(EST PUB DATE) CIVIL AIR TRANSPORT VOLUME IV OF IV

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 01511931
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 80
• Document Creation Date: December 28, 2022
• Document Release Date: September 27, 2018
• Case Number: F-2018-02086
• Publication Date: April 1, 1967

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CS Historical Paper
No. 87
Volume IV of IV
CLANDESTINE SERVICES
HISTORY
(TITLE OF PAPER)
CIVIL AIR TRANSPORT (CAT)
A PROPRIETARY AIRLINE
maim
1946 - 1955
DO NOT DESTROY
Date published': April 1969
Copy #2 of 2 copies
Controlled by � SO Division
Date prepared : April 1967
Written by Alfred T. Cox
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NOTICE
I. This historical paper is a permanent part of the Clandestine Services
History, 'and may not be destroyed.
2. It is included in the "Catalog of CS Histories" maintained by the
Clandestine Services Group of the Historical Staff (HS/CSG), 0/DC!.
3. If this document is moved from the office of control appearing on
the front of this cover, the DD/P Representative, Historical Staff,
0/DC!, should be immediately notified of the new office of control.
DORM
o 2485
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CS Historical Paper
No. 87
VOLUME IV of IV
CLANDESTINE SERVICES HISTORY
CIVIL AIR TRANSPORT (CAT)
A PROPRIETARY AIRLINE
1946 - 1955
Copy No. 1 of 2: SOD
Copy No. 2 of 2: DDP
Controlled by : SO Division
Date written : April 1967
Date published: May 1969
Written by : Alfred T. Cox
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VOLUME IV
REPORTS OF INTERVIEWS
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Volume TV
REPORT OF INTERVIEWS
I. INTERVIEW WITH MR. COLWELL E. BEERS . . . 1
II. INTERVIEW WITH MAJOR GENERAL W. RAY PEERS . 13
III. INTERVIEWS WITH MRS. LOUISE WILLAUER . . � 25
IV. INTERVIEWS WITH MR. THOMAS G. CORCORAN . � 35
V. INTERVIEW WITH MAJOR GENERAL WILLIAM E.
DEPUY, USA 70
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I. INTERVIEW WITH MR. COLWELL E. BEERS
Date of Interview:
Place of Interview:
Background Information
13 April 1966
The Grotto Restaurant
1013 15th Street, N.W.
Washington, D.C.
Mr. Beers transferred from the Forestry Service
to CIA in August 1949. The transfer was largely a
result of conversations with Mr. Frank Wisner, ADPC,
whom he had met while on a two-year assignment with the
Hoover Commission. His first appointment was as Execu-
tive Officer in the Policy and Planning Staff of OPC
(EXO/CPP).
prior to
his retirement in January 1964. He currently resides
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Report of Interview
The writer briefed Mr. Beers on the purpose of the
historical paper on air support (CAT) and the paper on
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The meeting with Mr. Beers was not only profitable,
but most enjoyable. He said he would be very happy to
be called on again when it is felt that he could be of
assistance. (It occurs to the interviewer that
phase of the Vietnamese operations might be of interest.)
The meeting closed with the interviewer's warm expression
of appreciation on behalf of himself and the CS/RSG.
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II. INTERVIEW WITH MAJOR GENERAL W. RAY PEERS
Date of Interview:
Place of Interview:
1430 Hours
28 April 1966
General Peers' Office
Room 1E962
The Pentagon Bldg.
Washington, D.C.
Background Information
General Peers had served with the OSS in World
War II, first as Commanding Officer of Detachment 101
in Burma, and then, as the Japanese moved back into
China, he and much of his command moved into the China
Theatre, where he served as Deputy Commanding Officer
of Detachment 202. He was one of the outstanding of-
ficers who served with the OSS. He remained in the
service after the war,
after completion
of the Command and General Staff Course at Fort
Leavenworth.
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He is cur-
rently assigned as Chief, SACSA, (Special Assistant for
Counter-Insurgency and Special Activities) of the JCS,
a position involving constant Liaison and coordination
with CIA. Previously, he had been Special Assistant
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to the Chief of Staff, USA, for Special Operations,
which also involved a considerable relationship with
the Agency.
Report of Interview
I briefed General Peers on the purpose of my visit,
which was to discuss with him the relationship of the
airline, CAT,
for the purpose of
developing a historical paper on the utilization of air
support for clandestine operations.
other things, he had initiated the first paramilitary
training program, given at Fort Benning in the summer
of 1950. (He recalled this with satisfaction, since
some of the graduates of the course were later to join
him on Taiwan.) In August 1950 he accompanied Colonel
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Richard G. Stilwell, Chief FE/OPC on a tour of the Far
East. I met with them in,Hong'Kong, at which time we
discussed what could be done, policy permitting, in
support of the UN effort in Korea. (The war was going
badly at the time, with the Allied perimeter around
Pusan steadily shrinking, but OPC had not yet been
authorized to undertake large-scale activities except
in Korea, itself.)
In January 1951, General Peers was asked to under-
take the responsibility'
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� General Peers recalled with pleasure the assistance
provided by CAT, especially mentioning by name chief
pilot Robert E. Rousselot, 'assistant chief pilot Paul
Holden, and PBY pilot Don Teeters -- it was interesting
to note that the Western EnterprisesCAT relationship
had been so close that he remembered instantly the
wives and families of those men, as well as he did the
air support activity. Don Teeters had provided the
airlink with their offshore island activities, always
susceptible to Communist mainland artillery interdiction.
Bob Rousselot had personally flown the first long-range
flights to resistance groups in Szechuan -- overflights
of 12 to 14 hours duration. At the time, CAT did not
have the equipment for such flights, and Headquarters
arranged for the charter of a Seaboard and Western DC-4.
It arrived in Taipei without a suitable door for making
drops, and it required a good deal of around-the-clock
maintenance effort in order to make the flights during
the proper moon period. This experience helped to con-
vince Headquarters of the need to accumulate long-range
equipment in the CAT inventory. Paul Holden was a
veteran of many overflights
General Peers had to contend with a dichotomy in
terms of the ChiNat intelligence and police services.
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Mao Jen-fang and one of his immediate staff, Pan Chi-wu,
were of course, by reason of Mao's inheritance of Tai
Lee's position and of Mr. Johnson's prior associations
with SACO, very much in the picture. General Chiang
Kai-min, subordinate to the heir-apparent, Chiang
Ching-kuo, was also very much involved. General Peers
felt strongly that
interest in Chiang Kai-min, had deliberately lied to
him on a number of occasions and had negated some of
his efforts. At this late date, the naming of indi-
viduals involved Would not be helpful.
with a vested (b)(1)
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Cox asked whether consideration had been given to
the cultivation of General Chiang Ching-kuo, the heir-
apparent, through the close relationship between Madame
Chiang and Mrs. C.J. Rosbert, wife of the director of
operations of CAT. Both women were White Russians and
the General and Madame Chiang were frequent guests at
the Rosbert home. General Peers replied that the
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subject had not come up prior to his departure, and Cox
later recalled that Mr. Rosbert's clearance had been
considerably delayed because of his wife's nationality.
General Peers recalled many of the people who had
joined him in implementing the project -- it can truth-
fully be said that the backbone was supplied by veterans
of OSS Det. 101 and 202 service. Because of our close
association in China in 1945,
Cox could recall almost every one tha(b)(1)
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General Peers Mentioned.
