commander of the Royal Naval Flying Service, who had been sent out
by my friend K-P to observe American carrier operations. After two
decades, he was doing the Godfrey de Chevalier act in reverse.
During my two-day visit at Pearl Harbor, Chester Nimitz, Commander in
Chief, entertained at a luncheon for his top commanders who had been
called in by air for briefing on the next operation, and he invited
me to join the party. As I sat down, the single civilian in a galaxy
of top brass, I estimated that the average number of gilt stars among
thirty-odd officers must be about two and a half per man. These
fellows, all either contemporaries at Annapolis or men with whom I
had been shipmates prior to leaving the Navy, had fought through two
world wars and participated in world events none had even remotely
foreseen.
After a review of my program with Jack Towers and Forrest Sherman,
the latter now Nimitz’s planning chief, I caught the Clipper back to
San Francisco. We had a full load, top brass returning to Washington
and young bluejackets returning home on top priority because of
illness in their families or other personal difficulties. Arrived
back at Beverly Hills in time for lunch, I called Don Douglas on the
telephone, and made a date with him for the morrow.
As our company car pulled up at the entrance to Don’s plant in Santa
Monica, the California sun shown on the camouflaged village, which
so completely concealed the sprawling plant that it was hard to find
the gate. Don sat behind the desk in the shadow of his lightproof and
soundproofed ground-floor office, and stood up to greet me as I came
in. After a few words to state my business, I handed him his copy of
the air-power statement and as Don sat down to read it, I opened my
copy with a view to pacing his reading. Don Douglas read carefully,
noting every word.
“I’ll go for this,” he said simply, speaking in the soft voice that
made it difficult to hear him at times. Then after a moment he added,
“What do you want me to do?”
I explained the need for a meeting of our Aeronautical Chamber of
Commerce at which the board of governors should adopt the program. We
must reorganize the Chamber and give it a set of officers who could
direct the program; I suggested that he become chairman of the board
of governors. He countered with the statement that this job should
be mine, but agreed to accept the vice-chairmanship of the board. I
suggested that we borrow John G. Lee from the West Coast Aircraft
War Production Council to head up the reorganization of the chamber
and, after some consideration, he agreed. We would bring in Clyde
Vandenburgh, of the East Coast Council, and Frank Russell, of the
National Council, to assist. A meeting of the National Council was
scheduled to take place in Los Angeles late in April, 1944, which
would be attended by all the company presidents. We would call a
simultaneous meeting of the Chamber and put the air-power program
before the Board for consideration at that time.
On April 26, 1944, the board of governors of the Aeronautical Chamber
of Commerce met in Los Angeles. In presenting the program, still
in its tentative typewritten form, I pointed out that this was a
preliminary statement and subject to revision by the members. After
all, the Constitution of the United States had been no one-man job
but the painstaking effort of many men of different minds; we needed
the thoughts of everyone on what would prove an important action by
the board. A number of constructive suggestions were offered and
voted, after which the revision was adopted unanimously. The preamble
to the resolution ran as follows:
The Board of Governors of the Aeronautical Chamber of Commerce of
America, in order to “provide for the common defense, promote the
general welfare and secure the blessings of Liberty to ourselves
and our posterity,” and in order to ensure that the airplane which
America created shall be used to maintain peace and secure the
blessings of peace to mankind, does unanimously recommend the early
formulation of an American Air Power Policy under the following
guiding principles:
And the essence of these principles was summarized toward the end of
the pamphlet in this paragraph.
The public character of aviation imposes upon it a dual role.
Commercial companies, to advance their private interests and
stimulate technical progress, must compete in the realm of
operations. At the same time, they must collaborate in the realm of
policy to promote the public interest.
We had naturally expected that when this document was released to
the aviation press it would create something of a stir, but in this
we were disappointed. After this warning that the idea would need to
be sold, even to aviation writers, we began to appreciate the fact
that we had a job on our hands. Through Deac Lyman, an old _New York
Times_ reporter, we were invited to lunch with Arthur Sulzberger
and his editors in the executive dining room of the Times Building,
where we briefed our situation. The _Times_, always alert to aviation
matters, subsequently covered aviation news and handled aviation
editorials against the background of the policy. The magazine
_Aviation_, whose editor, Leslie Neville, was author of numerous
books on aviation, caught the new spirit and developed the theme.
Soon all the members of the Aviation Writers’ Association took a
hand in developing the broad background of air power as a trinity of
commerce, industry, and security.
Subsequent events proved that we had acted none too early. Within a
matter of weeks, we were haled before a Congressional investigating
committee, the War Contracts Subcommittee of the Senate Committee on
Military Affairs.
