POLITICAL GROUP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00926A007700530001-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 121
• Document Creation Date: December 15, 2016
• Document Release Date: September 12, 2003
• Sequence Number: 1
• Publication Date: January 1, 1947
• Content Type: REPORT

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URGENT NECESSITY FOR IMMEDIATELY
INCREASING CHINESE COAL PRODUCTION
TO PREVENT ECONOMIC COLLAPSE
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TdARY OF FINDINGS AND CONCLUSION
Prer Production (1937)
Present Production (first half 1947 basis)
Defic?ty Against Prewar
32,000,,000 tons per year
23,000,000 tons per year
9,000,000 tons per year
1942-3 Wartime Production (inch Manchuria and
Taiwan)
72,0000,,000 tons per year
China's Coal Reserves
241,634 Million tons
Number of mines included in this proposal
Anticipated Production of Restored Mines
12,300,000 tons per year
Estimated Cost of Rehabilitation of
$19,023,815 (U-SO
Restored Mines
Amount of Loan Requested
$17,504,000
Amortizing Period of Loan
25 years.
Interest Rate
2-1/2 %
Yearly Amortizing Charge
950,250
Amortix rig Charge based on Production
.08 per ton .
Coal''Sxports can Supply Foreign Exchange
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GENERAL OBSERVATIONS a
The most essential element in the industrial life on anyotion is
an adequate supply of coal both for its industries and for the well-being
of its peoples
China used to produce 32 million tons of coal in 1937 when she had
not yet entered the war with Japans Of this amount about 12 million were
produced from the Northeastern Region (Manchuria), 11 million from the North-
ern Provinces, and 9 million from the rest, During the war in the years
1942'3, it was estimated by the Foreign Economic Administration of U. S.
Government that the annual production of. coal for all of China, including
Northeastern Region and Taiwan, was 72 million tons,
China is suffering today from a serious shortage ,of coal. Its mines
are currently able to produce at the rate of 23 million tons per year or
less than one-third of the tonnage produced in 1943*
This deficit is having a. serious effect on Chinas present economy,
coal being the main source of energy for its many small and widely scattered
industries.
This coal shortage also contributed to the distress, unrest and sick-
ness of the people, especially in the larger cities where fuel is required
for heating and maintenance of essential services,.
Finally the shortage of coal in China prevents any substantial coal
export upon which Japan and other Far Eastern countries are dependent for
commercial revival.
The cause of this shortage is primarily due to the condition
of the mines as a result of the war and its aftermath, A survey to
determine these conditions and the requirements for speedy rehabilitation
was made in 191i.6 by leading American mining engineers of the firm of,
Pierce Management, Scranton., Pennsylvanian Their survey shows that the
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malicious destruction., flooding., and disruption of power and railroad
facilities
All of the mines suffer from deferred maintenance due to lack
of equipment and materials., misapplication of machinery,9 lack of opera-
ting supplies and bad wartime mining practices
Much of the Japanese productive capacity cannot be restored
as it was obtained from outcrop openings by crude methods and the use
of forced labor. The age of such openings and the destruction subse-
quent to surrender has eliminated these tonnage possibilities.,
LOCATION OF CHINAS RESOURCES:
China is plentifully supplied with coal reserves which can be
developed to meet any requirements.
These reserves., classified million of metric tons.,are:
Total Reserves of Coking Coal 2,9728
Total Reserves of Anthracite Coal b6,ool
Total'Reserves of Bituminous Steam Coal 188,167
Total Reserves of Lignite 738
GRAND TOTAL PROVEN RE SERVES.MilLion metric tons
China ranks fourth in coal resources among the nations of the
world.
At China?s previous maximum production., these reserves would
last for 3, OO years.
The distribution of these reserves by provinces is'shown on
T a ble I in the Appendix of this report,
CONS UIR T s
The previous. acrd current coal consumption for different purposed
is shown in the following table:
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^I! 4 M
DISMIBUTION OF PRC WAR, WARTI6E AND CURRENT COAL CONStJIdlPTION IN CHINA
Esto Est.
1221-25- 19
Production
Imports
Total Supply
Exports
Available Supply
32,600 72,000 23,000
1,038 O (very small)
33,638 72,000 23,000
3,800 38,400 0
29,838 68,600 23,000
Type of Use
Railroads 3,210 12,0000 4j6Oo
Mines and smelters 3,200 12,000 1,200
Household and small industry 11,500 15,000 99200
Large tnffg establishments 7,200 10,500
Electric power 4*500 3,500
Military ..~..~.~ 6,000 .~........
Bunkering 1,964 3,1000 28,000
Residual
c/
Total 7oonsumption 29,838 68;600 23,000
As noted in the foregoing., the current rate of production in the
last half of 1946 to the first part of 1947 amounted to only twenty-
three million tons per year.
Even with the elimination of all export coal,, the amount avail-
able for consumption is less than one-third of 1943 production.
As pointed out in our general observations., the effect of
on railroads, electric power plants., household and small industries is
having a serious effect on China's internal economy, in its effort to
create employment and to stalilize currency in relation to other our-
As compared to a per capita consumption of coal in the United
a c u' es ouse old and small industry" and "large manufacturing
establishments"' categories.
Included in ;o
old } n categories,,
Res
AINVIf4 es ? e s : ili& ~78 m f asro umn
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States for industrials power and all other uses of five tons per person,
the maxis .production in China provided only one-eighth of a ton per
persona
There is, therefore, the necessity for promptly taking the fol-
lowing actiono
le Immediate rehabilitation of existing strategic mines to
relieve the present coal deficiency.,
Development of modern mines to provide for industrial
development and improvement in living standards.
PRESENT PRODUCTION:
The production of coal by regions for various years and at present
is shorn in the following table:
PREWAR. WARTIME AND CURRENT COAL OUTPUT IN CHINA BY R ONS
s
U M:30-0 metric ti
R ion
Manchuria
North China
Southwest China
Remaining areas
19
19ti6~-h7
11.9800 33,000 5
16,000 26,000 11
850 7,000 2p
39O 6
Total 32,9620 72,000 23,000
*Estimated figures (app.)
PIERCE RECOMMENDATION AND OUTLINE OF PRESENT PROJECT
The mines considered for immediate rehabilitation in the various
areas are shown on the map by colored pencil in the Appendix of this
reports
The selection of these mines takes into account their location in
relation to consumer requirements according to population and transporta-
tion, as well as their future value to industrial a pansiono
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The mines are listed in three categories., namelys First Stage
Government Mines, Second Stage Government saes, and Private Mines.
On August l.. 1945, Pierce Management submitted a summarizing
report on the material and equipment for coal mining required by the
PORT PROGRAM., total cost f.oob. American factories,, $9,#407p19OeO0p
total tonnage 23,O52e63 (Attachment 1). This program vati,=t um-
sited due to the earlier arrival of V-J Day. Thb.''J.utention
getting coal production from the mines then occupied by the Japanese
was., however, one of the major prerequisites for the anticipated success
of American Expenditional Force. The equipment suggested is also in
line with the general requirement for the rehabilitation of Chinese coal
m nese
Reports on the equipment and material necessary for the rehabili-
tation of all Government mines were submitted by Pierce Management to
the National Resources Commission of China under date of August 20, 1946.
As shown on Attachment t2 the summarizing report gives the capital re-
a,'uirement for immediate rehabilitation of all 1st and 2nd state Govern-
fY
meet mines, total amount required was UaS,? $399749,213.OO.
Detailed list of requirements were provided for several of the
first stage mines (Attachment 3)* These specifications cover only the
material essential to correct the machinery and supply deficiency in
order to obtain the necessary tonnages and maintain the property. This
equipment will conform.. howeverp to future programs of mine moderniza-
tion which are required to develop these-mines to full. potential. capacity,
In this project., it is proposed to rehabilitate and develop the
following mines s
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Fuhsin, Jehol Province - - to rehabilitate from present pro-
duction of 5,o000 tons/day to 100000 tons/day.
Peipiao9 Jehol Province - to rehabilitate from present pro-
duction of 1,..000 tons/day to 39000 tons/day
North China
Ksilan, Hopei Province (Private ownership) - to develop
from resent production of 14,000 tons/day to 15,000
tons/day
Chinghsing,s Hopei Province - to rehabilitate from present
standll condition to 5,000 tons/day
Chunghsing, Shantung Province (Private ownership) - to
rehabilitate. from present standstill condition
(largely destroyed) to 1,000 tons/day
Yi1o, Hunan Province - to rehabilitate from present small
production to 19000 tons/day
Central and South China
Kaokang (otherwise known as Kansi), Kiangsi Province - to
develop from present small production to 2,500 tons/ day
Hsiangtan9 (otherwise known as Chunghsiang.. Hsiangkiang, etc,)
Hunan Province - to develop from present 500 tons/day to
3,000 tons/day
ECONOMIC AND ENGINEERING JUSTIFICATION
The larger mines in North China and Manchuria previously supplied
from 35% to 40% of China4s coal production .w Fuhsin9 Fushun, Kailan,
and Peipiao Mines being the main contributors- Coal to Shanghai and
coastal cities was largely supplied by Kailan and other mines in that
vicinity at the port at Chinnwangtaoo
The December 319 1911.6, "International Coal Trade" published by
the United States Bureau of Minos, states in part as follows relative
to shipments to Shanghai-
'Iaaeoee Loadings since mid-July have become increasingly irregular-.
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with shipments during August and September, averaging just
over 120,000 tons each, a drop of 30.,000 tons from the pre-
vious figures Stock piles at Shanghail, at the end of
August were estimated at 125,000 tons, but in view of the
curtailed shipments from the Kailan mines it has been neces-
sary to draw on these reserves with the result that stock
piles at the end of October were down to 90000 tons or
15 days supply 6600#e6eeall
This condition, we are advised, is typical at all principal
centers throughout Chinao
In view of the troubled conditions in some parts of China, not
all mines previously considered in the First State group are proposed
for immediate rehabilitations
The above mines are recommended for rehabilitation as best located
to provide immediate relief, and having sufficient reserves to justify
future modernizations
Upon the completion of this project, which will be accomplished
in two or a little more than. two years, there will be an increase of
6015 million tons of coal per year in addition to the 6o15 million tons
of present producing rate., making a total of more than 12.3 million.
tons a year (Table II)
Aside from these-strategic coal mines, there are many other
mines in Chinas The aggregate production of both groups are about
23 million tons for the present year, out of which the 8 mines under
this project only contribute 6.15 millions After two years even all
mines of less important groups keep on with their old production,wwhole
China will produce 29x15 million tons of coal, which is almost equivalent
to the pre-mar figures,
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COST OF I IATE REHABILITATION,
Basing on the Pierce figures for those they had definite estimates
and following their standard of estimation for those they had not made
estimates, it is required a total Gaunt of US$ 24,3349426 for the
eight mines under this project. Since some equipment and materials
have already been obtained through UNRRA', and a previous loan of 1n5
million U.S0 dollars, proper deductions should be made from this amount.
There leaves a deficit of US$ 19,023.,815 for all the projected mines.
Taking round figures and making slight modifications in accordance
with recent developments., a budget of US 17$500.,000 is necessary.
(Table II) This amount is distributed as followst
Fuhsin
3$9OO9000
Peipiao - .----- ~?~, ~...
800,000
1
300
000
Kailan
$
,
Chinghsing
,500,000
Chunghsing
~-
-~
1,000.,000
Yil
500
000
cr
K
k
----- - ?- -
9
6
500
000
ang ,
ao
,~ - .:., -
,
9
H
i
t
0 000
3
an -
ang
s
..~
Total
In this list the amount required for Fuhsin and a few others
are far from sufficient. They will be so allocated just for a start.
The Ka .l.an mines, Hopei Province., are jointly! coed and operated
with British and Chinese capitals. They have never suspended in work
since their establ.ishmente They suffered no loss in wartime., therefore
their development vork is quite easy to be carried out. Chunghsing in
Shantung Province is the mine entirely owned by private capital and
suffered serious loss for several times occupation of the Chinese Comm
munistso The restoration work will be most difficult and requires much
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more money than the above allocation. The Kaokang mines in Western
Kial sl will produce coking coal supplying the iron and steel works in
Tayeh, Hupei Province. Such new developments require a relatively larger
amount of fund. Hsiangtan mines in Hunan Province will also help in
this work. As to the other mines, their increase in production as
planned in this project cannot as yet reach their peak production in
the pre -mar days.
