by T. E. Cruise
Campbell usually won their arguments. He would reason that thanks to the depression there were acquisition opportunities all over the country: air terminals, airplane fleets, parts inventories, ground transport companies, instrument and engine manufacturers, and so on. If they didn’t gobble up those buys, a competitor would. Campbell would remind Gold that he hadn’t yet let the company down, and that he wouldn’t in the future. Finally, Campbell would march upon Gold’s crumbling defenses with an army of figures: projected revenues, compound interest calculations, income tax dodges. Reeling against the onslaught, Gold would give in, letting Tim do what he wanted. GAT and Skyworld became the holding companies for more than sixty separate operations.
In 1930 GAT’s modified G-1 Yellowjacket won the United States Navy’s competition for a new torpedo bomber. The navy contracted for an initial order of 150 airplanes, along with an extensive spare-parts order. This new cash infusion gave Gold the confidence to authorize Teddy Quinn to augment his staff with a dozen new, young aeronautical engineers who had been let go by those smaller companies that had gone under. Gold also authorized R&D on a new, all-metal, large-capacity passenger airliner, tentatively dubbed the Monarch, meant to steal a little thunder from Ford’s “Tin Goose” Tri-Motor. The Ford was the premier passenger plane in the world—Skyworld owned nine of them—but the “Tin Goose” had its problems. It was noisy and slow, giving it little advantage over travel by rail for long trips. GAT, Ford, Boeing, Northrop, Lockheed, Douglas, and others, were looking to the future with new concepts as they raced to come up with a large, fast, comfortable airliner.
That same year, widespread reports of corruption in the ways that the scores of smaller air transport companies were billing the postal service for carrying the mail led Congress to pass the McNary-Watres Act. The act was designed to rid the country of shoestring carrier operations, and to promote passenger air travel. The act’s first key provision was that U.S. airmail carriers would no longer be paid by the pound. Carriers would be paid a sliding-scale flat rate, based on the amount of interior space its airplanes could offer, regardless of whether that space was used to carry mail. A large carrier like Skyworld had the big passenger airplanes to receive the maximum flat rate, thereby reaping grand profits. The marginal carriers with their little airplanes received the minimum rate, which was purposely fixed so low as to force them out of business. This dovetailed with the second key provision of the Watres Act, which gave the postmaster general the right to consolidate those routes abandoned by the marginal carriers, and award the territory to the lowest responsible bidder.
Thanks to the Watres Act, only the largest, most established carrier companies would henceforth be eligible to fly the mail. All others need not apply.
A meeting was held in Washington to divvy up the nation’s newly consolidated routes among the aviation giants. Tim Campbell represented Skyworld, and went to Washington vowing to come back with a grand prize: a coveted transcontinental route. The conference lasted twelve days. Campbell came home without his coast-to-coast plum, but with a decent consolation prize: all the territory Skyworld currently held, plus a profitable route between Kansas City and Chicago. Skyworld’s scarlet and turquoise fleet was now authorized to fly over the western two-thirds of the nation.
The Watres Act cut the legs from the civilian market for the G-1 Yellowjacket and G-1a Dragonfly. They were just too small. Fortunately, Gold still had his navy contract for torpedo bombers. He shut down the Dragonfly assembly line, stockpiled the six unsold passenger airliners on his airfields, and poured money into the Monarch project.
In 1931 the crash of a TWA Fokker tri-motor in Kansas took the life of Knute Rockne, the famed football coach, among others. An investigation revealed that the cause of the crash was rotted wood in the Fokker’s all-spruce, internal wing assembly. The Fokker tri-motors were the workhorses of the airlines, and when they all had to be grounded for inspections it created havoc. Virtually all the major airlines, Skyworld excluded, flew them. The only reason Gold had stayed away from them was his unpleasant experience in the aftermath of the crash of his German-built Spatz, back in 1925. He was now a naturalized citizen, but because of his German origins he’d vowed to play it safe in the future and avoid all controversy by only buying American—until he could build a plane of his own to fulfill a specific need.
