Foreign Relations of the United States, 1958–1960, Volume III, Microfiche Supplement, National Security Policy; Arms Control and Disarmament

225. NSC Report¹

NSC 5919

Washington, December 28, 1959

U.S. POLICY WITH RESPECT TO THE DEVELOPMENT OF CARGO AIR LIFT

NOTE BY THE EXECUTIVE SECRETARY

to the

NATIONAL SECURITY COUNCIL

on

U.S. POLICY WITH RESPECT TO THE DEVELOPMENT OF CARGO AIR LIFT

REFERENCE:

• NSC Action No. 2151–f–(2)

The enclosed draft statement of policy on the subject, prepared by the NSC Planning Board with the participation of representatives of the Departments of Justice and Commerce and the Federal Aviation Agency, is transmitted herewith for consideration by the National Security Council at its meeting on Thursday, January 7, 1960.

It is recommended that, if the Council adopts the enclosed statement of policy, it be submitted to the President with the recommendation that he approve it; direct its implementation by all appropriate Executive departments and agencies of the U.S. Government; and designate coordinating agencies as follows: the Department of Defense for Paragraph 16, the Office of Civil and Defense Mobilization for Paragraph 17, and the Federal Aviation Agency for Paragraph 18.

James S. Lay, Jr.
Executive Secretary

cc: The Secretary of the Treasury

The Attorney General

The Secretary of Commerce

The Director, Bureau of the Budget

The Administrator, Federal Aviation Agency

The Chairman, Joint Chiefs of Staff

The Director of Central Intelligence

DRAFT STATEMENT

of

U.S. POLICY WITH RESPECT TO THE DEVELOPMENT OF CARGO AIR LIFT

GENERAL CONSIDERATIONS

1. It is in the [national security]² interest of the United States to have available an efficient and effective civil air cargo fleet, which, in time of peace, as well as in a national emergency, could be used to meet a portion of military air cargo requirements. Such a fleet could also serve as an instrument of [other]³ national policies. The United States does not now have such a fleet.

Conditions Which Have Limited the Development of a Modern Civil Air Cargo Fleet

2. In the commercial field, long preoccupation with the more profitable passenger business and with constant passenger aircraft modernization has resulted in a lack of emphasis on the development of the cargo business and of uncompromised all-cargo aircraft. As a result, commercial cargo planes are merely improvised modifications of passenger configured aircraft. Adaptation of the present essentially passenger configured aircraft to cargo use results in high operating costs, high handling charges, and inflexibility as to operating bases and facilities.

3. In the last several years the Department of Defense has had a higher priority requirement for the development of convertible (troop-cargo) aircraft than for the development of all-cargo aircraft.

4. The characteristics of uncompromised cargo aircraft are unique and differ importantly from the characteristics of presently available passenger aircraft. This difference is not unlike the difference between busses and trucks, or the difference between Pullman cars and freight cars. What is needed to further the sound growth of air cargo are types of aircraft which would (a) have an intercontinental capability, (b) be capable of operating from relatively small unsophisticated airports, (c) employ a minimum of high cost and high maintenance components, and (d) be capable of being routinely operated at a direct operating cost of 3.5 to 4 cents per ton-mile. This last-named capability would make possible air cargo service to the user at about 10 cents per ton-mile, or something less than one-half the present average rates. At present this is considered to be a very economical air cargo charge. A cargo aircraft currently being produced in Canada represents a major step toward achievement of these characteristics, and U.S. aircraft now under development show even greater promise.

5. Aircraft with the characteristics enumerated above could serve civil and many military uses. With the exception of certain outsized and sensitive cargo, the characteristics of most routine military cargo (dimensions, weight and density) are compatible with those of commercial cargo.

6. The U.S. Government maintains a substantial military cargo airlift capability and has not fully utilized in peacetime available civil cargo airlift. The stated basis for this practice has been that the U.S. commercial cargo airlift capability has not been adequate to meet civil requirements and those military requirements which could be moved by civil aircraft during periods of national emergency. However, in recent years, the Department of Defense has increased its use of the civil air cargo fleet by placing contracts with the civil air carriers (11% of the total MATS air cargo traffic in FY 1959), thereby making a contribution to the continued growth of the air cargo industry.

