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to develop so to immediately start reducing our airlift deficit we must develop the air-cargo industry with the use of existing types of transports. From the figures that have been made available to me I feel that a 10-year program, to develop a commercial air-transport fleet to materially reduce the airlift deficit and meet some of our mobilization requirements and create the most modern and efficient commercial air-transport fleet, would involve two basic types of aircraft: (a) Long-haul freighter; (b) turbo-prop or jet transport.

Such a program would be developed through Government financial assistance. Pilot production lines of current long-haul air freighters to fill the gap would produce during the next 4 years 144 aircraft. At the same time new types of aircraft would be ready for production in about 5 or 6 years. A reasonable production rate of 3 per month for the long-haul freighters and 1 per month for the turbo-prop or jet transport is assumed. The production aircraft are leased through Government financing on a basis of amortization of 100 percent of the production cost over a period of 8 years. Such a long-range program over 10 years would produce the following transport aircraft less than 8 years old by 1960: (a) Current long-haul transports.

144 (6) New-type long-haul transports---(c) Turbo-prop or jet transports-----

54 Total The complete program including the development costs of the prototypes and a reasonable sum for the administration of the program would involve an average cost to the Government of less than $7,000,000 per year and part or all of which may be recaptured by operating profits in excess of 10 percent.

Senate bill S. 3507 provides for an Aircraft Development Corporation within the Department of Commerce, as proposed by the President's Air Policy Commission. The Civil Aeronautics Board (now within the Department of Commerce for housekeeping purposes only) among its various duties, promulgates safety regulations and investigates accidents. The Civil Aeronautics Administration, now a part of the Department of Commerce, enforces safety regulations. I believe that for clear-cut lines of responsibility in carrying out safety measures in aircraft design and in flight over the airways, it would be a better administrative organization not to espand their existing organizations to take on any additional responsibilities which might become of a conflicting nature at some future date. The establishment of the Aircraft Development Corporation as proposed in the bill seems to me the proper procedure.

The Aircraft Development Corporation is capitalized for $100,000,000, however, the bill provides for a maximum annual expenditure of $10,000,000 for research, development, and testing. The majority of the capital will be used for the purchase of aircraft which in turn will be eligible for lease to operators authorized by the Civil Aeronautics Board to engage in air commerce. If the lease terms are based on 100 percent of the production cost, the only replenishment of stock by annual appropriaitions would be for research and development, and administration of the Corporation. The expenditure of slightly more than $10,000,000 annually to provide

to the the productio would be for one. The

modern transport aircraft, and personnel to most closely approach the requirements for a national emergency seems within budgetary limits without disrupting our American economy. It seems to me that our efforts should be to adjust our budget to make available this sum for enhancing our security.

Mr. Chairman, the enactment of S. 3507 will not only carry out recommendations of the President's Air Policy Commission, it will also reduce unemployment by having in work, pilot-production lines of existing types of transport aircraft, to fill the gap, and capable of expansion in emergency. It will create a large air cargo industry, whose domestic and foreign potential may be 50 times that of the present operations. S. ?507 also provides for assistance in the development of feeder line aircraft and civil aircraft adaptable for military service. I recommend the enactment of S. 3507, as it is the greatest advance in reducing our air-lift deficit and carrying out numerous recommendations of the President's Air Policy Commission.

In reference to S. 3504, I would like to make the following comments: The statements made to your committee indicate that Š. 3504 is insufficient to provide for filling the gap with modern transports of the Douglas DC-6 cargo type or the Boeing Stratofreighter. These types, according to data presented by their manufacturers, are capable of operating at less than 4 cents a ton-mile and therefor very much less than the DC–4 now used by some airlines for cargo operations. Unless we use aircraft designed for low-cost operations, instead of the DC-4 after it has been declared inefficient for passenger operation, we will not tap the cargo potential that is available. În computing operating costs, performance has a greater effect upon operating costs than amortization of the aircraft. Passenger DC-4's relegated to cargo are not the answer to building up a modern air transport fleet.

S. 3504 and the testing budget indicates that five prototypes are under consideration.

The Air Coordinating Committee report on the development of prototype aircraft estimates the cost of development of various types of new aircraft as follows: Long-haul cargo aircraft: Cost of development (2 articles)-------- $18, 600, 000 Feeder line cargo aircraft: Cost of development (2 articles) ------- 3, 800, 000 Jet transport: Cost of development (2 articles)------------------ 33, 000, 000 Two articles of a type are considered necessary; one for flight test and one for static test. The S. 3504 budget calls for three types of jet transports, making the total development cost to the industry $121,400,000. The S. 3504 budget provides $10,105,000 for testing of three types. I doubt if the industry would be able to produce any new prototypes with such little Government assistance.

S. 3504 provides for approximately $2,000,000 a year for 5 years, whereas S. 3507 provides for a long-range program not to exceed $10,000,000 for development and testing per year.

S. 3504 has a life of only 5 years, and in view of the report of the Air Coordinating Committee, that it will take 8 years to have jet transports available for airline operation, I consider this program is entirely inadequate to overcome foreign competition.

The Administrator of the Civil Aeronautics Administration stated that the program proposed by S. 3507 "seems excessive at this time”.

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In reference to S. 3504 the representatives of the Air Transport Association stated:

We cannot be enthusiastic about the effect of this bill in inspiring manufac® turers to design entirely new transports, whether this be jets, more efficient cargo aircraft, or new feeder line aircraft. The program is a very limited one, and would help the manufacturer only to the extent of testing his prototype after it had been developed at his expense. Thus, the bill probably does not provide a. complete solution to the prototype problem. The President of the Aircraft Industries Association stated:

We should not hold any extravagant hopes for the accomplishments of S. 3504.. It is only a partial solution to the challenge of the British. This challenge can be met fully only by a comprehensive prototype procurement program.