Some of the Northeastern mines, such as Fuhsin and Peipiaoe can
produce mores if more money is allocated to them. But being situated in
a somewhat disturbed areas they are only restored to such a degree as
they are required to contribute necessarily to the serious shortage of
coal in other parts of China, Their extensive restoration work will
therefore be left to a later dated
.The mines selected are those which are susceptible to rapid in-
crease in productivity, and accessible to rail lines to consuming cen-
ters. The mines in North China can ship their product to the Ports of
Hulutao, Chingwantaos, and later through Dairen to supply coastal cities.
MATERIAL AND EQUIPMENT E UIRED o
Mile the requirement, for each mine is different,, the material
and equipment wanted is, in general, of the following categories:
PowerPlant
Hoists
Fans
Pumps
Compressors, jacckharmnersg and accessories
Core drilling equipment
Mine and railroad ears
Steam locomotives
Mails and accessories
Lubricants and paints
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Rope9 manila and wire
Rubber hose
Miners tools
Machine shop equipment
Machine shop accessories
Machine shop tools and supplies
Electric cable and wire
Leather belts
Pipe and fittings
Structural steel and material
Mine lamps and charging equipment
Telephones
Office, surveying and drafting equipment
Mine timber
Coal laboratory equipment
Emergency hospital equipment and supplies
Engineering and supervision equipment
Coal stripping equipment
Rotary dump., skip and sinking buckets
Marie Rescue apparatus
Screen and picking table equipment
Dump truck and automobile trucks
Miscellaneous supplies
Miscellaneous equipmento
ESTIMATE OF REHABILITATION COST AND AMORTIZATION OF LOAN:
On the basis of the foregoing figures., a loan of $17,500.,000 (US)
should result in reestablishing China's prewar production and provide
a sound basl.6,for further expansion of coal production as contemplated
~k?
in its industrial program.
Based on a loan of this amount., carrying interest at a rate of
2-i/2% and an amortizing period of 25 years, it will require annual pay-
meets of $950?250 to liquidate the loan with interests
Based on a production from these mines of approximately twelve
million tons per year,, the amortizing charge is eight cents per tone
Due to scarcity and inflation, current costs are not representa-
tive and are of little use in determining normal, representative peace-
time production costso
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The present day average production per man for Chinese coal mines
is Oo25 tons per d.ay4
This compares with an average production of three tons per man
in Pennsylvania Anthracite mines having similar mining conditions.,
In order to establish a sound industrial economy., greater effi
ciency must be established in Chinese mines, not only for reduction in
operating cost, but also as means of reducing capital cost of new
projectso,
A comparison with the Anthracite mines of Pennsylvania which
have similar conditions should prove of interest in determining the
relatively financial ratios between these mines and the Chinese mines
being consideredo
ANTHRACITE
MINES
CHINESE RFC;
HABILITATION
Capital invested per ton. annual
$8,O0
$lo40
output
Amortizing Charges
038
08
Amortizing charges in relation
to investment
14o7%
. 5e5%
Tons produced per man day
3
25
The rehabilitation material when added to existing plant and
equipment of these mines will create a "going concern" value of approxi
mate1sr $5050 per ton., and result in an amortizing charge of only 2%
of total investment,, compared with 67% of similar mines in the United
States*
The foregoing favorable financial ratios. and the extremely
present law efficiency of Chinese production give assurance that moderni-
zation will result in. greater efficiency end cost reduction and that
the proposed loan can be safely made on a self-liquidating basiso
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The problem is not only one of engineering,, financial and political justification,, but also one of finding the foreign exchange to
meet loan amortization requirements.
In order to assure adequate foreign exchange for repayment,, we
propose to allocate a portion of the tonnage for exports from these
mines to (a) Japan,, (b) Philippines,, and (c) Hong Kongo In parti
char,, the occupation force in Japan have pressed their requirement for
a very substantial quantity of coal.
It should be possible to export a minim= of two million tons of
coal per year to these sources which should provide foreign exchange to
the extent of approximately $20,,000.9000 (U.S.) per year,.
If only 10% of the value of these exports is earmarked for amorti-
zation, it would provide two million dollars per year for loan retirement.
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APPENDIX
COAL RESOURCES OF CHINA
PROVINCE
TOTAL ESTIMATED
RESERVE
ons o
AMMCI
e r c ons)
BITUMINOUS
Kiangsu
217
2S
192
Chekiang
100
22
78
Anhwei.
360
60
300
Kiaxgsi.
992
216
776
Hupeh
0
160
280
Hunan
1,764
1
043
21
Stechwan
5,989
.9
5.9764
Sikong
531
3
401
Yin
2,707
11
1,266
Kweichav
1,788
774
1,014
Kwangsi
300
300
421
50
371
396
291
105
SWkiaang
60000
6,000
Ch nelit ?
500
600
Kansu
1
1
500
Ninghsa
Shensi
0488
719950
X66
750
,
322
71,200
Honan
70764
4,9455
3.9309
Shansi
127,127
36,471
87,985
Shantung
1,9639
26
1,613
Hope4i
.
3,
981
2,088
Suiyan
476
58
396
Chahar
504
17
487
JeY Q .
614
2
573
oning
1,836
187
1.9649
t
1
1,143
2
986
Heilung Kiang 1,017
6
TOTAL
Z? bit
rcv3ff
19-61-T95
LIGNITE OF.TOTAL
27
1,430
2,,671
,149
-4n
9182
20479
.220
1.120
s7.0
6124
$174
2,483
,207
e621
.202
29.776
3.213
5261x.
.678
2 10271
39
155.
392
x197
.209
,6254
4760
X421
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15
TABLE II PRESENT V'S PROJECTED PRODUCTION OF COAL CONES
Present . Projected Minimum Rate to be increased
Produc Rate Producing Rate in this lan
Item
Not, Mines tons/day tons/year tons/day tons/year tons/day tons/year
Fuhsin
5,000
1x5009000
10,000
39000,000
5,000
1,500,000
2
Peipiao
1,0000
3009000
3,,000
9009000
600,,000
3
Ka lan
119000
J ,,20O,,0OO
159000
495009000
19000
3009000
4
Chinghsing
-
3,000
900000
39000
9009000
5
Chunghsing
m
-
1000
3009000
1,,0?0
300,.000
6
Pilo
s :7.1
production
1
400
000
300
19000
000
300
.
9
,
,
7
Kaokang
small
production
5,000
1500,000
5,000
1,500,000
Hsiangtan
5OO
150,000
3,000
900,000
.29500
7509000
20,500
6,1509000
41,000
12,300,000
>.0950o
691509000
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TABLE III COMPARISON OF REQUISITIONS
Original Requisitions
1, 2459832
Thte 'by Estimated
Item P iage-Accordinc to
11 Noe Mines went Piercees Stdsa UNRRA,
1 Fuhs3 --75-2,624
Peipiao 1,179,542
3 Kai an
Chingghsing 29127,445
Chunghsing -
5
Yilo
192889483
Kaokang
Hsiangtan
m
Total
11,393,926
Allocations Already
Obtained Thru
Adjusted re-
Previous quisiti?ns for
Loan Deficit 'this loan
9Ot10 , 2,624 - y ,0OO
4OO9000 779s,542 800,x
1,245,832 193009000?
Q,249 15o9OO0 437,196 5008co0
128,00
128
000,000
000 1
1
1,
684
524
000
150
.,
9
,
000
959 500
453
-
7,98750000
3 937,5oo..
.9
876,551
.7090287
.9
25b,000
,
S
6,998,499 695o0,ooo
299789213 3,000,000
12,94O,500
3,810,611 1,,5OO,000 19,023,815 17,500,000
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DEVELOPMENT. OF PRODUCTION
OF. MINES FOR EXPORT
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2
Projected Centel. Investment
Domestic
-,s4 Loan Investment
R d, Planned
Tin mines US$ 1009000 U5$ 2x,5009000
Tungsten mines 3,000,9000 Ii,
Antimony mines Eke00 O0
us$ 695o0gooo
F ct on Prodtion a ad Pofits
Annual. Production Mice) of Annual Profit
Preen o cc e? d Increased. Product* f In'crease3 d
Tin mines 1x000 motto 5,000 noto US$ 3P168 000 u s$. 5280000
Tungsten mines li. 000 flit o 14000- mote 10 675?9000 2,,86o000
Antimony mines 2000 Moto 12,000 Moto 20200,000 .880 ,000
*Value basedon estimated long-range prices; current prices are much,.:highero
Thus, assuming-the requested credit were amortized over twenty
years, it is clear that it. could be carried and repaid without difficultyo
i C asol.dated Tin Corporation
u ufin&i ovance
The tin deposits in the Kouchiu areas about 360 kilometers south
of Kuzm~..iug., are. the best in Chinao Before the war exports. of tin from this
area averaged about 9,,000 shortlns per year,, derived from a number of
native mines and small smelters as. well as from the operations now controlled
by the lumian Consolidated Tin Corporations The Japanese.. blockade cut off
Kouchiu from outside sources of . supplies. and from markets. abroad,, and the
plant there was bombed repeatedly by the Japaneseo, Thus during the period
1941-1945 production of tin was - reduced to about 3,9000 short tons-'. yearly.
Since-the war- because of the continued inability of the mines to obtain
necessary supplies and equipment, annual production has been further reduced
to about 1,l00 short tons of refined tin (99.8% Sn) o
The National Resources Commission . hopes eventually to expand the.
output of the Yuman donsolidated Tin Corporation mines to 10,000 to ]2,000
long td per yearo It is: planned to put into effect immediately the initial
recommendations of the survey made by Behre Dolbear & Company" (Exhibit 10, )
requiring an estimated capital. expenditure of $235,000 to bring the mines o
production immediately up to 21,000 tons per yearn TJpon the completion of
necessary detailed s 'eys additional. work is planned to-raise annual pro-
duction to 5,000_ metric tons., of which 90 per cent would be available for
exporto It is expected. that ' this program can be completed within three,
years.
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3
Total costs for act ' :did materials to be purchased in the
United States are roughly a t '.as follows:
Transportation equipment
US$ l05,000
Mining equipment
250,000
Concentration equipment
4909000
Smelting equipment
4450000
Laboratory equipment
Total
US$ T9 TOT 9mo
Plus 15% estimated for freight and insurance 19 4.6 0o
Grand Total Us$ 1, 5008000
Expenditures in China estimated as equivalent to 'US$29 OOx,OOO w al also be
regiredo
It is difficult to make an accurate estimate of production costs
in terms of U. Se dollars in view of variations in the value of Chinese
currency's the past two years, The cost and profit estimates. prepared
by Bebre Dolbear present.a very conservative picture. They estimate the
cost of producing tin at Kouchiu at $0e296 per pounds calculated on the
basis of the rate of exchange (CNC$p2,020 to US $l) in effect as of August
1946,- since then the official.. rate of exchange has changed to CNC$l2a00O to
US81u
The cost of transportation from the mines to New York is estimated
by Behre Dolbear at $00165 per pound. On. this basis the total cost of tin
delivered in New York would be approximately 1.60 per pound, The market price
in New York is now about 7"0? per pounds On this basis,,_refined tin would
yield a net profit in New York of about 240 per pound? or $480 per short ton.
The projected annual production of 5,000 metric tons per year at this price.
would yield a profit of approximately 42,640,000 annually to the Yunnan Con-"
solidated Tin Corporation,
The sale abroad of 1,9500 mot, of tins at a price of 700 per pounds
mould provide China with foreign exchange amounting to over $6,000,000 per
year.
As Behre Dolbear & Companyas report points out, the psent market
price o?' tin cannot be expected to-continue at its present levels considerably
e the prewar price or the controlled wartirme. price, . However it may be
assumed that as the world price for tin declines,, the cost of deli ?ing
Chinese tin to the United States will also tend to decline substantially as
a result of the reduction in the ebitant transportation costs from the
mine to an ocean porte Moreover, ?o. Chinese production and transportation
costs ohn in the Behre Dolbear report are based upon conversion of Chinese
into American dollars at a very low rate of exchanges
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M.4..
