Douglas realized that for airlines to be profitable they would need a variety of aircraft sizes and capabilities to service routes of various lengths and passenger densities. The DC-3 would serve the medium range routes and the DC-4, under development, would relieve the DC-3 on the transcontinental routes. To fill the gap in the short haul routes serving the small, out-of-the-way communities, Douglas developed the DC-5.
This 16 to 22 passenger, twin-engine transport, had a high wing, a streamlined, circular fuselage, and a tricycle landing gear. To minimize spare parts required by an airline, many parts were interchangeable with the DC-3.
The tricycle landing gear on the DC-5 offered greater safety by permitting more positive contact with the ground, for quicker braking, and shorter roll-outs.
There was a significant trade off between the DC-3 and DC-5 in performance. For example, the nose wheel on the DC-5 provided a safety factor, which prevented ground looping, but the tail wheel of the DC-3 was a valuable feature for operating from rough and unsurfaced runways. The high wing DC-5 resulted in greater empty weight, and as a result, payload, and range suffered. The DC-5 was impossible to sell to the airlines, Arthur Raymond recalled. "We already had an airplane we were all tooled up for, and the airlines could handle repairs on. We didn't realize at the time it isn't smart to introduce another model which isn't more advanced. To me, we got into that again with the Super DC-3. Although the Super 3 was a much improved airplane as far as we could do it then, not many people bought it.74
Bugs in the DC-5 kept it out of production and the delay affected its fate. According to a Douglas engineer: "There was the presence of an aerodynamic phenomenon of tail buffeting, caused by the nature of the wing and engine wake as it struck the horizontal tail surfaces. After months of flight testing, we finally plotted the wake accurately and made the necessary changes in tail location and engine nacelle."75 Even a hint of a problem would cause hesitation in the industry.
When the Douglas sales force attempted to sell the DC-5 the airlines reaction was less than enthusiastic. The salesmen instead returned with more DC-3 orders, proving the soundness and popularity of the DC-3 design. When American Airlines saw the DC-5, they ordered 10 more DC-3s.
Douglas manufactured 12 DC-5s and three airlines placed orders for them, KLM, Penn Central, and SCADTA. The rest went to the U.S. Navy and Marines.
When clearly war was unavoidable, Douglas stopped production of the DC-5, and the A-20 bomber took its place on the production line.
Arthur Raymond summed up the DC-5 project this way "The main problem with the DC-5 was it was competing with the DC-3, in spite of the other features it had. Compared with its predecessor, it was hardly a success, but we had not reached the point where a new airplane had to be a success for the company to survive. That came later."