was forced to dissolve United Aircraft and Transport as a result. United Air Lines was reincorporated as an independent company on May 1, 1934, and its former president, Phil Johnson, headed north to help organize Trans-Canada Airlines (he was called back to United during World War II). The Boeing Airplane Company was reorganized on July 19 under the leadership of Claire Egtvedt, and United Aircraft and Transport officially ceased to exist on September 26, 1934.

With his former empire in ruins and deeply embittered by his treatment in Congress, William Boeing retired and sold most of his Boeing shares. His only consolation in 1934 was receipt of the prestigious Guggenheim Medal for aviation leadership, but William Boeing never again played a significant role in the company that still bears his name or in the industry that he, perhaps more than any other single individual, had helped to create.


Boeing Historical Archives, Year by Year, 75 Years of Boeing History (Seattle: Boeing, 1991); Peter M. Bowers, Boeing Aircraft Since 1916 (London: Putnam, 1993); Jim Brown, Hubbard, The Forgotten Boeing Aviator (Seattle: Peanut Butter Press, 1997); Joe Christy, American Aviation, An Illustrated History (Blue Ridge Summit, PA: TAB Books, 1987); Robert van der Linden, The Boeing 247, The First Modern Airliner (Seattle: University of Washington Press, 1991); Harold Mansfield, Vision, The Story of Boeing (New York, Popular Press, 1966); Donald M. Pattillo, Pushing the Envelope: The American Aircraft Industry (Ann Arbor: University of Michigan Press, 1998); Robert Redding and Bill Yene, Boeing, Planemaker to the World (San Diego: Thunder Bay Press, 1997); Robert Serling, Legend & Legacy: The Story of Boeing and Its People (New York: St. Martin's Press, 1992).

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