Rickenbacker deplored the poverty in Germany and concluded it could lead to no good end, so the first part of his proposal was for a reduction in the amount of the German indemnity for the war forced on her at the Versailles Conference, as well as an extension of the terms that would “make it possible for her to pay the balance.” The second part of the plan consisted of a bridge loan from the U.S. government that would allow Germany to meet her immediate indemnity payments, as well as “stabilize the government and get the currency on a firm basis.”
He saw it as a no-lose scheme that would allow Germany to repay the European Allies, which, in turn, would allow them to repay the war loans made to them by the United States, so that “it would be merely a matter of bookkeeping,” and everyone would settle up and live happily ever after. He released this manifesto to the press, which gave it widespread coverage, but that’s where the matter ended. Nobody in Congress wanted to fool with it and the general public didn’t care. The war was over and Europe was a long way off.
When the Rickenbackers returned to Detroit they moved into an apartment at Indian Village Manor, an exclusive new building overlooking the Detroit River and Lake St. Clair. There, with the antique furnishings and artwork she had purchased in Europe, Adelaide created a tasteful and sumptuous home for dinner parties and other obligations of an automotive company executive.
Eddie had taken the position of vice president in charge of sales for the Rickenbacker Motor Company. He took his work seriously, and soon the company had some five hundred dealers in the United States and about three hundred abroad. Profits were steady, if not huge, but the company paid dividends, increased its stock issue, and by the end of 1923 reported a profit of $511,060.15 Then, to his eternal regret, Eddie pressured the directors to include four-wheel braking on all models for the next year.
The system had been considered too innovative for the first models, but Eddie had driven the European race cars that used it and insisted they were the wave of the future. Unfortunately, all he did was set a trap for himself.
Rickenbacker Motors announced with great fanfare and a national advertising campaign that its 1924 automobiles would include a reliable, state-of-the-art, four-wheel braking system. This caught the other auto companies by surprise, because they had large inventories of cars and it was too late for them to change for the model year.
Their response to the Rickenbacker announcement was immediate and devastating. Led by the prominent automaker Studebaker, full-page ads were taken out charging that the four-wheel braking system offered by Rickenbacker was inherently unfeasible and unsafe. In rain, these rival attack ads claimed, the brakes would cause a car to skid out of control. Further, the ads said that oftentimes the front-wheel brakes would lock up and hurl the passengers into (or through) the windshield. Also, it was widely suspected by many Rickenbacker dealers that these same competitors had backed a whispering campaigna to start rumors that a huge number of accidents, many with broken necks and other terrible injuries, were being kept out of the papers by Rickenbacker bribes.16
Here was the dilemma Rickenbacker Motors was caught in: even though the unfavorable publicity was affecting sales, the company couldn’t go back to two-wheel brakes after making its announcement of the superiority of four-wheel brakes. All the company could do was hunker down and try to move the cars they had.
At the same time, in 1925 the American economy went into recession. Many of the Rickenbacker dealers were going broke, and Eddie put all of his own considerable savings into shoring them up. Then he borrowed more from banks or got credit from suppliers.
But the recession became worse. One of the directors of the company, a man respected for his knowledge and wisdom, was killed in a car accident. The company stock dropped. Then a new competing automobile appeared, a Chrysler, with a fashionable design, dependable engineering, and a reasonable price. There were more than one hundred U.S. automakers in the 1920s, and dozens of them foundered, including, at last, Rickenbacker Motors. The owners began quarreling among themselves and Eddie resigned his position as vice president, hoping that might inspire some miracle that would bring the company back.
In 1927 the Rickenbacker corporation filed for bankruptcy. Eddie was thirty-six years old, broke, unemployed, and $250,000 in debt. It is the ultimate measure of a man what he does under tremendously adverse circumstances such as these, and Rickenbacker was no piker. Friends advised him to file for personal bankruptcy, but he would have none of it. His own words bear repeating: “I owed the money, and I would pay it back if I had to work like a dog to do it. I was not ashamed and not afraid. Failure was something I had faced before and might well face again. I have said it over and over: ‘Failure’ is the greatest word in the English language. Here in America failure is not the end of the world. If you have determination, you can come back from failure and succeed.”
