Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
4520945
label
War Risk Insurance
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
4520945
sourceUrl
contentType
document
title
War Risk Insurance
citationUrl
collections
Philip W. Buchen Files
Philip Buchen's General Subject Files
subjects
Vietnam (Republic)
Insurance
Vietnamese Americans
Refugees
Aeronautics, Commercial
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
4520945
coverageEndDate
logicalDate
1974-04-01
month
4
year
1974
coverageStartDate
logicalDate
1974-04-01
month
4
year
1974
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
8d47ce8ee2e1c4b9
ocrText
The original documents are located in Box 65, folder "War Risk Insurance" of the Philip
Buchen Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 65 of the Philip Buchen Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
WASHINGTON
4.8.75
TO: Philip Buchen
For Your Information
For Appropriate Handling
Scoweroft Original sent to Brent
nor.
Robert D. Linder
BERALD R. FORD
AWL
William T. Seawell
Chairman of the Board
April 7, 1975
The President of The United
States of America
The White House
Washington, D. C. 20500
Mr. President:
We are, of course, anxious to cooperate in the movement of refugees,
orphans and American personnel from Vietnam under a program which we
understand is being developed by the U. S. Government, and to endeavor to
continue our scheduled and charter services to Vietnam. However, there
are problems which we have not been able to solve through our own efforts.
We have been advised by our insurance underwriters that they are
terminating, effective 12:01 AM EST on April 11, 1975, our third party
liability War Risk coverage with respect to operations to, from and over
Vietnam, Cambodia and Laos. We are seeking to reinstate this coverage
but have not been successful to date. Under the terms of our existing
indenture and mortgage with our creditors, we cannot operate any craft
into any recognized area of hostilities unless fully covered by war risk
insurance or a United States Government contractural indemnity. Further,
the premiums on our aircraft covered under our War Risk hull insurance
have been quoted at 25¢ per $100 of aircraft insured value per trip on any
additional flights into Vietnam and this coverage is subject to revised rating
or cancellation at any time. This amounts to a premium of approximately
$12, 500 for a 707 aircraft, and $62, 500 for a 747 aircraft, per trip.
We have sought coverage under Title XIII of the Federal Aviation Act,
but have found, however, that such coverage is restricted and does not cover
all the risks which are insured by our commercial insurance program such as:
a. Riots and civil commotion
b. Sabotage and malicious acts or other acts intended to
cause loss or damage
C. Hijacking, any unlawful seizure, diversion or exercise
of control of the aircraft
d. The detonation of an explosive
e. The exercise of military power by a foreign governme nt
FORD LIBRARY
Pan American World Airways. Inc., Pan Am Building. New York, New York 10017
The President of The
United States of America
2
April 7, 1975
Therefore, due to lack of insurance coverage and prohibitive costs,
if Pan Am is to participate in such a program we must secure compensation
for additional costs for insurance over the costs in effect prior to March 31,
1975 or a fully enforceable indemnity and hold harmless agreement by the
U. S. Government applicable to all aircraft hulls, third party and crew
liability involved in such operation. Such indemnity and hold harmless
provisions are described in our wire dated April 4, 1975 to the Military
Airlift Command, a copy of which is enclosed herewith. If such coverage
cannot be obtained by 12:01 AM EST on April 11, 1975, the time of termination
of our war risk liability insurance as referred to above, we will not only be
denied the opportunity to expand our operations to and from Vietnam but will
be forced to suspend all scheduled and charter service to Vietnam.
We would appreciate your good offices in developing such a United
States Government indemnification program.
