THE drone of German and Italian airplanes over South America is not a new sound. It has been heard, at least in the case of German aircraft, in steadily increasing volume for the past twenty years. But we in the United States have been slow to recognize it as the audible warning of Nazi-Fascist penetration in the Western Hemisphere. Only belatedly are we coming to realize that one of the most dangerous weapons in the hands of the dictators is the ever-widening network of airways controlled by them throughout South America.

Foreign Airlines in South America

The airlines under German and Italian control or domination on that continent comprise more than 20,000 miles of scheduled routes. Many of these have no commercial justification, and serve political and military rather than commercial aims. They are arteries of totalitarian propaganda, nerve centers of totalitarian espionage. Many hundreds of German military pilots have used them as a training ground for long-distance flying and as a means for becoming familiar with South American topography. The lines traverse the continent from the Atlantic to the Pacific along two separate routes and provide swift means of communication between the Nazi-Fascist Stützpunkte strategically located all over South America.

The airlines controlled by the Nazis and the Fascists fall into three general categories. One is represented by the Syndicato Condor, a camouflaged offshoot of Deutsche Lufthansa flying the Brazilian flag. The second comprises a half dozen ostensibly national lines whose management and policies are controlled by Lufthansa through the device of long-term equipment contracts which provide that the operating personnel shall be appointed by or be acceptable to the German company or its Brazilian subsidiary. Third, there are the undisguised operations of Deutsche Lufthansa itself and the Italian Lati, international air transport enterprises which are agencies of their respective governments.

The United States is represented in South American skies by the 15,000 miles of Pan American Airways. In addition, the Brazilian and Colombian affiliates of Pan American, Panair do Brasil and Avianca, cover 11,000 miles between them. Pan American operates from Miami via the West Indies down the east coast of South America to Rio de Janeiro and Buenos Aires. Lines also extend from both Miami and Brownsville (Texas) to the Canal Zone. Another line operates along the northern shore of South America to Trinidad, where connection is made with the east-coast route. The Brazilian affiliate conducts local services in Brazil over much the same routes as Pan American and also extends into the Amazon hinterland. Pan American-Grace Airways operates a line from the Canal Zone down the west coast to Santiago, Chile, and two transcontinental lines across to Buenos Aires -- one out of Santiago, the other via La Paz in Bolivia. Schedules on both the east and west coasts have recently been speeded up through the use of more modern flying equipment and the opening of a direct "cut-off" route in Brazil from Belém to Rio de Janeiro. These new schedules have reduced the trip between Miami and Rio de Janeiro to three days. Further improvements are projected for the near future. Even so, the Fascist Lati line reaches Rio from Rome as quickly as Pan American does from Miami.

The Dutch K.L.M., whose services in Europe have been suspended by the Germans, operates 1,850 miles of route along the north coast of South America, connecting Dutch Guiana and Curaçao with points in Venezuela and Colombia. Before the war, it also ran lines to Trinidad and Barbados. Air France used to operate a transatlantic air mail service from Toulouse to Natal in Brazil, and from there a passenger and mail line to Santiago de Chile via Rio de Janeiro and Buenos Aires. But this line was suspended following the capitulation of France. Thus far the British have failed to open any lines to or in South America.

Neither the Dutch nor the French lines have ever constituted a menace to the safety of the United States. The airway network of the Nazis and Fascists and of the national affiliates which they control, however, does represent a definite threat to the security of the United States. Let us therefore examine it in detail.

CONDOR

Syndicato Condor, Limitada, though not the oldest, is the most strongly entrenched and most aggressive of the German-controlled airlines in South America. It covers the whole of Brazil's 4,000-mile seaboard, traverses Uruguay to Buenos Aires in Argentina, and thence swings west across the Pampas and the Andes to Santiago. It penetrates deep into Brazil's sparsely populated interior, following the Bolivian border to the far western Territory of Acre [i] and serving a vast unremunerative area in the northern states of Pará, Maranhão and Piauhy. It connects, through the German-affiliated Lloyd Aereo Boliviano, with the German-owned Lufthansa of Peru, and thus reaches Lima. Its lines cover nearly 10,000 miles.

Syndicato Condor is a but slightly disguised offshoot of Deutsche Lufthansa, though its officials persist in denying any connection with its German forebear. It flies the Brazilian flag and receives a subsidy from the Federal Government of Brazil. To all intents and purposes, however, it is a German concern, owned and controlled by Deutsche Lufthansa -- which in effect is an organ of the German state. Condor is the spearhead of Germany's aërial penetration in South America. Its primary purpose is to further Nazi expansion in the Western Hemisphere.

Condor's managing director is a German named Ernst Hölck, or Ernesto Hölck as he calls himself in Brazil. The company's technical staff is also German. Its chief pilot is "Senhor" Fritz Fuhrer. Of its eighteen registered pilots nine are, or were until quite recently, "naturalized" citizens of Brazil who have retained their German nationality, and nine are native-born Brazilians of whom six have German names. The mechanic personnel consists of seven native-born Brazilians of German descent, three "naturalized" Brazilians born in Germany, and three uncamouflaged German citizens employed as instructors. The "naturalized" pilots, radio operators and flight mechanics log about three times as much flying as do the native-born.

Some of Lufthansa's German flight personnel remained in Brazil when the parent company's trans-Atlantic and South American operations were suspended as a result of the war. At that time Lufthansa's aircraft and operations in South America were turned over to Condor. Though not listed on the Condor rolls, the former Lufthansa crew members have made frequent flights in charge of Condor planes. It has been noticed that on the coastal trips the Condor crews are usually larger than necessary. One German crew member who flies both as pilot and mechanic on scheduled runs holds a valid aërial photographer's license. The company maintains an aëro-photogrammetric section which during the past five years has carried out air surveys over large areas of Brazil for the Federal Government.

