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Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ,GOVERNMENT TRANSPORTATION POLICY 1 IN SELECTED COUNTRIES VOLUME II- RAILWAYS HIGHWAYS CENTRAL INTELLIGENCE AGENCY Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 / ? 7 1?11.. ? C.? Declassified and Approved For Release 2013/03/11: CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : aPrRDP78-01617A004300060001-7 aerintit'D UNITED KINGDOM RAILWAY TRANFPORTATION POLICIES ? 1. Policy of the UK with respect to rail transportation will be fUndamontally altered by the Traasport act, scheduled to become effective 1 January 1948. Historically, policy of the UK toward the ruil linos has been one of non-inter- ference in private enterprise. Under the provisions of the Transport tot, private ownership till be terminated and , the government will take possession o2 the railroads. The Lot provides that the rail lines, witl certain minor exceptions, will be controlled by a Transport Cosmaission, under the Ministry of Transport, which will have authority "to parry Goods and passengers by rail, road and inland waterways." Direct managerial functions will be vested in a railway . executive, appointed by the Transport Commission. .The Commission will have authority to curry on, with Minor exceptions, all of the oimrations previously perforMed by the railroads under private management.. The present position of the state as toe. ? controllinG factor in rail operations dates from 1 September ? 1939, when the_ Ministry-of Transport, under the Defense of the Realm Lot, assumed_ control of the four main lino- railway companies, the London Pussencer Transport board, and certain other railway undertakings in Groat Britain. Ls a result of this stop, certain financial arrangements were made between the operators and the Linistry which provided for pooling of not revenues, with certain exceptions, and for annual payments from such pooling arrangements equivalent to the average net revenues of the rail companies for the yours 1935, 1936 and 1937. Tho London Passenger Transport Board was guaranteed u sum equivalent to its not revenue in the year ended June 393. The a,;reemont provided, furthermore, that after' such payments had boon made, any balance in the pool up to h 3,500,000 was ? to be paid to the rail lines and the Transport board in pro- portion to their respective guaranteed net revenues. The government will reimburse the four railway companies, whose operations are now to be taken over under the Transport i.ot, on the basis of the stock market value of their shares as of 1 November - 8, November 1946. Under-this plan, the shareholders will receive only about r 22,700,000 for the four lines whose capitalization is t 1,101.000,000. 2. Policies with respect to the rail lineS arc presently deter- mined by the anistry of Transport and they are subject to u high degree of integration and central administration bi the lanistry. Policies with respect to the coordination of rail. and sou transport are, relatively unimportant. . (Coordination of coastwise shipping and inland waterway policies with those of rail linos has been accomplished through private comittoes and associations.) Tho Railuay Aar Services Ltd, was established in 1934 in, ordor to integrate rail and air operations. .The integration of surface and air activities is further assured by a recent decision of the British Government that the Beards of Directors of tne three government controlled airlines (LE:L, D0hC and shall include representatives of shipping and rail circles. Document Nee 0 i) ? NO CHANGE in Class. Li ceplgai )(le DECLASSIFIED Class. CHANGED-TO: TS $ 0 ' DDA Memo, 4 Apr 77 ? RFerP PrZ01-1) Auth: DDA REG. /7/1701 'Date: /4P/0 14 7 r By: 4.1114___.: Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED UNITED 'KINGDOM - RAIL:AY TRANFPORTATION (te=3) S. Rail policies in the UK have boonformulated primarily upon the economic roeuirenents or the country. Llthouh little construotion, other than repair of war damano, has been carried on in recent years, there is no doubt that strategic considerations mould greatly influence a deeision to under- take new construction. 4. Since the earliest days of railway development in the UK, the question of outright state subsidies has received little consideration. Before the war, ihe four main line companies comprisinz the major portion of the state's rail system made' money steadily, never wont into a receivership, and, in fact, entered the recent war in bettor financial shape than did US railroads. During the depression of the late thirties, the financial decline of the British railways was in no may conparable to that experienced by most US rail interests. Britiih rail operators spent proportionately more on capital renewals than did the US railroads, and merle 4 practice of setting up specific funds for maintenance and additions out of operating expanses (a practice not required of US rail carriora until 1943). The present thosnolia difficulties of the British rail lines can be traced directly to. the war. Rollin; stock and facilities suffered enormous damage from anew action, and the' present acute shortcee of materials and the policy of the government toward imports have operated against any substantial improvonents in rail transport. 5. British railways, in the past, wore privately owned and were little affected by state policy until recent years. -Policy with respect to their operations was influenced primarily by vested interests represented by the stockholders; geo- nraphic, historic and political conditions have ecerted only u secondary influence. B. O1tG.i1174.TIOlf ? 1. Railway operations are under the jurisdiction of the Ministry of Transport. Until the Transport Let becomes operative, 1 January 1948, the followinn offices, within the anistry are concerned with railway problems: (a) The office of rail- ways doulp with rail Operations; (b) The Railway Executive Committee, established in 1939,?implements state railway policy; and (c) The Railway Rates Tribunal; established by. the Railways act of 1921, authorizes rail rates. In addition to the agencies mentioned.abovo,..there aro in the UK annumbor of private and state-sponsored organisations dealing with - railway problems. , 2. Tho Office of Railways is the permanent .affice within the Liinistry of Transport dealiin; with all aspects of railway operations.. This office is to be abolished 1 January 1948 and its functions are to be aseuned by a Transport Conmiszion appointed by the Ministry of Transportation. The Railway Executive Committee and the Railway Rates Tribunal will continue to function as in the past. - 2 - RESTR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED UNITED KIM= a RAILRAY TRANSPORTATION (84) :The various agencies dealing with rail operations are administra- tively separate, but coordinate closely in dealing with problems ? of mutual interest. Ahoy are subject to controlled diroct ion . and coordination by tho Ministry. TheTe is no direct connection . betweun the agencies conoorned with rail operations and those . concerned with shipping and civil aviation, except in the establishnent and operation of coordinated policies. 4. The present status of railway control under authority of the Ministry dates back to the Ministry of Transport Let, 1919, . which transferred to the Ministry the powers and duties former- ly exercised by other govornment departments in relation to the various media. of tranSport. 5. although tho Ministry of, Transport is generally conceded to he ?erfortAas,; exceptionally well in view of the iresent critical ? conditions in tho UK, thero,is considerable opposition to the labor govornnent's policics,,both present and contemplated, ? with respect to state ownership and operation of transport laoilities. The railway companies insist that nationalization at tho present tine will be disastrous, that further unifica- tion of nunagomant is undesirable, that tho rail linos should retain their statutory right to earn rovonues fixed by law, and that tho present plans of the Ministry will completoly dis-. i-upt rail facilities within the state. C. altaiLESTIVITIOU 1. The ostublishmont of now railway lines is authorized by the 1.1inistry of Transport. 2. Elo Railway,Ratos Tribunal, created by the Railways Lot of 1921, is tho authority rosponsiblo for fixing rail rates. The Tribunal holds unnual'inVostigations of railway operating results, and rulings with respect to establishnont of rates aro based upon Duch invostiations. Historically, 'British rail rates have boon based on tho value of the i;oods conveyed. The railway companies have thus boon able to charge exceptionally high rates for sono traflic, while at tho maw ting; they wens conpallod to carry coal. and other raw material at very low rates. This ad valorem principle employed by the railways has resulted in a rapid increase of highway trucking of certain. typos of goods at cheaper rates. 3. Cevotition to the rail carrion in tho UK has boLn offered primarily by highway transport. Tho ad valorem principle nontionod in 2. abovo, plus the comparative freedom of operations alloyed the road operators, has diverted a largo volume of high-class traffic from the railroads. Competition Iron tho road transport oporators seriously threatonod the financial position of the rail linos, and in 1998 the rail operators requested the Ministry of Transport to rovise rate structures and regulations to enable torn to compete with the the road operators. trifling oat of this request, a Joint' Conference was ibrmed shortly before the war to revise rate structures and to /coordinate such structures for road and . rail servicd. Llthough the work of this Conforonco was intor- - .* PFCTI2 rrrn Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : aA-RDP78-01617A004300060001-7 RESTRICTED UNITFD KINGDOM RAIL"AY TRANSPORTATION (C..3 CMT'D) ? ruptod by the var,conSiderahle progress toward rate structure coordination has boon accomplished. Under the provisions of the TransportAot, further coordination of road and rtils will be carrietiout and competition between those two media will be largely'restrictod. 5. It does not appear that the state is participating in the training of tooltniciGns for rail transport. The railroad pporatars, however, have instituted stuff training schemes, and Schools of Transport fortraining of personnel have been established. It-is planned to extend such training under govornmentownorship to practically all classes of personnel in the railroad industry. 6. Because of Ms goographicisolation, international agreements concsrning interchange of traffic, joint facilities, rate- fizing, and other problems which in other countries are of considerable magnitude, are of littleimportance in the UK. Ln exception to this is the operation of "train-ferries" by t.o of the major railroads, Tho London'und-North Eastern Railway operates three ferry boats, each capable of carrying 45 freight cars of 20 ton capacity between darwich and Zeebrugge, Belgium. Tho Southern Company operatoo three chips of about-5000. tons capacity, each capable of carrying 40 freight curs or 12 passenger carp between Dover ,and Ounklrh. Those. operations are carried out und.ir international ' -agreements between the countries concerned. 7. Railroads are required to file income statements with the anistry of Transport, in accordance with the provisions of the Railway Companies (Accounts and Returns) Act, 1911. Those - statements aro similar in content to those required by the Interstate Conmrce Comission with respect to the operations, of Cie US railroads. RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ra r"nnE--, e Arevir? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? ? TRANSPORTATION - FRANCE THE SUPHEME'TRANMPORTATIOD ADVIODRY BOARD 107.: The following information was not available during the preparation of this study. . ? 1. The most important development in French transportation since the war is the establishment by the National Assembly in August 1947 of a Supreme Transportation Advisory Board. The Board will advise the ' Minister of Public 7orks and Transport on all transportation matters submitted to it, but may also formulate recommendations on its own initiative. The Advisory Board's immediate mission is to present, within one yo:kr, plans for the coordination of rail, highway, inland raterwayl-air and ocean transportation. It will include in its Plans coordination of domestic transport with colonial and international transportation. The Board rill study all social, technical, financial and econdtic matters relative to the organization and functioning of the various modes of tranlportation; it will also study matters concern- ing stock and equipment, technical abd commercial development and the social, economic and administrative problems arising therefrom. 2. The Supreme TranspOrtation advisory Board is established under the Minister of Public 7orks.and Transport.and?consists,of 69 members, including representatives from various government agencies, .members of Parliament, specialiets from the large transport organizations, employee representatives from the operating companies and publid organizations such as tourist travel agencies. Feven permanent commissions are estab- lished under the Board, charged with examining questions of transport coordination. .These are as follows: Rail Rail - Rail - Rail. ? Highway - Highway - Sea - ? highway inland ratenvay sea air inland waterway air 3. The Supreme Transportation Advisory Board is financed through a special fund provided by the Minister of Public -orks and Transport. The sum expended shall be reimbursed?to the state by the various trans- portation operators under conditions to be set forth by decree of the Minister of Public -orks and Transport and the Minister of Finance. RESIRKTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RFCTD Aver. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 usr FRANCE - RAILWAY TRANSPORTATION A. POLICIES 1. French Government policy, over a long period of time, has been to foster the development of rail transport through legal, fi- nancial and administrative assistance of various types. French rail policy attempts to avoid both outright private operation' -and complete Government ownership by having the roads remain under corporate form with the state awning 51 per cent of the stock. 2. French rail policies are determined by the Department 'of Rail- roads and Transport (DIRECTION CENERAIS des CHEMINS de FER et des TRANSPORTS) which possesses considerable freedom of action under the authority of the Ministry of Public Works and Trans- port (VINISTERE des TRAVAUX PUBLIQUES et des TRANSPORTS). Rail policies are integrated into the over-all transport policy as determined by the Ministry. 3. Systematic planning of rail facilities has been a traditional feature of the transport policy of the state. The rail policy of France was historically greatly influenced by the German strategic Policy with regard to railroads under Von Moltke. . It is probable that French rail development was greatly expe- dited by the apparent emphasis which her neighbor across the, Rhine placed upon rail network development. Recent strategic policy with regard to railroads has been to attempt to counter- act, insofar as possible, any transport plans of neighboring states which might threaten national security. 4. The French Government has always promoted, development of . rail facilities, and the state has been very liberal in sub- sidizing and otherwise encouraging such.dtivelopment. ? 5. French rail policy has been influenced principally by political and economic conditions. While political conditions furnished the first great impetus, it is evident that the economic needs .of the country have generally determined the eventual course of railroad policy (except during those periods when military policy determined that. national security transcended other fac- 'tors).', B. ORGANIZATION 1. The rail system of France is under the direction of the Depart- ment of Railroads and Transport (DIRECTION GENERALE des CHEMINS de PER et des TRANSPORTS) in the Ministry or Public Works and Transport. 2. The Department of Railroads and Transport is organized into six offices. Of these, five deal with the various aspects of railroad management, Such as: (a) administration (b) finance, (c) control, (d) technical developments, and (e) labor. The sixth deals with over-all coordination of rail and road trans- port. RFSTR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11_: CIA-RDP78-01617A004300060001-7 FRANCE - RAILWAY TRANSPORTATION (B-3 CORM) 3. The Department of Railroads and Transport is an independent agency in the Ministry. It has no direct relation to any Other agency in the Ministry, the Ministry performing the func- tions of such coordination and over-all control as are found necessary. The rail system is related to shipping. and civil air functions only through the over-all administration of the Ministry. From the earliest days of French railroads a century ago, the state has shown great interest in their development, and the present unationalized" rail system is the logical sequence of state policy as developed over the years. 5. In the light of present conditions, it is believed that oper- ations are as efficient as can be expected in -vier of the eco- nomic disruptions and rolling stock shortages due to the war. C. ADMINISTRATION 2. Proposed rail rates are prepared by the railroads and submitted to the Ministry for study and approval. If the proposed rates appear justified, they are approved. In case of disapproval, the railroad has the right of appeal to Parliament for debate and decision. In March 1947, the French National Railways brought into oper- ation a completely revised system of rates for freight traf- fic. The new system is the outcome of several years of de- tailed investigation. Prior to the new system, freight rates were based on the ad valorem principle. (High rates for high- value cargo regardless of weight or difficulty of handling.) From a national policy standpoint the ad valorem principle had many advantages, but from the standpoint of the rail system, such policy was not entirely satisfactory. As long as rails had a practical monopoly the system worked well, but as soon as competition with other forms of transport developed, the railroads were placed in an unfavorable position, since the ad valorem principle disregarded the actual cost of such trans;- port, while road haulage rates were based on an entirely dif- ferent principle and took much of the high-value traffic away from the railroads. The new revised freight rate principles include the following points: freight shall not be carried at a rate less than cost; rates for each class of merchandise shall be scaled to meet the level of charges by competing forms of transportation; and, more efficient car loading procedures shall be designed to effect necessary economies. Virtually every coMmodity has been covered under the new freight rates with the exception of livestock, certain types of road vehicles, and certain high-value commodities, such as precious stones and securities. The present rate system is considered to be a dis- tinct advance over the former policy of charging as much as ? the traffic would bear and is expected to equate, as fai as practicable, rail charges with road rates and still allow an area of competition between the media. - 2 - RESTR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 IALAJIINIVIUW FRANCE - RAIMAY TRANSPORTATION (O-3 CUM)) 3. The rail system and the water carriers have a distinct advan- tage over highway transport, since rail and water carriers receive state aid, while highway carriers do not. (Policies on competition between competing modes of transport are de- scribed in C-2.) It is not likely that the acute competi- tion that developed between road and rail facilities in the thirties will be allowed to recur, because this experience proved that each held certain natural, advantages which could not 'be overcome by rate cutting or by traffic practices that eventually proved disastrous to both. It. Inspection of equipment and safety regulations are the re- sponsibility of the rail lines under the supervision of the Controller of Public Works in the Ministry of Public Works. and Transport. European international standards are followed and enforcement of inspection and safety regulations is under- taken by both railroad and state inspectors. 5. The railroads provide technical training courses at tile ECOLE POLYTTCHNIQUE, which is state-controlled. The government evidences keen interest in the training of transport techni- cians. 6. The government, through its control of the French rail system, has committed the railroads to a policy of participation in international agreements on exchange of traffic and related problems; in addition it has concluded a number of bilateral agreements with other countries regarding ,such matters. - 3 - Prern,A.-- Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? ? ? 1 ? ? ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 I I, I 1 1 1 ? t jiETIIERLANDS RESTR I CTED RAILWAY TRANSPORTATION A. POLICIES 1. Railways of the Netherlands are state-owned and operated. Rail policy is determined by the state through the Mini- stry of Transport. The government is concerned, at present, with rehabilitation of the railways which surfered extensive war damage. Pre-war studies indicate that: rails accounted for only 15 per cent of all traffic; the principal mode of transport; insofar as freight is concerned, is by water; rails, however, account for the bulk of passenger traffic; and passenger revenues exceed freight revenues on the rail- roads. It may be expected that rails will assume increasing .importAnce in Petherlands transport as war damage is elimi- nated and the need grown for rapid transit. 2. Rail policies are determined by the Netherlands Railways Company under the supervision of the Ministry of Transport. Policies for rail transport, while determined independently from other forms of transport, are subject to integration and central administration by the Ministry. 3. The vulnerability of the Dutch railways was amply demonstrated during the war. Strategic considerations, however, have had little effect on development of the railways, which lie off the main European east-rest traffic routes, and serve a Tour pose primarily domestic. 4. Under the policy of complete ownership and control of rail ? transport, the state is directly concerned with the development of new equipment and the replacing of ways and rolling stock destroyed by the war. Since the end of the war, the state has directed large, sums of money to reconstruction work. 5. State policy with respect to railroads has been developed primarily under the impact of economic and political forces. The geography of the country dictated that first efforts toward transport development be directed toward the waterways but during recent years (since c.1900), the state has recognized that railroads offer probably the best all-around transport system. Rail policy is now influenced considerably by the rapid strides made by highway transportation. B, ORGANIZATION 1. The railroad system of the Netherlands is under the authority of the Ministry of Transport. However, actual operation of the lines is under the jurisdiction of the Committee of Man- agement of the Netherlands Railways Company. A Rate Commis* sion,Andependent of the Ministry of Transport approves 'rates for all forms of transportation. 2. The Committee of Management is appointed by the Ministry. of Transport. It has complete control over railway operations. The Committee is composed of representatives of both state and private enterprise. . .RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A064300060001-7 RESTRICTED EMMAUS ? &Ala TRANSPOWC_SAralpt21 3. The various agencies within the Ministry of Transport dealing with the several media of transportation are not related to each other. The Ministry, however, coordinates all transport policy. 4. The present Ministry of Tranoport was established by the Royal Decree of 18 July 1946, which also abolished the old Ministry of Transport and Power. By the same decree?, the Ministry of Shipping was abolished and its functions were assumed by the Ministry of Transport. 5. The rail system of the Netherlands was badly damaged in 1940 by the retreating Dutch Army and later by Allied bombing and by the German policy of retribution for the rail strike in Septem- ber 1944, called as an aid to the Allied effort. The rail sys- tem is recovering its pre-war efficiency as fast as shortages of material and rolling stock will permit. The Ministry of Transport appears to be operating efficiently and in the public interest. C. ADMINISTRATION 11. The state, through its ownership of the rail system determines the program for construction or extension of rail lines. Such plans must be clearly in the national interest and necessary to the general welfare. 2. Rates on all transport must be approved by the Rate Commission, similar in function to the US Interstate Commerce Commission. 3. The state does not favor competition between the state-owned rail lines and the privately-owned water carriers. Such com- petition was one Of the primary causes for the state's action In organizing the railroads into a state-owned company. The action of the state in recent years leads observers, and par- ticularly the water carriers, to believe that the state is attempting to move away from its traditional policy of depend- ence upon inland waterways. 4. There is no state agency dealing specifically with inspection of equipment, but the Scientific Commercial Car Institute, a private organization, contracts to inspect cars and issue cer- tificates of loading capacities. 3. Technical education in the Netherlands is sponsored increas- ingly by the state and consists of full and part-tine training covering a wide range of trades and professions. Excellent training courses for railroad technicians are provided by the rtate University at Delft. The state does not sponsor railroad training, hoiever? to the extent that it sponsors training in navigation (inland and ocean-going). 6. The railroads of the Netherlands are a party to the Bern Con- vention regarding traffic, rates, facilities and related inter- national traffic matters. - 2 ? sriatik dfEr5 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-61617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 1 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDR78-01617A004300060001-7 :RESTRICTED USSR - RLlIfljT TREATSPORTaTICII A. ?DUCT LS 1. Barrie Soviet policy with respect to reilway transport tion is expressed in the currant Five-Year Plan. The plan 'Sate in first placci among the 25 major tasks con. fronting the na%.onta economy, "tam rentoratiors and develop- ment of lieuvy industry end railway transport, vithout Which the rapid and of native recovery and development of the ' entire nutionul esoreroy of the USSR would be impossible." The foregoing text is significantly lorded. Repeated mention of war damage rootaration ahoud of' new development reflects 'the roost dotorraining rector in the Soviet. railway problem. While new construction : is in progress to satisfy the expanding Soviet'induatrialization tt,TKI the geographic readjustments of pact-war Soviet industry, the major emphasis for some time will be placed upon repairing war damage in ? areas of %Jarman occupation, shore rail capacities are still below rd.:timers levels demanded by the National interest. Railway policy, except on minor matters, is exclusively determined by the State et high political levels. The rail- ore viewed by the government solely us an economic in,. striatum* of national policy. Zonsidorations such us con- venience of the public, the interests of private ovmership, .or the requircannts of industry, which would strongly in- flounce railway policy in other countries,. aro of little or no importance in the USSR, %there the r.ailvaar system swat be responsive to over-all economic planting, which itself is essentially a manifeatution of the Communist Party's political will. 2. In the USSR, policy for the various media of transportation is administered primarily by separate ?comics, ulthough coordination in administration out be enforced, if necessary, by the State Manning Commission (Gosplan). In the determina- tion of policy, on the other hand, there is little latitude for independent cotton, because all important aspects of transportation policy must be approved by the State Planning Commission (and on occasion by the Politburo of the Party). lharause the note Manning Coariasien is charged with es- tablishing over-all economic policy responsive to the Putts political will, and is disinterested in the narrow points of view of individual. interests, integration of policy at the planning level is thus theoretically assured. 