Aeronautics Board, “that if our airline system were today the same
size as it was in 1941 in terms of routes, points served, and service
provided, it would be completely independent of government support.”
It was certain additions to the service, he further pointed out, and
the fixing of certain “fair” compensations by the Board that slowed
all airlines save Eastern down to stalling speed and all but put them
into a flat spin. He shared his responsibility with the appropriation
committees of Congress and thought that if funds were provided for
an adequate staff the Board might do a competent job. However the
fact that the Civil Aeronautics Authority and Civil Aeronautics Board
already had 18,000 employees as compared with approximately 80,000
employees for all domestic and overseas scheduled airlines rather
discounted this opinion.
That the damage did not end with heavy losses imposed by arbitrary
rates but was multiplied by the award of retroactive payments is
evidenced in the testimony of Roger F. Murray, vice-president of the
Bankers Trust Company of New York.
“The Board’s thinking,” he said, “has apparently been that rates
should be set so that _each_ carrier will break even and perhaps
earn some so-called ‘fair’ rate of return on it’s ‘used and useful
investment.’ Under these circumstances, enlarged payments have been
made to rescue some airlines in difficulties or keep others going on
a subsistence basis. While this may be reassuring to creditors of the
airlines, it is the poorest kind of an appeal to potential purchasers
of equity securities.”
Translating this into lay language, the private investor or his
agents just cannot be interested in buying stock in enterprises which
are suffering economic regulation by political agencies. And once
an enterprise is denied access to the highly competitive markets
for risk capital, it is indeed on the verge of bankruptcy or about
to crash into the abyss of nationalization. And if the government,
after having reduced the market value of the airlines by its own
mismanagement, then takes possession of them, it becomes guilty of
expropriating the capital of private investors, some of whom had
risked their savings in an enterprise they deemed secure because it
was government regulated.
Now mismanagement of the airlines was not necessarily the fault of
wicked or even stupid men. As Speaker Sam Rayburn had pointed out
to me in the case of Congressmen, government administrators are no
smarter nor more stupid than the average. But they hold their jobs
by knowing which side their bread is buttered on and making the
correct estimate of what action will produce the most votes.
The Civil Aeronautics Board, in light of current public opinion
with respect to the profit motive, could hardly be expected to
accept public responsibility for such economic regulation as would
permit any airline to make a profit, especially one such as might
be subject to political attack. Nor could it be expected to muster
courage to defend such an apparent monopoly as its own route pattern
had created, even though the law authorized it. Although the Board
was directed to so administer the Act as to prevent “unfair or
destructive practices,” it must permit “competition to the extent
necessary to insure sound development of an air transportation system
properly adapted to the needs of the foreign and domestic commerce of
the United States, of the Postal Service, and the national defense.”
Its decisions, predicated on an attempt to administer such complex
mandates and still keep out of hot water, brought the airlines into
jeopardy at the very moment when they had established their economic
self-sufficiency and faced the brightest futures of their turbulent
careers. In other words, economic regulation by political agency is
an anachronism.
Meanwhile, with the real solution to the Board’s competition problem
ready at hand, the Board even messed that up. This drama was unfolded
before the Committee by a group of enterprising young veterans who,
having participated in such wartime miracles as the transportation of
air cargo over the Himalayan Hump, had concluded that this and other
services as yet unexploited by the certificated passenger carriers
offered unique opportunities for their postwar reconversion. Perhaps
the gist of their testimony can be extracted from the statement
of Amos E. Heacock, executive committee chairman of the National
Independent Carriers, and president of Air Transport Associates.
“Let me review briefly,” he said, “the near miracles that have
been wrought in the development of air transportation by United
States veterans.... In the international contract air carrier
field, Transocean Airlines, Seaboard and Western, Pacific Overseas
Airlines, etc., have found an entirely new market for air
transportation, formerly practically untouched by the scheduled
airlines.... I want to point out to you an additional and perhaps
the greatest air transportation feat performed by the veterans of
World War II. I am referring to the amazing record of the Pacific
Northwest-Alaska nonscheduled carriers.... The scheduled carriers
that were subsidized to do the job of developing air transportation
to Alaska were a miserable failure. The bulk of the cargo, 73.6 per
cent of the northbound and 83.5 per cent of the southbound, was
transported by the much maligned nonscheduled air carriers.... The
records show that the non-skeds pioneered a wealth of new business.”