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Chennault and Cox worked with him in locating training,
billeting, and logistical sites to be available for the
people being processed at Headquarters for dispatch to
the field. Both General Chennault and Cox were rela-.
tively active at that time in getting the project roll-
ing, but as soon as General Peers and Colonel Delaney
arrived in the field, they properly took over, and we
continued to assist as required.
General Peers noted with regret that his chief air
officer, Mr. and CAT chief pilot Robert
Rousselot were not always compatible. Both were strong-
minded, aggressive and, on occasion, perhaps hardheaded.
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He had to choose between them, and since Rousselot was
not only advising and directing the overflights, but
also participating in the toughest flights, the general
had to side with Rousselot. (A similar situation had
developed in Japan, with the same result.)
The accomplishments despite the great(b)(1)
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handicap of its late start, were considerable. Valuable--
support had been given for the holding of the offshore
islands. Seaborne commando raids and the maintenance
of contact with internal resistance groups had kept the
ChiComs uneasy, and had probably forced them to main-
tain troops in many areas which otherwise might have
been released for duty in Korea. (A major.objective
of the project.)
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The contributions of CAT to these accomplishments
were the air-hauling of material and personnel (mainly
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from Japan and Okinawa), the PBY support on the off-
shore islands, aerial delivery of personnel and supplies
to resistance groups, and leaflet drops. In addition,
there was the personal assistance given, mainly by
General Chennault, in relationships with the ChiNat
Government.
General Peers and the interviewer agreed that time
had been the greatest single limiting factor on the
achievements of the project.-- the late start, the
assembling of the American staff (selection and recruit-
ment, clearance, training, processing, etc.), and then
the selection and training Of the ChiNat personnel. In
addition, there was a lack of .dequate intelligence on
the resistance on the mainland. It was regrettable that
the project had not been initiated ai the time of the
meeting in Hong Kong, in August 1950, when the deteriorat-
ing situation in Korea would certainly have justified such
an activity. A capability would then have been in being
at the time the ChiComs crossed the Yalu.
During our conversation, the interviewer had men-
tioned/
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General Peers advised that (W(1)
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General Yarborough was due in his office in a few min-
utes for a meeting at 1530 hours. He left word with
secretary to have the general come in as soon as he
arrived. General Yarborough arrived just before the
his
end
of my meeting with General Peers, and a few minutes were
spent in philosophizing anent Army-CIA relationships.
It occurred to the interviewer that it might be useful
for a few senior Agency officers to meet informally with
officers such as Peers and Yarborough, and to discuss
mutual relationships. They recognize the problem areas
and do their best to understand the Agency side. The
interviewer told General Yarborough that, in preparing
a paper on Agency activities in the PM field for the
period of 1956 to 1962, he would like to meet with him
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General Yarborough said he would be glad to do so, and
he expressed to General Peers his personal satisfaction
at the way a mutual understanding had advanced
had spent approximately 50 percent of his time at Fort
Bragg from mid-1961/
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The interviewer would like to record that his dis-
cussion with General Peers did not touch upon any cur-
rent CIA activities, since they would not be pertinent
to the historical paper under preparation, nor be proper
in view of the interviewer's current status as a retiree,
without a "need to know."
It should be noted that
great magnitude and complexity, and should be the subject
of a separate historical paper. There are still a number
of officers available who could assist in the prepa-
ration of such a paper, and certainly General Peers
would be glad to help in any way.
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(
III. INTERVIEW WITH MRS. LOUISE WILLAUER
Date of Interview:
Place of Interview:
7 September 1966
Willauer Apartment
929 Park Avenue
New York, New York
Background:
Mrs. Willauer is the widow of the late Ambassador
Whiting Willauer. She has lived for extensive periods
in the Far East, where the late Ambassador was associ-
ated with General Chennault in the formation and oper-
ation of Civil Air Transport (CAT). She has lived for
a considerable period of time in Central America, when
the Ambassador was accredited to Honduras and then to
Costa Rica. She is presently serving with the Inter-
national Rescue Committee (IRC).
Report of Interview:
Prior to his death Ambassador Willauer had decided
that he would leave his personal papers to Princeton
University; these papers covered his activities in the
Far East during and after World War II and his service
as an ambassador in Central America. About two years
ago Mrs. Willauer requested that the papers left by the
Ambassador be screened by the Agency in order to ensure
that there would be no security compromise involved in
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turning over any of the papers to the university. At
that time the writer, representing the Agency, reviewed
all of the papers Mrs. Willauer made available as being
considered for turning over to the university. Only two
or three documents were felt to be somewhat sensitive,
and, after consultation with Mr. Lawrence Houston,
General Counsel of the Agency, Mrs. Willauer very will-
ingly excluded these papers from consideration for turn-
over to Princeton.
At the suggestion of her lawyer, Mrs. Willauer
requested that Princeton University furnish her with an
inventory and evaluation in terms of dollars and cents
of any documents already in their possession that might
have been turned over to them by the late Ambassador
prior to his death. She has recently returned from a
short tour in Saigon on behalf of the International �
Rescue Committee (IRC) and received a letter from
Princeton indicating that a number of documents and
tapes prepared by the late Ambassador on the history of
CAT were in their possession. She had not been aware
that the tapes had been made, or that Princeton already
had as many documents as they indicated in their letter.
Mrs. Willauer wrote to me to indicate that she felt
that the writer ought to know to what extent documents
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had already been furnished to Princeton, and that he
might be interested in going through these documents and
tapes, particularly since he was involved in writing the
history of CAT. The writer made a couple of phone calls
to Mrs. Willauer and arranged to meet with her on
Wednesday, 7 September.
Mrs. Willauer and Cox had lunch together at her apart-
ment. She showed him the letter from Princeton which indi-
cated all of the documents that had been turned over,
with an evaluation of each document, and also indicated
that four tapes had been prepared for them by the late
Ambassador. (The reason for Mrs. Willauer's request for
inventory was, of course, for income tax purposes and
for settlement of the estate.)
The writer advised Mrs. Willauer that he would be very
much interested in going through these documents and listen-
ing to the tapes, and she indicated that she would write a
letter of authorization to the librarian of Princeton Uni-
versity that would permit his access to their records.
Since then Cox has written to the librarian indicat-
ing his interest in the matter, and suggesting that he
would like to call at the library and go through the docu-
ments and listen to the tapes.
Mrs. Willauer and Cox talked about her activities
with the IRC. After the death of the Ambassador,
Mrs. Willauer had found herself at loose ends, and had
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told Cox that she would like to find something that
could keep her usefully occupied. She felt that with
her long experience overseas in both the Far East and
Central America, she might have something to offer,
although she did not know in which direction to look.
Following a talk with Mr. of the CA Staff,
it was arranged to introduce Mrs. Willauer to the senior
members of the IRC. They were very much interested in
her capabilities, and she has been employed with them
ever since (the writer believes on a dollar a year
basis). From independent sources Cox has learned that
Mrs. Willauer is very highly regarded by the IRC and,
in the words of one of their senior officers, she is
known as "the miracle worker."
Mrs. Willauer had just returned from a four to six
weeks stay in Saigon, where she had been assisting the
permanent IRC representative there on IRC matters. He
is rather swamped with work, and the IRC hopes to be
able to give him an assistant on a permanent basis in
Saigon, and to establish a representative in Danang.
Mrs. Willauer had recorded her impressions of her
sty in Saigon, in a series of letters t0 her family,
and Cox has been provided with copies of all of these
letters. They in turn have been passed on to Mr.
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another old friend of the Willauers, with the suggestion
that some of the comments made by Mrs. Willauer and her
observations on refugee matters in Vietnam might be of
interest to the
Although not a youngster, Mrs.
