COPT NO. 5 '
8?o4 7
TRENDS IN AIR, OCEAN, AND RAILWAY
OA HISTORICAL REVIEW PROGRAM RELEASE IN FULL
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ORE
TRENDS IN AIR. OCEAN. AND RABjWAY
SUMMARY
1. L
Thc data which comprise- lhe present study were originally prepared in separate economic surveys8 and discussions of probablo trends9 covering civil air, ocean, and railway transportation. The material selected is not comprehensive in coverage but analyzes certain aspects of world transportation and the transportation situation in sensitive areas which are ol particular interest in terms of US national security. This discussion of current transportation trends may therefore be useful in the analysis of strategic concepts.
The strategic significance of air, railway, and ocean transportation is not based on the same factors and their analysis therefore requires differing treatment. In the case of air and ocean transportation, the fact that equipment Is transferable from one theater of operations to another offers thc possibility that It can be utilized in an emergency by distant powers with sufficient political and economic Influence toits disposition. Although railway rolling stock can also be transferred, ultimate control of fixed railway installations accrues to thc power controlling thc areas in which thc facilities are Installed.esult, tho strategic significance of civil aircraft and merchant ships extends almost equally to all such equipment, wherever It may belocated, whereas the strategic interest in land transportation focuses on those facilities in sensitive areas. Since production facilities for all three types ofare relativelyapid change in the relative transport potential of any two opposing groups of nations can result from sudden conquest of Industrial areas.
This study Indicates that there will be no developments in transportation9 which will decisively alter thc relative positions of the USSR and the Western Powers. In civil aviation the Soviet Union will make rapid progress, particularly in the organization of its domestic network. The Western Powers, on the other hand, while not expanding appreciably, will consolidate their position on world air routes. Although the USSR will lead the world in the quantitative production of medium and light civil air transports, the US will retain the strategic initiative because of its superior potential production capacity, as well as Ils pre-eminence in the design and manufacture of heavy, long-range transports and of aids to navigation and electronic airport landing systems. The USSR will continue9 toerchant fleet which is of minor Importance in terms ot world ocean traffic, and ranks only tenth among thc world's merchant fleets in tonnage. The Western world, on the other hand.
Note: The intelligence organization* or the Department* of Stale. Army. Navy, and Ihe Air Force hare concurred In this report. It la based on information available to CIA as
SECRET
will continue lo expand its fleets. Moreover, combination of the active shipyards of Western Europe with the latent productive capacity of the US places thc Western world in an extremely strong position to make any required expansion or to replace losses due to attrition, the most important exception to this fact being the contingent weakness in thc Western tanker position. In railway transportation, the prewarof both Western Europe and the USSR-satellite orbit have been largely restored to operation, although much of the rehabilitation has beenemporary nature in both areas. Because of the far greater prewar level of Western railway development, however, railway programs in Western Europe do not include any substantial further expansion such as that scheduled for the Soviet and satellite rail systems.
Transportation.
Tho US continues to dominate virtually every phase of world civil aviation activity. Despite the USSR's low percentage share of world air-line operations. In terms of mileage flown, it Is second only to thc US'ln this respect In general, the rate ofroute mileage expansion continues to decline and, with certain exceptions, future expansion will probably be more Intensive than extensive. There will be anof international competition between national-flag scheduled air lineselatively stable passenger traffic market The scheduled air lines will also meetcompetition from non-scheduled carriers. Air cargo traffic, on the other hand, is expected to continue to expand rapidly. The Soviet Union Is by far the world's foremost producer of transport aircraft. Its output, however. Is concentrated in light and medium types, whereas tho US Is the only producer of heavy transports and probably mainuuns qualitative superiority In all categories. Financially, the world's commercial air lines will continue lo be dependent in varying degrees upon national subsidies.
Txanhfobtation.
Increased world competition in merchant shipping and contracting ocean freight movements haveonsiderable share of new vessel construction to be allocated for replacement of uneconomic vessels rather than fleet expansion.esult, the aggregate world fleet is being increased by only about two-thirds of the annualactually constructed. The inevitable leveling off of the world fleet will not occur before the endostwar shipbuilding, however, remains considerably below) levels, principally because of the elimination of Germany and Japan as major shipbuilding centers and the substantial decrease in US output. The UK and Western Europe are regaining their traditional predominance in both shipbuilding and merchant shipping. USSR-satellite production and potential capacity remain far below that of the Western world. Although thc total tonnage of oc can-bo me freight will probably decreaseerchant shipping, on the whole, will remain profitable. Decreased cargoes and increased vessel tonnages willecline in International chartering, although there willontinued demand for chartered tanker tonnage.
