SPECIAL FREIGHT RATES ON CHINESE RAILWAYS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700130026-7
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: September 23, 2011
• Sequence Number: 26
• Publication Date: August 21, 1953
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/02/08: CIA-RDP80-00809A000700130026-7
CLASSIFICAI';0N ~_
CENTRAL INTELLIG GGEN REPORT
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS CD NO.
COUNTRY China DATE OF
INFORMATION 1945 - 1951
SUBJECT Economic; Transportation - Rail, rates
HOW
PUBLISHED Monthly per
WHERE
PUBLISHED Peiping
Cr EAJLI1i`' E ACftCY
PUBLISHED Mar 1951
LANGUAGE
DATE DIST. 2 I Aug 1953
"is soatlalo COITAIU 14101"110.1 YnmM na KAMMMAL sano$a
CO no Came Anna 01n1a us susuA or UneaMa An IS
I S.C., ..Age 03.11 As11A0. in TAlsuulOA ON". an!unan
iluncomm ii ii,ngei II i oC mu "on 'I noilwn?e. is
Jen-min T'ieh-tao {People's Railways), Vul III, No 3, 195].
SPECIAL FREIGHT RATES ON CHINESE RAILWAYS
fummary: This article defines general and special freight
rates in China. Special freight rates are applied for special
needs and situations, and since the establishment of the Minis-
try of Railways there have been five revisions of these rates.
Current reductions in freight rates are made for various
reasons, such as seasonal rates for perishable vegetables and
fresh fish and the direction of shipment for such items as
cotton .7
Meaning of Special Freight Rates
For the transportation of passengers or goods from Point A to Point B
the railway receives a definite amount of mc.ney which, in the case of goods,
is called the freight rate. At present, there are 30 categories of goods.
Depending upon the cost of transportation,what the goods can stand, and the
economic situation, the freight rte is determined for each category. This is
the general freight rate schedule.
In this general freight rate schedule, because of the difference in classi-
fication, the average article has an appropriate charge which conforms to our
objective. In the case of essential goods, mechanical implements for farming
and industry, the classification is set comparatively low; while luxury goods,
valucble objects, and articles of adornment are assigned a higher classifica-
tion.' Thus, the general rate is suitable for average articles; but, if it is
wished to encourage or to limit the transportation of articles of special aa-
ture, or under special circumstances, certain problems are raised. Freight
rates must be more or less permanent. If the ordinary freight rate is re-
vised from time to time to meet some special exigency, it is inconvenient thfor
the merchants and very troublesome for the railway administration.
reason the problem must be settled by the application of special freight rates.
CLASSIFICATION
NSNd
FBI
AESTRIeTED-
DISTRIBUTION
f
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 Declassified in Part - Sanitized Copy Approved for Release 2012/02/08: CIA-RDP80-00809A000700130026-7
Special freight rates are distinct from regular rates and are determined
partly by the special need or special conditions re&arding the particular goods,
and partly by the desires of the railway administration itself, such as the
return trips of empty cars or the regulation of traffic density.
The determination of special freight rates is not hampered by a rigid rate
structure. All sorts of methods may be used, such as diminish or increase the
percentage, diminish or increase the grade, abolish an increase in price, indi-
cate the name or description of articles, limit the load, time, distance, final
destination, number, etc.
Since t4a atablishment of the Mil'istry of Railways, because ul tu_e fluctua-
tions in the cost of commodities, there have been five revisions of freight
rates, but through it all there has continued to be also the possibility of
special rates. Because of the revision of freight rates and the changes in the
political or economic situation there have repeatedly been increases, decreases,
and revisions of the special rates. The previous rates and the current rates
are described below.
In July 1949, when freight rates for the whole nation (with the excep-
tion of the Northeast became uniform Freight goods were classified into 20
categories; the special rate for coal was set at 30 percent
more than that or freight goods in Classification 19. This was because at that
time the freight rate for goods in Classification 19 was actually less than cost.