CHAPTER THIRTY
Toward Public Inquiry
Having developed a certain gun shyness before such Congressional
inquiries as the Nye inquisition and the air-mail investigation
conducted by Senator Hugo Black, now Mr. Justice Black of the United
States Supreme Court, we air craftsmen might have shied away from
Senator Murray save for a bit of sage advice given me by Mr. Sam
Rayburn, then Speaker of the House. When I called on him for counsel
as to how we should proceed with our air-power program, the Speaker
offered it as his opinion that we should avoid lobbying as we would
a plague. All trade associations were suspect; they usually devoted
their energies to the search for special advantage for their clients.
And the munitions business was condemned out of hand. Besides, that
was the wrong way under any circumstances. Congressmen, the Speaker
assured me, were just average people, no wiser, no dumber than anyone
else. But there was one thing a Congressman had to understand if he
wanted to stay in politics, and that was the will of the people. He
thought we had a good case for public approval in our air policy, and
he advised following Jim Forrestal’s advice and taking it direct to
them.
He thought one of the best ways to get our story to the public was
to appear at the public hearings held by Congressional committees.
These, according to the Speaker, were good sounding boards from which
to beam your point of view. Besides, you might actually influence a
committee if you had an especially strong case. But it was a mistake
to send lawyers or staff members of an association to these hearings.
The company presidents should appear themselves; they were more
convincing, and Congressmen liked to look them over. They respected
men who had won their spurs in competition, especially if they also
knew how to stand up and speak their pieces.
“Don’t send a boy,” the Speaker concluded, “to do a man’s work.”
By the middle of 1944, with the outcome of the war no longer in
doubt, men began worrying about postwar and the inevitable letdown
of peace. Nation-wide unemployment was taken for granted, and what
to do about it became a live political issue. The aircraft industry,
now one of the largest industries in the history of the world and one
wholly dependent upon an inflated demand for war materials, seemed
headed for the biggest bust imaginable.
And while this was a problem of national interest, it had its focus
in Southern California. Thousands of people had left their homes and
jobs and migrated toward the setting sun there to do their several
bits and incidentally enjoy the climate. Almost immediately, public
officials sensitive to the reactions of the working class began
proposing legislation to meet the problem; a ticket back home for the
dispossessed worker and six months’ unemployment compensation were
widely advocated. The fact that high wages had been paid them and
that the thrifty could probably take care of themselves seemed to
have been lost in the shuffle.
Looking back on this situation now, we can see how completely wrong
the forecasts were. Most of those workers, having basked in the
California sunshine, had already determined to settle there and
could not have been driven out by an air raid. Their newly acquired
mechanical skills would find ready employment in new industries. The
war demand and the “total war” policy had drained all the pipe lines
of consumer goods while the cold fear of the ’thirties had frozen the
investment market and stopped the normal expansion of housing, plant
construction, and so on. What the country really faced was a pent-up
demand that would lead to a postwar boom, and a dearth of labor. The
automotive industry, for instance, could expect to reconvert to a
demand of unprecedented proportions; the aircraft industry, on the
other hand, would face an overwhelming war surplus. The problem that
faced the country was not that of unemployment; the real job was to
keep alive a remnant of vital defense industry.
But this was not the problem before the War Contracts Subcommittee of
the Senate Committee on Military Affairs and its chairman, Senator
James E. Murray, of Montana. “Full employment” was the war cry of
that era, and the C.I.O. echoed it through the halls of Congress.
Full employment, it appeared, was the right of every citizen, and
the government must guarantee it to him whether he wanted to work
or not. Some industrialists applied similar thinking to their
corporations; the idea of government-guaranteed corporate social
security had prompted the creation of the NRA and the formulation of
its monopolistic codes. Now labor unions on the one hand and trade
associations on the other vied with each other in bringing pressure
to bear on Congress to relieve them from the necessity for struggling
to survive.
And so when Senator Murray extended us an invitation to appear
at a hearing to be held on July 10, 1944, we decided to conform
with the Speaker’s advice. The C.I.O. had tipped its hand in a
circular distributed in advance, castigating aircraft manufacturers
as profiteers who had averaged as high as 3,000 per cent on war
contracts. Since we manufacturers were scheduled to make the first
appearance and be followed by the C.I.O., it was a fair guess that we
had been selected as whipping boys.
And so our association, using the air policy as its bible, prepared
its case with a special slant at this matter of war profits. We
divided our presentation into four parts, with a separate witness
for each. I was to make the general introduction of the industry
viewpoint, and submit our statement of air-power policy. J. C.