3. Economic consideratione originally determined tho pattern of the Russian network, and prior to tend Vier II strategic and military consideratians did not strongly influence rail policy, although crocasionally, as in the Siberian lazitime Provinces, railroad construction Was undertaken it th sub- stantially strategic objectives. iSSIR I CTEQ Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR I CTED USSR - &MUT TELaHSPORSCLTIGIf (A-3 CULIT'D) During torld War I/ the USSR carried out some major emergency railroad construction solely for military reasons, and administration of lines under Soviet control was directed exclusively toward meeting the demands of the vax.effort. The announced future development of Soviet railroads does not appear to include major projects which are primarily strzAtegic, although rimy projects will increase the Soviet economics potential, and thus the srilitury'potential. There can be little doubt, however, that the USSR hue become more aware of the strategic implications of rail development, or that the Soviet General Staff is carefully scrutinizing all features of railway policy; However, it will not be possible for the USSR rapidly to eliminate the major strategic weaknesses such as (a) the broad gauge of Soviet railroads, (b) the leek of reserve capac_ity,70) absence of railways in large_noction.s-of-the_IMSR, (d) poor rail ?iuthorn connections to t?,__Lbtr assiang most_ottheJASts boundarien? and (e) tolatively losr_potential of the exabting trans-Siberitaa railroad. (Tho completion of the projeotod.South Siberian trunk line, es described in the fourth livoseYear Plan, which will not provide the USSR with a second transcontinental rail ounneotion, is justified ' in :krelet statements on economic grounds.) 4.. As in the case of all other Soviet enterprises, state owner- ship of railroads ;makes the question of subsidization in- , applicable. (Soo Merchant Shipping, 1-3). 5. Vested interests, in the usual private- sense, could not exist in the USSR, and therefore do not influence rail 'policy. titan the Conneaut Party, however, thirty years of power have produced sorze measure of bureaucratic factionalism, which might introduce conflicts at the planning level. Historical circumstances obviously moulded the development of ?luau and thus influenced the pattern of rail construc- tion. No historical factor, howover, appears to exert a determining influence on present rail policy: Geographic conditions have alrittys influenced rail policy and still limit the direction in which railway devolopennt oUn proceed.' Geography and ?lir:sato, for ext.nple, have excluded railroads from Northern Siberia, and the only rail connection from the Atlantic to the Pucific (the Trans-Siberian) is actually a circuitous route when compared to the groat circle from Gibraltar to Vladivostok, which passes in the vicinity of Leningrad and touches :the Arctic Circle. plitutte has also produced large arid areas .in the USSR, whore water supply , 2 VESTR I CT ED Declassified and Approved For Release 2013/03/11 CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ,RESTR I CTED USSR - RblWwY TRAMSPURTATION (a-6 CUHT'D) for stoaM locomotives is a major limiting factor in railway operation. Largo rivers in the area of raility ooncentra- tiaras (wostorn USSR) have also interposed surto G barriers to railway conitruction. Pblitical consieorations indirectly dominate Soviet rail policy, in the sense that thelcommnist Perty's entire economic progrbus thioh governs rail policy. is itself a manifestation of the Party's political will. The progress of Soviet industrialization will provide the major incentive to rail development, once tho extensive danago of Vorld War II has boon repaired. tor the next few years ? the Soviet econouv will witnosa a continuation of the race which has boon in progress for many yours in the USSR be- tween expanding roquirements of industry and increased ruil-ospuoity. During this irrocons, rail facilities have never had aubstuntial reserve capacity, nor bre they likely to achieve this.desirablo soul during the current live-Year Plan, B. DRGANIZATIOH. Maio railroad operations are administered by the Ministry of Railways, there :aro several other Ministries whose activities affeot railroad operation and construction. /song those are: (a) the Ministry of the Iron and Steel Industry. (3) the Ministry of the Transport Machine Building Industry, and (o) the Ministry of Internal Affairs. In addi- tion to the direct controls exorcised by the .above listed Ministries, ouch churgod with specific functions.' al as- pects of Soviet rbilroad policy are subject to the over-all economic pluna of the State Planning Commission ,and the political program of the Commun:t PartY0 3-. RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03,1r. ar12-1(17PrIc-01617A004300060001-7 -tiasR,LALTarith 2. The Linistry of Railtays is reeponsible for the fornulation of roil policies and administrative procedures at the Cabinet level, anco the Linistry of the Iron one Steel Industry produces major items required by the railroad industry, such as rails, its pro- gram must be carefulay integrated eite projected railway plans. Likewise, the capabilities of the :Anistry.of the Transport !:.schino euilding In:a/am ehich constructs rolline stook- for The railroads, must be considered. The Linistry of Internal affairs also plays an important rola in Soviet rail plane, be- cause it-is responsible for roadbed construction and the rail laying. 3. etile each of the foregoing agencies is an administrative entity and is ineependent of outside con .rol at the Cabinet level, they are all subject to top-level direction ene coordination by the Stete.clanning.Commiesion. a general statement with respect to overlapping and conflicts in Soviet administrative organization is contained in the answer to ae3 covering USSR Inland ?aterway Transportation. 4. The present Uinietry of Railweys was originally a part or a ,Commissariae havine over-all responsibility for all transporta- tion,. with departments to administer tee various meaia. The development of economic planning during the past twenty years has resulted in a re.arp compartmeatetion of transportation ad-. ministration, so tLst today hera are separate'einistries for railroads, inlanewaterecys, and tLe eorceant marine. there is no evidence of' impending change in the pfssent adniniserative structure. 5. By Soviet definition, all government agencies operate in the public interest, because tesoy implement the Party's prorram. On ths other hen:, even official assessment of the efficiency of individual seencies is frequently unfavorable, as evidenced by tress criticisms of operational end buebaucratic deficioncien. If the efficiency of the railroads thomaelves is compared to ? that of the US or no for example, Soviet operations appear in- efficient in certain respects. irains operate at lea speeds, automatic block-cignal equipment and moeern couplings are only available in limited quantities, ear loadings and unloadings are subject to delays, an, passenger traffic is badly neglected. On tho other-hen? many increases in otficionce, poseponed by the war, are now bsine effected. The average length of haul is being reduced, heavier rails are being laid in large euantities, long stretches oe lino ore Silt.' electrified; Liesel equipment is being introduced, One numerous lines are being double-tracked. The result or this program eill be a notarial adjustment upwar s in the rail system's ability to mast the requirements of the planned doviet.indestrial expansion. The railroads, however, will not soon be able to offer comfortable transport to a large volume of passeneer traefic, because the ;Fourth Five-Year elan provides for relaeivel, minor ceestructior of paseongar cars. RESTRICTED Declassified and Approved For Release 2013/03/11 CIA-RDP78-01617A004300060001-7 nirerers !fern% Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 gas..11447.1Y Taci,DAT0TJ3K (c-ii 0 C. Ax.ruzsTaAnoN 1. Projects for the construction of nee rail linos in the USSR. are the responsibility of the Linistry of ftaileays at the Cabinet level. 'knells? of their importance, horever: there is little doubt that they must be referred to all agencies, political, economic and military, whose interests might be effected. The final decision, in fact, is probably taken in the State Planning Commission, or oven the eolithuro. 2. Rates for,reilreau traffic are certrelly determin2d an ap- pay to all Soviet lines. They are eseeeliseed at a level which' assures the return of a plennee profit to lines which operate at 'average efficiency. The USSR may permit sub- marginal lines, which could not show a profit on the basis of officiel rates, to maintain the fiction of operating pro- fits through the use of concealed special charges. In the numerous instances weer? the donated for freight space far exceeds the aveilabia,sueply, tee state equates supply and demand by allocatine space on tee basis of a "complicated system of traffic priorities, insteed of permieting rates to be raised by the competition of shippers for space. ). Competition, it the usual sense, does not exist in the USSR, and there is no competition for business between the various rail lines. .(Shippers, in fact, are more likely to compete for space.) "Socialist competition", prnuent in all forms of transportation, is especie4yinall orgsnizei throug".out the rail system. This activity is promoted be the trade unions and the State in order to increase operatine effi- ciency in such mess as eauling larger loads, speeding up service, ene reducing the accident rate. Coepetition be tween the railroads and the other transport media in the sense of one media invening the logical Province of another is theoretically eliminetee by the transport planning activi- ties or the state. 4. There are carefully defined rules covering operating safety and the condition of equipment on eoViet railroads. doth equipment and persornel ere subject to purio.ic inspection: depending upon the type of equipment or the one hend and the nature of %/ore engaged in on tee other. In the regula- tions great emphasis is laid upon the armed responsibieity of Operatine personal for the condition of equipment titer Les jurisdiction. Accidents are investigated on the spot, such investigatione being-held in "people's courts" reere grester empnesis is reported t) be given to the circumstances of such mis Ape than to legal aspects. The importance eeich the State attaches to the investieation of railnot-e- accidents is revealed by the fact that tilitary tribunals have jurisdic- tion to a tertein extent over the corjuct of such investiga- tions, eaLhougt safety rogultitions are established tur.ier the authority of tee einistry of eailways. The actual administration e ? ?Pi:CyrnittriN Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 PricIDIrerrn Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 of the rules outlined above is frequently lax, and public hear- ings regarding accidents sometimes reflect political considera- tions beyon: the merits of the eases. 5. Technical schools are under the jurisdiction of the Linistry of Labor Reserves. he state maintains a network of such schools devoted exclusively to training technicians for the railroad industry. These schools are distinct from tee technical schools where training in transportation is given as a pert of the gen- eral curriculum. In addition to the foregoing training, boys ? with only elementary school educa:ion who wish to join the rail- road industry are enrolled in tra:ie schools where tt_ty are given training below the level required by technically skilled workers. further trainik of selected students from the above group is given at the college level. I; is known that Soviet workers in theory must possess evidence of qualifications and previous employment. Those papers an be demanded as a condition or em- ployment. 6. International agxeements coveringrailwayoperations have been an important feature of aoviet foreign policy since the end of World II. In 1945; for example, the USSR solidified its post ion in Lanchurian railwcy transportation by concluding with China a Treaty of Iriends.ip and alliance. In connection with,t.lis agreement, joint Soviet-Chinese ownership and ex- ploitation of the important fainehurian trunk lines were guar- anteed for a porioi of 3D years. The USSR is entitled to un- impeded transit of goods from the Sevie.. naval base at 2ort Arthur and the free port of Darien to the system's connections with Soviet territory. Another formalegreement hes been con- cluded with Annintnias giving the USSR preferential rights on the acumen/en railroods. Irrespective of signed agreements, the USSR controls railrosds in the Soviet-occupied areas of Europe, where dmstic measures with regard to Cie utilization of rolling stock, change of gauge, and even disbantling of lines have been carried out. 7. Voluminous statistical and economic reports are submitted month- 13,' to the Linistry of Railways'hy the loci-level operating and administrative groups. 6 a PF:cirDieiri1 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 _ %. , r , _ / , / N _ % , , \ ... ???? , Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 :CIA-RDP78-01617A004300060001-7 RESTRICTED SWEDEN - RAILWAY TRANSPORTATI3N h. POLICIES 1. The majority of Swedish railroads are owned by the state. The policy of state ownership dates back to the middle of the 19th century, and in. recent years there has been a marked trend toward complete nationalization of the rail eystem,of the country. The railroads are Sweden's prime form of transport, and the bulk, of all freight truffle, except timber and iron ore, moves hy trail over a well-developed network, about half of which is electrified. All policies concerning railroad ad- ministration and operation are determined by the state through the State Railway iadninistration (JARMAGSSTYRMSER); 2. Railroad policies are determined and administered sepa- rately by the State Railway Administration, an independent office in the Ministry of Communications. The Ministry is charged with integration and.administration of all communications and public works policies, and is the liaison channel through which the various organizations concerned with transport deal with the state. 3. Strategic and military considerations have had little effect upon the determination of Swedish rail policy which directs the railroads in furthering economic and indus- trial considerations. 4. 'Since the government owns the major portion of the rail system (74 per cent in narch 1940, subsidies, in the commonly accepted usage, are of little concideration. Thia government, however, is very active in promoting improve- ments in equipment and operating procedures on both state- owned and privately-operated lines. 5?. Government rail policy in Sweden has bean influenced in recent years by economic and geographic considerations and vested interests have relatively little direct in- fluence. B. ORGANIZATION 1. The agencies of government concerned with state-owned and private lines are as fellows: The State Railway tdmin.istrLtion (Anis-try of Conaunications) The Railway Council (JA.RTIVA,GSRJ.DET) The ,State Railway Board 2, The State Railway Administration is organized by bureaus, ouch dealing with specific problems; of administration and operation, such as traffic, safety and finances. The Railway Council acts as an advisory board on questions involving nil traffic. The State Railway Board is appointed by the government and operates through district administrators. Representatives of the State Railway RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 STR I CTED ____1.1LV;ILY TRANSPORTATION 84 ContLAL ? Board are customarily appointed to the Board of Directors of private rail linos to which the govern- ment has made loans. 3. Tho State Railway Ldninistration has no direct relation to any other transport agency, except as its operations aro affected by over-all control and coordination with- in the Ministry of Communications. 5, The Swedish railroad lines are considered by competent ? authorities to be among the most efficiently operated of all state-owned systems and no public criticism is , apparent concerning either administration or operation. C. tLILU UI STRaTI ON 1. The :Ainistry of Communications is charged with, the re- sponsibilityft determining the need for new rail linos or extensions of the existing systems. The need for now ? rail facilitiesj is determined by the government in ac- ? cordance with the needs of industry and .commerce. The Ministry .is inclined to allow privately-controlled lines ? to develop as they see fit. It should be noted, however, that duo to the intense competition of highway trans- portation, no new rail construction is contemplated and Some rail lines have either discontinuedor sharply cur- tailed their operations. 9 Rates applicable to the stuto-operated lines are promulgated and established by the jinistry of Communications, Rates ? on privately-operated lines must be submitted to the lanistry of Communications for approval. Minimum freight and passenger rates are established by the State Rallying Board, which has authority to effect changes under certain conditions. 3. The principal competition to the rail lines is offered by the highway transport carriers. The stato'does not attempt to favor rails over hizhway carriers, despite the financial interest of the state and as a result of this policy, the rail linos have suffered. This is.partioular- ly true of the 35 privately-owned and operated lines which account for 26 per cent of the total rail mileage. Despite the basic competitive positions of the two media, of transport, however, a policy has been evolved which enables both rail and road transport to organize cooperative services for their mutual benefit. 4. The re:-,ulations applying to both state and private rail- ways are issued and enforced by the Royal Railway Board, whose decisions in all major mutters arc subject to the approval of the government, and in specific cases, of the Riksdag. RESTR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/08/11 : CIA-RDP78-01617A004300060001-7 RESTR 1 CTED SWEDEN . MILLIS TRIZSIORTATION (C-5) - 5, There' are a 'inzaber of toChrxict.1 schools yhich are either state-operatod or stt-te-subsidized, offering courses in technic-Nal trdnin Tho Royal School of Tochnstcycy in Stockholm, ;Aid the Choir:tors Technical College at -..loteborg a.ro examples. ? 6, Sweden is. a. party to many international agreomonts concern- ing ? tirt;fi'ic fLci1itis, n?.tos Lind othur problems. cre-rolr'rrn Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 1 aA-RDP78-01617A004300060001-7 RESTRICTED (.) Ao POLICIES PRE-WAR GER?/ANY RAILWAY TRANSPORTATION 10 The Reiohsbahn law of July 4, 19390 was the final definition of the position of the German National Railroad: its inter- nal organization, its financial status, its relationship to the Government and other public bodies and undertakings. Paradoxically, the Reichsbahn must be desCribed as a com- pletely state-owned enterprise which.still enjoyed financial0 adminintrative and operating autonomy* As a juristic person, it administered all its operations under its own responsi- bility* Its peculiar status under the legal device of a "Sonderverni8gen des Belches" (Special Property of the Nation) gave it the self-government necessary for successful opera- tion, though "belonging to the Reich alone, influenced by the Reich alone, and responsible to the Reich alone". .The only injunction expressly laid on the Reichsbahn was that it was not to consider itself as a profit enterprise but as a pub- lic service which had to be self-supporting at the same time. The transportation policy of the German Governments between the wars transcended the usual duties of regulation of abuses ? arising from monopolistic tendencies, or the general protec- tion of the public interest* The preamble to the law on land passenger traffic of December 8, 19370 expresses the German attitude in these words: "In the National Socialist state the leadership (Flihrung) in regard to transportation is e task of the State* The means .of transportation can be operated either by private persons or by public bodies. But. ell must subject 'themselves to the rules which are framed uniformly for the whole Reich* Each branch of transportation must be ago signed those tasks which it is likely to serve in the best possible manner within the frame of the whole transportation system and of the national economy*" In transportation, as in other phases of economic activity. the Nazi state brought to completion tendencies already ex- isting, for "in Germany the concept of transportation (Verkehrsgedanke) has always been most iniAmately bound up with the concept of the National State (Reiohsgedanke)", The German transport system has been "nothing other than the expression ,of the political and politico-economic ideas" of Germany* Paragraph I of the law of February 17, 1934, charged the Reich Minister of Transport with the organization of the whole system of surface transportation on the basis of this conception of uniform control* The way had been pre- pared for him by the nationalization of the state railroads and the main highways, the inauguration of motor transport reguletion, and the assumption by the Hitlerian State of broad powers after the eradication of the states as politi- cal entities* More than 00% of the trucks, about 50% of RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED PRE-WAR GERMANY - RAILWAY TRANSPORTATION (A-1 CONTT) the buses, and most of the river vessels Were permitted to remain privately-owned and operated. However, the Ministry, by means of the '"self-governing" Transport Groups? exer- cised Par-reaching control on the transportation services and auxiliary enterprises not immediately awned by the Government, Hence, the German Ministry of Transport from 1934 to 1939 exercised the functions of a railway board of managers for the Reichsbahn0- combined with responsibilities similar to those of the. US Interstate Commerce Commission and of the US Maritime Commission as regards the remaining . carriers. In pre-war years such aa 1937, the Reichsbahn handled about 73g of all freight traffic of the oaUntry, as against 3g handled by privately-owned railway lines, 21 1/2% by watera. way carriers and 2 1/2% by highray.vehieles, In the pas- senger field, statistical evidence is less complete, but the Reichsbahn apparently conducted some 70% of all passen- ger travel, privately-owned railways about 3%, and the meter carriers about 27%0 much of Which was purely local business. In physical extent1, the inland waterways (streams and canals) totaled 12,000 kilometers8 the railroad net 80,000 kilometers,, and the road net (including the Auto- hahnen) 250.000 kilometers. The following indicates generally the proportions of the pre-war division of traffic! Type of Transportation Private railways State. railways (the Reichsbahn) Waterways Highways Freight Tons 3,700,000,000 97,8320600,000 28,972,600,000 3025400000000 Passengers 220200,000 6180204,100 214,000,000 Total 133,759,200,000 8810404400 2. The law of Febniary 170 19340 combined in the National Transport Ministry the governmental regulation of all model of surface transportntion with the management of the ne.-0 tional railroads. The glaring exception to the "uniformity of control" prescribed by this law was the independent ad- ministrative position of Dr. Fritz Todt0 succeeded by Alfred Speer, as General Inspector of the German Road System. Although the posts of Minister of Transport and General Manager of the Reichsbahn were combined in one person after 19370 the Transport Ministry,.thriugh its railroad depart- ments, administered the railroads on'a basis of extreme decentralization. 