` 'Elmist Tungsten Mitres
The wolfram mines: in southern'Kiangsi have been in `$he- past the
largest producers of,tungsten ore in thi3 world, because of their rich
deposits. the ease of operation and the'avaiilability of cheap labor,
Probable reserves of the four principal. wines are estimated at 550,000
tons of 65% W03, Prewar operations were very primitive, completely
vnmechanized,
As a result of the war and the occupation of this. area by the
Japanese, the mines were shut down for some time, Resumption of produc-
tion has. been hampered by much higher labor costs and a lowering of the
grade of ore processed. Thus mining efficiency must. be increased through
mechanization if the prewar levels are to be regained and maintained.
According to the report of Behre Dolbear & Company (Exhibit I7,
page 2), "the present ore exposures, although not systematically.sampled,
analyzed or mapped, leave little doubt that potential reserves are larges,
and suggest that adequate development may establish them..to.be the largest
reserves in the world,tEE
Average annual. production of tungsten. concentrates (60%10 basis)
from southern Kiangsi deposits in the. years 1936-1943 exceeded 8, metric
tons per year. Present production, under difficult and often primitive conditions, is at the rate of about 4,000 metric tons of 65% 'W03 ore, The
N'RC plans, through further development and mechanization of mines, to reach
an annual production of i4,000 metric tons of 65%.WO tungsten ore, of which
95 per cent will be available for export. It is estted that this program
can be completed in three years
The requireaents of equipment and supplies from the United States
required for completion of this work total an estimated $3,000,000, divided
roughly as follcros9
Power plant. equipment
rS$ 690,000
Development equipment
368,,000
Mining equipment
t88
9.0Oo
Milling equipment
,
5oop
Transportation equipment
8sooa
Ore testing. equipment
80.2000
.
Machine shop equipment
67,ILOO
Road construction equipment
320,9000
purveying equipment
Other materials
20,000
Total
US$ 206089400
Plus 15% estimated for freight and Insurance
Grand Total US$ 3,000,000
In addition, an investment in Chinese currency is requii`edq estimated as
the equivalent of U44,500, ,
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AAcording to the Behre Dolbear report (page 9)p "Quotations for
tungsten ores and concentrates, duty paid, at New York., have.held.at around
MOO per short ton unit since l911, a.period of 5 years, This is equivalent
to slightly more than $16so0 per unit. for Chinese ores (before duty) a e .- s
Assuming freight and. handling . charges on. ore from. Chinese. mines at 6o oo per
tons the present value of tungsten concentrate at the Kiangsi operations would
be about 500 per ux ta"
On the basis of their surveys of four mines, and assuming a. value
of $l50O per short ton unit at the mines, Behre Dolbear & Company estimate
the profit per short ton unit of ore at from $3050 to $4,82 at current prices.
Ore of the quality to be mined from these deposits would yield a profit at
any price dorm to and including $10.00 per. unit. of W0 , Assuming $1&.O0
profit per short ton unit, the profit on 65% W03 Lung ten concentrates would
be $260 per short tong or.. about. $286 per metric. ton. A production of ;11.,000
metric tons per year would yield a total profit of over $4,,000,000.
The export of 90. per cent of this production would bring China over
13,500,000. in foreign exchange-
Haikuanshan timony Mines
These mines located near S.inhua, Hunan Province, have long been
the world's most important source of antimony. Reserves are estimated at
some 500$000 tons of antimony metal. Before the war these mines produced
about 10,9000 metric tons of antimony regulus (99.8% Bb) each years During
the war the mines were shut dawn, and subsequently some caved in or were
flooded owing to lack of maintenance, There has. been little min g 'activity
since.. operations were stopped by the Japanese occupation in 194
In the past, antimony mining and smelting. operations in this dis-
trict have. been qu to primitive, .using tools and powder of local manufacture
and depending solely on manpower to bring the metal out of the mine, Only
the richer ore was extracted, Inefficient. smelting operations produced a
waste slag of high antimony content, and lost over 20 per cent of the metal
in stack gases for lack of adequate cooling and condensing equipment,' As
the depth of the mines has increased these primitive operations have become
more difficult and expensive and in.soome cases mining has been stopped by
underground waters Immediate rehabilitation and mechanization of operations
is essential if Chinese antimony. exports are to recover
The NRC Os plans envisage an increase in the production of these
antimony mines from the present law level of about 2,000 metric. tons per
year of antimony rem us to 12,000 tons, of which about 80 per cent will be
availab,e for export, It is estimated that the development program can be
completed In three years.
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The requirements of equipment and supplies from the United Mates
this work total an estimated $2,000,000, divided roughly as followso
Power plant equipment
Exploration equipment
Mining equipment
Concentration ec ipment
Smelting equipment
Us$ 450,000
130,000
350,000
1000 000
71t?
US$ 197.01,000
Plus 35% estimated for freight and insurance 260 000
In addition, an investment in Chinese currency is
equivalent of US$3rOOO,O00
required, estimated as
The tentative cost estimates contained in Hehre Dolbear & Compa y s
report (Exhibit 111) indicate-a coat of about 60 per pound of antimony recovered,
or about $132 per metric tonb The metal would have a sale value at the mine
of at least 10? per pound or $220 per tone (At the current high New York
price of about,300 per pound the value would be more than doubled; moreover,
the projected rehabilitation of the branch railway from 3inhua to Hsiangtan
would greatly reduce transportation costs and increase the value of the metal
at the mines) On this basis a production of 12,000 meta of antimony regulus
would yield a profit of $936,,000 annually.
Assuming that 80 per cent of the metal were exported the return to
China in foreign exchange would be at least 12,000 x $220, or $2,b40,000 per
yearn
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6
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Tientsin, 4th August, 1947.
Statement of Tugs and Lighters available for
Transportation of cargo in Tientsin Harbour
August 1947
---------------
----?---------------------
Tugs Li
tern
Ile ad weigh. t
capacit
y
Tientsin Lighter Co. 3
14
6,540
tons
China Merch
t
St
an
s
eam Na\ on Co
14
18
.
8,350
Dah Iowa (Great China Corporation)
2
3
800
Li en Mao
3
5
1,600 '
22
40
17,790 tons
NB. In 1940 the number of craft
Tientsin was:
registered with the Customs
Tugs
97
below:--
Details of Tugs & Lighters
Tientsin Lighter Co,
Li ters
9
3
2
Tug's
k' A " Class liF .tern
ti C rt rr it
2 Nos, 1& 2
1 Chenyang
Dead Weight
Li ters ca cifv
208 60,000 tons
present available are given
Ca city
450
550
420
707-h14
4050
1840
0
5540 tons
350 h,p, Capable of toie;T 2 li ght er s
450 h.p,) Taku Bar to Tentsin.
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China Merchants Steam Navigation Co.,
Li s l i t e L i t e r s Capacity
7a7A1,
5 "D" lighters 500 2,500..-
4 No. 31, 3 5 7 . 5500 00 2, 000.-
4 Nos. Lu '3,4,10,12. 450 1,800.-
1 Fengten 600 6000-
1 Taku 500 500.-
1 Kai Ping 500 500.-
1 No. 140 450 450.-
18 8,8500 tons
Tugs
1 Kuo Tsin
1 Kuo Lan
1 Kuo Wan N.P. varies from 200 to 400. suitable
1 Kuo Loo for proceeding to Bar but in some cases
1 Kuo Tsang towing only one lighter at a time.
1 Kuo Chi
1 Kuo Tung
1 Kuo Ku
1 Kuo Yung
1 Kuo Shu
1 Kuo Tang
1 Kuo Yen
1 Ho Yu
1 F'ei Lu
14
Suitable for River only towing one lighter
at a time.
Suitable for river only, not for towing.
Dah Hwa (Great China Corporation)
Lighters Capacity
2 Nos. 101, 98 200 400 for river only
1 No. 146 4,00 400 for TakuBar
3 800 tons
Hwan Ho about 350 I .P.. suitable for
Pei Yien ~ proceeding to
Taku Bar.
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3 -
Lien Mao
Lighters Capacity
ERG,- YVW
1 !sin Foo 500 500
1 Hsin Lee 350 350 Suitable for
1 Kiang Cheng 300 30?) Taku Bar.
1 Kiang Ping
1 Nsin Mao 150 150 - For River work only,
Tugs
Tien Lung
Tien Yun
Kwong Yi
1600 tons
Suitable for towing one lighter
250 H.P. at a time o
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Next 1 Page(s) In Document Exempt
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 Approved For Release 2003/12/02 : CIA-RDP80-00926A00770053000
DEVELOP E.:NT
OF.
FERTILIZER PRODUCTION
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I. INTRODUCTION AND S1Th AR'Y
FERTILIZER PRODUCTION
The healthy development of the Chinese economy and raising of the
living standard of the Chinese people depend in large part upon an expansion
of agricultural production. As a result of very intensive cultivation of
Chinats arable land over centuries there has been serious soil depletion in
many areas, accelerated during the war. The natural fertilizers tradition-
ally used to restore the fertility of the fields have been insufficient in
quantity, and it is necessary to supplement them. Extensive experiments with
chemical fertilizers indicate that their use would substantially increase the
yields of the most important Chinese crops; one ton of fertilizer will increase
yields of rice, wheat, cotton, or other products by as much as three tons.
Chinese imports of chemical fertilizers expanded steadily before the
war, reaching a peak of nearly 168,000 tons in 1937; in ac~i-t; nr+ e~,^?,t 109,000
tons were used in MManchur a under Japanese control, and over 300,000 tons in
Formosa. If wa no rup d it is probable that the expansion of
fertilizer imports would have continued. The use of chemical fertilizers in
China, hcnvever, is still substantially below that of other major countries.
To obtain maximum benefits it has been calculated that nearly 11,000,000 tons
should be used annually.
Chinats present production of fertilizers is very small -- only
about 85,000 tons annuallyo Because of the world shortage of fertilizers,
also, it is diff cult o increase imports substantially. A considerable ex-
pansion of the Chinese capacity can be effected, however, at relatively small
cost, and will result in very substantial benefit to Chinese agricultural pro-
duction. The National Resources Commission of China has developed a project
for production of fertilizers at the rate of about 630,000 tons per year --
comprising 426,000 tons of ammonium sulphate, 34,000 tons of ammonium nitrate,
and 170,000 tons of superphosphate. The details of this project are summarized
in the following pages. A credit of $50 million is required for the purchase
of necessary equipment, supplies and services in the United States.
The estimates of the National Resources Cmmaiasion are based on the
cost of new equipment. When it appeared that part of the necessary equipment
might be obtainable from United: States war surplus, National Resources Carlaission
engineers developed an alternative plan for producing substantially similar
amounts of fertilizer using the facilities available in certain ordnance plants
in the United States, which would have required only about $32 million credit.
The Chinese Supply Commission, on behalf of the Government of China,
has already bid on certain of these surplus facilities, and is exploring the
possibility of obtaining others. It is probable, however, that many items
essential to the NRC plan will not be declared surplus and will have to be
`? purchased from new production. Thus approval of the full $50 million credit
is requested, It is th?'Chinese.Government's intention, however, to obtain as
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much as possible through surplus channels, in order to reduce the cost of
the project and to save as much time as possible in the procurement of the
equipment,
The estimated profits from the sale of fertilizers in China will
easily suffice to carry these credits and amortize them over it per.3 ,o
15 years. China's foreign exchange balance will also be aided to a
substantial extent by the increase of agricultural production and the'`'con-
sequent reduction of food imports into China. The value of the increase of
crop yields to be expected from proper use of the 630,000 tons of fert :lizer
produced by these plants is conservatively estimated at nearly 0800, d1 on
per year.
II. WED FOR FERTILIZERS IN CHI 1A
China is basically an agricultural country -- over 80% of the
population are farmers -- and any healthy economic development or permanent
rise in the Chinese standard of living must depend in substantial part upon
increased agricultural production. China's arable land is generally culti-
vated very intensively, producing two or three crops a year in moapr areas.
This has resulted in a considerable depletion of soil fertility over the
years -- a process which has been accelerated during the past decade of
war to that the feeding of the Chinese population may present a growing
,problem.
Even in the normal years before the war large quantities of food
had to be imported. Statistics in the Sun-Pao Yearbook of 19314 shoal annual
average imports of 16,000,000 piculs of rice, 11,000,000 piculs of wheat,
and 5.000,000 piculs of wheat flour for the period from 1923 to 1931g. Since
the defeat of Japan it has been necessary to supplement domestic food pro-
duction with UNRRA shipments and foreign purchases by the government.
Experience has demonstrated, however, that increased use of ferti-
lizers will greatly increase the output of food and other agricultural pro-
ducts. In the past manure has been the major source of plant nutrients in
China, but it has not been available in sufficient quantity. It must be
supplemented by chemical fertilizers.