Willauer is a very active womanc and was able to travel
into a number of the rural areas of Vietnam. Her letters
are most interesting.
Prior to visiting with Mrs. Willauer the writer had
discussed refugee matters with several Agency officers
who had recently returned from Vietnam, and who were
interested in some of the matters of IRC concern, such
as orphanages, schools, etc. They had mentioned to me
several areas that they hoped the IRC might look into
and find worthy of support. These comments were passed
on to Mrs. Willauer, who was aware of a couple of the �
activities, but promised to look into the others. The
writer also told her that a listing was being prepared,
which would be forwarded to her, of other ideas that
might be culled from people who had been on the scene.
On the same day as the interview, a letter was
received from the Medical Supply Corps Detachment
assigned to the Military Assistance Group in Thailand.
The writer, a major, urged that Mrs. Willauer come to
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Thailand and promised that she would be taken up into
the northeast areas of the country where there is an
acute refugee problem, particularly with regard to the
people in Laos crossing the Mekong into Thailand.
Mrs. Willauer discussed with Cox the advisability of
making such a trip, and he told her that he thought it
would be a very good thing, and that he was sure that
the major would arrange for her to go upcountry to get
an on-the-spot view of the actual problems. The writer
also told her that the commanding general of MAG in
Thailand, General Richard G. Stilwell, was an old
friend of his and also of the Willauers,
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He had visited the Far East several times and became a
close friend of the Willauers. The Oriter told her that
he was sure that the General and Mrs. Stilwell would be
very glad to see her if she visited Bangkok, and that he
was sure that her visit would be an effective one.
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ADDENDUM
INTERVIEW WITH MRS. LOUISE WILLAUER
Date of Interview:
Place of Interview:
23 November 1966
Mrs. Willauer's Residence
929 Park Avenue
Nbw York, New York
Report of Interview
At Mrs. Willauer's invitation the writer met with
her for lunch at her apartment on Wednesday, 23 November
1966. She had just returned a few days earlier from her
most recent trip to the Far East and Southeast Asia for
the International Rescue Committee (IRC). She was still
tired, and had not yet begun to prepare her report on
the trip for the IRC. Also, she was departing the same
afternoon to spend the Thanksgiving holiday with her
relatives in Massachusetts.
Mrs. Willauer described her trip, with the main
points of interest having been her visits to Hong Kong,
Thailand, and South Vietnam.
While in Thailand, Mrs. Willauer met on a few oc-
casions with Major General Richard G. Stilwell, Command-
ing General of USMAG in Thailand, and his family. She
had become well acquainted with General Stilwell while
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With the assistance and at the request of the U.S.
Army Medical Supply Corps Detachment in Thailand,
Mrs. Willauer was taken on an extended field trip,
mainly concentrated in the northeastern areas of Thai-
land contiguous to the Laos border. She visited all of
the major installations and some of the minor ones.
From Thailand she moved to Saigon, but did not
spend as many days there as she had anticipated, as
apparently the newly-arrived IRC Senior Representative
in Saigon did not appreciate too much having her come
into his bailiwick. She accomplished the major purposes
of her visit on behalf of the IRC, and then flew back to
the States. The writer then recounted to her the visit
he had made to Princeton University Library to review.
the papers which the late Ambassador Whiting Willauer
had left to the library. She had not as yet had any
real opportunity to read the various letters, copies of
which Cox had forwarded to her, but she was very much
interested in his general resume of the contents of the
papers that had been turned over to the library thus far.
The writer advised her that, in his judgment, the
most valuable portions of the papers were those which
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dealt with the activities of the China Defense Supplies
Corporation (CDS) during World War II, and which had
been fully annotated on tape by the late ambassador.
Cox also gave her a general rundown of the other phases
of the papers, which were: the establishment of Civil
Air Transport (CAT) and its operation until 1949; a
very limited coverage of the i.emaining years that
Willauer had spent with CAT; and then some of his ex-
periences while serving as Ambassador to Honduras and
Costa Rica, and in the State Department in Washington.
She was also interested in the writer's remarks on
the exchanges of personal correspondence and said that,
to the best of her knowledge, all these letters had
really been family and folksy letters sent to her brother-
in-law for him to circulate among the family. She indi-
cated that she had a number of personal letters between
her late husband and herself and she hopes to find time
before too long to review those papers.
The writer told her that since, in his opinion, the
papers dealing with CDS were perhaps the most valuable
and most documented part Of the collection, it might be
possible that Mr. Thomas G. Corcoran and his brother
David, who were also closely associated with CDS, might
be interested in contributing to the collection. Knowing
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that the current relationship between Mr. Thomas G.
Corcoran and Mrs. Willauer was not too cordial, the
writer told her that he had not wanted to speak to
Corcoran on the subject until he had discussed it with
her. She told Cox that she had no objections at all,
and hoped that they would prove to be cooperative.
In view of her very recent return from abroad and
the fact that she was more or less hurrying to get off
for the holiday, Cox thanked her for a very pleasant
luncheon and cordial conversation, and then made his
departure.
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IV. INTERVIEW WITH MR. THOMAS G. CORCORAN
Date and Place
of Interviews:
27 July 1966
University Club
1135 16th Street
Washington, D.C.
2 August 1966
University Club and
Mr. Corcoran's office
1511 K Street, N.W.
Washington, D.C.
9 August 1966
University Club
16 August 1966
University Club and
Mr. Corcoran's office
Background Information
For full background, the reader is referred to
Who's Who in America. Mr. Corcoran was brought to
Washington early in the thirties by President Roosevelt,
and he became very well known as "Tommy the Cork," one
of the so-called braintrusters in the New Deal. He con-
tinued with the Government throughout President Roosevelt's
regime, being particularly active in Asiatic affairs.
At the end of the war, he left Government service and
formed his own law firm, which today is known as Corcoran,
Foley, Youngman and Rowe. He was one of the original
backers in the formation of the airline organized by
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General Chennault and Mr. Whiting Willauer in 1946
after the war. The exact extent of his financial
interests in the airline is not known to me, but it
is believed that he, or at least he and his law part-
ners, principally Mr. William Youngman, held sub-
stantial interest, if not control. He is well known
in Washington and is on a first name basis with most
of the more prominent persons, ranging from the Presi-
dent on down. He has always evidenced a considerable
interest in the Agency, both vath regard to personnel
and to Agency operations.
Report of Interviews
The writer would like to state, prior to reporting
on the interviews, that he is fully aware of Mr. Corcoran's
political astuteness; his interest in the Agency; that,
during the period in which the purchase of the airline
by the Agency was negotiated and during the CATC/CNAC
litigation, there was occasional friction between the
Agency and Mr. Corcoran and his associates; and that
Mr. Corcoran is not fully trusted by some people in the
Agency. The writer was fully aware that Mr. Corcoran
would probably make an occasional attempt to develop
any information he might have about current Agency
activities. Fortunately, the writer had not had any
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direct contact with Agency activities for more than two
years, and, therefore, was in a position to deny any
knowledge as to current operations.
The interviews with Mr. Corcoran resulted from a
chance street encounter with him while the writer was
returning from lunch. After chatting a moment,
Mr. Corcoran invited Cox to join him for lunch at the
University Club the following day.
On that day, Wednesday, 27 July, Cox met Corcoran
as agreed at 1330 hours at the University Club.
