Bulletin of Concerned Asian Scholars vol 2 Issue 2

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CONTENTS

Vol. 2, No. 2: January-March 1970

Alfred W. McCoy and Angus McDonald - Pan Am Makes the

Going Great

Carl Riskin - Chinas Economic Growth: Leap or Creep?

Portfolio of Drawings from the National Liberation Front

Herbert P. Bix - The Security Treaty System and the Japanese

Military Industrial Complex

Orville Schell - Melby: The Mandate of Heaven

Edward Friedman - Extremists are Extremely Extreme

Ngo Vinh Long - Leaf Abscission?

BCAS/Critical Asian Studies

www.bcasnet.org


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CCAS Statement of Purpose

Critical Asian Studies continues to be inspired by the statement of purpose

formulated in 1969 by its parent organization, the Committee of ConcernedAsian Scholars (CCAS). CCAS ceased to exist as an organization in 1979,

but the BCAS board decided in 1993 that the CCAS Statement of Purpose

should be published in our journal at least once a year.

We first came together in opposition to the brutal aggression of

the United States in Vietnam and to the complicity or silence of

our profession with regard to that policy. Those in the field of

Asian studies bear responsibility for the consequences of their

research and the political posture of their profession. We are

concerned about the present unwillingness of specialists to speak

out against the implications of an Asian policy committed to en-

suring American domination of much of Asia. We reject the le-

gitimacy of this aim, and attempt to change this policy. We

recognize that the present structure of the profession has often

perverted scholarship and alienated many people in the field.

The Committee of Concerned Asian Scholars seeks to develop a

humane and knowledgeable understanding of Asian societies

and their efforts to maintain cultural integrity and to confrontsuch problems as poverty, oppression, and imperialism. We real-

ize that to be students of other peoples, we must first understand

our relations to them.

CCAS wishes to create alternatives to the prevailing trends in

scholarship on Asia, which too often spring from a parochial

cultural perspective and serve selfish interests and expansion-

ism. Our organization is designed to function as a catalyst, a

communications network for both Asian and Western scholars, aprovider of central resources for local chapters, and a commu-

nity for the development of anti-imperialist research.

Passed, 2830 March 1969

Boston, Massachusetts


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DRAWINGS FRoM THE NATIONAL FRONT. FOR THE .LIBERATION' OF SOUTH VIET HAMThe drawings reproduced on ..pages 25 through 29 were done ,by ar t i s t s of the Natioual. Front fo r .the Liberation of .South Viet! NaIll. They are, from a. co l lec t ionof13S prints .'available in three folios under th e t i t l e Miln!!!! Viit NaIll:.Dit Nl1lfc. Con Ngdai (South Viet Ham: Country and .people) . Liberation Publishing House. 1967. An exhibition baaed onselections from th is collection i s available to . interestedpersons or organizationsthl:tlU8h the CCAS chapter of CornellUniversity. . .. '

-navid Matt


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. January 1970 I Volume 2; Nuniber 2 contents2S

192530

s.S9.6373

Alfred W. McCoy &:AngusMcDonaldCar/Riskin

HerberJ P. Six

OrvilleSchellEdward FriedmanNga VUrh Long

EditorStafffor this Issue

Editorial BOIU'rl

SubS!;riptionsCo"espondence

CommunicationsPan Am Makes the Going Great

China's Economic Growth: Leap or Creep?Portfolio of Drawings from the National Liberation FrontThe Security Treaty System and the Japanese

Military.;fndustriaJComplexMelby: 1be Mandate of HeavenExtremists Are Extremely ExtremeLeafAbscission'"?Note on the Contributors

JamesSanfonlChuck Hayford, Nancy Hodes, Tom LifsonJon Livingston, Jim MorrellKathleen Gough Abede, Nina Adams, Herbert Bix,Noam Chomsky, Bob Clark, John Dower, Edwardfriedman, LeighKapn, Maurice MeiSl1el',Jonathan Mirsky, Ray Moore, Gary Porter.franz Schunnann,Mark Selden, Jon Ungar,Marilyn Young

$4 for one year, 52 introductory student rate1737 Cambridae Street, Room 30SCambridge, Mass. 02138Copyright C> 1970 by the ! ! P ~ t i ! l ~ t ~ ' L ~

~ ! ! ! ! L ~ ' ! . ~ . . : . Published quarterly - October.January, April, and July - by the Committee ofCom:emed Asian Scholars. NationalCoordinators: Jim Peck & Orville Schell


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Communications

The Join t Statement of Two PeoplesAcross the PacificWe, cit izens of Japan and ci t izensof the United States, denounce theresults of th is week's negotiat ions

between the prime minister of Japanand the president of the United Statesas they are expressed in the jo in t com-munique issued from th e White Houseear l ier today.

I t is clear that the negotiat ionsregarding Okinawa have not been conducted in the in terests of the peopleof Okinawa, mainland Japan, an d theres t of Asia, but rather in the inter-ests of perpetuating an d extendingAmerican mili tary presence in thatpart of the world. The communiquereveals an in tent to bolster the Amer-ican securi ty system in Japan, and theeconomic and pol i t ica l controls thatgo along with i t . I t also insuresthat the people of Okinawa and mainlandJapan, af ter many years of vigorousprotest , wil l continue to see theirhomeland used as a staging area formilitary campaigns l ike the War inVietnam.

Okinawa has been a mili tary colonyof the United States since the endof World War I I . With almost to ta ldisregard for the dignity and l ive-l ihood of the people, the Americancommand has militarized the i r islandand enjoyed free use of the basesthere for operations throughout th ePacif ic. The people of Okinawahave been exploited economically,pol i t ica l ly , and cuLturally by asystem which i s , a t i t s core, bothracis t and undemocratic. They l ivein constant danger from the existence

of American mili tary faci l i t ies , whichinclude both nuclear stockpiles andchemical and biological weapons.The agreement reached today (Novem-ber 21 , 1969) in the jo in t communiqueclearly violates the consistent demand

of the people 0 f Ok inawa and mainlandJapan for immediate and unconditionalreversion to Japanese administration.By t ransferr ing legal t i t l e of Okinawato Japan while leaving the mili tarycapacity of U.S. bases substantiallyintact , both governments hope to muteopposition to the entire security system represented by th e U.S.-JapanSecurity Treaty. On th e other hand,today's agreement, by allowing forspecial arrangements regarding nuclearweapons and prior consultation vis -a-vis the bases in Okinawa, establishesthe possibi l i ty that the same conditonsmight la te r be applied to the basesin mainland Japan. The apparent "Japanization" of Okinawa, in this sense,will in fact lay the basis for th e"Okinawanization" of Japan.

The U.S.-Japan Security Treaty,which provides for the stationing ofover one hundred American mili taryfaci l i t ies in mainland Japan, infringeson Japanese sovereignty, jeopardizesthe l i fe an d property of the people,and implicates Japan in U.S. militaryoperations throughout Asia. I ts effectis to increase the insecurity of Japanby set t ing that country 's interestsover against those of their Asian neighbors. I t forms th e basis of cooperativeneocolonial exploitation of other Asiancountr ies by the U.S. and Japan. Inaddition, the mili tary al l iance basedon the Security Treaty, accompanied bythe strengthening of th e mili taryforces of Japan, wil l be a direct threatto the independence of other Asiancountr ies. A majority of th e Japanesepeople oppose the t reaty , an d massesof them are actively struggling toblock i t s renewal next June.

We therefore urge both the Americanand Japanese peoples to make known


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3 their opposition to the deal whichhas just been negotiated in Washington.We ca l l for support of the demands ofthe people of Okinawa and mainlandJapan for immediate and unconditionalreversion, and for an end to the Secur i ty Treaty. We call upon both governments to undertake the rapid dismantlingof th e U.S. mili tary in a l l parts ofJapan, in accordance with Japan's"Peace Constitution." We believethis would lead to the recoveryof full independence for Japan andwould end present A m e ~ i c a n dominationand prevent future Japanese dominationof East Asia, especial ly Korea and Taiwan.

Signed:

Stewart Meacham, Co-Chairman, NewMobilization Committee to Endth e War in VietnamHoward Zinn, Professor, BostonUniversityNoam Chomsky, Professor, MITFranz Schurmann, Professor, U.C.,BerkeleyErnest Young, Professor, Universityof MichiganMakoto Oda, Chairman of Beheiren,JapanOrville Schell and James Peck,national coordinators, Committeeof Concerned Asian ScholarsAnti othersWashington, D.C., 11/21/69.

Saving Face the American WayAs an Asian and as an American, I find th e war and the stereotypes

it thrives on deeply disturbing. Ironical ly, stereotypes that have been perpetuated about Asians seem to apply more to Americans. We have accused A$ians of being overly concerned about saving face-which among other things involves resolving a situation without undue embarrassment. To an Asian, saving face means preventing humiliation

to one's opponent as well as to onese l f . When the opponent loses facean Asian also considers himself discredited. To an American, savingface seems to mean avoiding humiliation for oneself a t a ll costs regardless of. th e cost to one's opponent.We miss many signals because of thislack of sensit ivi ty . For example,the current l u l l in the fighting inViet Nam has been interpreted byastute observers as a signal forserious negotiations. But insteadof picking up on this possibi l i ty ,our reaction has been to demand thatth e Vietnamese admit that they havestopped fighting. By insist ing thata person say "uncle" without givingallowance for the delicacy 0 f thesituation, we r isk more than humiliat ion.