Respectfully yours,
Enclosure
GENALD R. FORD LIBRARY
Copies of this letter have also been sent to the following persons:
Attorney General of the United States
Secretary of Defense
Secretary of State
Secretary of Transportation
Acting Chairman, Civil Aeronautics Board
Acting Administrator of the Federal
Aviation Administration
SEALE R. FORD LIBRARY
FORD
SEALS
THE
FOR
PUNICASIONS
USE
CALY
LIBRARY
THIS
MESSAGE
MISSE
INDICATED
BY
CROSSING
CUT
PRIORITY
DATE April 04
1975
HEADQUARTERS
MILITARY AIRLIFT COMMAND
XXXXXXXXXX
SCOTT AIR FORCE BAŞE, ILLINOIS
ATTENTION: ARTHUR W. PURKEL, AIRFORCE CONTRACTING
OFFICER
RE YR TEL APRIL 3, 1975 CONCERNING INDEMNIFICATION AND INSURANCE PROVISIONS
TO BE APPLICABLE TO MAC CONTRACT CARRIERS' PARTICIPATION IN VIETNAM EVACUA
PROGRAM CMA IN VIEW OF TOTAL INABILITY TO PROCURE LIABILITY INSURANCE CMA
RESTRICTED COVERAGE UNDER TITLE XIII INSURANCE AND EXCESSIVE COSTS FOR
COMMERCIAL HULL AND WAR RISK INSURANCE CMA PAN AM MUST INSIST UPON OBTAINE
AN INDEMNITY ALONG THE FOLLOWING LINES AND FULLY ENFORCEABLE BEFORE WE CAN
CONSIDER PARTICIPATION IN SUCH PROGRAM COLON QTE THE GOVERNMENT HTDERY
INDEMNIFIES THE CONTRACTOR AGAINST AND SHALL HOLD IT HARMLESS FROM
ONE/ ANY TOTAL LOSS PAREN WHICH SHALL INCLUDE DAMAGE RENDERING REPAIR
IMPRACTICAL OR UNECONOMICAL PAREN OF ANY AIRCRAFT OF THE CONTRACTOR ENCAGE
IN OPERATION TO OR FROM VIETNAM CMA INCLUDING ANY PERIOD WHEN SUCH AIRCRAF
MAY BE ON THE GROUND IN VIETNAM CMA IN AN AMOUNT EQUAL TO THAT FOR WHICH =
CONTRACTOR OTHERWISE INSURES SUCH AIRCRAFT WHILE NOT ENGAGED IN SUCH OPERA
CMA AND FOR DAMAGE TO SUCH AIRCRAFT NOT AMOUNTING TO TOTAL LOSS THEREOF II
AN AMOUNT EQUAL TO THE COST TO THE CONTRACTOR OF REPAIRING SUCH DAMAGE AND
RESTORING SUCH AIRCRAFT TO AIRWORTHY CONDITION CMA BUT NOT MORE THAN THE
AMOUNT WHICH WOULD BE APPLICABLE TO TOTAL LOSS THEREOF CMA AND
TWO/ ALL LOSSES OR DESTRUCTION OF OR DAMAGE TO ANY OF THE CONTRACTORS
PROPERTY PAREN OTHER THAN AIRCRAFT PAREN CMA USED IN THE PERFORMANCE 07
SERVICES REFERRED TO IN ONE AEOVE CMA AND ALL LOSSES AND EXPENSES PAREN
(cont'c)
USE
THIS MESSAGE WILL
SE
INDICATED
51
CROSSING
CUT
THE
PRICRITY
DATE April 04 1975
PAGE TWO
HEADQUARTERS
MILITARY AIRLIFT COMMAND
XXXXXXXXX
SCOTT AIR FORCE BASE, ILLINOIS
LEGAL FEES AND EXPENSES PAREN INCURRED BY THE CONTRACTOR IN THE DEFENSE
OR DISCHARGE OF CLAIMS OF OTHERS RESPECTING PROPERTY OR RESPECTING DEATH
CMA DISEASE CMA DISABILITY CMA INJURY CMA OR IMPAIRMENTS OF RIGHTS OF
PERSONS CMA INCLUDING EMPLOYEES OF THE CONTRACTOR CMA ARISING OUT OF OR i
ANY MANNER CONNECTED WITH THE OPERATION OF ANY AIRCRAFT IN THE PERFORMANCE
OF SERVICES REFERRED TO IN ONE AEOVE STP THE INDENNITIES PROVIDED FOR ABC
IN THIS PARAGRAPH SHALL BE APPLICABLE WHETHER OR NOT THE LOSS IS CAUSED
BY ANY ACT OF NEGLIGENCE ON THE PART OF THE CONTRACTOR CMA ITS OFFICERS
CMA AGENTS OR EMPLOYEES IN CONNECTION WITH SUCH OPERATION OF SUCH AIRCRAFT
END
PAN AMERICAN WORLD AIRWAYS, INC.
JAMES J. RICE
STAFF VICE PRESIDENT-
MILITARY TRAFFIC
R. FORD LIBRARY
Wednesday 4/9/75
6:35 General Scowcroft's office advises that they just today
received the 4/7 letter from Seawell of Pan Am to the
President -- and it has been sent out for staffing.
SEAL B. FORD LIBRARY
Rod: show about
taking on another ourstion
THE WASHINGTON HITE HOUSE problem? P.
4.8.75
TO: Philip Buchen
For Your Information
For Appropriate Handling
Scoweroft Original sent to Brent
nDC.
Robert D. Linder
PAN AM
William T. Seawell
Chairman of the Board
April 7, 1975
The President of The United
States of America
The White House
Washington, D. C. 20500
Mr. President:
We are, of course, anxious to cooperate in the movement of refugees,
orphans and American personnel from Vietnam under a program which we
understand is being developed by the U. S. Government, and to endeavor to
continue our scheduled and charter services to Vietnam. However, there
are problems which we have not been able to solve through our own efforts.
