WEEKLY INTELLIGENCE SUMMARY NO. 92

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A005000010142-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 27, 2016
• Document Release Date: May 22, 2013
• Sequence Number: 142
• Publication Date: December 13, 1949
• Content Type: REPORT

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? SECRET
? CONFED
Nftb TO CIA USURY
TRANSPORTATION DIVISION
OFFICE OF REPORTS AND ESTIMATES ?
CENTRAL INTELLIGENCE AGENCY
WORKING PAPER
NOTICE: This document is a working paper, not
an official CIA issuance. It has been co-ordina-
ted within ORE, but not with the IAC Agencies.
It represents current thinking by specialists in
CIA, and is designed for use by others engaged
in similar or overlapping studies. The opinions
expressed herein may be revised before final and
olTicial publication. It is intended solely for
the information of the addressee and not for
further. .dissemination.
Copy for: Library
? ? r PI% kiWeNTIAL
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CONFIDENAL DECLASSIFIED
OFFICE OF REPORTS AND ESTIMATES
Class. CHANGED TO: TS S
DDA Memo, 4 Apr 77
TRANSPORTATION DIVISIthu th: DDA REG. 77/1763
Date: %Arlo% 73 BY: 121.___41
13 December 1949
Weekly Intelligence Summary No, 92
SECTION I. SUMMARY OF TRENDS AND DEVELOPMENTS
The Danish commitment to build tankers for the USSR under the terms
of a 1948 trade agreement may be avoided aa a result of Soviet refusal to
permit inspection of the steel for the program. (Item No, 1, A)
No weakening of its port closure policy should be inferred from the
Nationalist decision to allow the US cargo ship SIR JOHN FRANKLIN to de-
part from Shanghai, The Chinese Minister of Foreign Affairs has informed
the US Charge d'Affaires at Hong Kong that special permission was given
only at the request of the US Government and should not be considered
as establishing a precedent. (Item No, 2, B)
Recent efforts of the Chinese Communists to acquire rails abroad
indicate thot they wish to commence the rehabilitation of their railway
system immediately, regardless of the drain on their limited foreign
exchange resources, (Item No. 3, B)
A new railroad link connecting the province of Assam with the port
of Calcutta by a route entirely within Indian territory has been com-
pleted some three months ahead of schedule, This development has re-
sulted from the partitioning of Bengal which placed a large portion of .
the former Bengal Assam railway in East Pakistan. (Item No, 4, C)
Restitution of foreign rolling stock still hold in Western Germany
may soon be carried out. Recent consideration of the problem by Britieh,
French and US occupational authorities has revealed general agreement thit
the improved operational efficiency of the German railway systemos evi-
denced by the recent handling of the harvest traffic and general reduction
of the turn-around time for freight cars,now make restitution possible
without endangering the German econemy. (Item No. 5, B)
rfli1lirlirtrairt a,
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CONVIDENTIAL
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? The Assistant Military Attache of the Soviet Anbassy in Ottalla
is apparently showing an active interest in current transportation de-
velopments in Canada's western provinces. (Item No, 6, C)
Present indications are. tItt Western Germany may be included in the
International Customs Convention on TouringpCommerioal Road Vehicles and
international Transport of Goods by Road, signed in Geneva on 16 June'
1949 by. various European ECE representatives and nor awaiting ratifies..
tion by their respective governments. (Item Vo. 7, B)
In the event that Czechoslovakia
their operation on scheduled services
only if a common policy is'maintained
which such flights would take place0
countries would provide an opening of
take advantage. , (Item Wo. 8, A)
acquires four-engine air transports,
to the Near East can be prohibited
by the Mediterranean countries over
Defection by any one of these -
which Czechoslovakia would quickly
,CONFivali .