We charge that Asians value l i feless than we do. But there are factsthat suggest we don't value l i fe asmuch as we sa y we do. As one indicator of the concern for l i f e , considerates for infant mortali ty . Infantmortality ra tes ref lect such conditionas avai labi l i ty of nutrients to infantand to mothers, access to servicessuch as medical help, and the moraleand concern of the general public.The s tar t l ing fact is that th e infantmortality rate in Viet Nam is identicato that in Mississippi--36 per 1,000.But what is more alarming is that theinfant mortality rate fo r non-whitepeople in Mississippi is nearly 50per cent higher than that in VietNam. In fact , the infant mortali tyrate for non-whites in the entireU.S. is comparable to that of VietNam, a country tha t i s undergoingdestruction and to ta l war. But i ti sn ' t just Mississippi and relatedsouthern states that have higherra tes of death occurring to non-whiteinfants. Included also are statessuch as Iowa, Kentucky, Massachusetts,New York, Pennsylvania. Our countryi s supposedly a t peace, yet i f onelooks a t these figures and especially


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those pertaining to the non-whiteminority, i t ' s hard not to wonderwhether the minority population maynot be experiencing a s ta te of siegeand oppression comparable to t h a ~in Viet Nam.

We stereotype the Asians as beinginscrutable and devious, and accusethem of interfering in the internalaffa irs of our country. Calling atelegram from Hanoi on a day of moratorium an interference in our internalaffa irs is a b it far-fetched, incontrast to w h a ~ _ w e have done tophysically annihilate their vil lagesand towns. Which is interference-sending a telegram or dropping bombsday in and day out for a thousanddays?

If being inscrutable means maskingour intentions, then we disguise ou ractions by words such as "advisor",fighting war to prevent war", and"democracy." But words cannot hideour confusion and our calculatedintent to destroy. "Vietnamization"i s another inscrutable term whichonly reflec ts how Americanized theentire Viet Nam war effort has been.

We assure ourselves that the u.s.goes only to the aid of people whoask for our help and where freedomi s in danger. But whose freedom andwhat kind of aid are we talking about?And how free are we to even talk?Some- of our leaders have said thosewho speak out in a time of nationalcrisis such as this abusing theprivileges of democracy. But the sadrecord shows that the democraticprocess was by-passed in gett ingus into th is war in the f1rs t place.As for batt les in th e name of freedom,there are struggles for freedom anaself-determination going on in SouthAfrica, Rhodesia, Angola, and Mozam-bique--why are we there? Howmuch of ou r non-involvement i s relatedto the fact that the freedom-fightersare black and the oppressors white?

And as for Viet Nam, hasn ' t i t everoccurred to those who fight in thename of freedom that we may be fightingon the wrong side?Our attempts a t explaining how we

ca n get out of Viet Nam ar e jus tas inscrutable. In a recent NewYork Times interview, President ~ i x o nexplained t:hat "the way to avoid beinginvolved in wars in Asia is to continue to play a significant role inAsia." Translated, th is means "weget out by staying in ."What kind of people and nation

have we allowed ourselves to become?What we have a t t r i b u t e ~ to Asians-low r e g ~ r d for l i fe , overconcernwith saving face, being devious--reallyapply to us. This hurts because for apeople who have prided themselves forbeing frank, i t says that we're notleveling with ourselves.Isao FujimotoUniversity of California,DavisDecember 17, 1969


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Pan Am Makes the Going Great Al.FRED W. McCOY -& ANGtlSMcDONALD

The great Boeing 707/32lC cargo je trolled off th e runway toward the unloading ramp of Travis Air Force Baee. Turned and stopped by the white-overalledtechnician waving a long, orange-conedf lashlight, i t s doors rol led open toreveal th e lightweight load it ha dbrought on i t s return from th e dis tantbatt lef ield: one hundred and sixty-eight plastic-wrapped, aluminum-boxedbundles, th e bodies of American soldierskilled in Vietnam. Another Pan AmericanWorld Airways all-cargo charter was readyfor unloading.

This je t is only one of nineteen PanAm Je t Clippers w h i ~ b fly full time fromthe American mainland to Vietnam and re-turn. America's largest internat ionalair l ine is th e only American carr ier withscheduled service to Vietnam, and i t sPresident, Najeeb Halaby, estimates thata total of some 60 pieces of Pan Am'sequipment fly in and out 0 f th e war zoneregularly.

In 1968 Pan Am was paid $99.8 millionfor i t s charters to Vietnam: a sum largeenough to account for 12% of Pan Am'stotal revenues, enable i t s Pacific operations to g e n e ~ a t e 50% of Pan Am's to ta lprof i t , and make i t the leading a irt ransporter of men and material toVietnam.

The public is only vaguely aware ofth e important role of the civi l ian air -l ines in prolonging American involvementin Vietnam. Pan American ha s pioneeredprocedures which enable a military f ieldcommander to receive a high prior i tyitem from the States only 72 hours af te rrequesting i t ; th e Military Air Transport Service (MATS) and the civi l ianair l ines cooperate closely to l ink the

batt lef ie ld with th e supply l ine. On apsychological level, th e f lexibil i tyand comfort of civil ian je t transportat ion enables the mili tary to breakdown G.I. resistance to combat service.John Bartholomew, passenger officer a tTravis AFB, noted that during theKorean War troops sent out on ships had8 days during which to question theirmotives and build up anxiety. "Thisway they are in Vietnam within 16 to 22hours, before they even have a chanceto think about i t . Besides, i t ' s a lo tmore comfortable to f ly . I t ' s a greatway to go !"

Homeward-bound soldiers receive ale t te r from Gen. Creighton W. Abramsreminding them of th e pleasant momentsthey have spent in "one of 10 excitingfun capitals of Asia and th e Pacific" onthe Pan Am-initiated Rest and Recreation(R & R) program. R &R is designed- toimprove morale by giving G.I . ' s a breakin the middle of the i r combat tour.

Why ha s Pan Am taken th e trouble topioneer th e integrat ion of civi l ian andmili tary air transport and to developth e Rest and Recreation program? Whydoes Pan Am consistent ly style i t se l f"The Department of Defense's major civ i l -commercial air l ines partner"? The answerto these questions l i es in th e natureof the various interests which have al l -ied themsleves with Pan Am throughouti t s 42-year history, and the relat ionships that these groups and Pan Am havefostered with the U.S. government.Pan Am was founded in the 1920's bya coali t ion of wealthy young Yale graduates enraptured with the .glamour offlying, American investors interested inLatin America, and major aircraf t manu


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facturers. In this period Pan Am usedi ts mail contracts with the Post OfficeDepartment to destroy potential competi tors and i ts r e l a t i o n s h i ~ with theState Department to win a ir rights inLatin America and Asia. This coali t ionremained intact unti l th e end of WorrdWar I I , when domestic competitors beganapplying poli t ical pressure to break upPan Am's monopoly in internat ional a irtravel. Pan Am countered by allyingwith conservative Congressmen who fe l tthat a single carr ier was th e best meansto a strong competitive position ininternational civi l aviat ion. To strengthen i t se l f against foreign competition,Pan Am joined with the aeronauticsmanufacturers and the conservatives tourge an aggressive stance in post-wardiplomacy and commercial c o m ~ t i t i o n .

When Pan Am's efforts to restraindomestic competitors met narrow defeat ,and i t s posit ion as the aggressive arbiter of American internat ional aviat ionpolicy was eroded by i t s new civi l iancompetitors and an expanding Air Force,Pan Am's alliances and poli t ics took ona more l imited, covert nature. In the1950's Pan Am eliminated most Of i t st ies with aeronautics manufacturers,retaining only those with Boeing. I t sfinancial all ies were narrowed to a fewmajor banks, and i t restrained i t s government influence to building close t ies

w i t ~ the Air Force and the Pentagon.These t ies led ultimately to Pan Am'sreliance on military contracts and amajor role in the Vietnam War.The Early Years

The key figure in the formation anddevelopment of Pan American World Airways is Juan Terry Trippe, the so n of aNew York stockbroker. Experience in theWorld War I Navy Flying Corps and la te rin the Yale Flying Club gave him ataste for the excitement of flying thatmade his in i t ia l encounter with WallStreet seem dull . After a year of stocksand bonds, Juan quit the brokeragebusiness to begin a series of unsuccessful air l ines ventures with Corneliue

Vanderbilt Whitney (Yale '22). Despitesuccessive financial fai lures, theseexperiments led them to realize the potent i a l of the multi-engine, long-distanceaircraft for trans-oceanic t ravel andto envision a New York-Florida routeultimately l inking with a trans-Caribbeanand La t in American network.

In 1927 Trippe and Whitney began torealize their vis ion. Scurrying aroundthe New York financial dis t r ic t , theyforged an all iance with financiers suchas W. Averell Harriman, John, Hay Whitney,William S. Rockefeller, William Vanderb i l t , and Robert Lehman (o f Lehman Bros.Investment Bankers and th e United FruitCo. h who wanted cOIlUJlunications fortheir growing interests in Latin America,and with aircraft manufacturers such asSherman A. Fairchild and C . M ~ Keyes(o f Curtis Aircraft) who needed an out le tof growth for thei r infan,t industry.Trippe 's idea was that Pan Am would beth e community instrument to unite a l lAmerican aviation interests fo r international expansion, eliminating divisivecompetition, much as J.P'. Morgan hadconsolidated the railways and steelcompanies several decades before.

William A. Boeing ' P r e ~ i d e n t andfounder of Boeing Aircraft) , who joinedthe club in 1929 and was la ter a Director,stated Pan Am's purpose quite clearlybefore Senator Hugo Black's subcoIlUJlitteein 1934:

I t was a period when foreign com-panies were operating in SouthAmerica under concessions and i f PanAmerican did not go in there andhave whole-hearted support of thewhole group, i t was fe l t that theforeign companies would get thebetter of us there.

After Trippe consolidated most of NewYork's potential air l ine capital behindhis company and convinced the Cuban dict ator Machado to give him exclusive landingr ights in Cuba, Pan Am's rise was meteoricIn 1928 Trippe "made a'personal all iancewith the House of Morgan, taking the


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daughter of a partner, the l a te EdwardR. Stet t inius, as his bride" (Fortune,April, 1931), s i m u l ~ a n e e u s l y gaining anentree into th e State Departmentthrough his brother-in-law, Edward R.Stett inius Jr . Of equal significance,Trippe managed to convince PostmasterGeneral Walter Folger Brown (under Hoover, 192-8-32) that Pan Am .should be"America' s-chosen instrument" in international a ir travel. Pan Am's r ivalswere foreign carr iers , not otherAmerican corporations.

