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Fred Rentschler's dreams soon ranged far beyond engines to a great air combine. He, Bill Boeing and Chance Vought decided to merge their plane and airline companies into United Aircraft & Transport Corp., rounded it out by adding propellers (Hamilton Propeller Co. and Standard Steel Propeller) and large amphibians (Sikorskys). When National Air Transport, holding the Chicago-New York mail route, balked at merging with them, Rentschler said imperiously: "The air between the coasts is not big enough to be divided." He bought up National's stock in the market until he had a controlling interest; its bosses came to terms and the first coast-to-coast airline (United) was formed.
Then high-flying Fred Rentschler got an order to land. Senator (now Justice) Hugo Black, investigating supposed overpayments in Government airmail contracts, compared the value of Rentschler's original investment in Pratt & Whitney (nothing but his know-how and a few shares bought at 20¢ each) to the market value of his holdings in United Aircraft in 1933. Black concluded that Rentschler had a paper profit of $21 million on a $253 investment. Rentschler said that he had, indeed, made a lot of money, and patiently explained that this was because Pratt & Whitney had grown big by making good engines.
Flying Windmill. The upshot of the Black investigation was the Air Mail Act of 1934, which divorced aircraft builders from airlines. Boeing and United Airlines went their separate ways while Rentschler held Pratt & Whitney, Vought-Sikorsky and Hamilton Standard together in truncated United Aircraft. Trouble of a different sort now struck Pratt & Whitney. By 1937 it had lost the lead it once had over Wright Aeronautical, largely because it spread its engineering talents trying to develop nine different engines, while Wright concentrated on its famed Cyclone, grabbed much of the transport and military market.
Doggedly, Pratt & Whitney went back to improving the Wasp, got back into the running. Furthermore, Rentschler had not lost his prophetic eye. He decided to stop making flying boats in his Vought-Sikorsky division (they were competing with his planemaking engine customers), and decided to start pouring millions into a brand-new type of aircraft, the helicopter. In 1940, Igor Sikorsky made the first helicopter flight in the U.S., and opened up another field of air transport. But soon, the helicopter, and most other experimental projects at United, were swept into the background. World War II came and the big job was to expand production of United's engines, propellers and Corsair fighters.