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CadraNTIAL
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SECTION II. CURRENT DEVELOPMENTS
SURFACE TRANSPORTATION
1. The Danish commitment to build tankers for the USSR under the terms
of a 1948 trade agreement may be avoided as a result of Soviet refusal to
permit inspection of the steel for the program. The agreement called for
the USSR to supply ship plates for three bankers, among other vessels,
The Soviet Union, however, has refused to allow entry to a Danish ship-
builder, who contracted to build one of these-tankers and five other
vessels, and wished to inspect the stool prior to its delivery to the
shipyards in Denmark. (This may have been an attdhipt to force the Danes
to supply steel, now in tight supply in the USSR.) Following this refusal,
the shipbuilder undertook to supply the required steel from other sources,
The Department of State has instructed US EMbassy, Copenhagen, to
solicit Denmark's agreement to refrain from building tankers, which the
US has classified I-A on its list of prescribed export items for either
Soviet or Satellite purchasers. With respect to the USSR; the inspection
difficulties provide a possible basis for Danish action to nullify its
tanker commitment, The Department has suggested that the US would have
little objection to a compensatory increase in dry cargo ship construction
for the USSR, although other compensating exports would be even more
preferable, A Danish commitment to the US along the foregoing lines may
also balk Poland's present efforts during trade talks with Denmark to con-
tract for the construction of four large, ocean-going tankers. This would
be particularly advantageous, in view of the danger that Poland might
transfer ,such veosels to the USSR, This possibility is suggested by the
recent sale of Polish passenger vessels to the USSR (see D/Tr Weekly No
89)
Although a substantial cargo ship program would obviously increase
the ocean-going transport potential of the USSR, such tonnage would be of
much less value to the Soviet Union than would even a few fast modern
tankers, The USSR's repeated efforts to acquire tankers from other
European shipyards suggest that tanker tonnage constitutes the major short-
age in the Soviet ocean-going fleet. (At present the USSR's ohean7going
tanker tonnage ranks fourteenth In world tanker fleets, totaling only
127,000 gross tons as of 30 June 19490) Moreover, the recent Soviet
chartering of US and other foreign-flag tankers to supply its petroleum
needs in the Far East indicates current inability to meet its petroleum
transport needs (see D/Tr Weekly No, 91)9 If the USSR were to acquire four
vessels equivalent to the US T-2, the tanker fleet would be increased by
only 40,000 gross tons, but the Trans-Siberian railroad would be relieved'
of some of the strain under which it now operates. (Secrot)
CONFIDENTIAL
CROPWT
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2. No weakening of its port closure policy should be inferred In the
Nationalist decision to allow the US cargo ship SIR JOHN FRANKLIN to de-
part from Shanghai. The Chinese Minister of Foreign Affairs has inThrmed
the US Charge d'Affaires at Hong Kong that special permission was given
only at the request of the US Government. and should not be considered as
establishing a precedent, The Minister, furthermore, requests the Ttbassy
to take steps tO warn the vessel's operator, Isbrandtsen, against repetition
of past attempts to violate the closure order by sending ships into
Shanghai.
Meanwhile, both the Far Eastern representative of Isbrandtsen and the
line's Shanghai agent now believe that it would be unwise to attempt
.
further entries into Shanghai under present conditions. The basis for
their attitude is not known, but it 'is unusual in tint it apparently con-
flicts with that of the US home office. in all probability the represen-
tatives realize that, despite US protests, the Nationalists may staoesfirm
on their closure policy in the future, and that movements into Shanghai
will become increasingly dangerous. , (Confidential)
3. Recent efforts of the Chinese Communists to lequire rails abroad
indicate that they wish to commence the rehabilitation of their railway
system immediately, regardless of the drain on their limited foreign
exchange resources.
An attempt to resolve the railway probletwith domestic resources bee
resulted in the restoration of most lines, although many of these are
capable of handling only light traffic. In this restoration, the Commue
nists have been forced :to utilize rails taken from sidings anclyards,
from the second. track of double tracked lines, and from an abandoned
Japanese military railroad between Poian and Beiho in north Manchurie.
Although an order was placed with the Northwest Iron and Steel Company
at Taiyuan for 'large quantities" of rails and other track materiels,
the capabilities of this.pIant are relatively limited. The steel plants
in Manchuria, toreover, have been dismantled.
It is not positively cOnfirmed that the Communist-controlled rail-
roads of China have received any rail material from abroad. Reports to
the effect that about 500 miles of rail have been delivered from the USSR
to Manchuria may refer to nothing more than the reallocation to these
lines of rails which were removed from them after the Japanese collapse.