4. Railway Transportation.
The problems of railway transportation of most immediate concern to the US are concentrated in Europe and the USSR, where transportation will be most uncertain and critical in an emergency. The most acute railway problem is rehabilitation, which is now primarily dependent upon the production and international distribution of rolling stock. This process continues to be retarded by economic dislocations which are keeping supply and demand out of normal alignment. Production of railway equipment is still increasing, but8 the actual production and the great potential capacity of the US hadinor effect on other world railways. Production capacity of the ERP countries of Europe (excluding Germany) already exceedsthe drain imposed by German deficiencies, however, will resultontinuing freight car deficit in Western Europe. With less serviceable equipment than they had at the beginningany railways in both Western and Eastern Europe arc now hauling tonnages approximating or even exceeding those hauledside from Europe, there are certain other areas of special concern to the US because of potential or actual production of strategic materials, in which transportation hasestrictive influence.
1
TRENDS IN AIR. OCEAN. AND RAILWAY
AIR TRANSPORTATION
Predominance of the US in World Civil Aviation,
Thc US continued to dominate virtually every phase ot world civil aviation activityith the exception of quantitative production of civil transport aircraft. For example:
approximatelyercent of thc world's civil aire rail were registered in the US;
scheduled domestic and international carriers of the US operated more transport aircraft than the aggregate of all European scheduled air lines;
US air lines accounted for more than half of the mileage operated by the world's scheduled air lines, though owning less than one-third of the world's commercial aircraft engaged ln scheduled operations;
each of the Ave major US air-line systems flew more mileage In scheduled operations than the air lines of any single foreign country except the USSR; and
overercent of the world's commercial aircraft in scheduled operation, excluding those of the USSR, were of US manufacture.
oreover, utilization of thc average US aircraft In scheduled operations was approximately three and one-half times greater, in terms of mileage flown, than that of the average aircraft of all foreign air lines. US pre-eminence has resulted from the virtual suspension of civil air operations during the war in most foreign countries, particularly in Europe, and from generally superior US technical, financial, andcapabilities. The US share of the world's postwar civil aviation activityto be reduced, however, by three inter-related factors:
thc leveling off of US air trafficeriod of postwar expansion;
the gradual elimination of wartime disruptions of foreign civil aviation industries; and
the postwar development of civil air potentials by countries whose prewar operations were negligible.
Although these factors will continue to reduce the US pre-eminence in world civil aviation, this trend will not be accelerated9
Relative Importance of Soviet Civil Air Operations.
The USSR accounted forercent of world scheduled air-line mileage operated8 (andercent including satellite airespite the USSR's low percentage share of world operations, however, the Soviet Union was second only to the US in this respect In accordance with the ambitious air
transport development program of the current Soviet five-year plan and in contrast to the relatively static condition of OS civil aviation anticipatedhe USSR may be expected to continue to expand all phases of civil aviation during the year. By providing rapid transportation for high-priority passengers and cargo over great distances, in many cases to points not served by other means of transportation, air transport represents an essential aspect of the Soviet transport economy.
Trends in Scheduled Civil Air Operations.
An indication of the continuing development of world air line routes is given in the following table of "unduplicated" route mileage flown by scheduled air lines of the world78hile the table does not provide an accurate index for comparison of the civil aviation activity of thc various countries, lt ishere as the best available means of demonstrating the relative total new-route development by each country's scheduled air lines during the past year.
oute (as of 1
A
Miles op tub Scheduled Air Lines op the World8
incr
Total
available
Total (excluding
States
Kingdom
available
The following hypothetical case illustrates the manner Inuplicated" routeIsiven route, sweh as New York-Mlaml-Habaria. might be operated by two US air lines and two foreign air lines of different nationalities. The route mileage would bein the above table twice In the US total and once In each of the foreign totals.the New Yerk-MlamI or Miami-Habana distances would be repeated in thc national totals of any other air lines operatine solely those segments of the route.
Continued)
Rumania
Hungary
Bulgaria
Yugoslavia
Satellite Total USSR-Satellite Total
2
Not8
% increase
a corresponding period In the previous year, US scheduled air lines4 percent increase in unduplicated route mileage.
while that of all foreign air lines, exclusive of the USSR, increasedercent. Last
year'sercent andercent respectively. Indicate thc general slackening ot rapid postwar route development. This declining rate ol expansion may be expected to continue
The trend of civil aviation ln the US and major Western European countries will be toward intensification of services over established route patterns, rather thanof new routes in light-traffic areas not yet developed. Increases in route mileage, however, may be achieved by the air lines of India, Egypt, Italy, and the Philippines. Other countries, such as the USSR and Canada, whose territories cover vast geographical areas, will also continue to increase air route mileages. Fulfillment of ambitiouscivil aviation plans will be dependent upon political considerations and solution of critical shortages of equipment and aviation fuel.
