COORDINATION AND STANDARIZATION OF RAILROADS IN THE SINO-SOVIET

Created: 9/1/1959

OCR scan of the original document, errors are possible

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;v. ECONOMIC INTELLIGENCE REPORT ,

'

I^JCOORDINATION AND STANDARDIZATION".OR;RAILROADS IN THE

tlA HISTORICAL REVIEW PROGRAM RELEASE AS SANiTEED

CENTRAL INTELLIGENCE AGENCY

OFFICE OF RESEARCH AND REPORTS

SfCRPT

FOREWORD

For several years the USSR has been attempting to create within the Sino-Soviet Bloc an economic area independent of and competitive with the West. Industrial development and increases in Intra-Bloc trade have resulted in Increased demands oc the transportation systems of all of the countries of the Bloc. At present tbe Bloc is dependent predominantly on railroada for the transportation of freight and passengers and isost intensive effort towardand standardization of rail transport, with particular emphasis on international freight traffic.

Thle report examines efforts to coordinate, unify, and standardize tho railroads of the Sino-8ovlet Bloc. The discussion deals almost exclusively with the economic aspects of these efforts as they apply to rail tranoport of freight, but the program also has considerable significance with respect to military operations.

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comnrTS

Pigc

I. International toll

II. rail Transport a, n : of the Sino-Soviet Bloc

(SKGS-SMPS)

III. Organization for thc Cooperation of Socialist Railroads

(OSShDj

Statua

of

Significance

Appendixes

Appendix A. Transit Freight Pates ln the Sino-Sovlet

Appendix B. Capa ln

Appendix C. Source

J afcj

d standardization of EC'

Suarrary and Conclusions

The countries of the Sino-Sovlet Bloc ereoncerted effort to establish uniform regulations and operating practices for their railroads, to standardize railroad technology, and tothe movement of rail traffic. This effort has been madeby industrial development and Increases in intra-Bloc trade, both of which have placed graving demands on the existing railroad system. In addition, the USSR is attempting to make the Bloc an economic entity that ls Independent of aad competitive with the west. Because the Bloc relies heavily on railroads for the transportation of freight, its railroad system must be unified and coordinated to be efficient.

Before World War II, rail freight traffic was negligible between the USSR and what are now the European Satellites, and little use was made of the rail connections between the USSR and Manchuria. Under the circumstances the difference in gauge between the railroads of the USSR and those of adjacentas considered to be of laoo significance economically thanilitary defense measure. After World War II, however, the formation of the Sino-Soviet Bloc and the consequent reorientation of tradeetter unified system of rail transport an economic necessity.

Immediately after World War II the USSR and most of theSatellites entered into bilateral agreements governing rail freight, andultilateral agreement among the Satellites and thc USSR became effective governing international freight and peaaenger traffic. 3 the railroads of Communist China, North Korea, and Mongolia also became participants in this agreement, and5 the railroads of North Vietnam were added. These postwar

* The estimates and conclusions in this report represent the beat Judgment of this Office as of

** The rail gauge in the countries of Western Europe and the European Satellites as well as in Communist China is European standardn the USSR, broad gauge,nd in North Vietnam, narrow gauge (less thao standard gauge).

efforts to coordinate and otaodardize rail transport culminated7 vith the establishment of the Organization for the Cooperation of Socialist Railroads (OSShU).*

The long-terra objectives of this organization are to achieve uniformity ln the regulations, procedures, rates, and technology of rail transport and to coordinate the movement of rail traffic within the Sino-Soviet Bloc. The actions underway or planned forand standardization of Bloc railroads are apparently attempts to adapt moaBures which have been successfully used in Western Europo to fit Eastern European economic requirements and capabilities. The European Satellites could have Joined with the Westernoordination prograa bad the USSR permitted them to do so. Such action, however, would have frustrated Soviet ambitions for tho reorientation of Eastern European trade and would have contributed nothing toward alleviating the difficulty of making connections with Soviet broad-gauge lines. Western European railroads have no single counterpart organization to the OSShD, but ln general they areahead of the Sino-Soviet Bloc railroads ln efforts toand standardize. Although the achievements of the OSShD have been modest, tbe centralizing of authority in one agency is likely to lead to more rapid developmentnified system of rail transport ln the Bloc. nified system not only would furnish more effective economic support for the member nations but also would be readily adaptable to operation under centralized military or civilisn authority in time of war or other emergency. In addition, tbe OSShD provides for admission of non-Ccsssunlst countries and thus may prove to be an instrument of extending Communist influence ln such countries as Iran, Finland, and Greece.