In any case, the Chinese Communists are known to have negotiated for
large quantities of rails from both Germany and Japan, Two Vest German
companies have been approached by a London firm to supply 75,000 tons of
85-pound rails for the Chinese Communists. The orders have been held up,
however, at the request of the US State Department. A Tokyo metal Sire
has easoteen asked to supply 65,000 tons of rails and 10,000 tons of rail
laying materials to the same customer. This order, hewever, has likewise
encountered delays in obtaining SCAP approval. (Confidential)
COBFLPENTIAL
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COMMEN
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4. A new railroad link connecting the province of Assam with the port
of Calcutta by a route entirely within Indian territory. ..as been com-
pleted some three months ahead of schodulen The new line is about 145
miles long and connects Fakiragram on the existing Assam railway line
with the Alipore depot, south of Calcutta. The new track nine through
West Bengal, Bihar and Cooch Behar in ardor to avoid entering East
Pakistan territory. This development has resulted from the partitioning
of Bengal which placed a large. portion of the former Bengal Assam rail-
way in East Pakistan.
Since partition in August 1947, it has been necessary to move goods
and passenger': from India's frontier province of Assam to the rest of
:ndian territory by means of the East Bengal Railway of Pakistan. Thin
eailroad has been the principal route for delivering cargoes of jute and
tea from Assam to Calcutta and from there to the markets of the world,
The existence of so large a portion of the railroad's-track within
Pakistan has given Pakistan authorities a degree of control over the:
movement of tea shipments considered undesirable by the Indian tea
industry,
The desirability and necessity of constructing an all-Indian rail
route was immediately apparent to the Government of India and its Rail-
way Board, which late in 1947 authorized the construction of the AtSalfl
Rail Link Project. According to press dispatcheS, goods traffic was to.
commence over the entire distance of the new line on 9 December with
formal opening of the line for both passenger and goods traffic to take
place on 26 January 1950, when the country celebrates the inauguration of
the Indian Republic. (Restricted)
5. Restitution of foreign rolling stock still held in Western Gerleany
may soon be carried out. Recent consideration of the problem by British,
French and US occupational authorities- has revealed general agreomett
that the improved operational efficiency of the German railway syatam,
as evidenced by the recent handling of the harvest traffic and general'
reduction of the turn-around time for freight cars, now make restitution
possible without endangering the German economy.
Subject to explicit reservations in favor of foreign countries which
may be entitled to reparation or compensation through a future German
peace treaty, the occupational authorities are studying the feasibility
of negotiating and implementing jointly such agreements between Western
Germany and other countries whose rolling stock is still in Western
Germany, or countries which are holding Reichebahn equipment. The occu-
pational authorities will probably insist that agreements meking final
ar.aflflCkITM
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CONHIItTh0AL
6.
disposition withoyt compensation, must dispose of all of the rolling
stock in Western iermany belonging to any given country in such a nliy
that there will ie no unliquidated claims of this typo against Germany.
The agreenuuts would probably carry varying conditions with
respect to tho different categories of equipment. Freight care owned
by railways, nhother serviceable or unserviceable, and passenger equip-
ment, lugga";,. vans and locomotives in serviceable condition will prob-
ably be ex:'nanged on a one-for-one, all-for-all, or equal value from
each side. Unserviceable rolling stock in the lattor three categories
and privet:Ay-owned rolling stock and equipment not otherwise covered
will probOly be returned without compensation.
ally proceed along these lines should result in substantial reduction and
pQ"eat elimination of foreign rolling stock still held in (;ermany
during 1;50. (Confidential)
The Assistant Military Attache of the Soviet Embassy in Ottawa is
apparent y showing an active interest in current transportation develop-
ments in Onnadars western provinces. These projects are designed to
provide -ail connections and improve highway links betmeen the DS and
Alaska (nse Or Weekly No. 89). According to the publisher of the
taske highway Ueweat Fort St. Johnsthe Soviet Attache not only is a
subsenUor to this meekly newspaper, but is gathering newspapers from
ether northern points in the Highway area, (Restricted;
Prnsont indications nre that Western Germany may be included in the
International Customs Convention on IreiWing, Commercial Road Vehicles
and Intcrnational Transport of Goods by Road, signed in Geneva on 16
June 1969, by various European ECE representatives and new awaiting
ratifier tion by their respective governments.