3. The Germans wore among the. first to recognize that the . "armed forces of a nation are not a thing in themselvesobut nn expression of the entire state and folk structureo A real people in arms must utilise for the-purposes of national - 2 - Declassified and Approved For Release 2013/03/11 : CIAI-rlie6TPn7hr:Or1r617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR I CTED PREc.WAR GETrAUY PAIVAV TRANFRORTATION (A03 COMM) defense everything that the land and its characteristics pro- vided*, An industrialired state must possess armed forces that use all the possibilities of industry", This concept is that which General Thomas, Chief of the 2:ilitary-Economics Section of the German General Staff0 called "depth of arms? mane, and which is usually described in Ludendorff's phraie as "total war", -"A certain military political meaning can be demonstrated for every branch of politics", The place of transportation in this scheme of grand strategy is subordi, nated to the general needs of the economy, "The principle is that transportation does not exist for itself? but has its. only meaning and justification in serving the country's economy", The Yittelland canal, for example0 was conceived in terms of the huge Hermann Ggring works at. Salegittor. The roles assigned to transport in theoretical considerations of strategy were therefore secondary to its economic impor- tance in the war potential? At the same time, German trans- portation was in a state of all but complete mobiliration even before the outbreak of war, Most obviously, pre-war physical transportation facilities far exceeded the demands of a normal peace time industry & That the restrictions on highway and inland waterway tOiffic were kept in force until 1938 demonstrates that neither the Autobahnen nor the canals fulfilled essential needs, "If from many sides critical opinions are heard which nroclaim our overcapacity, it still remains an enduring principle that a responsible government plans and creates all traffic means and establishments in terms of the future, In transportation9 potential must be greater than immediate transport needs, The best example is the building of the Autobnhnen ordered by the Fuhrer," The strategic meaning of the Reichsbahn in Nazi thinking is illustrated by a significant change in the wording of the fundamental laws, Paragraph 2 of the laws of August 300 1924, and March 13, 1930; agreed that the Reichsbahn was "to conduct its operations for the preservation of the German folk economy under business prindiples," In section 30 pare? graph 3, the law of July 4, 19390 provided that the "Peichs- bahn is to be administered for the use of the German people; in this connection, the importance of the national defense is to be considered", 40 After November 1923. the German Reichsbahn received no finan- cial subsidy from the Reich, On the contrary. from 1924 to 1931 the railroad paid sums approximating 660 million annually for repnrations under the Dawes plan, and at the same time a transportation tax averaging 290 million PM an- nually, After the end of reparations, s fixed sum of 70 million PM was Taid annually in addition to the transport tax, With the expansion of German industry under the Maris. the Reichsbahn was celled on to contribute even more sub- stantially to the Government& In 19370 a plan was worked out whereby 3% of a total under 4 billion RM. and 971, of any sum over 4 billion RP, were to be turned over to the Govern- ment, The amounts for 1937 and 1g38 were 15708 million RM I Declassified and Approved For Release 2013/03/11 :(";IP?UgrcT7A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED ? PREe,WAR GMANY RAIL7wAY TRANSPORTATION (A-.4 COTITID) and 193.4 million RV respectively? In addition to these sums the Reichsbahn paid the transport tax, which for 1937 was 25407 million RN and for 193,A0 286,7 million W.. The law of July 4;1939, on the assumption that with the absorption of the Austrian, Sudeten, and renel lines a total operating ine? come of 4.5 billion RM might be expected, provided that 3% of this amount--nnd in no ease less than 100 million RM annually nhould be paid to the Nation, Thin was to be treated, as opera- ting expense? In addition, it vas provided that the contribu- tion should be increased or decreased by 10% of the amount of which the total income exceeded or fell below the stated level of 4.6 billion RM, 5. The use of the "Gomeinnutz/iches Tarifsystem" as an instr10 ment to effect Nazi economic ideas is described in C-2. The subordination of the states to the nation was an avowed goal of the post-Bismarckian German Notion. As part of this policy, the eimar constitution assumed for the Reich control of all moans of transportation, but Practice lagged behind the expression of intention, The states fought the Reichs. bank on the allotment of railroad stops and etations, and the geographical definitions of administrative boundaries. Seven - thousand local political units were involved in the admtnis- tration of the roads. The transfer of waterways to the Reich set for April 1, 1921, was never effected, because the states wished to give up only the duty of maintenance, while re- serving to themselves the right of administering flood control., drainage, reclamation'and miter transportation? The law of February 17, 19340 with exceptions already noted, accomplished the tranhport unification of Germany, to go along with the political unification proclaimed by Hitler on January 30, 19330 In the field of what the Germans called "BevOlkerungspolitik" (population politics) important missions were assigned the railroad and the Autobahneno "The state has built a series of railroads which, by private economic standards, were never worth building, because they brought in no profit, Thinly settled, economically poor districts have been tied up with industrial and cultural developments. The economy of border districts, where the populsce, because of the proximity of the foreigner, needed particular strengthening, has been supported." The decentralization of industry was stated as an official government policy as early as itarch 29, .1935. Transportation was also an agent of politics in the narrowest sense of that wordo The canals, the Autobahnen, the com- merical air fleet were all visible symbols of the vitality of the new regime, as well as sources of employment for the work- less. "At ell times the roads have been the expression of the-culture and status of a people? The highways of ancient Rome, of Napoleon And the Chinese Emeire? and of the Incas bear witness to this facto Our roads also shall exist eternally--The name Adolf :iitler obliges us to make of his roads the exrression of our new erso" RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED PRS?:WAR GnR13iNY a RAILFIAY TRANSPORTATION (A-5 CO,IT/D) The German conception of the place of that country in thn world geographic structure has been populariaed an the geeo political writings of Karl Haushofer. The traffic?geographical conditions of Germany can be summarized as* (a) the almost ? parallel south to north course of comparatively closely situated rivers (Rhine, ;Teter, Elbe, Oder, Vistula) which needed only the oast-west connectione supplied by the lattel- land and Adolf Hitler canals; (b) the influence of river val- leys by the shaping of the mountain ranges ip the development of the railways: (c) the full opportunities provided the automobile by the extensive lowlands that make up the greater part of Germanyo . The perennial aspirations of the nationalistic intelligentsia of Germany, Viddle Europe under German domination* and the "Drang nach Osten" were undoubtedly conscious aims of the German transportation policy. An example in'point is the ? waterways? !'The prime consideration has been not whether the way %mild be a sound economic development,. not whether tolls received plus income from power plants would carry the fixed charges incurred for construction, but whether the completed natomNay would serve as an artery in a completely united end ? self-sufficient economic area, composed of Germany and the small states on the Danube, under the domination of Germany, and affording basic economic security and military power." B. ,ORGAVIZATION 10 The rinistry of Transport Was concerned only with neje:. prob. 2 lams of policy, such as rates, status of personnel, and bud- & getery matters. Routine control and day-to.-day management , 3 were effected by the 26 (in 1938) Divisional Vanagements (Reichsbahndirektionen), who were not limited in authority to the maintenance of way and structure and the operation qf ? equipment* as in the American scheme of divisional organiza- tion, On certain matters of policy the Minister had the ado vice of a special advisory council, formed of representatives of industry, trade0.and public, Directly under him there were two technical offices, at Berlin and Munich, in charge ? of mechanical and civil engineering, workshops, research, and other technicsa matters requiring common administration? Under the divisions were the local district offices for traf- ? fic, construction, operations, locomotives and rolling Stock, responsible for their particular function in their districts. The major workshops were supervised by a board consisting of ten of the division managers. To coordinate the work of the 26 divisional managements there were three operating offices, in Berlin (East), Essen (Went), and Yiunich (South). ' They were responsible for the harmonious coordination of train and traf- fic working in the divisions under their immediate control? However, the divisions were on equal footing with the operating offices, and in all administrative matters were responsible only to Berlin. 5 -? Declassified and Approved For Release 2013/03/11 : CIA:RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR I L; tu PRE-1%1R GERUITY RAIUZY TRANSPORTATION (13-10 2 & 3 CONT'D) The general regulation of private railroads was also the task of the divisional president, although tariff problems were still reserved to the Vinister0 In the case of light railroads, the regulatory functions were divided? Powers of administrative regulation were delegated to the state authoritiess whereas technical regulation was exercised in Bill areas (except Bavaria) by the presidents of the divi- sion managements. Both private and light railways were members of the Reich Railways Transport Group in the Nat.. tional Transport Group of the German corporative eystem? The Railway Transport Group therefore represented the rail.. roads insofar as they remained in private0 municipal or state hands, but only in a consultative sense? . The centralization of power in the ReichsverkehrsMinis0 ?terium (Linistry of Transport begun by the decree of June 21, 1919, and Confirmed by the law of February 170 1934, continued all through the pre-war-period? It is to be noted that two aspects of transportation were assigned to other agencies: (a) air transportation was the business of the General Air Office in the National Air Ministry, (b) the supervision of road construction and maintenance had been shifted to the Inspector General for Roads. The rinistry of Transport was hbaded by a !lir-lister, Dr? Ing0e.h0 DorpmUller0 The Undersecretary, Dr. Ingo GanzenmUllers was the overall head of the Railroad Divi- sions? An Advisory Council (Beirat) consisting mainly of industry representatives and transportation experts9 car- ried..out purely consultative functions? The various divi- sions of the Ministry will be discussed below as they were related to each form of transport? The railroad divisions of the Reichsverkehraministerium did 'not merely "supervise" or "control" the administration of the Reich railroads; they emnaged them directly? All organs of the Reichsbahn. were Reich agencies, its em- ployees were civil servants of the Reich,; The Minister of Transport was the head of the Reichsbahn, with the title of Generaldirektor der Deutschen Reichsbahn. As Assistant in this capacity0 he had on Undersecretary of the Ministry, whose title was Stellvertretender General- direktor (Deputy General Manager)0 The Railway Traffic and Rates Division (EisenbahnflVerkehrs- und Tarifabteilung) prepared and adjusted rate schedules, organized the regular transportation services for passen- gers and shippers, and in addition handled large mass movements of persons and goods and arranged preferential rate schedules therefor. In this capacity s it managed the transport aspects of the Nuernberg mass meeting of "Kraft durch Freude"; and in wartime it adapted railroad trans- port regulations to military needs,' in cooperation with , the. Railroad Finances and Legal Matters Division. bDeclassified and Approved For Release 2013/03/11 : CIA-RgT78D-017n1r7A004300060001-7 Declassified and Approved For Release 2013/03/11 :()IA-RDP78-01617A004300060001-7 RESTR I CTED PRE.ZAR GERMANY - RAILMY TRANSPORTATION (B-10 2 & 3 CONT'D), The' Operational Management Division (Eisenbahnbetriebs- abteilung) controlled the operational coordination of' the whole railroad system? including the technique of train and locomotive services, marshalling and switching, end the preparation of timetables. The Machine-technical Matters and Purchasing Division (Eisenbahn-Maschinentechnische-und-Einkaufsabteilung) placed orders for major new acquisitions? and was the top- administrative agency in control of workshops, stores? locomotives and electrification works. It handled mech- anization projects, electrification, and research on the problem of substituting domestic materials for imported ones in order to save foreign exchange, The Railroad Finances and Legal Metter? Division (Eisen- bahn-Finanl-und Rechtsabteilung) handled the finances of the Reichsbahn, one of the world's largest single busi- ness enterprises, separately from the general finances. of the Reich. The accounts of the Reichsbahn were pre- pared from the daily reports of the 26 Divisional Managements, which were treated almost as separate enter- prises. As prescribed by the Reichsbahngesetz, balance sheets and profit-and-loss accounts had to be published yearly. This Division had two sections. The Legal Sec- tion (Rechtsabetilung) handled the Reichsbahn's day-to- day legal business, formulated rail legislation and transport regulations. The Light Railroad Section (Kleinabteilung) regulated the 136 privately-owned rail- roads, the 309 narrow-gauge railroads, and the 100 com- mercially run sidings, all totaling about 13.000 kilometers, which formed approximately 20% of the Reichnbahn's entire network. .Routine technical matters for these roads were controlled by division managements. The private and light railroads were organized into a corporate system of transportation, which as a unit exercised strict control over its members and interfered radically with the manage- ment of the component enterprises. This corporate system was under the control of The Division for General Adminis- tration ( Abteilung Air Verwaltung), The Division of Personnel Matters (Eisenhahn-Personal7 abteilung) handled the personnel affairs of more than 1,000,000 men and women. One section (under a Ministerial- direktor) dealt with employees; another (under a Minis- terialrat) with laborers. The Division of Construction (Eisenbahn-Bauabteilung) super- vised the reconstruction and eXparisiop program. In addition, .numerous Construction Offices (Neubauamter) were created; these were subordinated to the Divisional Managements. The Railway Planning Division (Eisenbahn Planungsabteilung)p ' a newcomer among the railroad divisions, seems to have assumed, before 1943, the functions of the former Railroad Declassified and Approved For Release 2013/03/11 CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Ktbintuicu PPE-WAR GERMANY - ? .RAILWAY TRANSPORTATION (B-1. 2 & 3 COYT'D) Construction Division (Eisenbahn-Bauabteilung). Although no complete description of the work of this division is available, it may be assumed that the jurisdictional dif- ference between it and the Division of Construction was that the Planning Division prepared the plans for new con- struction and reconstruction projects,, the execution of which was supervised by the Division of Construction. The Railway Military Matters Group (Eisenbahnwehrmachtliche Angelegenheiten), set up long before the war as a liaison between the Ministry of Transport and the 'Aehrmacht, pre- pared the plans to meet the needs of military transporta- tion and arranged schedules to go into effect when war should begin. During the war0 this division cooperated closely with the military authorities. The Audit Organization of the Reichsbahn (Hauptprufungsamt) audited the Reichsbahn accounts. It cleared accounts with the Rechnungshof des Deutsohes Retches (Court of Accounts of the Reich). Subordinated to the above were the audit offices attached to the Central Offices and to each Divi- sion Management. The chiefs of these were the acoounting officers of the respective agencies. When they acted in the capacity of chief of audit offices, they reported to the Chief Audit Office; otherwise9 they reported to the President of their agency. Complementing the Transport Ministry in its performance of regulatory !Unctions were two organizations0 a resume of whose workings will be given here. By the Act of November 27, 19340 Germany's business enter- prises were organized into self-governing groups, headed by the Reich Economic Chambers, with compulsory membership. The 140,000 transportation enterprises were originally a part of this system, but by a decree of September 23e 1936, they were separated from the other Reich groups, renamed "Organization of Transport", and divided into seven func- tional groups. The. Transport Groups were placed under the jurisdiction of the Minister of Transport, whereas the other Reich Groups remained under the nominal administration of the Ministry Of Econothics, The Transport Groups, although referred to as "self-governing bodies"0 acted as government agencies, with power to intervene in almost every aspect of the management of the transportation enterprises, including . questions of expansion0 transfer of officers, and personnel problems. Through interchange of delegates with the other organizations, such as the Reich Chamber of Economy. the . nandtional and regional groupings of industry and trade, and the German Labor. Front, uniformity of administration was theoretically ensured. 8 - Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 :CIA-RDP78-01617A-004300060001-7 fltIItIaICL PRE?WAF GERMANY - RAILWAY TRANSPORTATION (B-1. 2 & 3 CORM) Those transportation facilities which were not in the hands of the Reich were thus united into the Reich Transportation Industry (Reichsvorkehrsgewerbe) with these seven groups: 1. Ocean Transport 2. Motor Transportation 3. Private Railwaya 4. Inland Shipping 60 Forwarding and Stet-age 6. Auxiliaries Of Transport 7. Hauling and Carting These groups were divided into Trade Groups (Fachgruppen)9 which in their turn were divided into Sub-Trade Groups (Fachuntergruppen). ? The fUnction of the National Transportation Advisory Council was to produce a close liaison between different branches of the industry and in turn with the users of transporta- tion. The results of their deliberations were presented to tile:Transport Minister to use or reject as he saw fit, The Council meetings wore hold irregularly at, the convenience of the Minister, who also fixed the agenda for the meeting. The broad purpose was an exchange.of ideas on'the national scale between shipper and carrier. The composition of the council indicates.the character of its representation: The loaders of the 7 transport groups, 6 delegates from indus- try, .2 from the Nntional Food Chamber, and 1 each from the Air lanistry. the Post Office, and the Inspector General .of Roads, the Cities, the German Labor Service, and the Nntional Cultural Chamber. The Advisory Council wag dupli- cated all down the echelons of command so that every sub- . group had an advisory council formed on the same representa- tive principle. 4. AG has been said, prior to the Weimar Republic0 transpor- tation mattera were not centralized in the Reich. The. Weimar Constitution9 however, transferred the state -railroads to the Reich for uniform management.- By the decree of June 21. 1919, the Reich Ministry of Transport was established. In 1934, the Reich Ministry of Transport And the Prussian Ministry of Transport were unified under the name of the Peichs-und Preussiaches Verkehrsministerium. After the annoxntion of Austria, the name again became Reichaverkehrsministerium. When the Ministry of .Transport was created9 the aim was to concentrate all supervision and control in one Reich agency. ' The states showed considerable resistance, which was gradually- . overcome to some extent. Under the Nazi regime, the internal g Declassified and Approved For Release 2013/03/11 : CIA-RDR18:61617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR I CTED PRE-A?. Gtanry 111.ILITAY TRA:PORTATION (6-4 CCCT'D) organization and personnel of the Yinistry of Transport were at first left relatively unchanged. The concentration of power in the Iiinistry of transport continued, although im- portant sectors were again taken out of its jurisdiction' (a) the lanistry of Air Transport took over aerial transpor- tation; (b) the construction of waterways was transferred to the Inspector General for Tater and PoWer; (c) the supervi. Gioia of road construction and maintenance was transferred to the Inspector General for Roadsi and (d) maritime shipping was placed under the Reich Commissioner for Ocean Shipping in 1941..: 6. In the absence of a free press or of parliamentary debate on the Anglo-Ameridan model,, there could be.no free expres- sion of opinion in Germany on the operiating efficiency of a government department or a state monopoly. Taking perfor- mance as the yardstick of meaouremento we have the statement of the United States Strategic Bombing Survey: "In brief, the .Reichebahn was the sort of plant any railway man would like to have constructed had ha been free from financial obligations...Esprit de corps song German railroaders appears to have been very good. Voreoveyithe standard of technical training and,Ecneral competence was exceptionally good." "Prior to the war, Germany possessed one of the most complex, adequate and well.maintained railroad systems in the werld...A strong inland waterway system connecting the important rivers of North Germany, crisscrossing the Ruhr coal area; and pro- viding through water transportation from the Ruhr into the Berlin area, accounted for 21 to 36 per- cent of the total freight traffic movement. It was well adapted to the movement of heavy cargoes in and out of the Ruhr distriet. Commercial high- way transportation of freight was of little signific- ance, accounting for less than three percent of the total, ,and coastwise shipping was of minor importance compared with the.total inland. movement. Contrary ? to general belief at the outbreak of the war, none of these transportation systems, wad undermaintained. Standards were well above those common in the United States, an element of strength which would permit curtailhent in maintenance for a period of years before operating efficiency or safety would be affected." C. AMINISTRATION 1. This question is not strictly applicable, since the govern- mental policy was one of restricting rather than expanding transport facilities and enterprises. For specific infor- mation see the relevant sections of this report. -10. Declassified and Approved For Release 2013/03/11 : CIA-RI-F7/8:6-1617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 i,tsTR I CTED ppG0':7tR GlaikNY - RAILICAV TRANSPORTATION (C-2) 2, The German rate structure was known RS Gemeinairtschaf- flitches Tarifsystem (rate structure *based on the interests of the economic life of the country as a whole). The sub- ordination of the freight rata structure to considerations of economy, defense and politics may be illustrated by noting some of.the special adjustments, The railroad rates effective in 1937 reflected the four-year plan. Thus special rates were established for raw materials used in the manufacture of artificial wool and cotton yarns, Special rates were also allowed for German raw materials where such rates ddmulated their use and saved foreign exchange.; examples were ores, slags, and synthetic Diesel fuel. Low rates on potash and calcium were designed to help agriculture. On the other hand, by way of aiding exports, iron and steel goods, paper, glass supplies, and chemicals could be hauled to seaports et special rates, Material for the Autobahnen'was carried at cost, this accomodation (rendered for an ostensible subsi- diary which was in reality a rival) amounting to a probable total sacrifice of 100 million RW at the end of 19370 In addition, some arrangements were even more directly politi- cal. Building materials for the party grounds at Nurenberg were forwarded at a reduced rate of 30 percent? In addition, goods destined for winter help were shipped free of charge, entailing a freight revenue loss to the Reichsbahn of 18 million RM. The Reichsbahn had separate rating systems in operation for wagon-lord traffic and traffic in part wagon-loads, and further, according to whether the traffic was conveNed in ordinary freight trains. The ordinary rate classification applied only to wagon-load traffic; there was no classifi0 cation for part wagon-load traffic, which was charged ac- cording to freight tables based on weight and distance, Wagon-load rates applied to wagon loads of 15 tons and up- wards, and were increased by fixed percentages, varying with the class of goods for wagon-loads of ten tons and five. tons roopoctively, All haulage rates tapered downwards with in-. crease in distance. The exceptional tariffs were not always special rates ss usually understcod, that is, rates applying to certain goods and to certain areas. There was a considerable number of ex- ceptional tariffs in favor of certain commodities from all stations to all stations in Germany. Some of these so-called special. rates had a general application and thus functioned merely as a new classification added to the general tariff, Thus, there was a raw materials tariff for bulk commodities such as fertilizers, potatoes, minerals, etc. These general 'exceptional rates had no quantity restrictions and were avail-- able to and from all stations in Germany? In addition, there were many Genuine exceptional tariffs, These rates were subjected to a number of restrictions over and above those which would apply to the same commodity when dispatched at the normal rate, The employment by. a -11- Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : aPrRDP78-01617A004300060001-7 ? atel"-- PRE-MR GEWANY RAIMY TRANSPORTATION (C-2 COrT'D) trader of a given special exceptional tariff was usually deo pendent upon the observation by him of certain attendant clauses. An example was the *producer' clause; when this was imposed the goods for dispatch must have come from a particu- lar country, district or town. This clause was generally im- posed as a discriminatien between home products and imported goods, but was also employed to aid the development of an industry in an area unfavorably situated geographically. 'Men the clause *prohibiting re-export* was applied, goods were given a reduced rate to a particular foreign country on the understanding that once the goods had reached their destina0 tion, they would not be re-consigned elsewhere. Exceptional tariffs were introduced on the German railways as part of p policy which aimed at adjusting the cost of transport so as to benefit the country as a whole by. assisting industry and trade against toreign competition, and by de. veloping exports. The exceptional tariffs may be divided into two main categories: (a) Exceptional assistance tariffs; these were introduced in order to favor economic activities within Germany. They facilitated the transport of vital goods, the movements of exports from their place of origin to the seaport? and protection of home markets. They overcame temporary disadvantages by emergency measures? e.g. they per- mitted the granting of rebates to retain the custom of tra- ders near e frontier who could obtain cheaper rates by using a foreign railway, (b) Lxceptional competitive tariffs: these tariffs were designed to prevent any undue trespassing within Germany of foreign transport systems which could offer lower rates for exports end imports - seaports? railways, waterways? air or road transport. A prominent example of such tariffs WAS the Seehafenausnahmetarife, which exerted R powerful influence in diverting to Bremen and damburg from Antwerp And Rotterdam the traffic of Wettern Germany, and which to some extent diverted from Antwerp, Rotterdain, Marseilles, Clenoa and Trieste the traffic of South Germany and Switzerland. 30 Since the firing of tariff ratee is the single most important instrument of regulating transport competition, this question is implicitly answered in the answer:: to question C-20 4'. There were no peculiarities in the German administrative system of safety regulation and inspection which?require en- umeration here. The only difference.from commonly accepted practices lay in the high degree of centr.lization within. the the lanistry of Transport. 5. The employees of the Reichsbahn, by far the largest single element in transportation, were civil servants, and therefore subjected to the training and educational requirements of civil service. They were similarlx divided Into three main 'classes: higher civil servants (hohere Beemte), civil ser- vants of intermediate rank (nittler? Bearte), and those of lower rank (untere Beamte). Prior to the war higher officials numbered about 1.250 civil servants of intermediate rank 30%, and those of lower rank 66.e of railroad personnel. - 12 - : Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED PPY0WA7 RAILWAY TRANSPOTIATION (005 CONT0D) The higher carreer was in general open only to well recommended, applicants with full university education and good scholastic records. Applicants with legal baokground were required to have passed the state-bar examination which required, in ado dition'to graduation from a university, 3 to 4 years of train- ing in courts and law offices. Applicants with engineering background were required to have graduated from an institute of technology in mechanoial or civil engineering, and, after 3 years training in technical railroad service or in other techni- cal enterprises, to have passed n special engineering examination for higher reilroad serviceo then admitted to railroad service, both classes were trained for a period of 1 14/2 to 2 years in all fields of practical routine (in division managements, superintend- ents2 offices, and subordinate agencies). They then started RS junior section members of a division management o Promotions were baaed on ability. Under precwar conditions about 45% of higher officials were civil engineers, 255. mechanical engineers, and 207 had legal training. Only about 102i:were promoted from the intermediate ranks: Tho intermediate career was open to boys who had completed 4 years of grammar school and 6 years of high school. Yany applicants, however, had a better education? and for admission to technical services graduates from technical high schools were preferred, Positions as chiefs end assistants in the agencies subordinate to the division managements and all important clerical jobs in agencies of all grades were filled with civil servants of intermediate rank. Civil servants of lower rank were usually' recruited from workmen employed in railroad service or from former non-commissioned army officers who after a certain period of service -- had obtained a certificate for preferential admission to civil service (7ivilversorgungsschein). Such positions as stationmaster at small stations, clerical helper? locomotive engineer, firemen, conductor, and foreman in maintenance of way and structure and eouipment service, were occupied by servants of lower rank. The status of workmen was similar to that which prevailed in German industry in general, The largest groups of workmen were helpers in services usually performed by civil servants (Hilfskrafte in Beamtendienst), workers in train and switching service (Betriebsarbeiter)? track laborers (Bahnarbeiter), and shop laborers (Werkstatteorbeiter). A small number of employees? such as typists and clerks (mostly women), had the status of clerical workers (Angestellte). Their status was determined by the 'general provisions which German legislation had established for cLrical workers. 