I. International Rail Traffic

* See the footnote on p.elow.

Before World War II, rail freight traffic was negligible between the USSR and the countries that are now the European Satellites. These countries at that time traded primarily with one another and with the countries of Western Europe, and it was of minor economic Importance that their rail gauge differed from that in the USSR. In the Tar East the Chinese Eastern Railway, which connected the Trans-Siberian Railroad with Vladivostok, was of Soviet gauge until the Japanese converted it6 to European standard gauge in order to

conform to thc other railroads ln Manchuria aad China. During the Japanese occupation of Manchuria, comparatively little use vaa mode of the railroad connections vith the

International rail freight traffic ln Europe vns governed bytreaties and conventions, bilateral agreements, transportation clauses in commercial trade agreements, and special tariffs. The most important of these controls vaa the multilateral treaty entitled the International Convention Concerning the Carriage of Goods by RailInternationale Concernant le Transport dca Harcbandlaes par Chemins de PerIM). This convention, adoptedrescribed regulations for the carriage of goods in international rail traffic. At this time, all countries in continental Europe, including Rus3ia, participated. After the revolution the USSR did not participate, but rail transport between the USSR and adjacent countries vaa regulated by the terms of bilateral trade and transport agreements, and there vere no legal reatrictions on the movement of goods between the USSR and any other European country. The USSR also had bilateral agreements with Finland, Iran, and Turkey.

Since World War II, Western trade controls end the pressure exerted by the USSR to bring about economic integration within the Sino-Soviet Bloc have reoriented trade. In recent years, more than one-third of the foreign trade of the Europoon Satellites has been vith the USSR, and about one-half of Soviet trade has been with the European Satellites. More thanercent of the foreign trade of Communist China is with other Bloc countries, Uo percent of this trade being with the USSR. The bulk of the latter moves by rail. 2/ Thia extensive trade conducted with the USSR by both the European Satellites and Communist China depends largely cm rail transport. Moreover, military planning in countriea of the Warsaw Pact Is to some extent geared to the rail transport capabilities of the Sino-Soviet Bloc. For these reasons, differences in track gauge, operating regulations, procedures, and standards have assumed greater economic and strategic importance since World War II.

Immediately after World War II the USSR and Poland enteredail transport agreement presumably intended toegal basis for the interchange of traffic and to take Into consideration the changes in national boundaries that had resulted from the annexation of Polish territory by the USSR. 2/ ore Importantwas the desire of the USSR toegal right for transit traffic through Poland to its occupied zone in East Germany. 'Ihe USSR also entered into bilateral agreements with all the present-day European Satellites exceptf During this postwar period the European

or serially numbered source references, see Appendix C. ** Albanian railroads do not connect with any other system.

Satellites continued to adhere to the terms and conditions of the CIM governing traffic aaong themselves and vith the rest of Europe. In the east the Chinese Ch'ang-Ch'un Railroad vas under joint Sino-Sovlet ownership5hen, by termsreaty, ownership and management reverted to Communist China.

II. Pall Transport Agreement of thc Sino-Soviet Bloc (SrtOS-SMPS)

As the countries of Eastern Europe came under the svay of the USSR, Moscov undertook to replace the several heterogeneous trans-portatlon agreements in force in the Soviet Bloc with one which would conform more cloeely to Soviet interests. By the end8 the USSR vas exerting pressure toward the establishmentailagreement which vould rival, if not replace, tho CIM ln thc European Satellites and in which the USSR would participate.*ail transport agreement vas signed0 and became effective1 vith the USSR and all the European Satel-lites, includingarticipating. 3j 3 the railroads of Communist China, North Korea, and Mongolia became participants, and5 the railroads of North Vietnam were added. Thus theSino-Sovlet Bloc entered into an official agreement to regulate, coordinate, and standardize the terms aad conditions for carrying goods and passengers in international rail transport.

