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Brass Backed. Smith never let himself get sloppy, was unafraid to take a gamble to put American out ahead. For example, while most other airlines were shunning New York's newly built La Guardia field in 1938 because they did not want the bother and expense of moving from Newark, Smith saw that the shift closer to Manhattan would improve service, switched American's New York base to La Guardia. New York City was so glad to get American that the gamble paid off. Smith got a rock-bottom rental, and the other airlines were eventually forced to follow, but at much higher rates. When World War II began, Smith resigned from American to become an Army Air Corps colonel. He was made second-in-command of the Air Transport Command in Washington, ended up as a major general. His old boss, Lieut. General Harold L. George, gives him the "principal credit" for success. Used to cracking out orders himself, C.R. was not awed by brass. George remembers vividly the time Smith disagreed with General Henry ("Hap") Arnold, Army Air Force chief. "C.R. turned around and said," recalled George, " 'Hap, that's a hell of a way to run a railroad.' "
Touch & Go. At war's end Smith returned to American, convinced that the great strides made during the war in air transport would bring on the air age and a huge new air-travel market. Just as he had worked with Douglas on the DC-3, he encouraged the firm to build the four-motored, long-range DC-6s, boldly ordered a fleet of 125 DC-6s and shortrange, two-engined Consolidated Vultee CV-240s. As usual, he showed himself a master at timing and bargaining. So eager was Consolidated (now Convair) for orders to relieve its postwar slump that he got the 240s for the rock-bottom price of $225,000 each; even now, American is selling them for nearly what it paid.
To pay for his new planes, C.R. pulled off a financial coup by arranging to sell $40 million in preferred stock issues and $40 million in debentures, by far the biggest airline financing till then. Since the unprecedented move came at a time when airline finances were weakening, it was touch and go whether the underwriters would not back out at the last minute. Said Smith to an associate, when he sat down to sign the deal: "Boy, if we hadn't got to work on time this morning, we wouldn't have any deal."
For a year or two, it looked as if he had speculated wrongly about the future of air travel, had dangerously overexpanded. A subsidiary, American Overseas, had started transatlantic flights and lost money with almost every planeload. Domestic air travel did not expand nearly so fast as Smith expected. In the first three postwar years, American piled up losses of $6.7 million.