60 As of September l 11938? Germany had ratified these international transport conventions of the League of Nations: the transit conventions, ports convention, railways convention, the declaree tion recognizing the flag of Inland States, the hydro-electric power convention, the Toad and motor traffic conventions. Germany ?13. Declassified and Approved For Release 2013/03/11 : CIA-RDW8:01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 - - RESTRICTED PRI7,0WAR ? RAILWAY TRANSPORTATION (C-6 =Ton) belonged to the following international organizations cone earned with transportationa The Baltic and International Association of Navigation Congresses International Shipping Conference International Shipping Federation ? Union for the Use of Carriages and#Vans in International Traffic International Railway Congress Association Central Office for International Railway Transport International Railway Union International Railway Wagon Union International Conference for Promoting Technical Uniformity on Railways European Conference on Time?Tableso 00 In. addition? Germany was 'a member of the Voroin Mitteleuropaischer Eisenbahnverwaltungen (Association of Central European Railway Administrations)0 The last organizationD since voting reiresen?? ' tion was-based on mileage and its decision(' were binding on all membershipso was of fundamental importance? ?14? arm-14 I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 a Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 r Abeiffneirrr CANA4 - RAILWAY TRANSPORTATION A. 'POLICIES 1. The Canadian railway system, throughout the years, has repre- sented a planned developmentipointed toward national political. objectives, It has provided the transportation basis for a 'very substantial movement of traffic across Canada, and has thus largely contributed to the establishment of a purely Canadian economy, independent of the US railway. network. Railway policy has been determined by the State,'Which.has. inflemented its will through the no*er to regulate rates.: The Canadian railway system occuPies first place among the various media of transportation, both economically and stra- tegically. In a political sense it binds province to province and the Maritimes on the Atlantic to British Columbia on the Pacific. ,At the same time, the two transcontinental systems operate numerous lires cannecting up with others south of the border. The emergence of two powerful railway. systems, the Canadian Pacific Railway, owned and operated by private interests, and the Canadian National Railways, owned and operated by the . Dominion, appears to be emirently satisfactory to Canadians and to the government. 2, Over-all transportation policy is certainly administered at Cabinet level. The Dominion Department of Transport was or- ganized in November, 1936, to unify in one department the control and supervision of railways, canals; harbors, marine end shipping, civil aviation and radio. , 4n The government and the provinces liberally extended subsidies to railways daring the days of pioneering and assumed as a result a large volume of debt, The government, therefore, was in the railway business almost from the beginning. To protect its interests it was compelled to take over the Ca- nadian Northern, the Grand Trunk, the Grand Trunk Pacific and other lines which were consolidated in 1922 into the Canadian National Railways, Except for a rew years during World War II Canadian National Railways have operated at a loss and hate been subsidized to that extent by the Dohinion Govern- ment. A staggering burden of public. debt has been acquired by the Dominion Government as the result of its involvement in traniportation. At the end of 1937, 70 percent of the combined ton-self-supporting debt of the Dominion, provinces and municipalities, was directly attributable to tranaporta- tion. An attempt was made in that year to determine what part f' the cost of public transportation was borne directly by the users of the facilities and what part was borne in- directly by the general public through taxation. The total cost of public transportation was found to be appreximaiely. 31,3670000,000, of which about 88.5 percent was directly borne by the veers and 11.5 percent by taxes of general ap- plication. The progressive accumulation of obligations on ofisetsltizEo Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP8-01617A004300060001-7 RESTRICTED CANADA para. TRANSPORTATION 14-1. CONTID1 behalf of water and rail transportation facilities *owned by the Dominion in 1936 had reached 33,386,000,000, a per capita basis of $307, as against $22 in the year 1882. The Canadian Government still assumes the annual deficit which is incurred by its wholly-owned system, the Canadian National Railways. This system has operated at a profit only during the war years. In view of possible reductions in Volume of freight, and increased operating codts? it is likely that the Canadian Government will be forced to cot- tinue its substantial subsidization of this system... At the present time yailroads have before the Board or Transport Commissioners a request for an over-all 30 percent increase in rates. Hearings have been conducted throughout the coun- try on the request and despite violent opposition from some quarters, largely agricultural elements, it is probable that the request will be granted. 5. Early railway and canal policy was greatly influrced by the capitalists who prospected that development. In later years the public interest has dominated that of the vested interests. - t . In the early nineteenth century Canada experienced a period , of enthusiastic railway building similar to that in the US, .and by the time oT Confederation in 1867 plans were afoot for the establishment of the first transcontinental railway. . (The waters of the St. Lawrence and the Great Lakes had given ? the early explorers and fur traders ready, if not convenient, ' access to the interior of the ctintinent and the valley of the Vississippi. Access to Canada's prairies was also developed by way of the Hudson Bay, where Fort Churchill was early established.) While the large volume of trading which has always. existed . between Canada end the United States, has favored the ori- entation of.Canada's railroad development into north and south routes.. Provincial and Dolieion political considerations have been strong enough to counteract this eConomic reiluirement. Canada-?s railway development, consequently, has progressed ? from east to'west and hasTinally resulted in two strong competing systems, both Operating transcontinental routes-- one the Canadian Pacific Railway, a private enterprise, the other the' Canadian National Railways, government-owned. Destrective competition between these two gigantic systems has been very largely avoided. ? - RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 n-- , --- Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 CANADA' - RAILWAY TRANSPORTATION (B-1) D. GRGANIZATIO:: 1. The over-all policies are applied in the case of inlarvi '& waterways; highways and railways through the Board of 2, Transport Commissioners; and in the case of ocean-going traffic through the --laritine Commission. These two organizations are autonomous bodies, with both adminis- . trative and judicial functions. It is doubtful that the Lardstereof Transport, vho heads the Department of Trans- port, could directly influence them unless they wen in t fUll agreement' with his policies and objectives.. For ' example, in the case of the Board of Transport Commissioners, the only adminiktrative tie-up with the Department of Trans- port is that the latter receives from the former its annual estimates and submits them to Parliament with its oat annual request for oPerating funds. 3. The various agencies regulating transport operate very close to the Cabinet and look to that source for major policy. ' The Dinister of Transport has lost much of his responsibility to the Board of Transport Commissioners, the Air Transport Board and the Maritime Commission, all three of-which are largely autonomous. However, as indicated, the Ministry of Transport furnishes extensive services to all three fields of transportation. it. The.Beard of Railway Commissioners was established in 1903 and succeeded what was then known as the Railway Committee. /t consisted of throe members, later increased to six, appointed by the Governor in Council. It is autonomous, has batt administrative and judicial functions, and is a court of record. It has gradually assumed most of the administra- tive and judicial functions fornerly falling under the Dinister of Transport'and has practically complete authority on railway matters. Its orders are, however, subject to appeal to the Privy Council and in some circumstances to the Supreme Court of Canada: In 1938 the title was chmmgedirom Board of Railvmy Commissioners to the present title, "Board of Transport Commissioners'', at vhich time its power was extended in certain respects to the fields 'of tater and air transport. 5. In the main, the Canadian agencies handling transportation policy are regarded as operating efficiently in the interest. The Board of Transport Commissioners and its 'predecessors have played a vital role in the development of the railway systems in the national interest, C. ADMEaST1ATT0IA 1. The Board of Transport Commissioners exercises authority, as to location, construction and operation of railways. 2. Passenger rates are divided into standard and special. Freight rates into standard, special and competitive. Standard rates - 3 - ocormtrirciN Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 piESTRICTED CAUADA BA/LAY TPaUSTORT.TIOil (C-2 CMTID) are mixiMum rates and the only ones that must be approved bY the, Board before they are applied. Special and competitive rates, being less than maximum rates, may be applied by railmays without the Boardls approval, provided that a change of rates has been advertised. This permits the railways to compote, insofar as rates are concerned, with motor carriers. 3. Although all lines of transport are subject tp scam govern- ment. regulation, there is a wide area permitting free com- petition. With the uniform establishment of rates by the Board of Transport Commissioners, competition resole/es it- self largely into a question of efficient operation. The Canadian Pacific Railway manages to show a profit whereas the government-orned and operated Canadian National, except for the war years, has operated in the red. This is not . entirely due to the lessor efficiency or operation resulting from government ownership and control. Both roads own and operate extensive indhstrial'and mining interests. They are both heavily involved in the operation of hotels, steamship companies and airlines. -. ? ? 4. Safety regulations and operational proceftres have been standardized on both sides of tie border and are satisfactory. The Board of Transport Commissioners establidhes rules and regulations and enforces thentwith respect tO railway opera. - tions.. It investigates accidents in a judicial capacity'. 3. The Government does very little to foster or regulate train- ing of technicians in any of the fields of transport. 6. There appear to be no high- gr level international agreements in . ' the railway field toachich Canada is at present a party. Canadian railways and American railways Work out anderstandiags on the Operational level as to the division of payments for ? freight and passenger trenepsitation arioing in their respectitia countries. The railways maintain a division sheet indicating the amount of charges received for service aceruing to the Canadian and American Carrier. Waybille Are settled with each carrier's audit office. These payments are net of interest to either government. It is required, of course, that freight tariffs pertaining to Canadian companies be posted with the Beard of Transport Commissioners and that the tariffs pertain. inc to American companies be posted with the United States Interstate Commerce,Conwdssion. Through freight rates, however, are essentiAlly worked out by the carriers themselvea and neither goverthent injects itself into the matter unless It is considered that the rates are exorbitant. It is possible to :ship merchandise on a through bill of indin8, for example, from New.Ierk to 'ainnipeg. !lost of the travel in international freight movements occurs within Canada the rela- tive mileage being apprcecimately 60 per cent in Canada and RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ' Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR:Orn CANADA_. RAIL:Alr TRANSPORTATION tC-6 COLUID1 40 per cent in the United States. The dicitz;1.1mtion of railuay revenue on international traffic is a matter adjusted in each case betueen the connecting lines. The United States Office' of Defense Transportation has establishea an upper limit of 8,000 US cars as a maximum to be in Canada at any one tine. There have been several misunderstandings about this arrangemen.4 the most recent one having led to considerable ill-feeling at thetine. blaring the mar there mus very effective pooling of traffic und equipment, both as to railway animater transport. At the present time, hoeever, no such arrangements exist. The American Ansociation of Railroads has worked out an understanding with the Canadian roads on the return at. American freiLtt cars, which again is an agreement on the operational level. 7 The reports which are required to be submitted to the various supervisory agencies of the govanina.nt arc too amorous and variable to petmit listing. Such a list, if it 'mere possible to compile, would chance substantintiy from day to day. The nature of the replies to the questions .previously covered in believed to indicate in a broad sense the nature and extent of the reports desired. The Dominion 'Bureau of 3tatistic3, for purely statistical purposa, requires numerous reports as to traffic, materinls used, employment given, etc. Rates in all cases must be filed nith the appropriate supervisory bard or agency.' Practically all detnils as to the operation of common carriers are supdlied in printed form to the public by the Dominion Bureau of Statistics. Further information is made available .throwt the annual reports or 'he Departt.ent of Trade and Conerce, the Boarcrof Transport Comissioners ? the Department of Transport, and others. Jimilarly information is published annually in the Canada Year Book and in special reports poriedicallymade by the vair6E agencies. These reports make it evident that transport companies file an infinite' variety of reports and farms durinc the course of operations. HeArts on inspections of accidents are periodically published by the agencies concerned, in tSe case of the railroads by the Board of Transport Conissioners, in the case of tSe air lines by the Air Transport Board, and in thn case of raterborre traffie by the Uc;.artnnt of Transport. ? RESTRICTED 5 - Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED .BRAZIL e RAILWAY TRANSPORTATION A. TOLICIES \ .1. Railway transportation policy is determined brthe,state. Basic transportation policy in Brazil has favored railway development more than that of other forme of inland trans- portation, jand the isolated population areas along the coaet have been able to organize individual rail networks serving their respective hinterlands. Government policy, however, has not been sufficiently farsighted to insist on development according to a national plan, and many largely unconnected systems with different gauges have resulted. Recognizing the importance of adequate railroads, the Government_is now be- latedly attempting to effect a certain degree of standardi- zation in gauge, and to achieve by expansion a more integrated nation-wide system with connections into Uruguay, Paraguay and Bolivia. A continuation of the trend toward nationalization rill probably further redUce the number of privately-owned rail systems. 2.; Polley governing all forms of transport, except air, is,con- ? trolled by the Brazilian Ministry of Transport and Public rorks. There exists, however, little integration within the ? Unistry of its components which regulate the individual transportation media, and the Ministerial Departments are largely autonomous. There has been, moreover, a-certain de- gree of decentralization in the administration of Brazilian railways. rhereas the Federal Government owns 21,368 kms of railway lines, it actually qperates only 13,068 kms. The , delegation by the Federal Government of operating responsi- bility to the individual states is indicated by the fact that while the states only own 3,274 kms, they,operate 10,550 kms (private interests awn and operate about 10,000 kms of rail lines). 3. While the development of the Bratilian railway aystem has been dominated by economic considerations, there are certain as- pects of strategic significance. One objedtive of Brazilian policy is to establish a lateral railway line behind the en- tire Brazilian coast from the mouth of the Amazon to the Ar- ? .gentine frontier. If this line materializes, the movement of ? material and troops could be organized sufficiently distant from the coast to be independent of local military developments in the coastal port areas. Another objective of Brazilian policy is to connect its railway system through Bolivia with what may eventually become a transcontinental rail artery. In achieving this, Brazil Would counterbalance the advantage now enjoyed by Argentina, its most powerful potential enemy in ? South America, which already is-coanected by railway with the Chilean Pacific port of Valparaiso. Possible future rail de- velopments into Boli ?la, Paraguay and.Uruguaywould also be of advantage to Brazil in case of localized military operations in these areas. RESTR I CT EV Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11: CIA-RDP78-01617A004300060001-7 RESTRICTED SP0 - A el, ? 4) 4. Brazilian railraods are not subsidized, although operating ? deficits are covered for the lines under government ownership. Indirect support is given the railroads in the form of import tax exvmptions for fuels and equipment. According to press reports', the Brazilian Ministry of Transport and Public Works has asked the US eXport-import bank to finance a projected ? five-year plan for transport development in Brazil involving the expenditure of S2000000,000. Included in the plaq'is a program for railway improvement. For this purpose the Bra- zilians are said to desire to purchase 1,100 locomotives, ? 7,000 freight cars, 42,000 tons of rails and 2,500 tons of railroad bridge material. 5. Nested interests exerted great influence throughout the de- velopment of the Brazilian railway systems. A substantial part of the Brazilian railways was constructed under private initiative in which the profit incentive was dominant. The preeent disjointed character of thaBrazilian network, with its lack of uniformity in gauge, is strong testimony ofthe pressure which was exerted by private interests desiring only a rail development satisfying their particular individual requirements. ' Brazilian geography has also played a large role in estab- lishing'the pattern of railway development. The country has a narrow coastal plain backed by a low sierra and upland plateau with the population of over 40 million largely con; Icentrated in areas along the Atlantio coastal strip south of the Amazon. These population concentrations have developed relatively independently of eachother. The resulting rail- way construction accordingly, has served primarily to connect, each coastal city with those points in its back area which it has desired to develop. There have resulted more than 50 lines, which include Over 30,000 kms of one-meter track (about 39 inches), 2,000 kms of various broad gauges, and approxi- mately 1,500 lens, of various gauges 1 feet and under. Domestic political considerations-have affected Brazilian railway development because the government has been subjeeted to pressure from local,politidal factions interested in spe- cific railway projects. , B. oROANIZATIOR ? 1. The Ministry of Transport and Public Therks controls, through .its departments, all forma of transport except air., The. Federal Department of Railroads administers the Ministry's responsibility for railroads. A separate Government agency, the Tariff and Transport Councg, has jurisdiction in matters of rates. 2. Despite general administration Of railroads by the Federal . Department of Railroads, other Ministries have specific re- sponsibility as follows: Labor is responsible for working - 2 - Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001:7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED. gygn. ratar _RikESPaS015.1 conditions; Finande for revenues and disbursements; and 7ar for engineering. While railroad building policy comes under - the control of the Ministry of Transport and Public 77orks, actual construction is carried out by the Par Department. 3. During the war there vas effective coordination within the Ministry of Transport and Public 7orke of transportation policy. This coordination, however, is now rapidly disappear- ing. There'is no specific ielattonship between the' Miniatry of Tr:Insport and Public 7orks and the Air Ministry by which. rail 'policy and that of civil aviation are coordinated. t 4. NO reorganization of transportation agencies appears now to be under consideration. Puperimposed on the normal trans- portation agencies was a war-time arrangement by which the Council of National Defense was assisted in transportation matters by a temporary section called the Transport Department of National Defense, 5. The Federal Department of Railroads and the Ministry of Trans- port and Public 7orke aro attempting to direct Brazilian rail.- ? way policy in the national interest, but they are handicapped by. political, military and financial considerations. Opera- ? ting standards do not compare with those in the US. C. ADMINISTRATION 1. New railroad lines mat be approved by the Federal Department of Railroads. 2. Railroad rates are determined for individual lines by the Tariff and Transport Council. Different rates for the same merchandise frequently apply to the various railroad systems. 3. The Brazilian Government does not specifically regulate com- petition between railroads and other means oftransportation. ? The government recognizes, however, the problems raised by,. competitiou between different forms of transportation. In a 1946 publication of the Brazilian Ministry of Foreign Affairs, rail and highway competition was described as haying been acute since 1927. The Ministry described the results as "un- fortunate". The government has encouraged the railroads to apply for revised freight and passenger rates in order to place the competition between railroads and, highways on "fairer grounds". The government has described the results of this effort as a "rational and spontaneous coordination of transportation . . hitherto unobtained by any other country". This assertion, however, appears to misrepresent the actual situation vith regard to coordination or transportation policy. (See A.-2) 4. Safety regulations for railroads are enforced by Federal in- ? spectors. 3 _ RESTR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED BRAZIL- R.A.M4Y TRA1ZEPOR'a 5. The railroad systems have individual training programs, and the Federal Department Of Railroads subsidizes an apprentice training school. Engineers are licensed by private profesr ,sional organizations. Engineer licenses for foreigners must be re-validated every three years. - 6. The lack of railway connections with foreign countries has made it unnecessary for Brazil to.negotiate international agreements covering railway operations. 7. Comprehensive annual reports must be submitted to the Federal Department of Railroads. These reports cover traffit, rates, accidents, and the financial aspects of railway operations.' ' ? 4 - RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7' Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 trak RESTRICTED t, Present Argentine policy on nallway trensportation?reflecte ? the tomato and political philarsop32 of the nationallet gennirnecent. The goverment'has specifically stressed the public service aspect of rail transportation as contracted ? with the profit-making incentiVe. A high government official ? recently described the transportation syctem, with particular reference to railways, as the key to Argentine production. LOELDIT to neighboring countries for the construction of ma- ? road linos, and cooperation with Brazil in the construction of S international bridge 'demonstrate that it is a. feature of Argentine yralicy to improve rail connections with its neighbors. The current Five-Year Plan provides for the intensification of government contralti over the nation's economy, including a com- plete reorganization of the transportation watt* and an inten- sive technical educational program. 'Raajc railroad policy in Argentina is strongly influenced bp ? the trend torard state ownership of the various fox-as of trans- portation. In its initial &ingest, this trend concentrated on lines in the less develeped trees of the country. It later int eluded the Argentine State Railways: Eyston (Administracien,de ? Ferrocarriles &el Estado), and by 1946, bad encompassed nearly one-third of the total rail nileage. After protracted negotiations with the Government of Argentina, British interests controlling nearly tma-thirds of all mileage recently agreed to sell their holdings to the Argentine govern- ment. Other lines owned by French capital, constituting nearly ? 10 per cent of the total, have likewise been acquired by the Argentine Government, It appears that formal ratification of these transactions by the stockholders will be forthconing. 2. Under a Government decree of 15 July 1947, a new Secretariat wan created responsible ta the President, known ac the Rational Economic Council (NFL). Its function is to coordinate the en- ? tire Argentine ?economy. Integration of transportation is ac- cordingly a part.of HECos responsibility. . 3. Both economic and military Considerations have influenced Argen- tite rail policy. Railroads have opened up the interior for shipment of agricultural and pastoral Products. Foreign capital was primarily attracted by the economic opportunities of nil development. On the other hand, strategic considerations have prompted the construction of acme lines having no economic jus- ? tification. The present nationalistic governMent appears to be particularly'anare of the strategic aspects' of proposed railway construction. For example, strategic and military considera- tions were undoubtedly responsible for the drive to complete the ? 