The rail transport agreement vac entered Into by the ministers of transportation of each of the governments of the Sino-Soviet Bloc on behalf of the participating railroad adain1atrations. The agreement Is in two portaone, the International Rail Freight Agreement

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*There van some alarm in thc European Satelliteu because it was not entirely clear whether or not the USSR vanted them to withdraw entirely from the CIM. It seems probableomplete withdrawal waa never intended, becauseove could conceivably have disrupted the flow of traffic between thc European Satellites and Western Europe and between the USSR and Western Europe.

** The participation of Albania may be explained by the fact that Yugoslavia had originally been consideredarticipant and badail extension to connect with the Albanian system, thereby establishing connection between Albania und other participants.

o Mezhdunarodnom Zhelezaodorozhnom Oruzovom Soobshche-nil nd the other, thc International Railezhdunarodnom Zhelezaodorozhnom rassazhirskom SoobshchenilSMPS). To administer theseontrol office known as the Bureau for the Administration of Railroads (Byu UpravleniyaorogBUD)as established at Warsaw under the supervision of the Polish State Railroads. The SMGS (probabl

the more important or me two parte froa an econonic as vcLlilitary point of view)egree of uniformity lnregulations, and standard documentation for freightsurpassing anything that preceded it ln the Sino-Sovlet Bloc. Although ln many respects almost identical to the CIM, the SMGS goes beyond the terms of the CIM lnniformfor all goods in all International traffictandard tariff of freight rates for all transit traffic passing through one or more participating countries. Ihe railroads of Western Europe never have been able to agree collectivelytandard tariff of rates except for email shipments of less thaa carload lots.

A number of the specific provisions of the SMGS should be The railroads of the Sino-Soviet Bloc are obliged to accept and carry any shipment tendered to them by another member railroad system. In view of the large amounts of international rail traffic exchanged by countries of the Bloc, this provision would appear to require coordination In the planning of international transport. Without such coordinatedransit railroad could have difficulty ln accepting traffic originating in one countryhird country. Moreover, Article II of the SMGS Imposes specific time limits, beginning at midnight on the day of acceptance, for the processinghipment. Havement of the shipment ln line-haul operation must be performedpecified number of kilometers perilometers (km) for fast freightm for regular freight. Specific time limits are Imposed for customs or other border formalities as well as for trans loading at points where the railroad gauge changes. Penalties, sometimes rather severe, are Imposed on the railroads for failure to maintain these schedules. Either the shipper or the receiver may file claimsailroad for failure to perform In accordance with the rules of tba SMGS, and recourse to the courts ls prescribedarrier or shipper feels Justified ln complaining. The agreement alao providesniform bill of lading or shipping contract which must be printed in the language of the country of origin aa well aa In Russian aad German, and it must be executed in the official language of the country of origin, withussianerman translation attached. The bill of lading actually servesegal contract between the shipper and Ihe railroad and at the same time functionaaybill to identify the shipment en route andreight bill Indicating all charges which may accrue ea route. One bill of lading ls required for each shipmentarload or lessarload from oneto one consignee. Exceptions are made forailroad of less than ataadard gauge. In that case, oae bill of lading may suffice for more than one carload. Thishas evidently been made toblpper locatedarrow-gouge line to meet the minimum weight requirements provided for

In the tariff of rates, because such shipments vould be loaded into larger cars at change-of-gauge connecting points. It is also ato the railroads of North Vietnam, which are narrow gauge.

In general, the terms and conditions of the SMGS appear to adhere closely to vorldwlde practice, inhipment of one carload or lessarload from one consignor to one consignee constitutes one legal contract for transportation. Considered in the light of European practiceeriod of many years, thoormal agreement that clearly establishes the rights and privileges as well as the duties and responsibilities of both tho shipper and the railroad. It formalizes in one multilateral agreement uniformequally applicable to all railroads, thus replacing the numerous nonuniform bilateral arrangements of the past within the Sino-Soviet Bloc. Although thes nev and progressive in intra-Bloc relations, there ls nothing about it to which themay point as evidence of the superiority of Communism. Articlef the SMGS provides for the acceptance of new members or participants on condition that none of the present members objectseriodonths from the date of application for This provision could conceivably oLlov Austria, Finland, Greece, Turkey, or Iran, for example, to become members, thereby extending the sphere of Bloc influence aad paving tbe way for even greater economic penetration.

