The official report of the Battle of San Juan Hill, filed by Major General William Shafter, stated that the service rendered by the balloon observers was satisfactory. Enthusiasts have credited the observers with making the victory possible. At the time, the unofficial view was that the balloon drew enemy fire. Worse, long rounds landed among troops in reserve and even rewounded casualties waiting for treatment at aid stations well behind the main line of battle.
It had been an almost impossible task from the start. The balloon was aged and in bad condition, and personnel were hastily gathered and lacked experience as a team. There was no time for a test ascent before deployment to battle. In spite of all that, the balloon was made airworthy, was operated in three different locations, and did furnish useful and timely intelligence to Shafter's staff.
The balloon corps languished again after that war, its equipment concentrated in storage at Ft Myer, Virginia for economy reasons. In 1902 the Signal Corps tried again, establishing a Balloon Detachment at Ft Myer. Some funds were found to order and construct a few new balloons. More aeronauts were trained to fly them, and Army officers observed and entered the great balloon races of the early 20th century.
Ballooning was a field that the Signal Corps saw as a useful adjunct to the primary mission of communications for the Army, and one to which the Corps had staked an early claim. So it was logical for them to take one more step forward, and to create the first of the predecessor organizations of the United States Air Force.
The order was issued on 1 August 1907, by the Office of the Chief Signal Officer, War Department. It stated: "An Aeronautical Division of this office is hereby established to take effect this date. This Division will have charge of all matters pertaining to military ballooning, air machines and all kindred subjects. All data on hand will be carefully classified and perfected for future experiments. The operations of this Division are strictly confidential."
A major undertaking for the Corps was the acquisition of a newer kind of air machine, the dirigible. Several had been flown in the United States and Europe, and their performance offered the prospect of freeing the military balloonist from dependence on the wind. The dirigibles combined the lifting power of the balloon with a powerplant for propulsion, and control surfaces for steering.