The accompanying table of weekly air mileage scheduled by the national air lines of thc world (Tabic B) accurately reflects the relative commercial aviation activity of representative civil air powers. Comparison with world totals (exclusive of the USSR) for the twelve-month period67 againlackening of the rapid growth of air transport following the initial postwarThc annual US rate of increase in scheduled operations declinedercentercent while the rate of increase in total world-wide scheduled operations dropped fromercent toercent The US share of the world's total air-line operations (exclusive of thehich had beenercentas reduced toercent by thc end
TABLE B
available
World Total (excluding
United
G
t
a
Continued)
increase
Kingdom
available
operating
Total
Total
coming year will witness an intensification of International competition in air transport. It is unlikely that the volume of scheduled air-line passenger traffic will substantially increasespeciallyroposed multilateral Introduction of traffic-generating tourist rates over certain international air routes, if adopted, would probably not become effective until late in thcultiplicity of national-flag air lines will therefore be competingelatively limited traffic market and themay be sufficiently intense, particularly on the trunk routes, to resultontraction of the more uneconomic services. Increased competition may also create, in certain areas, pressure for:
reduction of the number of competing carriers through outright merger or equipment and facility pooling arrangements; and
reservation of some types of traffic lo national carriers throughrestriction of commercial privileges for foreign carriers.
In the absence of governmental intervention, the scheduled air lines also face increasing competition from non-scheduled carriers of several countries (particularly thehich have alreadyignificant market for international and domestic passenger and cargo operations in many parts of the world. Thc rapid growth of contract air operations is attributable to several factors:
7
greater operational flexibility, which is particularly adaptable to theworld-wide movement of displaced persons by air;
substantially lower rates than those of scheduled aironsequence of small initial investment, as well as low administrative and operational costs; and
the general lack of governmental regulation.
Ones major air traffic developments was the sharp increase throughout the world in the volume of air cargo. This was particularly evident in the operations of US domestic and international air lines, whose combined ton-mileage for air freight and express increased almostercent during the year. It is probable that world air cargo operations will continue to expand rapidly
Production.
The following table shows78 production of non-combat airin the three principal aircraft manufacturing countries in terms of number of aircraft and airframe weight produced. It does not include reconnaissance,or utility and trainer aircraft.
TABLE C
Production op Non-Combat Transportroduction by Types
No. of transport aircraft produced
a-
>>-
5
weight of transport aircraft
produced (thousand
b-
'The term "non-egmbol transport aircraft" Includes military transports not Intended or equipped to operate in an active combat area, and conventional commercial transports containing no provision for specialised military usage. This designation Is Uie only available commonwhich can be applied to US, British, and Soviet transport aircraft because there is no clear distinction between Soviet civil and military transports.
Quantitatively, the USSR was by far the world's foremost producer of transport aircraft in7ts output, which increased appreciablyas ten times that of the US and almost IVi times that of the UK. In the more significant term of airframe weight, however, the USSR accounted for lesst times the US
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^ SECRET
output <the Soviet output was double that of the US, but over Z% times the production of the UK.lso reveals that the UK produced more transport aircraft than the US in7he total weight of its airframehowever, was far below that of thc US.
The following standard of reference is employed in the ensuing analysis of non-combat transport production by categories:
Heavydesign payload in excess0 lbs.ile tactical operating radius (the tactical operating radius istof maximum range under design load conditions).
Mediumdesign payloadbs.ilo tactical operating radius.
Lightdesign payload of less0 lbs.ile tactical operating radius oractical operating radius of lessiles with any payload.
Non-combat transport production of the US. UK. and USSR by the foregoingis shown In the following table:
roduction by Types
of aircraft
of aircraft
weight (thousandeavy
weight (thousand lbs.)
production In thc USSR continued to be concentrated on light transport types, it is apparent that significant advances were made8 in medium transport production. This trend will probably continuen the US. output of both the medium and heavy categories was considerably reduced.heavy transport production in the US will rise sharply. While other countries are developing heavy transport prototypes, thc US will remain9 :the world's
S
only producer of certificated commercial aircraft in this category. It is unlikely that the UK willarge producer in thc medium transport fieldlthough some progress may be made.