In a day when commercial ~ a s s e n g e r sand freight were incapable of generatinganything but spectacular losses for th eair l ines , possession of the airmail cont ract and i t s subsidy was the sine quanon of commercial a v i a t i ~ n . DespiteCongressional instruction to stimulatecompetition, th e Postmaster General hadsuch enormous discret ion in his awardsthat Hoover's Postmaster Brown was knownas I1Tsar of t.he Airways." He was aninvaluable. ally to a man with plans onth e scale of Trippe's. When Pan Ammoved into the Caribbean in 1928 andonto the east coast of South Americain 1930, Brown withheld the mail cont ract from Pan Am's comp.etitors andforced t.hem t-o se l lou t to Pan Am a t afract ion of their original in vestment.

WillIe the Post ~ f f i c e Department wasinstrumental in quashing Pan Am's American competition and giving i t subsidies4 and 5 times as high as those for otherdomestic carr iers , t he State Departmentwas very helpful in frustrating theresistance of foreign governments,especial ly in Peru and Colombia.In 1928 a French company was negotiating with the Peruvian government forth e r ight to establish an air l ine incompetition with th e hitherto unchallenged economic might of the W.R. GraceShipping Company and i t s related firms.The State Department advised Pan Am tomove quickly, and Pan Am's hasti ly dis-patched representative soon convincedthe Peruvian government that Pan Amcould compete more effectively with

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Grace than any other l ine . The Peruviangovernment was using th e old Chinesestrategy of playing the imperialists offagainst each other. However, as th e.struggle began to take shape, W.R. Graceand Juan Trippe real ized that it wouldbe foolish to engage in wasteful competit ion, since there was no essential conf l i c t i n their shipping and air l ineenterprises. In February, 1929, eachcompany put up $500,000 for a 50% ownership in Pan American-Grace Airways( la ter Panagra).

The Colombians s t i l l resented theAmerican seizure of the Panamanianisthmus under Teddy Roosevelt and wantedto foster aColombian-owned internationalai r l ine . Effectively combining threatsand bribes, Pan Am bought th e Colombiancompany an4 presented i t s governmentwith a Colombian-American bilateral a irpact which had been hast i ly written oneafternoon by Juan Trippe and a helpfulState Depart-ment off ic ia l . Soon Bogotawas jus t another stop in Fan Am'sgrowing system.

In three years Pan Am buil t a vastnetwork of airl ines encompassing a l l ofLatin America, purchased vast amountsof expensive equipment, and won a monopolyover American internat ional aviat ion.I t also began to ~ k e money. By 1932Pan Am was in the black by $700,000, andin 1934, when the depression had mostdomestic air l ines on th e verge of bankruptcy, Pan Am made a $1.1 million profi t .I ts Latin American operations werereturning an enormous 31% profi t on i t sinvestment and supplying th e wherewithalfor Pan Am's push into th e Atlanticand Pac if ic .

Unfortunately for Pan Am, such spectacular success did not long go unnoticed.Pan Am's l ibert ies with government funds,such as a ir mailing bricks around theCaribbean, were brought to public at tent ion when Trippe's Republican friendswere replaced by th e Democratic NewDealers. Disturbed by reports of PanAm's excesses, Senator Hugo Black openedCongressional hearings on a l l airmail


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contracts, and Postmaster General JamesFarley was preparing to demolish Pan Amwhen th e Roosevelt administrationchanged i t s mind.Strong American financial control andfrequent mili tary intervention had bui l tup tremendous hosti l i ty toward th e U.S.in Latin America. To resolve this problem, Roosevelt replaced direct pol i t ica lcontrol with the indirect economic manipulation of th e "Good Neighbor Policytwhich has marked U.S.-Latin Americanpolicies ever since. Indirect controlsnecessitated a much more sophisticatedand dexterous manipulation, possibleonly through an eff icient communications network. As Fortune put i t (April,1936):

If you want to sel l shoes in Equado r or Brazil or Uruguay, Pan American will col lect data for you onprices, competitors, poli t ics ,.and shoe consumption, wil l offersuggestions as to the best wayto exploit the market, and holdyour hand when you get intotrouble.The Imperialis t at t i tude, theworld view of things, i s no a r t i -f icial creation on the part otPan American's management. I tr ises real ist ical ly enough fromthe fact that Pan Am's businessis entirely foreign This is what gave Mr. Farley pause,this is what stopped SenatorsBlack and McKellar from haulingPan American onto the carpet foran investigation of i t s contracts. . The U.S. simply could notafford to attack an org anizationwhich had come to represent theNorth American continent , which ina great measure created new interAmerican relationships, and whoseprest ige was inextricably--sometimes intangibly--bound up withU.S. t rade.

When the investigations were over,every American ai r l ine los t it s airmail

contracts and had to be reorganized-except Pan which quiet ly accepted a10% reduction of i t s rates .Having established a monopoly overAmerican aviat ion in Latin A m e r i c a ~ Pan

Am turned to China and the Pacific. In1933 Pan Am purchased 45% of China National Airways Corporation from CurtisWright Aircraft Corp. and became responsible for the management and growthof the major air l ine for Chiang Kaishek's Nationalist government. Pan Amgreat ly improved CNAC's abysmal serviceand by 1938 had firmly secured theChinese market for American aeronauticsmanufacturers.

Pan Am then began construction on i t st rans-Pacific route to integrate i t sChinese network into i t s growing international system. Since 1932, Pan Am hadbeen conducting route surveys with theassistance of th e U.S. Navy, discoveringthe existence of two islands the UnitedStates was not even sure i t owned:Midway and Wake. Pan Am was given landin g r ights in Hawaii, the Philippines,and Guam, but when the British BOAC(then Imperial Airways) applied forlanding r ights , aur future al l ies weredenied them for "reasons 0;: mili tarysecurity."Indeed, the U.S. Navy was helpingPan Am for jus t this reason. In theFive Power Washington Treaty of 1922,the United States and Great Britaintraded their promise to cease buildingnew fort i f icat ions in the Western Pacificfor a Japanese agreement to l imit i t sconstruction of battleships. I t wouldhave been a violation of the treaty farthe U.S. Navy to construct air f ie lds onthese islands, but Pan Am was not sores t r ic ted .On November 22, 1935, the f i r s tt ranspacific f l igh t took off from SanFrancisco Bay, bringing China and thePhilippines within a few days of theU.S. and marking the las t major achievement in Pan-Am's pre-war expansion.


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The War and th e Post-War WorldWorld War II shattered the formerl imits on American aviation. Nationaland colonial boundaries closed to Pan

Am before the war were erased in i tsaftermath. Pan Am bui l t 53 a ir bases inLatin America and around the world. I texpanded the number of people on i t spayroll from 4400 to more than 80,000.In 1943 alone it earned $126 million fori t s war services, doing more than 50%of a l l military transport flying.

But i t s very success--and the hugedevelopment of airpower during the war-threatened Pan Am's position. Whilebefore the war only a handful of a i r -craft had flown both ways across th eAtlantic, -during the war -more than1.5 million men flew from America toLondon. European governments saw thepotential of airpower for dominationand control in the post-war world, andwould no longer be ineffective competi tors with Pan Am. American domesticairl ines were gaining internationalexperience ~ o r the f i rs t time, and woulddemand a share of international airt ravel ' s post-war growth and profi t .To counter both these challenges to i t sposition as the world's largest in ternational air l ine, Pan Am allied i t sel fwith isolationist-turned-expansionistCongressmen to urge a single Americaninternational air l ine, and with therapidly expanding aircraf t industry tourge a militant conquest of internationalcivi l aviation.

Juan Trippe proposed to make Pan Amthe core of a "national flag airl ine"which would take aggressively to theairways, dominating them with technicalachievement and capital investment.Among his spokesmen in government wereRep. Clare Booth Luce (R ., Conn.) andSen. Patrick McCarran (D., Nev.), authorof the 1938 Civil Aeronautics Act andla ter close ally of Sen. Joseph McCarthy.The spectacular war time growth ofthe aircraft industry from less than 1%of the Gross National Income in 1939 to

10% in 1945 presented a major peacetimeconversion problem for the industry andthe national economy. America's continental boundaries could no longer absorbthis enormous production, and the indust ry 's acknowledged organ, American Aviat ion, announced i t s enthusiastic supportof Pan Am's interna.tional program (March 1,1943):

The United States should becomeimperialist in the Pacific--openlyand aggressively. Not only shouldwe take over every Japanese mandated island, bu t we should assumecomplete control over every otherisland now nominally 'owned' byanother nation as far south as NewZealand and the East Indies. Thereshould be no exceptions, for he whoinsists on compromise in th e Pacificbas no understanding of airpower orthe ramifications of world a ir commerce There is nothing basically wrongwith a benevolent imperialism suchas the United States could provide.There is nothing basically wrongwith an imperialism that raisesstandards of l iving, creates newopportunities, and brings a betterway of l i fe to more and more people.I f we think enough of our way ofl iving to fight for i t and wreck oureconomy in helping others fight fori t , why should we apologize and shyaway from extending that way of l i feto other and larger areas?

In 1943 these ideas look concrete formwhen McCarran and other Senators of l ikepersuasion--Bilbo, McClellan, Pepper, andBrewster--introduced the so-called "AllAmerican Flag Line Bill ," proposing tomake Pan Am the single instrument of American post-war international aviation.Al though the bi l l was eventually tabled,the British were badly frightened. Earlyin the war, Roosevelt and Churchill hadagreed that Britain would concentrateon the production of smaller fighter a i r -craf t , and America on bombers and transports.. The ready convertability ofthese large American planes into instru


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ments of civil a ir power so concernedth e British that in 1943 they begandecreasing their rate of fighter productio n to s tar t tooling up for transportaircraf t .