Brazilian law requires that at least two-thirds of the executive personnel and all the flying staff of air transport enterprises under domestic registry shall be native-born. The affiliate of Pan American Airways, Panair do Brasil, has complied with this law to the fullest degree. But owing to an insufficiency of Brazilian transport pilots, the authorities have only recently attempted to apply it to the other air carriers operating under the Brazilian flag. Approximately half the pilot personnel of Condor, Varig and Vasp -- the three other commercial air lines under Brazilian registry -- were Germans who for expediency's sake have taken on Brazilian nationality. It is of course well known that Germans who naturalize themselves in other countries remain Germans in the eyes of the Third Reich. Early this year, Condor asked for, and obtained, a two-year extension of its exemption from the rule requiring it to replace its foreign-born pilots with those of Brazilian birth. On October 6, President Vargas renewed his ruling that pilots of Brazilian-registered aircraft must be native-born Brazilians, except in the case of Varig, which was given until next February to comply. Condor was subsequently granted another extension; but it now appears that the government is insisting on full compliance.

The main offices of Condor and those of Deutsche Lufthansa for South America occupy the same premises in Rio de Janeiro. They are designed to impress the Brazilians with the strength of German air "commerce." Well supplied with funds for many not too obscure purposes, working closely with the diplomatic, naval and military staffs of the German Embassy and with "Cultural Attaché" Herr von Cossel, the airline's offices constitute a busy and important propaganda center. Condor's plans to extend its coastwise line from Belém to the border of French Guiana, over jungle wastes of no possible commercial interest, followed a prolonged visit to Pará state by the German Naval Attaché. The concession to operate this extension has, however, been annulled on the order of the Federal authorities. It has quite recently been reported in the press that Syndicato Condor has entered into a contract with the Amazon River navigation company and port authority, known locally as "SNAPP," for the development of traffic to the Atlantic from the Amazon hinterland and, eventually, Ecuador and Colombia.

The Lufthansa-Condor system has kept its passenger fares well below those of Pan American Airways. Commercial revenue is not a primary consideration to the Germans. Some of Condor's operations into the remote interior of Brazil have little other justification than to provide transport for government officials.

In equipment Condor is at present the largest airline in South America. Its radio communication and direction finding systems consist of the latest types of Telefunken and Lorenz installations. Its fleet comprises sixteen tri-motored Junkers Ju52 17-passenger convertible land or seaplanes, eight older Junkers, and two 26-passenger four-engined Focke-Wulf FW200's. Accompanied by a fanfare of publicity, the two Focke-Wulfs were flown across the Atlantic last year to be placed in service on the Rio de Janeiro-Buenos Aires route. The first to arrive made the trip from Berlin to Rio in 34 hours 55 minutes flying time, or 40 hours 50 minutes elapsed time including stops at Seville, Bathurst and Natal. Together with Lufthansa's six Ju52's these planes were turned over to Syndicato Condor by Deutsche Lufthansa when the parent company suspended its South American operations owing to the war.

There is an interesting story in connection with these two Focke-Wulfs. Shortly after the outbreak of hostilities, officers of the British cruisers Ajax and Exeter, on patrol duty some 75 to 100 miles off the south Brazilian coast, sighted a large plane flying high above them. Through binoculars they identified the plane as a Focke-Wulf bearing the Syndicato Condor insignia. The cruisers reported their observation by radio to the British Naval Attaché in Buenos Aires. Immediate inquiry by this officer disclosed that one of Condor's Focke-Wulfs had departed from Buenos Aires several hours earlier on a test flight and had not yet returned. When the crew returned after a flight of ten hours they were questioned as to the reasons for going so far out to sea, but failed to give a satisfactory explanation.[ii]

Following this incident the Argentine Government issued instructions that no Condor plane was to make a non-scheduled flight out of sight of the airport without having on board an Argentine Army officer as observer. It further ordered that Condor aircraft were not to depart from the airway between Buenos Aires and Rio de Janeiro while making regular passenger flights. The Condor management vigorously protested these rulings, and on the very next day requested special permission to make another test" flight without an observer. They said the flight was being made at the instance of the Brazilian Government in order to conduct certain special trials desired by the Brazilian Army. Argentine officials communicated with the Brazilian Government, and learned that no such trials had been requested. Permission for the flight was refused.

There were other instances of Condor planes being sighted well out to sea, in spite of the efforts of both the Argentine and Brazilian Governments to prevent the use of Condor aircraft for military observation purposes. It may have been that the action of the Argentine officials in refusing permission for the second "test" flight saved the Ajax and Exeter from an untimely end. The German pocket-battleship Admiral Graf Spee was lurking in the vicinity at that time. The Condor crew, having located the two British cruisers the day before, may well have wished to communicate the latters' position to the Graf Spee, so that, if no British battleships were near, she might attack and have the effect of her fire reported by the Condor plane.

Syndicato Condor was officially founded at Rio de Janeiro December 1, 1927, though it had been engaged in operations between Porto Alegre and Rio since February of that year under the name of the Condor Syndikat. The latter was the outgrowth of a project dating back to May 1924, when a group of "American and European businessmen" organized a company to establish an air mail and passenger service between Key West, Florida, and Colombia via the Canal Zone. It does not appear that the "American businessmen" included any North Americans. The principal proponents were Dr. Peter Paul von Bauer and Captain Fritz Hammer, respectively managing and technical directors of Scadta, a German-Colombian airline which had been operating in the northwestern corner of South America since 1920. Dr. von Bauer visited the United States in 1925 with the object of obtaining capital and government support for this project. In April 1925 he wrote to an official in the United States Department of Commerce that a company to be called Inter-American Airlines had been incorporated under the laws of Delaware, with "three dummy directors so that the identity of the real promoters will not appear in the charter." To this letter there was appended the confidential prospectus of the International Condor Syndicate.