We have been advised by our insurance underwriters that they are
terminating, effective 12:01 AM EST on April 11, 1975, our third party
liability War Risk coverage with respect to operations to, from and over
Vietnam, Cambodia and Laos. We are seeking to reinstate this coverage
but have not been successful to date. Under the terms of our existing
indenture and mortgage with our creditors, we cannot operate any aircraft
into any recognized area of nostilities unless fuily covered by war risk
insurance or a United States Government contractural indemnity. Further,
the premiums on our aircraft covered under our War Risk hull insurance
have been quoted at 25¢ per $100 of aircraft insured value per trip on any
additional flights into Vietnam and this coverage is subject to revised rating
or cancellation at any time. This amounts to a premium of approximately
$12, 500 for a 707 aircraft, and $62, 500 for a 747 aircraft, per trip.
We have sought coverage under Title XIII of the Federal Aviation Act,
but have found, however, that such coverage is restricted and does not cover
all the risks which are insured by our commercial insurance program such as:
a. Riots and civil commotion
b. Sabotage and malicious acts or other acts intended to
GERALE R. FORD LIBRARY
cause loss or damage
C. Hijacking, any unlawful seizure, diversion or exercise
of control of the aircraft
d. The detonation of an explosive
e. The exercise of military power by a foreign governme nt
Pan American World Airways, Inc., Pan Am Building, New York, New York 10017
The President of The
United States of America
2
April 7, 1975
Therefore, due to lack of insurance coverage and prohibitive costs,
if Pan Am is to participate in such a program we must secure compensation
for additional costs for insurance over the costs in effect prior to March 31,
1975 or a fully enforceable indemnity and hold harmless agreement by the
U. S. Government applicable to all aircraft hulls, third party and crew
liability involved in such operation. Such indemnity and hold harmless
provisions are described in our wire dated April 4, 1975 to the Military
Airlift Command, a copy of which is enclosed herewith. If such coverage
cannot be obtained by 12:01 AM EST on April 11, 1975, the time of termination
of our war risk liability insurance as referred to above, we will not only be
denied the opportunity to expand our operations to and from Vietnam but will
be forced to suspend all scheduled and charter service to Vietnam.
We would appreciate your good offices in developing such a United
States Government indemnification program.
Respectfully yours,
William
Enclosure
SERATE R. FORD LIBRANT
Copies of this letter have also been sent to the following persons:
Attorney General of the United States
Secretary of Defense
Secretary of State
Secretary of Transportation
Acting Chairman, Civil Aeronautics Board
Acting Administrator of the Federal
Aviation Administration
SEALS R. FORD LIBRARY
SEAL
FORD
LIBRANT
THE FOR 02 ADDICATIONS USE
THIS
MESSAGE
RENSENT
INDICATED
BY
CROSSING
CUT
THE
PRIORITY
DATE April 04
1975
HEADQUARTERS
MILITARY AIRLIFT COMMAND
XXXXXXXXXX
SCOTT AIR FORCE BASE, ILLINOIS
ATTENTION: ARTHUR W. PURKEL, AIRFORCE CONTRACTING
OFFICER
RE YR TEL APRIL 3, 1975 CONCERNING INDEMNIFICATION AND INSURANCE PROVISIONS
TO BE APPLICABLE TO MAC CONTRACT CARRIERS' PARTICIPATION IN VIETNAM EVACUAT
PROGRAM CMA IN VIEW OF TOTAL INABILITY TO PROCURE LIABILITY INSURANCE CMA
RESTRICTED COVERAGE UNDER TITLE XIII INSURANCE AND EXCESSIVE COSTS FOR
COMMERCIAL HULL AND WAR RISK INSURANCE CMA PAN AM MUST INSIST UPON OBTAININ
AN INDEMNITY ALONG THE FOLLOWING LINES AND FULLY ENFORCEABLE BEFORE WE CAN
CONSIDER PARTICIPATION IN SUCH PROGRAM COLON QTE THE GOVERNMENT HEREBY
INDEMNIFIES THE CONTRACTOR AGAINST AND SHALL HOLD IT HARMLESS FROM
ONE/ ANY TOTAL LOSS PAREN WHICH SHALL INCLUDE DAMAGE RENDERING REPAIR
IMPRACTICAL OR UNECONOMICAL PAREN OF ANY AIRCRAFT OF THE CONTRACTOR
ENCAGED