After referring to Section 2(d) of the Act, which provides for
competition, the witness stated, “With an unprecedented opportunity
to preserve competition to develop the air transportation system and
so provide adequate and economical service, the Board’s actions have
provided for just the reverse.”
One explanation of the Board’s action might be derived from the
statement of C. R. Smith, chairman of American Airlines, one of the
largest of the “Big Four.”
“If the law of the land is to be enforced against the certificated
air carriers,” he said, “it should have similar enthusiasm of
enforcement against the irregular carriers who compete directly for
the same business of air transportation. We cannot live with economic
health in an atmosphere half legal and half illegal. If this business
is to be regulated, all should be regulated.” It would be interesting
to know just what significance attaches to the use of the word
“against” in this statement.
“If the Civil Aeronautics Act is to mean but little,” continued
“C.R.,” “then let us return to the rules of the road which obtained
before the Act was passed, when competition was direct and
unregulated.” Had “C.R.” gone on to urge this course, he might have
given a demonstration of the rugged individualism for which he is
credited; instead he summed up, “We were in favor of the Act, we are
in favor of the continuation of the Act, but if we are to abide by
the terms of the Act, we ask that our competitors be bound by the
same rules of public conduct.”
Juan Trippe, president of the Pan American Airways System, stated the
issue in similarly clear terms:
“The fundamental problem, both domestically and internationally,
is that although Congress intended to place the airline industry
in the category of regulated public utilities, the airlines, while
treated on one hand as public utilities, have, at the same time,
been made subject to all of the competitive pressures proper and
appropriate only in an unregulated industry. There is no precedent in
American industry that I know of for such a Dr. Jekyll and Mr. Hyde
arrangement.”
After developing the principles under which public utilities are
regulated and financed and suggesting that Congress should make
up its mind as to whether or not they want to return the airline
industry to its intended status as a regulated airline industry,
Juan, like “C.R.,” mentioned the alternative of eliminating the
relative provisions of the Civil Aeronautics Act and exposing the
airlines to the full competitive force which exists and should exist
in ordinary commerce.
“There will be no real progress in the solution of the airline
problems,” he summed up, “until this issue is met squarely. An
airline can’t be a regulated public utility and a free enterprise at
the same time.”
However, the witness did not waste further time on this alternative
but, acting on the assumption that the doctrine of regulating the
airlines as a public utility would be preserved, went on to develop
his own case with all the unique persuasiveness that had helped
him pioneer Pan American in one of the most impressive displays of
self-reliance, individual initiative, and private enterprise of
modern times. His discussion led up naturally to the merger of Pan
American with American Overseas Airlines which he and “C.R.” had
earlier submitted to the Civil Aeronautics Board. In justifying this,
Juan expounded his well-known thesis of the “chosen instrument”
advocating a government policy of maintaining one American-flag
system—Pan American Airways—in the international field, supported
with frank outright subsidies such as those paid under the Merchant
Marine Act of 1936. He justified his position by citing its benefits
to the stockholders of the company and argued that the higher wages
thus made available to American workmen employed in international
aviation would constitute a subsidy to them.
With the major certificated airlines mobilized solidly in support
of the “chosen instrument” policy, the Committee received a clear
statement of the opposing point of view from Raymond A. Norden,
president of Seaboard and Western Airlines, Inc. One of the
independents who had been characterized by Captain Eddie Rickenbacker
as “irregulars,” “latecomers,” “interlopers,” “pretenders,” and
so forth, Mr. Norden undertook to support Eddie’s contention that
the airlines were suffering from too much coddling. In perhaps the
outstanding statement to be made to the Committee, he put his finger
on the crux of the airline controversy.
“The Civil Aeronautics Act of 1938,” he said, “is unusual among
regulatory statutes in one very important respect. Other forms of
transportation have not customarily been subjected to comprehensive
regulation until the pattern of growth has been assured and until
the industry has become so highly developed competitively that
there is need for rigid controls and restraints in order to prevent
destructive practices.” Out of the background of the airplane story
to date, one might argue the other way around, namely that once the
rigid controls and restraints are imposed, the growth pattern becomes
stabilized. Mr. Norden went on to argue with persuasion:
“Aviation is relatively a new business. Air freight, as distinguished
from other forms of aviation business, is in its infancy. Yet the
entire aviation industry is hedged about with red tape, the like
of which has never been encountered in any other form of American
industry. One has merely to look at legal payments made by some of
the certificated carriers. TWA, for example, in 1948 alone, paid a
single law firm the sum of $340,000. My own small company spent in
excess of $50,000 in legal expense. Sometimes I feel as though I had
more lawyers than pilots.”