The first recommendation of the recent Hutchison Agricultural
Mission is "that increased emphasis be placed on the construction of chemical
fertilizer plants;"t and their Report goes on to states
"AA substantial increase in the use of suitable fertilizers
would add a great deal to the national production of agricultural crops.
Careful field tests, conducted by the National Agricultural Research Bureau,
have shown that the use of fertilizers,, particularly nitrogen, usually gives
significant increases in yields. Phosphorous fertilizers are needed in a
few numbers of cases, and potash still less frequenter,. Japanese found,
both in Japan and in Taiwan, that it is profitable to use;: substantial appli-
cations of chemical fertilizers in addition to the usual forma of manure-
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ca y used in China today. Besides increasing yields, fertilizers fre-
quently increase the mineral content of crops, thus improving their nutrient
value.
ds.The most proniisi.ng source of additional supplies of fertilizer
appears to be chemical, fertilizerse While an improper use of such fertilizers
may not increase yields, when used properly they give excellent results*",
"'Chemical fertilizers will not be used widely in China until
they are offered to farmers at a price whn.oh makes their use profitable. Tbey
were not so offered in mare parts of China before the war. It would appear
more likely to occur in the future if. a large part of the needed supply is
manufactured within China,
"'The element of plant food most in demand is nitrogen. For
rice, ammonium sulfate is the nitrogen-bearing fertilizer in common use-in
most countries. Tests have shown that atc`a :ur nitrate loses a part of its
effectiveness when applied to rice paddles,, but it is a good fertilizer for
upland crops like wheat or cotton.
"The current, demand for n'i.trogen fertilizers; in all parts of
China, including Taiwan, is some-where around )400,000- metric tons a year, but
officials of the National Agricultural Research Bureau-believe that the
lsy
demand is likely to, increase rapidlyo Taiwan alone consumed in 1938 near
300,000 metric tons of nitrogen fertilizers, the average application being
about 50? kilograms of nitrogen (equivalent to 250 kilograms of ammonium
sulfate) per hectare Although.. this Mission has not attempted to estimate
carefully the probable demand for fertilizers it seems reasonable to 'believe
on the basis 'of information at hand, that the demand in all of China could
shortly; become several times greater than at present, provided fertilizers
are offered at reasonable pries and an effective agricultural extension pro-
gram is undertaken to teach farmers the value of their uses".
l ports of chemical fertilizers began some years before the war, as
shown in Table .
Fertilizer mpOrts Into -?Chi 1928 ]937
j in metric trans)
Y
ar
Fertilizer
aoxn Su]ahat~;
Phosphate
and. Others
Total
.
e
1928
106.,279
1Q6,279
1929
100,9
48,603
149,517.
1930
193 9361
40061
933,722
1931
11 O,t.i36
3b.,399
174,835
1932
113,521
3 1303
116,824
1933
101,271
ts.19685
1069156
1.934
49,948:
3,865
53,833
1935
68,633
,
2,576
71.9509-
1936
796
122
2,716
3259.512
1937
y ,434
48187
167,621
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3
 Theaparentc d IN R! r 0 -Q3926 WoA- ee
ill occu a ono Manchuria and-the subseuen exclusion of Manchurian imports
fr she ne _ ustoms records By 1937x, owever, imports of fertilizers
for na south oft ea had increased to nearly 168,000 metric tons,
and it is probable that but for the outbreak of war ferti.IS e 'r nsurimption in
China would have continued on this upward trend. In addition to the imports
shown in this table the consumption of fertilizer in Manchuria amounted to
about 100,000 tons per year, and in Formosa over 300,900 tons, which must now
be included in the Chinese requirements.
Effect of Chemical
Fertilizers on Chinese Production
The reaction of Chinese soils to chemical fertilizers is very favor-
able, Mr. N. F. Chang, Head of the Soils and Fertilizers Department of the'
National Agricultural Research Bureau, gives the results of 271 experiments,
conducted at 85 localities in 14 provinces, from 1935 to 1940. The increase in
acreage yields of rice, wheat, cotton and rape seed achieved by applying chemi-
cal fertilizers are shown in Table II below, 65% of the 85 localities showed an
increase in economic returns from rice production by the use of nitrogenous
fertilizers. (Table III on page 5). In studies of soil deficiencies it was
shown that nearly all, the rice-producing areas suffered from a nitrogen deficiency
and that a similar deficiency in phosphates existed in a substantial proportion
of these localities. The deficiencies were less serious in areas devoted to
other crops but were nevertheless of considerable importance (Table IV.).
The average increase in production obtained by using proper chemical
fertilizers is summarized in Table V. According to Or, J. L, Buck's survey of
16034 farms located in 150 h,iens and 22. provinces in China, for the years
1929 to 1933, the average yield of rice was 2,310 pounds per acre and that of
wheat 980 pounds per acre. These figures correspond generally with those given
in the International Agricultural Yearbook for 1933 and 19314, which show 2,666
pounds of rice and 1,003 pounds of wheat per acre. Based on Dr. Buck's figures
an increase of 31% in rice production would raise the average yield for China
to 3,,030 pounds per acre,, and an increase of 23% for wheat production would
raise the yield to 1,200 pounds per acre, These expectations are by no means
unreasonable, as can be seen by comparing them with the average acreage yields
for these two crops in other countries shown in Table VI.
Increase of Acreage Yields from. Apply11 Chemical. Fertilizers
Increase pounds in acreage yields achieved by using
Ammonium sulphate at
Superphosphate at
Potash sulphate at
Crops
rate of 261 lb. acre
rate of 290 lb./acre .
rate of 106 lbajacre
Rice
753
.
5314
1100
Ilheat
726
321
Cotton
265
140
118
Rapeseed
334
398
164
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TABLE III
Crops
Rice
Wheat
Cotton
Rapeseed
Increased Economic, Returns Gained by Usi
as
Chemical Fertilizers at ariou8 Loca.l.itie
of LocaltieahainIc?~ae in Economic
w,. ~. .
Phosphatic
Nitrogenous
Fertilizer 'Fertilizer
gr~WV[TrSMY,MSg~.ws5.6xW V yFia~ ~~'C%~O'+~~"~'~-'M~"
69 32
214 16
45 16
39 39
7
26
TABU IV
Defia.ienries of Plant Nutrients in
Ave,ra e Increase in Fnxm Production
Usira
'rra1er Chem1c:a1 Fertilizers
?o s
Avera a Increase of Production
Rice
33%
Wheat
23%
Cotton
26%
Rapeseed
18%
T.IUL; VI
Pox -nta .7f .tcac i .ties' a ,c ri _ fi,c .eneies in Plant Nutrients
Nitr^gen Ph2 ha , Po h
Rice
96
45
18
Wheat
71v
31
9
Cotton
42
01
24
Rapeseed
85
. _5,
16
Yield of Rice and Cheat
in aria Countries ~'
Cta
Italy
:Rice
4076 lbs/acre
tai
1253 lbs./acre
Japan
3212'
x.57
Thdia
2267
65:x,
Great Britain
101
U.S.S.R.
1b87
616
U.S.A.
2.1.1.2
634
C*, noslw
1(93)
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Returns
Potash
Fertilizer
 Total ui.reAys ttbsv863FAW6 0 ~ IA-RDP80-00926AO07700530001-0
Aacordirg to 'o N. F. Chang, to increase total. ar production
in China by the ro . re e , , of
airs torsi um sulphate, 'f " one osp tons of
potash s phate ann a ion Japanese records show a ' consumption
of fertil zere in Formosa of 350,000 tons annually. Thus tote, t hirssea
fertilizer requirements amount to a little lees than 12, ', OOO tone per
year.
This level of fertilizer consumption cannot, of course, be achieved
in the immediate futures The demand for fertilizers is acute throughout the
world and there is a current shortage of production capacity Vhieh will pre-
aumabl r continue for some time to cono. Fertilizers are still unc r alloca-
tion. Total production in the United States the principal producer of
chemical fertilaizers, amounted in 1946 to something over 12J million tons,
principally (so far as nitrogenous fertilizers are oonuer ed) emmoniwn nitrate,
which is unsuitable f or use in Chinese rice fields. The UNE A program for
China called for shipment of 316,150 tons of fertilizers in the year 1946-171
because of the shortage, only 70.,00 0 tons have been delivered.,
China cannot hope, therefore,, to increase its imports of ertil.izer
very substantially in the rear f~ztureo Moreover, the oter Arid and ocean
freight and handling charges for imported fertilizer greatly increase its
cost to the Chinese farmer. The current price of imported ammonium sulphate
in Shanghai is CNC 10,000 OCR. per ton (United Credit Information Bureau, June 2,
1947), equivalent to v8033 at the official rate of ezchangeo Obviously such a
price is far beyond the means of the ordinary farmers It is much more economical
and practical, therefore, to establish plants for fertilizer production in China
as recommended in the Hutchison Mission Report, quoted 'above.
Existing capacity for fertilizer production in China is very sllo
Japanese bombing completely destroyed the Canton Fertilizer Works, including
a newly finished amonium sulphate plant. The '''ungii Chomic,: : Company's capa-
city has dropped to about onie-half its former level as a result of destruction
and misuse during the Japanese occupation. parts of the equipment from the
Chinei Refinery, which could have been converted to a fertilizer plant, were
removed by the Soviet forces and: additional equipnent has been destroyed by
the Commix istsa At present there is a single plunt of the "Tung li Chemical
Company, producing about 70 tons of aznmoni um sulphate per day; it is hoped to
expand this capacity within the next two years tc, about 220 tors per day There
are also three plants in Forracsa producing 200 tars of cyanamide and superphos-
phate fertilizers. The total production of the entire country at present is
thus only about 8 5,,000 tons per year.
III, PLANS FOR INCREASING CHM- SE 1 ERTILIZ?t P C TION
The National. Resources Commission has plans drawn, sites selected,
a skeleton organization established, and key personnel trained for the con-
struction and operation of ,new 'plants for producing sxmnoni um sulphate,
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ammonium nitrate and superphosphate. These plants will be located at
Canton and at two locations in Taiwan respectively. A brief description
the plant sites is attached as Appendix A. Their estimated cost is as
Canton ammonium sulphate plant US 2ti,UUO,0U0 plus CNC240,000,UUO,000
Taiwan ammonium sulphate plant
Shinchu on the Northwest Coast
of Formosa U5'0l79UO0,00O Plus CNC 120,000,000,000
Taiwan superphosphate plant
Kao-shiung (Takao) US_ ; 9 OOO_ rLO 21,us CNC 10,,000,000, 000
Total US'$50,000,000 plus m4cs4OO,000,000,,000
These locations were chosen for the following reasons (See also Appendix B):
1, They provide easy access, to raw materials. All three
are on the seacoast near adequate port facilities.
Coal and coke can be brought either from North China,,
or in the case of Canton,, from -mires located near the
CantonHankow Railroad. Pyrites deposits at Yingteh
125 kilometers north of Canton on the railway,. and at
Kingkwasheh (Kinkaseki) and Suaifan in Formosa will
supply most of the requirements for sulphur. Sulphur
is also produced at the rate of about 30,000 tons per
year at Taitunsan in Formosa, and the production can
be expanded,
2. Upon completion of the planned rehabilitation of power
facilities in the Canton area and in Taiyuan, adequate
cheap power will be available for the, fertilizer projects.
3, All three locations are ideally situated in relation to
markets and especially to the areas in which fertilizers
are most required. Taiwanes sugar production requires
large quantities of fertilizer. Canton has traditionally
been the distribution center in China proper for ammonium
sulphate and the need for fertilizers is especially great
in the rice-producing areas of South China which will be
served by the Canton plant.
Table VII on Page 8 presents a comprehensive summary of the three
projects, including their capital cost,, the volum of production, the esti-
mated production cost and estimated annual profit for the three plants.
A breakdown of the estimated US dollar cost for the Canton ammonium sulphate
plant is shown in Table VIII on Page 9; that for the Taiwan ammonium sulphate
plant is shown in Table IX on Page 10; and that for the Taiwan superphosphate
plant in Table X on Page ll.
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7
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OF PERTILIZ1 t PROJECTS
SUMUW
With New Equipment
Canton Ammonium
Plant
t
S
Taiwan Amnonium
Sulphate Plan
Taiwan. Super-
phosphate Plan
To
e
ulpba
Canton
Shinchuq Taiwan
Kao?hi., Taitran.