By early November, 1944, th e problemhad become so divisive that i t wasnecessary to hold an internat ional aviation conference of 50 non-Axis nationsin Chicago to wrangle over post-war a irrights. The major obstacle to agreementwas the nascent BOAC-Pan Am r ivalry anda general fear that Pan Am would floodth e airways and destroy a l l foreigncompetition. Heading the American delegation was Anglophile Adolph Berle,Undersecretary of State. For months PanAm opposed his attempts ta pacify theBritish or compromise, but fate f inallyintervened: in the middle of th e conference, Secretary of State Cordell Hullbecame i l l , and upon his retirement wasreplaced by Juan Trippe's brother-inlaw, Edward Stet t in ius J r . Stett iniusimmediately fi red Berle as Undersecretary, destroying Berle 's prest ige an dguaranteeing th e fa i lure of th e conference.

The one resul t of Chicago was th ecreation of th e International Air Transport Association, whose bylaws providedthat a l l internat ional a ir pact s h a dto be unanimously agreed upon by a l lpart icipants. In October, 1945, Pan Amtr ied to sabotage even that by announcing a drast ic cut in fares, from $572,New York-London, to $275. Pan Am couldnot fly a t those ra tes for long, butno foreign or domestic competitor couldf ly at al l . In 1957 Rep. Cellar 's anti-t rust subcommittee heard testimony thatPan Am had used every means to denyBraniff landing faci l i t ies in LatinAaerica. On several occasions in thelate 40's and early 50's Pan Am blackedout entire airports--including terminallights--when competitors' ai rcraf t approached for emergency landings.International harmony had been so badly....ged by 1946 tha t a second conferencewas called in Bermuda. This time Pan.Aa was defeated by the united force of

the other 17 American l ines and a l lmajor foreign carr iers who combined tocreate a series of fair ly strong international a i r agreements.Similarly, during the Civil Aeronaut ics Board (CAB) internat ional routehearings of 1946-47, the united lobbyingefforts of the same 17 domestic air l inewere required to overcome Pan Am'sresis tance, and Pan Am's monopoly onAmerican internat ional a ir t ravel wasf inally broken. Trans World Airlinesand American Overseas Airlines ( laterabsorbed by Pan Am) got European routesBraniff was given a competing route inLatin America, and Northwest OrientAirl ines got a valuable route to Japan

via Alaska. Pan Am's dominant posit ionwas gradually being eroded as her American and European competitors grew instrength.The Pacific and Vietnam

WitaPan Am's Atlantic operationsquickly declining in importaace and prof i t , and growth in Latin America stagnating, Pan Am found that i t s l a s t majoarea of untapped potential was the PaciDuring the Korean War, the promise ofth e Pacific was clearly revealed, andPan Am began to plan for long-range je tai rcraf t , which were most profi table ovth e long Pacific distances.

Pan Am's changing regional focus re -quired a different poli t ical strategy.In pre-war Latin America, U.s. foreignrelations were the responsibi l i ty ofthe State Department, and aggressiveAmerican corporations with the r ightconnections were given strong diplomatisupport. But the post-war Pacific wasthe property of the organization whichhad captured i t , the American ArmedForces. Since A m e r i c a ~ s diplomatic pr ii t i es in the region were strategic andthe bulk of potential a i r transport wasrelated to military operations, Pan Amwoald have to integrate i t se l f with themilitary to reap the benefi ts of Pacifia i r t ravel


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During the Korean War, Pan Am carried114,000 mili tary personnel and 31 millionpounds of cargo and mail between th e WestCoast and Japan. But the end of theKorean War brought problems, for t raf f icwhich had been expanding a t the rate ofabout 16.6% per annum during 1950-53slowed to half that , and planes flew withfewer paying passengers. Capacity hadoutrun demand for services, and Pan Amfor the f i r s t time turned to the mili tary for help in t iding i t 0 ver th ecr i s i s . According to FredericK C.Thayer's Air Transport Policy andNational Security (1965), Pan Am pushedhard against allowing the Air Force'sMil1tary Air Transport Service (MATS,l a ter MAC) to carry non-strategic,routine passengers and cargo, attackingthe MATS competition as "governmentsocialism." At f i r s t when Pan Am askedfor the r ight to carry enough cargo tof i l l i t s half-empty je ts , the Air Forcerefused, stating that th e civ i l carriers would have to become more fullyintegrated with MATS before it couldweaken i t s own a i r l i f t capacity. Laterthe Air Force softened i t s posit ion,and by 1958 Pan Am was doing an i r regular business with military dependents.Pan Am made a few gestures aboutstrengthening i t s commitment to th eAir Force's Civil Reserve Air Fleet .(CRAF), but soon the passenger marketrevived and these proposals lapsed.

Pan Am began to add other mili tary.s tr ings to i t s corporate bow. Since1953 Pan American World Airways' AeroSpace Division has been the prime contractor for the guided missi le rangea t Patrick Air Force Base in Florida(now Cape Kennedy), where i t manages a l lbase maintenance and personnel faci l i t ies an d th e Atlantic Missile Testing ..Bange. Soon af ter the contract wasnegotiated with the government, Pan Amhired Asst. Secretary of. Defense RogerLewis, who bad part icipated in thecontract negotiations and authorization,-as a member of the board and ExecutiveVice President for Administration.

Missiles and lI l i l i tarycbarters were

not Pan Am's only labors for the military. Some 600 of i t s employees have beenengaged in systems work fo r the AtomicEnergy ~ o m m i s s i o n ' s Project Rover atJackass Flats , Nevada. Others worked atFort MacGregor, Texas, on telemetry andradar communications for anti-a ircraf tdrones. Another 256 employees worked atth e Upper Atmosphere Experiment s i te atFort Churchill, Canada, and an undetermined number were employed at th e obscure"electronic weapons testing stat ion" a tFort Huachuca, Arizona. According to anunnamed army officer quoted in the WallStreet Journal (March 18, 1960), "Heretechnicians and soldiers wil l be testingth e nuclear age communications-electronicssystems for the s i lent war--the war ofradio, of infra-red to see targets inthe dark, of automation and machines togather combat intell igence."

While mili tary contracts were ableto sat is fy Pan Am.in the early 50's, by1957 Pan Am's directors had committed th ecompany to a vast outlay: of capi ta l forthe purchase of a f leet of Boeing 707je ts large enough to replace a l l of i t spiston planes on major routes and toexpand i t s passenger capacity far beyondthe projected growth of internationalciv i l a i r travel. This brought about acr i s i s , for with an oversized f leet newje ts would be flying a t a fraction ofthe i r capacity, and the company wouldbe in danger of collapse by the early1960's . Why didn ' t Pan Am introduce th eje ts gradually and get ful l return oni t s investment in piston aircraft? Whydid Pan Am great ly over-expand i ts capaci ty and seriously r isk financial collapse?

I t seems l ikely that i t was more thana managerial miscalculation, becausePan Am i s repeating this pattern almostexactly with the purchase of i t s newmonster, the Boeing 747. The 747 isfaster and will once again inf late PanAm's to ta l capacity far beyond the p r o ~portions of the a ir t ravel market. Why.

In order to answer this question, onebas to look behind Pan Am's projections


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for Pacific a ir t ravel and examine therelationship between Pan Am, the majorinvestment banks, and the aircraftmanufacturers.Pan Am has a uniquely advantageouscredit arrangement with 38 banks acrossth e country, headed by Firs t NationalCity Bank and Chase Manhattan. Thesetwo banks have large holdings in bothPan Am and Boeing. Chase Manhattan Bankowns 6.7% of Pan Am's stock and 8.7% ofBoeing's stock (5.0% is considered apotential ly controlling interest underpending U.S. legislat ion) . Firs t National City Bank ha s a similar relat ionship with th e two companies, for one ofi t s officers is on Boeing's board, andFirs t National City's chairman, James S.

Rockefeller, has been on Pan Am's boardsince 1953.These banks are more than neutralinvestors seeking profitable holdings.In many cases they stimulate the purchaseof aircraf t that the air l ines industrycannot afford, and sometimes even windup Jwning aircraft and leasing them tothe air l ines . Both banks make sure thatPan Am's $350 million "slush fund" is

always f i l led. Recently they arrangedthe loan for Pan Am's $525 milliondeposit on twenty-five 747's whichenabled Boeing to s t a r t production.

Encouragment from banking interestsand a ready consumer in Pan Am help toexplain Boeing's production of thestreamlined 747. By 1965 Boeing hadsaturated i t s domestic and internationalmarkets with the 707 and 727, and i tseemed inevitable that the company'sfortunes would begin to decline longbefore replacement orders for new 707'sand 727's started coming in the mid1970's. The only possible solut ion tosuch a problem was to design a new andmore eff icient je t and introduce i t intothe market in a way that would force a l lthe air l ines to buy whole f leets of newmodels long before the i r old je ts hadbecome obsolete.

In 1965 Pan Am announced that by

introducing the 747 on a l l i t s routes, i t could reduce i t s costs by 30% and pass on the savings to i t s customers. Faced with the spectre of having to compete with lower rates , a l l of Pan Am's international competitors scrambled to place large orders for 747's. Convenient ly, a l l of Pan Am's American-flag internat ional competitors have domestic routes as well, so that eventually even the entirely domestic air l ines will be forced to buy the 747 to remain "competit ive. "

Not only wealthy American and European a ir l ines , but also the capitalstarved Third World nations, have beenforced to engage in the wasteful compet i t ion . A i r ~ . i n e s are an integral part ofth e national development image fosteredby the World Bank, AID, and the State Deartment, and Pan Am ha s had a key role inencouraging unnecessary capital expendi ture in this area. Pan Am paternal is tical ly trains personnel for feeder l inesof developing countries, not only inLatin America (where a 1954 investigation revealed i t owned substantial stockin eleven "independent" airways) and inpre-war China, but also in the MiddleEast (Middle East Airlines) and thePhilippines ( i t sold i t s 480,000 sharesin Philippines Airlines to Rubicon, aPhilippine corporation, in 1968).

