The accidents and the publicity surrounding Mitchell's court-martial did have a beneficial effect. They led to the passage of the Contract Air Mail Act, better known as the Kelly Act of 1925, which encouraged private operators to carry the mail, rather than the U.S. Post Office Department. President Calvin Coolidge convened the Morrow Board, which investigated U.S. and civil aviation and made recommendations that led to the Air Commerce Act of 1926, legislation that established a Bureau of Civil Aeronautics to regulate civil air navigation, license pilots, inspect aircraft, establish and maintain air routes and navigation facilities, and promote the growth of civil air transport service.

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It was at this point that the Guggenheims quietly stepped onto the national stage. Harry, after a trip to Europe in 1926, was deeply impressed with the postwar aeronautical work he observed there, and he became fiercely interested in promoting aviation in this country. He proposed the establishment of a school of aeronautics at New York University's College of Engineering. Also, he suggested that a campaign be launched among a group of wealthy individuals to raise $500,000 for the school's construction. He went before his father to practice an impassioned presentation that he intended to make to such a group. His father listened carefully. After thinking about what he had heard, the elder Guggenheim said he saw no need for his son to involve anyone else or to launch a fund campaign–he would provide the half million dollars.

On October 23, 1925, ground was broken for construction of the nation's first school of aeronautics at a major American college. In a letter to the university, Daniel Guggenheim stated that he saw the need for placing aeronautics on the same educational plane that other branches of engineering enjoy….Aviation is capable of rendering such service to the nation's business and economic welfare, as well as to its defense, that universities should concern themselves with the education of highly trained engineers capable of building better and safer commercial aircraft.

At the groundbreaking ceremonies, Daniel said, As I am an old man whose active days are past, I shall dedicate the rest of my life, with the aid of my son Harry F. Guggenheim, to the study and promotion of the science of aeronautics….Were I a younger man seeking a career in either science or commerce, I should unhesitatingly turn to aviation. I consider it the greatest road to opportunity which lies before the science and commerce of the civilized countries of the earth today.

One guiding realization motivated both Guggenheims. They believed that aviation's economic future lay in the development of commercial passenger transportation, but that such development would, in turn, depend on public acceptance of air travel as safe, practical and commercially profitable.

Although he did not announce it then, Daniel Guggenheim had decided to take an active leadership role and to do more than make a grant to one university. He would fund more schools of aeronautical engineering and help develop the industry that would absorb their graduates.

In a January 1926 letter to then Secretary of Commerce Herbert Hoover, the senior Guggenheim announced the establishment of the Daniel Guggenheim Fund for the Promotion of Aeronautics. It would not be a permanent fund but one that would bring about such an advance in the art and science of aeronautics and aviation that private enterprise will find it practicable and profitable to 'carry on,' and thus render a continuous and permanent endowment for this purpose unnecessary. The fund had an initial grant of $500,000 to which $2 million was later added, and was followed by a third grant of $500,000. It had four general purposes:

• To promote aeronautical education both in institutions of learning and among the general public.
• To assist in the extension of fundamental aeronautical science.
• To assist in the development of commercial aircraft and aircraft equipment.
• To further the application of aircraft in business, industry, and other economic and social activities of the nation.

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