Production of non-combat transport aircraft accounted for onlyercent of8 airframe output of tlic US aircraft Industry, and for aboutercent of the total output of the British and Soviet Industries. The proportion of combat aircraftba each of tbe three countries, however, was roughly the same, varyingercent. The remainder of US production (approximatelyercent)of small civil and military non-combat types which were not produced in quantity ui the other countries. The relatively small proportion of total US output allocated to transports8 reflects the earlier substantial fulfillment of US air-linefor new and replacement aircraft This was made possible by US assumption of virtually all Allied transport development and production during the war. The substantial proportion of the Soviet Industry devoted to transport production reflects:
Intensive effort of the USSR toomestic transportboth civil and military purposes; and
Soviet program for the replacement of obsolescent transportIts expanding and vital civil airemphasis on transport production Is the result of the British determination:
to rebuild the Industry alter complete cessation of transport development and production during thc war;
to use exclusively British-built aircraft on International routes of British-flag air lines; and
to develop transport types which can compete In thc export market
In qualitative terms, traditional US superiority in the transport aircraft field has been maintained, partially as the result of the favored US position during the war. Current Soviet-designed aircraft are comparable only to thc light and medium transport types which are now being replaced in the US and some other countries by modem postwar types. Thc UK has not yet produced an operationally and economically adc quute postwar transport.
Financial Prospects for World Civil Air Comers.
Factors determining the financial prospects for world civil aviation9 include:
the extent of aid through governmental subsidies or possible direct or indirect ECA assistance;
the development of the world's total air traffic potential, which is in part dependent upon thc availability of foreign exchange; and
thc degree of political stability in certain geographic areas.
All the world's scheduled commercial air carriers are dependent In some degree upon government subsidy, either in the form of direct financial assistance or through government-sponsored Improvement of ground facilities and assistance In theof new aircraft types. The financial status of many US civil air carriers which operatedubstantial deficit8 has been improvedecent retroactive increase in government air mail rates, but will continue to be affected by the extent
10
of future subsidies. Wnile government funds available to the nationalized air lines of the UK will be decreased, new aircraft recently purchased by thc government for use on the trans-Atlantic and trans-Pacific air routes will bring greater efficiency, thus
reducing the cost of operations.
The noticeable world trend8eduction in administrative costs and duplication of services through inter-company agreements will continue9 and will better the financial position of many air lines. The probability, however. Is that most of the world's air carriers will fall to turn in substantial profits and will continue to be largely dependent upon the financial support of their respective
The possibility must be anticipated that political developments may arise inareas to hamper commercial air operations. The existing political situations in Indonesia and China, for example, have already adversely affected commercial air operations for some air lines operating in the Far East.
Strategic Considerations.
Although the USSR maintains its lead of all other countries in the quantitative production of aircraft, it is producing no long-range air transports and its output is concentrated on light and medium types. The US retains thc strategic initiative for the following reasons:
The US continues to dominate the world's civil air routes in respect to both scheduled and non-scheduled air carriers;
The US maintains its leadership in the design and manufacture of heavy long-range air transports and production of aids to navigation andlanding systems.
The US aircraft manufacturing industry, though greatly reduced from wartime levels and existing largely on military orders, retains itscapacity for mass production of air transports.
OCEAN TRANSTORTATION
Sue and Distribution of the World Merchant Fleet.
World merchant marine development!8 and prospects9 reflect areturn lo the intensive competitive conditions prevalent in the industry during prewar years. Contracting ocean freight tonnages have caused shipowners to plan thc construction of vessels for replacement of obsolete and uneconomic tonnage, rather than expansion of their fleets.esult of this factor, the net increase In the world fleet8 was onlyillion deadweight tons, despite construction ofillion. Construction during the current year will probablyillion tons, with about the same relative emphasis on replacement The Inevitable leveling off of the size of the aggregate world fleet will not occur before the end of the year.
hows the ocean-going merchant fleet tonnages of representative maritime nations of the world. Statistics are given for certain years In the. including estimated tonnages at the end8he totals do not include vessels of lessross tons, those operated on inland waterways, or those owned by armed forces.
TABLEE
Merchant Fleets or Selectedthousands ov deadweight tons)
Country
Sept. 39
June 45
Dec. 47
Dec. 49
2
5
5
3
0
0
8
0
recce
3
3
0
F
Continued)
Country
Sept. 39
June 45
Dec. 47
Dec. 41
ec. 49
Total
Estimated.
Excludes Lend-Lease vessels,WT. which arc included in US total.
One of the most significant trends in the maritime industry is the fact that the traditional UK and Western European predominance In international merchantis gradually being regained. This position ls being achieved by the acquisition of new shipping which, by depressing freight rates, has accelerated the laying up of US vessels.esult, the US "mothball" fleet now exceeds in size thc active US merchant marine.
Shipbuilding.
Postwar shipbuilding activity throughout the world remains considerably below) levels, principally because of the elimination of Germany and Japan as major shipbuilding centers and the substantial decrease in US output. On the other hand, construction8 increased slightlynd may again increase slightly during the current year.
Launchings and completions of merchant vesselsross tons in certain major shipbuilding countries8 are shown In Table F, together withstatistics87 launchings. Thc countries shown account for approximatelyercent of world shipbuilding.