Location
Tonal Investment
S. Currency
U
#0,000,000
*17,000,O00
*5,O00000
9 9
000
i
.
Chinese Currency
CNC
.0, 000 0000,000
C
20,000?000,000
CN .O,000,000,000
CN
jO0' 000,O00$
U S. Loan Requested.
$28,000,000
W9000,000
$5,000,000
000,000
Production, yearly
426
700
hate
tons
S
l
i
800
261
164a900
,
,
u
p
ua
on
Ammon um Nitrate
tons
,
l7a0'
17,,000
34,0W
,
I0000
I ( 000
tons
3vperphospbate
,
Total, tons
278,800
181,900
l70 000
634,700
Cost of Production, Estimated
knmonium Sxl.phate, per tea.
443-99
442.21
Amonium Nitrate, per ton
#76075
$t?l
Superphosphate, per ton
$24.05
Total l Sales, Eati.-bed.
hate; 0 *60/ ton
n;
Sul
um
5,708,000
$ 9, ",400
$25,62,0x0
.
p
.
000
00
l
3)400
,000
te 4D$ 00/ton.
Amonim Nitr
:&,700,000
,
,7
.
a
107 000
5, 300,000
xperphosphate 0 30/ton
Total A al Sales
0
000
4
102
000
$3L
Estimated
417,408,000
tll., gooo
"
5-110
,
~
C
12
821
332
'.220
639
1 +71
ost
Totes, Amnual Production
,
9
,
Total dual Profit
Est.~mated U,So#
?gn?saa
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CANTON ANM0NIU SULPHATE PLANT
CAPITAL REQUIREMENT IN U.S. CURMNCr
Buildings, Structures. and Overhead Cranes
U0 S. 7F
1,98 17,000
Processing Equipment
16,78,000
Ammonia (225 tons per day) 10,636,000
Sulphuric Acid (600 tons per day) 3976Ej000
Ammonium Sulphate(770 tons per day) 1,084,000
Nitric Acid (80 tons per day) 750,000
Ammonium Nitrate (100 ton.: per day) 550,000
Mining Equipment for Pyrites
210,000
Process Steam & Emergency Power Plant
880,000
Water Supply Equipment (13.,5008000 gale per day)
413.., 000
Repair Shop Equipment
537,000
Power Plant (259000 KVA)
2750,00O
Yard & Miscellaneous Facilities
1,039,0030
Imported Spare Parts & Supplies
192,000
Freight Charges & Insurance
2,4509000
Foreign Advisers for Engineering & Design
930 000
U.S. as,0008OOO
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TA WAN AWLONT SULPHAM PLANT
Buildings,, Structures and Overhead Cranes
Processing Equipment
Aimm,onia (150 tons per day) 7, 260,000
Sulphuric acid (400 tons per day) 295003000
A .oniia Su:lphate(190 tons per day) 805,000
Nitric Acid (80 tons per day) 750,4000
Ammonium Nitrate (100 tons per day) 550,000
Process Steam & Emergency Power Plant
Witter Supply Equipment (5,760,0C0 gal. per day-)
Repair Shop Egtipment
Yard & Miscellaneous Facilitiea
Imported Spare Parts and Supplies
Freight Charges and Insurance
Foreign Advisers for Engineering & Design
U. .o
1,307,000
11,865,000
390,E
3 369,000
3109000
7809000
337,000
19575,E
5.00,0000
U050 17,000,000
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Table X
CAPITAL, REQUIREMENTS IN U. S. CURRENCY
TA fAN' (Kaa-Shiung) SUPERPHOSPHATE PLANT
Capacity: 170,000 tons per year
Equipment
U.S.$
Superphosphate Plant,. 500 tons/day
19385,000
Material Handling
300,000
.55.,500
Crushing & Grinding
106,000
58,E
Proportioning
80,000
Ong & Cutting
1859000
63,000
F7.uorine Recovery
25,000
7,000
Storage
10,000
409000
Bagging
36,000
31,500
Sulphuric Acid Plant, 200 tons/day
1,1118 9000
Contact Plant.th Sulphur
8509000
609000
Burners
Material Handling for Pyrites
50,000
Crushing & Grinding
14.9000
10,000
Herreshoff Furnaces
316,000
809000
Cottrell Precipitators
60,000
8,000
Services and Facilities
1,567,E
Water Supply
216,000
33,200
Substation & Power System
340,000
2,900
Railway
312s,000
1
6
Locomotives & Cars
5
,000
Mobile Equipments
120,,000
Warehouses
6,000
9,000
Laboratory
!62000
12.9400
Repair Shop
120,000
65,000
Office
614,000
22,500
Fence, Gates, etc.
22,000
f
Contingencies
5000
Total
j
03,1040,000
$960,000
Ocean Freight & Insurance
Engineering Fees
350,000
LOW
_5
$5,0009000
Building
Structures Total
U. S. $ U. S.
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The NRC alternative plans for use of American war surplus ecquip-
ment, in the event it became available, are shown in Table 11 on Page lie
While some of this equipment can probably be obtained from surplus, the
most important units listed - the ammonium producing facilities at the Ohio
River and Cactus Ordnance Yorks - are being retained by the "f"ar Department.
It is uncertain, therefore, how much surplus material can be obtained; thus
XRC plans at this stage are based upon the expectation of purchasing all
needed equipment from new production. However, the Chinese Supply Commission
has already bid on the sulphuric acid facilities and expects to satisfy part
of the requirements thereby,, The possibility of obtaining other equipment
from this ,source is under active investigation, and surplus facilities will be
used to the fullest extent possible in order to reduce the cost of the project
and the trine required for delivery of equipment.
IV, FINANCIAL JUSTIFICATION OF THE FERTILIZER PROS
:Li aci d profits
The capacities of the three fertilizer plants as' projected by
NRC are shown in Table XII on Page iUe Substitution of some surplus equip-
ment may alter these quantities slightly but the difference will not be
material.
The estimated production cost for ammonium sulphate, ammonium nitrate
and superphosphate from these plants is worked out in detail in Appendix Co
On the basis of this estimate the cost of producing ammonium sulphate will be
$43,99 per ton; that for ammonium nitrate $76.75 per ton; and that for triple
superphosphate $24.05 per tone The comparable costs for importing these ferti-
lizers are $76,60, $102.60 and $62e60 respectively. If it is possible to obtain
a substantial part of the necessary equipment from war surplus facilities, the
Chinese production costs will. be reduced somewhat, as a result of lower amortiza-
tion and interest charges.
Assuming selling costs of $60 per ton for ammonium sulphates $100 for
ammoniurn nitrate, and $30 for superphosphate, the total annual profit from these
operations will be ,97l,529a
Because of the long period; required to complete delivery of the neces-
sary equipment and erection of the plants in China, capacity operation probably
cannot be attained before the fourth year following approval of the project.
It is proposed, therefore, that although interest charges should be paid annually
from the start, repayment of the principal should begin only with the sixth year,
and the entire loan should be liquidated by the end of fifteen years. Assuming
an interest rate of not more than 3% per anntun, maximum payment on the loan in
any one year would be 46,900,000, which would leave an ample margin for reserves
and contingencies e
Contribution to the Chinese Boonomy
The figures quoted earlier on the average increase in yield resulting
from the use of chemical fertilizers indicates that 630,000 tons of fertilizers;,
if properly used, might increase crop yields by as much as $800 million a years
This: conclusion is based on the following calculation:: (continued on page l5).
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 t
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Table IT
S MURY OF FE TILIZER PROJECT
Using 11 gus i=G33t
Canton Ammonium
& 1phate PL..ant
Location
surplus Equipment
Taiwan k noni m
Spbate Plant
Shinchuo T I
Ohio River,, Badger, Cactus, Keystone, West
W
Kentue4 Ord. Works
Production,, Yearly
AEmonim Sulphate, tons
knmoniu Nitrate,, tons
Superphosph&te, toy
Total, tons
2339 -000
449 000
27,000
orks
Virginia Ord,
1579000
26 9000
1839000
1109; 0
1709000
3909000
70 000
I0:n
6309000
Procurement Cost9 Estimated
000
s
420
U
U.S.$ 17009000
2009000
UGS0$2
U.S.$ 2,0809000
,
Q
o
zost Of Supplementary
Equipment, dismantlixig9
9
$12
253
US
u.s.ii190609000
U,~S 0 399209000
UeS p 279230.000
suipping9 etc,,
U. S. Loan Required
a
9
9
$l9L50 9000
$139 X09 000
$ 4,340,
*31,9309000
Capital Investment
$ 4
340
300-
$3199309000
U.S. Currency
$14,450rOOO
$13909 000
000
,
9
004o
000
000
,003-
C'1
009 00
00 000, 0
Chinese Currency
C N C .O9 000, 0009
CNCi20 n 0 90009
,
,
,
T.'tc' IMU&I Profit
1.S.,$ 4D60O9000
UOS O -3910090u0
Taiwan Super..
phosphate Plant
KaoeShiu g9 Taiwan
Plancor 2100 and Bur-
p1, .s Sulphuric "id
Plant
110009000
* Cost of production. will be somewhat lower than those given in Table tic
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U&SO* 897OC90OG
13
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CAPACITY OF THE FERTILIZER -P iOJECT WITH ENTIRELY NEW EQU' T
Ammonia
ftiphuri o Acid
nrncnih. Sulphate
Nitro Acid
Ammonium Nitrate
Total
Install d Op e capacity Installed Oper-a'Hig aoity
Capacity Capacity
Tons/day Tons/day Tons/year T /dey Tons/day Tons/year
Plant Taiwan
Total
Anmal
Production
Tons
225
225
150
150
600
590
400
370
770
770
261, 800
4 9 0
4 8 5
1
80
40
80
40
100
7 ,
100
50
,7~ 000
00D
278,800
181
A
, ,oo
Taiwan Superphosphate, Plant
Superphosphate
Sulphuric Acid
Note a 1a All quLutities in metric tonso
2a One year is assumed to be 340 gating days.
5W 500 l70r000 170,003
3s The difference between installed capacity and operating capacity is designed
to provide flexibility of production to meet market demands for two kinds of
nitrogen fertilizers and to adjwt the production to the supply of sulphur or
pyrites e
31.
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The experiments summarized in Table II, page 5, indicate that the
proper use.of one pound of fertilizer will increase rice production by about
three pounds. At the current price of CNC h00,000 per picul (ice. GNC$6,000,000
per ton), the application of each ton of fertilizer would result in increased
rice yields of CNC$18,000,000. !50,000 tons would increase yields by
CNC 3,100,000,000,000, or U5 175,000,,000 at the current rate of exchange.
Similarly, the proper application of one ton of superphosphate in-
creased rice yields by about two tons; thus 170,000 tons of superphosphate per
year will increase rice production by 33,000 tons. This quantity will have a
value of CNC: 1,)40,000,000,000 or US4120,000,000. -This increase in production
wJ,U have an immediate effect on China's foreign exchange balance,, either by
permitting a reduction in food imports or making available additional.food
products for export.
Attached as Appendix D are letters from Drs. 0o B. Hutchison and
Raymond T. Moyer, Chief and Deputy Chief, respectively, of, the U. S Agricultural
Mission to China, and from Dr. F. W:. Parker of the U. S. Department of Agriculture,,
endorsing the project for expansion of fertilizer production in China.
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panda To be purchased,
Facilities. Wharf for 4,000-ton freighter, two railroads,
railway siding, and highway, See map in Fig, 1.
II, Taiwan Ammonium Sulfate Plant
Land: 500 acres with improvements,
Buildings:: Offices, laboratories, hospital, dormitories,
etc.
Warehouses.
Facilities t-
Water works:. 800,000 gala/day
Natural gas.i 3,000,,000 cu, ft./day, 18 miles away.
Steam plant. 100,000 lbs./hour
Railway and siding,
Highway and waterways.
See map in Figure 2,
III, Taiwan Superphosphate Plant
Land: To be purchased.
Facilities: Railway, ocean transportation and waterways,
highway, and old 90-ton superphosphate plant nearby.
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36
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Raw Hater .als. Transportation and Power
A. Coal from (Keelung mines, 280 miles by coastal freighter,
or 220 miles by rail from works
Ba Phosphate rock, from Haichow 900 miles from works by
coastal freighter.
