On August 1, 1907, the U.S. Army Signal Corps formed an Aeronautical Division. This action came only three-and-a-half years after the Wright brothers flew the world's first powered airplane at Kitty Hawk, North Carolina. At first, however, the Aeronautical Division was mainly interested in balloons and dirigibles instead of heavier-than-air flying machines. The Army had already used manned balloons for aerial observation during the Civil War and Spanish-American War in the 19th Century. The Aeronautical Division accepted delivery of its first airplane from the Wright brothers in 1909. Under the leadership of brave pioneers such as Capt. Benjamin D. Foulois, a small band of early Army Airmen experimented with various aircraft and formed an operational unit, the 1st Aero Squadron, in December 1913.
On July 18, 1914, as a result of congressional legislation, the Army established the Aviation Section of the Signal Corps to improve its fledgling flying capabilities. Just a few weeks later, Europe plunged into the massive military struggle that became known as World War I. The Central Powers (primarily Germany, the Austro-Hungarian Empire and the Ottoman Empire) fought the Allied Powers (led by Britain, France, Italy and Russia). By April 1917, when the United States entered the war on the side of the Allied Powers, each of the major combatants had developed aircraft industries far superior to those of the United States.
Despite optimistic plans and ample funding, the United States proved unable to catch up to the European nations in aviation technology. Responding to criticism of the American aircraft effort, President Woodrow Wilson created the Army Air Service and placed it directly under the War Department on May 24, 1918. By the time of the armistice in November 1918, the Air Service had grown to more than 19,000 officers and 178,000 enlisted men while American industry had turned out 11,754 aircraft (mostly trainers like the JN-4 Jenny). The Air Service soon lost most of these people and planes in a rapid demobilization right after the war.
Although failing to deploy competitive combat aircraft, the United States had sent many fine Airmen to Europe. Flying mostly French-built planes, they distinguished themselves both in Allied units and as part of the American Expeditionary Forces (AEF) led by Gen. John J. Pershing. By the time Germany surrendered, Brig. Gen. Billy Mitchell had honed many of the AEF's aero squadrons and groups into a formidable striking force. While the outcome of the Great War was decided primarily by horrible attrition on the ground and a strangling maritime blockade of Germany, air power had shown its potential for autonomous offensive operations as well as providing valuable support to surface forces. The United Kingdom had recognized the importance of air power by creating the Royal Air Force, independent of the British Army and Royal Navy, in April 1918.
Notwithstanding a bitter struggle by visionaries such as Billy Mitchell, the United States did not follow the British lead and create a separate air force. The Army Reorganization Act of 1920 made the Air Service a combat arm of the Army, and the Air Corps Act of 1926 changed its name to the Air Corps on July 2 of that year. On March 1, 1935, General Headquarters Air Force (GHQ AF) assumed command of U.S.-based Air Corps tactical units, which previously had been parceled out to regional Army corps commands. Yet even after Germany, Japan and Italy began to build up their armed forces, the Air Corps (as well as the rest of the Army) remained a small, peacetime establishment with only limited funds for growth or modernization.