Mr. Chairman, in conclusion, I wish to turn to the statements of General Kuter, pages 2090 to 2095 of the committee's hearings on. Senate Resolution 50, Air-line Industry Investigation. These, together with those of the Air Transport Association and the Aircraft. Industries Association, prove to me that the enactment of S. 3504 will cause us to rest on false hopes of security, whereas the provisions of S. 3507 will fill the gap with modern cargo transports and produce new prototypes and build up a modern air transport fleet for national security.

Thank you very much, sir.
Senator CAPEHART. Thank you, sir.

The committee will stand adjourned until 10 o'clock next Tuesday morning. I presume the first witness will be Mr. Marvin. We will have three witnesses at 10 o'clock Tuesday morning: Mr. Marvin, Mr. Wilford, and Mr. Lukens.

(Whereupon, at 10:50 a. m., an adjournment was taken, to reconvene at 10 a. m., Tuesday, May 16, 1950.)

PROTOTYPE AIRCRAFT DEVELOPMENT

TUESDAY, MAY 16, 1950

UNITED STATES SENATE,

SUBCOMMITTEE ON AVIATION OF THE
COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C. The subcommittee met, pursuant to adjournment, at 10 a. m., in the committee room, United States Capitol Building, Senator Edwin C. Johnson (chairman) presiding.

Present: Senator Johnson (chairman) presiding, Senator Lester C. Hunt, Senator Charles W. Tobey.

The CHAIRMAN. The hearing will please come to order. Mr. Marvin?

STATEMENT OF LANGDON P. MARVIN, JR., FORMER CHAIRMAN,

INTERDEPARTMENTAL AIR CARGO PRIORITIES COMMITTEE

Mr. MARVIN. Senator Johnson, I had hoped that General Knerr, who appeared before you once before, would be able to be here with you today. He was not able to come to Washington and he has therefore prepared a short statement for the record, which, with your consent, I offer for inclusion at this time.

The CHAIRMAN. We can put it in now, if you wish, or we will put it in following your testimony.

Mr. MARVIN. Senator Johnson, members of the committee, Dr. Cabot tells me he had it from a famous statesman once that the secret of eloquence is iteration. I hope you will bear with me if I am here again as a private citizen to talk again about airlift preparedness.

For over 2 years we have had staring us in the face a serious shortage of airlift to meet any future war. This deficit was first high lighted by the President's Air Policy Finletter Commission in January 1948. We are already over 2 years behind the timetable which was laid down by the Finletter Commission; on the other hand, events abroad, particularly the atomic explosion in the U. S. S. R., have increased the need for action. Therefore we are already 2 years behind on an already obsolete timetable.

This country is insufficiently protected with airlift.

The minimum deficit between the airlift which this country would need at the start of another war, and what we have in commercial and military hands now, exceeds 5,000,000,000 ton-miles a year. (Source: Report of the Military Air Transport Service, quoted by CAA, D. W. Rentzel, House Commerce Committee; February 27, 1950.)

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To lift this amount of traffic would require 1,200 of the most familiar current type transport plane, the C-54, (although naturally, the deficit figure is smaller in terms of larger planes).

The basic military necessity for this air fleet has been repeated again and again: the presence of a fleet of Russian submarines five times as big as what the Germans had to start the last war; the possibility of attack over the Arctic or areas inaccessible to shipping; the probability as stated by General Eisenhower that in the next war the first 60 days will be determining. We must have an air merchant marine.

In a 500-mile-an-hour age we cannot allow ourselves to be caught short without aerial supply lines. “Mobility, mobility, mobility. Turn to any page in history and observe how the great captains built their great victories around it.” (Extract from unpublished dissertation by First Lt. James A. Horowitz, USAF.)

Since wartime transport is primarily a business of moving freightin tonnage, 100 to 1 over passengers—we must have freight planes to achieve modern mobility.

The six different bills before your committee are various attempts to answer both the airlift deficit and the lag between American and foreign jet transport development. It is the responsibility of this Congress, with the advice of private citizens and Government officials, to select the piece of legislation which best meets the country's needs.

In January 1948 the President's Air Policy Commission made the following specific recommendations:

The problem of building up a pool of military transport planes in commercial use seems to warrant a more coordinated study of the number of transports needed, the potential commercial cargo traffic, and the possible subsidy cost to the Government than has been carried on by the Armed Services, the Department of Commerce, and the Civil Aeronautics Board. We recommend that the problem receive the immediate attention of the Air Coordinating Committee.

It is unfortunate that in the ensuing 24 years the ACC has not produced that study, although the first of the three parts of the study, i. e., military requirements, has presumably been at least partly accomplished by the Defense Department.

Nevertheless, even without having done this study, the ACC has recommended to your committee the enactment of their "testing' bill, S. 3504. This bill provides for expenditures by the Civil Aeronautics Administration of $12,500,000 over, presumably, a 5-year period, for the purpose of paying the airlines or manufacturers or other persons for the testing of aircraft and making minor modifications in them to meet the civil aviation regulations of the Government.

The best thing that can or has been said about this bill is that it is better than nothing.

This committee should not pretend, however, that S. 3504 is an adequate solution to the serious national problem of airlift unpreparedness.

In the first place, while the military need is for aircraft capable of carrying large loads of freight, this bill (p. 1, lines 6 through 8 of S. 3504) puts cargo planes in definitely second place. Since the amount of money authorized to be appropriated under the bill, is rather small, it would seem doubtful that the CAA would ever be able to get around to the second-place cargo plane. Unfortunately,

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