The Uniform Transit Tariff (Einheltllcher TranelttarlfETT) is an appendix to the SMGS and hao the force of law on all participating railroads. It la probably the boat Illustration of standardization and coordination in rail transport so far achieved in the Sino-Soviet Bloc. The ETTariff of freight rates for transit traffic and at the sameniform nomenclature and classification of goods* for all international traffic. The rates named in the tariff are mandatory for the portionovement ln transit through one or more participating countries and are permitted but are not mandatory for the portion of the movement within the country of origin and/or destination. The ETT also applies to traffic originating ateaportanube River port when the shipmentln and ia destinedountry other than the country ln which the portocated. Forhipment from Sweden to tbe USSR by eeaolish port and thence by rail to destination would be in transit through Poland, and application of the ETT la mandatory on

* The uniform nomenclature of goods ls presently under 6tudyorking party of the Inland Transport Committee of the Economicfor Europe (ECE) of the UN for possible adoption by all European railroads.

thc Polish railroads. The ETT also applies to shipments originating at or destined for points in nonparticipatlng countries and moving by rall through one or more participating countries.

The procedure for the application of the ETT is comparatively staple but because of political considerations can become ratherin certain instances. The procedure is outlined ln detail in Article IV of the ETT. The tariff does not discriminate against any shipment legally acceptable under the terms of thend the ETT, regardless of the country of origin or destination, and also recognises and accepts the validity of other international agreements orto vhlch Its own participants may or may not adhere, even though the tariff does not mention these agreements or conventions by name.

Generally speaking. Article IV of the ETT provides that thestation master of the SMOS railroad receiving from or deliveringonparticipatlng carrier will act as an authorized agent for the shipper and vill prepare new documentation ln accordance with other International, agreements or the legal requirements of the connecting carrier. The shipper must, however, consign tho shipment to the station master at the entry or exit station on en SMGS route and must mark the bill of lading for the ultimate consignee and destination. In tbe event that the SMCS carrier and the connecting carrier do not have any form of agreement for the Interchange of traffic, the entire transaction at connecting points may not be Imposed on the station master but must be handledreight forwarder authorized to act for and on behalf of the consignor or consignee. Por traffic entirely within the Sino-Soviet Bloc, tha use of the middleman or freightis obviously never required, resultingonsiderable saving ln export-import brokerage fees. All rates and all supplementary charges prescribed in the ETT are in rubles end are collectible at the official rate of exchange in tbe currency of the country in which payment is cade.

Some reports state that the ETT favors the USSR and discriminates against all other participants. These statements are incorrect. Most transit traffic through the USSR is extremely long-haul trafficwith transit through other (smaller) participating countries. This long-haul transit traffic requires no origin and destination terminal handling and, because of its sheer volume lnields substantial revenue.** Ret revenue per ton-kilometer on transit traffic is no greater in tbe USSR than in any other Bloc country.

Tonnageg are given ln metric tons throughout this report.

** rief explanation of transit freight rates In the Sino-Soviet

Bloc, see Appendix A.

There la considerable evidence, moreover, thnt many of the tariff proirlsions are in reality concessions by the USSR to the European Satellites. The requirements for carload minimum weight, for example, are based on the capacities of the freight cars of the European Satellites rather than on the capacities of the heavier Soviet counterparts.

The ETT lists all international border or port terminals and the tariff diatances between them, thusimplified method of determining total charges. In addition to ordinary freight retea, exact charges for refrigerated transport, by season, are named. Charges for tranaloading or for changing wheel sets at change-of-gauge points and for ferrying service across rivers are listedas edditlonal payments.

The ETT, ln effectas been adjusted aa the need haa arisen. It appears that profit on transit traffic per ton-kilometer equals or exceeds profit on Internal traffic. With some room for tbe downward adjustment of ratea, therefore, the ETT can algnlficantly Influence foreign trade. Rates can be adjusted to meet changing conditions or to correct Inequities, thus aiding in coordination and standard 1aation.

IH. Organization for the Cooperation of Socialist Railroads (OSShD)

See II, p. a, above.