The Syndicate realized "that it was inadvisable at this time to organize national German companies." Its proponents therefore sought to form a holding company in which the financial control would be American but in which they would furnish the technical direction and would handle the sale of their own equipment to the company. With this end in view they had associated with themselves the developers of a type of seaplane called the Dornier Wal. This was being built at Pisa (Italy) by a company registered under Italian law -- since the manufacture of aircraft in Germany was restricted by the Treaty of Versailles -- with the "technical assistance" of Dr. Claude Dornier, former chief engineer of the Zeppelin Company, and a full staff of German experts. Thirty percent of the initial capitalization of the International Condor Syndicate, or Condor Syndikat, was reported held in the name of Deutsche Lufthansa of Berlin through Aero Lloyd, and thirty percent by Schlubach, Thiemer & Co., of Hamburg -- with possibly some participation by the Hamburg-American Line. Central and South American capital controlled a minority.

Dr. von Bauer failed to interest United States capital in his inter-American air service. Condor Syndikat then shifted the field of its activities to Brazil. In November 1926 a Dornier Wal named the Atlantico was flown from Buenos Aires to Rio on a successful demonstration tour in which an ex-Chancellor of Germany, Dr. Luther, took part. Shortly after this the Condor Syndikat obtained a license from the Brazilian Government to establish a regular air transport service between Rio and Porto Alegre. From that modest beginning the enterprise has spread over the greater part of South America.

VARIG

Condor's initial Brazilian undertaking was an airline established in January 1927 between Porto Alegre, Pelotas and Rio Grande over the coastal lagoon known as Patos. This line lay wholly within the state of Rio Grande do Sul, whose population is strongly German. Four months after its establishment, following the opening by Condor of a service between Porto Alegre and Rio de Janeiro, certain capitalists of Rio Grande do Sul bought up the Condor interests in the Rio Grande line. The terms of purchase have never been disclosed, but it is clear that the deal which resulted in the founding of Varig -- S. A. Empresa de Viação Aerea Rio Grandense -- in no wise excluded Condor's participation in that enterprise. Varig purports to be purely Brazilian. In reality it is an affiliate of Syndicato Condor, and therefore of Deutsche Lufthansa.

Varig receives a substantial subsidy from the state of Rio Grande do Sul, and for the past two years has obtained an equal amount from the Federal Government. Ever since its formation it has received strong support from the principal officials of the State. In 1932, the State became an important stockholder, reputedly to the extent of a quarter interest, the balance of the stock being privately held. It is generally believed that Syndicato Condor controls a substantial interest in the enterprise. Syndicato Condor acts as Varig's agent in Rio de Janeiro, while Varig is Condor's agent for Rio Grande do Sul. Condor coöperated in Varig's first experimental flight in 1927. Varig's latest plane, a Ju52, was assembled in Condor's Rio de Janeiro shops. It is supposed to have been acquired on one of the long-term Lufthansa-Junkers equipment contracts. Varig's managing director is Otto-Ernst Meyer, a German World War veteran of dual nationality, German and Brazilian, either of which he assumes as the situation may suggest. Its technical director is Rodolfo Ahrons, a Brazilian of German extraction. The Board is composed of nine members and nine alternates, all of German extraction or strong German sympathies.

Varig's flying equipment consists of seven planes, all German, including the one tri-motored Junkers Ju52. The routes which it is at present operating total some 940 miles, serving the principal towns of Rio Grande do Sul and extending to the Uruguayan border, with connections to Montevideo through the Uruguayan air transport company Pluna. At Porto Alegre, connection is made with the Condor system. Varig also maintains a German-equipped flying school.

VASP

The third Brazilian-flag airline under German control or influence is the Viação Aerea São Paulo, usually known as Vasp. This concern was formed in 1934 by a group of German-Brazilians of São Paulo State. It receives subsidies from the state governments of São Paulo and Goyaz and from the Federal Government. The State of São Paulo is the largest stockholder. The balance of the stock is ostensibly held by São Paulo citizens, but as with Varig it is generally believed that Deutsche Lufthansa controls a substantial interest. German influence is further entrenched through Lufthansa-Junkers equipment credits.

The managing director of Vasp is a German-Brazilian, Dr. Ismael Guilherme. Instruction of the company's personnel and aspirant pilots is in the hands of Commander von Bueldring, a German specialist designated by Lufthansa. Two of its six pilots are, or were, German applicants for naturalization. The other four, of whom one has a German name, are native-born. At the invitation of Lufthansa-Junkers, Dr. Guilherme made a four-months' visit to Germany, all expenses paid, in the early part of 1939. The purpose of the trip was to study German airline practice, and to arrange certain details in connection with the delivery of two new Junkers Ju52's ordered from Dessau, for which the State of São Paulo had provided an additional subsidy. Owing to the war these planes were not received. One of them is reported to have been en route to Brazil via Russia and Japan since last July.

The Vasp fleet consists of three tri-motored Junkers Ju52's and two small twin-engined planes of English make. The Junkers units are under the technical supervision of Syndicato Condor. Vasp operates approximately 1,200 miles of routes in São Paulo and contiguous states in southern Brazil. Its most profitable run is the direct line between São Paulo and Rio de Janeiro, operated twice daily. Its lines connect at various points with the Condor system. Present plans call for further extensions totalling 1,950 miles across the wild country of central Brazil to Cuyabá in Matto Grosso and to Carolina in the State of Maranhão, in order to connect at both points with Condor's "penetration lines." An international service from São Paulo to Asunción in Paraguay is also projected.