Mr. Corcoran apologized by saying that
his schedule mixed up and that he also
engagement with a judge, but suggested
sit and chat until the judge arrived.
he had gotten
had a luncheon
that he and Cox
They were able
to talk for 20 to 25 minutes before the judge appeared.
The writer explained to Mr. Corcoran that he had.
been asked to undertake writing up the history of CAT
as seen from the field, extending from his arrival
there in late 1949 to the end of 1955. Cox said he was
writing this history entirely in the context of what the
field did; only to the extent of what the field knew of
activities at Headquarters would there be coverage of
those activities. Cox had not made any contact with
the CAT office in Washington, but he had had access to
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a number of Agency records that he had never seen or
been aware of previously. Mr. Corcoran indicated that
he was quite pleased to learn that such a history was
being written, as he felt that General Chennault and
Mr. Willauer had been quite unfairly criticized by of-
ficers of the Agency in the past. Saying that this
applied particularly to criticism of Mr. Willauer,
Corcoran specifically named Mr. as one who (b)(3)
had made written allegations as to Willauer 's integrity.
He indicated that he would be glad to assist in any way
that he could, and felt sure that he had documents that
might help in writing the paper.
The writer inquired casually as to the well-being
of Mrs. Chennault. (Ever since General Chennault's
death, Mr. Corcoran has felt an obligation to watch over
Mrs. Chennault's affairs, and ,they have maintained a .
continuing and close relationship.) He said that
Mrs. Chennault was out on the west coast, and was leaving
the next day for a tour of Southeast Asia, including
Indonesia; he inferred that her trip, in part at least,
was on behalf of the Agency. The two daughters were
in. college, one of them in Louisiana. Cox inquired as
to whether this might raise some problems with regard
to the miscegenation laws of Louisiana.
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At this point the judge arrived, and Mr. Corcoran
indicated he and Cox would talk more about that at their
next meeting. Due to the arrival of the judge, the talk
shifted to general affairs, with no mention of any con-
nection that the writer might have had with the Agency.
In parting, Mr. Corcoran asked Cox to meet him for
lunch again on the following Tuesday.
The writer, next met with Mr. Corcoran at the Uni-
versity Club on 2 August 1966. At least the first half
of the conversation dealt with personalities and is
included in this report only in that these persons are
all involved in CAT and CATi to a certain extent; at
some future date, there is still a possibility the
Agency might be drawn into certain difficulties with
them.
Mr. Corcoran said that the relationship between �
Mrs. Willauer and himself had reached an absolute
impasse, and that they were no longer talking with each
other. (Cox had talked with Mrs. Willauer a few months
before, and it was evident that she felt that Mr. Corcoran
did not handle Mr. Willauer's estate properly, and that
additional funds should be coming to the estate. She
was always quite bitter over the fact that the document
representing the bill of sale by which the Agency
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purchased CAT provided for rights of first refusal to
Mr. Willauer and to Mr. James J. Brennan, but that no
provision had been made for her to succeed to Mr. Willauer's
rights. She had retained her own lawyer some time prior
to Mr. Willauer's death; at Mrs. Willauer's request, the
writer met him briefly at the funeral services. At the
time, Mrs. Willauer was concerned as to the security
implications of explaining some of the ramifications of
the legal dealings between Corcoran's interest and the
Agency, and indicated that if she had any questions she
would get in touch with Cox.)
The writer queried Mr. Corcoran as to the current
status of the rights of first refusal. Corcoran stated
that he had been trying to get Mr. Brennan to sign off
on the rights, but that Mr. Brennan Was sulking on the
west coast, and apparently not yet willing to cooperate
by signing off. (In the judgment of the interviewer,
Mr. Corcoran and Mr. Brennan do not really believe that
they will ever be able to activate the rights of first
refusal, but since it costs nothing, they will probably
drag their heels somewhat in closing out the matter
completely.) Mr. Corcoran then stated that he had done
his best to convince Mr. Willauer, during negotiations
for the sale of the airline, that he should hold out for
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the rights of option, but that Mr. Willauer, anxious to
get negotiations completed, had on his own agreed to
accepting rights of first refusal rather than the option.
(NOTE: The General Counsel advises that Brennan
and Willauer originally had an option exercisable between
1952 and 1955 but this was rendgotiated into a first
refusal in 1951, Corcoran participating.)
Mr. Corcoran then went on to state that, on a number
of occasions, Mr. Willauer's flamboyancy and tempestuous-
ness had caused unnecessary problems, and had led to
resultant criticism from some Agency officials. He
stated that, although Mr. Brennan had certain faults,
which they both knew, he felt that Mr. Brennan operated
with better judgment than Mr. Willauer.
Mr. Corcoran then threw up a trial balloon, which
Cox had been expecting, saying he had heard reports that
the Agency was seriously considering selling the airline,
and he asked whether Cox knew anything about that. The
writer told him that he had not been in touch with CAT
affairs for some years, and that he was not really aware
of any such report. Mr. Corcoran then intimated that
his information had come from Mr. A.L. Burridge, a
former CAT employee who left CAT in the early fifties
and whom Mr. Corcoran had established as regional
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manager for the Sterling Drug Company, headquartered in
Tokyo. On a recent trip to the States, Burridge had
passed through Taipei, and apparently had picked up the
rumor there from some of his old CAT and Chinese friends
whom he had met. Mr. Corcoran also observed that he had
learned the same thing from Captain Robert E. Rousselot,
who had been a CAT officer up until the early sixties
and then had been employed by the Continental Air
Services, a subsidiary of Continental Airways. Con-
tinental Air Services is doing its utmost to establish
itself in the Far East and Southeast Asia areas, and has
strong financial backing from the parent organization.
Mr. Rousselot recently resigned from Continental Air
Services and is currently reported to be associated with
TWA in New York. The writer told Corcoran that he was
aware that Continental Air Services was doing its best
to expand, that it had a considerable volume of business
in Southeast Asia and might very well continue expanding
to the north, which might create difficulties for CAT.
Mr. Corcoran then returned to the possible miscegena-
tion problem involved with the Chennault children. He
stated that he strongly recommended to the general, when
the latter retired, that he establish his residence in
California, which does not have such laws and where
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Mrs. Chennault had relatives. The general was adamant
on returning to Monroe, Louisiana. While the general
was alive, there was no problem, of course, because of
his tremendous reputation. However, Mr. Corcoran had
contacted all of the leading political figures in
Louisiana, and he stated that everything was going most
smoothly, and that he did not anticipate any difficulties
for the Chennault family.
Mr. Corcoran then went on to tell of some of the
difficulties encountered in handling General Chennault's
will and his estate. For some unaccountable reason,
although excellent legal advice was readily available to
the general, he had prepared his own will, which practi-
cally amounted to a holographic one. The writer asked
whether there had been any problems involved with the
children by General Chennault's first wife. Mr. Corcoran
said, "Yes, there had been." Apparently the children,
knowing that CAT was a major airline .and that the
general had held the most'senior position in the airline
for years, were quite disappointed that the estate was
not much larger than it turned out to be. Corcoran said
that, strangely enough, the most difficulty had come from
the two children who had actually worked for CAT out in
the Far East. One was David Chennault, an assistant
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security officer who spent about a year with the company;
the other was Mrs. Albert (Peggy) R. Lee, who worked for
4 number of years as an administrative assistant and
in the supply department. It has to be assumed that both
these children were aware of the Government interest in
the airline, and it is not inconceivable that they might
press further on some kind of
Mr. Corcoran then shifted to a discussion of various
Agency personnel, with whom the writer presumes he had
been in contact. He said he often felt that if the
Agency had not taken a standoffish attitute, but had
treated him more frankly and openly in their negoti-
ations, a lot of friction could have been avoided. He
expressed a very high regard for Mr. Lawrence Houston,
the General Counsel, whom he has known for many years.
