| Between 1926 and 1934, the U.S. airline industry was created under the guidance of the federal government. During this time, airlines were formed to take advantage of lucrative air mail contracts awarded by the Post Office to transport the mail and, more importantly, develop a rational air transportation system. The leaders behind this program were former Progressives who remained committed to their ideals concerning the relationship between government and business despite the supposed passing of their time. In particular, Progressive Republicans applied Theodore Roosevelts's concepts of New Nationalism in fostering a group of "good trusts" in the aviation industry which, through their firm financial backing together with substantial government incentive and guidance, could develop aviation as an industry acting in the public interest while avoiding the problems experienced earlier with the railroads.; While several Progressive Republican figures emerge as leaders of this movement, the most important was President Herbert Hoover's Postmaster General, Walter Folger Brown. Brown directed the expansion of a rational network of airlines flying along well defined routes operating under his definition of the public interest, unlike the earlier chaotic expansion of the railroads. While his definition often conflicted with Congress's and that of the small airline operator, Brown did build the vast air transport network that exists today. He also ensured the economic viability of the industry by ensuring that large, well financed holding companies operated the system. Brown's authoritarian manner angered many and this, coupled with popular fears of concentrated economic power eventually led to a partially successful attempt to undo his work.; In 1934, Senate investigations led by Hugo Black exposed Brown's plan to public scrutiny. Espousing Wilsonian Progressive Democratic ideals opposing all oligopolies, Black's investigations led President Franklin Roosevelt to suspend the air mail contracts. When this failed, Roosevelt was forced to return the contracts to the large airlines, but with the proviso that the holding companies were broken up.; In essence, the New Nationalism of Progressive Republicans was replaced by the New Freedom of the Progressive Democrats in the aviation industry. The results, nevertheless, remained essentially the same. While the aviation trusts were abolished, the same financially strong airlines created by the previous administrations continued their dominance under federal regulatory protection. Thus Progressive ideas were directly responsible for the creation and direction of the airline industry in the United States. |