IN OPERATION TO OR FROM VIETNAM Ci-1A INCLUDING ANY PERIOD WHEN SUCH AIRCRAFT
MAY BE ON THE GROUND IN VIETNAM CMA IN AN AMOUNT EQUAL TO THAT FOR WHICH THE
CONTRACTOR OTHERWISE INSURES SUCH AIRCRAFT WHILE NOT ENGAGED IN SUCH OPERAT
CMA AND FOR DAMAGE TO SUCH AIRCRAFT NOT AMOUNTING TO TOTAL LOSS THEREOF III
AN AMOUNT EQUAL TO THE COST TO THE CONTRACTOR OF REPAIRING SUCH DAMAGE AND
RESTORING SUCH AIRCRAFT TO AIRWORTHY "CONDITION CMA BUT NOT MORE THAN THE
AMOUNT WHICH WOULD BE APPLICABLE TO TOTAL LOSS THEREOF CMA AND
TWO/ ALL LOSSES OR DESTRUCTION OF OR DAMAGE TO ANY OF THE CONTRACTORS
PROPERTY PAREN OTHER THAN AIRCRAFT PAREN CMA USED IN THE PERFORMANCE OF
SERVICES REFERRED TO IN ONE AEOVE CMA AND ALL LOSSES AND EXPENSES PAREN INC
(cont'c)
USE
CALY
THIS MESSAGE WILL DE
SE
INDICATED
5Y
CROSSING
OUT
THE
PRICRITY
DATE April 04 1975
PAGE TWO
HEADQUARTERS
MILITARY AIRLIFT COMMAND
XXXXXXXXX
SCOTT AIR FORCE BASE, ILLINOIS
LEGAL FEES AND EXPENSES PAREN INCURRED BY THE CONTRACTOR IN THE DEFENSE
OR DISCHARGE OF CLAIMS OF OTHERS RESPECTING PROPERTY OR RESPECTING DEATH
CMA DISEASE CMA DISABILITY CMA INJURY CMA OR IMPAIRMENTS OF RIGHTS OF
PERSONS CMA INCLUDING EMPLOYEES OF THE CONTRACTOR CMA ARISING OUT OF OR III
ANY MANNER CONNECTED WITH THE OPERATION OF ANY AIRCRAFT IN THE PERFORMANCE
OF SERVICES REFERRED TO IN ONE AEOVE STP THE INDENNITIES PROVIDED FOR ABOVE
IN THIS PARAGRAPH SHALL BE APPLICABLE WHETHER OR NOT THE LOSS IS CAUSED
BY ANY ACT OF NEGLIGENCE ON THE PART OF THE CONTRACTOR CMA ITS OFFICERS
CMA AGENTS OR EMPLOYEES IN CONNECTION WITH SUCH OPERATION OF SUCH AIRCRAFT
END
PAN AMERICAN WORLD AIRWAYS, INC.
JAMES J. RICE
STAFF VICE PRESIDENT-
FORD LIBRARY STREET
MILITARY TRAFFIC
War
Powers
Wednesday 4/9/75
6:35 General Scowcroft's office advises that they just today
received the 4/7 letter from Seawell of Pan Am to the
President -- and it has been sent out for staffing.
TOWN is LIBRARY
Wednesday 4/9/75
6:30 Mr. Hills asked me to check with someone in NSC
to see what action NSC took today on the subject of
war risk insurance and/what in form it was taken.
of
taking on another oirstion
Rod: How about
THE WASHINGTON WHITE HOUSE problem?
4.8.75 P.
TO: Philip Buchen
For Your Information
For Appropriate Handling
Scowersfe Original sent to Brent
nDC.
Robert D. Linder
STATE FORD
THE WHITE HOUSE
WASHINGTON
April 10, 1975
MEMORANDUM FOR:
THE PRESIDENT
FROM:
RODERICK M. HILLS R.H.
SUBJECT:
War Risk Insurance for PanAm
Flights to Southeast Asia
PanAm's President has notified you by letter of April 7,
1975 (see Tab A) that it must terminate its scheduled
operations to, from and over Vietnam, Cambodia and Laos
because its insurance underwriters are terminating its
third party liability War Risk Coverage as of 12:01 a.m.,
April 11. The Secretary of State has determined that it
is essential to continue these flights, and that they
continue to be scheduled rather than charter flights.
Under Title XIII of the Federal Aviation Act, the Secretary
of Transportation with the approval of the President may
provide such insurance against loss or damages arising out
of War Risk, if it is determined by the Secretary of Trans-
portation that the carrier cannot obtain such insurance on
reasonable terms or conditions from private carriers that
is adequate for the air commerce of the United States. The
Secretary of Transportation has consulted with the Departments
of State, Defense, and Justice and finds that PanAm cannot
obtain such insurance on reasonable terms and conditions,
and that such insurance is important to adequate air commerce
of the United States (see Tab B).
It is apparent, therefore, that the PanAm flights will
terminate unless you approve the proposal of Secretary
Coleman to provide War Risk Insurance Coverage to PanAm
for so long as it conducts scheduled operations to, from
and over Vietnam, Cambodia, and Laos. Transportation will
set a premium for this insurance at a price they believe
to be reasonable.