He asked if the writer had been aware that Mr. Lyman
Kirkpatrick, former senior Agency official, had been in
town recently. Cox said that he had not been aware of
that. Mr. Corcoran remarked that Mr. Kirkpatrick
appeared to be doing very well at Brown University and
that, although he had been' living in Mr. Corcoran's
house, he was now in the process of building his own
home, which seemed to indicate that Kirkpatrick was
quite happy and planned to remain in Providence for
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some time. Mr. Corcoran remarked that Mr. Kirkpatrick
had been very active in discussions with student groups,
particularly on current issues. The writer asked him
whether Mr. Kirkpatrick was following more or less
governmental policies, specifically with regard to the
Vietnam situation. Mr. Corcoran replied, "Oh, yeS, very
much so, indeed, arid very ably." Mr. Corcoran also
indicated that Mr. Robert Amory, formerly the DDI, was
now associated with him, and that there were one or two
other Agency officials with whom he would like to form
a similar association, should they desire to resign from
the Agency. It was obvious that there are other Agency
officials for whom Mr. Corcoran does not hold the same
regard.
Cox then turned the conversation to the subject of
the sale of CAT and stated that, to the best of his
knowledge, the agreed purchase price had been $1,750,000,
adjusted by various advances that had been made to CAT
in order to keep them going until the negotiations were
completed. Mr. Corcoran replied that this was sub-
stantially correct, to the best of his recollection, and
suggested that they move on to his office where there
were a couple of documents which he would like Cox to
see.
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They then went to Mr. Corcoran 's office at 1511 K
Street. The first document shown to Cox by Mr. Corcoran
was a paper prepared by Mr. Willauer, in which he makes
several arguments justifying the claim of the old manage-
ment that the agreed sale price was much too low in com-
parison with the actual value of the airline. Among the
arguments put forth, Mr. Wilbur pointed out that the
$1,250,000 for the purchase of the 20 percent interest
of Pan American in CNAC, which had to be put up in a
hurry in order to ensure that the purchase of CNAC/CNATC
was consummated prior to British recognition of Communist
China, indicated that the 80 percent interest of the
Chinese Government was worth approximately $5,000,000;
and that CNAC was completely immobilized, in the hands
of the Communists, and not a going doncern. At the same
time, CAT was a going concern, was strongly anti-
Communist, was controlled by Americans -- hence, the
figure of $1,750,000 was much too low. The paper goes
on to compare the assets of the three companies, with
particular reference to the maintenance facilities, and
gives other additional arguments. Apparently the paper
was prepared in the hope that the sale could be re-
negotiated.
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Cox then inquired as to the actual sales figures
that were involved in the purchase of CNAC and CATC from
the Chinese Nationalist Government. Mr. Corcoran advised
that he was certain that he had the "records" that ap-
peared in the case, and that these records included the
actual sales agreement. The secretary located a file
copy of the document entitled, "In the Privy Council-
Civil Air Transport, Inc. vs. Central Air Transport
Corporation-Record on Appeal." Mr. Corcoran quickly
located an accepted sworn statement as to the actual
sales agreement, and offered to lend the document for as
long as the writer might desire to assist him in prepar-
ing his paper. Cox thanked him very much and, as
Corcoran obviously had telephone calls piling up and
people waiting to see him, Cox excusd himself with an
agreement to meet for lunch again on Tuesday of the
following week.
(The writer notified the Office of the General
Counsel that he had the particular document in his pos-
session and would be glad to make it available to them,
if they felt that they did not have full documentation.
Apparently they did have full documentation since the
document was not called for.)
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�
The writer again met Mr. Corcoran at the University
Club on 9 August 1966. He told Mr. Corcoran that he had
been going through the file copy of the CATC appeals and
was preparing a. list of questions which he would like to
ask him at their next meeting. The writer also told him
that he found part of the document heavy going because
the lawyer's language is not the ordinary language of the
layman, and because reference is made to a number of rele-
vant cases of which he knew little or nothing. Cox asked
whether, in this particular case, if it had not had all
its unusual political ramifications with regard to
American and Communist participation and the effects of
. the Chinese Communist entry into the Korean War, could
not CATC have readily put forward a case which would as
easily have been decided in their behalf as it was
finally decided in behalf of CATI. The writer also
pointed out that the Hong Kong courts, being right under
the gun adjacent to the Chinese border, probably had
more at stake in not offendinkthe Chinese Communists
than did the Privy Council in London, which was thousands
of miles away and much more subject to American pressures.
Mr. Corcoran agreed that, if it had not been for the polit-
ical ramifications, the decision could certainly have
gone either way. Then he stated that any time you find
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that a judge is using a lot of big words and going on
at great length, there is probably a "nigger in the
woodpile," and the chances are that there has been polit-
ical maneuvering going on behind the scenes which has
affected the decision of the court.
Mr. Corcoran again brought up the activities of
Mr. Six of Continental Airways in establishing the sub-
sidiary Continental Air Services, which was trying to
establish itself in the Far Eastern Area. The writer
told Mr. Corcoran that he had been contacted by phone a
few days earlier by Captain Eric Schilling, who had
once been a CAT pilot and had resigned. After flying
with Swiss Air for a while, he had gone to work for
Captain Rousselot in Continental Air Services. He told
Cox that the reason Captain Rousselot left was that he
found it almost impossible to get quick action and
decisions from the company office, based in California,
and that despite his responsibilities as regional direc-
tor he could not make an expenditure of more than $100
without referring it back to California. Operating
under prevailing conditions in Southeast Asia, Captain
Rousselot (who the writer knows very well, and who is
a very strong-minded and determined person) finally
decided that he could not put up with these restrictions,
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and he resigned.
He was 'replaced by Captain Robert ("Dutch")
Brongersma, also a former CAT pilot. The company now
has rather extensive commitments for operating between
Bangkok, Saigon and Laos, and is apparently gaining a
firm foothold. Captain Schilling had resigned to
return to the States, and is 'Looking for employment.
He did not volunteer any information as to the reasons
for his resignation.
Cox then queried Mr. Corcoran as to whether CATI had
been able to dispose of all the assets that they had
acquired. He said that he had not been following the
situation too closely, but that he thought there was
very little left, and that Mr. Brennan on the west
coast was handling whatever there might be. He also
stated that Mr. A.R. Lee, who had left CAT to establish
a company on the west coast for the purpose of handling
the CATI assets, was no longer with the company.
Mr. Corcoran then returned again to the subject of
the $1,250,000 that had been paid to Pan American in
order to obtain clear title in the sale of CNAC to
CATI. He remarked on the fact that, although Pan
American is always waving the U.S. flag, they had not
shown any patriotism whatsoever in handling of the
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matter. He also said he was certain that, in addition
to the money paid for the sale of the assets, Pan American
had walked away with a considerable amount of cash which
was on hand in CNAC at the time of the defection.
Mr. Corcoran was quite bitter on this point and remarked
that, whereas he and his associates had really gone out
on a limb in order to deny the airline to the Chinese
Communists, Pan American had more or less held up the
transaction and had greatly profited on their deal.
Since both Mr. Corcoran and the writer had other
engagements, they separated at this time, agreeing to
meet on the following Tuesday.