TABLE V
Gross Tonnack or Merchant0 Gross Tons and over)
Country
Canada
Finland
France
Germany
1
0
Included In "All Others."Not available.
13
RET
F
.
others reported
total reported
available.
As Ip merchant shipping, there hasapid resurgence of shipbuilding in Western Europe (except innd this area accounted for aboutercent of total world constructionhipbuilding activity in the UK, Sweden, Italy, and France was above the prewar levels of those countries. The UK alone, operating at aboutercent of capacity, accounted for approximately one-half of the world's total launchings during the year and will continue to dorruhate world shipbuilding
No accurate statistics concerning ship construction in the USSR and the Satellites are available. It is estimated, however, on tho basis of present activity, that thecapacity of the non-Communist world is at least nine times that of the USSR and areas under its control. In view of latent US and UK production capacity,the actual disparity is far greater. USSR-satellite production of ocean-going merchant vessels is unimportant in terms of world shipbuilding activity, mostbeing small Inland and coastal craft. The Soviet Zone of Germany is particularly active in this type of production. Soviet production of ocean-going vessels probably does not0 gross tons annually, although Soviet construction activity in respect to smaller vessels for inland water traffic ls much more extensive.
Resumption of prewar shipbuilding levels in occupied areas is not yet in sight. Despite the existence of considerable capacity, western German production willto be unimportant9 unless the present strict occupation controls on shipbuilding are relaxed. Japanese construction, on the other hand, which was probablyonsay reach as muchonsrincipally for foreign account.
Volume of Ocean Traffic.
Despite the fact that the value of world trade In general is expected to Increase slightlyhe total tonnage of ocean-borne freight will probably decrease,esulthange In the character of thc cargoes hauled.arge portion oi ERP expenditures was made for US coal and grain, rather than fabricated goods. This
SEC^s^
year, however, low-weight, high-freight cargoes will largely displace last year's bulk cargoes.
Government Control of Merchant Shipptng.
In general, the lifting of wartime controls over the major merchant fleets of the world was completedleets remaining under state control9 will be, for the most part, those of countries in which state participation in shipping is
Financial AspectsMerchant Shipping.
Shipping operations throughout the world9 should, on thc whole, beThe coming year, however, willide range in thc financial results of merchant murine operations In various countries. Among the leading maritime nations whose fleets will improve their financial positions are the UK, the Netherlands, France. Belgium and some of the countries of Latin America. These countries, for the most part, added considerable tonnage to their fleets8 through eitheror domestic construction. On the other hand, the merchant shipping revenues of several countries, including Sweden, Norway, and Spain, are expected to bo well8 figures. In general, unprofitable merchant marine operations will be largely confined to those countries which abstain from substantial aids to shipping, or those countries whose merchant marine revenues will decline because of thc expectedin charter rates and thc volume of chartering.
A general decline In international chartering will reflect both the Increase intonnage throughout the world and the over-all drop in volume of ocean cargoes moved. This trend willerious effect upon the foreign exchange balancesumber of countries. The fleets of Scandinavia. Greece. Spain, Panama and some other countries are far larger than required for domestic traffic and customarilythrough chartering, significant foreign exchange revenues. Despite the general decrease in chartering, several major maritime countries will continue to have heavy charter requirements because of the inadequacy of their domestic fleets. (The UK, for example, had about two million deadweight tons of foreign shipping under charternd may not be able to reduce that figure appreciably) Tanker chartering will be especially heavy, since construction for thc fleets of many countries has not been adequate to meet their increased traffic in petroleum products since the end of the war. At present, almostercent of UK chartered tonnage consists of tankers. The US. Panama, and Norway, which have surplus tanker tonnages, will be the principal beneficiaries of the continued demand for such vessels under charter.
For reasons of prestige and to reduce foreign exchange outlays, there will beontinuation of the effort of many countries to increase the proportion ofand Imports carried in bottoms under their own nags.esult, some leveling of the present disparity between foreign trade carried in domestic and foreign-flag will be accomplished.
Strategic Considerations.
The peacetime division of the world merchant fleet into numerous nationalIs subject at the outbreak of war to rapid modification Into three groups: the opposing belligerents and the neutrals. Effective controleUlgerent group over wide segments of neutral shipping can be established by dominant political andstrength. Vessels of militarily Insignificant countries becomeense asImportant, therefore, as those of major powers. (Norway is an excellent example of thishipbuilding faculties, on the other hand, cannot easily be transferred and the strategic importanceiven shipyard is qualified by the fact that it can only augment the logistic potential of the power controlling the area in which the industry is located.
The major strategic factors affecting water transportation in the postwar era have been:
Failure of the USSR toarge-scale program of shipbuilding which would giveerchant fleet large enough to eliminate Soviet dependence on foreign vessels, and adequate for military commitments.