It was certainly a test of Rickenbacker’s character. He was a man of his times, and of his country. He had come up from nothing, an immigrant family’s child of the streets who’d sold rags and bones at the age of six and climbed up the ladder, rung by greasy rung, a Horatio Alger story without the pervasive helping hand. Though he couldn’t know it then, his severest trials lay in the future, with only the barest hank of hair or piece of bone between himself and eternity. Without a winning mind-set such as he had, Eddie Rickenbacker never would have made it.
IN THE MEANTIME a showdown was brewing in the court-martial of General Billy Mitchell. Mitchell had accused the Army Air Service hierarchy of behavior that was in his estimation criminal in its neglect of planes and pilot training. He reasserted his demands for a separate air force—or at least one that was controlled by flying officers—ideas that did not sit well with the twelve generals who sat on the court-martial jury, including General Douglas MacArthur, who thought Mitchell was insubordinate.
The highlight of the trial came when Rickenbacker, who had once been Mitchell’s driver in France—and was still the most famous airman in America—took the oath to testify in Mitchell’s behalf. As the final witness in the trial, he told the court that the United States ranked an embarrassing seventh in aviation power, behind France, England, Italy, Germany, Russia, and Japan. He had some sharp clashes with the court-martial officers, including Major General Hugh A. Drum, who insisted to Rickenbacker that he could defend Washington with a dozen antiaircraft guns.
Eddie responded with a tirade, pointing out that when the United States entered World War I there was no American aircraft industry, and that hundreds of pilots lost their lives needlessly flying obsolete foreign planes. He excoriated the military brass for denying pilots parachutes in the war.
“This nation owes General Mitchell a debt of gratitude,” he told the court, “for daring to speak the truth. He learned his lesson from the only true teacher—experience. It is pathetic to think that military leaders can destroy the life of a man who has done us the service Mitchell has … It is a crime against posterity. This nation will pay the price of its selfishness. Not perhaps in this generation, but in that of the boys who are growing up today, or their sons.” In the end it all came to naught. Billy Mitchell was found guilty of conduct prejudicial to the military service and suspended from active duty for five years without pay. “I might as well have been talking to a stone wall,” Rickenbacker said bitterly.
EDDIE RETURNED FROM THE TRIAL to the cutthroat world of big business with a splash. The first thing he did was to buy the Indianapolis Speedway, home of the Indianapolis 500.
Of course it wasn’t quite as simple as that. But Eddie’s very name was leverage. He had investigated buying a small company in Indianapolis, Allison Engineering, which manufactured auto and airplane parts, but its owner, who was also looking to sell the Speedway, talked Eddie into buying it instead of the engineering plant. It hadn’t taken much talking. Eddie had many fond memories of his glory days on that track, and the alternative was that the property—which was now surrounded by the fast-growing city—would have been br
oken up and sold off in real estate parcels.
A banker acquaintance of Eddie’s in Detroit had told him after the bankruptcy of Rickenbacker Motors that if he ever had a business proposition to come to him with it for financing. Eddie had been profoundly grateful that such an offer had been made when he was broke, unemployed, and deeply in debt. Now Rickenbacker went to him with a plan to finance the Indianapolis 500. The bank floated a $700,000 bond issue—the purchase price for the property—and within a few months Rickenbacker held a 51 percent interest in the Indianapolis Speedway, with the bank holding the other 49 percent as its fee. He was back in business.
First off, Eddie resurfaced the track, putting asphalt over the old bricks of what is still known in car racing circles as the Brickyard, making it smoother and safer. Since the race was only a one-day-a-year event, he added an eighteen-hole golf course to generate more revenue. Moreover, he persuaded the National Broadcasting Company to begin airing the entire race on its nationwide radio network—a huge coup.