Recently AID ha s called on Pan Am tohelp i t build shiny internat ional air -l ines for Pakistan, Thailand, Afghanistaand Vietnam through a technical ass is t -ance program oriented to American-built. equipment. In Afghanistan Pan Am hasacquired 49% of Ariana Afghan's stock. antwo of i t s directors are on Ariana's boaMost of these internat ional air l ines aregovernment-owned and many, especiallythe transcontinental l ines which areforced to purchase expensive 707's toremain competitive and which often flya t 10% capacity, lose vast sums of moneyBut having committed themselves to air -l ine t ransportat ion, these nations willnow have to purchase the newer 747's i ftheir internat ional air l ines are to survive. The bitterness of these nations


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is evident. A-t the recent StanfordInternational Air Transport Conferencean officer of Air Pakistan stronglyattacked the enormous waste and recklessness of th e ]47 program.The disposal of a company's _s'econdhand air-craft: once i t has decided toreequip presents quite a problem. Mostcompanies trade in their second-handaircraft on new je ts (except Pan Am,which usually sel ls to Third World nations or the CIA's Air America). General ly , the manufacturers then se l l theseold aircraft to subsidiary non-scheduledairl ines such as World Airways and Overseas National (General Dynamics), whichthe m a n u f a ~ t u r e r s control through a tangled maze of financial connections.

Since almost a l l of the non-scheduledairl ines depend upon the military for80-90% of their business, they frequently delay purchase of thei r aircraf t unt i lthe manufacturer has arranged a lucrativemilitary contract to f i l l i t . This t r i -angular r e l a t i ~ n s h i p was endangered inth e early 1960's when insufficient military activity brought the non-scbeduledairl ines to the point of collapse; butwith the war in Vietnam, these air l inesand their circle of manufacturers andfinanciers have prospered.In 1957 Pan Am lent money to themanufacturers and made the same sweepingpurchase with th e same inevitable results. All th e other air l ines wereforced to replace their entire f leetsand dispose of outdated aircraf t , andPan Am was faced with a devastatingsurplus of passenger capacity far beyondthe most optimistic p r o j e c ~ i o n s forcivilian passenger growth.I t was obvious to Pan Am and a llindustry observers that th e only possible source of passengers and freightcapable of f i l l ing such a huge capacityand promising a guaranteed source ofgrowth was the U.S. Air Force. Pan Am'sformal relationship with the Air ForceMilitary Air Transport Service was theCivil Reserve Air Fleet, but this hadexisted only on paper since i t s incep

tion in 1950. CRAF was essentially a doomsday scheme devised by Air Force planners supply a post-nuclear-war invasion of foreign countries or larger scale conventional engagements. I t was under the auspices of theseweak l inks that Pan Am had applied fora share in military t rafffc in 1954.General Curtis LeMay and others had opposed any weakening of the Air Forcetransport capacity unt i l the civi lcarriers secured "no-strike" unionagreements for military duty, increasedtheir cargo --capacity, and proved theirmilitary abil i t ies. Pan Am alone amongcivil ian carriers began meeting these

c r i t e ~ i a from 1956-58, when i t conducteda series of 5 major "War Games" sessionswith SAC and MATS, and increased i t scargo capacity based on military specif ications. Today Pan Am's "Air Pak"cargo loading system i s essentially theAir Force's 463L system. Without heavyAir Force use of Pan Am's all-cargo j e t s ,such a large volume of international a l l -cargo service would be impossible intoday's market.

Although these war games reduced th ehost i l i ty of th e Air Force, the MATSempire builders were s t i l l too jealousof their ~ w n aircraft simply to turnthings over to Pan Am. Pan Am onceagain found i t necessary to organizepolit ically to gain i t s objectives. Inviolation of the anti- t rust laws, PanAm organized a l l the international carr iers in January, 1958, to win the r ightto fly military personnel and to adapttheir je t f leets to military needs.T h e s ~ air l ines brought their case to theCAB, -the Air Transport Association, anda House subcommittee, and in every casewon a favorable response. But the AirForce refused to budge.

The a.irlines managed to raise th eissue into such a heated government controversy that L. Mendell Rivers of theHouse Armed Services Committee, in th espring of 1960, fe l t called upon to sett lethe matter by convening a special Congressional subcommittee to resolve the


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confl ict . Juan Trippe told Mr. Riversof Pan Am's desperate situation:As a result of th e technologicalimpact of th e effic ient passengerje t , thousands of skilled personnel will be displaced i f government t raff ic to their designatedareas is thus siphoned away (byMATS). Mr. Chairman, ou r owncompany alone expects to have torelease some 300 pilots during th enext 6 months i f traffic--otherthan normal civ i l traffic--doesn'tbecome available to th e scheduledairl ines . . . Unless our overseasflag l ines receive real assistancefrom a l l branches of government,the alternative is subsidy.

As grave as th e situation was, therewas hope. With the help of GeorgeMeany and th e AFL-CIO, Pan Am was ableto announce i ts dedication to counterinsurgency warfare. Trippe continued:Just th e other day a t a formaldinner here in Washington I hadthe pleasure of talking with President Meany of the AFL-CIO .Mr. Meany said that we couldcount on his personal support.He went on to sa y that any of myassociates in th e a ir transportation industry could approachhim personally, and he would seekto help . . Today, Mr. Chairman,these new labor agreements havepermitted us to offer ou r equipment and personnel to the mili tarynot only in wartime but also inperiods of "brushfires," with th eassurance that the mili tary cancount on us at a l l times .

With th e cooperation of Mr. Rivers,Pan Am was integrated into the Air Forceteam, and the Air Force agreed to ret i remost of i t s own transport in favor ofcivil ian carriers , awarding supplementa l contracts for mili tary charter inproportion to th e commitment of apart icular air l ine to CRAF--and giving

preference to the air l ine whose regularroutes were in th e vicinity of a military charter route. In exchange forre t ir ing a l l but a "hard core" of i t s own t ransports, th e Air Force receiveda commitment from the participatingair l ines that they would order newall-cargo je ts .

Pan Am boasts that i t s reduced military ra tes for cargo and passengers area self-sacrificing service to th e natioThis simply is not t rue-- the militaryoffers unique advantages for th e air l inThe carriers get stable, guaranteed cont racts with a consumer who always payson time, and no expensive terminal faci l i t i es , downtown t icket offices, orvast advertising campaigns are necessarPan Am pays no landing fees when i tworks for the military; i t s planes flya t 100% capacity, while c iv i l in ternational flights average about 50%.Indeed, one purpose of this program hasbeen to provide profi ts to subsidizeth e expansion and development ofAmerica's civ i l international air l ines.Pan Am was intended to be th e primarybeneficiary of these arrangements. In1961, out of the to ta l CRAF f lee t PanAm had committed 71% and was therebyentit led to receive 71% of a l l militarycharter contracts.

In 1961 America began i t s f i rs t acticombat-support role in Southeast Asiawhen 500 marines and their helicopterswere transported to Udorn Base in Thailand to provide transportation for theRoyal Laotian Army. Since Pan Am wasth e sole American air l ine to fly toThailand, i t began ai r l i f t ing cargoand civi l ian personnel related to theoperation. In May of 1961 th e ceasef i re in Laos heralded an increasedcommitment to Thailand and South Vietnam. Later in the year Vice PresidentLyndon B. Johnson and General MaxwellTaylor, Chairman of the Joint Chiefsof Staff , separately visited Saigon andannounced America's commitment to th e"freedom and independence" of the Diemregime. Pan Am received i t s new a11


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cargo 707's from Boeing, and in the yearending June 30 , 1962, the total chartercargo load of Pan Am's Pacific Division-- the best public indicator of th el ine ' s service to the mili tary--increased 450% over th e previous year to4,918,000 to n miles.

In November of 1962 American troopsdropped their role as pure" advisors"and th e Military Assistance Comm andVietnam was established. And i t camejust in time for Pan Am. In 1961,because of excess je t capacity andstrong competition, Pan Am's Atlanticservice ran a t a loss. But the growingPacific revenues were large enough toyield an overall 6.3% prof i t - - i t s f i r s tyear in th e black since 1956.Pan Am began to reinforce i t s Pacificholdings. In 1961 Juan Trippe's son,Charles, became director of th e SoutheastAsian Division of Pan Am's subsidiaryIntercontinental H o ~ e 1 s . Pan Am beganto dot the South Pacific and SoutheastAsia with luxury hotels, some, such asthe Karachi Internat ional , bui l t withAID or State Department counterpartfunds. By 1965 Charles Trippe had completed or was constructing hotels inIndonesia, Pakistan, Thailand, New Zealand, Pago Pago, Hong Kong, and Samoa.Pan Am is thus an innkeeper in manyof th e "exciting fu n capitals of Asiaand th e Pacific" to which i t ferr ies i t sR & R passengers. These hotels represent a novel form of exploitation--whileth e tour is ts are drawn to these ci t iesby their interest in Asian cultures,most of th e money they spend can besafely returned to America, as long asthey stay at an Intercontinental Hotel.

.In th e mili tary buildup for Laos andVietnam th e CRAF structure was notcalled into action. Instead the government used charter contracts awarded onthe basis of mili tary expecience andCRAF cOJlDDi tmen t . Pan Am' s planning wasrewarded: from 1960 to 1963 i t s PacificDivision charter revenues soared almost300% (from $12.6 million to $35.6 mil l ion), and in 1964 Pan Am reinforced i t s

position by hiring General Laurence S. Kuter as a vice president. Kuter had been the commander of MATS, commander of the Air Force in the Pacific, Comm-ander-in-Chief of NORAD, and a leading advocate of mili tary intervention in Southeast Asia.

But with th e assasination of President Kennedy in November, 1963, WhiteHouse loyal t ies changed dramatically.The Eastern financial and businesscircles which Kennedy had favored werepushed aside for th e Texas and California crowd. The new in-group was madeup of LBJ's buddies, such as Robert Six,President of Continental Airlines anda collector of Oriental ar t , and JamesLing of the Houston conglomerate LingTempco-Vought, owner of Braniff Airlinesof Dallas. In early 1964 th e CIA pickedup Continental Airlines for work inSoutheast Asia to supplement i ts owna ir l ine , Air America, whose facil i t ieswere being strained by the sudden escalat ion in Vietnam. In 1965 Continentaltook away Pan Am's government charterbusiness for Micronesia, and was in aposition to unseat Pan Am in the Centraland South Pacific. Robert Six hiredPierre Salinger to manage publicity forContinental's internat ional division;he hired former governor of Guam, Charlton Skinner, to ease things with thenatives; and he hired LBJ's formerchief-of-protocol to manage Washington.