Practical elimination of the German and Japanese fleets as factors in world shipping and the efforts of these countries to regain some measure of their prewar position In both shipping and shipbuilding.
Drastic reduction ba the size of the active US fleet and the output of USMuch of the potential capacity of US shipyards remains unaffected, however, and the "mothball" fleet could be activated in an emergency.
The potential weakness of the Western tanker position, resulting from the replacement of thc US by thc Middle East as thc major supplier of European oil markets. This weakness will, however, be largely counterbalanced by the great Increase in tanker tonnage scheduled for completion during the next few years. Thc Western position will also be materially affected by the future status of proposed pipelines In the Middle East.
The threat to merchant shipping contained In advances in submarine design and In the development of long-range aircraft.
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S
1
RAILWAY TRANSPORTATION
The most acute problem of the world's railway systems Is rehabilitation, which is now primarily dependent upon thc production and international distribution of rolling stock This process continues to be retarded by complex factors which are keeping supply and demand out of normal alignment On the supply side, production capacity, except for Diesel-electric locomotives, would be sufficient to meet even today's abnormal requirements. However, arbitrary allocation of labor and raw materials to higherindustries in some of the most important manufacturing areas prevents thefrom developing its potential. On the demand side, critical requirements are frequently not translated Into purchases because of: (a) arbitrary governmentalof stringent foreign exeliange to other import requirements; and (b) in the case of EGA recipient countries, priorities which are established from tho point of view of broad program objectives rather than the requirements of an Individual industry.
World production and distribution of railway equipment, as well as railway traffic, will be discussed In this study largely in terms of their significance to Europe and thc USSR, since the problems of railway transportation of most immediate concern to the US are concentrated in these areas.
Production ot Railway Equipment.
World production of locomotives and freight cars increased in 1MB and willstill furtheresult, the world-wide backlog of construction orders will be considerably reduced by the end of the year.
The US undoubtedly possesses the world's greatest potential capacity for theof railway equipment. Although the USonsiderable quantity of rolling stock and motive powerS capabilities hadinor effect on the equipment situation of thc railways of the rest of the world. It is apparent fromhat, in contrastery small portion of US production9 exports will decrease and no equipment exports of any consequence are contemplated for Europe or the USSR during the year. (The US will furnish, however, certain component parts sufficient forars to benith respect to the USSR, political considerations have blocked itial participation by the US in thc rehabilitation of the Soviet rail system, sales of railway equipment to Western European countries arc dominated by decisions at the EGA level. The policy of ECA has been to develop and utilize European production to tbe fullest possible extent, channeling surplusinto the alleviation, as far as possible, of equipment deficiencies in westernUS raw material resources, in general, have been used for other ECAunrelated to the railway problem.esult, the US railroad industry has not even been able to fill the equipment requirements of US railways.)
seg/et
SECRET
delivered)
S Railway Equipment Production
Freight Cars
Domestic use Export
Total
* Most of these cars were delivered toars delivered to Europe, principally to FranceNone of these cars will be delivered to Europe.
Passenger Cars Domestic use Export
None of Locomotives
Total
these cars will be delivered to Europe.
(delivered)
539
Domestic use Steam
Diesel and electric Export Steam
Diesel and electric
Total
655 (all types)
"
None of these locomoUves will be delivered toncludes only three switching locomotives for Europe.
Although productive capacity already exceeds rolling stock requirements In the ERP participating countries of Europe, thc drain Imposed upon them by the heavy requirements of western Germany will resultontinuing overall freight car deficit in Western Europehows the estimated freight carand productive capacity of the participating countries, and of thosetogether with western Germany,8
TABLE H
European FRxight Car Situation
0
fif)n
Participating countries only
(a) Planned production <b> Requirements
(c) Surplus Western Europe
0
0
(Participating countries and western Germany)
Planned production
Requirements
Surplus or deficit
0
initiation of German production earlier than anticipated will reduce to0 cars the four-year Western European freight car deficit which was originally estimated atars. While the new car construction program in western Germany has progressed satisfactorily to date, however, increasing lightness infunds mayetarding effect before thc endhe over-all freight car situation in Western Europe may be even less severe than the revised estimate. Western European car repair programs have advanced beyond expectations and will considerably reduce the new car requirements of the next few years
With respect lo locomotives,8 productive capacity of the participatingwasnits In excess of their requirements5 locomotives. It Is expected that9 locomotive production capacity will continue lo exceed Western European requirements. The present locomotive stocks In western Germany arc adequate with minor exceptions In passenger and shunting types which will be satisfied from Internal production.
