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But the new financing provided the money to ride out the postwar ups and downs. When the travel boom did arrive, American was in better shape than any other line to meet it. Like any good gambler, Smith decided to cut his losses on American Overseas by selling it to Pan American for $10.7 million. In 1949 American broke through the dark clouds with net earnings of more than $7,000,000. Thus encouraged, C.R. took a squint into the future and decided to expand again. He placed the first order for 25 of Douglas' big, fast DC-7s, which he got for some $700,000 less than later buyers, used them to begin the first roundtrip, nonstop flights across the continent. American has been in the black ever since '49; despite a slump in airline earnings, American held its own this year with nine-month earnings of $13,325,000, on a par with last year's nine-month earnings of $10,148,000, after allowing for a change in depreciation policy.
Whisky for Daughter. While leading the field with bold financing and new equipment, American also built up a reputation for service, based on C.R.'s deep belief that passengers must be handled with care. One Smith innovation: "Admirals' Clubs" at major airports to give 30,000 steady American customers (who joined by invitation) the chance to relax or drink while waiting for flights.
Smith, who drinks sparingly but ages his own 150-proof bourbon in special barrels for his friends, at first balked at the introduction of liquor on airlines. Later he decided to serve it—free. Says he: "It costs you more money to sell liquor than to give it away. Also, we don't want our girls to sell whisky. Would you want your daughter to be an airline hostess if she sold whisky?"
When the jet planes were ready for production, C. R. Smith decided that for once American did not have to be first, though it could not afford to be last. He held off ordering until Pan American had placed the first firm orders for the Boeing 707 and the Douglas DC-8, and United Air Lines had picked the DC-8. He shrewdly figured this would increase his bargaining power—as it did. To land American's order, Boeing agreed to enlarge the 707 fuselage, sell the planes for $500,000 less apiece than the DC-8.
Topflight Staff. No sooner had American signed its jet contracts than it began planning for the long and involved transition from props. Though Smith personally keeps tabs on every major problem, he is surrounded by topflight staffers: Among them: