As was explained to me in the mid '70s at a small gathering of his wife's family by a very, very high person in Boeing at the time. He was one of 2 Special Assistants to the President of Boeing, and is since deceased. I don't know this is what happened, and he had no reason to make any of this up, and even less reason to make it up and tell me.

The Air Force funded much of the developmental work on the US SST, which was done by Boeing. After much of the work was complete, and stored in a large underground safe in Bellevue, WA, there was a fire in that safe. That safe, really a large complex, was supposed to be, was guaranteed to be, fireproof. Clearly Boeing's liability. Computers weren't widely used, data storage was more fragile and bulky than now.

Fire, smoke and water damaged much of the data, which would have had to be replicated.

Since the Air Force had already paid for it, Boeing would have been stuck for millions upon millions of dollars. Boeing was developing the risky 747 at the time and in difficult financial straits anyway.

There would have been much lost time, the US coming in very late with their plane.

The Senators from Washington were very powerful. As noted below, "Scoop" Jackson and Warren "Maggie" Magnuson, the "Senators from Boeing", had pushed the project hard from the beginning.

After the fire, one option was to have Boeing stuck for a large bill re-creating the data, being late with the plane, losing the race and face on the international scene to the USSR and Europe anyway.

The other option was to have the Air Force cancel the project and everyone just kind of walk away.

Which is what happened. Quite uncharacteristic of either the country, or Scoop and Maggie. After all, the US had just landed on the Moon, beating out the Soviets, and was in the business of "meeting any challenge".

Here is a more official version of what happened.

"About the same time that Boeing was sinking its money into the 747, it was also attempting to develop America's first supersonic transport (SST). In the early 1960s, fearful about being left behind in the SST race, the U.S. government asked its aerospace companies to submit a design to compete with Europe's future Concorde. At the end of 1966, the government chose Boeing's design over Lockheed's, and the company began work on a prototype. Hard economic times and mounting environmental concerns, though, combined to force the program's cancellation in March 1971, after more than $500 million of federal funds had been sunk into the program."

"The Washington delegation's political power was never more in evidence than during the bitter Senate fight over the Supersonic Transport, the SST. Annual attempts to stop government support for SST development -- a huge portion of which went to Boeing -- were turned back by Scoop and Maggie, prompting an opponent, Wisconsin Sen. William Proxmire, to conclude: "There are just two strong, persuasive reasons for the SST" -- Scoop and Maggie.

"Yet even their consummate political skills could not save the SST, which was finally grounded in 1971. Scoop and Maggie responded in character, obtaining an extension of unemployment benefits for states such as Washington facing serious economic problems."