BERALD LEVESIT P. FORD
- 2 -
Your approval of the Secretary's proposal is supported
by the Departments of State, Defense and Justice and
by the National Security Council.
In granting this approval, you should know that the
insurance to be provided under Title XIII is limited
to so-called "hull insurance" which does not cover
all the risks now insured by PanAm's commercial
insurance program. Such excess insurance would be pro-
vided to PanAm by the Department of Defense under
authority which they have regularly exercised, which
does not require your approval, and which is presently
being utilized to provide insurance coverage for
presently operating charter services provided to Vietnam.
A description of the DOD indemnification is attached
(Tab C). State has notified Defense that it will take
responsibility for seeking whatever additional appropri-
ations may be necessary for this excess insurance. After
discussions with the above Departments and the NSC, we
recommend the Secretary's request be granted.
APPROVE
DISAPPROVE
Attachments
CENTER FORD LIBRARY
LIBRARY
WE
cues
3
DEPN
William T. Seawell
Chairman of the Board
April 7, 1975
ACTION
The President of The United
FAH
States of America
CONTROLINO
The White House
19512
Washington, D. C. 20500
SIRS
S-10
Mr. President:
We are, of course, anxious to cooperate in the movement of refugees,
orphans and American personnel from Vietnam under a program which we
understand is being developed by the U. S. Government, and to endeavor to
continue our scheduled and charter services to Vietnam. However, there
are problems which we have not been able to solve through our own efforts.
We have been advised by our insurance underwriters that they are
terminating, effective 12:01 AM EST on April 11, 1975, our third party
liability War Risk coverage with respect to operations to, from and over
Vietnam, Cambodia and Laos. We are seeking to reinstate this coverage
but have not been successful to date. Under the terms of our existing
indenture and mortgage with our creditors, we cannot operate any crafi
into any recognized area of hostilities unless fully covered by war risk
insurance or a United States Government contractural indemnity. Further
the premiums on our aircraft. ebvered under our War Risk hull insurance
have been quoted at 25¢ per $100 of aircraft insured value per trip on any
additional flights into Vietnam and this coverage is subject to revised rating
or cancellation at any time. This amounts to a premium of approximately
$12, 500 for a 707 aircraft, and $62, 500 for a 747 aircraft, per trip.
We have sought coverage under Title XIII of the Federal Aviation Act,
but have found, however, that such coverage is restricted and does not cover
all the risks which are insured by our commercial insurance program such as:
a. Riots and civil commotion
b. Sabotage and malicious acts or other acts intended to
cause loss or damage
c. Hijacking, any unlawful seizure, diversion or exercise
of control of the aircraft
d. The detonation of an explosive
e. The exercise of military power by a foreign governme nt
STATE FORD LIBRARY
Pan
A
World
The President of The
United States of America
2
April 7, 1975
Therefore, due to lack of insurance coverage and prohibitive costs,
if Pan Am is to participate in such a program we must secure compensation
for additional costs for insurance over the costs in effect prior to March 31,
1975 or a fully enforceable indemnity and hold harmless agreement by the
U. S. Government applicable to all aircraft hulls, third party and crew
liability involved in such operation. Such indemnity and hold harmless
provisions are described in our wire dated April 4, 1975 to the Military
Airlift Command, a copy of which is enclosed herewith. If such coverage
cannot be obtained by 12:01 AM EST on April 11, 1975, the time of termination
of our war risk liability insurance as referred to above, we will not only be
denied the opportunity to expand our operations to and from Vietnam but will
be forced to suspend all scheduled and charter service to Vietnam.
We would appreciate your good offices in developing such a United
States Government indemnification program.
Respectfully yours,
William T. Scawell
Enclosure
EXECUTIVE SECRETARIATE
OF
'75 APR 8 Pil 3:23
BEALTH R. fore LIDRANT
Copies of this letter have also been sent to the following persons:
Attorney General of the United States
Secretary of Defense
Secretary of State
Secretary of Transportation
Acting Chairman, Civil Aeronautics Board
Acting Administrator of the Federal
Aviation Administration
R. FORD LIBRARY
BEALD R. FORD LIBRARY
OF
THE SECRETARY OF TRANSPORTATION
UNITED STATES OF AMERICA
WASHINGTON, D.C. 20590
April 10, 1975
MEMORANDUM FOR THE PRESIDENT
The Federal Aviation Act of 1958, Title XIII - WAR RISK INSURANCE,
provides that the Secretary of Transportation, with the approval of
the President, and after such consultation with interested agencies of
the Government as the President may require, may provide insurance
against loss or damage arising out of war risks in the manner and to
the extent provided in Title XIII, whenever it is determined by the
Secretary of Transportation that such insurance adequate for the needs
of the air commerce of the United States cannot be obtained on reason-
able terms and conditions from companies authorized to do an insurance
business in a State of the United States.