Cox met again with Mr. Corcoran on 16 August 1966
at the University Club. He opened the conversation by
recounting what had happened in Hong'Kong at the time of
the Privy Council's favorable ',decision on appeal. CAT
had been notified late at night, and Mr. Brennan,
Mr. C.J. Rosbert, operations manager of CAT, and Cox met
at Brennan's apartment. It was agreed that Mr. Brennan
would remain there at the telephone while Rosbert and
Cox went out to the airfield. There they crouched in a
ditch, and at about 0300 hours the British police,
carrying bamboo shields and wearing helmets, swept in
swiftly; in a matter of ten minutes the whole thing was
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over. The Chicoms were literally caught with their
pants down -- almost all of them asleep -- and there
was no resistance..
Rosbert and Cox remained at the airport until dawn
in the event that the ChiComs might try to organize a
counter attack. They then proceeded to the office of
the Commissioner of Police, Mr. Macintosh; and congrat-
ulated him on the efficient manner in which the oper-
ation had been conducted. Mr. Macintosh appreciated
the congratulations, but urged very strongly that CATI
make every effort to move the assets from the Colony as
quickly as possible. As long as they remained there,
they presented a constaht temptation for Communist
operations.
Mr. Corcoran responded by saying that from there
on they encountered some of their major problems. The
original planning had been that the aircraft would be
put in flyable condition by JAMCO, an aircraft main-
tenance and engineering company owned by the Jardine-
Matthieson Company, and then flown to CAT Engineer-
ing and Maintenance Base at Tainan on Taiwan. This would
have been the most inexpensive and rapid way of removing
the assets. However, the British insisted that the
whole reasoning behind the favorable decision by the
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Privy Council had been based on the fact that a legit-
imate sale had been made, and that moving the planes to
Taiwan would destroy the base for that decision.
Mr. Corcoran went on to say that he felt that Sir
John Kessick, one of the managing directors of Jardine-
Matthieson, was determined to force CATI to sell all the
assets to him. He would then have them put into flyable
condition by JAMCO, and would presumably dispose of the
assets by sale to any customer that came along.
Mr. Corcoran was sure that this would have involved
sale of a considerable amount of the assets to the
Chinese Communists, whereas the whole purpose of the
long extended litigation had been to deny the planes to
the Communists.
The writer told him that he had 'seen a considerable
amount of correspondence between CATI, the Agency, and
the Department of Defense with regard to the aircraft
being moved out by the U.S. Navy. Mr. Corcoran replied
that an aircraft carrier from the Naval Base at Sangley
Point, P.I., had picked up some of the aircraft, but
that the removal of the assets had to be done mainly by
contracting with private ogranizations. He mentioned
particularly Luzon Stevedoring, a Philippine Corporation,
which dispatched a number of seagoing barges to Hong Kong
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and picked up a large number of aircraft.
Mr. Corcoran stated that this insistence by the
British that they not put the planes in flyable con-
dition and remove them to Taiwan had taken all of the
profit out of the operation. Assets such as the
Bailey's Shipyard had turned out very favorably and had
helped to avoid a disastrous loss. He said that he was
not aware of what the final figures were, but that he
had not received any financial return, himself.
He then went on to state that whereas General
Donovan and representatives of his firm had been paid
handsomely by the Chinese Government for their efforts,
it had been necessary for CATI to employ a Hong Kong
law firm, Wilkinson and Grist, to represent them in the
Hong Kong courts; in addition it had to employ the
services of Sir Walter Monckton and Sir Hartley
Shalcross to represent CATI in Hong Kong and before the
Privy Council, and lawyers of their caliber are very
expensive.
The writer then asked Mr. Corcoran whether he had
ever met Sir Percy Chen, a prominent barrister in Hong
Kong who represented practically all of the major Com-
munist interests in the Colony, and whether he had any
idea as to the type of salary he received for his
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services. Mr. Corcoran responded that he, of course,
had heard of Sir Percy Chen, but that he had no idea
as to what form of remuneration he might have received.
He felt confident that it would be commensurate with
that paid for the services of any British barrister.
Cox remarked that Sir Percy was a perfect example of a
capitalistic Communist who liked to live like a capi-
talist by getting paid by the Communists.
The writer then queried Mr. Corcoran as to the pay-
ment to Governor K.C. Wu of the Province of Taiwan of
$500,000 from the cash assets recovered in California.
This was to be balanced against the $1,250,000 which
Mr. T.V. Soong had been able to persuade the National-
ist Government to provide in December 1949, in order to
ensure that the sale went through before the British
recognition of the Chinese Communists. Mr. Corcoran
responded that he honestly did not know how it had
come about, but that General Chennault and Mr. Willauer
had apparently made the decision.
The writer then told Mr. Corcoran that this pay-
ment had raised all kinds of difficulty for CAT
management. The Nationalist Government, on becoming
aware of the payment, was highly indignant that the
money had been paid to the Provincial Governor, rather
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than to the Nationalist Government, which had provided
the money. Cox had heard that General Chennault had
cleared this payment with the Nationalist Government,
and that it was intended to stabilize the Taiwan cur-
rency. However, the Nationalist Government became
highly indignant, and for a considerable period relations
between the General and the Generalissimo were quite
strained. Although every effort was made to establish
the fact that CAT and CATI were two entirely separate
entities, this was never accepted by the Nationalists,
and the fact that General Chennault and Mr. Willauer
were active in both was used by the Chinese Nationalists
as providing proof that there was really no difference
between the two organizations. As this had happened at
a time when CAT was applying for a renewal of the fran-
chise, and when a foreign investment law was being con-
sidered, great difficulties had been created for CAT.
Mr. Corcoran replied by repeating that he was not
really aware of the payment until after it had been
made, and then rather bitterly remarked that Mr. Willauer,
after making the payment, had walked off leaving CAT and
CATI management faced with the problem, while Mr. Willauer
went on to become an Ambassador.
The writer then queried Mr. Corcoran as to his
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estimate of Mr. Willauer's physical and mental con-
dition at the time of his departure from the airlines.
Mr. Corcoran replied that Mr. Willauer was not too well
physically -- he was troubled by attacks of thrombosis,
with blood clots forming in his legs, which required
him to remain in bed for considerable periods. Also,
he appeared to be extremely fatigued mentally, and
perhaps was a little unstable at the time.
Cox queried Mr. Corcoran as to how he had been
able to arrange for Mr. Willauer to be appointed an
ambassador -- that the writer had always considered
that Mr. Willauer, because of his associations, was a
Democrat, but that he had been appointed by the
Eisenhower administration. Mr. Corcoran laughed and
remarked that that was quite an operation, and took
quite a bit of doing.
Cox then remarked that one of the problens encoun-
tered in CAT was that over a period of years it had
been necessary to clue in various government and non-
government people as to the true ownership of the air-
lines, and that this presented considerable problems.
He pointed out that, in getting American registry of
the planes in December 1949, it had been necessary to
brief the chairman of the CAB. Normally, because of
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the poor condition of the aircraft U.S. certification
at that time would not have been possible. However, by
briefing the chairman, it was possible to get �the
necessary U.S. certifications. At a later point, the
chairman had left government service and accepted a
position as president of Northwestern Airlines, a com-
petitor of CAT in the Far East area. The writer noted
that, to the best of his knowledge up to the time he
left CAT, the aforementioned president of Western Air-
lines had not registered any protest against a U.S.
Government-owned airline competing with a private
American-owned airline; but that, as more and more
people became aware of the true ownership, there would
be more and more chances of protest being raised
publicly. Mr. Corcoran responded by stating that that
was only too true, but he did not know how it could be
avoided except by using the utmost discretion in con-
sidering people to be briefed, and perhaps taking an
occasional loss if it were considered that the risk of
later disclosure was too great. He also remarked that,
as nearly as he could judge, it was almost common knowl-
edge throughout the aviation industry that there was a
considerable U.S. Government interest in CAT, to which
the writer had to agree.
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Cox then queried Mr. Corcoran as to whether or not
he was in frequent touch with Mr. Paul Helliwell, whom
Cox was anxious to
another historical
Mr.
contact in connection with this and
paper on which he was working.
had been a consultant to OPC in (b)(3)
the early days of its establishment, and had participated_
in the initial discussions with Corcoran and General
Chennault on the use of CAT by the Agency. He had
established
(b)(1)
(b)(3)
For a number of reasons,
therefore, Cox felt that a meeting with
produce valuable information applicable
him could
to a number
of
historical papers. Mr. Corcoran and Mr
have
(b)(3)
been associated
for many years.
�Mr. Corcoran
replied
that he saw Mr.
practically
every time that
(b)(3)
he came to Washington
(Mr.
is located in
(b)(3)
Miami).
said he
anxious
He did not know when he would next see him but
would be glad to pass word to him that Cox was
to get in touch with him. He said that, if
possible, and if he were aware of when
coming, he would notify Cox. in advance.
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He suggested that Cox return
to his office
with
him, and that he would call Mr.
Miami
(b)(3)
office to determine what his future
plans were
with
regard to visiting Washington in the near future.
The
call was made and it was ascertained that Mr.
(b)(3)
was on vacation in Norway, and was not expected
back
until early in September. Mr.\
Corcoran requested that
Mr. be �notified to contact
Mr. Corcoran's
(b)(3)
office when he arrived in New '-ork.
Mr. Corcoran stated that he was somewhat worried
about Mr.
condition. He stated that he was
suffering from emphysema, and that he also had been
encountering difficulties with some insurance firms whom
he was representing.
The writer thanked Mr. Corcorawvery much and
agreed to meet again, but without setting any definite
date.
As future meetings are held with Mr. Corcoran,
they will be recorded and appended to this document.
Comments of Interviewer
As is obvious from the Record of Interview,
Mr. Corcoran likes to swing back and forth from one
subject to another, rarely giving the person to whom
he is talking the opportunity to pursue any particular
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point as vigorously as might be desirable. Also, at
times, his memory appears to be a convenient one. He
remembers some events, personalities, and figures with
instant clarity, while on others he tends to be vague.
This appears to be true particularly with regard to CATI
assets and figures.
Despite the foregoing, the writer has a feeling of
confidence that Mr. Corcoran will, within reasonable
bounds, continue to be frank and forthcoming in future
meetings. He recognizes that the writer had a very
close relationship with General Chennault and
Mr. Willauer from 1949 until their deaths, and that if
a history of CAT from 1949 to 1955, as seen from the
field, is being written, that Cox is knowledgeable and
would give fair and sympathetic attention to the actions
taken and problems facing the General and Mr. Willauer.
Although Mr. Corcoran has indicated his pleasure
that a history is being prepared which might clear
away some of the criticisms of, the General and
Mr. Willauer in the past, the 'writer is sure that he
recognizes that he, too, is involved to a certain
extent -- a recognition which 'does much to ensure his
cooperation: He realizes that the record of conversa-
tions will be gone over by knowledgeable Headquarters
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senior officers, such as Mr. Houston, and that obvious
and even obscure discrepancies will be duly noted.
The conversations thus far have been interesting
and informative, and although it would be unwise to
stretch them out too long, the writer feels that there
is still some productive ground to be covered.
1'1
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ADDENDUM
INTERVIEW WITH MR. THOMAS G. CORCORAN
Date of Interview:
Place of Interview:
2 December 1966
Mr. Corcoran's Office
1511 K Street, N.W.
Washington, D.C.
Report of Interview
The writer met with Mr. Corcoran in his office at
1000 hours on 2 December 1966. Initially, Cox told him
of his visit to the Princeton University Library to
review the contents of the various documents, tapes,
and pictures that had been turned over by the late
Ambassador Willauer to the library, and gave him gen-
eral impressions as to the content of the collection.
The writer particularly told him' that he considered
that the best coverage was that given to the establish-
ment and operations of the China Defense Supplies (CDS)
Corporation, and that, between the documents and the
rather lengthy taped annotations made by Willauer,
it seemed that there had been established a good basis
for a rather exhaustive study of that entire operation.
The writer told him that he was well aware, and that the
papers themselves fully showed, that Mr. Corcoran and
his brother, David, had been quite active in that oper-
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�
ation; Cox wondered whether or not David as a Princeton
allumnus, and Mr. Corcoran, because of his interest in
.the matter, might be willing to give consideration to
adding additional documents to the material already
supplied.
Corcoran indicated that he would be very happy to
discuss this with his brother, David, who, since he had
been the first president of the CDS, would probably have in
his own personal files a considerable amount of additional
documentation.
The writer then discussed the other aspects covered
by the collection -- the early days of CAT, CAT from 1949
until Willauer left in 1953, and then Willauer's expe-
riences as ambassador to Honduras and Costa Rica and in
the Department of State.
The writer advised Corcoran that he had been to see
Mrs. Willauer just before Thanksgiving, that she had
voiced no objection at all to his discussing the above
with Corcoran,.and had expressed the hope that he and
David might be able to increase the quality of the col-
lection. Unfurtunately, this led Corcoran to divert
the conversation at considerable length to his problems
with the Willauers. (He indicated that, in addition to
the deterioration of the relationship between Mrs. Willauer
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amd himself, he had had a number of problems in handling
affairs for Whiting Willauer, Jr. [Skip], although the
personal relationship between Skip and himself was still
quite close.)
The writer gave him every opportunity to bring the
subject around to the status of Mr. Brennan, and to
Corcoran's ideas as to what he might feel the Agency
responsibilities were with regard to the first refusal
rights which Brennan holds. It was not until almost
noon that he was able to introduce this subject in a
general way; since Corcoran had one of his partners,
Mr. Foley, and another gentleman waiting to go to lunch
with him, only a short time was spent on the subject.
He did state that he felt the quickest and easiest way
out for the Agency was to purchase the west coast instal-
lation presently being managed by Brennan, and which was
developed as a result of the successful conclusion of
the CATI litigation. The writer told him that he had
been away from the CAT picture for a long time, but
that offhand he could not really see how CAT had any
real need for the acquisition of the installation.
Corcoran indicated that that was not the point. The
point was to try to clear up, once and for all, the
whole question of the first refusal rights and that, if
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the Agency would purchase the installation, he felt
that he could guarantee that Brennan would sign off on
all and any rights that he might feel he now possesses.
Corcoran indicated his awareness and concern over
the recent publicity being given to CAT and to its
successor companies (Air America etc.), and to the
growing rumor that the Agency was about to divest it-
self of the airline. The writer told him that he did
not know just what the Agency intentions were, and
agreed that it was unfortunate that so much newspaper
publicity was being given to the interlocking companies
and their relationship with the Agency.
Corcoran expressed some touchiness (with which the
writer would have to agree) that there seemed to be
little attention given to the fact that CAT, as such,
had been the product of a lot of hard work and imagi-
nation and dedication on the part of Chennault and
Willauer. The meeting closed with Corcoran indicating
in vague terms that "after the first of the year, by
God, I am going to start doing something." It seemed
to have some connotation of a possible threat of action
against the Agency, but that can only be surmised.