Conditions Which Would Stimulate the Development of a Modern Civil Air Cargo Fleet

7. The conditions may now exist whereby, with minimum measures of government encouragement, the development of an uncompromised civil air cargo fleet would be given the initial incentive it needs.

8. Some U.S. air cargo operators are buying a Canadian-manufactured all-cargo aircraft of advanced turbo-prop design. Direct operating costs of this aircraft will be approximately 3.5 cents per ton-mile, and user costs, approximately 10 cents per ten-mile. Such costs will be competitive with those of other modes of transportation for many types of cargo and are significantly lower than those for any cargo aircraft currently in production in the United States. The efficiency of this aircraft reflects an important technical advance and the related Canadian government program guaranteeing purchase loans up to 80 percent of the investment (available to U.S. purchasers), constitutes an important financial initiative. The potential air cargo market will be greatly stimulated by the introduction of this aircraft.

9. Many of the commercial advantages to be derived from operation of a modern civil air cargo fleet could be achieved by the procurement and use of this Canadian-manufactured aircraft by U.S. civil airlines. Such procurement and use would accord with the principle of sharing the resources of the United States and Canada on a continental rather than a national basis. On the other hand, stimulation of the cargo aircraft manufacturing industry in the United States would encourage (a) development of more efficient cargo aircraft; and (b) retention of U.S. leadership in civil aircraft production to the extent that is considered desirable.

10. a. The progressive transfer of non-hard-core traffic to civil carriers is now underway and will be continued as civil aircraft of modern types (e.g., the DC–7F and the L–1049H) become available. Limiting MATS peacetime operation to that required by the war-time “hard-core”⁴ mission would permit the transfer of additional cargo business to civil carriers and could assist in the development of an uncompromised air cargo fleet. As civil air carriers equip themselves with uncompromised cargo aircraft, this orientation of MATS to the “hard-core” function can be further effected, and increased use can be made of the services of such civil carriers.

b. The foregoing would present no risk to the national security, if coupled with guarantees that the civil air cargo potential, as achieved, would be immediately and wholly responsive to national defense needs. A stimulus to the purchase of uncompromised cargo aircraft would be given if such transfer of business were limited to those carriers which demonstrate a willingness and ability to so modernize their cargo fleet. The progressive transfer of MATS business, appropriate reductions in average rates, [and the enactment of legislation offering U.S. guarantee loans for the purchase of new all-cargo aircraft]⁵ in addition to a continued rapid growth of commercial demands for air cargo service, should stimulate development of a modern air cargo fleet.

11. It is the general policy of the Federal Government that it will not carry on any commercial activities to provide a service for its own use if such services can be procured from private enterprise through ordinary business channels.⁶ Exceptions to this policy are permitted for various compelling reasons including national security and “relatively large and disproportionately higher costs.” In this connection it should be noted that Congress included in the FY 1960 Appropriation Act a provision that $85 million of the funds appropriated for MATS would be available only for the procurement of commercial air transportation service (passenger and/or cargo). In denying funds in FY 1960 for procurement of ten jet-powered cargo aircraft for use by MATS, Congress also stated in an official report that “adequate transport capacity for this portion of the MATS mission exists in private commercial aircraft during the present cold war situation, and in the civil reserve air fleet in the event of mobilization”.

12. The Government requires the immediate availability of the civil air cargo fleet to assist in meeting military and mobilization requirements in time of war, national emergency, or whenever a military situation requires. There is a strong difference of view within the Executive Branch as to whether the U.S. Government does now have immediate availability of the civil air cargo fleet to meet these requirements and as to whether present arrangements under which the Civil Reserve Air Fleet is on call by the Government are adequate.

13. The expansion of a civil air cargo fleet would have the bonus effect of contributing to the fuller utilization of existing U.S. aircraft production capacity to the extent that U.S. (rather than foreign) manufactured aircraft are purchased.

14. The operation, under the U.S. flag, of an uncompromised efficient air cargo fleet would enhance the prestige of the United States, particularly in those overseas areas served by that fleet, and would promote our objective of maintaining U.S. leadership in international civil aviation. Uncompromised cargo aircraft developed for U.S. use would also be useable by indigenous carriers in at least some of the underdeveloped countries. Such aircraft would thus contribute to the implementation of the policy that, as a means of promoting the Free World aviation position in the underdeveloped areas and of neutralizing further Sino-Soviet aviation encroachments in such areas, the United States should encourage the development in the United States and other Free World nations of competitive types of aircraft and aviation equipment suitable for use in underdeveloped areas.⁷

OBJECTIVE

15. A civil air cargo capacity which, together with the military air cargo fleet, is adequate (in quantity and quality), and immediately available, to meet military and mobilization requirements in time of war, national emergency, or whenever a military situation requires.