The US dolqcation in Genova, although not representing a contracting
government, favws the .inclusion of Western Germany and indicates that
the German Goverements having instituted changes in official regulations
in order to confirm to the convention's provisions, also &mires to be-
come a party to :he agreement.
Article VI nf the Convention provides for signature or accession
only by those genrernments 'invited to take part in preparation of draft
conventions' an.;. thus excludes Western Germany, However, Articlo 11 2,
CONFEDpiTIAL
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CON-FIDEt
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providing specifically for occupied areas, states that a "contracLe;
government may at any time, by notification to UN SYG, declare that tip
present agreement shall extend to any of the other territories for which
it has international responsibility,"
The ECE Secretariat has stated that, so far as the UW is concerned,
inclusion of Western Germany can be accomplished legally by notification
to the UN by the French or British Governments that the agreement
extends to Western Germany, The British are now considering consulta-
tion with the Allied Commission, Germany, with a view to reporting to the
'A an agreement among the three occupying powers to this effect.
CIVIL AVIATION
B. It the event that Czechoslovakia acqyiros four-engine
their operation on scheduled services to the Wear Eaut can
only if a common policy is maintained by the Mediterranean
which such flights would take place. Defection by any one
countries would provide an opening of which Czechoslovakia
take advantage0
air transports,
be prohibited
countries
of these
would quickly
over
Numerous reports emanating from the Greek Embassy at Prague have
concerned the efforts of Czechoslovak Airlines (CSA) to obtain modern U.
air transports? These reports have been accepted with some resereo by
US officials, because it was felt that they have been partly inspired by
the Charge's desire to promote a change in Greek aviation police toward
Czechoslovakia6
now seems to bear out these warnings that agents in Switzerland are pre-
pared to sell the Czechoslovaks long-range air equipment. In conversa-
tion with General Stanoesky, Chief of the Czechoslovak Ministry of Trans-
port's Aviation Division, learned that the
General "confidently" expects to purchase four US four-engine transports
in Switzerland.
Concern of the Greek Charge at Prague over his country's position
.vis-a-vis Czechoslovakia, as a result of Greek denial of landing rights
? at Athens for Czechoslovak Airlines (CSA), has caused him to report all
rumors affecting developments which might permit modification of Greek
obligations to deny repeated Czechoslovak overtures on this score,
Believing that his government has borne the principal burden of impo-
waiting US-UR Satellite aviation policy in theliediterranean to the
detriment of its trade relations with Czechoslovakia, the Charge apparently
is attempting to show that this prime responsibility should now be shifted
to Italy becmase, with new long-range aircraft, CSA could by-pass &than";
from Rape on route to the East,
CONFIDENTIAL
SECURT
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The ability of CSA to fly non-stop from Rome to Lydda would not of
itself insure the granting by Italy of the necessary transit rights to
the Near East. CSA, in fact, has been denied the right to transit Italy
on the ground that the airline has no apecified terminal point beyond ?
Italy to juatify such operations. (A refusal of transit rights over
Turkey by CSA was based on similar grounds.) amen if CSA could obtain
these terminal?rights for scheduled services, Italy, although a member
with Czechoslovakia of the International Civil Aviation Organization and
thus bound by the articles of the Chicago Convention, has not adhered
to the International Air Transit Agreement as have Czechoslovakia and
Greece; and therefore is not obligated to grant overflight privileges to
foreign airlines.
During recent personal visits to Greece, Israel and Italy, General
Stanovzky'attempted in each country to break down resistance to CSAcs
Mediterranean operations, but without success. _Although Israel has not
been asked to collaborate in implementing the US-UK Satellite aviation
policy, it has in effect done so by indicating that it is not ready to
discuss civil air matters with Czechoslovakia until after an Israeli-US
air agreement has boon concluded, negotiations.for which have not yet
commenced.
CSA has one remaining avenue of approach to the EasternMedibermes=
through Belgrade. The present political tension between Czechoslovakia
and. Yugoslavia, however, would appear to preclude any arrangement of this
nature. (Secret)
-ONFIDENTIAL
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