The Department of Transportation has consulted with the Departments
of State, Defense and Justice.
Investigation of the availability of such war risk insurance has been
made and it is my finding that such aviation war risk insurance adequate
for the needs of the air commerce of the United States cannot be obtained
on reasonable terms and conditions.
Therefore, in order that the aviation war risk program may be placed in
effect, your approval is requested.
William T. Coleman, Jr.
Secretary of Transportation
SEAL 1. FORD
DEAL R. FORD LIBRARY
SEAL
THE
USE
CHLY
LIBRARY
THIS MESSAGE
INDICATED
BY
CROSSING
PRIORITY
DATE April 04
1975
HEADQUARTERS
MILITARY AIRLIFT COMMAND
XXXXXX
SCOTT AIR FORCE BASE, ILLINOIS
ATTENTION: ARTHUR W. PURKEL, AIRFORCE CONTRACTING
OFFICER
YR TEL APRIL 3, 1975 CONCERNING INDEMNIFICATION AND INSURANCE PROVISIONS
BE APPLICABLE TO MAC CONTRACT CARRIERS' PARTICIPATION IN VIETNAM EVACUATION
CRAM CMA IN VIEW OF TOTAL INABILITY TO PROCURE LIABILITY INSURANCE CMA
TRICTED COVERAGE UNDER TITLE XIII INSURANCE AND EXCESSIVE COSTS FOR
MERCIAL HULL AND WAR RISK INSURANCE CMA PAN AM MUST INSIST UPON OBTAINING
INDEMNITY ALONG THE FOLLOWING LINES AND FULLY ENFORCEABLE BEFORE WE CAN
SIDER PARTICIPATION IN SUCH PROGRAM COLON QTE THE GOVERNMENT HEREBY
EMNIFIES THE CONTRACTOR AGAINST AND SHALL HOLD IT HARMLESS FROM
NE/ ANY TOTAL LOSS PAREN WHICH SHALL INCLUDE DAMAGE RENDERING REPAIR
BACTICAL OR UNECONOMICAL PAREN OF ANY AIRCRAFT OF THE CONTRACTOR ENCAGED
OPERATION TO OR FROM VIETNAM CiVA INCLUDING ANY PERIOD WHEN SUCH AIRCRAFT
BE ON THE GROUND IN VIETNAM CMA IN AN AMOUNT EQUAL TO THAT FOR WHICH THE
RACTOR OTHERWISE INSURES SUCH AIRCRAFT WHILE NOT ENGAGED IN SUCH OPERATION
AND FOR DAMAGE TO SUCH AIRCRAFT NOT AMOUNTING TO TOTAL LOSS THEREOF IN
MOUNT EQUAL TO THE COST TO THE CONTRACTOR OF REPAIRING SUCH DAMAGE AND
FORING SUCH AIRCRAFT TO AIRWORTHY CONDITION CMA BUT NOT MORE THAN THE
JNT WHICH WOULD BE APPLICABLE TO TOTAL LOSS THEREOF CMA AND
WO/ ALL LOSSES OR DESTRUCTION OF OR DAMAGE TO ANY OF THE CONTRACTORS
PERTY PAREN OTHER THAN AIRCRAFT PAREN CNA USED IN THE PERFORMANCE OF
VICES REFERRED TO IN ONE AEOVE CMA AND ALL LOSSES AND EXPENSES PAREN INCLUDE
(cont'd)
THIS
MESSAGE
BY
CROSSING
2
CUT
PRICENTY
DATE April 04 1975
PAGE TWO
HEADQUARTERS
MILITARY AIRLIFT COMMAND
XXXXXXX
SCOTT AIR FORCE BASE, ILLINOIS
LEGAL FEES AND EXPENSES PAREN INCURRED BY THE CONTRACTOR IN THE DEFENSE
OR DISCHARGE OF CLAIMS OF OTHERS RESPECTING PROPERTY OR RESPECTING DEATH
CMA DISEASE CMA DISABILITY CMA INJURY CMA OR IMPAIRMENTS OF RIGHTS OF
PERSONS CMA INCLUDING EMPLOYEES OF THE CONTRACTOR CMA ARISING OUT OF OR IN
NY MANNER CONNECTED WITH THE OPERATION OF ANY AIRCRAFT IN THE PERFORMANCE
IF SERVICES REFERRED TO IN ONE ABOVE STP THE INDEMNITIES PROVIDED FOR ABOVE
N THIS PARAGRAPH SHALL DC APPLICABLE WHETHER ORENOT THE LOSS IS CAUSED
Y ANY ACT OF NEGLIGENCE ON THE PART OF THE CONTRACTOR CMA ITS OFFICERS
MA AGENTS OR EMPLOYEES IN CONNECTION WITH SUCH OPERATION OF SUCH AIRCRAFT
ND
BERALD LEVERY E:FORD
PAN AMERICAN WORLD AIRWAYS, INC.