180 km. Pedro Vargas - Uarlargue line- to the Andean slopes to transport livestock, oils, precious Metals, Mendoza coal, copper, lead and vanadium. That the line runs through a military outpost RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED ARGENTINA - RAIL7AY TRANSPORTATION (A-3 CORM) and near the Mull hpiroelectric damstte bay have strategic importance. ID the race against Brazil to the southeastern Bolivian oil fields, Argentina installed rail connections from Yacuiba through Villa Mentes to Santa Cruz. 4. To attract foreign capital, largely British and French, former Argentine Governments guaranteed a return of 7 per cent on rail- way investments. It was also necessary to offer inducements in the form of land grants and cash subOidies. As a rosult, in the eighty years from 1857 to 1937 about it1,5000000,000 of British capital was invested, with additional large sums from a few French operators. Under the provisions of the Mitre Law passed in 1907, .railways have been exempt from customs duties on materials imported for use of the lines as well.as from national and provincial taxa- tion. In return for such exemptions, the linos have been obli- gated to pay the government '3 per cent of net receipts, such paYmente being applied to improvements of highways and bridges. A further major form of indirect subsiay was the guarantee that additional concessions would not be granted to other interests within Certain areas during the life of an agreement. The provinces on authority from the national governient, have been empowered to grant concessions to railway interests, in order to further the development of the areas under their jurit- diction. It is probable that the character of subsidies will change after the completion of the nationalization program. Deficit appro- priationt? as required, are expected to be adopted. The current Five-Year Plan includes an appropriation for 800,0000000 pesos covering the purchase of equipment and rolling stock, and the improvement of rail connections with Chile, Brazil and Bolivia. The plan, however, does not provide for extensive construction of new lines. 5. Railway policy in Argentina has 'been strongly influenced by: (1) vested interests, largely British and French capital; (2) economic requirements, such as the progmm to develop the in- . terior; and (3) geographic factors (Argentina, unlike Brazil or the US, has no extensive river system, and has had to develop rail and highway facilities to serve adequately the great pampas regions)". The nationalist Complexion of the present government rill un- dbubtedly result in careful examination of all future plans for railway construction ,to ensure the protection of strategic and political national interests. - 2 - RESTR ICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA.-RDP78-01617A004300060001-7 C RESTR I CTED ARGENTINA - .RAIINAY TRZSPORT/ITION (3-11 B. ORGANIZATION 1. Ministry of Public 7orks:' Director General of Railroads 2. The Ministry of PublicTiorks is responsible for railway trans- ." portation policy. The Director General of Railroads implements laws pertaining to railroidi. He inspects railroads and super-. . vises railway operation and construction. He initiates projects for extension of existing lines and the construction of new lines. He approves operating schedules, and collects, compiles and publishes statistics.- The Office of the Director General is subdivided into sections responsible for: Administration Construction Tariffs and Statistics The Director General has a staff of railway inspectors. 3. Rail policy is integrated with policy on all forms of trans- portation at the level of the National Economic Council. 4. It is reported that a new transportation law is under considera- tion which may carry far-reaching changes in the organization of transportation responsibility. 5. Argentine railroads have been generally' credited with a higher level of operating efficiency than any other South American system. This has been primarily.due to the predominant British control. The US-trained Director General of Railroads is con- sidered capable, however, and the impending elimination of *British control may not be greatly detrimental to efficiency. On the other hand, governmental reorganization measures will introduce new control personnel, and may adversely affect opera- tional standards. C. ADMINISTRLTION 1. New railroad lines are proposed by the Director General of Railroads, who submits his documentated recommendations to the Congress. Any subsequent construction is under his supervision. 2. The Director General determines rates. Changes in current rates are expected, in vier of the recent purchase of all lines by the state. The 1944 railroad rates are currently applicable. 3. Vith the assumption of state control of all railroad operations, Ocompetition will now be confined to quality of service rendered. Uniform rates will be applicable to all the lines, including those still temporarily under British operation. 3 7 RESTR ICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED ARGENTINA - RAIMAY TRANSPORTATION (G-4) ? I. 4. InSpection and safety of equipment is a responsibility of the Director General of Railroads. Pertinent regulations were first approved in 1894 and modified as occasion demanded. The enforcement of these safety and inspection regulations is carried out by the staff of inspectors responsible to the Di- rector General of Railroads. Regulations governing the safety of the operating personnel are determined by the Secretary of ? Labor and Social 7elfare and enforced by that office. , i5; The training of operating engineers iS under the Director General of Railroaas? whose office issues 'licenses required for operating locomotives. The training of other operating and shop personnel has been left to the individual lines. However, the Five-Year Plan provides an intensive technical education program for all media of transport. 6. International rail traffic is coveied by agreements with neighboring countries which permit through passenger and freight traffic and the interchange of rolling stock (except locomotives). The couptry of destination picks up passenger and freight cars with its awn motive power at frontier sta- tions. There appear to be no international agreementS on traffic or equipment pools, joint facilities, rates or routes. 7. The Director General of Railroads requires daily and compre- hensive monthly reports covering traffic, operating costs and revenues, rates and other operating data. Reports concerning accidents and conditions of employment are .routed to the Secrec4 tary for Labor and Social 7elfare. Such reports have a bearing on government consideration of wages, personnel insurance and social security matters. \ -4. ,RESTR IC! Lb Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 , , - _ i , _ - _ 1 ? i - . Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 :(."NPaRDP78-01617A004300060001-7 AL4 D arc. La, PERU - RAILROALZ A. 91LIGIES 1. Basic rail policy is determined by the government. It involves promotion and construction of now railroads to unite the widely separated regions of the country. Peru is a country of great geoaraphical contrasts. There are three Peres ?the dry, narrow coastal plain with modern citier and ports; the Andean Sierras with mineral resources; and the immense montano sloping eastward to the Amazon plain. It is fund4cantal to the national economy that these regions be connected by efficient transportation. The populous and politically influential Southern Peru area is isolated from the capital. It is politically expedient for the party in power to provide this region with efficient cross country railroads connecting the Pacific coast port of rollendo (ratarani) with Bolivia via Lake Titicaca shipping. It is advantageous, furthermore, for Peru to maintain Bolivian good-will by protecting this valuable outlet for Is Paz. Actually, the new harbor facilities at the protected port-of Natarani are not subject to the Pacific swells which endanger loading and unloading at Uollendo, and thus have improved the safety of the operati%ns. 2, There is little integration between railroad policy and that of other forms of transportation. , 3. For strategic and military reasons the Peruvian govertrient is interested in maintaining the railroad route into Bolivia.. Peruvian flag steamers operate to Bolivian ports on international Lake Titicaca. 4., There are no subsidies to privately owned railroads. The true financial circumstances to State owned railroads cannot be deter- mined because some maintenance expenses are not accounted for. The extent of subsidization of state-owned lines is thus difficult to ascertain. The government promoted the construction of a rail extension to the protected harbor of gatarani, however, which im- proVed the service between Bolivia (La Paz) and the Pacific. 5. The government's rail transportation policy is unaffeeted by vested interests. The railroads are indispensable for moving bulk pro- ducts. Terrain difficulties, however, have forced Peru to subordinate rail policy to the requirement of highraa expansion. B. ORGANIZATION 1, The railroads of Peru are controlled by the following agencies: . Ministry of Development and Public Works Bureau of Highways and Railroads Railroad Section Department of Adhinistration. Department of Operations Department of Engineering RESTRKTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 PERU - RAILROADS OONT010 2. The Bureau of Highways and Railroads is headed by a Director General who is directly responsible to the Ministry of Develop- ment and Public ?c4orks. A sub-director is in charge of the Railroad Section which in turn has departments for Administration, Operations and Frigineering, . 3. Highways and Railroads are coordinated within the Ministry of Development and Fublic Torkso. There la, no direct, coordination . between the Ministries responsible for the various media of trans- portation. There is no appreciable overlapping or conflict be- tween them or between the national agencies and the political subdivisions. L Formerly goverment supervision of highways, railroads and all other public works was the responsibility of a Bureau of Public Works and Transportation. This proved unsatisfactory and resulted in a reorganization into separate specialized bureaus under trained personnel, 5. There are no known plans for reorganization or the establishment of new agencies. The present governmental agencies are considered to be fulfilling their funitions adequatel. The railroad agencies are operated for the public good. They are relatively free from Political interference. Engineering is good, but there is a need for more medhanized construction.,* C. ALMINISTRATION 1. New railroad construction is decided by the Construction and Studies Department of the Bureau of Highways and Railroads after recommendations from appropriate commissions following approval of the current budget, However there has been no new railway construction of. importance during the last thirty years. This emphasizes the priority given the highway construction in national transportation policy, 2. The tariffs of privately owned public carrier railroads are stipulated in contracts approved by law and renegotiated every five-years. digher rates can be authorized only by new contracts or by decree approved by the?Ministry of Public Works. The rate schedules must be within the maxima established by the Bureau of Highways and Railroads. Rates on state-owned lines connecting both private and common carriers are patterned after the latter. 3. Basic government policy has, for the last fifteen years, favored highway transportation against railway transport, by approving the construction of roads which in some cases parallel the rail routes. Motor transport units follow no fixed schedules, charge what the traffic will bear, furnish inferior service, compete for the best paying traffic, provide door to door service and are primarily in the hands of non-liable individual driver...owners. Consequently the railroads have not been able to increase rates despite higher operating costs, -2 RFSTR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 PERU ? RAILROADS (C CORM) h. Railway safety measures established by the Bureau of Highways and Railways ire inforced by the Bureau's inspectors. Railroad personnel is not subject to government regulations. Railway accidents are investigated by both police and the inspectors of the Bureau of Highways and Railways. 5. There are no government?fostered courses for training railroad technicians other than the courses offered by the National School of Engineering. Training procedures at this school are determined by the Ministry of Educatien. 6, The Peru?Bolivia trade treaty of 1935 makes no mention of opera- tional agreements, merely stating that Peru will furnish safe conduct for tax?free Bolivian carte. The Southern Railway is owned and operated by the Peruvian Corporation. Moreover this '? corporation owns the Lake Titicaca steamship line and the rail line from the Bolivian shore to La Paz. Through handling of passengers and freight is an integrated operation by the Peruvian Corporation. The Tacna?Arica railway, extending a fey miles into Chile, is not subject to any operating agreements, 'Operations are entirely under Peruvian government control. Free transit over Chilean territory is provided in Article VII of the 1929 peace treaty. 70 Railways must submit reports to the Bureau of Highways and Rail? ways covering traffic, rates, and accidents. Traffic figures are reported annually for analysis and compilation by the Statistical Section of the Bureau of Highways and Railways. Routine inspection reports are submitted to the same Bureau by government inspectors, , while aceident report's are forwarded to both the Bureau and the ' police, 3 RESTR r-rcn, Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 r Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRJ&ED CHINA 4.4.IMAT TRAOPORTATION A. POLICIES 14 The current basic objectives of the Cletnese National Govern- merit with respect to railroads are: (a) restoration of war- damaged or destroyed lines; and (b) modernization rhesmhr . peaceful conditicinq permit. The ninistry of Commvnicatioes has Given first priority to the repair of.the,:flentnin-- Nunking.(Puhow) main line, long-range Chinese rail pelidy, originally ekpressed by Sun Yat-sen, and reiterated by Chiang;- Kai-Shek, involves an eventual railway nettatk of 140,000 kilometers (present system about 14,0)0-1ams.). This ambitious.. and preoontly unrealistic Goal is considered by Chinese planners?te be indispensable to China's ecohomic development and political unification. The present National Government has indicated a determination to eicludo foreign interests from ownership and operation of future Chinese rail developments. Control will be vested in the National and Provincial Governments. Ck conciliatory statement of the lithistty of Communications in 1945, inviting' foreign capital to participate in the development of China's 'transportation, was careful to emphasize that the ultimate aim would be state ownership.) ? ? .2. .Strong contruliSed control of railwaysis effected through ' the Ainiiitry,of Corammications, Mhich is responsible fOr.all. transportation, including civil aviation: . ? 3. StrateGic faCtors new dominates Chinese, rail policy, Particu- larly in Northeastern.China...Even in south China, it is' importantte keep the railroads operating wherever possible for logistic teasonp. Military operation's in the civil Mar .are directed largely toward Control,idisruption or'reinstute-. vont of rail .lines. ? ? 4, The Chineee rail system is Governmont.,owned and is entirely, dependent on GoVernment support. The operating: losses of the individual government-owned lines aro absorbed by the natibtal treasury, and construction 'A:ejecta can only be accomplished as 'outright 6overzurtont undertakings.' Although 'new ,construction ? .is still effectively procluded 'by Ca.:alto economic crisis, the Zhinebe Army is engaged in same patching up of' damaged lines.. . 5. Vested interests do not appear to play an importantrold in influending Chinese rail policy. On.the other hand, railMay policy clearly reflocts'historicali?-Geographic, economic and political,conditions? . . . , The basic factors underlying modern Chinese history have pre- . ventod the development of an eztansive.nation-wide railway ? RESTRICTED. Declassified and Approved For Release 2013/03/11 :C.:1A-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED CHINA 0. RAILWAY TRANSPORTATION Al CONTLCI network. The same circumstances, in fact, have operated to stifle any substantial industrialization,and have thus re- moved some of the incentive which impels railroad construc- tion in areas possessing more advanced economies. Neverthe- less, the 541a0 geographic conditions which have distributed the Chinese population unequally (difficult terrain, di- vergences in rainfall and fertility, the location of ports and raw materials, and the river pattern, particularly that of ths navigable streams) originally influenced the develop- mont of Chinese railroads. Out of those factors emerged economic requirements, such as the mood for rao-tring provincial raw materials to the population centers and for distributing food. These conditions have demanded, frequently without satisfaction, a suitable adaptation of the means of transport. Likewise, political conditions have reacted on railway policy. One of the cardinal political principles of Sun-Yat-son was the removal of foreign privileges. The logical rceult of this 'nationalistic philosophy has boon the. exclusion of foreign ownership and operating control from Chinese railroads, Pp inevitable price of this policy/ however, is an increased re- luctance on the part of foreign capital to support the expan- sion of Chinese rail facilities. Overriding the foregoing considerations, the exigences .of war have dominated Chinese policy for more than a decade. Chinese thinking has viewed the railroads almost exclusively in the focus of military ovents; these facilities, a source of defensive strength, have been repeatedly the objective of enemy operations. Te, ORGANIZATION 1. Tho Minister of Communications in the central Chinese Govern- ,ment controls railroads and all other forms of transportation, including civil air. 2. The Railway and Highway Department is charged by Article VII of the Organic law of the Ministry of Communications with the following far-reaching railway responsibilities: (a) planning and construction; (b) control or operations and subsidiary activities; (c) engineering and mechanical problems; . (d). supervision of public and privately owned linos; and (e) all other railway Matters. The Railway and Highway Department has jurisdiction over the ? following subdivisions concerned with railroads: ? (a) 4-.dministrations of the various railway systems, which ? operate under and are responsible to the Ministry ofN . Communications; 7 :1iE TR I CTED. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESIN I CTED CHINA RAILWAY TRANSPORTATIOLLE.:.2.CONTIII) (b) General Office of Railway Survey; and (c) Railway Traffic Office 3. Transportation problems involving other Ministries such as Foreign Affairs, Water Conservancy, Interior or Economic Affairs are jointly studied, but final decision usually rests with the Ministry of Communicatione. Major conflicts on ratters primarily concerned with:transportationCan be carried to the' Executive Yuan or the Generalissimo. There tendency in the Chineao Government to allow Minietries'other ? than that of Foreign Affairs to decide mattors.involving foreign policy. Sine-Russian railroad matteral,for example, tvmld be .discussed by. the Ministry of CommuniSations directly ? with the Russian Embassy. I. 4. The Department of Railways and Highways-wss established at the close of torld War .II.. Proviounly rail administration had been in the hands ofa Rathay Ministry. The neod, for increased efficiency and greater coordination caused the Chinese Government to delegate feSponsibility for 'railroads to the 2inistry of Communications. 5. The Ministry?of Communications,.through.the Department of. Railways and Highways, undovbtedly attempts to operate the i'ailroade in the public interest.- The factors which prevent the Chinese railroads from satisfying more than a fradtion of Chinala traneportation needs are entirely beyond the control- of the able Miniater of Communications, General Yu Te-woi, who . was trained in German and US (Harvard). Universities. The in- - ? soluble Problems include vast equipment shortages, commandeer- ing of facilities by the military, track removals or destruc- tion incident to the 'civilwar, and inadequacy of national funds for railroad reconstruction operations. O.' ADDIDISTRATIOU' ? 1. Recommendations for the construction of new lines and the. extension-ofaxisting linos are submittefly the Ministry of Communications -to' the Executive Yvan for. final dedision. The 'National-Defense Minister, however, ray decide independently. that the prosecution of the civil war demands the development of rail facilitieS. 2. Prior to World War II, each'ruilway Administration proposed La rate structure which wasintended to cover operating costs or perhaps net a modest profit.. AfterapproVal by the Ministry of Communications, these rate schedules at.;re sub-. mitted.td the gxeoutive Yuan for final decision. ik.to deterMination for all forms of transport is ruw complicated by the severe inflationary trdnd of prices. Rates are no longer intended.to coier.operating costs; rather, a system of RESTRICTEDgovern- Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED. CHINA ? RAILWAY TRANSPORTATION (C-2 CONT'D) mont support amounting to subsidization has been introduced in lieu of increased rates. ail? rates are occasionally increased, they lag behind the inflation of prices generally,. The Executive Yuan appears to believe that price increases, rill be retarded if utility rates are kept low. 3. HO competition exists in railway transportation, as the rail- ways are all owned and operated by the. Chinese Government. Other media of transportation, moreover5 are so poorly organized that their competition is not seriously felt by the railways. 4. With respect to railway operation, regulations govern the inspection of equipment/ choice and employment of personnel, and investigation of accidents. The Ainistry of Commumics- tions can issue regulations of a purely administrative nature; the Executive Yuan establishes major regulations of an administrative or policy nature; and the Legislative Yuan and State Council adopt statutory regulations. 6. Training programs were stressed by Dr. Sun Yat-sen in the early days of the Republic. Mere reeently,,Generalissivo Chiang Kai-shek, in his book, "China's Destiny" asserted that the universities and vocational schools should produce the following: Civil Engineers 222.400 Mechanical Engineers 136.400 Electrical Engineers 41,600 Navigation Technicians 7,000 Transport Specialiste 37,000 Aware of the lack of trained personnel, the national goverment sent 1,200 young students in 1944 to the US for training in engineering and management at universities and in private industry. 6. The Chinese railway network is connected with foreign territory only by the Kunming Haiphong (Indo-China) line, and the Manchurian lino running east from Hanchouli through Harbin 'to the Soviet frontier above Vladivostok. The China-Indo China lino is the subject pf a now Sine-French agreement, con- eluded in ibbruury, 1946. Under the terms of this agreement, there shall be free exchange of traffic and equipment on the sections of the lino owned by the tun countries within their respective terAteries. Rates are to be established by a joint commission. Actually, however, the agreement cannot begin to operate until necessary bridge reconstruction and other re- hubilitution has been completed within China. The status of the Manchurian.railrays is regulated by an Agreement accompanyingithe Sine-Soviet Treaty of Friendship and Alliance, concluded in 1945. This agreement specifically covers the trunk lines :,from Dairen to Hurbin and from Manchouli -4 RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 k` CHINA - RAILWAY TRANSPORTATIOLip=.6 CONT) threttch llurbin to Suifenho, north of Vladivostok. Joint mmership and ox-ploitatien of these lines is stipulated. The USSR is given free tri.nsit of goods from the Soviet naval base ut Port itrthur and the free port of Dairen to , the system's- connecticns with Soviet tbrritory. ? The Chinese Civil tor, however, has 17tade imp:es:Able for the Chinese ? to keep the Manchurian lines in operation. thele 'sections of trunk lines are in continuous ,Chinese COLIZalitiSt control, while other sections, hold by the 1:ationalists, are -sporadically cut by the ootnunist.t. After thirty years the lines now jointly elated. will revert to the full -possession ? of the Chinese Govern:Lent. ? 7. lprior to lend .1:kr II the Chinese railroLd systems ,;viire required to submit detailed d.atu on operations, as evidenced ,by the excellent- govc:rnmant railwq ,reports of that period. RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 A. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? e."-??? Declassified and Approved For Release 2013/03/11: CIA-RDP78-01617A0043-00060001-7 - , ? ? ? ? \ _ _ ??? ??? ? ??? ? ' ? e ???.. ? I. ' 2 . - Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? 4. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED Uill TED T11...11SP.MTLTIOil POLICII.X. la It has been the basic policy of the UK with respect to road transport to impose as little restriction 143 possible on 1ljg:way carriers. The. state interest has been to coordinate hirlumay and rail facilities and to reuluto competitive -practices which r.1:4.;ht prove harmful to the transport system as a whole. 11161n-fay transport in the UK, as in other countries, Was of relatively lainor importance before 1:or1d 7:ar I, but during the tuontien operations increctsed to a point where they seriously threatened the position or rail- roads with respect to (a) the transport of certain Commodities and (b) certain short-haul operations. Basic policies with respect to highway transport in the U?4 till be radeally olianed under the Transport et. effeetive 1 !January 1948. The act establishes a pritish Transport dommission Izhich will .have potter "to curry :jowls und pussenners by rail, road and inland watoraLy within Uiroat 24-itain." Milo the ,et dies imixese curtain restrictions trpen the autharity of the Comaissien, it is obvious that, as t. i_ractical matter, road transport in Gra:. t 3ritin will be lar;ely nationalized. Exceptions to the policy of nationalization - will bo: (a) true:tors, 'oporatinc nut as comden carriers but fur their own accoluit with their own vehicles; and (le) trial:ors operating within sa radius of 25 miloc. Those WO :2r01.11)11 till not be re,pairod to obtain omens:lent licenses for their operations. (4.pproxinato1y 300,000 vehicle s owned by 150.000 small operators will be thus cncempt from nationalization.) Public nighwaj carriers nut affiliated with tie railroads but - subject to nationalization will be allowed considerable ? latitude in opbrations at least; for the -,resent. Road carriers 0:mod by thz; railways will be subject to tao same nationc.lization policies as the railroads. 2. Iiigirtn,y transport 1.eolicies, under provisions of tile now Trans- port tot, will be determined and administered by the Road Transport 4xecutive in the serLnsport Commission. ? The Executive will be ?one of five such authorities apeointed by the ...lint:Aar to deal with the various media of transport. lii;hway transport policies in tne Ult. are unquestionably in- fluenced by ?commie considerations (particularly tha effect of road transport upon mil lines); strato:;ic u.id military corzsiderationa have onl; u secondary role in the establish- ment of such policies. The all :ni; influence or strategiC planning in the development of al. :6.,;1r3ays is evidenced by the Iasi. of an orz:: nizocl network of modern express lai;;Imays. 4. The governnont does net subsidize highway transport and the RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? RESTRICTED UNITED KIIIGDOM HIGHaY TRi.:1SPORTATION (A-4 CONT!D) quotion has never been seriously raised in the UK. Tho state, however, has been interested in the development pf road facilities and-the extension of highways to' benefit the general economy. 