LLOYD AEREO BOLIVIANO

Condor's activities within Brazil and across the continent to Santiago are becoming increasingly coördinated with the activities of other air lines under German control or influence. On the west, Condor's Rio de Janeiro-São Paulo-Corumbá line meets with Lloyd Aereo Boliviano, which in turn connects with Lufthansa of Peru at La Paz to form a second German-dominated route between the Atlantic and Pacific coasts. For, while Lloyd Aereo is nominally a Bolivian company with forty-six percent of its stock held by the Bolivian Government, its managerial and operating personnel is German, seven of its nine aircraft are German, and its schedules are coördinated with those of the German network.

Lloyd Aereo Boliviano was founded in 1925 when the German colony at La Paz presented a German airplane to the Bolivian Government during the celebration of the centennial of Bolivia's independence. It thus antedates Condor as an active operator. There is small question that Deutsche Lufthansa has furnished equipment to Lloyd Aereo Boliviano on long-term contracts at low cost, and that in so doing has acquired an effective control over Lloyd Aereo's activities. Deutsche Lufthansa Peru is believed to hold thirty percent of Lloyd Aereo's stock.

Lloyd Aereo Boliviano's founder and present vice-president is Wilhelm (or Guillermo) Kyllmann, a German allegedly the head of the Nazi Party in Bolivia. Its general manager and chief pilot is Herman Schroth, also a German, who has held this position since 1927. Two of its pilots and most of its technicians are German. Its flying equipment consists of three tri-motored Junkers Ju52's, one twin-engined Junkers Ju86, three older Junkers and two American-built amphibians. Deutsche Lufthansa has reputedly offered to supply Lloyd Aereo with three new Junkers planes from Germany, though how delivery could be made is difficult to see. The Junkers planes now on hand are overhauled at Condor's Rio de Janeiro base. There is a continual interchange of personnel between Lloyd Aereo and Condor.

Lloyd Aereo now operates some 3000 miles of routes in Bolivia. Its importance lies in its being a primary link in one of the German transcontinental systems.

DEUTSCHE LUFTHANSA

From the beginning the Lufthansa-Condor combination contemplated a transoceanic air service between Europe and South America via the west coast of Africa. In February 1930 Condor inaugurated a weekly service between Rio de Janeiro and Natal. One month later this was extended experimentally to the Island of Fernando de Noronha, where the Condor plane delivered air mail for Europe to a Hamburg-American Line steamer. This in turn transported it to the Canary Islands, whence it was taken by a Lufthansa plane to Europe. This operation, which effected a two-day saving over the all-sea route between Rio and Europe, was of course only a temporary expedient.

In May 1930 the dirigible Graf Zeppelin made its first landing at Rio, presaging the regular airship service established between Germany and Brazil in 1931. After three years of lighter-than-air service the Brazilian Government and the Luftschiffbau Zeppelin of Friedrichshafen entered (March 1934) into a contract calling for a minimum of twenty airship trips per year. Syndicato Condor worked closely with the Luftschiffbau Zeppelin up to the time service was suspended following the disaster to the Hindenburg at Lakehurst in May 1937. Condor remains general representative for South America of the Deutsche Zeppelin-Reederei, operating company of the Zeppelin ships. If the Nazis are successful in imposing their "new order" on Europe and Africa, airship operation across the South Atlantic will probably be resumed.

In February 1934 Lufthansa, with Condor's close collaboration, established a regular weekly air-mail service between Central Europe and South America via the west coast of Africa. This was the first all-air transoceanic airplane route in the world. It was flown with the aid of catapult depot-ships stationed part way out from each coast. This Lufthansa-Condor mail service soon proved faster than that provided by the Graf Zeppelin; beginning in 1935 the airship was therefore reserved for passenger traffic only, the mail being carried by the flying boats. The latter traversed the South Atlantic from coast to coast in fewer than twenty hours, bringing the air trip between Central Europe and Rio de Janeiro to less than three days. Up to the outbreak of war this line operated with remarkable regularity. It served as a proving ground for various types of heavy flying boats developed especially for Lufthansa, and also provided valuable training in long distance over-water flights for many German military pilots.

In 1934, with the inception of all-air service from Europe, Condor extended its lines into Uruguay and to Buenos Aires. At the same time Deutsche Lufthansa extended its own operations from Natal to Rio and Buenos Aires. This in effect made for a dual German air system along the coast with Lufthansa operating weekly express flights for the European mails and Condor a weekly local passenger and mail service. More and more German personnel arrived to serve as flight crews or as instructors.

In October 1935 Condor established the trans-Andean line between Buenos Aires and Santiago de Chile. It was Captain Fritz Hammer -- co-founder of Scadta in Colombia (oldest of all the German air lines), one of the founders of Condor Syndikat and later to be the organizer of Sedta in Ecuador -- who secured the concession from the Chilean Government for this operation. The second pilot accompanying Hammer on his flight to Santiago for negotiations was Gustav Wachsmuth, who later became technical director of Sedta. These details indicate the close interrelationship between the various units of the German chain. Two years later, in 1937, service on the trans-Andean line became bi-weekly and operation was taken over by Lufthansa under a special authorization-decree of the Chilean Government. At almost the same time Condor doubled its hitherto weekly service on the long coastal route from Buenos Aires to Belém.

The four-year concession in the name of Syndicato Condor which Hammer had secured from the Chilean Government in 1935 was extended by decree in 1939 to run until December 24, 1942. This time, however, the decree designated Deutsche Lufthansa as the concessionaire. Lufthansa also obtained the right to operate in Brazil on a twice-weekly frequency but without the right to carry traffic within the borders of the country. Condor, as ostensibly a Brazilian enterprise, is of course privileged to engage in internal air commerce.

All of Lufthansa's operations in South America until the outbreak of the war, when they were temporarily suspended, have been regarded by well-informed quarters in Brazil and Argentina as more a military than a commercial activity. They were conducted primarily for the training of German military pilots on long distance flights and to further German penetration of Latin America, and not to make a profit.