Ward, president of Fairchild Aviation Corporation and a convincing
witness, was to cover postwar national defense and the aircraft
industry. Harry Woodhead, president of Consolidated-Vultee Aircraft
Corporation, was to discuss the George-Murray bill, manpower
demobilization, contract termination, disposal of war surplus, and
reconversion. Joseph T. Geuting, chairman of the Personal Aircraft
Council of the Chamber, was to discuss the role of personal aircraft
in postwar readjustment.
When the hearing opened in one of the large committee rooms of the
Senate Office Building, the place was crowded and the press table
filled by Washington correspondents attracted by the C.I.O. handout.
Senator Murray sat on the dais while the witnesses were called to
testify from a table at his feet. This layout put the witness at
something of a disadvantage and news photographers sometimes used
it to get worm’s-eye shots of bigshots looking anything else but. I
recalled one taken of a friend of mine in the Black investigation,
and widely used by the press, in which my friend, who was really a
good egg, looked like nothing so much as a praying mantis.
This inquiry, however, appeared friendly. It wasn’t important enough
to warrant klieg lights or a radio hookup, but attracted the usual
barrage of flash bulbs touched off at the instant best calculated to
catch the witness with his mouth open or his guard down.
In my extemporaneous introduction, I pointed out to the Committee
that we welcomed this inquiry and especially the Committee’s interest
in postwar unemployment. We had taken the position early in the
war that the government should permit us to earn enough money on
war contracts so that we might discharge our responsibilities to
employees terminated by the cessation of hostilities. We had had in
mind that, by adjusting each case on its merits, and out of funds set
aside from earnings for that purpose, the employer could handle the
problem with fairness to the employee as well as to the public which,
after all, was the customer in this case.
However, Congress had disapproved that procedure and, through the
excess profits tax, the Price Adjustment Act, the cost inspection
service, and all other controls, had so limited our earnings that we
now had no funds available for the purpose. As a matter of fact, our
companies had been so blown up by war demands that a sudden cessation
of hostilities must inevitably wipe out all our resources before we
could reduce our working forces in any orderly manner. In short, our
problem was not one of war profits; it was rather a question of how
to survive.
But while on the subject of profits, it might be noted that only
recently the National City Bank of New York had printed in its
_Bulletin_ an analysis of profits as a percentage of sales of the
several groups of industries doing war work. This report had shown
that the aircraft industry ranked lowest of all industries, with a
record of approximately 1½ per cent. The same table had revealed that
the automotive industry, now busy manufacturing products designed and
developed by the aircraft companies, had earned nearly twice as much.
This fact had resulted from the automotive industry’s better tax base.
Meanwhile, I pointed out, my own company, United Aircraft, had
from the beginning voluntarily stabilized its earnings at a figure
based on the use of its own facilities and resources prior to the
commencement of the United States aircraft production program.
All these figures were, however, quite academic; they were simply
estimated results of current operations based on an assumption
that the war contracts might be terminated in an orderly manner.
In the last war, no such thing had taken place; contracts had been
closed out so brutally that, according to another National City
Bank _Bulletin_, many companies had gone through the wringer and
even the strongest, in the number of some sixty-six representative
suppliers, had been forced to write down their apparent net worth
by approximately one billion dollars, or 50 per cent. Our present
“profit” was therefore but a temporary bookkeeping entry; no company
could even guess where it would come out unless Congress proceeded
with all speed to write new legislation that would facilitate orderly
reconversion.
While I developed this testimony, our staff circulated a summary of
the figures among the men and women at the press table, some of whom
had, no doubt, read the C.I.O. pamphlet charging us with having made
3,000 per cent. C.I.O. figures showed gross profit before taxes as
a percentage of net worth and, while accurate enough, manifestly
emphasized what wide variations can result from the mere definition
of the naughty word “profit.”
In continuing my testimony, I went on to point out that the
aircraft industry, now the biggest industry, was a vital factor in
our domestic economy and that the public interest as well as the
worker’s interest demanded that we not upset the whole national
picture through disorderly or even punitive procedure. By this we did
not mean for a moment that our industry should be subsidized in any
way; we hated subsidy because it tended to throttle technological
progress. We had made rapid strides only because we had had rough
going; in our struggle to exist at all we had been forced to conceive
and create devices that would otherwise have never seen the light of
day. What we asked of the government was that it make up its mind as
to what it needed and then let us go back to cutting each other’s
throats in that exciting way which had kept United States technology
in the forefront of world progress.
At this remark, I noted a stir among the newsmen and women; long
accustomed to hearing special pleaders demand special privilege, they
were taken aback by the aircraft industry’s expressed preference for
competition. Such unheard-of conduct was news of the “man-bites-dog”
variety.