5. Highway transport policy has been influenced primarily by the demonstration of the usefulness of highway transport us an adjunct to rail and coastwfse operations. Policy .- with respect to highway transport has been affected to a limited extent by the ?vested interest of the rail lines. B. ORGALNIZisTIOld' 1. The Road and Rail Transport Divisiorrin.the present Ministry of Transport is the agency dealing directly with highway ? transport. Under the Transport Lot, the new Road Transport Executive will be the administrative agency for highway carriers. The Transport .i.dvisory Council, a government. sponsored organization 'to be set up by the Minister and . ocmposed of representatives of all media of transport, local authorities and laborp-will advise the Minister with re- spect to coordination, improvement and development of trans- port Generally. The Highways Division and the Highway Engineering Division are responsible for construction and maintenance of highways. The Roa&Rail- Joint Conference and the Road-Rail Tribunal deal with rates. ? The London Passenger Transport Board is a publicly-owned operating company in the Ministry of Transport created under the London Passenger Transport Act df 1933. Under the new Transport ict this company, which handles all highway and subway passenger traffic in the London area, will be under authority of the London Transport Executive. 2. .There is a high degree of decentralization of authority in the Ministry. of Transport v4th respect to transport problems. The Road and Rail.Transport Division of the Ministry of Transport is divided into three parts. Those deal with (a) highway engineering, -(b) vehicle.maintonancep'and (c) ad- ministration and policy., ' 3. The agency dealing with road transport in the Ministry has no direct administrative relationship with the other transport agencies in the Ministry, ill are subject to control and direction by the Ministry. There is no relationship between highway transport Lconcies'and agencies dealing with civil aviation. (civil aviation is organized under u separate Minis try.) There is no apparent confliet in government truns.o port policies in spite of some integration of road and rail' transport thri:gh the acquisition of meter lines by rail lines. 2 RESTRICTED. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : aA-RDP78-01617A004300060001-7 RESTR 1.CTED UNITIX KIIIGDOM TR:IFSPuRLaTIO11 (13-4) 4. The present organization of the Ministry of Transport is bused upon the Ministry of Transport jot of 1919. tIth the exception of assuming control of the main lino rail- roads and of the London Passenger Transport Board on 1 September 1939, and the acquisition of the functions of the war-tine Ministry of shipping in 1946, there have been no major ehanges in recent years. Under the provisions of the Trahsport let, the present organization of the Ministry of Transport will be considerably altered and expanded. 5. While general opinion is that highway carriers are operating efficiently under present conditions, nationalization is being accepted reluctantly as a necessary stop to help over- come the present economic distress of the UK. ' aDIUMSTRaTION 1. Regulations concerning the establishment of new motor trans- port lines are under the authority of the Road and Rail Transport Division of the Ministry of Transport. Thelligh- uuys Division and the Highway Hngineering Division are also concerned with such questions, since they are the agencies in the Ministry dealing with construction and maintenance of highway over Uhich such operations would mare. ' 2. Until 1938, there was little or no control over highway rates. In 1968, the rail linos, in an effort to curb high- way competition, asked for the right to fix their own rates. The Transport Ldvisory Council, at the request of the Ministry of Transport, thereupon recommended that a Road-Rail Joint Conference revise the rate structures for both forms of transport. Although the work of the Conference was interrupted by the 'war, considerable progress has been made Ulnae then in establishing equitable raters. Rates are subject to appeal before the Road and Rail Tribunal in the Ministry. 3, The question of restricting or fostering competition between highway transport carriers and other media of transport, particularly rails, has boon a difficult problem in the UK during the past 25 years. The rapid rise of highway transport carriers as a competitive factor during the twenties led the rails to ask the government for certain restrictions on the ' competitive advantages which highway carriers enjoyed with respect to rates, routes and operating policies. The state was sympathetic to the request of the railways and took stops to compose the basic conflicts between road and rail transport. Among the significant actions taken by the state to control. competitionwere: 'RESTR 1CTED Declassified and Approved For Release 2013/03/11: CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR I CTED UHL Ti itliCrlaLl TRL.:SiVatt (0-6 ) ) (a) The Road and Rail Tmnsportiot of lD43, mhich )revidcd for the licensing of hichway and transport carriers, thereby olininatiY,g Tally of the unorcanized or ir- responsible carriers; (b) The Road and Rail Central Conference, which came into beiug only ,a few nontns prior to the outbreak of the ? var. Thin Conference established procedures for filing a few years before Forld War I the control of road transport in the Netherlands was largely in the hands of local authorities. The years after 'mad ,.7ar I, however, sew a growing dependence Upen highway transport and increasing competition between road and rail. The state, therefore, took action to bring road administration under the direction of the central government. There appears to be general satisfaction with the CovernMentis policy to rescue the road transport system from war-time dis- integration. The highway carriers, however, do not like the fact that, under the present organization, highway tax reve- nues are being used to make up the deficits of the Netherlands Railway/ Company, ? C. AGMINISTR1TI04 All projects for new transport routes must be approved by the Ministry of Transport and also by the Traffic Fund. 5. The government has a traditional policy of intervention to regulate competition in transportation, but.natural economic '-forces have had probably equal influence in determining the final status of competition between transport media. The principal competition to highway transport comeo frOm the rail carriers. This competition applies both, topassenger and freight traffic. In the early days of rail development, there was considerable opposition on the part of the canal interests, but the problem has solved itself; he canals handle slow, bulky cargo, 'chile railroads, (and ree6ntly? highway transport lines), concentrate upon speed and high-value, light-weight cargo, as well as passenger traffic. Coastal g ocean-going shipping and aviation offer tittle competition to highway transportation; and little has been done to regulate such coml. petition. 4. The Government Traffic Bureau in the Ministry of Transport is' responsible for the enforcement of safety regulations and in- spection. As a matter of fact, there are virtually no laws covering vehiCle inspection, overloading or safety regulations. This is partly the result of light highway traffic conditions together with the traditionally lar abiding temperament of the DutCh people. A private organization the Scientific Com- mercial Car Institfle, has contracts. to inspect and certify as to condition of- trucks belonging to members of one of the large trucking associations. ) ? REiTRICIEb Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11: CIA-RDP78-01617A004300060001-7 RESTRICTED NETHERLANDS 1110H1TAY TRANSPORTATION (C*6) ? 6. Although there is no recognized European organization dealing with international highway tranSport and traffic problems, efforts have been made to break down the existing barriers to free exchange of highway traffic. Some progress has been made in this respect and there are weekly bus servicefrom the Netherlands to several neighbOring countries. In May 1946, NIM).(Nederiansche Internationale Wegvervoer Organi- satic) was founded; (a) to promote cooperation among inter- national transport interests; (b) to function as intermediary between authorities and :ransport interests? 'and (c) to su- pervise the, activities of the highway transport carriers0 The goverrinent has granted NIVO a "special status" in inter- national freight operations. 'Members of VITO include trucking companies, rail lines, Chambers of Camerae and shipping op- erators.. It has obtained the cooperation of other states for the abolition of various restrictions on international traffic'. 'Among its major accomplishments has been progress in achieving uniformity in international ,bills of lading. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 nricTmeerrN Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 A. POLNAIE 1. The published text as well as Soviet official commentaries on The Fourth Five-tear Plan indicate that hiy,hway.donstruc- tion and the development of private motor vehicle operation .hold a lor priority in Soviet planning. The reeources of the Soviet automotive industry will be primarily applied to truck construction. By 1950 the industry is scheduled to produce 500,000 vehicles annually. Of these, only 65,000 will be nassenger cars. -Bus production will total 6,400 units, rhile track production is -expected to reach 428,000 units. The USSR has indicated that in 1950 the national truck fleet will have reached approximately double its pre- war size. That the truck fleet will be still subjected to - 'sewn operational limitations, however, is revealed by the official statement that at leaSt throtgh 1950 large numbers of trucks will operate on producer gas and other "local Awls". The few existing "arterial roads" are to be "restored" and completely overhauled, but apparently new first-class highways are not to be constructed. Even the subsidiary "improved ? motor roads" are to be extended by only about 7,000 miles throughout the whole USFR during the entire five-year period. While Soviet policy will emphasize use of the truck fleet as an adjunct to the rail system in short-haul traffic, some progress will be made in organizing longniistance hauling. 22. While the various media of transportation are controlled by separate agencies, over-all coordination of transport policy is the responsibility of the State Planning Commission .(Gosplan). . Prior to World War II, the Soviet highway system and the volume of motor transportation did not satisfy the strategic requirements of the USSR, and probably reflected little . military influence. The most striking example of thif was the failure 'to provide trans-continental highway communication . between the Siberian Maritime Provinces and Western Russia. The Soviet military, however, now undoubtedly exerts a strong influence in planning of motor transportation development. A substantial portion of the present Soviet trunk fleet; for example, consists of lend-lease trucks tutted over to the military authorities, who presumably still largely control their utilization. 4. Subsidization in the USSR is an academic matter, since all - economic activity is controlled by the State, and enterprises will be developed or maintained, regardless of their degree of self-sufficiency, if they serve the national interest.- Both road construction and motor vehicle manufacture are covered by specific provisions of the Fourth Five-Thar Plan. FZESTRiCIT:D Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? n. rtnTni$,I'lners Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 USSR - RIGWAY TRAI:SPORTATION (A-5 CONT 'D) 5. Czarist Russia and the USSR have never been able to develop an aggressive and completely effective policy with respect to highway construction and mechanized road transport. This backwardness has been primarily due to a long-standing combination of economic factors. Early railway development satisfied minimum national requirements for long-distance traffic, and the localized regional economies were able to exist with roads of low capacity. The USSR did not have the basic economic factors (rapid accumulation of capital, ? potentially large consumer market, for motor vehicles, the imagination required for the full exploitation of national: resources, and a rapid rate of industrialization) which - combined in the US, for example, to create a motor vehicle, industry which in turn set up a compelling requirement for .adequate roads. , B. ORGANIZATION ? 1. There are three Ministries whose jurisdiction directly affects highway construction and motor transport in the USSR. They are: (a) the Ministry of Internal Affairs, (b) the Ministry of the Automobile Industry, and (c) the Ministry off the Industry for Building and Road Construction Machinery. As in the case of all other Soviet agencies, the State , Planning Commission is responsible for over-all Planning. It should be noted, however, that motor transport in the Soviet Union is not nearly so susceptible of centralized control as are the other transport media, sinhe every Ministry or other agency whose operations require any substantial amount of trucking has a fleet of trucks under its orn jurisdiction. Such dispersion of facilities patently produces a diffusion of control not present in the other transport media. 2. The Chief Administration of Paved Highways in the Ministry of Internal Affairs is charged with all planning, financing, construction' and maintenance work on the principal highways, as well as regulations for their use. The Road Administrations of the various Republics perform similar functiOns for those roads under their jurisdiction. The Ministry of the .Automobile Industry is responsible for basic planning and execution with respect to production of motor vehicles in accordance with over-all state planning. The Ministry of the Industry for - Building and Road Construction Machinery is charged with basic planning and execution with respect to production of heavy equipment required for road construction and maintenance programs. : 3. While there is no direct administrative relationship between ' the agencies listed in 11-1 and the other state agencies, the activities of all the Ministries are coordinated by the State Planning Commission.. The nany government agencies utilizing thelr own fleets of trucks doubtless encounter administrative conflicts with the 3inistry.of Internal Affairs. ? 2 PcVIRKTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 farC7ncreirrm Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 o USSR HIGR-AY TRATXPORTATION (grial 4. After a period of shifting responsibility during the early years of the Soviet regime the responsibility for road construction and other matters relating to highway transport was placed under the Commissariat for Domestic Affairs, as a .result of which considerable progress in road construction was made. In 1936, the Chief Administration of Highways was created within the Commissariat for Domestic Affairs to administer and coordinate awidely decentralized, program. In March 1946; the Commissariat for Domestic Affairs became the Ministry of Internal Affairs. 5. The basic social philosophy of the Soviet system postulates that all activity is carried on in the nubile interest. There is, however, little basis for claiming any high degree of efficiency in either highway construction or motor trans- port operations. Soviet highway standards are far below those of the United States, and the poor quality of Foviet maintenance and repair facilities becamenotoriouely evident . during the late war. That the Foviet Government is aware of the shortcomings of its highway facilities is evidenced by the open criticism in the press of officials responsible for the serious lag in the fulfillment of state plans with respect to road construction. C. ADMINISTRATARI 1; The establishment of new highways is the responsibility of the Ministry of Internal Affairs'. Over-all authorization for new highway construction; however, is provided in the five-year plans of the State Planning Commission. 2. Since the agencies requiring any substantial amount of motor transport maintain their awn truck fleets (see B-1) and ' private traffic is unimportant, the question pf rates on motor transport traffic is largely meaningless. In those instances where one agency transports goods for another, the carrying agency sets the rates at a point calculated to return a normal planned profit. 3. There is no competition between highway transport carriers beyond state-sponsored asoCialist competition" for the purpose of increasing efficiency; reducing accidents, etc. There is little competition between the various media of transport, since all are used to capacity and beyond. Furthermore; operations of all media are integrated within . the over-all transport plan of the state. 4. Highways and equipment are subject to very strict rules established by the Ministry of Internal Affairs concerning ? operating safety and inspection of equipment. Regulations require constant inspection and necessary repairs at all times, as well as periodic inspections and scheduled over- halite at specific times. Accidents are investigated officially and negligence is severely punished; the offenders being con- sidered ae "enemies of the people". RESTRICTED -3 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 :RESTR I CIE" lop - H/GH7AY TRANSPORTATIOLiall 5. The etate has prepared extensive programs for technical training in transport, maintaining a number of schools for that purpose, Operating personnel must pass examinations and be licensed. .Secause of the poor distribution of re- pair facilities; every chauffeur or driver is supposed to be qualified in repair and maintenance. Procedures for training of technical personnel are under the authority of the linistry of Labor Reserves, while the Uinistry of Internal Affairs establishes regulations for the licensing of highray operators. 6. International agreenents new in effect concerning highway transport problems are limited to incidental provisions of bilateral trade And political agreements between the USSR and its neighboring satellite states. 7. Highray trar sport is no exception to the generalization that the intensive planning of the Seviet economy necessitates the preparation of many reports covering all aspects of operations. The Ministry of Internal Affairs requires various reports dealing rith commodities carried, operating costs, accidents, etc. 4 fa. RESTRICTED ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 (01 ? I \ ? ? ? / -- ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 , Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR I CTED %SWEDEN - HIGHWAY TRAESPORTATION Ao POLICIES 10 Highway transport is second in importance to rails in the, transport economy of Sweden It provided the flexibility of transport essential to the economy of Sweden where indus- try and population centers are scattered to such an extent as to make concentration of rail facilities unprofitable., The basic policy of the Government with respect to road transport is to allow the highway carriers a large degree. of freedom of action, Policies of restriction are practiced only as required by the overall interest of the utate, 20 Policiee concerning road transport are determined by the Board of Roads and Waterways in the Ministry of Communica- tions? The policies determined by the Board are not subject to the control of any authority other than that of the Ministry of Communications, which integrates and coordinates all policies dealing with communications and public works, 3, Strategic and military considerations have had relatively little influence upon the highway transport policies of ' Sweden, The geographical position of the country together with its topography would render ineffective any attempt to base transport policies upon strategic and military cone siderations, Swedenta historic policy of neutrality in international conflicts also has permitted emphasis on ' economic needs rather than those of a military nature. 4. The Government does not directly subsidize highway transport operations, but it does expend considerable sums on the construction and upkeep of highway facilitiees B. Policy with respect to highway transport in Sweden has been developed by three factors of primary importances The first of these is the vested interests of the, rail liness both private and state owned, whieh has influenced policy to favor rail lines. In contrast, however& private interests represented by industrial organizations have urged the development of highway transport, since such transport Pure nishee flexibility needed for fast, cheap, door-to-door transport, The second factor which has influenced highway transport policy is the relative ease with which highway transport can be established and maintained, maintenance cost being par- ticularly heavy on Swedish fail lines'becausseof weather and terrain0 The third, and possibly the most important factor influencing highway policy is recognition by the state that despite its financial interest in the' rail lines, highway transport en- joys a tremendous advantage in serving a population so widely scattered as to make rail operation uneconomic in a large part of the country, RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIATIRDP78-01617A004300060001-7 RESTRICTED SWEDEN .., HIGHWAY TRANSPORTATION Bo ORGANIZATION 1. Highway transport services are under the authoeity of the Board of Roads and Waterways (VAG - OCH VATTENBRGGeADSSTYREL- SFN) in the Tfinistry of Communications. 2n The Board of Roads and Waterways has administrative control over all highway transportation and inland waterways, but through a policy of decentralization of control the provine cial governments are given authority to issue concessions for operations and to-establish rate schedules. -Inter- province traffic rates are determined by that province in which the greatest portion of the travel is performed. Inter-province concessions are assigned through mutual agree- ment of the provinces concerned, 30 The Board of Roads andNaterwayse in addition to technical and administrative matters regarding roade? has authority regarding ferries, canals and inland waterwaye, There is no administrative conneetion, however, between the agencies within the Board, dealing with highways and the agencies dealing with waterWaym. All activities and polices are directed and coordinated by the Ministry of Communications, There is no relation between these agencies and the agencies dealing with merchant shipping and civil aviation, and no overlapping or Conflict between the various agencies is apparent? There is no apparent -consideration being given to reorganizing the present structure of the Ministry of Communications as it affects road transport, nor is the creation of nevindminis- trative agencies under consideration, The policies regarding road transport; as laid down by the Board of Roads and Waterways, appear to meet with the general, approval of all 'parties concerned. C. ADMINISTRATION 10 There appear to be no legal barriers to the establishment of new highway service's forpassenger and freight, Routes and rates must be authorized by the provincial government's to be served. 2, Proposed rates are determined by the operators and submitted to the provincial authorities in whose territory cervice.is proposed, Approval of such rates is readily given since inequities may be subject to review if protested, 30 Free competition between transport media is a basic policy in Sweden, However, highway rates leadingto deficit opera- tions are discouraged as being inimical to the public ?2 = Declassified and Approved For Release 2013/03/11 : CIA-R61;11-616777004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR I CTED SWEDEN - HIGHWAY TRANSPORTATION (04 CONT'D) interest, (Such operations adversely affect the rail systems, in which the state has a financial stake.) In recent years, the railroads, in order to combat cows petition, have lowereu their rates one organized truck operations in an effort to meet the competitive door-to- ' door service offered by the road carriets. 40 There is to uniform legislation applying to the country as a whole with regaru to inspection and safety regulations. Such regulations are the responsibility of the provincial governments and indication are that such enforcement poli- cies ere not entirely successful. 5. Thera is no evidence 'of any particular interest on the ,part of the Government with regard to training of technicians in the field of highway transport, Sweden is noted, however, for a number of excellent technical schools whose curricula include instruction in such matters. 60' Highway.transport carriers in Sweden have much to gain through the conclusion of international agreements con= cerning traffic, facilities/rates and other related mat- ters. The general apathy of European governments,, hewever, toward international highway transport and the strong posi- tion of the railroads in most countries has retarded the development of such agreements, At the present time, there is a considerable volume of long distance bus traffic operating passenger service weekly from Sweden as far south as Paris through neighboring states. In addition, long distance truck operations ?have grown _rapidly, and at present there is considerable international traffic in fish and similar products. Mile the restoration. of highway trans- port is notable, one factor acting to retard development of highway operations, international as well as domestic, is the acute shortage of vehicles, ' a 3 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP8-01617A004300060001-7 . c * \ V. or, - 1 7 ? \ , Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ?/ t. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED PRE-WAR GERMANY - HIGHWAY TRANSPORTATION A. POLICIES 1. Information on transportation policy in general is contained in A-1 of the Pre-War German study on railway transportation. Germany, like practically every other government of Continental ? Europe, was intent on protecting the government-owned railroads ? against the competition of the highway carriers. Licensing re- quirements for existing long-dibtance freight carriers were very stringent, and no licenses were issued to new carriers from August 1933 to the summer of 1938. More important, the law of June 26, 1935 kept automobile trucking rates aligned with those of the rail- roads. The civilian passenger car? as. long as the Volksiagen remained an unkept promise, was important. There were numerous bus lines, run . by the Reichspost, the Reichsbahn, and private enterprise, but about 90% of passenger traffic, both lo-g distance and local, used the railroad. In view of the relative unimportance of trucking and passenger traffic, and pf the civilian motor car, the famous Autobahnen? and indeed Hitler es whole road-building program, can be explained only as a rather grandlous gesture. Probably the larger purpose of the scheme was to provide employment, with con- siderations of prestige and military strategy playing a secondary' part. 3. See 4-3 of Railway Transportation for a general discussion of strategic and military considerations. 4. The financial maintenance of the Reichsautobahnen was entirely secured by subsidies from the Ministry of Finance in the form, of a certain share of taxes. While in theory these roads were entitled to collect contributions from their users, no such contributions were infect ever levied. During 1937 allotments from tax and duty receipts to the Autobahnen totaled 197,092,534 RM. Of this total, 104,600,000 RM came from the mineral oil duties, 61,700,000 RM from the mineral oil tax, and 30,800,000 RM from the transportation tat. Any temporary financing was obtained by short and medium-term bills, drawn on the Reicha-Autobahnen-Beschaffungs G.m.b.g.? which Was a department of the Deutsche Verkehrs-Kredit A.G. (the banking institu- tion of the Reichsbahn.) These bills could be rediscounted by the Reichs- bank with the indorsement of the Deutsche Verkehrs-Rredit Hank. The total indebtedness of the Autobahnen on December 31, 1937 was stated to be: 1. Acceptance Credits 450 million E1 2. National Railway Loan 400 . " n 3. National Unemployment 'Insurance 375 'fl n 4. Old Age Insurance Office 100 it n 5. Ministry of Finance 300 - " II 6, National Association of Insurance CoMpanica . 