World War One was barely over before a nascent airline industry emerged. The first commercial flight had actually taken place before the war.
It happened on New Year’s Day, 1914—a hop between St. Petersburg and Tampa, Florida, lasting all of 23 minutes and costing its single passenger, Abram Pheil, $400. Commercial airlines began selling short-distance flights to well-heeled customers, and companies began building airplanes.
But the investment costs were large, and one crash would spell bankruptcy. Even with the technological boost from NACA, an additional stimulus was needed. The industry needed a market, and the market couldn’t start up without a robust industry. The egg needed a chicken.
Salvation came in 1925, in the form of a mailing envelope. Most government agencies had treated the arrival of the airplane with curiosity and caution. But there was a notable exception: the Post Office Department. As early as 1911, the Post Office had begun authorizing experimental mail-carry flights at fairs and aviation festivals. The prospect of transporting a letter from origin to destination many times faster than a train was irresistible.
The experiments grew in scale, coming to a head on February 22, 1921, when the department used a series of private aircraft to transport 16,000 letters from New York to San Francisco. Flying day and night, they beat the best possible railroad time by 75 hours. Impressed, Congress appropriated $1,250,000 of funding for expanded airmail service. In 1925 it passed the Kelly Mail Act, which authorized the Postmaster General to contract with private industry for airmail service.
The story illustrates an essential aspect of the government’s role in developing technology.
Relatively little tax money goes toward actually building equipment like airplanes. Most of the time, the government doesn’t build. It buys. By creating a market for the new aviation industry, Congress took the economy airborne. It funded an experiment to prove whether planes were practical for more than warfare. As a result, aviation would boost the American economy and help define the first American century.