After a short period of suspended service following the outbreak of hostilities in Europe, Condor took over all of Lufthansa's operations and flying equipment in South America. The establishment in December 1939 of service from Rome to Rio by the Italian airline Lati, under the management of Bruno Mussolini, provided an Axis substitute for the Lufthansa trans-Atlantic service. Some time ago Lufthansa announced that its through service between Berlin and South America would be renewed during the summer of 1940 with Dornier D036 fourengined Diesel-powered airplanes making the ocean crossing non-stop. Though this service could not be reopened as scheduled, it may quite possibly be under way in the fairly near future.

LUFTHANSA PERU

The most recent addition to the German airways network wears no camouflage. Deutsche Lufthansa A.G., Sucursal Peru (Peruvian Branch), is openly German, although registered as a Peruvian company. It was established in May 1938 by its parent concern. As yet it is a comparatively modest undertaking, operating only 1210 miles of routes with two Junkers Ju52 airplanes. But its potential importance is considerable, for it forms the westernmost link in the Nazi-controlled transcontinental airways system. It operates two weekly services between Lima and La Paz over separate routes, one of which connects at the Bolivian capital with Lloyd Aereo Boliviano's service to Corumbá. At that point, direct connection is made with Syndicato Condor's service to Rio, whence -- until Lufthansa renews its trans-Atlantic operations -- Lati's irregular service carries the mail to Rome. Lufthansa Peru's management is German, its flight personnel is German, the majority of its technical personnel and all its equipment are German.

The chief pilot of Lufthansa Peru, Capt. Berthod Alische, was recently in Iquitos, at one of the headwaters of the Amazon, to make arrangements for a service between that point and Lima. Should Lufthansa Peru inaugurate such a service its operations would then be within connecting distance of Syndicato Condor's "penetration line" in western Brazil. Some four years ago Condor made overtures to the Brazilian Government for a concession to extend its services westward to Tabatinga, 250 miles from Iquitos. At the same time the Peruvian Ambassador to Brazil announced that his Government would establish a corollary service from Lima to Ramón Castilla, just over the frontier from Tabatinga. Such a line would have no commercial advantages but would be a useful adjunct to Nazi penetration. The area it would cross lies on a direct line between Rio de Janeiro and the Panama Canal, astride the main tributaries of the Amazon River. Along such a diagonal route from sea to sea there are many points where secret bases might be established.

Since the outbreak of the war Lufthansa Peru has had difficulty in obtaining equipment and funds from the Fatherland: its flying personnel is on reduced pay and its program of expansion has been retarded. But this situation is expected by the Germans to correct itself before long. Before the war the company announced that it would open a service between Lima and Guayaquil. (Well-informed sources have suggested that what Lufthansa most desires at present is to extend its services up the entire coast of Peru in order to check on the location of British warships.) This service would connect with Lufthansa's affiliate Sedta, which operates between Guayaquil and Quito. Quito is some four and a half hours flight from the Panama Canal by Junkers Ju52, or little more than three hours by a plane with the speed of, say, the Focke-Wulf FW200.

SEDTA

The Sociedad Ecuadoriana de Transportes Aéreos, known as Sedta, was organized in 1937 by a group of Germans and Ecuadoreans headed by the late Fritz Hammer, who, as already mentioned, was active in promoting German airlines in South America as early as 1920. He had vision, an individualistic temperament and the head of a wind-tossed hawk. He was killed in March 1938 when he flew a Sedta plane into a mountain.

In February 1935, Hammer negotiated a tentative contract with the Ecuadorean Government, though more than two years elapsed before it was actually signed. The contract called for regular operations between Guayaquil and Quito, with unspecified extensions every five years, in return for which certain subsidies were to be paid. In the final arrangements there was a tie-up with a general barter deal between the German and Ecuadorean Governments. Shortly after Hammer's death Messrs. Paul Moosmeyer, director of Lufthansa's head office at Rio de Janeiro, and Grotewold, Lufthansa representative in Argentina, descended upon Quito. They had just inaugurated the Lufthansa-Lloyd Aereo Boliviano-Condor service between Lima and Rio. In Quito they made certain arrangements with respect to Sedta, though their first plan to absorb that company in an extension of the Lufthansa service from Lima into Ecuador was not accepted by the Ecuadorean Government. Nevertheless, Lufthansa gained control of Sedta through an equipment agreement and by providing a subsidy from the Rio office reputed to be thirty thousand sucres (approximately $2,100) per month.

Sedta has so far survived more than a normal share of ill luck. Its first plane, a light 4-passenger machine used by Hammer on a photographic mission, was damaged beyond repair before the final signing of the concession. Early in 1938 the company received two single-engined Junkers W34's. A few days after the arrival of the second one, Hammer flew it into a mountainside near Quito, killing all on board. Following the company's realignment with Lufthansa, a Junkers Ju52 was placed on the scheduled service between Guayaquil and Quito. This plane was destroyed in December 1938 when it spun in at Quito airdrome, causing fatal injuries to co-pilot Musselberger and minor ones to the passengers. It was promptly replaced by another Ju52 from the Lufthansa pool in Brazil. In September 1939 the remaining W34 was washed out in landing at Cuenca, and was also replaced by a Ju52 from Brazil. These two tri-motored Junkers now constitute the company's fleet. Sedta operates approximately 900 route miles. Despite this distinctly spotty record the attitude of the Ecuadoreans towards Sedta remains favorable. Its elastic rate structure is not paying cash dividends, but it has built up local good will. Nearly fifty percent of Sedta's passengers are said to travel free, while barely ten percent pay the full tariff.