With the Fokkers out of service, the airlines looked around at what was available in a large-capacity transport, all-metal design, and found not very much. Gold’s surplus of all-metal Dragonfly airliners was quickly sold out, but the G-1a was a stopgap solution. The Dragonfly was too small, while the larger, all-metal tri-motor offered by Ford was too uncomfortable and slow. Something better had always been needed, but now that need was crucial, and the potential rewards for the firm that satisfied that need had become far greater. The race to build a state-of-the-art airliner was heating up.
The Monarch project became GAT’s top priority. Gold spent most of his time working with Teddy Quinn and the expanded pool of engineers. Long gone were the good old days back in Santa Monica, when the group could sit around one table, chewing the fat and brainstorming as they gazed out the windows at the sparkling blue bay. Today, Gold had engineers working for him whose names he didn’t know.
The new airliner had started out as a tri-motor, but Rogers and Simpson had told Gold about their latest design for a powerful radial engine that made him think the Monarch could be a twin-engined craft. In the months since the project had gone into high gear, Teddy Quinn and his gang of boy genuises had worked out a fuselage design that would allow the Monarch to carry twelve passengers plus a three-man crew in swift, quiet comfort. A prototype model of a twin-engined Monarch—designated the Gold Commercial One (GC-1)—had been built. Wind tunnel tests had proved that the aircraft could effortlessly cruise with only one working engine at any practical altitude. Unfortunately, wind tunnel tests also showed unsatisfactory rudder control flying on only one engine.
GAT could start on a full-scale prototype as soon as the damned rudder control problem was licked. Gold worked late nights at his own drafting table, laboriously struggling with the Monarch’s engineering problems; dreaming about them during fitful sleep. He knew that he was obsessing on the Monarch at the expense of other important matters, but he couldn’t help it. He did his best creative work when he was obsessed. Anyway, he’d always believed that Campbell could take care of routine business matters concerning Sky-world well enough without him.
The intercom snarled. Gold pressed the button. “Mister Campbell is here,” his secretary said.
“Send him in.” Gold took the anonymous note accusing Campbell of treachery out of its envelope. He folded the sheet of stationery into a paper airplane, meanwhile brooding that perhaps Campbell had been taking care of things without him too well…
“What’s this about, Herman?” Campbell complained as he came into the office.
Gold watched him approach. It was fifty paces from the double doors to Gold’s marble-topped, oak desk. The journey took Campbell past sideboards lining the paneled walls, the burgundy leather sofas and armchairs grouped together like campsites on the vast moss green plain of wall-to-wall carpeting. The walls above the sideboards were taken up with ornately framed, murky oil paintings of hunting scenes and seascapes. Gold did not know any of the artists. Erica had furnished and decorated the office for him. Banished to one corner of the cavernous room, looking somewhat forlorn, like country cousins come to the big city, were Gold’s battered, old drafting table and glass-fronted bookcases filled with technical manuals. Erica had given him a hard time about that table, but Gold had stood his ground, insisting to her that he still spent more time at his drafting table than he did at his desk. He wished he were at his table right now, instead of desperately trying to come up with an idea of how to resolve this confrontation without losing Campbell’s friendship.
“I’ve got a ton of crap to take care of before lunch,” Campbell was saying. “And I get this
goddamned summons from your secretary like I’m some kind of goddamned errand boy—”
Gold gestured toward a leather armchair in front of his desk. “Sit down. I’ve got something serious to discuss with you.”
Campbell settled into the chair. He took a gold cigarette case from out of the breast pocket of his gray flannel, double-breasted suit jacket, extracted a cigarette, and then lit it with a matching gold lighter. His eyes flicked desultorily over the two envelopes lying on the burgundy leather desk blotter, and then at the paper airplane in Gold’s hand. “Well?” He exhaled a stream of smoke. “I trust that gizmo in your hand isn’t another new design you want me to finance for you?—”
Gold sailed the paper airplane into Campbell’s lap. “Read it.”
Campbell unfolded the note and skimmed its contents. When he was finished he looked up at Gold, his expression contemptuous. “You believe this?” he asked.