Still, Rickenbacker needed more income to pay off his creditors, so he took a job at General Motors for $12,000 a year as vice president for sales, promoting and publicizing the company’s LaSalle and Cadillac brands. He put a man in charge of the Speedway operation in Indianapolis, and GM agreed that he could have a leave of absence during the month of May when the Indianapolis 500 was held.
The job with GM necessitated working out of New York City, where Eddie purchased a comfortable, rambling home in Bronxville, an affluent suburb in Westchester County. He needed the space because by now he was the father of two young boys, William Frost, age one, and David Edward, three. Adelaide and Eddie had adopted them, since she could no longer have children of her own.
In May 1927 Charles Lindbergh stunned the world when he flew nonstop between New York and Paris, landing in the dark at Le Bourget airport, which had so impressed Rickenbacker when he’d visited there in 1922. Eddie was just as excited by the feat as everyone else, but he also realized he himself was no longer the most famous airman in America.
As usual, Eddie took his work at GM very seriously, as he had when he commanded the 94th Aero Squadron. Rickenbacker refused to sit behind a desk, instead traveling into the field visiting hundreds of dealerships throughout the country. Once he called on seventy-one different dealers in eighty-one days. After Eddie had made an assessment of an operation, he would call the entire workforce together and harangue them with lengthy motivational speeches offering encouragement, criticism, and advice. In the end he recommended to GM that it discontinue its LaSalle model—not that there was anything wrong with it—because it was competing against its own Cadillac brand. Next season, LaSalle was no more.
Meanwhile, using leverage again to do a deal, Rickenbacker at last purchased Allison Engineering, and soon he sold it to GM, pocketing a tidy sum, most of which went to reduce the notes to his creditors.
In June of 1929 GM bought the Fokker Aircraft Company, which was connected to Trans World Airlines, and Eddie was asked to be vice president in charge of sales. It seemed ironic that he would now be working for the same outfit that built airplanes that had tried so hard to kill him, but he accepted. It was the end of his affiliation with the auto industry and the beginning of an illustrious career in commercial aviation.
By now Fokker was building large passenger planes. It had introduced the famous Fokker trimotor F-10 in the mid-1920s and was now producing a four-engine plane, the F-32, which had “an unfortunate habit of blowing the cylinder heads off.” When this happened, Rickenbacker said, the huge cylinder head, or part of it, would fly back into the rear engine, “which would throw it in any direction.” A friend of Eddie’s told of the time he was enjoying a flight between San Francisco and L.A. when the cylinder crashed through the window by his seat, flew past his nose and out the other window, and smashed into the opposite engine. These were the kinds of things that needed to be dealt with.
During his time at Fokker Eddie acquired the Pioneer Instrument Company, which would be so beneficial to Jimmy Doolittle’s blind-flying experiment with the Guggenheim fund. When news of Doolittle’s perfect blind flight broke into the headlines later that same year, Rickenbacker, perhaps more than anyone else, knew what a godsend it would be for commercial aviation. At last airlines could adhere to firm schedules, without fear of fog and storms.
In the autumn of 1929 the stock market crashed. Especially hard hit were the automotive and aviation industries. Since no one had lived through anything like it before, or ever heard tell about such a thing, no one knew what to do or how long it would last.
Amid the gloom, the War Department announced on July 14, 1930, that Eddie Rickenbacker would be awarded the Medal of Honor, “For conspicuous gallantry and intrepidity above and beyond the call of duty in action against the enemy near Billy, France, September 25, 1918.” The citation referred to his first day as commanding officer of the 94th Aero Pursuit Squadron when, flying alone over enemy territory, he took on seven German planes—five Fokkers and two Halberstadt photography aircraft—shooting down two and causing the others to flee.
This honor had been initiated several years earlier by a Michigan congressman, Robert Clancy, and was supported by everyone from Rickenbacker’s squadronmates from the Hat in the Ring gang to Charles Lindbergh, who had also received the award.
