In His Own Words
Jack Frye, world's youngest and most successful airline president and aviator legend, weary of Howard Hughes' antics, relinquishes his powerful position, and the company he built!
as told to daily publications around the United States
SPLIT WITH HUGHES
President Since 1934
Differed with Controlling Stockholder
On Financial Policies
Kansas City Missouri, February 21, 1947
The Howard Hughes interests assumed complete control of Transcontinental & Western Air today in a managerial shake-up that brought the resignation of Jack Frye, TWA's president since 1934.
Announcement of his resignation and that of E. Lee Talman, senior vice president in charge of transportation, came in a statement from the Hughes Tool Company of Houston, Tex., owner of 46 percent of the line's outstanding stock.
The development followed weeks of speculation about rumors that Messrs. Frye and Hughes were at odds over proposed refinancing of the company. Recently the Hughes interest advance a $10,000,000 loan.
Until then, an executive committee of A. V. Leslie and Palmer Bradley, Mr. Hughes' representatives, and John A. Collings, transportation vice president and acting executive vice president, will manage the airline. Its system stretches from San Francisco to New York and half way around the world to Bombay.
Today's statement made no reference to Paul E. Richter, the airline's executive vice president who is now vacationing in Florida. There was speculation in some aviation circles that he might become the new TWA head. He has been associated with the airline since its inception.
Mr. Frye, a pioneer in air transportation, began flying in 1923 and in 1927 started the first airline to operate east of Los Angeles. It was the Standard Airlines and went as far as Phoenix, Ariz., and El Paso, Tex. He became vice president of Transcontinental & Western Air, Inc., in 1930, and its president in 1934.
During his long years of flying, much of which was done on a financial shoestring in his early days, Mr. Frye has set three transcontinental records. Two of them came in 1934, the first 13 hours 4 minutes and the other 11 hours 31 minutes. On April 17, 1944, with Howard Hughes he piloted a four-engine fifty-two passenger Lockheed Constellation from Burbank, Calif., to Washington D.C., in 6 hours 57 minutes 51 seconds, another transcontinental record.
He and Mr. Richter have been closely associated since they began flying. Several years ago when TWA was running into its first financial difficulties, Mr. Frye interested Mr. Hughes in the airline.
The airline's financial difficulties came to a head with a pilots strike in October in which its planes were grounded for 27 days at an estimated loss of $7,000,000.
First indication of the shake-up in the management came two weeks ago with the resignation of T. R. Wilson as chairman of the board and head of the international division.
Washington D,C, , Feb. 21, AP
Following is the text of the statement by Jack Frye on his resignation as president of TWA.
"I have decided that I will not stand for re-election as president of TWA or as a member of its board of directors. I have arrived at this decision because I am not in agreement with the policies of the controlling stockholder with respect to the financing of TWA and the operation of its world-wide routes.
"It has not been easy to come to a decision which brings to an end a close personal association with many who have worked with me during the past twenty years in the building of TWA. However, the satisfaction of having completed the development program which was set out to accomplish in the early days of air transportation can exist in full measure only if this great system is operated soundly and with full recognition of our responsibilities to the public and to our Government.
"This can not be achieved without full accord between ownership and management on matters of basic policy, and I see no likelihood of such a situation developing. I prefer to withdraw from my present responsibilities.
"To every one in TWA I extend my sincere thanks for all you have done to help in making TWA one of the finest air transportation systems in the world.
"The foundation of a transportation system is its routes. The TWA routes are now second to none among the world's commercial airlines. TWA is potentially one of the most profitable of the world's airlines and it should provide good futures for you who are TWA.
"If policies with which I disagree are unsound, it will only be a question of time until they are changed, so I urge you individually and collectively to do your best for the TWA you have helped to build."
The Hughes Tool Company, which controls 46 per cent of the capital stock of TWA, issued a statement here yesterday that it had no intention of separating the transcontinental and international divisions of the airline, as recent reports stated. Hughes Tool also said that a new program of management for TWA designed to strengthen its financial status and to implement refinancing plans would be presented to stockholders within a few days.
Speaking for Hughes Tool, A.V. Leslie, chairman of the executive committee of the airline's board of directors, said that a recent report that Hughes Tool felt that the international division of TWA should be disposed of because it was responsible for the carrier's serious financial plight was "without any basis of fact and is contrary to the opinion held."
Concerning the new program to be suggested to stockholders, the company stated:
"A basic step in the new program involves the election of a new board of directors, probably of eleven or twelve members, to replace the present board of twenty-four. This proposal will be incorporated in the notice to the stockholders accompanying the mailing of proxies for the annual meeting of the airline in Kansas City next April 24. At that meeting stockholders will vote on the new board nominees.
"Following the election of the new board, officers will be chosen by the board to manage the airline for the ensuing year. T.B. Wilson, formerly chairman of the board, Jack Frye, president, and E. Lee Talman, senior vice president, will not continue in administrative capacities. All are now board members. Mr. Frye and Mr. Talman, however, will probably continue in consulting capacities.
"An executive committee is functioning in a management capacity pending the election of new officers. This committee is composed of A. V. Leslie, chairman; Palmer Bradley and John A. Collings. The Washington executive offices have been closed. Headquarters of the company will remain in Kansas City, Mo., with the international division offices in New York City."
Mr. Leslie formerly was with the Mellon banking interests in Pittsburgh. Mr. Bradley is a senior partner of a prominent law firm in Houston, Tex. Mr. Collings, currently serving as acting executive vice president of TWA, is one of the airline's senior employees and a long-time operating executive.
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