The results were predictable. In1962 Continental's charter operationsflew fewer than 4 million passengermiles. By 1965 mili tary escalationpushed i ts charter mileage up to 253million passenger miles, and in 1966alone i t jumped 390%, exceeding eveni t s regularly scheduled operations. I tscharter freight division also showedenormous gains associated with the war,rising from nothing in 1962 to 93 millionton miles in 1967.

Braniff 's r ise was somewhat lesss p e c t a ~ u l a r , but s t i l l significant . I ts

c h a r t ~ r operations rose from just overhalf a bil l ion passenger miles in 1963,


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to over a bil l ion in 1967. In 1968 i tscharter operations doubled again to2 bil l ion passenger miles, more thantwice the mileage of i ts regularlyscheduled operations.Other air l ines did well during th ewar's early years too. TWA's chartersrose 650% in 1964, and 50% in 1965.Northwest, Pan Am's weak competitor inthe Northern Pacific, increased i t sannual charter operations from 61 million passenger miles in 1962 to 1.1bil l ion for 1967.

But for Pan Am, LBJ's escalation of th ewar was a disaster. In th e year followin g Kennedy's death, i t s Pacific chartersgrew a t a slower rate than i t s scheduled,civi l ian operations. In the f iscal year1965, while Continental's Pacific charters increased 25 times, Pan Am's dropped 33% from th e previous year, and PanAm finally los t i ts posit ion as theleading charter air l ine in the Pacific.The only air l ine with a scheduled stopin Saigon, th e air l ine that was depending on i t s Pacific profi ts to pay fori t s new . iets, now found i t s Pacificgrowth rate fall ing off .

This alone might have been tolerable,but the Civil Aeronautics Board wasre-opening the Airl ines Route Case, andPan Am was vulnerable. The CAB waslegal ly required to conduct a periodicreview of a l l air l ines operations, andeither to confirm the present routestructure and air l ines allocat ions orto expand the route structure and redivide i t among the competing applicants.The CAB's judgements were made on therather vague cri ter ia of the abil i ty ofthe present air l ines and a i r routes tomeet "customer needs," and t he abil i tyof new route applicants to offer immed-ia te , experienced service. Generally,the vast expense of training experienced pilots and crews and building thenecessary hangars, terminals, and repairfaci l i t ies for fmmediate service onroutes they might win was so high thatfew airlines could afford ther isk.

In the Pacific, however, th e riskswere worth taking. Inflated fares overthe Pacific (13.5 per passenger mile,San Francisco to Tokyo, vs. 7.4 permile, New York to London}, long distances, and oligopoly had brough enormousrewards to America's two .Pacific carr iers .Pan Am's relat ively limited number ofPacific f l ights gave i t 50% of i t s totalprof i ts , and Northwest Orient 's Pacificrevenues overcame i t s domestic lossesto make i t the most profitable Americanair l ine.

Eager for the rewards of the Pacificbonanza, Continental, Braniff, and TWAwere accumulating experience in transPacific flying, building fac i l i t ies , andbecoming familiar with the Pacific market- -a l l a t military expense on c o s t ~ l u scontracts. And since the largest customer in the Pacific was th e U.S. military, these air l ines could argue as wellas Pan Am that they were servicing"customer need." The competition fornew routes was so fierce that Pan Am'sold central and south Pacific monopolywould inevitably be broken; unless PanAm could get some of the new routes i twanted, i t would hold much the sameposit ion i t held in the Atlantic, theleading air l ine in a glutted low-profitmarket.

Juan Trippe hired Najeeb Halaby tosave the day. Najeeb Elias Halaby (YaleLaw '40), tes t pi lot of the f i r s t Lockheed j e t , was chief of the IntelligenceDivision for the Department of State andAssistant Secretary of Defense for International Security Affairs during the earlyyears of the Cold War (1945-53). Balabyconcentrated h is act ivi t ies on militarywork, such as founding the Air Force'sAerospace Corp., unt i l 1960 when hestepped into pol i t ics by becoming themanager of the Kennedy campaign for LosAngeles. He was appointed Administratorof the Federal Aviation Administration(1961-65), where he became the primearchi tect of the super-sonic t ransport .In 1965 Juan Trippe made him a memberof Pan Am's board of directors, heirapparent, and senior vice president.


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Halaby ~ d o p t e d a simple strategy: i fothers could get into th e charter business through the White House, he couldget his company into i t through th e~ i l i t a r y . The crucial question waswhat th e mili tary needed that Pan Am,and no one else, could give? The answerwas R & R ( res t and recreat ion). Business Week reported i t this way:

While in Vietnam several years ago(late 1965) he [Halaby] found thattroop morale was low because of alack of adequate recreation facI l i t i es . He proposed that Pan Amuse the piston planes i t was phasingout of th e Berlin a ir corridorto ferry men from Saigon to HongKong. R & R began in March, 1966.In the f i r s t three months th ef l ights cost the Defense Department ~ token $3, and Pan American

~ r l d Airways $2,400,000."There'sn a doubt that our earningscould have been higher i f we hadn't donethis ," a Pan American spokesman e x p l a i n e d ~disingenuously noting that the planescould have been used elsewhere. "Butthink of a l l the young friends we'remaking for Pan American." Pan Am put13 obsolete planes on the R & R run,and ~ u s i n e s s Week pointed out:

Important as these friends maybecome l a ter as customers, th ea ir l ine is probably gaining a moreimmediate advantage Pan Am'scontribution to the Vietnamesewar effort undoubtedly will beweighed [in parcelling out new andexpanded routes in the Pacific] .Pan Am's R & R program has helpedthe generals to continue the war bymaking the year-long tour of duty a

more bearable experience for the Amer-ican G.I. I t has saved old ai rcraf tfrom the scrap heap and put them towork in th e national interes t . And inthe interes t of Pan Am, in th e f i r s t fewmonths of R & R service there was aperceptible turnabout in Pan Am's Paci f ic charters (a turnabout only partly

due to the R & R f l ights themselves).Within a year Pan Am's "service to th enation" was up a measurable 358% andonce again i t was th e largest charteroperator in the Pacific.The return of these charters was farmore important than their monetary value, for they demonstrated Pentagon confidence in Pan Am's ab"ility to meet i t s"customer needs" and Pentagon supportfor i t s bid for new a ir routes. Whenthe long-anticipated Pacific RouteHearings were f inal ly called in 1967,Pan Am got i t s coveted long-distancegreat circ le route from New York toTokyo and another from San Francisco/L.A.to Tokyo, paral lel to Northwest's oldroute from Seatt le via the great circ le .

In no area was Pan Am's run to be duplicated by more than one air l ine, and noair l ine accumulated anything approachingPan Am's total routage.To be sure, Pan Am was not the onlybeneficiary. The Civil AeronauticsBoard--with a majority of Qemocraticappointees--proffered generous favors tothe Democratic l ines, Continental andBraniff. When the decision was passedon to President Johnson, he insisted thatContinental and Braniff get Eastern'sroutes in th e Pacific but did not touch

Pan Am. Subsequent maneuvering underNixon ha s also l e f t Pan Am safe. Clearly a near-monopoly has been transformedinto an oligopoly. But Pan Am willmanage as long as the market in th ePacific continues to grow.Predictions of Pacific market expansion depend on a ra te of growth evenhigher than that in the past . Althoughthe as yet undeveloped tourist industrywill become more important as additionalluxury hotels are constructed, even this

important source of passengers will notbe suff icient . Government, military,and business personnel must continue tot ravel in increasing numbers to f i l l PanAm's largantuan 747's.Certainly intra-Asian t ravel will notkeep Pan American growing As Asian


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discovered, the industrial structuresof many countries fa l l into a fair lyregular pattern depending uponlevel of economic development. Thusthere is a range of values, in international experience, for th e proportion of a country's national income which originates in agriculture.At which end of the range a givencountry finds i tself depends a gooddeal upon how "developed" that c ountry is , measured in terms of percapita income. 5 But i t would besurprising to find a country whoseindustrial structure not only didnot conform closely to expectationsbased u ~ o n i t s level of development, bu t took on values far fromthose of any other country in ou rexperience. This is wha-t Coneclaims to have found in China.

Specifically, the rat io ofproduct per worker in manufacturing, mining and construction(the M sector) to that in Ag-r icul ture (the A sector) rangesinternat ionally from sl ight lyover one, to a high of 2.7 forthe Soviet Union af te r World War 11 . 6But for China during the FFYP peribd,according to Cone, product per workerin the M sector was eighteen times thatin the A sector !

This aberration Cone takes asevidence of grossly inflated prices inthe Chinese M sector, which causes th eoutput of the M sector to be exaggeratedrelat ive to that of the rest of theeconomy. Now it happens that the mostrapidly growing part of the Chineseeconomy in the 1950's was preciselythe M sector. If i t s importance in thewhole economy is exaggerated, then thegrowth rate of the whole eco nomy (whichis but an average of th e growth ratesof the different parts) will seem to bemuch higher than i t "actuallyH was. Thisis th e charge Cone brings against previous

to China other eountries ' rat iosof product per worker in the Msector to that in the A sector. Thisenables him to deflate the size ofChinese industrial output, reducei t s importance in the economy, andthus lower the overal l rate of growth.Both th e Soviet Union and India arepressed into service to this end.The Soviet rat io yields an averageChinese growth rate during 1952-57 of3.5 percent per year, while theIndian rat io yields one of 3 percent,significantly lower than the rate ofgrowth of the Indian economy during the1950's. Since in the course of hisexercise CGne makes several assumptionswhich he believes favor the case for ahigh Chinese growth rate . he regardsthese resul ts as maximum estimates.But even i f one is will ing to be ~ e n e -rous and accept them, Cone is s t i l lable to flourish the growth rates of 44countries, of which only 11 were lowerthan China's during 1952-57. To ru bsa l t in the wound, these 11 were mostlyadvanced countries which did not evenhave to grow fast . Thus, China did especial ly badly in comparison with otherunderdeveloped countries! This analys is sees the much-vaunted "Chinesemodel" of development as nothing but apaper dragon.