Sedta is a corporation organized under the laws of Ecuador. Its total Ecuadorean capital is said to be about $12,000, and there is nothing to indicate that any part of this was ever paid in. Actual control rests with Deutsche Lufthansa through equipment credits or loans, other subsidies and the appointment of managing and technical personnel. The Minister of National Defense has recognized Sedta as a foreign entity despite its national disguise. Nevertheless, the company receives a subsidy from the Ecuadorean Government. The present managing director, appointed by Lufthansa after Hammer's death, is likewise a German, Gustav Adolf Wachsmuth, a graduate in aviation engineering from the Polytechnic School of Berlin, who spent ten years as a pilot with Syndicato Condor. Except for the traffic manager, all the company officials and operating personnel are Germans designated by Lufthansa. There are eight or ten pilots, co-pilots and radio operators of German nationality, plus a dozen or so other Germans in various capacities.

In accordance with the practice of all the German lines in South America, Sedta employs pilots sent to it from Germany for periods of instruction. One of its pilots flew for Lufthansa in China, Afghanistan and Arabia, and during the four months immediately preceding his transfer to Sedta he was pilot for Syndicato Condor on the Buenos Aires-Santiago line. Sedta's German personnel is hostile to the United States. Its members have attacked Pan American-Grace Airways from the start -- vocally, in the press, in resolutions before Congress and through local supporters. A well-informed source reports that a certain Schulte, employee in a bakery at Quito and reputed head of the Gestapo in Ecuador, pays substantial sums each month to Sedta. The German employees of Sedta live with German families, who are compensated in credits available in Germany. The pay of the German pilots, formerly 2000 sucres a month (about $140), has been reduced by more than half since the outbreak of war; but the pilots feel that they are working for a "cause."

Presumably, the company's continued operation depends on its ability to obtain funds from Germany. Evidently it is still able to do this, though probably in restricted amounts. In any case, Germany is believed to have substantial sums available in Ecuador. Sedta's continued operation also depends on whether a United States-operated service satisfactory to the Ecuadoreans can be developed to take the place of the German company. Since such a service could not earn its way, it would need financial support from the American Government. This support would be repaid through increased hemisphere security.

In July 1939 Sedta made a "good-will" flight from Quito to Bogotá, announcing it as the inaugural trip of a weekly service to Colombia. The proposed service did not materialize owing to the refusal of the Colombian Government to grant the necessary permission. But the announcement itself was significant in view of Lufthansa's previous discussions with the Ecuadorean Government relative to a northward extension of Lufthansa Peru to connect with Sedta's thrice-weekly service between Guayaquil and Quito. Meanwhile, Sedta continues its endeavors to expand northward into Colombia.

Sedta recently attempted to secure a contract from the Ecuadorean Government to operate a service to the Galapagos Islands. Such a line could have no possible commercial justification; but it is more than a mere coincidence that the islands happen to lie in a highly strategic location off the Pacific entrance to the Panama Canal. The Government did not sign the contract. Sedta has also been negotiating for a concession to operate a seaplane line into the jungles of eastern Ecuador. The Ecuadorean Army would find such a line useful for provisioning its frontier outposts. If Sedta should obtain this concession, its operations would, as in the case of Lufthansa Peru, be brought within easy distance of the Condor "penetration line" in western Brazil. This is believed to be Sedta's primary interest in this line, for it could scarcely be a paying proposition, even with a substantial subsidy. The Lufthansa strategy undoubtedly aims at creating a southeast-northwest belt line across the continent.

AVIANCA, FORMERLY SCADTA

The Sociedad Colombo-Alemana de Transportes Aéreos, called Scadta, was the first permanent air transport operation in the Western Hemisphere and one of the first in all the world, and was the forefather of the whole German airline network of South America. It was founded in 1919-20 by a group of ex-officers and pilots from the German and Austrian armies. Dr. Peter Paul von Bauer and Fritz Hammer, of whom we have already heard, were the leading spirits. Hammer was Scadta's technical director until the time he left to help in the formation of Syndicato Condor. Under the initiative and ability of its organizers, Scadta thrived. Within a few years its operations had spread all over the country, by land as well as by water.

In 1931 Dr. von Bauer, who remained at the head of Scadta until early in 1940, sold a considerable block of its stock to Pan American Airways under an arrangement whereby this stock remained in his name in a form of voting trust. Von Bauer continued as managing director and the German staff remained with him. Seven of the company's twelve officers were Germans. Twenty-one of its pilots were Germans, believed to be reserve officers on the payroll of the German Air Ministry. They were -- perhaps for that reason -- willing to accept lower wages than pilots of other nationalities. The fifteen German flight mechanics were also suspected of being trained co-pilots and reserve officers.

Meanwhile there arose, both in the United States and in Colombia, increasing concern over the fact that a German-dominated airline was operating within easy striking distance of the Panama Canal. At the outset efforts to "de-Germanize" Scadta met with little result. But in 1939 the Colombian Government succeeded in bringing about a merger between Scadta and Saco, a bona fide Colombian-flag company, and in "nationalizing" this new line -- Aerovias Nacionales de Colombia, known as Avianca -- by retaining the right to acquire a controlling interest in the enterprise at any time within ten years of its reorganization. Avianca now operates a total of 5,175 route-miles.

With this merger the situation became somewhat clearer. The new company was under Pan American's financial control. Nevertheless, von Bauer and his German associates remained, and difficulties were encountered in replacing the German operating personnel. United States or Colombian pilots could not take over from the Germans without first familiarizing themselves with the Scadta routes and it was feared that a program aimed at the gradual replacement of the German pilots would result in the immediate resignation of all of them, thereby crippling the whole organization. The thesis was therefore accepted that replacement of the German communications personnel would provide a sufficient check on the movement of aircraft to guard against a surprise attack on the Panama Canal. Nevertheless, pressure for the "de-Germanization" of the new company continued.