It had been opposed, however, by prohibitionists in the Senate, who pointed to newspaper stories revealing Eddie’s penchant for flouting the Volstead Act by having cocktails, and also by high-ranking staff members in the army who remembered Eddie’s spirited defense of Billy Mitchell. These objections were soon overcome when the American Legion became involved; the organization represented too many votes to ignore. On November 6, 1930, at Washington’s Bolling Field, President Herbert Hoover slipped the blue ribbon of the medal over Rickenbacker’s head, with Adelaide and the boys in the forefront of those looking on.
Afterward, there was a substantial air show, including a performance by the 94th Aero, then located in Michigan. Eddie was incensed, however, that Billy Mitchell was left off the invitation list. At one point, Eddie made an attempt to persuade Hoover of the importance of an independent air service but to no avail. “The president was polite and courteous,” Eddie said, “but his interests were not in military aviation.”
In March 1931 a TWA Fokker trimotor airliner en route to Los Angeles was involved in a horrible crash over the wheat fields of Kansas. It was the kind of accident that every aviation company dreads. A wing tore off the plane as it flew out of a low cloud formation. It simply nosed over and dove straight down, burying itself several feet into a cow pasture. A farmer had watched horrified as five passengers fell out and bounced when they hit the ground. Everyone of course was killed. Among the dead was the University of Notre Dame’s legendary football coach Knute Rockne. It was accidents such as this that gave Eddie fits.17 In 1932 GM moved the TWA Fokker operation to Baltimore, but without Eddie Rickenbacker, who did not wish to move his family away from New York.
Rickenbacker soon became involved in a series of aviation companies owned by two young Wall Street geniuses, W. Averell Harriman and Robert Lehman. During the next few years he found himself serving as vice president of American Airways, which had east-west routes serving between New York (whose only airport was in Newark, New Jersey) and the Midwest. He had tried to persuade the owners to buy a small outfit then called Eastern Air Transport, which flew passengers on a north-south route from New York to Atlanta and Florida, but he was rebuffed. A year later American was bought by E. L. Cord, manufacturer of the Cord and Auburn automobiles, who moved the home business offices to Chicago, again without Eddie Rickenbacker, who declined to uproot the family and take the boys out of school.
It was around this time that the big airmail brouhaha erupted, which put Rickenbacker in direct conflict with President Roosevelt. He’d voted for Roosevelt in the election of 1932 but was highly critical of what he called Roosevelt’s “socialistic” agenda, which
is how Eddie viewed the New Deal. He believed that Roosevelt’s original platform “was sound and conservative and what the country needed.” But it seemed to Rickenbacker that when he got into office the president “made a complete 180-degree turn, and took off in the other direction.”
In December of 1934 an opportunity presented itself that would change Rickenbacker’s life forever. He was approached to become the general manager of Eastern Air Transport, now known as Eastern Air Lines after the government airmail fiasco. It was owned by his old employer GM, and it was losing money to the tune of $1.5 million that very year. Eddie saw it as an opportunity to get back into aviation and accepted the position as a challenge. Florida was gaining a reputation as a vacation destination, and Eddie thought there could be a fine opportunity flying people there, with stops all along the East Coast. New York to Miami by train took two days, whereas an airliner could make it in a matter of hours.
Rickenbacker approached the problem with his usual vigor and persistence, the same way he had with the car companies, popping up everywhere from the Eastern ticket counter selling tickets to the cockpit flying planes; from the mechanics’ shops changing spark plugs to the men’s rooms off the lobby inspecting for cleanliness. He analyzed every aspect of the business, then gave the workers inspirational speeches. He was a stern taskmaster, but employees soon came to understand that he was fair and, more important, they saw that he was working day and night to improve the company. In those days widespread passenger travel was just beginning, as airlines started designing planes with creature comforts in mind—large enclosed cabins, comfortable seats, heating, and meals. Even so it still took at least twenty-five hours to fly from New York to Los Angeles, including several different airlines and changes of planes and more than a dozen stops. With Eddie now running Eastern, the company made $35,000 in 1935. It was a start.