Gold shrugged. “Not if you tell me it’s a lie.”
Campbell didn’t say anything for a moment; then he smiled. “Why the fuck should I bother lying? You were going to find out sooner or later.” He crumpled the sheet into a ball.
“You want to tell me why?” Gold asked.
Campbell stared at him. “You don’t know? Could your self-absorption—your fucking ego—be that big? You mean to try and tell me that you’ve been so focused on that goddamned Monarch project that you don’t remember what happened?”
Gold frowned. “You mean that flap we had over Cargo Air Transport?”
“That flap, as you put it, was the final straw as far as I was concerned,” Campbell said.
Gold leaned back in his chair. At present Skyworld was authorized to fly as far east as Chicago. A small airline, Cargo Air Transport, had managed to survive the Watres Act, holding on to its single, lucrative Chicago/New York route, but now the company—in other words, its route—was up for sale. Campbell had wanted to go after Cargo Transport, calling it the last piece in the puzzle to make Skyworld a coast-to-coast airline. Gold had balked. There were other transport companies with the same idea; the bidding for Cargo Air had hugely inflated the price of its stock. Campbell was willing to overpay, believing that Cargo Air would turn out to be a worthy buy in the long-term, but Gold had refused to let Campbell sink Skyworld that deeply into debt.
“Cargo Air has made me realize that for the longest while we’ve been like two mules straining to go in opposite directions, but tied together by a piece of rope,” Campbell said. “I figured it was time to cut the rope.”
“That rope you’re talking about cutting belongs to me,” Gold said sharply.
“A public company belongs to its stockholders,” Campbell said evenly. “I believe that when the truth comes out, Skyworld’s stockholders will not react kindly to your argument against the Cargo Air acquisition: that buying up all that inflated stock would rob Skyworld of its liquidity at a time when GAT might want to borrow on those cash reserves to fund the Monarch project. The thing of it is, I’m sick of Skyworld always getting the short end of the stick. I’m willing to wager that most stockholders will agree with me.”
“You know my philosophy—”
Campbell nodded. “That as far as you’re concerned, GAT will always come first. Well, one thing I have to say for you, Herman, you’ve stuck to your guns on that. But a lot of us have worked damn hard to make Skyworld what it is today, and we don’t see why we should have to take a backseat.”
“Tim, listen to me,” Gold began. “For once, I think it’s you who’s losing sight of the big picture.”
“This I’ve got to hear.” Campbell scowled, stubbing out the remains of his cigarette in the smoking stand beside his chair, and immediately lighting another.
“I’ve been thinking about history,” Gold began. Campbell opened his mouth to say something, but Gold help up his hand. “Just hear me out. The Watres Act that gives the postmaster general the right to decree who can fly where is a product of the Hoover administration.”
“So?” Campbell demanded.
“So now there’s a new president. A Democrat. I think Roosevelt will move to rescind everything Hoover’s done.”
“You think FDR’s going to try and repeal the Watres Act?”
“I’m saying he might.” Gold nodded. “And with it, the postmaster’s authority to parcel out routes. If that happened we could fly anywhere we want, with or without the postmaster’s blessings, and without taking ourselves to the poorhouse to do it.”
Campbell nodded. “Okay, that’s an opinion.” He smiled thinly. “It doesn’t happen to be mine.”
“Right, we disagree, and time will tell who’s right.” Gold acknowledged. “But what’s the point of starting this civil war? Even if you could manage to take over Skyworld—”
“Oh, I’ll manage it, all right.” Campbell smiled. “I’ve been busy while you’ve been preoccupied with the Monarch project,” Campbell replied. “I’ve put together a group of shareholders who, like me, disagree with your leadership. The group has authorized me to vote their shares by proxy.”
Gold was startled. He hadn’t realized until now just how out of touch he’d become concerning what was going on at Skyworld. “Is Hull with you in all this?” he asked softly.
“Yes, Hull’s with me.”
So now it’s two old friends I’m losing, Gold thought wearily. “I take it you intend to wage a proxy battle for the company at this month’s annual shareholders’ meeting?”