At the end of January 1940, von Bauer finally submitted his resignation. This was followed within a month or so by the resignations of Albert Tietjen, elected acting president when von Bauer resigned; Herman Kuehl, manager and vice president; Wilhelm Schnurbusch, technical director; and several others. (Schnurbusch was reappointed in an advisory capacity, for a period of two years.) But of the seventy-nine or eighty Germans who had been connected with the company's technical and managerial staff, there still remained a substantial number in the operating, maintenance and communications departments.

The blitzkriegs against Scandinavia, the Low Countries and France, with their disclosures of fifth column activities, finally gave the joint guardians of hemisphere defence serious alarm. On June 8, therefore, the Scadta-Saco merger was finally ratified by the stockholders, and immediately thereafter all of Scadta's German flight, radio and shop personnel still on the rolls were retired with substantial bonuses. But an approximately equal number of German office personnel, including the traffic manager and chiefs of postal and express services, still remained.

Immediately after the discharge of the pilots and technicians, the German Legation at Bogotá announced that no attempt would be made to repatriate citizens of the Reich, despite the fact that nearly all of them were military reserve officers. However, Associated Press despatches from Panama reported the departure during August of some twenty of these men with their families on a Japanese steamer bound for the Orient. Twenty more are said to have escaped on board the German freighter Helgoland which slipped out of Puerto Colombia on October 29 without obtaining proper clearance from the Colombian authorities. Some of the dismissed personnel remaining in Colombia are reported to have settled in the sparsely populated llanos in the eastern part of the country in order to take up "farming," an occupation which seems scarcely suited to airplane pilots, mechanics and radiomen. Two former Scadta pilots, Hans Hoffman and Fritz Herzhauser, have been conducting an unscheduled air transport service in this region under the corporate name of Arco. These two men have been in an excellent position to survey landing fields in Colombia's unpatrolled eastern plains, and even to lay out and stock such fields. Although the Colombian Government revoked their concession last August, it is reported that they are seeking to expand their activities.

Other Germans, formerly with Scadta, still remain in Colombia engaged in various activities. One suspects that the last has not been heard of the goodly company of Scadta alumni.

AEROPOSTA ARGENTINA

Aeroposta Argentina is an Argentine company; its board of directors is one hundred percent Argentine and all its capital is Argentine. It is an outgrowth of the French Aeropostale company. Its administrators, most of whom are well known in Argentine politics, are not at all pro-Nazi or pro-Fascist. The President and owner of the company, Ernesto Pueyrredon, belongs to one of Argentina's oldest families. Yet Lufthansa-Condor is in a position to dominate Aeroposta's policies.

Aeroposta dates back to October 1929. Its services have been efficiently operated and its traffic has steadily improved. At the present time the company is said to be on a paying basis. In 1936 the Pueyrredon group took it over from the government, which had been operating the line since its abandonment by Aeropostale in 1931. The new management soon found itself in financial difficulties. That was where Lufthansa-Condor stepped into the picture with its outwardly attractive long-term, pay-as-you-earn equipment rehabilitation proposal. Under this scheme three trimotored Junkers Ju52's were delivered to the company against a minimum cash outlay. The contract, of course, mortgaged Aeroposta's assets and future earnings, which in the event of default would provide the Germans with an effective wedge for further infiltration. Furthermore, it provided that specifically designated German pilots and mechanics should be employed for fixed periods, that German specialists were to train Aeroposta's Argentine personnel, and that Condor should direct and supervise the maintenance of the planes, including major overhaul in Condor's own shops, until final payment had been made in full. As a result of these terms Lufthansa-Condor has obtained a considerable degree of control over the line. Innocent-appearing equipment contracts of this sort have constituted one of the major weapons in Germany's penetration of South American skyways.

Aeroposta Argentina now operates approximately 1,600 miles of scheduled routes. It has for some time been seeking additional subsidized extensions, including an eventual junction in the northwest with the Lufthansa-affiliated Lloyd Aereo Boliviano. Junction is already made at Buenos Aires with the Lufthansa-Condor system. Aeroposta also connects at Buenos Aires with the Compañia Aeronáutica Uruguaya S. A., known as Causa, which operates to Montevideo and other points in Uruguay. Causa is a small company whose principal financial backing comes from the Supervielle family, Uruguayan bankers and ranchers. It is considered to be a Uruguayan enterprise, though under some degree of German influence. Its pilots are, or have been, Germans; its flying equipment consists of two Junkers Ju52 seaplanes; while the technical supervision of these aircraft, including major maintenance, is in the hands of Condor.

THE NAZI-FASCIST LINK WITH EUROPE

Fascist Italy has long had aërial aspirations in South America; but only in December 1939, after a lengthy period of preparation, did the Ala Littoria company finally inaugurate its widely publicized service from Rome to Rio. This line is operated by a heavily subsidized offshoot called Linee Aeree Transcontinentali Italiane, or more briefly Lati. Its managing director is Bruno Mussolini, the Duce's son.

The preparatory period gave certain indications as to the nature of the service which the Italians proposed to give. In Brazil the Ala Littoria staff, engaged ostensibly in preliminary studies and negotiation, comprised some thirty persons, most of whom were officers of the Regia Aeronautica. They made great efforts to curry Brazilian official favor, with some success. In Argentina similar efforts were less successful. Argentine opinion, since the Ethiopian, Spanish and Albanian episodes, has been decidedly antagonistic to the Fascists, despite the existence of a large Italian element in the population. The Argentines were also alarmed by the fact that the airplanes used on Ala Littoria's survey flights were bombardment craft -- one of them even carried machinegun mountings and a coat of camouflage. Popular indignation was so aroused over the proposed use of military pilots that the Argentine authorities flatly refused to permit this phase of the program.