The adoption by the Sino-Soviet Bloc of tbe SMGS, Including tha ETT and the cooperation among railroads required to administer lt, brought to the fore many other operational problems, includingof rolling stock; Interchange of rolling stock; restrictions on axle weight loads, which varied from country to country; signaling; and track. The organization BUD* was not technically constituted to Bolve these problems, nor was lt legally competent to do ao. Its sole function was to sdmlnlster the SMGS-SMPS agreement. At aof transport executives in Sofia6 the various problems of operations, equipment, and rolling stock were dlecuased. It was even suggested that complete standardization of track gauge aad rolling stock to conform to the Soviet gauge should be considered. Thiswas temporarily postponed because of prohibitive coats. It was proposed, however, that the functions and authority of tbe BUD ahould be extended to include the inherent problems of uniformity and standardization of all elements of rail transport. Among the suggestions put forth were standardization of operating rules, design of rolling stock, track, track structures, signaling equipment, and brakes. Apparently the suggestions were seriously considered,eeting was held ln Peking fromo7 and was attended by

TTiT7 T

delegates froa all the SIno-Soviet Bloc countries. The delegatesand approved alterations to the fUGS and amendments to the ETT vhlch resultededuction of bom freight chargea. The delegates also prepared information, presumably- working papers and agenda,onference of ministers of transportation vhlch convened ln Peking fromaymmediately following the meeting of the working group, fj The outcome of the minietcra1 conference was the foundation of the Organization for the Cooperation of Socialist Bail-roads (OSShXr*). The scope of the functions, responsibility, and authority of the OSShD goes far beyond the original concept of the BUD and the SMGS-SMPS. Tbe BUD ceased to existeparate entity, and the functions of that agency among others were delegated to the Ball Transport Commission of the OSShD in Warsaw. 0/

a. Legal Status 2/

Thc OSShD, vhlch coordinates and standardizes rail traffic in the Sino-Soviet Bloc, was founded by an international treatyby all countries of the Bloc) that came Into force* Its authority Is derived from its statutes and amountselegation of authority from participating governments. Over-all policy and management ore vested ln the Council of Ministers ofof member states. This Council meets regularlyear but may meet more often If circumstances so dictate. It la legally constituted when tvo-tblrds of the members are present. All decisions of the Council must comply vith the laws of the member states or, if outside tbe scope of Council authority, must be referred to the member states for ratification.

* Also known as OCR. OSShD is the German transliteration for the Russian OSZhDOrganlzatBlya Sotrudnichestva Zhelcznykh Dorog, the

German translation of which is Organisation fuer die Zusammenarbclt

der Elsenbahnen.

Executive authority to menage the day-to-day affairs of the OSShD Is delegated to the Rail Transport Commission, with headquarters in Warsaw. On the Commission, each member state has one member who Is selected from among the railroad officials of member state railroads. Each member has one vote. The chairman, two deputy chairmen,ecretary of the Commission are appointed by the Council from members of the Commission. The Commission la empowered to make decisions on problems within Its Jurisdiction provided that at least two-thirds of thc members approve. Decisions of the Commission become obligatory upon all railroads of all member countries provided that no objection is raisedember of the Council withinmonths of the date of the decision. The Commission is directed to publish an officialin the Chinese, German, and Russian languages, containing all

decisions of the Commission as well as selected technical studies or pepers effecting all mentor railroads. The Commissiontaff of technical experts. It is financed by dues paid by thc member states, and dues are assessed according to the length of railroad route in each state.*

3. Scope of

The OSShD has been assigned the following responsibilities within the Sino-Soviet Bloc:

Administration of the SMGS-SMFS agreement on roll traffic, compilation of international rail tariffs, improvement of operations at frontier stations, and coordination of problemsto construction and reconstruction of international routes.

Solution of problems concerning efficient use ofstock, improved schedules, and reduced time for rail movements.

3- Organization and coordination of scientific andresearch related to rail transport.

Solution of such operational problems asof routes, rolling stock, signals, and operating regulations aa well as development of the moat rational methods of traction.

5- Cooperation with other international organizations dealing with rail transport snd traffic problems.

For purposes of comparison, these responsibilities in Western Europe are vestedarge number of organizations, offices, and agencies,ew of which have legal authority to make binding decisions.