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ADDENDUM
INTERVIEW WITH MR. THOMAS G. CORCORAN
Date of Interview:
Place of Interview:
20 January 1967
Mr. Corcoran's Office
Investment Building
Washington D.C.
Report of Interview
The writer had a short meeting with Mr. Corcoran
on 20 January 1967. Also attending the meeting was
Mr. James J. Brennan, who had handled CATI matters in
Hong Kong. His presence was particularly fortunate, as
he was able either to confirm or to correct some of the
writer's recollections of the events that took place
during the period from November 1949 to late 1952 when
litigation over the CNAC and CATC assets was in progress.
Brennan confirmed that two U.S. aircraft carriers
had come to Hong Kong; the first, specifically for the
purpose of picking up the CATC assets, and later the
second to pick up the CNAC assets after the Hong Kong
court had decided to uphold the CATI appeal. He also
confirmed that, at the insistance of the British, those
assets which had not been removed by the aircraft car-
rier were placed on seagoing barges and towed to the
U.S. Naval Base at Sangley Point in the Philippine
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Islands. From there, most of these assets, particularly
the C-47's and C-46's, were shipped back to the States
by commercial sea transport.
Both Corcoran and Brennan stated again that the
high costs involved in having to ship these assets by
sea to the States, and to have them rehabilitated and
pay American costs, had taken most of the profit out of
the entire transaction. In particular, they blame the
British for not permitting them to have the assets
removed to Taiwan, where they could have been reha-
bilitated by CAT much more economically.
The writer pointed out that if the assets had been
taken to Taipei, there would have been a considerable
risk that the Chinese Nationalist Government might have
taken them over as payment for their debts, that it was
felt that this would have nullified the judicial base
on which the Privy Council decision to uphold their
appeal had been made, and that any ChiNat takeover of
the aircraft might have developed into a competing air-
line with CAT; both men were noncommittal on this
subject.
The writer queried Corcoran as to the ultimate
result of the negotiations with Taylor, who had been
bringing suit against him and others in Taiwan, claiming
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that he had not received his share of the proceeds from
the sale of CAT. Corcoran stated that Taylor had always
been extremely difficult to deal with but that, to the
best of his recollection, Willauer had finally been
able to arrange an agreement with Taylor, and the suit
had never been brought into court.
The writer told Corcoran of the interest a young
history instructor at Princeton had in doing a detailed
study of CAT. Cox said he was planning to meet with
the instructor and hoped to steer him toward doing a
history of the China Defense Supplies Corpoation (CDS)
which is very well covered in the Willauer papers at
the Princeton Library. Cox aSked Mr. Corcoran whether
he and his brother, David, who was the first president
of CDS, would be willing to assist with anything they
might have available to help prepare such a history.
It was also pointed out that any attempt at a detailed
study of the history of CAT would seriously endanger a
lot of other things. Corcoran indicated that he and
his brother would be glad to assist in any history of
CDS.
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V. INTERVIEW WITH MAJOR GENERAL WILLIAM E. DEPUY, USA
Date of Interview:
Place of Interview:
1500 Hours, 31 August 1967
jOffice of the Special
Assistant for Counter
Insurgency and Special
Activities,
;Room 1E956, The Pengagon
Background Information
General DePuy served in the European Theater with
the 90th Division during World War II and remained in
the military service at the end of the war.
(b)(3)
General
DePuy has on two occasions been assigned to duties
which required a considerable amount of liaison and
contact with Agency representatives. In 1962, he was
closely involved in negotiations between the US Army
and the Agency on Operation SWITCHBACK, which involved
the turning over of considerable Agency-developed assets
to the Army; later he served on the staff of General
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Harkins and General Westmoreland. In his present posi-
tion in the JCS as Special Assistant for Counter Insur-
gency and Special Activities (SACSA), he is in almost
daily contact with various offices of the Agency.
Report of Interview
Cox outlined to General DePuy the purpose of his
visit and the nature of the historical papers on which
he had been working. General DePuy remarked that his
memory of the events of the early 1950's,
were rather hazy in view
of the many different assignments which he had had
since that time. He expressed, however, considerable
interest in the history of CAT airlines since he had
been very much involved with it
We then discussed briefly some of the
projects which had been carried out under CAT cover,
(b)(3)
(b)(3)
(b)(1)
(b)(3)
General DePuy stated that he had been well aware
of the administrative problems of the airline, but that,
in general, these had been handled personally by Stilwell,
He stated he had had little to do
with the extensive CATI litigations and negotiations
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with regard to the acquisition of CNAC and CATC, but
agreed that, in the long run, it would have been very
much preferable for the Agency to have undertaken
responsibility for this at the outset.
Cox stated to General DePuy that one of the main
purposes of the visit was to seek his views and recol-
lections of the relationships between the operating
area divisions and senior staff elements. DePuy stated
that the reliance of the area divisions on functional
staff elements was practically nonexistent, and, as he
put it, "they were occasionally thrown a bone to keep
them quiet and happy." He was aware that there was
little love lost between the functional staffs and the
operating divisions, a situation which existed almost
from the date of the activation of OPt. He also stated
that he did have a close relationship with budget and
administrative staff elements, since they controlled
funds and personnel, and that, without their concur-
rence, the operating divisions could not operate.
DePuy remarked that, in his opinion, the whole
concept of the senior staffs illustrated poor manage-
ment principles. They were noVin the line of command
which ran directly from ADPC (and later DDP) to the area
divisions. The area divisions often duplicated the
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senior staffs by having small staff elements internally,
such as the staffs of the division, but these (b)(3)
were small and were not too heavily relied upon by the
division chief. He remarked that he felt that the
division of the CAT project into two separate respon-
sibilities, the administrative side under DD/S and the
operational side under ADPC and later DD/P, had not
been a particularly happy one. He seemed to feel that
the earlier arrangement of a Commercial Division under
the DD/P might have worked more smoothly. He was well
aware of the bitter controversies between the Agency
and the Corcoran group
(b)(3)
Cox queried General DePuy as to whether
/had been helpful in his later (b)(3)
military assignments, such as that which involved
Operation SWITCHBACK.
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he was very much convinced that
the Army would fall flat on its face if it attempted to
adhere to strict peacetime military administrative
procedures in taking over the Agency assets, and that
his major efforts and, he felt, accomplishments had been
in convincing the JCS and the Department of the Army
that flexible procedures similar to those of the Agency
had to be adopted. Cox did not dwell on the subject
very long as he was not personally familiar with
SWITCHBACK or the General's current activities at SACSA.
DePuy indicated that the bulk of his liaison with the
Agency was with C/FE and other area division chiefs.
Cox had a general impression that he was aware that
there was a certain amount of unhappiness within the
Agency at the implementation of the SWITCHBACK turnover,
particularly as it affected c10se personal relationships
developed by Agency field officers with local and
provincial leaders.
1
The General remarked that he strongly felt that
the tours of duty of military officers at senior levels
(above Battalion Commanders) should be lengthened instead
of reduced and further, that the same might be appli-
cable to the Agency.
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Cox thanked the General for the courtesy of the
interview with him. General DePuy expressed regret
that he could not remember more clearly the events of
some 15 to 17 years ago, but said he felt our discus-
sion had revived old memories, and that he would be
glad to meet Cox again after he had had a little time
to further refresh his memory. The meeting closed on
this note.
After apparently giving further thought
General DePuy
wrote to Cox to express some of the conclusions he had
reached based on his past experiences. His views may
well merit consideration today and in the future.
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