Ala Littoria also acted as sales agent in South America for Savoia Marchetti bombardment planes. It controlled a pseudo-Argentine air line company called La Corporación Sudamericana de Servicios Aéreos. That venture nearly came to an untimely end when the Department of Civil Aeronautics suspended its service because the company's Italian pilots had refused to turn the Sudamericana planes over to Argentine co-pilots at the end of the first six months of operation, as prescribed in the terms of the concession. Shortly thereafter Sudamericana lost its operating license because of its persistent refusal to submit its planes to airworthiness inspection and test. The license was reinstated, however, when the company agreed to the government's demands, and Sudamericana is again flying its Macchi planes on daily schedule between Montevideo and Buenos Aires.

Ala Littoria's authorization to operate its transoceanic service as far as Argentina has not been exercised and has now lapsed. Presumably a new permit will be sought in Lati's name. Lati's Rome-to-Rio service continues in operation, though somewhat irregularly. At present it is the only air service across the South Atlantic, Lufthansa having suspended at the beginning of the war and Air France at the end of June 1940.[iii] The Lati route in Brazil is 1,800 miles long.

The Italian service has taken the place of Lufthansa for all Nazi-Fascist communication with South America. Air mail from South American cities to Central Europe "Via Condor-Lati" takes less time than from the same points to New York. Instructions, funds and propaganda material for Nazi agents in Latin America are transmitted in this manner from Berlin. The planes used, convertible bombers with a cruising speed of better than 220 miles per hour and a range of over 2,500 miles, are tri-motored Savoia Marchetti S83T's, known as "Green Mice." These planes go from Rome to Rio in three days via Seville, Rio de Oro (Spanish), the Cape Verde Islands (Portuguese) and Recife. The Atlantic crossing takes about nine hours.

CONCLUSION

This network of airlines controlled or dominated by the Germans and Italians now covers a good part of South America. The German components are integrated by the directive genius of Deutsche Lufthansa, and they are coördinated in matters of propaganda and public relations with the general program of the Wilhelmstrasse. Through its Fascist partner, the Germans control the only airway connection now operating between Europe, Africa and South America. As for the future, the Germans are planning to expand their airways in and to South America. Dr. von Bauer is understood to be preparing such plans to be put into effect after the war.

It need hardly be said that neither the present activities nor the future plans of the Axis-dominated airlines in South America are advantageous to their American competitors; nor are they compatible with our policy of hemispheric security. Several of the South American republics are becoming increasingly aware of this latter fact and of the threat to themselves inherent in the activities of the Nazi and Fascist air transport enterprises. Yet it is not sufficient merely to be aware of the situation; prompt and effective measures are required. That such measures are possible is evidenced by the recent progress in "de-Germanizing" Scadta. All the South American governments should coöperate in a policy of nationalizing whatever airlines under their flags which engage in activities that are actually or potentially subversive, and they should scotch the misuse of commercial permits granted to the Nazi and Fascist lines by cancelling them if necessary.

Some progress is being made toward these goals. In Ecuador the government has permitted Pan American-Grace to extend its routes so as to include certain points until recently served only by Lufthansa's affiliate Sedta. In both Brazil and Argentina, the governments are making concrete efforts to eliminate the employment of non-native-born pilots by Syndicato Condor and certain other lines operating under the Brazilian and Argentine flags. Pan American is stepping up its schedules to Latin American points and increasing frequencies of service by placing new aircraft of greater speed and range in operation, day and night, over routes more direct than those flown heretofore. But more remains to be done.

For example, a wisely planned and coördinated program is needed for the replacement of equipment on the national airlines of the Latin America countries. Many of the South American air carriers seriously require new aircraft, spare parts and other matériel which they can no longer obtain from Germany. The United States could well step into this breach. If aircraft, engines and accessories were to be supplied to the national airlines on terms no less favorable than those provided by the Lufthansa-Junkers equipment contracts, there would be little inducement for the lines to revert later to German equipment. We might go so far as to assist the national lines in liquidating these German contracts. In return for this, and in full coöperation with the governments concerned, the lines should be induced to divest themselves of all German control, or influence, and personnel.

To accomplish all this we might have to aid in providing trained flying and technical personnel for an interim period, under some arrangement whereby the lines would not be burdened with too great an increase in pay-roll expense over the cost of the present German staffs. We should make every effort to coöperate in training more Latin Americans to be competent transport pilots. They make excellent aviators when properly schooled, but there is at present an insufficiency of experienced men to staff the national lines. We can furthermore aid the airlines themselves by providing the local departments of civil aeronautics in some of the Latin American republics with ground equipment and installations on liberal terms, as well as technical collaboration where desired. The Export-Import Bank of Washington is now in a position to extend its facilities for such purposes.

In all of this the coöperation of the South American countries is, quite evidently, essential. There is reason to believe that this coöperation would be forthcoming, in most cases at least, if we presented them with a clear and properly coördinated program. Such a program will, of course, cost a considerable sum. It will need both the financial and technical backing of the United States Government. It will require the support of the War and Navy Departments and of the Council of National Defense in the matter of priorities on equipment and flight personnel. But there can be no question that it would pay high dividends in terms of national and hemispheric security.

[i] Condor's service between Corumbá and Porto Velho is reported temporarily suspended.

[ii] La Nacion of Buenos Aires, reporting this incident on September 15, 1939, offered a possible explanation. The German steamer Monte Pascoal had left Buenos Aires on September 9 taking some two hundred Germans, including part of the Lufthansa personnel, back to military duty in the Fatherland. Information as to the position of the Ajax and Exeter on September 10 would have been of extreme value to the Monte Pascoal. It is quite possible that her captain received such information from the Condor plane. There is no report that the German vessel was intercepted.

[iii] For a description and map of transatlantic air routes see Edward P. Warner's "Atlantic Airways," FOREIGN AFFAIRS, April 1938.

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