Ca Pyrite from ICingkwasheh, 280 miles by coastal freighter,
or 220 miles by rail from the works.
Power from Taiwan Power CoOes network at $0?003 per KoW Hm
Io Canton Amm miLun Sulfate Plant
Ac, Cob and coal from Shehpirlg, 170 miles from works by
ail,, ?r from North China by coastal freighters
B. Pyrites from !ingteh mines, 100 miles from works by
rail, or 1.20 miles by inland waterwayso
Co Power to be generated in the works.
Ile Taiwan, Ammonium Sulfate Plant
Aa Natural gasp now only 3,000,000 cu.- ft0 per day,
furnished by the wells in Chinshwei.. Taiwan,
19 miles from the works
B? Coke and coal, furnished by Chutung mines, 20 miles
from the works..
C. Pyrites shipped from Mahanshan mines near Nanking,, or
from Kingkvrasheh mines, 70 miles from works by rail.
D Power, at $0x003 per K0WQHo, furnished from large
network of Taiwan Power Company
III? Taiwan Superphosphate.Plan
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17
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Mendi
1o CANTON AMMONIUM SULFATE PLANT
Estimated Production Cost
1o Estimated Factory Coat of NH3
(225 tons of NH3 per 24 hours, 310 days per year)
Raw Material
l01 tons coal per ton of NH3
for steam,, etc o
1o7 tons coke/ton
Labor 312 man-days/day
Power 1,800 K.W*H0/ton
Unit Cost Cost per Ton
U0 so t U0 a. 0
10000 11,00
15.00 25650
3.00 4.16
0.006 io.80
Depreciation and maintenance 2M0
Total Cost of NH3 per Ton $73.66
Estimated Factory Cost of H2804
(590 tons per 24 hours, 340.. days per year)
Unit Cost Cost per Ton
U. S.' $ ~J . S.
Rainy Material
Pyrites 0.825 ton/ton
9
12650
10.31
Labor
69 manndays/day
C
3.00
0.37
Power
70 K.W.H./ton
@
0.006
01442
Depreciation and maintenance 2.96
Total Cost of H2S04 per ton $1604
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 Approved For Rele1Q;/(l2 C{$0-00926A007700530001-0
Total Cost of (NB4)2SO4 (770 tons per 24 hours, 340 days per year)
Unit Cost Cost per Ton
IIaa
U. 8
Raw Material
0.26 tons of NH,/ton @ 73.66 19.l
0.76 tons of H280 /ton 0 14-04 10.68
Labor 86 man-days/day 3.00 0.33
Power 15 KoW0Ha/ton Q 0.006 0.09
Depreciation and maintenance `Oa85
Overhead 3000
Taxes and Insurance 1.50
`Interest on U. S. Loan, Chinese Capital
Expenditures and Operating' Fund 6.39
Packaging 2.00 2,00
Total Cost per Ton of (NH4)2S04 $43.99
eta Estimated Total Cast of HNO3 (50 tons per day, 340 days per year)
Raw. Material
O.46 tons of MI 3 /ton
Labor 56 man-days/day
Pavrer 495 K.W.H?/ton
Unit Cost Cost per Ton
U. S. * U S. ,
73,66 33.88
Q 3,00 3.36
0 0.006 2.97
Depreciation and maintenance
21.87
Overhead
5.00
Taxes and Insurance
2.50
Interest on U. S. Loan, Chinese Capital
. Expenditure and Operating Fund
5.17
Packaging
Total Cost per Ton of NHHNO3
$76.75
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Appendix.C - Continued
Annual Profit
From (NHH)2504$ 261,800 tons
Selling Price ? U.S. 60,00 158708,000,00
Total Cost ? U.S,$ 43-99 11L5161582,00
U0L 064.,1919 t00
From NI- !4"03 $ 1,7,000 tons t ~y /~ r~ ``rS
trice @ U.S.$1000OO 197OO,OOO OO
Selling
Total Cost 0 U.S, 76e75 ,30t~975OoOO
Total Annual Profit
U,S,$ 395,250,00
U-S0$ .g586,66r
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 Approved For Release 20 102' CPA-RDP80-00926AO07700530001-0
UNITED STATES DEPARTMENT OF AGRIOMIM
Office of Foreign Agricultural Relations
Washington Z5, D. C.
June 6, 1947
Mr, Shou-Chin Wang
Chairman, Chinese Supply Commission
2311 Massachusetts Ave., N, lit,
Washington, D,.C0
Dear Mr, Wang:
This is in reply to your letter of April 26 in which you tell of plans
to acquire certain United States, plants for the manufacture of chemical
fertilizers in China.. You raise the question of an endorsement of this
project as a start in carrying out one of the recommendations of the
China United States Agricultural Mission, on which I served,
Not feeling qualified to speak with regard to its manufacturing aspects,
I forwarded a, statement of the proposed plan to Dr. Frank e Parker,
Assistant Chief of the Bureau of Plant Industry,. Soils and.Agricultural
Engineering of this Department, in Charge of Soils. Enclosed for your
reference is a copy of a memorandum which he wrote after a review of
your plan.
Enclosed, also., is a. letter on this subject received from Dean C. B.
Hutchison, Dean of the College of Agriculture and Vice-President of the
University of California, and Head of the American Section of the Agri-
cultural Mission, As you will. see. in reading their statements, both of
these men comment favorably on the proposal,
As seen from my former experience in China and the studies made recently
in.connection with the Agricultural Mission, I would be glad to associ-
ate myself with the statement of Dean Hutchison, The evidence, I believe,
is clear that the fertilizers which it. is proposed:be manufactured could
readily be absorbed in China and used to the farmersa advantage. Of
the steps that ought to be taken to improve the agriculture of China I
an convinced that the manufacture of nitrogenous and phosphate fertilizers;
as you plan, should be given an important place and high priority.
Sincerely yours,
(Signed)
Raymond T, Moyer
Head, Far East Division
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OFFICE NEMORAN1 .FM UNITED STATES GOVERNMENT
From: Fh Wo Parker, Assistant Chief of Bureau, In Charge of Soils
Subject: Chinese Government Purchase of Ue S. Plants for the Manufacture
of fertilizers
Date May 13 , 19117
Raymond T, Moyer, Office of Foreign Agricultural-Relations-
This is in reference to your memorandum of May 7 transmitting
copy of statement by the Chinese authorities on "Fertilizer
Plants for China1?' which we have reviewed rather carefully.
In view of the well-known need for greatly expanded use of-
ferti-lizers in China, the proposed plan for increasing the indigenous
production of plant food in the form of corrmiercial fertilizer
seems to us to be entirely reasonable, Also, the.proposed geo-
graphical distribution of the additional facilities seems logical.
It is suggested that it would be desirable to explore carefully
the possibility of producing urea at those plants where the
hydrogen for ammonia synthesis. will. be made With the use of coal
or coke. At such plants the carbon dioxide'required for urea
manufacture would be available as a by=product. Prod ction of
urea would afford a material having double the nitrogen content
of axnnioniim sulfate and would eliminate the-need for sulfuric
acid. It is our understanding that China is not well supped
with raw material sources of sulfur for sulfuric acid manufacture,
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UNIVERSITY OF CALIFORNIA
College of Agriculture
Agricultural Experiment Station
Office of the Dean & Director
Berkely !, California
May 27.9 1947
Dear Doctor Moyers
You have asked my opinion, as Head of the United States
Section of the China - United States Agricultural Mission which
studied agricultural conditions in China last summer, of the proposed
plan of the Chinese Government for the purchase of equipment to mane-
-facture fertilizers in China,
Although the Mission made no effort to investigate the tech-
nical details of the manufacture of fertilizers in China, it did con-
clude that through a judicious use of fertilizers it would be possible
to increase substantially the yields of food crops in that country.
As to the merits of the particular proposal, I am not competent to
speak, I ziote, however, that Dr,, Frank W. Parker and his group at
Beltsville, in whose judgment I have full confidence, have examined the
plan and report that in their judgment it appears to be entirely reason-
able.
I am glad to hear that steps are being taken by the Chinese
Government to increase the production of fertilizers in China. I hope
they will succeed for I know of no more effective means of immediately
increasing food production, there, Chinese farmers have to rely too
much on night soil with its attendant hazard to human healtth and upon
the rather wasteful use of oil-seed cake of various kinds or the
maintenance of the fertility of their soils. If more chemical fertil-
izers were available and at reasonable cost, more oil cake could be
used for feeding animals, whose products .v milk, eggs and meat '- would
greatly improve the diet and health of the people.
I am sure it would not be feasible for China, to undertake to
import the fertilizers she needs. In the first place, they are not
available in the quantities she needs,.and in the second place, the
costs would be prohibitive to Chinese farmers, She needs to develop a
sound plan for manufacturing them in China and at the lowest possible
cost consistent with sound financing, in order that they may be sold
to the Chinese farmer at a price that will yield him the, greatest net
returns,
Anything the United States can do to assist China in develop-
ing a sound program for the manufacture of fertilizers will, not only
be helpful to China but in the long run to the advantage of the United
States,
Very sincerely yours,
/s/ CO B, Hutchison
C. B. Hutchison
Dr, Raymond T, Moyer Dean, College of Agriculture
Off ce of Foreign Agri- Vice-President of the University
c RygA iF @ase 2003/12/02: CIA-RDP80-00926AO07700530001-0
U, S, Dept, of Agriculture
 Approved For Release 2003/12/02 CIA-RDP80-00926AO07700530001-0
IAW
k610
Crops
MHA
ftly 1
mign
"50 "0
ILIIO,M
tom.
149,M
1
Oft
40
I*iv on
by
1.1
160353onI
4,122.526
368,4
42,E
1,
2,420 SODOM
473
44
7
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
1"0000 40
9,60,
o 100
60
MOOG 82,
S
Approved For Release 2003/12/02 : CIA-RDP8O-Ob926A007700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
is
20$
, ast an
3,s9$
4,
4f412
"$7
30,999
4,MA
4,4"
8,
51'11,E
1200" 1]I:,,000
I . statistics ve3amss$ lb the lmsear SW 4
**sonic Cssmissto? of the Torthsast 24s4,gea?ter2
e103 sat0 fir UI $1.00, from Aug 19, 19
Offict -'tai rate V9 $1.00 * ? . s
ea...,.:l bYIra ad Able
vermgss (epproxt*ately)
lh 1947
440
M"k 2:, 1947
may is
9
hae 1,7
Ie.17
My 21
Jaw 31
A.9. Abbott
9.95
U.06
10.94
11.01
11.00
*1 lletts Granted U9 0ert
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 Approved For Release 2003/12/02 : CIA-RDP80-00926A007700530001-0
July 1%7, Fvshm.
91*
72,1
239-147
of .,du
13
30,599
942
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 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
auly 4, 1941
AWWRIAli TSXT'Lf nlIMSTRY par we g. t!. Ft ,
coma Textiles Industry
estions and Answers t
1. No. of spindles In Govt areas.
o. of spindles in Come areas.
6#12 0
indles in operation in OoTt areas.
of s
p
.
due shortie
1*0,O00 = but at present complete steppa8e
lsstrto power.
Bstbmte of amount of raw cotton used since Oat 1946.
10,000,000 lbs.
lstimsta of cotton needed until Dec.
17,000,000 lbs.
cpeeted source of raw cotton until Dee.
It is itil.l possible to purchase from local farmers.
Chief problem in cotton milling in Manchuria.
7 1?etrioity, coal and textile accessories.
Looms avsilable and looms in operation.
5000 available and 2400 in operation.
Estimate of raw cotton production in 0o'vt areas this xwm*r
cotton farms .
J.v 0
Cotton cloth 12 lb* (31' x 40 y'ds) RffiO ,000 Per Pa.
Cotton yarn dt's (400 lbs.) $1 015,000 per bale.
lit class local raw cotton RiO 11,500 per kgg.
COTTON TZXT MILLS IN ROR' AST
(N' tionalist Area)
purposes.
C th .. a ra'r cotton prices.
Any comments on the cotton situation in Manchuria.
The quality of local cotton is good enough for spinning
30,000,000 AS this autumn.
1. LiaoyaM
Yingkow
tung *
Ohinohow
fangtien*
"tung and wafangtien under mist control at present.