POLICY GUIDANCE

16. a. In the implementation of existing policy which requires that the government divest itself of those activities competitive with private industry, divert progressively and in an orderly manner increasing quantities of non-hard-core Federal cargo airlift traffic from the military cargo fleet to certificated U.S. air carriers⁸ [as civil aircraft, of modern types (e.g., the DC–7F and the L–1049H), become available and can provide civil air cargo capability at reasonable cost⁹].¹⁰ In negotiating contracts for the carriage of MATS non-hard-core cargo by civil air carriers, give preference [to the extent feasible]¹¹ [wherever possible]¹² to those certificated U.S. carriers which demonstrate a willingness and ability to acquire uncompromised cargo aircraft.

b. As civil air carriers equip themselves with uncompromised cargo aircraft, increase the use of such carriers for non-hard-core traffic.

c. Adjust the operations and capability of MATS toward meeting only its wartime “hard-core” mission in accordance with a and b above. However, at all times:

(1) Maintain MATS in a posture adequate to satisfy those wartime military requirements which must be met by military aircraft and those other wartime military requirements which are beyond the capability of civil air carriers; [productively utilize during peacetime the capability so maintained].¹³

(2) Assure that the civil aircraft handling the cargo transferred to the civil air cargo fleet pursuant to a and b above will be immediately available to meet military and mobilization requirements when necessary.

17. Review the present arrangements under which the Civil Reserve Air Fleet is on call by the Government to assure that the civil cargo air fleet is immediately available to meet military and mobilization requirements.

18. If legislation is proposed which would, through purchase loan guarantees, encourage and facilitate the acquisition by U.S. certificated air carriers of uncompromised cargo aircraft produced by U.S. manufacturers, it should contain provisions to ensure the immediate availability of these cargo aircraft to meet military and mobilization requirements.

Enclosure

Memorandum From Lay to All Holders of NSC 5919

Washington, January 28, 1960

As indicated by the second paragraph of the NOTE following NSC Action No. 2181 (adopted by the National Security Council at the 433rd meeting on January 21 and approved by the President on January 26, 1960), this Action obviated the need for a statement of policy on Cargo Air Lift as proposed in NSC 5919, which was accordingly removed from the NSC agenda.

James S. Lay, Jr.
Executive Secretary

1. Source: “U.S. Policy With Respect to the Development of Cargo Air Lift.” Confidential. 14 pp. NARA, RG 59, S/S–NSC Files: Lot 63 D 351.
2. Treasury and Budget propose deletion. [Brackets and footnote are in the original.]
3. Treasury and Budget propose deletion. [Brackets and footnote are in the original.]
4. “Hard-core” requirements are those military requirements which, because of their nature or timing, must move in military aircraft manned by military crews. These “hard-core” requirements include highly sensitive operations from the standpoint of security, importance, and quick reaction, such as deployment of initial elements of strategic and tactical units and emergency positioning of support personnel and equipment in anticipation of maximum effort operations. [Footnote is in the original.]
5. Treasury and Budget propose deletion. [Footnote and brackets are in the original.]
6. See Bureau of Budget Bulletin 60–2, September 21, 1959. [Footnote is in the original.]
7. See paragraph 31, NSC 5726/1, “U.S. Civil Aviation Policy Toward the Sino-Soviet Bloc”. [Footnote is in the original.]
8. A certificated air carrier is an air carrier holding an effective certificate issued by the Civil Aeronautics Board authorizing it to engage in air transportation. [Footnote is in the original.]
9. The Department of Defense has stated that its criteria for determining comparative costs are on the basis of Bureau of the Budget Bulletin 60–2, September 21, 1959. [Footnote is in the original.]
10. Budget proposes deletion. [Brackets and footnote are in the original.]
11. Defense-JCS proposal. [Brackets and footnote are in the original.]
12. Treasury, Commerce, Budget, FAA proposal. [Brackets and footnote are in the original.]
13. Proposed by State, Defense, OCDM, JCS. [Brackets and footnote are in the original.]