In December, after three adjustments of freight charges and raising the basic
rate, in consideration of the long-distance hauling of coal, the increase in
percent was abolished and for a haul of more than 1,000 kilometers, the rate
changed to be 15 percent, less than the regular rate, and for a haul of 1,500
kilometers, 30 percent less than the regular rate. On 1 January 1950, be-
cause prices had again advanced, the railways were losing money on coal trans-
portation so the special rate was canceled.
Later, a special reduction of 50 percent was also given for oxygen 11.
tanks7 and automobiles. These reductions were determined by industry's need for
raw materials.
A special discount of 50 percent on shipments of pears and dates, ef-
fective from 5 September to-the end of November, was made to help certain flooded
areas market their prLiucts.
In the summer of 1950, in the interests of fishermen, a 30 percent re-
duction of the usual freight rate for fresh fish and shell fish was gtanted from
12 May to the end of July, irrespective of quantities, distance, or destination.
In June, in order that South China might ship porcelaiu and bamboo prod-
ucts northward, it was decided that porcelain should ha-?e a special rate reduc-
tion of 30 percent and bamboo a reduction of 40 percent. After conditions changed,
all the above reductions were abolished.
To encourage industrial plants to locate nearer the source of raw mate-
rials and to prevent their becoming unreasonably concentrated in one part of
China, and to save what is spent in duplication of transport, a 50-percent re-
duction was promulgated to induce industries to move from Shanghai to the interior.
This reduction remains in effect.
STAT
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W
In September 1949, to supplement the insufficient supply of cotton and
to meet the needs of the cotton mills, cotton imports were permitted temporarily
and the railways established a 50-percent reduction of freight rates. This ap-
plied to all cotton imports that had proper certificates from the ministry of
Foreign Trade, and?that were shipped from any oort to such places as Shanghai
and Soochow, up to the end of March 1951. Originally it had been stipulated that
this special rate would apply only until the end of 1949; but late., since the
.nation's supply of cotton was still insufficient, the time limit was extended
twice to prevent mills from closing for lack of raw material and workers from
being thrown out of employment.
Many kinds of art works are produced in large quantities by Peiping
handicraftsmen. These art works are world famous. According to railway regttla-
tio^.s such ::pork arc of various clacs.ficutions but mostly in the higher catego-
ries. To stimulate their production and sale abroad, thus securing foreign ex-
change, on 10 October 1949, it was decided that all such goods certified by the
Ministry of Trade, when shipped from Peiping to Tientsin, wc?:ld be given a re-
ducticn of 40 percent applicable to 14 classifi-ations. In August 1951, it was
decided that there should be no discrimination because of classification and
that all such goods, if properly certified, would be considered as belonging to
Classification 13.
For coal production, pit props are necessary but are not available
everywhere. Therefore, to lessen their cost, they were given a classification
lower than ordinary lumber. In December 1949, a further reduction of 30 per-
cent was granted on pit props that were transported 500 kilometers or more.
This rate is still effective.
Special rates were made for export goods. In September 1949, such
goods as hog bristles, raw silk, tea and tung oil had accumulated in Shanghai,
but had to be transported from Shanghai to Tientsin for export. To lessen the
cost, it was decided that between Shanghai and Tientsin a special reduction of
50 percent be granted for goods that were thus transhipped to another port.
Later, because of changed conditions and as a result of experience, there were
repeated revisions, with other articles of merchandise added and destination
points changed. After two extensions of time, the present special rates for
export goods went into effect. The main purpose of the special rates is to
promote the general export of Chinese products to secure foreign exchange with
which to import articles essential for construction. The railways help by grant-
ing special rates from the point of production to the shipping point, thus re-
ducing transportation costs. This policy also tends to increase the production
level. The practice now is to give a special rate to all goods certified by
the Ministry of Trade or its subsidiary emits as intended for export.
Export goods are of many classes. There is need of careful investi-
gation to determ_ne which ones should really have reduced rates and what should
be the decree of reduction. The Ministry of Railways and th. Ministry of Trade
need to inquire into and discuss the matter j-tntly before deciding on the items
and the rates. The method of procedure shoulr? also be clarified. The impor-
tant points to keep in mind are the natir'nal policy regarding export trade, the
price of the goods and the market demand for the articles within the nation and
abroad, the variations in railway rates, the nature of the goods, the packaging
of the articles, etc. Special attention must be given to manufactured articles,
location of factories, how much is produced, distribution of the product nation-
ally, and the distance fr'm the production point to seaports.