When the Russians blockaded Berlin in June, 1948, according to the
witness, the Air Force, lacking reserve planes, called upon three
certificated, subsidized North Atlantic carriers, Pan American,
TWA, and American Overseas Airlines, to lift essential material
between this country and Germany. Those carriers failed miserably;
of the three irregular international carriers called upon to assist,
Seaboard and Western lifted more than twice as much tonnage over
the North Atlantic in the next six months as Pan American, TWA, and
American Overseas combined. Yet under pressure from the certificated
carriers, the Civil Aeronautics Board revoked Seaboard’s authority
to fly under its Letter of Registration, as of May 20, 1949, along
with all other large irregular airlines in this country. In his
indictment of the certificated carriers the witness said, “In their
zeal to keep the air transportation field to themselves and to
obviate the chance that a measurement will be set up against their
operational efficiency, the North Atlantic carriers are doing a great
disservice to the country. To put it bluntly, they are sabotaging the
development of airlift which is vital to national security.”
Mr. Norden then went on to quote from an article by J. A. Durham and
M. J. Feldstein in the _Virginia Law Review_ entitled “Regulation as
a Tool in the Development of the Air Freight Industry”:
“But where an agency is charged with creating new national wealth
by developing an infant industry, the consequence of permitting
established interests to employ the forms of justice to obstruct the
attainment of statutory objectives may well destroy the value of the
administrative process.”
A less reasoned but even more revealing statement was that of Charles
F. Willis, Jr., president of Willis Air Service, Inc., one of the
“irregulars”:
“Consequently it is with great bitterness that we have seen ourselves
singled out by the Civil Aeronautics Board for denial of a
certificate of public convenience and necessity.... It is even harder
to accept the decision because the only reason we are given for it is
that we don’t have a million dollars. We never had a million dollars
and we never needed a million dollars to perform our operations, but
we do have almost all the dollars we started with. We feel that we
have successfully demonstrated that an airline can be kept going, at
a profit, if hard work, ingenuity, and a desire to make a profit are
substituted for lavish spending of other people’s money.”
In such a sketchy review of the reams of testimony submitted to the
Committee it is quite impossible to do more than attempt to summarize
the major points of view and try to pan out the nuggets that reveal
the vital issues. After sluicing away the rubble and uncovering bed
rock, my own impression is largely one of intense sympathy for the
Civil Aeronautics Board. Charged with an almost impossible task, it
has been subjected to terrific forces by organizations skilled in the
art of influencing public opinion. I also come away with a feeling of
regret that airline management could not have approached the problem
under the precepts adopted by the Aircraft Industries Association.
Most American early birds will recall with a nostalgic smile a
cartoon that once adorned the walls of many a pioneer flight school.
Entitled “His First Solo,” it depicted a forlorn fledgling perched
out on the end of a bare limb. Near its root poised an impatient
mother bird from whose beak floated the command, “Come on, kid! Give
’er the gun!”
One day, while studying the conflicting testimony of airline
operators in an endeavor to predict the next twist of the slipstream,
I recalled this early masterpiece of contemporary art. The fledgling
on the end of the limb seemed now to have feathered out; he
appeared, in fact, almost overgrown. The mother bird cocked her head
questioningly, “I wonder if he’s got what it takes?”
* * * * *
From the days of Wilbur and Orville Wright on down to the present,
aviators have groped for an understanding of the airplane’s destiny.
Charles A. Lindbergh, in his book _Of Flight and Life_, has stated
the problem:
The tragedy of scientific man is that he has found no way to guide
his own discoveries to a constructive end. He has guarded none so
carefully that his enemies have not eventually obtained it and
turned it against him. He has developed a system in which his
security today and tomorrow seems to depend on building weapons
which will destroy him the day after. He has become so hypnotized
by his search for knowledge that he must go on discovering and
experimenting even though it leads to his own annihilation. With
the key to science he has turned loose forces which he cannot
re-imprison.
In the closing paragraph of his book Lindbergh states, “Our
salvation, and our only salvation, lies in controlling the arm of
western science by the eternal truths of God.”
Igor I. Sikorsky, in _The Invisible Encounter_, goes back two
thousand years for his solution. In a chapter called “Kingdoms of the
World,” he quotes from the Gospel according to Matthew: “Again the
devil taketh Him up into an exceeding high mountain, and sheweth Him
all the kingdoms of the world, and the glory of them and saith unto
Him. All these things will I give Thee, if thou wilt fall down and
worship me.”