JAMES J. RICE
STAFF VICE PRESIDENT-
MILITARY TRAFFIC
THE WHITE HOUSE
WASHINGTON
April 10, 1975
MEMORANDUM FOR THE FILE
FROM:
Rod Hills
SUBJECT:
Discussion points on war risk insurance
granted PanAm for flights to, from and
over Vietnam, Cambodia and Laos.
Because of the increasing war risks in the Vietnam area,
PanAm's commercial carrier (Lloyd's) notified PanAm
approximately ten days ago that its premium rates would
increase dramatically and would be cancelled at 12:01 a.m.
April 11th.
PanAm notified the President by letter of April 7 that it could
not fly into Saigon without war risk coverage and asked the
President to authorize the Secretary of Transportation to grant
Title XIII coverage.
The Secretary of Transportation found as required by Title XIII,
that PanAm could not secure insurance adequate for flights into and
out of Vietnam on reasonable terms and requested the President's
approval to grant Title XIII coverage.
In fact, the Secretary quite some time ago had delegated such
authority in the Department of Transportation to the Federal
Aviation Administrator so that the statutory certification of
the Secretary of Transportation was in fact made by that official.
The Federal Aviation Administrator also pursuant to specific
delegation makes the determination of the premium to be paid by
PanAm for such coverage. By long-standing practice that premium
is set at about the rate charged for such war risk coverage to other
carriers flying obviously to other spots. The premium to be set
for this coverage is slightly above that which PanAm was paying
prior to the increase in war activities around Saigon.
E. FORD LIBRARY
-2-
PanAm wrote the President also to point out that the Department
of Transportation under Title XIII could not give the complete
coverage previously given by PanAm's commercial insurance
program and that PanAm therefore would need a broader
indemnification from the government than the Department of
Transportation could give. After consultation between the
Secretaries of State, Transportation and Defense, and the
National Security Council, it was determined to be in the national
interest to maintain scheduled air service into Saigon. In response
the Department of Defense has granted the additional indemnification
that PanAm required for such continued service.
By reason of the above facts, PanAm will be insured as of 12:01 a. m.
for essentially the same risks that were previously covered by a
commercial carrier and PanAm will pay a premium slightly in excess
of what it was paying prior to the recent increase in war activities.
The Department of Defense regularly provides complete war risk
coverage for chartered aircraft operating in and out of war risk
areas for the evacuation of refugees and for other humanitarian
purposes.
It was determined by the above governmental officials that the
cancellation of scheduled air service by PanAm into Saigon would
severely hinder the departure of American citizens and would
place additional demands for U. S. military help in removing
civilians.
Attached are copies of the documents considered by the President
in approving the Title XIII coverage. It should be emphasized that
Presidential approval as required by statute was directly solely to
the Title XIII coverage of the Department of Transportation and
was not required for the broader indemnity granted by the Department
of Defense.
Attachments
R. FORD LIBRARY
THE WHITE HOUSE
WASHINGTON
April 10, 1975
MEMORANDUM FOR THE FILE
FROM:
Rod Hills
SUBJECT:
Discussion points on war risk insurance
granted PanAm for flights to, from and
over Vietnam, Cambodia and Laos.
Because of the increasing war risks in the Vietnam area,
PanAm's commercial carrier (Lloyd's) notified PanAm
approximately ten days ago that its premium rates would
increase dramatically and would be cancelled at 12:01 a. m.
April 11th.
PanAm notified the President by letter of April 7 that it could
not fly into Saigon without war risk coverage and asked the
President to authorize the Secretary of Transportation to grant
Title XIII coverage.
The Secretary of Transportation found as required by Title XIII,
that PanAm could not secure insurance adequate for flights into and
out of Vietnam on reasonable terms and requested the President's
approval to grant Title XIII coverage.
In fact, the Secretary quite some time ago had delegated such
authority in the Department of Transportation to the Federal
Aviation Administrator so that the statutory certification of
the Secretary of Transportation was in fact made by that official.
The Federal Aviation Administrator also pursuant to specific
delegation makes the determination of the premium to be paid by
PanAm for such coverage. By long-standing practice that premium
is set at about the rate charged for such war risk coverage to other
carriers flying obviously to other spots. The premium to be set
for this coverage is slightly above that which PanAm was paying
prior to the increase in war activities around Saigon.