There is no evidence that the OSShDubsidiary body of the Couacil for Mutual Economic Assistance (CEMA). Membership ln the OSShD includes all nations of the Sino-Soviet Bloc, whereas membership ln CEMA does not include Communist China, Mongolia, North Korea, and North Vietnam. Moreover, whereas the CEMA transportation committee appears toolicymaking agency for its members, the OSShD is en administrative, implementing, and operating authority for policies, plans, operations, and traffic.

It is not clear whether this length applies to the total route or only to the international routes prescribed in the SMGS-SMPS.

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the OSShD vas organized' originally, the responsibility for the study and solution of problems confronting the railroads vas entrusted tounctional committees of the Rail Tranaportln Warsaw. Tn8 an eleventh ccoclttee on motor vehicle traffic and highway systems vas Instituted. Each committee is under the chairmanshipermanent national delegate to tbe Commlsalon. The commltteea are authorized to draw on the servicea of technicalfrom the railroads of member countries ln addition to those employed on the permanent staff.

Because the OSShD has beea in existence onlyhere has hardly been time for any spectacular achievements. Nevertheless, the commltteea have been active and haveumber of recommendations which have beea adopted by the Commission, thereby acquiring the force of law. Tbe nature of the committee tasks and the specific problems under study are evidence of intended goals.

* See II, p. k, above.

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Committees responsible for the study andof passenger traffic and is under the chairmanship of thefrom Coircunlat China. Thla committee supervises the SMFS* and has been studying plans for improving passenger comfort; establishing an international sleeping-dining car enterprise; standardizing and coordinating financial liability for deaths or injuries of passengers in international traffic; andniform tariff for the rail tranaport of passengers, baggage, and expresshe Slno-Sovlet Bloc. ?io reports of committee activity nave beea madebut Committeeas announced the adoption of standards of design for passenger cars Incorporating standard windows and heating and lighting equipment. esolution also has been adopted toa Bloc-wide sleeping-dining car enterprise. Thle enterprise may developointly owned and operated pool of sleeping snd dining carsersonnel staffingle managing agency, probably an office of the Ball Transport Commission. At present, some passenger cara crossing thc Soviet borders are designed for easy change of wheel sets at the border, and through car service is available between the USSR and many European Satellite cities aa veil as between the USSR and Communist China.

Committees responsible for the study sndof freight traffic and is under the chairmanship of the delegate from Hungary. The committee supervises the , changes were made in the SMGS which will affect freight charges and may eventually be reflectededuction In costs of goods. For example, some perishable goods which formerly required an

escort nay now be shipped without escort, thereby ellodnatlng the escort feeublesB. Freight rates and supplementary chargea which were formerly collectible on tbe basis of rates in effect on delivery are now collectible on the basis of rates in effect on the date of shipment. This rule precludes an increase In charges after the transport contract has been signed. The time allowed for transloadlng at change-of-gauge points has been increasedo k& hours. ew and more permanent text of the SMGS Is under study by the committee.

3. Committee* responsible for tariffs and is under the chairmanship of the delegate from Bulgaria. Zt administers the ETT and studies ways and means of establishing more uniformity ln other International tariffs. The1 iesue of the ETT was completely revised and reissued Because1 issue has never been available for study, the nature and significance of thc changes In6 Issue are not known. ome rather significant adjustments have been reported. Forhipmentommodityarload minimum requirement0 kilograms (kg) and actually0 kg would previously have been charged for0 kg. Under the change the same shipment is now charged forateg for the exact weight0 kg. This change has resultededuction ln charges for identicaland Is more in line with worldwide practice.

The most recent significant changes in the ETT are the resultonference of the committee held In Warsaw in The tariff formerly prescribed different carload minimum weight requirements for carston capacity and for carston capacity. nly one carload minimum will be applied regardless of the type or capacity of the car used. In practically every instance the minimum requirement has been adjuatcd downward, and the rate applicableg remains thc same. In the few cases where there baa been an upward adjustment of the minimum weight requirementiven commodity, there hasompensating downward adjustment in the freight rate. The function of the committee goes beyond the administration of the ETT and lo applicable to alltariffs within the Sino-Soviet Bloc, suchariffexport-import freight rates between Poland and the USSR. If the basic concepts of uniformity and standardization are carried out, an export-Import tariff between Bulgaria and Rumania, for instance, would be identical to the Polish-Soviet tariff. ore specific and extensive alphabetical classification of goods has been adopted,efinite method of relating rates to costs haa been prescribed, neither rule is available for analysis.