“I do. With full-page newspaper advertisments, press conferences, the works. It’s going to be messy, Herman, I can promise you that. And in the meantime I’ll be buying up as much stock as I can.”
“I could match you on that strategy,” Gold threatened.
“You could,” Campbell said. “But what good would it do you? You can’t buy it all, Herman. But each share I grab will add to my credibility. And I still expect to be able to beat you in the proxy fight.”
“The meeting isn’t until the nineteenth,” Gold said. “Cargo Air Transport will be long off the market by then.”
“Cargo Air Transport is off the market now,” Campbell said. “Because Skyworld has bought it. Or will have bought it, I should say, come April nineteenth, when I take over as chairman, and as soon as I can get to a telephone. I’ve made Cargo Air Transport an offer it is quite happy with. They’ve agreed to wait. I’ve also gotten from Cargo’s board the privilege to top by ten percent any better offer they might get between now and the nineteenth.”
“You haven’t the authority to commit Skyworld to such a transaction,” Gold protested.
“It’s a touch illegal at present,” Campbell admitted. “But it won’t be after the nineteenth, when I control a majority share, and when I’m chairman.”
“Why are you telling me this?” Gold asked. “Don’t you realize that I could pick up the telephone and take legal steps against you?”
“I don’t believe you’re capable of ratting on a friend, not even one who’s about to take your company away from you.” Campbell grinned. “After all, I didn’t rat on you concerning a certain incident in which a fire got started and a fellow burned to death.”
“That was seven years ago,” Gold said.
“There’s no statute of limitations on murder, Herman, but let’s not dwell on the past,” Campbell said, dismissing the matter with a wave of his hand. “I brought that ancient history up merely to make the point that both of us have experience bending the rules when it suits us.”
“Then I have your word that ‘the certain incident’ will not rear its ugly head during this present conflict?” Gold asked.
“You do, and I trust that I have your word that our conversation today will remain confidential?”
Gold nodded. “But if you don’t succeed with this takeover you’ll still be finished,” Gold said. “I won’t have to rat on you. Cargo Air Transport will sue you for everything you own, and you will go to jail.”
Campbell nodded. “That’s my problem, no
t yours. I know that I’ve put everything—including my freedom—on the line. So you see, Herman, there really is no turning back for me concerning this.”
“You must have agreed to pay Cargo Air Transport a fortune for them to go along with this scheme…”
Campbell lit a third cigarette off the butt of the last. “Let’s just say that I’m paying generously for something they have, that I want.”
“Will you have to borrow money?” Gold asked. When Campbell nodded, Gold laughed. “I don’t pretend to be the money master that you are, but even I know that it’s bad business to overpay, and go into hock to do it. What good will Skyworld be to you if you bury your precious company in debt?”
“It gets a little complicated, Herman,” Campbell patronized. “Let’s just say that my long-term strategy is to wait for the economic climate to improve and then sell some of Sky-world’s subsidiaries to help pay off the debt. During the short-term, I believe that while there will be an initial slump, once Skyworld has settled into its new coast-to-coast route, business and profits will resume their upward course.”
“Good cash flow to debt ratio, eh?” Gold asked sardonically. Campbell’s smile was faint. Gold picked up the envelope containing Campbell’s resignation. “Know what this is?”
“I can guess. But it’s no longer relevant, is it? I mean, I’m not resigning from anything, except, I guess, our friendship.” Campbell hesitated. “Unless, of course, you’re firing me from my position as president of Skyworld? As chairman, you do have the authority to do that,” he seemed to encourage.
“Thanks, but no thanks,” Gold muttered. “If I did fire you, you own enough stock to fight me on it, but suddenly you’re being obliging. Now why is that?” Gold smiled. “Probably it’s because without you—and Hull, who no doubt would loyally follow you out—Skyworld would grind to a halt, and revenues would plummet. Wall Street would get wind of it, and the price of the stock would drop. That would look just swell for me at the stockholders’ meeting, wouldn’t it?”
