American Airlines Inc., a pioneer in U.S domestic aviation that celebrated its 50th anniversary last year, also was a pioneer in making political contributions from corporate funds.
At least, that was the recollection of American's former chairman, Cyrus R. Smith, in 1975 testimony to the Securities and Exchange Commission which was made public for the first time yesterday.
And while Smith said he believed his competitors did as much or more, the American disclosure is one of the few public admissions that corporate funds were used for political contributions four decades ago.
"Since the early days, we establsihed a general policy and everybody was acquainted with it," Smiths said.
In essence, American Airlines followed these rule since "the beginning," according to Smith:
"One was that we had very little money" and had to be "very economical in anything we do."
"Annual expenditures should be kept ot a "reasonable amount."
"Preference in no way should be given to buying tickets to political affairs, an dthe airline firm usually purchased two to three tickets to a politican's party instead of a full table, "like a lot of other people did."
In some cases, Smith said, he made personal contributions in lied of corporated money "where people I know well were involved."
Smith, who started with American in 1930 and was a company officer for more than four decades, got to know many people but in the early years "we got the reputation of being very niggardly among both airlines and politicians," he testified.
In most years since 1934, the total amoutn of political contributions "was much less than" $25,000 a year, Smith said. "I just wanted to make sure that we didn't go off, the deep, end by somebody making promises. It was established in the policy that we never gave nobody any considerable amount of help."
That pattern appears to have been followed into the current decade according to American Airlines doc documents. Between 1964 and 1972, for example, the airline firm disbursed about $227.000 from its secret corporate fund for donations to 71 previous and past members of Congress, an average of slightly more than $25,000 annually for the 9 years.
Americans paid a civil fine of $150,000 in 1975 to the Civil Aeronautics Board in the wake of that agency's investigation of political payments. However, the airline's contributions included $55,000 to former President Nixon, which apparently violated Smith's stated guidelline that no politician should get "any considerable amount."
But Smith told the SEC that in meetings of American officials where political payments were discussed, no ceilings ever were established. They were told only "to follow good judgment."
In every corporation, Smith stated "You've got . . . the same thing, requests for contributions, and you get demands in a national election year, and you not only have all of those congressmen, and all of those senators, and all the presidents, and all the county officers, and all the city officers, so that one year you might have to look at twice as much as you did in the year before."
Other contributions made by individuals helped boost American's total contributions. Smith recalled that in 1967, the last full year he was chief executive, he personally gave $20,000 to $25,000 in addition to the company money. CAPTION: Picture, The Ford [WORD ILLEGIBLE] -Motor, was a workhorse for American Airways, American Airlines' predcessor. AP