Untangler

"Did you ever go fishing in a quiet pool at dusk? You cast your fly and your line tangles up in the trees. There you are, with the fish swimming around, the daylight waning, and you can't get your line untangled. All of a sudden you pull the magic string and the whole thing comes loose. That's how I feel."

The magic string that Western Air Lines' President Terrell C. Drinkwater had used was the telephone wire in his hangar-office at Los Angeles' Municipal Airport. Over it one morning last week came news from Washington that the Civil Aeronautics Board had finally, okayed Western's sale of its Denver-Los Angeles route to United Air Lines for a handsome $3,750,000.

Much depended on the sale. Bustling Terry Drinkwater had proposed it as the first major step in a desperate policy of "constructive contraction" soon after he became head of overexpanded, ailing Western (TIME, Dec. 23). Last March he received--and within five hours spent--a down payment of $1,000,000 which United had made in the form of a loan. He also applied to the Reconstruction Finance Corp. for a loan of $4,500,000 to pay off old debts and buy new equipment got a tentative O.K. on the condition that CAB approve his proposed sale. But since then the sale had hung fire. Drinkwater heard that CAB Chairman James M. Landis viewed it with disfavor. Landis, in fact, continued to view it thus, and was the only dissenter to last week's decision.

What bothered Landis was that the sale price was an estimated $1,500,000 higher than the value of the physical assets involved. This, he said, was "certain to be productive of serious and eventually disastrous inflation in values underlying air transportation." He also thought it would "provoke a series of mergers and route transfers that will be irrational and unfortunate in the extreme because they will be dominated by the principle of selling to the highest bidder."

But the four other members of the board held that it would be "strange indeed if the board were now to declare a policy of hostility to any commercial profit" in such transactions. To do so, they thought, would in effect freeze the nation's air pattern and kill most hopes for its improvement. Commercial airmen generally applauded the board's new policy. For Terry Drinkwater it meant that Western, which operated in the black during the second quarter of 1947, might soon be on a steadily profitable basis.

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