Secretary of the Air Force to design a plane that must be sold commercially as well as to the military. Senator CANNON. May I ask the chairman: Does he have the idea that someone will develop this airplane if these people are given another $10 million of business a year? GOVERNMENT-INSURED LOANS FOR CARGO PLANES Senator MONRONEY. As I told the distinguished Senator, that is only a very small portion of this whole general picture. I am sure the Senator is aware of what General Quesada has been trying to do with the support of the President, that is, to provide for Government-insured loans for cargo planes which meet the specifications, performance, and otherwise, of commercial carriers as well as the Air Force's. And that had been awaiting this bill, which is in the drafting stage, I may say, in the Federal Aviation Agency. We have been awaiting it almost for a month. It has been only the opposition of the Air Force itself that has prevented us from getting this through. Senator CANNON. I think I saw a few days ago in the press, reports that the Flying Tiger Lines were definitely opposed to any subsidy, and they were one of the lines mentioned there. Senator MONRONEY. This is no subsidy. Senator CANNON. There is certainly a subsidy if the Government is going to guarantee the loans to put these people into business to buy the airplanes. Senator MONRONEY. Do you think there is a subsidy for the housing? Senator CANNON. Yes, to a degree. Senator MONRONEY. I do not think we lost anything of the subsidy to the merchant marine on building ships for the sealift, usable in wartime, by insuring these loans, and I do not think the Senator means what he says, that a Government-insured loan with a 25-percent downpayment on the most modern planes off the line would be a subsidy if we insured the other 75 percent of that loan. EFFECT OF INSURED LOAN PROVISION Senator CANNON. I want to say this. I do not want the chairman to infer that I am opposed to that sort of thing, because I have already stated that I would favor even going so far as to favor a direct subsidy to get this type of airplane. That I believe in. We just disagree in the method that we would go about getting it, but may I ask the chairman this: Does he feel that if this insured loan provision is put through that that would result in the commercial builders proceeding on their own at their own expense to develop and produce the airplane? Senator MONRONEY. I certainly think it would. We have already seen evidence where Canadair was able to sell 15 very expensive planes to U.S. all-cargo carriers with long-term payout, which meant practically the same as an insured loan, and which made it possible for them to buy it. I hate to see our carriers having to go to Canada to buy a modern air cargo plane. I was happy to see Slick buy an American-made plane. It happened they were in a good financial position, but I daresay that addi tions to these fleets will be contingent upon a Government-insured loan in order to make possible the risk that must be taken. UTILIZATION OF PRESENT AVIATION TECHNOLOGY There is a high degree of risk because air cargo is not there; it must be developed. There must be a change in the thinking. There must be a change of thinking in the military, that the only cargo that can be sent is high expense items such as aircraft motors and things of that kind. Many items today that move overseas tediously in 3 or 4 months could be moved by air. That can be done if today's present aviation technology is utilized, but it must be utilized if there is to be a breakthrough, with the cooperation of the military and commercial carriers, otherwise the whole thing will fall on its face and we will be another 10 years away from the day when aircargo will outdistance the carriers of passengers by air. THE GREAT FRONTIER This is the great frontier. The Senator comes from a great frontier country and is a frontiersman himself in his attitude toward aviation. That is why we regret that the move that we have tried to make, which eventually will inure to lower cost planes to MATS, more modern planes, planes bought in quantity rather than in small numbers and requiring only half of the capital outlay, has not come about. Senator CANNON. I appreciated the opportunity to appear here this morning, Mr. Chairman, and I think that our thinking, insofar as the end result is concerned on aviation, is certainly consistent, that I agree with you almost entirely, but I must disagree with you in some particulars as to the best method to achieve that result; however, I very firmly and completely believe that we cannot afford to stick our heads in the sand as far as the modernization of the MATS fleet, as far as getting our MATS organization up to a point to where they can do the job. USE OF OBSOLETE PLANES Senator MONRONEY. I completely agree with you on that and I even go farther than you do, as to the statement that 140 C-124's, nearly half of their fleet, is still the reliable workhorse. That is an obsolete plane. The engines are no longer made. The cost of maintenance and operation is staggering compared with what you can get in the more modern planes. If the Air Force would ever-and MATS particularly-would ever cooperate instead of obstructing the efforts to get this joint effort going, I think this thing could fall into gear and we could have exactly what the Senator from Nevada seeks. I know how airminded he is and how anxious he is to modernize this fleet, but we hate to see it begin with another false start. About $68 million was wasted by