From this beachhead I went on to urge the appointment of a
presidential advisory commission on aviation, one like the Morrow
Board of 1925. After reviewing some of the background, I pointed
out the rapid advances in technology since the day of that report,
especially in the key element of air transport. This alone would seem
to warrant a reappraisal of air policy, one based on the new concept
that air power was not a military striking force but a trinity
composed of air commerce, aircraft industry, and the armed service as
well as all the other factors that went to make a country powerful
in the air. All these factors were mutually interdependent and must
be closely integrated if we were to employ our air power to keep the
peace. The need for thinking through a new policy based on these
ideas was obvious; it concerned government, labor, management—all the
elements of the community.
In summing up, I pointed out again that our problem had never been
a matter of profits but one of survival and that survival was our
immediate concern. However, we were confident that, given an orderly
reconversion and the necessary constructive air policy, air power
could become the new reagent for keeping the peace of the world and
better still, through the medium of improved transport, lead to the
era of prosperity so vital to keeping the peace.
Following me, Harry Woodhead gave specific answers to eight questions
propounded by the Committee and concerned with the industrial and
human aspects of demobilization. Speaking in his clear, strong voice
he made a convincing impression. Following Harry Woodhead, Joseph T.
Geuting, Jr., submitted a comprehensive summary of things necessary
to the orderly development of personal airplanes during the postwar
adjustment period. Both Joe Geuting and Carl Ward, who now followed
with his presentation, had been selected because of their knowledge
of their subjects but even more important because both were good
extemporaneous speakers and both had strong convictions as to the
soundness of the industry policy. Carl Ward especially handled a
complex subject with a knack rare in professional men; he reduced
technical jargon to popular language.
At the close of the day, Senator Murray thanked us warmly for
our constructive approach to the problem. During the sessions of
the following days, Artemus L. Gates, Assistant Secretary of the
Navy for Air, endorsed the industry stand. Robert P. Patterson,
Undersecretary of War; Charles E. Wilson, executive vice-chairman of
the War Production Board; and representatives of the U.A.W.-C.I.O.
and I.A.M.-A.F. of L. made recommendations generally in accord
with the suggestions of the industry representatives. The C.I.O.
barrage on profits broke down against the record established by the
industry, and Senator Murray himself later introduced a bill in
Congress calling for the appointment of a new presidential advisory
commission, like the Morrow Board. However, many critical months must
pass before such a board would see the light of day.
Meanwhile, press comment on the hearing was favorable and David
Lawrence dug the meat out of the cocoanut in an article in which he
said that the aircraft industry had revealed its postwar plan to a
startled Congressional committee. The industry, he said, had thought
its problem through. And to the surprise of all, it had not asked
for subsidy. It had asked only that the government make up its mind
what it wanted and leave the rest to competition within the industry.
We drew encouragement from all these events. We knew that Senator
Murray was close to the White House and that his introduction of
the bill implied at least that the President was not unfavorably
disposed to it. For prior to the hearing, Fred Rentschler and I had
taken pains to cover this angle, by making a call on John W. Snyder.
Mr. Snyder had recently come to Washington at President Truman’s
request and was destined to do a statesmanlike job in many fields for
the Truman administration. We found him well informed on the whole
air-power problem and fully prepared to advise the President on the
industry’s plans to bring the matter before the public. Early in the
program we even hoped that the President might appoint the committee
himself, even as President Coolidge had done, but now to our surprise
we found active opposition in two quarters.
The Assistant Secretary of Commerce for Air, William A. M. Burden,
developed no enthusiasm for the idea, and when Don Douglas, Bob
Gross, and I called on him one day, he explained why. He felt
that the existing legislation on the subject of air commerce was
adequate and feared that a protracted public inquiry might hamper
things already in the works and thus retard progress. But the big
complication we faced came from the Army Air Forces.
The ancient Army-Navy rivalry had not died down under the impact of
war but had flared anew and on many fronts. At heart it was the same
old dogfight that had engaged Billy Mitchell and Billy Moffett twenty
years earlier. The Army Air Force still battled for control of all
military aviation, and the Navy scratched gravel to hang onto its
own. Within the industry itself, whatever might be our private views,
we took no position on the matter. After all it was a private grudge
fight between two customers. We had hoped that the Air Force, now
that it had won its battle for autonomy and demonstrated its decisive
character, would welcome an opportunity to plead its case before a
public tribunal. Instead, it resorted to the same tactics Billy
Mitchell had used and thus confused the whole matter of air-power
policy. The fact was that the Army Air Force, for all the miracles
performed by the military air-transport services—managed as it was
by personnel from the commercial air-transport lines—still remained
blind to the significance of air transport.