WEEKLY INTELLIGENCE SUMMARY NO.71

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000300060007-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: January 29, 1999
• Sequence Number: 7
• Publication Date: July 19, 1949
• Content Type: SUMMARY

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OFFICE OF REPORTS AND ESTIP.MAT!U'S
TRAj1SPORTATION GROUP
Weekly Intelligence Summary No. 71
19 July 1949
The Swiss Government may be the latest convert to a growing move-
:left for protection of national scheduled air carriers from the com-
aetition of foreign airlines. The increased cut-rate operations
through Switzerland of non.-scheduled foreir.,n carriers, especially
those of the US and UK, are causing particular concern. It is prob-
able that the Swiss will in any event soon attempt to reach an undor-
st?ucding with the US and UK for the regulation of such operations to
or through Switzerland. (Item No. 1, B)
The efforts of the USSR to alleviate its current shortage of
ocean -going merchant shipping tonnage through purchases abroad con-
tinue to be larl,,ely unsuccessful in spite of Danish press reports
concerning the impending conclusion of a shipbuilding contract with
the USSR. (Item No. 2, B)
The port of Shanghai is effectively closed to f orei ;n. shipping..
From 25 June through 12 July no fore;.#n fIag vessel either entered
or cleared the port, traffic being confined entirely to small Chinese
ccastal and Yangtze River craft. The failure of foreign vessels to
defy the Nationalist blockade will continue to paralyze Shanghai.
(Item No. 3, B)
CLASS. CHANGED TOE
NEXT REVIEW DATE.
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I, The Mao C4ornrne,nt m be ,, a .stoat convert to a growing move-
ment c pro a vn of nations so a ule air carriers from tho compe-
tition of foreign airlines 4 (?sae TG. Weekly' Nose 68.69). Although
Swttzerlr nd's 13 vi1 aviation po1tQy has traditionally favored freedom
for international Air co!nmerea, events of', iecerat xonths have forced
the Swigs to reconsider their positiof. Xn an attempt to protect the
d6mpetitive position of its nation air, ceirrior, SWISSAIR, Switzer-.
1 4 is oonsideri.ng limiting trarric rights of US and other foreign
4irlines operating through Switsorland. Restriotions imposed 'by
other countries. on S ESSAIR' a oporak ons abroad (see TG Weekly 1o. 39 ),
m x eovor, as well &s ' the strong coidpetitlon of forei a airlines- whioh
traheit Switzerland on routes-paralleling the services operate(! by
S W SSAIR, have strengthened the. oonviction In Swiss aviation cl dlen
that the nati o cal airline cannot continue its present operatibrib
lw.norn1oa11y unless the tr+aff o rights of competing foreign ci .criers
are limited.
A ehango in Strlas air po iay in evidenced bys (1) iriber&smpany
agreements which SWISSAIR hai iaoholuded vfii.th the Dutoh KU and
So dtnuVta SAS airlines, sv 1 eb+ the foreign carriers roli,nquish
traffio rights at Obneva and .Zurich on flights to Madrid and Lisbon
pe . lieltng SWISSAIR servicesi (2) efforts.. to restri at ,Ai.r Indisr s
trk-ffio rights. through Genova on raia'to to London] and (3) Sv4$s
detezYatnstion to obtsin a more equitable tiara of transatlantie
traffic between Switzerland and the US th a the present ratio of 2 or
3 weekly WISSAI9 to 14 A Edi na.
The Increased cut"rate.operations through Swi.tserld of non-.
staheduled forei carriersp dap46164ly those of the US and UK, are
pausing part1cuiar oonoe m. It is prob -bie that the Swiss will In any
event soon atteogt to roach an uadersttanding with the VS and UK for
the regulation or such operations. to or through Swltser3&nd.
(Confidential)
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The efforts of the USSR to alleviate its current shortage of
ocean-going merchant shipping tonnage, through purchases a roa con-
tinue to be largely unsuccessful in spite of Danish press reports
concerning the impending conclusion of a shipbuilding contract with
the USSR. The contract, which reportedly calls for the construction
in Denmark of a large tanker and five small refrigerator ships under
the 1:48 trade agreement, probably-could not be fulfilled until
sometime after 1962
While Soviet representatives have discussed shipbuilding con-
tracts with virtually all of the major Western European shipyards
during the past year, these negotiations will result in Soviet acqui-
s'i tion of only a few tugs and small cargo vessels during the next
several years. Although some trade agreements with the USSR provide
for negotiation of shipbuilding contracts, most Western European
countries have been reluctant, for political reasons, to permit
domestic' construction of any significant quantity of ocean=going
shipping for Soviet account. (Indications of an economic crisis in
Western Europe might sharply change this present attitude.) Lost
European shipyards, moreover, are already committed to capacity out-
put for some time to come and therefore could not in any case affect
the current Soviet shipping situation. The continuing Soviet search
for ocean-going tonnage, however, providea additional evidence that
the USSR has chosen to apply the combined capacity of its. shipbuild-
ing, industry primarily to commitments other than ocean-going tonnage.
(Confidential)
3. The port of Shanghai is effectivxely closed to foreiQi shtip i.n .
From 26 June through 12 July no foreign-flag vessel either entered or
cleared the port, traffic being confined entirely to small Chinese
coastal and Yangtze River craft. The failure of foreign vessels to
defy the Nationalist blockade will continue to paralyze Shanghai.
The blockade has also had a serious effect upon river traffic
between Shanghai and the hinterland. Imposition of the blockade has
forced the Communists to divert to coastal traffic most of the larger
vessels formerly employed on the Yangtze. (Normally, much of the
coastal traffic now carried by Communist-controlled vessels would be
carried by foreign-flag vessels.) The resultant shift from larre to
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s;secl l craft for river traffic has noc ssarily decreased the volume
of Yangtze traffic and increased costs. For instance, coal.,
normally brsu4;tat by water in large bulk shipments from up the
Yangtze, is now arriving by a combined rvdl..vwater haul at the un-
precedented cost of US 27 pea Non delivered at J,hsni hai.
:'`he, C01 z ani v,t , meanwhile, are sir king every effort to increase
river slipping by repairing or raising damaged craft in addition to
planning for crnstruction of small steamers. Re ,ardless of the
success of these efforts, however, such activities are at best only
palliatives and. blum[;hai will continue to be severely hampered until
domestic and foreign-flag vessel a can resume their normal ac U vities
in ;the port. and up the river. This is a nli;kely to occur in the near
future because the NvOWLonalistsa realizing the effectiveness of
threatened military action against foreign vessels, will probably
continue the blockade as long as it can be enforced. (Secret)
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