Mr. Sikorsky then goes on to say:
The crown and recognition as Messiah the king were offered to
Christ. But He refused to accept them. However, He offered his
spiritual leadership to the whole Jewish nation but his offer
was disregarded.... The real cause of the tragedy was the
irreconcilable conflict between the Divine ideology of Christ and
the supremely evil spirit of the impending revolution.
After drawing an apt parallel in current history, Mr. Sikorsky
remarks, “If the world is to be controlled by spiritually dead men,
it is as if an unconscious crew were placed at the controls of an
airliner.”
* * * * *
Civilization stands today at the same crossroad. It need but accept
the proffered leadership to commence an era of spiritual and material
progress such as it has not yet known.
A single characteristic differentiates America from all other lands.
Ours is a nation created by God-fearing men and women in search of
liberty. Liberty is a force more explosive than atomic bombs. It
created America. America stands today both as God’s living proof of
the power of human freedom and as the negation of conflicting human
doctrine.
As we have seen from the record, the airplane is one of the
miraculous creations of liberty. No result of human foresight or
planning, it is a Divine revelation. And though, as yet, largely
prostituted to the folly of war, it embodies in itself the potential
of world peace and freedom.
For always the hand on the stick has been the Hand of God. The Berlin
Airlift, hastily improvised amid the rubble of war, contrived out of
dire necessity, uncertainty, and fear, gave the world an American
answer to that eternal question, “Am I my brother’s keeper?” The
unequivocal answer came, not in a rain of destruction but on a flood
of life-giving necessities.
“Yes, I am his keeper. I am the keeper of the peace!”
The triumph of the airlift was not one of men and machines but of the
Christian spirit.
Index
A
Aeromarine Airplane and Motor Corporation, 18, 32-33
Aeromarine Inertia Starter, 33, 40-41
Aeronautical Chamber of Commerce, 213, 264, 268-269
Personal Aircraft Council, 273
reorganization of, 269-270
“Affair Fleet,” 47-48, 99
Air cargo (_see_ Air carrier service)
Air carrier service, 280, 296, 306
certified, 303-304, 306-307
international, 303-304
uncertified, 304, 307
(_See also_ Air transport; Airlines)
Air Coordinating Committee, 282
Air Corps Act of 1926, 69, 72, 244-245
Air Force, appropriations for, 293-295
and Berlin blockade, 307
created by Navy, 10, 20, 148
mobility of, 292
independent, 10, 25-26, 58-70, 107, 278-279, 291
and procurement, 282, 293
seventy-group, 293
and strategic bombing, 293
unification of, 293
(_See also_ Army Air Corps; Aviation, naval)
Air France, 208
Air freight (_see_ Air carrier service)
Air mail, 280
ocean, subsidies for, 187
revenues from, 300-301
Air-mail contracts, canceling of, 181-182, 186, 209
Air-mail rates, 298-299, 301
cut in, 298
and subsidies, 298-301
Air Policy Commission, temporary, 289
Air power, 5, 267-268, 285, 293
American, Lindbergh’s influence on, 103-104
economics of, 279-282
and foreign policy, 288
new concept of, 276-277, 287-288
public relations program for, 270, 283-284
and sea power, 267
studies of, 279-283
_Air Power for Peace_, 287-288
Air transport, commercial, 97, 186-187, 255, 267, 285, 288, 291,
294-296
and foreign policy, 295
military, 279-280, 291
veterans’ development of, 303-304
wartime importance of, 287-288
(_See also_ Air carrier service)
Air Transport Association, 294, 303
Air Transport Command (ATC), 255, 279
Aircraft, 4
carrier, 21-22
combat, 195
experimental, 297
foreign, 95-96, 204
personal, 96, 273, 277
rigid, 10, 56, 58, 67, 70, 181
styling of, 110
and world freedom, 310
(_See also_ kinds of aircraft, as Bombers)