5, 1947 _- Press reports $0,000 spindles operating
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 fi - '. ;C XC PO"'OR, our `- I
Approved For ReleasOUMNUM e"latQ pP80-00926AO07700530001-0
punt .. 130,o0 K, - (o t, w its)
3#
3#000
a AmmUm. and Ponhal he t 1 . is ii
files at
To Yuo Dlrec r ~ ?ovmr AdmU?, stated t t the sew or t -
du* o 50,t IM a s 2 more boilers are beeix iu t .ed. Anshan and PooMI l
1 cities
a as fella t
ant ail to nts.
38,0 '? (at whieb 25.E to Fu+~nm1
.Laos arA Steel ?'b r 5,000 f"ss
4. TMUIAS ( neipsii r Chint ) .. 1700 1
6. a and fae iesa -w- st - .. 10, (13,0 t K at
The demmid for Widen ales is about 40,000 X and at present on of dwand is
net, d. to the fact that the tray sn ssion line fie Hajacfeft~wn to out (as of fty ,
1947) 1I-
t
d
Ue a> a
e
t t u til t hi fh eolt e U A sdf
4 .neNNaeoqpma t - . h
$SLbokow is taken from the C stew and repaired there IJU continue to be a
serious shorts a of electric poser In Wakdon and other industrial cities in L .aeot
1
e The PONOV tla h hilk hit f 22000
.aoowias a capacyor,0 l tt and eh
usable delivers 90, OM Jr,* to kdes for Mutter distribution. The ammr line frm
Isis er to Ck* n can osrry 150#000 Z t and th*, line frost Ch&W%m to
66#000 . TIvw whem the o Ba is teen son is transmitted to *Men via mmdMez pwmw &= S -i o 6,000 .mss reach luatkdem. 11 of the at min
and hi of oil seeft to done v4tb noun od at mipht (after U .).
tAdmin. is
Mr. Rue told the pves an rn b inio zr the % for hia
TP 1 billion and tu
t. lose are 1) 4th lhaisofe a emm Lim out, the +ds a. hsa had to i ,e e
coal purohs s from 30 000 a. tee a so th to 55#,000 tons to a p27 th .eel uatis.
!e sta that owl as have been end: f oc, T P$9 to 0 per a. too".
2) Less PwA*r means low c . 3) Sam re fr bills t dww,-ed i .
stalUtions*
to Iti,000 and 10,000 > respectively toi* rd the and of
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
U,O(O k11ogters oft ar, :
2,400 loco ti s
3,03 p ' :r. cars
,os.list
319 fr. etc care
754 passgr. ors
730 1
Formor Japanese ind-aatrisliat satiated less Own 3#
Hertbourt I late Juro 1947.
stated t hut before Co s t offensive In Ifty 1947
ties, and now (My 1947) onIr 2,300 kaa.
railservice radiates from . do to a n,
and Sbasb iikaan (und co to sir t ) . tP of 3
Wen to C%aW*hua re
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
~Q bat PreduotiOA at , skefl
AM?5A1549
uarah 1547
oar wheels (pas.)
500 per month
Freight car axles
(PCs.)
steel rods
(en:t. )
eat +'zfI?s`ib
wire rope
1947
rated sotual
1000
fi hti 4
Sod 400 (due to fighting
1500
1 900 (duo shortage of
slsa. power)
s of
It 500
1000 700
ue to shortage
ld pipes (1/8' to 2')
es (2twt toner) is svheduled to pour steel on
(a.
(&.t.) 100
us sizes
A
kg)
. 1 upon Piss
NO AUK. 15, and Me
1 duce Sake en
to
p
A U6* 5, No. 7 CeMe oven
200 we are lucky
t
t
li on -
ar
tro
coating and billet U"J.L to s
is still insuffiel,sat?
but
Tt
nt
has sffeotod the production to he arzte
bein worked, and even during the working shift,
of power supply is quite of ten.
hihu and shun at present are producing some alloy steel,; about
30-50 tons Per month at each pleos.
(prepared by C. 0? She., Presidento Anshan Iron and Steel
Ltod
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO077005300Q1-0
"O"s 'of *"Ay*
zI f
a V" 1004 4$
th t t M.
%tw
O e~ Owa
1
Owadm"ug t a-Ldc t
A,r ofttft
0 th* *#41
Of Vi
?*Ow*a,-AtI*A
%
. felt of
a* Ut
ftr: r . I ,
tw 0, 10-
tuot * t*it . of iwwrtci
ttLiii 4 e im,
?*
In 'to (t I4 tv Iola
-a tom: . a -Ai - sit ;o
gro V* i.=` 1 O
we "Afted.
06111014+x# **
'1 tAvlow* "~
1.113' VIIOUAI
44
the
111-
1b 40 *05,) I e
t f 411
't i**
GOW-1 flolds Of "0 N
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
Ott . UUti V46- r w - x
or w*
w 113 tt Its
1 99F!a is -,
'. , 7 o
u
. were 4 fIfl F
in and to* *L *
t ww tL *Wt of Scaeus
or"
?; * PY0400 flat* 1i`
meets; ",141, fort
..e 11%A
4. a' ...: ~. s r at,
t ftt
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t. and vwj~ftrrwl agt"'bw
101 n . td%k
i
:4*r Uvel to Ir.
1 l z
.,_
tl-aa to
1w
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l1t :1]
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
4O "OUVI ,Otr i=
l I* 1A
x"1
'': *to U
to
'
ftip * stmatt
asmact, t
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follm4ftr *-wt
way "M a
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or Ow %k
a* mm * All
, "4 U 4M She **&I
Ott
S 4'
***,I W&O not
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Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
PMWO
ftuy #00 It
I
r are s$1f a tr
;*at bo 't
tw4t
A^ 1~
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
5 S
That
Um Vw
s or ftva 1
over OWPA-U0 *iWOU'00.
"r fc~ t 1 "`
or *t
t
4u*** Tboy got up
*1ons tow Sw 40M
of 440 Us uM a
*r PWAX W*
i i Ifto
:t of 2506 S , . It
lb*.,* a" VIM S
has
SUS
ma **to"V
*Iutpwmt* Ow
t
1 00111 - on
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
Aft
As* In --molaft.
surly * due,
yo oft,* UO Mal
12AMO A" ' tz
110 t to
VII
-W * i #Vol
m
bAsts 004
*`w If Oroduwaaft
IF 11 t tIw% t V~
1T%
"Ou
0"4** to
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
i
 t 41 tt I
timm 9 -bo
- U"*e
'~' !dell
e
i
r*TIw
11106* um ba
mites .
Approved For Release 2003/12/02 CIA-RDP80-00926AO07700530001-0
4
to oft,'
40;.1'"
*a! tar -rpir *014
Approved For Release 2003/12/02 CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
*-44 us" Vbo ow
. 01"s
S i - U
a4iw
to ._ fd~
fto t
i It ie tat
Lk, uuas, n 1A "0
vas vv w %Au 3r t
+,# t;;* "
X01
,`4 V-XA U 144 O ' :," `
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
"Ww"81 U.
U0 otwl le
upof t" t f t'
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
Aport"t
`$+
T)w Yi4w4fty 4
*no
~I*
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
'.., rx; -I v' 1,i4I.` G ~ A't .t u
fpm } 0i-i` pf_ .t j wiN
a 4;' ~ i~lV*-t ,
? N '> l Air
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
o" ? "'ht tt OPt of co ," stru4`tto!". iw: a+ .;('earl a!-~; +e .: .i
fl if, t 11. 4
.i,, ~E '7
.. n.rYtirats eni ,'?'. 9:Z1'o trove , t
Awt of r-emating, an
?
The
li lei
.~a
a is o tLe
14 et " E ri no
L. fl at 14 tat
%MI 1, y .4, r,
the fmt! of I'Jit
tc title s ? " ~ " ra ;.~ .' : t"` r rt a.k Tr a My
+ .. ~ y ?c~, '~, i~b ~ .: G}'1, ~ ~ .. ~a. ,. Gm w a fit:' ?
~Ahe )r$$; } ;1. k?y
t:1tn souls be oht?-tned ;; o,>.`' em .i er
is-~' ??' a t, t : .' -'
v t:= t itv t?.k
CVus: 5.3 ~F'i&'n .. :B r" L-n'
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
tat tMtL
.A. 1- 0 m. VI
40 oua~,,O
r - : of .X,0471
t Apr, uo
kiiVA1 .~. e.1t u, at
ate.;
t,I df 14 or
n z
"r it , QV i - 3 -.*" t'.4 Iet"StbL#;c k8 t P Fw
Nl*
Of iN
?? tl'f+ *pth t j,ttt.
~,,I a a`:
t:O xu, &t
r. ~ ~Pbr+~!fi"~
e h to
.ata1+4 j t gu3:'$D of
e " 's:! a"i ors ,~ kl 4,F,: k3 3F v 4 !'F 0 4 14
^p`sit e3a*1..''?ix*((U
Qa
*It, by IP i
sU .A ~F,t
Al P
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926A007700530001 f0
1.+41
`Eus UC~`S" iZ { ,Ct isA. U.0 bu..0-8hc wel Pn1 the
C2 C"S Ct`~9 fii. to 4 L''i ?
to 4 r I n ^aom er of 61
t un t 4a ! ~"} Y& item M b x 1* 6,:~#.4 W. V .' 3
of Si:
. M' ? :~~d. i, ', .Vay'Ir'J` {~t ;,1N F" ao ~f ! , i.~ J j A,3 kt W'iA (J U O
t'1
Ui
le 't? t t,
t'' W t Lie :xl s
1s btth yr * L the .
v1PF.V i f 4 :?'tnae
tr.,; ;`:'Ittor Qf the i isf
iwf' t~+k3 C !~1Y# ~.'~t .k 1w .'+R~41~.2p a.L 11 4}~) to
H
r-s+9.w it i4$ 70L-?'o II. c agwriov, out k )
ite now t} ,?.a s a to 'o ... ".*'4 "i4rt 8t. 1'11ut1t-clt1 v l; ,.V
VIEW irit'' the ~-
:nuciY d -ri . ,r 1.s.r*. few ;feu re.
3 .;
1'1} Y 4tiR. 4t .+.k ta l- l ear U4 the b ax
inj is o rrn*i ue w1't ;. : { re(i ; i ee .ffi
es-0-If t
Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
in a -'4r s l"~. o) i e`1, o C,:, Lam, cr`'Sd
1' E, ; t0 4, t60 r7 tcc r ,y
g.2 4 -
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
A- x* uej z
cal, t WW ou
'60 T""'A Par
139
be inxp ?*ve still sore to Qi1'
the o plett sti t L
U ~ ul ai t&iA*ti ja the bkx-
"beIbrAtion of the
ratiroe s e smtiniastu * world standard,
The tollowiss table gives pieunsd phae of the varims
41
1
A-M
s in Central na Sth Chi b
. aounay year
' eS iw' tuk w ectio 1
Cheki eng" l angsj L
Clanton-Hankow Line
g7w wan?ei?? Sc how Line
1 2
restored for operation on 1 aly
.
'
eo
r
,g link between the ' engtze and
of this railroad was ursawedy
jochinerles and xanuractur~d
of rice1 cotton, g a~-cs code for
._ hides p ens,, ramie, antimony
six con s#_ this line has all the
ns ('retying from 60 lbs.-tee-li0 lbs.
years. A%AV of the bri;ddee are talent v' oden struetu as which
ant"
" now liable to be washed away bad flood, With the exception at
4 locomotives from MMM# most of the iooc otives and oa
n Appro ej V'o)'re as1 J~JMM%A-RDP80-00926AO07700530001-0
 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
There is a general lack of repair materials and shop
machineries and they are not available in China. In view of
the general economic importance of the Canton-Rankow Railway
and the ever-increasing traffic demands, it is extremely
argent that all these defects be remedied at an early data.
(2) The Oiekiang-11iatgsi Railway, from the view int of its
onomio value, is as important as the Canton-Rankow-Railway.
chinaware, ramie, grass-cloth, paper, salt cotton,
of rice
,
cotton goods, machineries etc. Large deposits of bituminous
coal, wolf tram, tin and antimony in Hunan and Kiangei provinces
will also constitute a cac.siderable share of the freight traffic,
During its five years of operation from 1936 to 1942, this.
tooperation, this line nwill link up the Canton-Hankow Line
with the 3hanghai?Rengohow line and thus facilitate the economic
rehabilitation and development south of the Yangtze.