the MATS in their efforts to develop the 132. We developed the powerplant for it and no airframe to use those giant engines. About a week ago they burned the wooden mockup which was a part of this $64 million cost. That is why I am taking the time to have this colloquy, which I thoroughly appreciate having with the distinguished and very well-informed Senator from Nevada, on the necessity of the joint effort, and the joint effort implies that civilian and military must have some joint operation in the selection of the types of planes that would be used as the aircargo plane for the future. Senator CANNON. I think the chairman would agree that the development of the 133 was a development for a specific purpose, to take care of the outsized cargo and the intended authorization was only that the fleet be built up to 50, which I understand. Senator MONRONEY. But it was cut off after $64 million was spent with not even a hearing or anything of that kind. However, there is no use to worry or rehash that loss. I am merely saying that I think this matter needs to be rather carefully considered in the light of the effort to work jointly instead of at separate purposes on this. If the Senator has nothing further, it is now 1 o'clock. We do appreciate your appearance, and the time you have taken to prepare this fine statement and I am sure the committee will be glad to consider it. Senator CANNON. Thank you very much. (Whereupon, at 12:55 p.m., Thursday, July 23, 1959, the committee recessed until 10 a.m. on Friday, July 24, 1959.) SUPPLEMENTAL APPROPRIATIONS FOR 1960 FRIDAY, JULY 24, 1959 COMMITTEE ON APPROPRIATIONS, U.S. SENATE, Washington, D.C. The committee met at 10 a.m., pursuant to recess, in room 1224, New Senate Office Building, Hon. Carl Hayden (chairman) presiding. Present: Chairman Hayden, Senators Russell, Chavez, Ellender, Hill, Byrd of West Virginia, and Dworshak. DEPARTMENT OF DEFENSE DEPARTMENT OF THE AIR FORCE STATEMENTS OF MAJ. GEN. ELVIN S. LIGON, DIRECTOR OF PERSONNEL PLANNING, DEPUTY CHIEF OF STAFF, PERSONNEL; AND MAJ. GEN. ROBERT J. FRIEDMAN, DIRECTOR OF BUDGET, COMPTROLLER MILITARY PERSONNEL Chairman HAYDEN. The committee will be in order. First, we shall have the Department of Air Force testify on a request of transfer of funds amounting to $55 million to provide for an anticipated fiscal year 1960 deficiency. At this point in the record I shall insert Senate Document 40 requesting consideration of this item. (The document referred to follows:) [S. Doc. 40, 86th Cong., 1st sess.] COMMUNICATION FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING A PROVISION PERTAINING TO AN APPROPRIATION FOR THE FISCAL YEAR 1960 FOR THE DEPARTMENT OF DEFENSE-MILITARY FUNCTIONS THE PRESIDENT OF THE SENATE. THE WHITE HOUSE, Washington, July 17, 1959. SIR: I have the honor to transmit herewith for the consideration of the Congress a provision pertaining to an appropriation for the fiscal year 1960 for the Department of Defense-Military Functions. The details of this proposed provision, the necessity therefor, and the reasons for its submission at this time are set forth in the attached letter from the Director of the Bureau of the Budget, with whose comments and observations thereon I concur. Respectfully yours, DWIGHT D. EISENHOWER. 821 EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., July 17, 1959. THE PRESIDENT, The White House. SIR: I have the honor to submit herewith for your consideration a proposed provision pertaining to an appropriation for the fiscal year 1960, for the Department of Defense, as follows: DEPARTMENT OF DEFENSE-MILITARY FUNCTIONS DEPARTMENT OF THE AIR FORCE "MILITARY PERSONNEL "The Secretary of Defense is authorized to transfer to the appropriation provided under this head in the Department of Defense Appropriation Act, 1960, from such appropriations available to the Department of the Air Force for obligation during the fiscal year 1960 as he may determine, such amounts (not to exceed $55,000,000) as may be necessary for the purposes of this appropriation." The foregoing proposed transfer is necessary because experience during fiscal year 1959 has shown that the factors that have been used in estimating basic pay and quarters allowances for enlisted personnel in the budget estimates for 1960 and prior years are too low. As a result, the amounts included in the 1960 estimates are insufficient to maintain the strength of the Air Force at the level anticipated in the 1960 budget. I recommend that this proposed transfer provision be transmitted to the Congress. Deficiencies now exist in the appropriations for military personnel, Air Force, for the fiscal years 1958 and 1959, for the same reasons, in the approximate amounts of $17 million and $45 million, respectively. The exact amounts of these deficiencies cannot now be determined. Furthermore, the problem of effective financial control of appropriations for military personnel is involved. There is presently underway a study by the General Accounting Office, the Department of Defense, and the Bureau of the Budget to bring about improvement in the financial management of these appropriations. For these reasons, it is proposed to transmit these deficiency estimates for military personnel, Air Force, appropriations to the next session of Congress. Respectfully yours, MAURICE H. STANS, Director of the Bureau of the Budget. JUSTIFICATIONS Chairman HAYDEN. At this point in the record I shall insert the justifications for the item as prepared by the Department of the Air Force. (The justification follows:) |