The Coast Guard was transferred from the Navy back to the Treasury Department on 28 August 1919. Coast Guard Captain Stanley V. Parker who had been the Commanding Officer of the Naval Air station Rockaway, New York was ordered to Headquarters and assigned as the Aide for Aviation. With the war over Parker turned Coast Guard attention back to the utilization of aircraft in the saving of life and property along the coastal regions of the United States and at sea contiguous to them. The new Commandant, William Edward Reynolds, was favorably disposed toward the establishment of a Coast Guard air station to thoroughly evaluate the concept. The authority to establish Coast Guard air stations was contained in the Navy Deficiency Act of 1916.
Four HS-2L flying boats and two Aeromarine Model 40s, used during WWI, were obtained from the U.S. Navy. The air station continued to prove its worth but there was no appropriation for continued operation forthcoming from Congress. The Morehead City air station remained in commission until July, 1922 at which time personnel were transferred to other assignments and the aircraft were returned to the Navy. There would be no more Coast Guard aviation activity until the advent of the Coast Guard Air Station at Gloucester, Massachusetts in 1926. Only five out eleven of the initial cadre returned to flight status.