ON SOLVING THE DIFFICULTIES OF PRIVATELY OWNED AND OPERATED COTTON MILLS IN SHANGHAI

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00039R000200090030-8
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: April 9, 2012
• Sequence Number: 30
• Publication Date: July 25, 1952
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/04/09 : CIA-RDP82-00039R000200090030-8
So1v3.n the D? ff...icu1tcs of Pr!~.,
---
trd Cotton MI1 S n., Shan h~1
Owed ~ nra?~..~.~...,......
PF rspe c biv? , by pi YunMch' (E3,
Shanghai, 1 ar 1950
Declassified in Part - Sanitized Copy Aproved for Release 2012/04/09 : CIA-RDP82-00039R000200090030-8
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/09 : CIA-RDP82-00039R000200090030-8
'RFi? Oktt l id
ON SOLVING THa~a 3)IFFICUt1TIES OF PRTVATI;LY OiThfl) AND OP1 flATt'D
COTTON MILLS IN SHANGHAI
Eistin Problems
c Pivate lrowned cotton industry in Shanghai is currently facing
many difficulties. These diffi.cu1?ties trace back a long long time.
According to economic principle, these dlffjcultjes arise from poor lo-
cation of thc3 plants, lack of intial financial backing which necessitates
borrowing of fund at a very high interest rate, antiquated operation
t.chnique and methods of operation hampering production, and distr.Lbution
n
of profits to the owners instoad of rein estment into the business.
During the war and post-war years but prior to liberation, the
cotton mills in Shanghai wore very hard hit. The establishment of
branchr's outside the city necessitated transfer of large capital. Thus,
by Nowmber 1949, many plants ware unable to meet their operating costs.
One of the. causes for this was that they had to continue paying high
interest rate on their borrowed funds.
~reysent "I~ab7c~ms
Some of the major problemK nOW facing the cotton mills of S1langhai
are : l) commitment for the payment of too high an interest rate ; 2) lack
of working capital; ) low production; t) lack of power resulting from
war damages.
stns to be Taken to Remedy th Situation
In order to lighten the burden of interest payment, loans must be
converted from a monetary basis to an actual value basis. This will
4
~P) .... ~. A,t.1:L:.trr .c,.!u lb.d: ,13i.,! tr n1 Ef,'. r,h
' 4GF' ?.'`4 ; Declassified in Part - Sanitized Copy Approved for Release 2012/04/09: CIA-RDP82-00039R000200090030-8
e
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/09 : CIA-RDP82-00039R000200090030-8
permit tho cotton mills to pay off their debts in accordance with tha
current market pricc.
It is paramount that the capital of the cotton mil: be increased.
In time of financial crisis, financial firm generally refrain from
investing in an,T cotton mill. Therefore, cotton mills should be permitted
to seek floating funds or commercial capital because the prospect of
expansion in the industri.aJ. field will be much greater than in the
commercial field in the future,
P,!easures must be taken to establish closer cooperation b ottiveen
the management and labor. This step is an essential move to overcome
many of the difficulties now being faced by the cotton mills in Shanghai.
To m(c)t thc~. industrial power needs of the cotton mills, it is
important that present source of poti^rer be utilized to he maximum. Steps
must also be taken to exnan~ the power source of this area to fulfil
the future needs of these mills. Along this line, it might be added
that some plants should be moved into the interior closer to the raw
material sources. This may help .antly to oi1Ver the cost of operation.
rttFany T)roblems are now being faced by the cotton malls of China.
The solving of these problems would necessarily be very slow. Solutions
to these problems can b accomplished only through di.lgen~'e on the parts
of all persons concerned.
j; i I ~ 1 Y~i u`~
,p
1!U
F?1+
~'rl
Declassified in Part - Sanitized Copy Approved for Release 2012/04/09 : CIA-RDP82-00039R000200090030-8