(3) la kinc-Shan ai-Hansohow Line is the busiest line in
the whole area. During the pas year and half, it has in many
respects been brought to pre-war standard. But it is still far
from being able to most the demand, of the ever-increasing
traffic, We plan to modernize it in the immediate future. The
economic and political importance of this line is self-evident.
) Hunan-Kw -Kwe a o. Li which can be considered as
-
_ctens on of tile Q b e ang- angasi Line will be restored from
gyang to Kinohenkiang, a town 160 kilometers west of Liuchow,
the and of 1947. But this merely means improvised opening
traffic. We plan to bring it to such a standard late in 1948
as to enable it to handle the traffic of a normal railroad.
(5) Lunzhai Line. Tientsin-P ow Line (Soothe? i Boot
These three lines are the main?conomiC arteries of Central
China,. They must be brought up to prewar standard at an early
date to handle the tremendous volume of traffic in this area.
(6) Yellow r Bridge P i -Ranko L n
The present bridge is only a temporary structure and is now
in a most precarious condition. We plan, therefore to start
building a new bridge as soon as possible, The design has been
completed by the International Rngineering Company, an
Francisco, U.S.A.
(1Replenishae ok nt R o l l i n g o i !t th
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 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
red t
of than were eventually
destroyed at the last stage of the war. What the Japanese
had brought in to this area tra n n e Kura are
sufficient to meet the present reed. 3o
able addition to our looo;:)tive and ro .ii
been 147 locomotives and 3445
, and do sea nit-*s4 paeaen, er *hoe puroha sod
A. our present elan is to ur at least 7
Lore loeos Lives and 1500 fret t *are, and, it possible,
saais second-hand passenger coaches to replenish the lines In
Central and South China.
The existing roiling stock
ezo ptie , in deplorable a
and maintenance *atorials an
secure a sat" icinnt quanti
ma-ahineriod repair! rig iiateri _
,
to be di st-ri but to the above non
(8) nIAM Wit.
This is an essential item of th
account of its grost importance
safety, the early' procurement of th
equipment is vita's, desideratum,
eI and with very few
lack of repel-ring
It is necessary
kinds of shop
spare pars from abros
mod lines.
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 Approved For Release 2003/12/02 : CIA-RDP80-00926AO07700530001-0
(u
(1) it is at ly ditioult to approach *Ay disouezi
. _ - _____ - _ - _ . A..
~t obtained prior to end during the wear. tors
roads in China wearers,. for all intents and proses, li ited to
that year a ighway 1)aa part eAt wawa or is under 4v.S3't,ioit or al
Zeonog-t* G aunail and an tnterr-prcrvincaia . highval or nst.rcaaotlan
program was established and pr ulgst cinder that do rt ent
a:: C
with so to oh effort that, 7 July, 1937 ors: than )O9
kilometers of roads had been constructed. out or oh 4 0
kilometers had a aall wenthir surfs es of either gravel or
t r end ma adaam?
(2) During the ware with the aadvanoe the Japaaeausse Aran
may of these roads were destroyed for t ottoal reasons or
abandoned. C there wavers dea yed by Chines, units opeer t ,a g
in the rear of the esy. In ffi abet Chinn, many kilos o ,cold
roads were rebuilt and a r more newly constructed in order
that it i tarry taref fic aoaald be exnsdited. At that riod
eft
theme were loss than Q~ iei.l+cam~.tere of operable i ys left
La the hand of the Ch eese 4overrntats t, and with the eaccepion
of the Yangtze River and a f4r~ of its major tributaries no
large quantities of freight could be moved by water* ni ; .ys
i
V.Y oaeer o
n
absolute n.eoeaaity for the a xv nt of heea
a at that time Just as they are needed n,w t eot
rehabilitation and reconstruction. At we end..
49 509 kilometers of a ?1- ea er h +s were
"tree China, and in vat good condition.
kilomet rs of roads of TO=O U8 types bed
destruction of hid. took place in
,,_ - . a _ m_
use tanuA the in combat zone, his zone was
unalred kil.om$ter* in width and extended entirely
..,.____..
e roes chine from North to South U100 -1 ,,he general line
LoyenSZ# (east of ism) . L eeflin - NannIng. At the end of the
war rapid troop is were urgent in order take over
areas from the Zap*neaaa To acoomt alish this 4 016 k .l tern
of roach were restored in this comb t zo within a period of
1 ths. Later 4= 0 4 189 kilomete of edditionel
re were restored to must the needs- of relief a rehaa; l:i.-
that 20.513 kilometers of the 76.6ft kilt*eetere destroyed during
the war' This leaves 173 kilo tore of hi y's Without. n1 y
restoration work having b . done on then* Even c,,n ten rwC s
that have been restored the work is such that the ; t rity
only =aaasaaable for ftotor v hicleaew in a westher,brd es sire
narrow and th-. r eht of-wt is not en k lly salt
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Three factors have been the principal cause of this serious
conditions: (a) the chaotic: situation caused by the Con auniat
defection (b) the shortage of sufficient funds for foreign
exchange for the purchase of supplies needed from abroad: and
more than a small peroent ge of the planned assistance for
communications. This is briefly and generally the picture
of the present status of the highways in Chine.
ll. UR Y QR `I IAftD RNCGNSTUROTIt7N OF GOOD ALL-WEATHER
(1) From an economic viewpoint China can be divided into
three general areas for discussion as to needs for highways
for they next several years as follows:
(See Attached Yap*No.
a. The Northeastern region, which may be referred to
? th
i
Mi
e
l
tary Area,
b. The Northwestern region and the Southwestern region,
to bey referred to as the Maintenance Area.
The South and Southeastern region to be referred to
a
s the Rehabilitation Area.
(2) The Military Area inoludes Northeast China south to
Lunghai Railway ass far .asat as Sian
At Sia
th
t
.
n
e wes
ern
border runs in a northwesterly direction
Thins is
n
t
.
a
ex
remely
productive area and noes.:Sary for the complete recovery of
China. However, due to the Conun,iet rebellion and military
operations in this area, no extensive highway reconstruction
is contemplated by this Ministry until the situation is clarified.
When this territory is free of these elements road reconstruction
must - start immediately in order to make aecess;ble, the rich
l
Goa
and, mineral deposits and agricultural products to thi
3) (a) The Maintenance Area: This region includes all
Northwest and. Southwest China west of a line from the
,.k...... vim.,.:~ _.,, _ ~~ _._ ..,_ ....
f the MilitaryAreal. 'here are 49
569 kilo meters of;hi
h
,
g
ways
in this area most of which were constructed, during the war
for the movement of military traffioq. The re+anainder was reeoons4-
to handle troop mc:vements'intc the reocsoupied parts of ChIna.
AU of these roads were and are now in fair operable condition.
The majority of the roads have all-weather Surfaces of .various
types and widths, but cannot in any sense of the word be
considered as high type highways as the surfacers are all gravel
or broken rook with only soil binders. In Many oases, the
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brla es ar ~ narrow AM 3.i t?d he to weight loading,
factory' materials were not available at the, time of tww:
construction also the tlt ale=._ent was a mat factor w.
they were built. Furthter .ore, a lerj a percentage of the r..onds
traverses terrains that is very mountainous and are subjected
Oonstantly to heavy aountain rains. This offers a eery serious
problem in drainage, Continuota intenanoe is absolutely
neoessarr to keep these roads ?na,ssa'b.e,t It in the intention
of this inistr ' to anend only tli t unt absol .tel y
to keop the6o roads in a good passable condition at tbi.s t
This will require constant and inter - ,oat -intensnc'a w
the minimum of minor repairs. At a 1 date lar sums
money must necessarily he ex onded on the highways as eventually
traffic.
ro e run 0001'10r Ac sta nd dint it is bell
aye must bad ec t n' sl,able f. ;-:r motor va ttleles for anv
* . ? * . 7#e is o-:q t'fri o to on In th3 i,ro are
'
7
.11
y ~
F
~yyy }
I
uj
e{f: .~or1 fin- ~1 c' S?'annifir, sotJ. .Sttn
Mir -P', wO t1. a total of t.r a+ ka e,s of ahou G
nr the weeatern *ad o. the lut t*a . :'ail.way from ia.n to Tienstto
wit.ct, is std ??ra';:xu }1?: F di a r,rtc+ea apt kilometers.
aster 1?r tis r' t .o is a atrly a restricted as the rail
tr?nport.~aton, tth only the Pearl or Meatiiiver r
lac vii=,be to
ny n'ro at a :tent a `ttir fii`a-t [an %,^.a #ne in to tout t. artist - '
chins iS nro whet better of as it has t Yangtze .fiver
reRSWIRb,ly
r a vi a ; r _ fair w :st s is lrir.. Fe verct of Abe
tarter trLbuta r e3aa of the Ystnj a Rive are z.ltab o l r fairly
antiro north and nortLwc st sect i +n: has only trucks to de end on
for econoric;al transpcrtbtiort, at no rail or water raci.li t .es
are present, `." ese conditions will exist for at l oast several yeers4
aend: Some of Chha*s richest px'ovinces are situated In
a
, 3sechw+sn is probably Lht rLaohest arov'i acce in China.
source of salt in, t, ha west. Thoso products
'.~ to the L out. for uz a I t 'n '"; r
reef i...n eic P
r
5~~?,~an of and to the north and n.ortrhwet a amid :_ 00l .
it'..
. ovesa:.a ,at of cotton, wool and hider ro.- to northern
is as,went .al to the economy of all china, an well as to
ro, i.oii is t ,,is area and to tits world at large,
t tion Area (-Jc 744-p iso, : 3
ta) This area ..eludes the r inner of China wA ..cI is the
ww=ay. . ir very this'>iy pop atad.. as s its the a
or port-inn
,
,osier 1.1.411.atry located witiuuth 1t bout y: it also Includes
s".rc t, ` ;:t oduc tai eas tarotud `'wig' t ing a) e ~3t~t
?
`
fi e
Y 1i =~r
, =ti ;>,zl amt-44 mineral deposits,
r eeemji n 1V ": 1?l -lore
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damoli,hed during the war and have had
aistanceee in being rohabilitateed with a ,
Cures and equipment. Other railroads were
ant for a miser or two year* and then only
far the purchase of lies that must be
,.W..., .-_
bb .' "' to i sues., The Rea hen ai Railway
and the ba h :,a ,lwaY were the only ereeptia
and are in fair condition but serve only a very a .l
_ ...~ __~ .,. .
Water transportation is available
as the river
the vicinity of canton only
,
from, the lake areas are of no special value for relish
The above has been. tainted out to show the
'ation
,
VWWI ,
necessity for hi~i+ey' construct on and reconstruction in
scan,. Sven with the reconstruction of all the pre-war railways
to a high operating standard lr- areas will be totally without
any modern means of transportation unless good roads are ads
available.
onamio, and humanitarian point of v
of the Yaugtso River is most Critical and
or here are located the rice producing lake areas
t .- M
MWL- rice ~out rapidly to other
It is urg t to be able %a got
sitati the movement or rood
other areas to the sa th and west as
the
; Years.. Imen
+cer the last
~
~. ~,~
etion of the
.ct the whole of southeastern China south of
d east of the Canton-T mow Railway will
.....,..~ ..,._~.
be c oltely dependent on motor truck transportation for a
number of years. Without suitable sll either roads a largo
area will be isealated. In this area are located mfift deposits
of fine coa1 wolfram and ti,n, all of which are needed for
soanc,s recolrry. In addition, the region has aiculturaa
pr+ucts in quantity, such an ramie, turd or wood oil, as
cloth and =any other items of iapo oe to move to the coastal
parts or to rail be ads and inland water ports. The traffic frm
the parts to the interior will consist mainly of salt, manufactured
;mow hi s for i. ustriael improve t. Thin coastal
a -d CA "ton there are, four good sports,
nohow, too e:h , Amoy and i ratow. These ports are at
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y
th inlesad rail and water limes would. I'r+a
ions lo00-UY aend nationally*
the reads in this region are in
and h ,io ~:.3:M TfF A .TYLai.3 ua a u is#Y il~.r w,~.
,
e quantities of supplies from abra d
la
i
d
n n
out obta
.* .mvin i& in china +
B t`
fci
t the facM that this area neverd sufientroads
hey
tor operation.
the inland toms
vicinity, because no
,on exist other than carts mad m # nkin .
d
.
of transportation 'roan these ports inlaaan
tl
w aaar err of the lines
"Amp to most the most urgent and
,,~ ,..+. highways _ in this area, it is believed that
quirenents for roar