237.2 " It 7. Others 33.6 n fl RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 . Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED ? . PREAVAli GEREANY ii1G11WAY TRaRt1.011 (A-4 CuET?121 The foll.owing table shows the expenditures of Reich, states and municipalities for the highway system: Expenditures for Construction and Lain- Valiance of German Roads (Millions of RM) Other Roads Autobahnen fiiaintenance Construction. building and re- & Reconstruc- expenses tion_ Total Average ? 1927-29 me-... 42700 57000 1042,0 1C32 ____ 287,5 15008 438.3 1933 11.5 .321?.? 360.1 7033 1934 232.3 334.1 431.0 997,4 1935 476,9 34409 437.3 1255.1 1C36 617,8 317.3 471,5 1406.6 1937 663.5 315.0 525,0 150305 1538 '850.0 310.0 540..0 1700.0 .'Neither passenger nor freight r ad traffic were subsidited by the Reich, The transport tax for long-distance freight traffic was 7%, and that for paAsenger travel was 12%. , 5, See Railway Transportation, A-50 B. ORGANiZATION 10 All the local political authorities charged with the adniristra- tion and upkeep of the highways were subject to the supervision and control of the Inspector General rf German Roads, Important highways, classified as national roads, were financed by the ration, and administered by the Inspector General through the state and loe. cal authorities, , Roads of primarily regional significance were des., ignated as first or second-class roads, according to the importance of the area they served.. First-class state roads were financed and administered by the State and provincial authorities; second-class roads by the counties and districts. The Inspector General appointed the technical members of the administrative boards for these roads, The layout and manner of construction of the super-highways (Autobahnen) was his peraonal, responsibility, although actual construction and management were handled by the specially created Reichsautobahnen Company, original- ly a subsidiary of the National Railroad. The decree of October 6, 1531, as subsequently arended, gave the lanister of Transport the all-important power of fixing minimum rates for freight traffic, In 1935, all farms engaged in the trans- port of goods for the account of a third person in operations over 50 kilometers were required to become members of the Truck Cperators Association, or Reichs-Kraftwagen-Betriebsverband (RKS). The main functions of this association were the organization And regu0 lation of long-distance road freight transport, the distribution of Freight orders among members, the invoicing and collecting of bills REt TR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7. RESTRICTED PRE-:7AR GERVANY - HIGHWAY TRANSPORTATION (Bel CORM' on behalf of its members, and the compulsory insurance of all freight. At the same time, the RKB was incorporated bodily into the structure of the National Transport Group as the sole representative of private trucking. See also B of Railway Transportation study. C. Da_RATION 1 I. This question is not strictly applicable; since the governmental policy was one of restricting rather than expanding transport facilities and enterprises. For specific information, see the relevant sections of this report. Under a law of 1934, amended in 1937, the operators of road pas- senger services were required to obtain licenses, and sanction for alterations to licensed Services, from the Ministry of Transport. Passenger traffic was in the hands of three groups of operators, ' namely', "private ent-rprise" (usually a municipal corporation), the Reichspost, andethe Reichsbahn. Private enterprise was regulated by Under-Secretary K in the National Ministry, and represented in .the National Transport Group. The Reichsbank and' the Reichspost were exempt from licensing, being requireB only to notify the local authorities of their intentions 4 weeks before beginning a service. 2. The emergency decree of October 60 1931 on "Inland Traffic with , Motorized Vehicles" compelled the common-carrier long-distance truckers to adopt the Reichsbahn tariff rates toto. In 1935- 36 the entire German trucking system was organized under strong state pressure for the purpose of compelling.the truckers to abide by the prescribed rates: The public organization so founded, the Reichs-Kraftwagen-Bertriebsverband.(usually abbreviated RKB) pro-, cured orders for individual firms througha new-work of cargo space distribution agencies (Laderaumverteilungsstellen); took over the. "billing, collecting and parra-mt of freight monies" (to avoid the possibilities of price-cutting), and insured the freight carried. ,To all intents and purposes, the truckers became employees of the RKB. The freight rates established by the Reich Trucking Tariff of March 30, 1936, were worked out by the RKB in agreement with' the Reichsbahn? with the Minister of Transport as arbiter. The basic principle was that railroad and trucking ratep for the 4 meet ex- pensive classes of commodities (Reichsbahn classification A to D) were to be the same. That commodities in the cheapest classifica- t;ont (Reichsbahn classifications E to G) were to be forwarded by the highway carriers only at class D rates was relatively unim- portant. The unfavorable position of high value goods in less than wagon loads on the railroad, as for example, paper, beer, chemicals, is obvious. The tariff mantled the technical advantages of the truck over the railroad. In.addition? the embargo on licenses was 'continued.. Thus the membsrship of the RKB declined from 9,230 mem- bers in 1936 with 12,791 trucks to 8,752 members with 19,201 trucks in mid-1938. In 1938, when the transportation crises occasioned by the building of the West Wall, the incorporation of "Irredentist" lands to Ger- many, and the increase in military preparation became clearly.vis- -3- Declassified and Approved For Release 2013/03/11 larrRi i l;71-r8-61617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED 111611i14Y TItA1;67311TATION (0-2 CLNT.j ? ible, reatriCticns on licensing were lifted, But the action came too late to be of mean:ng, A truck ordered. in 1938 would have been received in 1940, wen the shortage of' gasoline kept all vehicles off the road. 3, Since the fixing of tariff rates is the single most important Inc. strument of regulating transport competition, this question is implicitly answered in the answers to question Cn2. 4, There were no peculiarities in the German administrative system of safety regulation And inspection which require enumeration here. The only difference from commonly accepted practices lay in the high degree of centralization within the Ministry of Transport. .5. The National Socialist _utorebile Corps (Nationa2.sozialie_tische Kraftfahrer Dina), usually abbreviated NjKK, wes, t use the Nazi language, the primary "organ of the political will to motorization," The NSKK arranged a schooling scheme under the title "Youth at the Rotor." .Sy 1938, it was estimated that 200,000 young men had re- ceiVed preliminary training designed to make them better recruits for the panzer and motorized divisions. The MotoreHitler Youth, with a membership of 100,000 in 1938, was under NSKK tutelage, as were parts of the German Labor Service. On January 27, 19391a Fuhrer decree made the NSKK the exclusive organ for all pre-ard post-military training in the motor field. The decree was im- plemented by an organization of 23 motor snort schools, for "leaders" and "experts") 2 national schools, and a technical drivers? univern city at Munich, By 1938, there were:5.5,million licensed vehicle drivers in Germany. The licensing process was begun by an application to the local police, who forwarded it to the regional police. The examination of the candidate was made by an "expert" (Sachver- st6diger), appointed by the Linister of Transnort and usually an NSKK man, with a degree in mechanical engineering and 2 yeart? experience. The licentine standards were in all essentials comb ? parable to those of the United States. However, there were 4 ? classes of licenses, in accordance with the type of vehicle to be driven: IQ Motorcycles with a cylinder capacity of over 250 c.c.; , 2. Motor vehicles, weight over 3.5 tons, and truck trailer combinations with more than 3 axles, regardless of weight; #5,,. Vehicles with cylinder capacity of 250 c.c., or less, and maximum speeds less than 20 kilometers per hour; 40 All others. 60 As of September 1, 1938, Germany had ratified the road and motor traffic convention of the League of Fiations. Germany also be- longed to the International Federation of Commercial hotor Users. c4 c, RESTRICTED' Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 a .?????? ? "IN ? 4. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? Declassified and Approved For Release 2013/03/11 rolATRD-P78-01617A004300060001-7 CANADA - HIGHWAY TRANSPORTATION A. laaLICZES 2. The Dominion Departre'ntof Transport was organised in November. 1936, to unify the control and cupervision of railways canals, harbors marine and shipping agencies, civil aviation and radio. Dominion control over highway transportation0 however, is slight, The various agencies regulating transport operate very close to the Cabinet and look to that nource for major policy. The Minister of Transport, however, has lost much of his responsi- bility to the Board of Transport Commissioners, the Air Trans- port Board and the Maritime Commission, all three of which are largely autonomous. ? 4. The Canadian Government does not extensively subsidize highway construction. It VW not until the passage of the Canada High- ways Act in 1919 that cash subsidies were provided toward the ,construction of highways considered to be of interprovincial character. During the following nine years 1:20,000,000vies granted for the purpose. During the period of acute unemploy- ment between 1930 and 1937 slightly more than 042,00,000 was spent on highways of national significance. Of this amount, e19,000,000 went to the Trans-Canada Highway, designed to run from the Atlantic to the Pacific entirely in Canadian territory. The Alaska Highway, 1,600 miles of roadway, 24 to 36 feet wide, extends from Fort St. John, British Columbia, throueliThite- herse,'to Fairbanks, Alaska. The Dominion Government supplied the right-of-way and the United States Government, through its Vier Department, carried out the construction work. The Canadian section of the highway from Edmonton to the Alaska border was taken over by Canada at the end of the war. The Cariadian sec- tion, now known as the Northwest Highway System, is being operated for the present by the Canadian Army. B. ORGANIZATION 1. (See B-1 of Railway Transportation.)- In the field of highway development, the British North America Act very clearly left to the provinces jurisdiction over pro- vincial highways. This right has been jealously guarded. As a result the Candaian highway system is largely a patchwork of provincial highways. A Canadian who wants to drive from east to west 'invariably does so by dipping south through the United States. It follows that Dominion control over highway traffic is slight. The Dominion may regulate only with regard to inter- provincial and external trade. It may incorporate coepanies whose purpose is interprovincial transportation. athin the authority contained in the British North America Act some con- trol is exercised through the Board of Transport Commissioners, RFSITRIrTrn ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED CANADA HIGMAY TRANSPORTATION (B-1 COW?' D) which requires that trucking rates. be filed with them. Due to the Board's alithority to approve or disapprove railway rates, it can to a very large degree influence truck competi- tion. The authority of the Board, however, has not been clearly determined. In fact, the authority of the Dominion Government in regard to highway location and construction leaves much to be desired from the national viewpoint. As has already been indicated the provinces jealously guard their almost exclusive jurisdiction over highways. Each province has its own highway department which issues opera- tors' licenses and registers and regulates motor vehicles. Traffic regulations are either provincial or municipal in nature. 5. In the main, the Canadian agencies handling transportation policy are regarded as operating 'efficiently in the public interest.' C. AMIELNISTRATION ' 1. The establishment of highways is almost exclusively a matter of provincial regulation. The British North America Act per- mits the Dominion to, project itself into the picture only insofar as interprovincial and foreign commerce are concerned. This is interpreted in a very restricted sense with the result that it has effectively prevented national planning and de- velopment of a highway system. 2. (See A-4.). There appear to be no international agreements in the highway field to which Canada is at present a pasty. 5. The government does very little to foster dr regulate training of technicians in any of the fields of transport. The number and variety of reports which are required to be sub- mitted to the various supervie cry agencies of the government are too numerous and variable, to permit listing: Such a list, if it were possible to compile, Would change substantially from day to day. The nature of the replies to the questions pre- viously' covered is believed to indicate in a broad sense the nature and extent of the reports desired. The Dominion Pureau of Statistics, for purely statistical purposes, requires numer- ous reports as to traffic, materials used, employment given, and so forth. Rates in all cases must be filed with the appro- priate supervisory board or agency. Practically all details as to the operation. of common carriers are supplied in printed form to the public by the Dominion Bureau of Statistics. Fur- ther information is made available through the annual reports of the Department of Trade and Commerce, the Board of Transport Commissioners, the Department of Transport, and' others. - 2 - RES TR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 \ Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RETft I CTED CANADA - HIGHWAY TRANSPORTATION (C-7 CO1T.1D) Similarly information is published annually in the Canada Year pook and in special reports Periodically made by the various ,agencies. These reports make it evident that transport com- panies file a large variety of reports and forms during the course of operations. ( ? 3 ? RESTA I CM Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 , ? ? ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11: CIA-RDP78-01617A004300060001-7 RESTRICTED BRaZIL . ? HIGMAY TRANSPORTaTIOU A. POLICIES 1. The basic Brazilian policy covoring highways has, as its long tango objective., the construction of a Fedoral network of main highways connecting tho existing local state systems. This has been the expressed aim of sevens]. successive . Brazilian governments. Prosidont Vargan.announced in 1944 that it was a responsibility of the Ministry for Transporta- tion and Public Lorks to "... organize a general plan of transportation devolopment and road building for the entire country in order to develop it gradually and in accordance with public necessity; and not in pursuance of occasional private interests.," ' Under the "now stator% highway building policy is detormined by the Federal government. formerly road construction was loft to the initiative of the States, with the result that there are fats through highways connecting the local networks spreading out from the port cition of Recife. Bahia, Rio de Janoiro, Sao Paulo, Porto allegro and Rio Grande du Sul. Brazil has adopted a hands-off policy with respect to controls over highway motor transportation. Tho government apparently believes that a badly needed expansion of motor transport in nest likely to occur with a minimum of interference. Tho only control of motor freight operations consists of a statistical cargo chock when motor freight pastas from one state to an- other. Punnonger transport on the highways is subject only to govornmont approval of rates. . 2. 'ail? higiamya, railroads and inland waterways are the ro sponsibility of the Ministry of Transportatian and Public 1:orks, it appears that the respective departments of the ilinistry function almost autonomously, and there is little integration of policy Idthin the Binistry on the various media of transportation. 3. Highway policy has boon influenced by strategic and military considerations to a limited degreo. During Lerlci Oar II tho abnonco of an efficient coastal highway not was a .substantial weakness in view of Brazilian and Llliod shipping looses, . which reduced the volume of vital port-to-port coastal shipping traffic. The national highway plan (seo.A.4)_now takes into consideration a pOssible rupture of coastal shipping. under war conditions. Tho Uinistry of rar has constructed some purely' military roads... Tho road from Sao Joao in Santa Catarina to Bariacao on the Lrgontine frontier, for example, was con- structed by military onginoors. 4. Subventions have been granted for many years to encourage local RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED BRAZIL - IfLGIMAY TRE4;ISPORTZ21014 (A-4 00171'6) road construction. Tho Fodorul Uovernment will now directly control the major highway developments in Brazil under National Highway Plan, which was drawn up by a Special' Committeo appointed by the Liinistor of Transportation and Public Works. Tho final report was completed in 1913, and its conclusions became law in 1944, (Plano liedoviario Nacional). - The proposed national highways aro classified into three groups: (1) north-south, or longitudinal highways (2) east- west, or transversal highways, and (3) connecting highways. The torn "national highway" is defined as a ruin road thich assumes nationul importance by: ? a, connecting to) or more Status; b.' reaching or approaching within 150 lana. of the country's borders; c. giving access to maritime river or lake ports operated under Federal oonoossion; d. forring part of tho Pan-American system; o. being of military, administrativo or tourist interest; or f. being an indispensable link between trunk highways. The National Highway Plan includes the folloWing projected highways: Gotulio Vargas - coastal route Belem to Jaguars? Pan-Nordostina - Sao Luiz to Salvador. Trunsnordostina - portulezza to Salvador Trunsbrasiliana - Belem to Santa Jam do Livraraento Amazonian - Santarom to Porto Don Carlos Acreana - Cruzoiro du Sul to Cuiaba The entire plan includes approximately 20,000 kms, of north- south and 14,000 kus. of transversal highways plus about 5000 kiss, of connecting branch roada. 'Chile the plan is ambitious, it is cupablo of fulfillment within .8 to 10 yours. The National 'army Fund, nude up of rocoipts Dmna Fedora]. taxes on fuel and oil, and from motor vohiclo import duties, will help to financo the National' Highway Plan. The fund is distributed as follows: 40;1 to the National Highway Department; 60;;; to the States, which receive aid on the basis of: 3V; to States in'ptoportion to local tuxes collectod; 12:;.; to States in proportion to population; and 12:; to States in proportion to urea. 2 RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTR I CTED HIGHTIAY THABSRBITATIOU (A-5) 5. iLifaway policy Is influenced by economic), political and ' geographic considerations in that order of importance. The projected highways will open up large areas of Brazil for an expansion of internal. trade, tad will lessen the country's dependence on coastwise shipping. The young 13razilian writer, De :31i, expressed a widespread view an highways in asserting:. "the cduntry has skipped the railroad era further funds should go into the construction of highways." B. omiliaziaioN 1. The Ministry of Transport and ,Public lurks controls all forms of transportation except civil air. 'within the Ministry, the ? ilational Highway Department handles, all mutters concerned with higlways. . The 'Car Department, however, jointly controls certain highways 17 i t 11. the Ilinistry of Transport and Public eorks. The .Ilational 11.1.;hway Department supervises road con- ..struotion?in southern and central Brazil, while the Federal Irrigation or Reclamation Service (Inspectoriu Federal do Obrus Contra as Soecus) constructs highways in. northeastern Brazil for the Einistry of Transport and Publics. The War Department, -moreover, has used its highway battalions to build certain highways, particularly those extending the -not- works of southern Brazil towards the borders of Paraguay and Bolivia. It appears that t.lese roads, of first-stage construc- tion, are considered to have military significance. 2, The Autional Highway abpartnont controls technical and ad- ministrative services pertaining to studies, projects, specifica- tions, budget, trafAc.policios, finance.' and? through delega- tion of authority, road building activities curried out by ?the States, 17ur aapartnont, and the Reclamation Service. The national Highway Sopartzlent has -the; following Divisions: I. Deliborativu Divisions a. Highway Council b. bxecutive Council II. Fiscal Division a. Financial Controls III. Executive Divisions a. Director General b. Technical Services C, Judicial d. Adndnistration ? \ It is the function of the Ifo.tional Highway Department to ad- minister the listional Highway Fund. (See A-4). Each state in the United States of Brazil has its own State Highway bepart- 3 RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED BitaZIL - BIGITC;:a TliatiSP0RTJ.TI0N (3-2 COHT ,ll) mont. Tho more progressive states along the coact, especially in the vicinity of Rio de Janeiro end Sao Paulo have constructed outstanding oxamplos of modOrn higlwaya undor tho general super- vision of the National Highway Department. 3. There does not appear to be much organized coordination of tho various forms of transportation within the Ministry of Transportation and Publics 'iorks. Coordination achieved during the war with other dopurtments is rapidly disappearing. Thera is no fermi relationship with the civil aviation agencios in tho Lir Ministry. 4. The construction of modern highways began in Brazil about twenty years ago. Various states had organizod highway depart- ments before tho establishment of tho iAideral Roads Commission in 1927. In 1930 the Commission was abolished by the Vargas regime and in 1937 the National Highway Dvpartmont was created under the Ministry of Transportation and Public t:orks. Decree- law author 8.463, dated December 27, 1945, CWOD tho National Highway Dopartment a more autonomous position uithin the Ministry. The same decree created tho National 11541rway dund and directed its administration by the Jail:mai Highway Department. 5. .:11 agenoios concerned with highway transportation aro attempting to administer policy of:iciontly and in accordance with the public interest. Tho y are handicapped, howover, by local state politics, military considerations and financial problems. C. iHMINISTRLTION 1. Tho National Highway Department determines tho priority of new Federal highways in accordance rith tho National Highway Plan (Docreo No. 15193, March 20, 1944). In.contrast to the US system of highway devolopmont, where state construction stems from local roads and .:;bderal construction from State systems, Brazil works from the top down, the Foderul Govern- ment holding tiu.t it should initiato highway construction throughout tho country. Tie expanding motor transport passenger lines in brazil operate under concessions granted by tho National Highway Departnont, after requiremonts regarding their financial reliability and the typo of their equipment aro nut. Tho implomentation of , them, controls by the National Highway Department, however, appears not to have roached all state and local vole0 Tho State of Pernambuco, for example, is roported to have deviated from Fedoral controls by permitting all vehioles to transport passengers. Lttor transportation is encourtc:od in this state by very elastic local regulations. Trucking operations aro not regulated in Brazil. A RESTR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 DeclessifiedandiNoproved For Release 2013/03/11 :CIA-RDP78-01617A004300066001-7 RESTRICTED Bith.SIL ILIGIRLY TRaNSI'ulfTaT1011 (C-2) 2. The Autienal Deparbient ostabliched pasaengor rato schodules on u passon:pr-kilometer basis, varyins with the kind of roud surface over which tho vohielos pass, and tho type of vehicle operated. There are no ?facially established motor freight rates in Brazil. ? 3. There is practically unrostrictod competition in highway 'transportation, passenger and freight, throughout Brazil. HighWay passenger transport has become increasingly competitive to the railroads. In spite of varying highway conditions, bus tine batman tho cities of Sao Paulo and Curitibap.for example, .is 12 hours fora distance of 523 kms., against a train timo.of 26 to 30 hours. This difference reflects the disjointod nature of Brazilian rail development. 4. Tho Arazilian -41ational Transit Coda, 19411, governs highway ` sufoty and accident investigations. It also contains voluminous. rogulations regarding tho qualifications of automotive vehicle ovoratora. The thoroughness of tho. rogulations 'lb illustrated by tho provision that professional drivers must ::ass physical aneaminations, aptitude and technical tests, nunt tau:ors? sanity and character investigations, puss examinations on traffic laws, and met requirements regarding military service and nationality. : 5. Tho initiative for the training of engineers and technicians in isighlvay work rests with tho educational institutions. Tho respectiVe proles:dont-1 organizations license civil enginoors. Laws relating to highway planning and construction often stipulate that only licensed civil engineers may hold certain positiens contained in doi.artmental une State tables of organfa ation. 6. Tho lack of international highways connecting nrazil and her neighbors obviatos the hocessity for international 4::reemonts concerningletor transport. 7. 14,tional Highway Departaont inspectors, working from inspection posts on tho 2bdoral highways, preparo traffic and accident reports. StItistics on cargo crossing St/to lines are furnished to the ilinistry of .griculturo. :Data co: piled on tho numbor of passengers land cargo. moved, however, is only partially and helat4e1y published. Individual accident reports state whether fatalities nave occurred, and give the degroo of vehicle &maga and nature of personal injuries. ? 5 RESTRICTED Declassified and Approved For Release 201-3/03/11 : CIA-RDP78-01617A004300060001-7 'Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED ? A.E9ENTIN - HIGHWAY TRANSPORTATION A. EQUITLE 1. The salient feature of present Argentine policy with re- spect to highway transportation to the trend toward nationalization of all such services which are considered to be of national interest. Thus Argentina will take over the trucking subsidiaries of foreign-owned railroads con- currently with the pending acquisition of these railroads. Nationalization of the highway transport systems of Buenos Aires and Rosario will set the pattern for future acquisition of other important highway transportation systems. Argentine highways were long considered primarily as ad- H juncts to the railroads. Until 1 January, 1947, Argentine law required the railroads to subscribe 3% of their gross income for road building. Originally such roads were to have fanned out from the railroads to form feeder systemst but beginning in 1932 the government applied certain funds to the-construction of highways paralleling the railroads. This produced competition between highway transportation and railroads, forcing the latter in sat defense to deVelbp their own trucking lines. Large suns are now in- cluded in the FivesTear Plan for deielopment of the Federal Highway System. City passenger transportation is a government monopoly. The present relative, importance of highways is evidenced by the fact that the share of total cargo handled by trucks in Argentina has risen from 5% (during World War I/) to 15%, while the railway share has dropped from 95% to 85%. Between 1940 and 1944 the Federal Highway. System increased from 30,773 to 38,584 miles. . 