Aircraft carriers, 5, 21-22, 127-128, 182, 190, 257-258
deck landings on, 116, 122, 125, 249-250
number of planes on, 116, 194
in relation to battleships, 134-135, 141-142, 147-148
vulnerability of, 292
Aircraft Industries Association of America, 283, 287, 290, 295, 308
Aircraft industry, 16, 23, 29-36, 51, 66-67, 72, 109-111, 183, 197,
199-203
air-power policy of, 276-277, 295, 297
assembly line in, 240-241
conference of, 1938, 213-216
consolidations in, 153-154
foreign, 196
and foreign markets, 188-192, 204, 220-222, 229
and foreign policy, 195
importance of, 275-276
investigations of, 181-182, 187, 249, 258, 270-287
nationalization of, 23
postwar difficulties of, 285-286
and public relations, 262-271, 283-284, 297
reconversion in, 260-262, 272
and red tape, 306-307
unification of, 262-263
and the unions, 249-251, 273
wartime criticism of, 242
Aircraft Squadrons, Battle Fleet (FLEET AIR), 111-112, 117-118, 121,
123-124, 126, 129-130, 137, 151-152, 157, 183, 187, 202
Airfoil, wing-flapped, 179
Airline operators, policy recommendations of, 297
Airlines, 280
“Big Four,” 298, 304
feeder lines for, 301
legal fees paid by, 306-307
mismanagement of, 302
monopoly in, 303
number of employees in, 302
overseas, 294, 305-306
private investment in, 302
reasonable regulation of, 280-281, 294, 298, 303-308
and subsidies, 299-301, 306
(_See also_ Air carrier service; Air transport)
AIRONS (_see_ Aircraft squadrons)
_Airplane, The_, 91, 188
Airplane catapults, 5-6, 21, 49
Airplane engines, 9, 27, 222
air-cooled, 18, 30-31, 35, 38, 44-45, 49, 50-51, 78-80, 119, 134,
147, 188, 196-200, 203, 206, 217-218
commercial, 14
cost and price of, 243-244
early history of, 13-18
government building of, 231-232
Japanese, 193
licensing production of, 232, 239
liquid-cooled, 13-14, 18-19, 30-31, 35, 50-51, 74-75, 78-79, 134,
147, 196-200, 202-203, 217-218
military, 14, 22
precision tools for, 247-248
types of, 12-13, 16-18, 49, 193
variations in, 243
(_See also_ kinds of engines, as Liberty)
Airplanes (_see_ Aircraft)
Airports and airways, 301
Aktiebolaget Aerotransport, 207
_Akron_, dirigible, 70, 181
_Alabama_, battleship, 25
Alaska, air transportation to, 304
Allison Engineering Company, 197
Allison liquid-cooled engines, 217, 238
Altitude, high, research on, 257
Alvis, Limited, Coventry, 171
Amphibians (_see_ Sikorsky planes)
American Airlines, 304
American Export Airlines, 183
American Overseas Airlines, 305, 307
American Society of Mechanical Engineers, 93
Anacostia Naval Air Station, 99, 104
Andrews, Frank, 214
Annapolis, 2, 142, 268
(_See also_ U.S. Naval Academy)
Approved Type Certificate (ATC), 176-177
Argentine Navy, 189-190
_Argus_, carrier, 5
_Arkansas_, battleship, 4, 121
_Arklight, The_, 259
Armed forces, 295
procurement for, 66, 187, 232
reorganization of, 290
(_See also_ Army; Navy)
Arms Embargo Act, 210, 218, 221-222
repeal of, 222
Army, 19, 25, 35, 41, 58, 72, 147, 290, 292-293
and aircraft industry, 23, 65, 172, 213-216, 243, 262
General Mitchell’s attack on, 58-59
Personnel Procurement Branch, 251
and procurement, 66, 187
war plans effort of, 213-216
war schedule of, 241
Army Air Corps, 196, 203, 214, 216-218, 229, 278, 292
Army Air Service, 9, 23-24, 71, 98, 148
Army Engineering Division, 33, 39, 191, 197
Army-Navy rivalry, 10-11, 24-27, 34, 43, 278, 290-292
Army Ordnance, 24
Army planes, C-54’s, 256
DH’s, 17, 29, 110
F4B’s, 134
Jennys, 14, 43
Lightnings, 257
PT’s, 44
Thunderbolts, 195
(_See also_ kinds of aircraft, as Bombers)
Army Reorganization Act of 1921, 213, 233
Arnold, Gen. “Hap,” 213-214, 217
Arnold, Les, 118, 147-148
Arnold, Milton, 294
_Aroostook_, mine planter, 122
ATC (_see_ Approved Type Certificate; Army Transport Command)
Atkins, Capt. A. K., 17
Atom bomb, 288, 293, 310
Aunt Lucy, 85-86, 90, 92