There are SOme strong theoreticalobjections to Cone's methods, however.They pertain particularly to the com-parison with the Soviet Union. Anessential par t of the development problem of countries l ike China in th e1950's is that their rate of development is substantially lower than thatof the advanced countries in the i r preindustia1 phases. Moreover,the developed countries of today,in their pre-industrial phases,represented small populationgroups None of th e count r ies in this group had appreestimates of Chinese growth(Cone, pp.37-39). ciably more than 30 millionpeople before the process ofTo eliminate th e over-pricing industrialization had begun. 7phenomenon, Cone simply applies


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Given these differences, not only isthere no reason to expect that th einter-sectoral productivity ra t ios incontemporary China should look anythingl ike those of "advanced" countries, butthere is l i t t l e basis of comparisonwith the same countries in their "preindustrial" periods or with curren t lyunderdeveloped countries with smallpopulations. Yet, with the exceptionof Brazil , a l l of the 44 countries mentioned above with which Cone comparesChina fal l into one of these categories.8

The reason for objecting to such comparisons is that when modern industryi s introduced into a country with aslow a per capita income as China's inthe 1950's , the difference between la-:bor productivity in tha t industry andlabor productivity in t radi t ional agriculture i s l ikely to be very large - much larger than in an advanced country,an advanced country a hundred years ago,or a poor country with a small rat io ofpopulation to arable land. Generallyspeaking, "the underdeveloped count r ies are farther behind the developedcountries in product per worker inagriculture than they are in productper worker in the non-agriculturalsectors.,,9 And since, as Kuznetsshows, an "agricul tural revolution"or marked increase in output per workerin agriculture seelUS to have been aprecondition of i n d u s t r l ~ l development in today's advancl'd countries,lOthis contrast also hol.ds as betweenpoor countries today and advanced count r ies in the early stages of their industrial izaion. l l

St i l l , while my argument might just i fy expecting some difference betweenthe M:A ratios of China and, say, theSoviet Union, a difference of the magnitude of 6-to- l , such as Cone claims tohave found, is too high to jus t i fy onsuch grounds. Here we must not e thatthe same exercise ha s been carried outby T.C. Liu (whose previous labors ha dbrought the Chinese growth rate down byone-third12 ) with no such s tar t l ingresul ts . 13

Liu's calculat ions Pu t the ratioof product per worker in China's M secto r to product per worker in her A sector a t about 3.5, or only 30 percenthigher (rather than six times higher)than that of the Soviet Union. Moreover, this i s an average figure forthe FFYP period. For 1952, the yearbefore the s tar t of th e plan, China'sratio turns out to be only 2.814 orabout the same as the Soviet ra t io .Clearly there is no case to be madehere for massive overpricing of indust r i a l goods in China relat ive to theSoviet Union.

The difference between th e two es t i mates stems from the proper inclusionby Liu in China's M sector of many lowproductivity workers in t radi t ionalact iv i t ies . Cone simply leaves themout . Nor is Liu puzzled by the factthat the M:A ratio for the FFYP periodin China is high relat ive to those ofother countries. He points out that"much greater knowledge and t rainingare required of workers" in nonagricultural act iv i t ies than in "the primitiveagr icul tura l sector" in China, whichwould explain such a difference. 15Moreover, the picture he paints - - ofincreasing output in Chinese industrydue to the introduction of new machinery and equipment but few new.workers,while labor productivity in agricultureremained very low - - is consistent bothwith ou r knowledge of Chinese development strategy a t that time, and withcommonly held views regarding the natureof the development problem in the midtwentieth century.

The applicat ion of Indian s t ructura lrat ios to China is less questionamle intheory, since both are heavily populatedcountries beginning their developmentprograms from roughly similar levels ofbackwardness. But problems of def init ion, coverage and comparability loomlarge in Cone's analysis . To mentionjus t 50me of th e more glaring problems,the Iadian f igures for output are fromthe ~ e r i o d 1948-53,16 before industr i l 'dization had s tar ted in earnest ,
http:///reader/full/results.13http:///reader/full/results.13http:///reader/full/difference.15http:///reader/full/difference.15http:///reader/full/results.13http:///reader/full/difference.15


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while China's are from 1952-51, whenindustry was growing rapidly. The figures for China omit an important partof the construction industry (work brigades). Agricultural output for Indiaincludes farmers' processing (storing,processing and transporting) of c r o p s ~but apparently excludes such processing for China. Perhaps most seriously,Indian labor force figures are limitedto self-supporting persons, excludingearning dependents and persons whoseindustry and status were unclassifiable.Most l ikely for this reason, the Indianlabor force to which Cone's calculationsapply consti tutes only 29 percent ofthe total Indian population, whereasth e Chinese labor force used makes up45 percent of her population. 17 I t isnot permissible to reduce the Chinesestructure to the Indian unt i l the setsof s ta t is t ics used are a t leas t broadlycomparable both in defini t ion and incoverage.

Cone's analysis , then, does not just i fy a drastic revision of our evaluat ion of China's economic growth in the1950's. But a certain malaise l ingersfrom this discussion. After al l , i fthere is so much uncertainty about thecomparability of data from differentcountries, how much significance ca nbe attached to international comparisons based upon growth rates? Moreover, i t is almost certainly true thatChina's method of financing her budgetby relying heavily upon state enterprise profi t s rather than taxes, together with certain pecul iar i t ies in hermethod of calculating constant prices,18have given r ise to some ar t i f ic ia linflat ion of her industrial productions ta t i s t ics in the 1950's.19 The pointis that this is largely a tempest in ateapot. I t concerns the paper appearance of what th e Chinese have done - not even whether they have actuallyproduced so many tons of s teel and somany bushels of grain over a given ~ e r -iod of time, but how to value them. 0While accurate and standard systemsof evaluation are doubtless importantfor some purposes (such as making inter

national comparisons), and while i t isimportant to defend the Chinese growthrecord of th e 1950's, creditable or not(and i t was), from unfounded assaults,le t us not be under the i l lusion thatwe are discussing important factors ineconomic development. Especially inth e short run, growth ra tes , even i f completely accurate and standardized for a l lcountries, mean very l i t t l e . I t isquite possible for a small country togenerate impressive growth rates part lyon the basis of mushrooming bordellosand American bases, or for the "greenrevolution" in India to take formswhich promise growing class s t ra t i f icat.ion in the countryside and the increasedprospect of yrowth-disrupting ruralrevolution. 2

The real question regarding China'sgrowth potential is whether Chinese communism free of foreign domination andthe worst internally-generated barriersto economic development ca n evolve asocial system under which the populationwill willingly make heavy sacrificesover an extended period of time formaterial resul ts largely in the future. 22In another recent book on the Chineseeconomy, an industrial managementspecialist a t D.C.L.A. examines indeta i l China's response to this questionand leaves l i t t l e room for doubt thatwhatever the vagaries of the growth ratemongers, in the things that count for th efuture the Chinese have already compiledan impressive record. 23

FOOTNOTES1. Eckstein, Alexander, 1967. Testimony before the Joint Economic Committeeof Congress, in Mainland China in theWorld Econemy,


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Product and Social Accounts, 1950-1957,(Glencoe, I l l ino is ) , p.2; Liu-Yeh, ibid . ,p. 213; Wu, Y.L., .F.P. Hoeber, and ~M. Rockwell, 1963, The Economic Potent i a l of Communist China, Vol 1,(MenloPark,-California) p. 241. A c o m p a r i s ~ nof these different estimates can befound in Liu, T. C., 1968, "QuantitativeTrends in the Economy," in EconomicTrends in Communist China, Eckstein,Galensoo-and Chen, ed.,(Chicago) pp .95-119.

3. See for eKample a review of LiuYeh by Dernberger: Dernberger, RobertF., Journal of Poli t ica l ~ c o n o m y , Vol73 , No.4 , (Augus t , 1965). Gurley hascri t icized the Liu-Yeh estimates inan unpublished paper., as has Richman,Riclunan, Barry .M., 1969, Industr ia l 'Society in Communist ghina, (New York)Chapter 7. An exchange on this issuebetween several part icipants can befound in Ho and Tsou, Ho Ping-ti , andTang Tsou, 1968, China in Crisis , Vol.I , Book 2,(Chicag9- ' - - . -

4. "Chinese Industrial Growth: Overa ll level of Investment and i t s R ~ l a t i o nto General Growth Rate, It MemorandumRM-5841-PR!ISA, May 1969. This is thethird of a series of memoranda dealingwith the economy of China and is to somedegree based upon the other two. Theseare "Chinese Industrial Growth: BriefStudies of Selected Investment Areas,"RM-5625-PR!ISA, November 1968; and"Chinese Industria'! Growth: InvestmentOutlays, 1952-1957," RM-S662-PR!ISA,November 1968.

5. The pioneer at this sor t of invest igat ion is Simon Kuznets. A convenient introduction to i t and i t s findingsis to be found in Kuznets, 1959, SixLectures on Economic Growth, (Glencoe,Il l inois) , Lecture III .

6. Kuznets, 1963, "A Comparative Appraisa l ," Ch. VIII of Bergson and Kuznets, ed. , Economic Trends in th e SovietUnion (Cambridge, Mass .), p. 34a . -7. Kuznets, 1963, "Underdeveloped

Countries and the Pre-Industrial Phasein the Advanced Countries," in Agarwalaand Singh, The Economics of Underdevelopment, (New York), p. 147

8. Kuznets, "A Comparative Appraisal,"Table VIII. 4, p. 340.

9. Kuznets, Six Lectures on EconomicGrowth, p. 54.

10. Ibid. , pp. 59-60.11 . I t is noteworthy that Cone discusses this objection in an Appendix designed to jus t ify applying "other country"weights to an underdeveloped country.But in th e simple model'he presents toclinch his point " he assumes that thereare no significant producti\f'ity differences between the countries concerned,

thus assuming away the problem. SeeAppendix C, pp . 7 5 - 7 6 ~Liu-Yeh, The Economy of th eChinese Mainland 1933-1959, p. 213.