2. The highways and transport on them are administered by the Ministry of Public Works, but independently of other forms of inland transport. There is some coordination . within the National Economic Council, which is accomplished by a National Coordinator for Highway's outside Buenos Aires and a Municipal Coordinator for transport within the Metropolitan Area, where city passenger transportation is a Government monopoly. The.location of strategic highways has been primarily determined in the past by economic rather than military conditions. Sore roads, however, were undoubtedly con- structed to serve military needs. This applies especially to temporary roads and trails northward to the underside of IRESTR I CTEn Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 B. RESTRICTED , ARGENTINA b .HIGHWAY TRANSPORTATION (A-, CONT0D) Bolivia and roads toimilitary outposts. Among planned roads is one in the direction of the Paraguayan frontiert 4. Highways are constructed from public funds by the Federal government in cooperation with the respedtive provinces and territories. There are no subeidies to private car- pantos, although the nationalized transport systems are operated at Government cost. The Five-Year Plan includes ? large appropriations for highways. , 5. Highway policy has been based essentially on economic ? requirements. The economic core of the country has its center in the Buenos Aires seaport area and embraces the great pampas regions and surrounding country southward to the Rio Negro, westwards to the Andean foot hills and northward to the Parana river. The prime mission of-the highway network is to expedite the movement of raw materials to ports and of finished products to the interior. This function makes the highways an auxiliary to the railroads. The most important example of influence on highway trans- portation policy from vested interests was furnished by the attempt of the railroads to have legislation enacted curbing the increasing activity of the highway 'carriers. The railroads initially proposed legislation requiring that highway transport be regulated by the National Rail- ways Board, but such obvious atteppte to stifle corpeti- tion were bypassed, and the finWdraft of the bill established centralized coordination for all public trans- port. ORGANIZATION 1. The control of highways lies in the Ministry of Public Works, which includes,:. Direcion Nacional de Transportes; Administracion General de Vialidad; and Corporacion de Transportes de la Ciudad de Buenos Aires. . 3. The highway agencies in the Ministry of Public Works are coordinated with agencies handling other forms of trans- portation at the level of the National Economic Council. 4. Two major laws were passed in 1936-7 providing for the coordination-of transportation. The first of these measures was designed to ease the acute corpetition be-' tween tramways, subways, suburban railways, taxicabs omnibusses? and small busses, (the popular "collectivos") in the Buenos Aires Area. Provision was rade for the establishment of the Office of the Coordinator of Muni- cipal Transportation. .This was followed by a second measure creating the Office of National Coordinator of Transportation with control over long distance trrinsporta- tion "in or between the National Territories, or between - 2 - Declassified and Approved For Release 2013/03/11 : CIA-R5P78-071617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 . REST RI CT ED ARGENTINA HIGHWAY TRAESPORTATION (134,C0NTID) these and the Provinces, or between these and the Federal Capital.? ? 5. The highway agencies are considered to be operating inefficiently, due to delays in obtaining new equipment and placing it in operation. There has been considerable. public criticism of this inefficiency, particulfirly with respect to the operation of the nationalized systems for city passenger transportation and Cargo hauling, as well as the private, highway passenger transportation companies. C. ADZNISTRATION ? ? 1. Motor transport lines for passengers are established under procedures set forth in la* No. 12346 (1937). Applications are channelled from the immediate Municipal Authorities ' through the Provincial Officials for final processing by the National Commission for the Coordination of Transport. Cargo transport lines do not need franchises, but must comply with licensing requirements. The National Commission for the Coordination of Transport controls the approval of highway and construction contracts. The first extensive plan for Federal and Provincial highways. envisaged in 1933 an expecitture of $385,000.000 for the construction of new roads during a 15-year program. .Under the recent Five-Year Plan, (1946) the annual expenditure for highways will be approximateiy $28,500,000. 2. Passenger rates and other tariffs are based on percentages of 1936 rates and codes. Adjustments are authorized for increased operating costs. The National Highway Transporta- tion Commission is competent for areas outside the Buenos Aires System. For the Metropolitan region the Coordinator of Municipal Transportation is the highest authority. 3. It has been considered in the public interest to nationalize the passenger transport service in Buenos Aires and the river Port of Rosario, and thus restrict competition between carriers. Small passenger operator competition is restricted bYlmeats of franchises restricting routes to specified companies. Cargo carriers are. not subject to similar restriCtions, and competition is not limited through Government action. 4. Vehicles must meet specified operating standards set by the police departments and demanded by insurance companies. Additional safety rules are established by the operating companies themselves, to forestall civil damage suits. It is reported that safety standards for passenger transporta- tion are unsatisfactory. in regard to fire hazard's. ? [RESTRICTED? , Declassified and Approved For Release 2013/03/11 CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTII I CUD ARGEhTIa HIGHWAY TRALSPORTATICii (C-5) 5. Kationdlized transport systems maintain classes for drivers and .,;uides. Driver licenses are subject to exaninatien in both theory and practice. Applicants are required to pass a physical examination. " 7. The Rizhway carriers are subject to the same inspections as the operators of other overland transportation. The . reports are used by the tax authorities as well as for purposes of studyinz working' conditions. and administerinz social security. They are submitted to the National Director of Highway Transportation and the Coordinator of Municipal Transportation. Reports on labor matters are forwarded to the Secretary of Labor and Welfare, The National Director of Highway Transportation also receives' statistics on passengers and freight. - 4 - rRESTR I CTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? ? Declassified and Approved For Release 2013/03/11: CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED PERU \ 111Glitla TRAIMP3RTAT1ON A. POLICIES 1, Highway transportation policy in Peru is determined by the state. The PeruVian ?Government considers adequate highways' to be the most essential component of its transportation system. This is because the flexibility of highways 'adapt them to the extremely rough terrain in Peru. The Govern- ment accordingly intends to premote\the construction of , new through roads t6 reduce the i escalation of its remote areas. 2. There is little integration between the .Ministries and ' other governmental authorities concerned with highways and other Dorms of transportation. 3. Strategic and military consideratiens do not appear to , influence appreciably Peruvian highway transportation policy. ' 1. There is no government subsidization of motor transport operating units. All interUrban highways, on the other hand, are constructed and maintained at state expense. There has been a parked increase in national road building expenditvres in recent years. Peruvian policy has in- creasingly subordinated railroad construction to highway expansion because of the adaptability of-highways to the country's difficult terrain. ( 5. The Government's highway transportation policy is not influenced by Vested interests. B. ORGANIZATION 1, The Ministry,of Development and Public i;orks is responsible for highway' and railroad matters. Under that agency is the Bureau of ,Highways and Rail.roadt? with separate 'Highway and Railroad Sections, 2. The Bureau of Highways and Railroads is headed by a biroctor General directly responsible to the Kinittry of Jevelopment and Public Vierks. A sub-director is in charge of the High- way section, which has departments for administration, opera- tions and engineering. 3. There is no dLrect coordination of transportation policy between the Ministry of Development and .Public torks, .the Ainietry of Aeronautics, and. the Ministry of the Navy. There is no appreciable eVerlapping @r conflict between the national agencies and the political sub-divisions in transportation matters. . RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/08/11 : CIA-RDP78-01617A004300060001-7 PLED - HIGHWAY TRANSPORTATIJN (B-4) 4, The present governmental agencies are considered adequate and there are no known plans for reorganisation or new agencies. 6, The highway-agencies are operated in the public interest9 and are almost free of political interference. Ehtle the engineering service's are good, there is need, for more mechanized construction. C. ADLIVISTR&TION 1. The planning of now highways is the responsibility of the Department of Studies and Planning of the Bureau 'of High- ways aad Railroads. New locations-are approved by the Minister after consultation with other branches of the Ministry of Development and Public F.orks. New roads are constructed according to a comprehensive national plan, Private motor transport lines for passehgers and cargo require a licence from the Bureau of Transit in the Ministry of Government and Police. 2. There is no official rate structure for cargo service on highways. While passenger bus rates are submitted by operators to the Bureau of Transit for approval. An prac- tice competition dictates fares. .75. In the absence of through coastal railroads9 cabotage operations of the state-owned Peru Steamship Corporation offer the only competition to letor transport along 2800 miles of coast served by the Pen-American highway. 3cean shiesent is preferred for long distances and for heavy cargoes while motor freight is largely restricted to shorter hauls of lighter goods. Competition among indivie dual meter transport.operatorsie not particularly 'desired by the Government. However, lenient licensing procedures .and the absence of remission charges for new' operators facilitate the organization of new lines. 4. The Traffic Department of the Ministry of Government and Police establishes and enforces regulations Governing motor transportation. Aside from traffic reGulations. hoeever. the State imposes no controls governing the safety and inspection of equipment and personnel using the high- .ways. There are, on the other hand, periodic inspections of urban vehicles. eiGhwey accident investigations camp under the respective political sub-divisions. of the country, 5. There are no Governmentefestered courses for training high- way technicians other than those offered by the. National. School of LnGineeritg. Trainihg procedures at this school are determined by the Ministry, of Education. The drivers of all vehicles must have licences issued under regulations established.by the Bureau of Transit. N. Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78701617A004300060001-7 ??? RESTRil CTED PERU - IIIGJUAY TRILESPORT4T ION (G-6) 6. The Peruvian Government it Committed by treaty with Bolivia to protect traffic through Peruvian territory ? to the new safe' port of Mates-di on the Pacific. Peru does not participate in any international highway rate conferences. 7. Motor transport companies are not Squired to submit operational data or reports on traffic, rstes, and - accidents. 3 RESTR CI EU Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 I , \ ? I O. - \ 1 / Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 _ N , - I f DrcigiriTn ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 C111111. TRaltSPORTATI011 A. POLICIES 1. Iblicy governing the development and use of hightuys in China in determined by the state. The major objectives of Chinese highway policy are; (a) restoration of highways Which have been damaged or destroyed; and (5) modernization of road sUr- faces wherever peaceful conditions and limited resources per- mit. In practice, however, little beyond naintenance can now be attempted. 2. Theoretically, a completely coordinated transportation system wad established by the delogationto the Uinistry of Communica- tions of responsibility for ell media of transportation. Actu- ally, however, highwuy policies uro determined and administered ? relatively independent of those for other forms or transports- -. tion. 3. Strategic and military considerations now dominate highway policy in the north and northeast. Been in south and west China the government makes an effort to hoop the roads open Wherever ? possible ferias? in.military eventualities. 4. Mile gpvernment initiative is a prerequisite to the develop- ment of provincial highways, as roll ae a system at national . highways, the central government is eeriously handicapped by meager resources id foreign exchange, primitive equiphrnt And ? innufficdont technical personnel. Generalissine Chiang Rai- sheltie ton-year plan, nevertheless, envisions a well-coordinated syntet of big,hwaye connecting theimportent centers, particular-. 1y those not served by rails, in Central, gest and South China. This comprehensive and ambitious program, patently unrealietio, calls for 253,000 kilometers of higkaluys,withan eventual goal of 1,600,000 kilometers. Chinese authorities also have ambitious pions for developing highway transport. They intend to organize a government monopoly of commercial bus and truck cervices on main highways, granting franchises to private companies only for operations on secondary roads. The contemplated government- operated services, Purthernore, would control distributing points and central fueling stations, thus excluding commercial ? gasoline companies and tire doulore from a substantial portion of the retail market.' 6. Mitch of China's economic life is controlled by powerful family groups, some of which are close to the gaiornment, and local political factions. Those vested interests exert great pressure on all phases of government policy affecting their interests. Since no substantial extension of the highway network or develop- . tent of motor transport could occur without affecting these private interests in many ways, their influence in the gevern- ment is used to aoccolerlito?or retard highway projects in adoord. ;moo with their individual interests. The Chinese motor trans- port industry, on the other hand, is too young and unorganized to yield any ',ameliorable influence on the central government. RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 IgWk. e omiu, rnau ,r Itte.11SPOirit:TIO: ?.-0 COUT'DI Historical conditions influence highway transport policy chiefly in the sense that Cldnoce hictory has ostablishoi a tradition of primitivo overland transport and thus orca.ted an inertia against progress. Indifforonco, and, indeed, ' actual resistance to change has been hietorloally a w..jor teeter returding the developeont or highway transport in Chino. Ccograpeio conditions have cOntrIbutod to thin stagnation by interposing my* formidable obstacilos, such us difficult terrain unmanageable streams and poor natural distribution of constructionmotorials. Political conditions operate both as an incentive end a complicating factor in highway transport development. Lhile the improvemont,of communications with outlyine subdivisions would be of grout political advantage to the Nationalint Government. no protrans of national scope can be instituted without considering the A views of local political authoritiea. If the ourront rAlitary emorgoney is resolved, highauy transportution will develop easontiallyos a compromise of economic factors: it will be u long time before the limited capabilities of the Chinese acorn:4v can do more than satisfy a fraction of China's basic need for adequate ovorland transport. P URGAili Zhn 0 1. The Ministry of Or>:_mimioutioru3 is the focus of Chinese Govorn- ment authority over all forms of transport, including highways, Tho Railway and ltighway.Departrant of tho Ministry includes the national Highway Administration. 2. Tho Railway and 111.ghtvay D3...b.rtnerrt of the Ministry of COIraMi06- tions is 'charged, according to irtiole VII of its orgbnio law, with the ?following responsibilities portbining to highwa,ys: (a) planning and construction; (13) operations on highways, including subsidiary activities; (c) enr,insoring and mechanical questions; and, (d) supervision of highways. , In addition .to the above 3:Unctions, the national Higartay Lcirain- istrution controls provincial and other highway administrations and variolds regional motor transport administrations, including ? the Metropolitan (Shanghai, Peiping, tranloati, ate.) highway de- partments. 3. Sore coordination of highway matters with other forms of .tuns- partition evolves from consultations batmen heads of the re- spective Departments and their subordinates in the: Ministry. Over-all policy planning within the Ministry is supervised . RESTRICTED Declassified and Approved For Release 2013/03/11 CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED , Chia - ILIGIG1/.Y l'ItLIISIMULTION (B-3 CONT'D) by the Minister of Cormamications and his two Vico-Ministers. Tho highest policy and planning level for all media of trans- port, &mover, is the Executive Yuan. 4. The administration of highways in Chine has been under various organizations since the formation of the Republic: From 1927 until 1941 motters relating to highway administration and trans- port wore handled by the Bureau of Highways and the Motional Highway Transport /Administration in .ths Ministry of Ccimmunica. tions. In July 1941, both of tithe agencies were tronsferred to the Transport Control Burcou under the National Military Council. The noed for more efficient highways and for improved ? coordination with the other overland forma of transportation led the goVernment to place the adminintration of highwws uguin under the Ministry of Cemmunicutions at tho end of torld tar II. 5. It is undoubtedly the desire of the Minister of Coirraunioutions to direct the Ministry's operations for the public good. The factors preventing efficiency are largely beyond his control. . They include vast equipment shortages, commondoering of facili- ties by the military, and tae interruptions and destruotion of highway facilities.inoident to the current civil war. C. ADMINISTRATION 1. Plans ler new highways originate in the Railway end Highway Deportment of the Ministry. After discussion with various officials within and mithout the Ministry, they are submitted to the Executive Yuan for final decision. Mile the construc- tion of now highways is the responsibility of the DInistry of Communications, the Ministry's capabilities are frequently nullified by military commanders, who can demand that the Ministry's technical and other trained personnel be diverted to development of road facilities required by the National 'Defense Minister in the prosecution of the civil war. 2. Motor transport rates are proposed by the administrations or companies operating on the highways. After consideration by the Ministry of Communications,' they aro passed to the Execu- tive Yuan for final approval. The Yuam is loath to grunt in- creases now because of the inflationary tendencies caused by higher rates. Pleas of the Minister of Communications, asking for discretionary authority to grunt limited rata increases, have se far been deeded. All increases granted to dote have boon so low as to continue to lag behind price raises. This seems to be Chinese policy. 3 .. RESTRICTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED 0111.1a_ - RIMS 30 It awn hardly be said that compotition in motor transport Is fostered in China. Motor transport to so undeveloped thut Compotition is an academic issue. A few privately:tanned highway transportation companies have been granted franchises over secondary routos but competition does not concern than as much as high operating Canto and inadequate demand for the services ol'forod. Competition oan1 if desired, be effectively controlled by the requirement that 'motor transport sorvities offered met be approvod by tie Ltnistry of Coamunications prior to initiation and by extensive eubsidies uhich the ?governtont currently pays to its onn highway companies. Detailed .regul: tions taro in ?Moot govorning motor vehicle operation and inspection. investigatian of aeoidonts, penalties for violating traffic regulations, and the use of highesys. Tho final authority on regulations pertaining to highway use rests with the ibteoutive Yuan. The extent to which the Ministry of Comunioatit..ns promulgates highway regulations may be judged from the results or the National highway Traffics Commission.e4.nforonce in 1937, which presented full :tutu- ton ibr adoption by the National Goveramont covering the following :aessuros: 4. 1: Regulations,l'or the Ikutagement of Traffio.on Hientays 2. Regulations Governing Pena/tics for Violation of Traffic Regulations \ 13. Regulations for lacyclos Traveling on the Public High- ways and Uniform Rate of Taxation 4. Regulations for Uniform Taxation of ;hotoroyeles 3. Regulations of 0rivers of Public Buses or Conlercial Automobiles in different Cities and Provinces 6. Regulations Prohibiting Private 4-utomobiles from doing Commercial Puniness on highways 7. Regulations for the Joint Transportation Procedure Regu.lutions Governizt Uniform Paymont of Wages to ? Drivers on the Higinays I 9. Regulations Governing, the Compensation for automo- bile accidonts on the Hightays ? 10. Regulations for Sovir*;s of Highway Staffs and Officers 11. Transportation of Motor Freight on China Highways RESTRICT:I) Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED Malta 111G1Fla TitaLtPeRTaTION (G-6) The China? Government has fostered the training of highany arsi motor vehicle engineers and technicians. ?ha treinixig or 1,200 Chinese in US industry end tmiversities included nowt spcoislitinr, in hiGhour denim othor features of highwa,y transportation. ,Chiunc Itui-ohek's tem-vett proctors orals for thousand? of engineer graduates and technicians flooded to carry out the ambitious kublic works progrui out- land in Ms book,"Ghinuis peat/rye. 4.11 higlay engineers and all mtor vehicle operators, including trucks and buses, ore lieensed by the government. Ga ma lack of through highways suitable fa =tor truf act ob- viates the need for international agreeraonto on motor trans- portation. ' 7. Both publicly and privately.crmed oporaton on the hirsickys cubadt reports on operations and accauents, flo vary detailed highmy safety mot.sures, however aro reported to be enforced rather loosely. he various regionul, provincial and locul ? highmy .adrailaistrt.tione submit annual reports to the Railway taxi Higher/4 Depart-snot. Passenger and freight statistica for ? various provinces have boon publiohed. - 5 ktS I KiCI ED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 ? ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 1 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 . RESTRir ? Cue ct ionnaire on . RAIL, HIGHWAY AND INLAND 7.:ATEMIY TRANSPORTATION , ? ? . To bd. ug , f,.n conjunction with this study e ? . ? Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 RESTRICTED OUESTIONIAIRE ON RAIL,' HIGIT6AY AND INLAND tATERWAY TRANSPORTATION A* Policies lo What are the basic policies of the country with regard to rail, highway and inland watemay transportation? To what degree are policies determined by the state? 2. Are policies determined and administered independentle for each form of transportation, or are they integrated and centrally adminietered for all forms of transport0 including sea and air? 30 To what extent are relit highway and inland waterwae transport Policies based on strategic and military considerations? 4, .Does the government subsidize these forms of transportation, promote the development of new types of equipment, and the construction of railroade, highways and canals? A 5* To what extant is police influenced by vested interests, historical* geographic, political and economie conditions? Bb Organization 10 Whet ere the agencies of the government concerned with these forms of transport? 2. That are the functions of each of these agencies, and how are they organized to carry out these Punctione? 3. How are the various agencies related to each other? Are they controlled., directed, or coordinated by, any agency or erotic on a higher level? Now are they related to agencies concerned with shipping and-civil aviation? To what extent do the various agencies overlap or conflict with each other? 4. ilhat conditions or developments led to the establishment of these ageneies Er$ they are now 'organized? What circumstances Led to the abandonment or reorganization of previously existing agencies? Is any consideration being given to reorganizing existing agencies or creating new ones? 5, Are these aleenoies considered to be operating efficiently in the public Interest? C, Administration lt What procedures-are followed in determining the establishment of new highways, mdtor transport lines, 'railroad lines knd waterways? 2, ilow are ratc4i'determined and what tzpes of regulations govern the rate- making processes? - 1 - RESTRKTED Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7 1 ' RESIRICTED) 3. To what extent, and by what .means Ls competition festered or restricted? 4. 4/hat types of rules and regulations govern .the safety and inspection of equipment and personnel, and the 'investigation of accidents? How are these regulations established and enforced? 5. Does the government foster or regulate the training of technicians in the fields of transport? To what extent, and how are technical classes of personnel licensed to perform their functions?, That types of requirements must be met to obtain these licenses? How does the government determine . its procedure with respect to training and licensing? . 60 In cases there these forms of transport extend beyond netienal houndanies0 or connect with neighboring lines, what international agreements and . arrangements exist concerning: (a) Exchange of traffic (b) Exchange Of equipment (o) Pooling of traffic.. equipment and revenues (d) Establishment of joint facilities (e) Fixing rates (f) Allocating routes 7. For the purpose of .administering policies, enforcing regulations. _granting financial aid, and assuring the adequacy, 'safety. and efficiency of operationb, what .typos of periodic. or 'special reports and forms does the government requi,re .covering: (a) Traffic (b) Rates. (c) Expenses, revenues and investment (d) Qualifications of technical and key personnel (e). IntiOections (f) Accidents (g) Others To what agencies are the reports submitted? How are they pi-di:et:Sod, and ,what uses are made Of them?' . ? -2- - nrCTEVerTrh Declassified and Approved For Release 2013/03/11 : CIA-RDP78-01617A004300060001-7