-
10AD
LIBRARY
-2-
PanAm wrote the President also to point out that the Department
of Transportation under Title XIII could not give the complete
coverage previously given by PanAm's commercial insurance
program and that PanAm therefore would need a broader
indemnification from the government than the Department of
Transportation could give. After consultation between the
Secretaries of State, Transportation and Defense, and the
National Security Council, it was determined to be in the national
interest to maintain scheduled air service into Saigon. In response
the Department of Defense has granted the additional indemnification
that PanAm required for such continued service.
By reason of the above facts, PanAm will be insured as of 12:01 a. m.
for essentially the same risks that were previously covered by a
commercial carrier and PanAm will pay a premium slightly in excess
of what it was paying prior to the recent increase in war activities.
The Department of Defense regularly provides complete war risk
coverage for chartered aircraft operating in and out of war risk
areas for the evacuation of refugees and for other humanitarian.
purposes.
It was determined by the above governmental officials that the
cancellation of scheduled air service by PanAm into Saigon would
severely hinder the departure of American citizens and would
place additional demands for U. S. military help in removing
civilians.
Attached are copies of the documents considered by the President
in approving the Title XIII coverage. It should be emphasized that
Presidential approval as required by statute was directly solely to
the Title XIII coverage of the Department of Transportation and
was not required for the broader indemnity granted by the Department
of Defense.
Attachments
as
FORD
BEALS
LIBRARY
The White Mouse
#Ha858(1789)(1-036315A184)PD:04/14/75 1659
ILX WU TFC OAK
1975 APR 14 PM 6 10
ZCZC 901 OAKLAND CA APRIL: 74 1975
PMS PRESIDENT OF THE UNITED STATES
GERALD FORD
C/O WHITE HOUSE OFFICE
1600 PENNSYLVANIA AVE
13
WHITE HOUSE DC
15
(DUPLICATE AND CORRECTED COPY)
19
20
22
BTD: 11:35 PoMo LOCAL:SAIGON 14 APRIL
23
24
25
25
THIS MESSAGE IS ALSO BEING SENT TO ALL MEMBERS OF THE CABINET, ALL
R. FORD LIBRARY
MEMBERS OF THE CONGRESS, THE GOVERNORS OF ALLUSTATES AND TO THE
PRESS.
WORLD AIRWAYS HAS OVER $22 MILLION DOLLARS WORTH OF IN
FLIGHT EQUIPMENT CURRENTLY ON GROUND IN SAIGON PLUS COCKPIT AND
CABIN CREWS AND OTHER EMPLOYEES. WE HAVE JUST BEEN NOTIFIED BY YOUR
HIGH RANKING AND ESTEEMED COMMANDING GENERAL OF THE MILITARY
AIRLIFT COMMAND, GENERAL PAUL CARLTON, THROUGH HIS SUBORDINATES,
MESSRS. PURKEL AND KLOECKNER, WITHIN HOURS OF MY:FORECAST OF THE
FALL OF SAIGON, THAT OUR CONTRACT WITH THE MILITARY AIRLIFT
COMMAND FOR THE SUPPLY OF FOOD TO CAMBODIA HAS BEEN TERMINATED
EFFECTIVE THIS DATE; LEAVING THE COMPANY WITHOUT ANY INSURANCE
1. FORD LIBRARY
COVERAGE WITH RESPECT TO THE AIRCRAFT IN QUESTION, WITHOUT ANY
COMPENSATION FOR ITS AIRLIFT CAPABILITY IN THIS EMERGENCY AND WITHOUT
ANY GUARANTEE FOR THE SAFETY OF THE EQUIPMENT OR ITS CREWS BY
TO
YOUR ADMINISTRATION.
12
THERE IS NO WONBER THAT THE PEOPLES OF THE WORLD HAVE LOST
13
THEIR CONF IDENCE IN THE U.S. GOVERNMENT AND ITS PEOPLE. WITH BUE
15
RESPECT TO YOU AND YOUR WORLDWIDE PROBLEMS, MR PRESIDENT, I
16
17
STRONGLY URGE THAT YOU GET THE INCOMPETENTS OUT OF HERE
18
INMEDIATELY AND APPOINT, SOMEONE WITH THE INTELLIGENCE, IGENCE, COMPETENCY
19
20
AND THE GUTS NECESSARY TO GET THE JOB DONE. YOU DON'T HAVE DAYS OR
21
WEEKS--YOU ONLY HAVE MINUTES.
24
RESPECTFULLY YOURS,
25
EDWARD jo DALY
26
SEAL R. FORD LIBRARY
2
+
5
6
PRESIDENT AND CHAIRMAN OF THE BOARD
7
WORLD AIRWAYS, INC.
a
9. NNNN
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
28
47.90
FORD is STATE LIBRARY