Air Trust

In the rambling Boeing Aircraft plant on the Duwamish River near Seattle workmen last week were putting the finishing touches on five of the world's most remarkable airplanes, the Boeing 314 flying boats for transoceanic service (another is already completed). Forty-two-ton monsters each as high as a two-story house and as powerful as 6,000 horses, the four-motored ships are the largest ever built for commercial service. Last week in Manhattan, Pan American Airways President Juan T. Trippe announced that his company's purchase of these six Boeings had been financed like ordinary railroad cars by the first full-fledged aviation equipment trust certificates.*

Three years ago American Airlines financed the purchase of some Douglas DC-3s and DSTs largely by equipment trust certificates sold to RFC. But Pan American had to seek no such professional giver of largess. It sold $2,500,000 worth of 4% certificates, maturing semiannually from January 1940 to January 1944, to the hardheaded New York Trust Co., has an option to sell it another $1,000,000 worth.

This provided 70% of the purchase price, about the same ratio as for standard railroad equipment trust certificates. Nevertheless, aviation equipment trust certificates have yet to rival railroad certificates as gilt-edged public investments: there was no public offering of last week's issue.

* Equipment trust certificates are in effect mortgages on vehicles.

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