At present articles for export are, divided into two classes.
a. Class 1 includes six articles, as follows: tea, brick tea, almonds,
hides, egg products, and raw silk. The upecial freight reduction for each of
these articles is 50 percent.
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 Declassified in Part - Sanitized Copy Approved for Release 2012/02/08: CIA-RDP80-00809A000700130026-7
b. Class 2 includes 13 articles, an follows: wool, camel's hair, wood
oil tallow tree seed oil, Camelina oil, peanut o!1, cottonseed oil, medicines,
casings, walnuts, fresh eggs, antimony, and cement. Each of these has a 30 per-
cent reduction below the regular freight rates.
In August 1950, when the freight classifications were changed, in addi-
tion to the above-mentioned reductions, it vat decided that the following special
rates should also hold..
F'eight car dunnage furnished by the shipper himself, such as canvas
coverings, ropes, matting, snd wooden props, should be returned to their start-
ing point free of charge, while receptacles that contained goods should tbesre-e
turned at half price. The last two items were omitted in the past
an The items first mentioned supplement the equipment provided by
the railways and help to preserve the goods; the reduction on the return or aua.s
containers lessens the total transport costs. These provisions are a special
favor in effect in railway transportation. To promote cultural motion picture
and to advance propaganda instruction, a special rate is given to all motion
picture machines and the accessory equipment, carried by the traveling groups
and vouched for by the Ministry of Culture, including reels, films, uniforms,
travel equipment, medicines, etc. Irrespective of their regular classification,
all these articles will be considered as belonging to Classification 18.
One of the most important tasks of the moment is that of preserving
public health and the task of plague prevention. In districts affected by
disease the government gives free inoculations for both men and beasts. The rail-
ways Live decreed that all goods certified as being transported for the Ministry
of Public Health or the Ministry of Agriculture should be treated as under Classi-
fication 18.
In addition there are some local reductions in specie] separate dis-
tricts. For example, in the Northeast, fresh fruit receives a 50 percent reduc-
tion. Stiff hides for a specified time have their classification lowered to
effect a reduction
or more costs. During the
a special rate`.inIn fresh
rice 300 kilometers transported to Shanghai from Wuhu and Tang-t'u has a reduction of 40 per-
cent, and from Ts'ai-shih and Nanking to Shanghai, a 20 percent reduction.
Other temporary arrangements for reductions, although exceptions to the general
freight rates, are limited to a single occasion or to a few times, and are not
included in the general sphere of reductions; for example, the reduction on re-
lief goods shipped to disaster areas.
Current reductions in freight rates are made for various reasons. For
example, fresh vegetables and fresh fish are seasonal, while with cotton it is
a matter of direction of the shipment. Special rates applied to goods for ex-
port are, given in consideration of their final destination. Reductions in the
Northeast and in. Shanghai are local matters. Special rates for Peiping handi-
craft articles and pit props refer to distances involved. These rates, although
omic
applied in many different ways, do not yet, ranage to meet the nat?.on's economics
requirements. Our land is large and its goods abundant, but in many places
has been little development.
In the future, through steady advance from an agricultural to an in-
dustrial economy, with planned construction and emphasis on expansion, every sec-
tion of the country will have its appropriate type of diversified labor. Then,
upon the present foundation, there will be a development on mining and industry.
In that economy, the coastal regions provide marine products and salt; the North-
east thetNortt
mineral productsaandawood ]oil; East Chinae,elight industry; North industry; China, coal;
C cotto
and Anhw mmony;entraandl w ol,nherrrbs, petroleume,iandorareeminerals. and anti-
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lpag rnn'the~uaual freight rates can solve the transport problem, there are cer-
and in babits of production. The same transportation rates for the same goode
_ .. . -_ "____1_ ------ . _-a-- 4..w
Declassified in Part - Sanitized Copy Approved for Release 2012/02/08: CIA-RDP80-00809A000700130026-7