Only estimates are available concerning Soviet or satellite rolling-slock production. In order to give some indication of the relative level of their freight car production, however, the following rough estimates are included, It is probable that lhe USSR and Eastern Europe producedarsoughlyercent of which were accounted for in the USSR. Estimated production9 will be Inars, with aboutercent of this number produced in the Soviet Union. Locomotive production in the USSR and Eastern Europe Is estimated at0 units8 and5ith lhe Soviet Union accounting forercent andercent of the respective totals.
Equipment Inventories.
Equipment inventories in both Europe and the USSR were affected,lmost exclusively by the balance between lhe internal production and requirement of the respective areas. (The only important contract between Western nnd Eastern Europe
SECRET
s
has been thc purchase with ECA funds ofreight cars in Czechoslovakia for delivery to western Germany. With thc exception of the UK, no countries in Western or Eastern Europe have had any significant trade in rolling stock with other areas of the world.)
Thc railway systems of Western Europewere operating, at the beginningith smaller inventories of serviceable freight cars and locomotives than those avail-able In prewar years. Although the total number of Western European freight cars and locomotives was less thanercent below the prewar total, aboutercent of the cars andercent of thc locomotives were under repair. (The prewar average of freight cars under repair, in comparison, wan considerably belown western Germany and France, where war damage to rolling stock was considerable, substantial progress was made8 in reducing the percentage of cars under repair. The proportion of unserviceable cars in western Germany was reduced from aboutercent toercent, while the French rate was reduced from aboutercent toercent
The railways of the USSR and Easternre estimated to have exceeded slightly their total prewar equipment Inventories by the beginningrimarilyesult of substantial Increments to Soviet rolling stock since the end of the war. Thc prewar serviceability rate for freight cars in the USSR and Eastern Europe was considerably lower than that In Western Europe. The current rate is still lower than In the West, although the differential is not asignificant contributing factor to the relative improvement of the Soviet and Eastern European serviceability rate, however, has been the existence in that area of considerably lowerstandards.
hows the freight car and locomotive Inventories of Western Europe and thc USSR and Eastern Europe7, asanuary each year. While the Information contained in the table has been based on the best available estimates of conditions within Individual countries Included In this study, thc estimates are probably not accurate in all cases
TAULE I
Freight Cam and Locomotive Inventories
USSR AND
WESTERNEUROPE
Total freight Cars
* Includes throughout the remainder of Uils study the following countries: Austria. Bclglum-Luxcmbourg. Denmark, Prance, Ireland. Italy, Netherlands. Norway. Portugal. Sweden. UK, Swlt-cerland, and western Germany
ncludes: Bulgaria. Czechoslovakia. Finland. Hungary. Poland. Rumania. Yugoslavia, and rmtcrn Germany.
S Ed
Continued
Total Freight Cars8
Serviceable Freight8
% of Total Cars8
% of Total and Serviceable) to) Total
Serviceable Total8
Serviceable8
% of Total Locomotives Serviceable
% of Total and Serviceable) to) Total
Serviceable
65
4
0
5
5 71
96
USSR AND
EASTERN EUROPE
8
4
0
3
76
3
Traffic.
esult of increasingly efficient use of limited rolling stock and acquisition of replacement stock in units of greater capacity, many European railway systems are now able with less equipment to haul tonnages approximating and in some cases ex-
lEOR*ET
RET
ceeding those of prewar yearsn Western Europe, excluding Germany, the tonnage of railway freight hauled8 was approximately the same as thathile ton-kilometers performed exceeded7 figure by overercent. Even including the western German railway system, which8 was still operating far below its prewar level, the total tonnage moved on Western European railroads was almostercent of prewar, while ton-kilometers were about equal tooviet and Eastern European railways, on the whole, were carrying8 slightly more tonnage thannd operated overercent more ton-kilometers, largelyesult of the postwar performance of Soviet railways. Freight hauled8 by railway systems of the Satellites and Eastern Germany alone, for example, was still aboutercent7 tonnages. Hallway freight carried in Easternwas probably less than one-half of7 tonnage.
The preceding paragraph indicates that in both Western Europe and the USSR and Eastern Europe,8 volume of trafficigher percentagehen expressed ba ton-kilometers than when tons carried are used. This reflects the greater distance the average ton of freight is being hauled under postwarThe longer average hauls in both Europe and the USSR are due to severalShortages of critical commodities of all types and dislocation of price structures throughout Europe have resulted in the transport of many products in long-haul rail movements which normal economic considerations would not justify. Moreover, in some cases freight movements have been made over circuitous routings because of the obstruction of normal routes by unrestored rail facilities. In the USSR. In addition to theserimary cause of the increase in length of average hauls has been thc relocation of Soviet Industry and the development of resources and industry in distant areas in which there was no large-scale production before thc war.