13 . Liu, T.C., "Quantitative Trendsin the Economy," pp . 123-::j.28.L i u . J . ' ~ C . , 1968, "Economic Developmen t , Q { . ~ 1 : n - e 9 l . ! i n j } s e ~ H p , i ! ! - l a n d , . 19491965," in l i o . a r i 9 . : ~ 1 ' $ O U ~ ed., China in

Crisis , Vol. on'e. -Boe< two (Chicago;,pp . 626, 627, 6 3 ( } . ; , , t ' \ - J : " " , , ~ - : '14 . Liu, T.C., "Quantitative Trendsin the Economy," p. 124.15 . Ibid. , p. 127.16 . Not 1950-58, as Cone's Table 12,

p. 45 , incorrectly states . See Cone'ssource:' .Kuzne t s , Simon, 1957. "Quant i -tat ive Aspects of the Economic Growthof Nations, I I ," in Economic Developmentand Cultural Change, July, 1957. Appendix Table 1, pp. 62ff.

17. India 's population and laborforce s ta t i s t ics are taken from the United Nations Demographic Yearbook, 1955.The industrial distribution of laborforce is on p. 536. Chinese population
http:///reader/full/123-::j.28http:///reader/full/123-::j.28


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is from Hou, Chi-ming, 1968, "Manpower, Employment and Unemployment,1t inEckstein, Ga1enson and Liu, ed., Economic Trends in Communist Ch ina, (Chicago)p. 332; and employment distr ibution fromLiu-Yeh, The Efonomy of th e Chinese Mainland 1933-1959, Table I I , p. 69.18 . Li, Economic Development of Com-munist China, ch . II .

Chao, Kang, 1965,. The Rate andPattern of Industrial Growth in-comm;nrstChina, (Ann Arbor, Michigan) ch. III.19 . I t is also true that g r o w t ~ ratesfor other countries are affected by monopoly pricing prae t ices in in dustry, whichraise industrial output values abovetheir "true" factor cost level.20. The difference between the off i cial Chinese government s ta t is t ics andthose of both T.C. Liu CODe, on th e

other hand, does contain an important"real" element..21. Frankel, Francine R., 1969,"India 's New S t r a ~ e g y of AgriculturalDevelopment: Political Costs of Agrarian Modernization," Journal of Asian

Studies, August, 1969 - . - - - -- - - . 22. This is an oversimple formulation, since improved health and sanitat ion, access to l i teracy, and assuranceagainst starvation are-certainly substan

t ia l material improvements brought aboutin th e l as t twenty years.23. Sec Barry M. Richman, IndustrialSociety in Communist China. Ceuain deficiencies in Richman's understandingand handling of "Maoist ideology" detract

l i t t l e from his illumination of the l inksbetween soeial and poli t ical changes andindustrial development in China.

ICDp lnternational Confederation fOf Disarmament and Peacec o n f 6 d ~ r a t i o n Inter:ation.ale le..D6sarmement et la PaixInternatlonale KonfoderatlOn fur Abr-ustung und FriedenFor carefully documented, up-to-date b a c k g r ~ u n d material, and insideinformation on the war in Vietnam, th e Talks in PariS, the situationin South Vietnam, . n ~ i n t e r n a t i o n a l developments:readVIETNAM INTERNATIONALThe moDthly journal published bythe IDteruational Confederation forDisarmament and Peace (ICDP),edited by PeglY Duff

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PORTFOLIOOF DRA WINGS FROM THE NA TlONAl. LIBERA T/ON FRONT


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30 The Security Treaty System andtheJapanese Military-Industrial CompleHERBERTP. BIX

INTRODUCTIONRecently much discussion has focusedon the U.S.-Japan Security Treaty, f i r s tsigned in September, 1951, renewed in amore equitable form in 1960, and up forrenewal again in 1970. Much lessattention has been paid th e U.S.-Japanmilitary-economic relationship shapedlargely by adminstrative agreements that

followed in the wake of the f i rs t Secur i ty Treaty. This art icle deals withthat military-economic relationship andother aspects of recent U.S.-Japaneserelations relevant to th e discussion ofcontemporary American imperialism inAsia.I will try to show thatarglBDents insupport of th e U.S.-Japan mili taryalliance fai l to recognize that Japanhas already rearmed on a scale sufficienLto pose a threat to her neighbors.Fa r from deterring this development,the U.S.-Japan all iance system hasactually facil i tated i t . Japan's rearmament, moreover, has been accompanied by the re-emergence of a militaryindustrial nexus which is becomingincreasingly interrelated with theAmerican military-industrial complex.The attempt by Japan's conservativerulers to legitimize and promote thatcomplex and define a new foreign policyrole for the Seventies poses the greatestdanger that postwar Japanese democracyhas yet had to face.Apologists far the Security Treatyhave dowoplayed the long-standingAmerican policy of pressuring Japan torearm and assume a s u b ~ r d i n a t e policeman'srole in Asia, and i t s poli t ical andeconomic consequences for Japanesesociety. They have been equally un

cr i t ica l of American "cultural" act ivi t iesin behalf of conservative Japanese unioni s ts and anti-Marxist intellectuals. Yetever since Occupation authorit ies defineda Itstable l t Japan as one in which Japaneselabor was poli t ical ly neutralized, policymakers in both countries have tended toregard the Social ist and Communist-ledlabor movement and the Marxist intellectualswho support i t as common internal enemies,despite the fact that they have been thestaunchest defenders of democratic l ibert ies in Japan.

In the las t part of the art icle Iquestion th e realism of this policy stance.I suggest that the American policy ofweakening and discrediting the forceson the le f t in Japan has simply been thereverse side of the policy of spurring onJapanese rearmament.

Part I Japan's Present Military PostureJapan has rearmed and already possessesformidable military strength. A barel is t ing of facts about her Self-DefenseForces indicates why Japan is now rated6th or 7th in the world in terms of actualmili tary power.The Ground Self-Defense Force (G.S.D.F.)is expected to have 180,000 men 1971with a volunteer reserve of over 30,000. 1While small, this army has a high proport ion of officers and non-coms and could

easily be expanded to millions i f theConstitutionwere revised and a Conscript ion law enacted. 2 Under the presentThird Five Year Plan the G.S.D.F. hasbeen equipped with Japanese-made smallarms, anti-tank rockets, and heavy tanks.For ant i -ai rcraf t defenses it has autorna t ic , radar-:-guided, 35 mm. Swiss-


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31guns and several battal ions of HAWK miss i les . I ts a ir support component isalso being -augmented with 60 Hughe-sreconnaissance and command helicoptersand 106 Japanese-manufactured BellIroquis troop-carrying helicopters.

Japan's Maritime Self-DefenseForce (M.S.D.F.) is the third mostpowerful navy in th e Pacific af terthose of the U.S. and th e SovietUnion. According to the latest Jane'sfigures, i t ha s 9 diesel-powered submarines, 26 destroyers' including oneguided missile type, 16 frigates, 20fast patrol vessels and 155 assortedsupport ships, motor torpedo boats,landing ships, and service craf t . I talso has an a ir component of 190 fighteraircraft and 50 helicopters. 3 Thisnaval arsenal will soon be beefed upand a naval reserve force started.M.S.D.F. contingency planning for the1970's is said to cal l for the deploymentof ships and aircraft to Singapore "toprotect Japanese shipping in the event ofserious trouble in Hong Kong. "4 Thecruise of a Japanese f lo t i l la squadronthrough the strategic Malacca Straits ,between Malaysia and Sumatra, and i t spart icipat ion in naval maneuvers withAustralian and Malaysian warships duringth e summer of 1969, was probably correct lyjudged as the "prelude to a future: .Japanese naval presence in SoutheastAsia. itS

The Air S ~ l f - D e f e n s e Force (A.S.D.F.),with 1,530 aircraft , was recently ratedby ! ! ! Force magazine as th e mostpowerful in Asia af ter the U.S. andRussia. 6 I t has 200 Fl04J's, 300 F86Dand F86F fighters, Nike-Ajax(surfaceto-air) missi les, 400 je t t rainers , and30 large Sikorsky helicopters. TheNike-Hercules missiles which she is nowmanufacturing provide Japan with an o p t i ~for a missile-type nuclear deliverysystem. 7 "This however, will not bethe f i r s t or only nuclear d ~ l i v e r ysystem t h a ~ Japan possesses. TheJapanese-manufactured EIKO (Fl04J)presently in service, can carry anuclear bomb anywhere within a 700-mile

radius . ft8 In the 1970's Japan willacquire a third nuclear delivery optionas the F4E P h a n t o m ~ a long-range fighterbomber capable of carrying nuclear weapons,becomes th e mainstay of th e A.S.D.F. Itis interest ing to note that the Japanesegovernment in 1960 . held that the A.S.D.F. couldnot be equipped with any kindof bomber aircraft ; la ter i t saidthat Japan could not possessfighter bombers with long flyingrange but could have such an a i r -craf t whose cruising range wasshort; now the A.S.D.F. is in theprocess of acquiring a fighterbomber with a radius of 3,700kilomet res . 9

On th e assumption that "offense is thebest defense," her officers speak ofbuilding a 5,000 plane'airforce, suchas Japan had during World War I I .Needless to say, this military capabi l i ty does not even begin to suggest Japan's economic potential fo r waging conve nt ional 'war. That is to be seen in thefact that Japan has the third largestGNP in the wor11: l45 'bi l l ion in 1968

and expected to reach from 500 to 8 0 ~ 0bi l l ion by the end of the Sevent

Documents

Bulletin of Concerned Asian Scholars vol 2 Issue 2