Since actual operating statisticsnd ln some casesre notthc figures given for those years inre estimates. As such, they aresubject to some error.
J Railway Freight Hauled
westernand eastern europe
Tons carried
(in millions)
5
843
920
1
Contiriuecl)
Postwar Freight Tonnage Expressedercentade7
AND
EUROPE
Considerations.
The primary strategic interest of the US in railway transportation is concentrated in Europe and the USSR. It is In these areas that thc performance levels of thein relation to transport requirementsuture emergency, will probably be both subject to greatest uncertainty and of greatest military significance. Moreover, in view of thc present East-West power relationship in Europe, control of the entire Western European rail network in the event of hostilities is also highly uncertain.
Among the major strategic factors applying to railway transportation in Western Europe and the USSR are thc following:
The approximate balance between the rolling stock production of Western Europe and thc Soviet orbit, although the Western nations probably maintain agreater potential capacity.
The density of present Western European rail systems, which provides greater flexibility for large-scale movements throughout the area.
The sparseness of the Soviet rail system In certain strategic areas, despite the indispensablllty of this form of transport in view of other transport deficiencies.
The Increasing economic and strategic capabilities of Eastern Europeanresulting from ambitious reconstruction and expansion programs includingand repair facilities. Substantial portions of these programs will be completed by the endhese developments will considerably increase thc flexibility of both Soviet and satellite rail systems and make them somewhat less vulnerable.
(c) Control by the USSRystem of railways in Germany which, together with the satellite systems, extends the Soviet-controlled system from the Soviet border to thc Iron Curtain. Although the prewar rail system of the Soviet Zone of Germany has been drastically reduced, it consistsetwork of principal lines which isor still superior to other Eastern systems, including that of the USSR.
he strategic disadvantage to thc USSR inherent in the change of gauge at the Soviet border. Although thisonsiderable disadvantage to invading forces crossing the border in either direction, it would be more difficult to convert the Western standard gauge systems to the Soviet broad gauge for westwardoviet) operations than would be the case in reversed circumstances.
There are certain other areas of vital concern to the US because of potential or actual production of strategic materials, in which transportation lias exerted ainfluence on development or maximum exploitation. The major areas of concern are:
(a) East Africa. In Northern Rhodesia the production of copper has beenaffected by shortage of coal supplies at pithead and smelting installations. Coal supplies are plentiful in Southern Rhodesia, but inadequate rolling stockhave prevented the desired distribution of this coal to the areas of operation Although efforts are being made to overcome this deficiency, it Is not probable that It will be entirely alleviated
Manganese and chrome ore production In this area also exceeds thc capacity of transport facilities which serve the mining operational areas and which connect with the Port of Beira. Active attention is being given this problem by the US. UK, and Portuguese Governments and ECA assistance will probably be furnished to increase both rail and port capacities. No forecast can be made at the present time, however, as to the extent this situation win be overcome
(b> South Africa, Manganese ore movements in this area are also restricted by shortages in rolling stock and the unwillingness of the government-owned railways to allocate additional transport faculties for this purpose. This condition should be materially alleviated, however, by thc delivery9 ofanadian freight cars, The US has agreed to supply Canada with certain necessary components for construction of the cars, upon the condition that South Africa will increaseof transport for the movement of manganese ore.
America. In Brazil, iron and manganese productionexceed the transport capacity available for movements to port areas.to rail development problems. poUtlcal factors will probably preventexploitation of the ore-producing areas
Venezuela's potential production of iron ore would exceed the present capacity of transport facilities available for its movement. It is believed, however, that the necessary rail development will, in general, keep pace with the development ol thc mining area, and that serious transport bottlenecks will not deter mining operations
tohrador. The development of the rich Iron ore deposits in this area isupon the establishment of transport facilities which, al present, areConstructionile railway from the deposits to the St. Lawrence River has begun. Full utilization of these iron ore deposits by the US. however, will still depend upon the construction of the St. Lawrence seaway which will permit thc ores to be moved in volume to the Great Lakes region. These obstacles will not be overcome
India. India ls normally one of the world's largest producers of manganese. Movement of manganese ore from India lo the US. however. Is uncertain due lo the apparent reluctance on the part of Indian officials to favor the export of manganese under present conditions and to other factors Including transport difficulties. The principal transportation problems which restrict the movement of US quotas of ore
to port areas are the following; (a) the difficulty of obtaining favorable priorities for ore movements by rail under the complex Indian system of rail priorities; (b) thecondition of ore-carrying wagons and motive power; and (c) the inefficiency of Indian railway administration and operation. It is unlikely that there will be any significant improvement in either thc quantity or quality of rolling stock available for ore movementsor is there any evidenceubstantial improvement in Indian railway administration.
25
Original document.
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