*. Committees responsible for rail transportand international border stations and is under the chairmanship of the delegate from the USSR. The committee is attempting to develop more efficient methods of using rolling stock and to expedite customs and other international border operations. At the third conference of the Council of Ministers ofesolution was adopted instructing the committee to study and solve the question ofa freight-car pool for railroads with standard gauge and to be prepared to present its proposals for approval at the next meeting of the Councilear). As the matter now stands, the member railroads have agreed on an interchange of freight cars, with the user railroadental feereight car during the time that the car is in possession of this rail rood.

A similar agreement la in force in Western Europe, the RIY (Regolamento Internationaleo which all the countriea of the European Satellitea have subscribed Railroads are supposed toome loading rule and to use empty cars for loading back to the country of ownership. When unable to load back, the railroad is supposed to return the empty car as expeditiously as possible to the owner railroad. Western European experience (andEastern European experience as well) ahowo that suchpresent at least two problems in practice. First, the user railroad is inclined to use the foreign car for dooeatlc traffic ln peak seasons and to pay the prescribed rental fee rather than to ln-veat ln new cars. This practice can deprive the owner railroad of rolling stock, therebyhortage. Second, ln order to avoid rental fees, empty cars are returned tc the owner with little effort to observe the home loading rule, thereby wasting capacity. The creationreight-car pool wouldong way toward solving these problems.

A freight-car pool has been organized in Western Europe and works in the following manner. Each of the countries concerneda number of freight cars based on the amount of export-import traffic of the country concerned. Cars aretandard designof operation over all routes. Each car is identifiedool carpecial symbol indicating its availability for use by the pool andymbol or marking to identify ownership. Cars are used in accordance with priorities, aa follows: (a) International traffic between pool participants, (b) internal traffic, and (c) international traffic to nonparticlpants. pecified hour each day, railroad administrative divisions of the Western European pool report to their headquarters the exact number of cars received from foreign systems and dispatched to foreign systems and the number of cars on hand. Railroad management then reports tho collective informationentral car pool office in Berne which determines and orders the necessary movements

to maintain the original pool balance, regardless of ownership. No rental fees are charged. Running maintenance and repair are performed by tbe railroads having possession, and cars are returned to the owner for general overhaul onceears. Ibis scheme hasreduced movements of empty cars in Western Europe, and ansupply of cars when and where needed Is maintained.

Tn view of the fact that recommendations of Committeef the OSShD have been adopted prescribing standards for freight cars to be constructed or altered for international use, the USSR andChina could conceivably participate inreight car pool. Efforts are being made to improve and coordinate operations at border crossing points. Poland and East Germany are reported to have reached an agreement on the subject of expediting borderhe details of which are not known. In trans border traffic, however,of healthustoms (control of prohibited articles or the collection of duties for revenuend travel control (limnlgration-eralgratlon) have always been major problems. Committeeas an extremely important function because certain duties must be performed at International borders to protect all concerned. The problem of quarantine possibly may be solved with an agreed certificate of immunization acceptable to all the countries involved, therebythe needhysical check of each animal, person, ortouarantine certificate may be applicable. The problem of customs inspection for transit traffic may be solvedimple comparison of documentation with railroad car seals andhysical check of merchandise. Customs inspection of import-export traffic at border points may be waived if inspection Is performed and duties are Imposed at some origin or destination stations and If the railroad operatesonded carrier authorized to act on behalf of the customs authorities. Ia passenger traffic, all inspections can be handled by teams of officials while trains are moving, therebydelays at border points. International trains operating between West Germany and Austria, for exsmple, are now inspected in thateam consisting of health, customs, and travel control officers of these two countriesouthbound train ln Munich, Germany, and by the time the train arrives at Salzburg, Austria, all border control for-malitiea have been completed, and the trainsrecise schedule.

5- Committees responsible for technical and scientific coordination and research and ie under the chairmanship of the delegate from Rumania. The committee met in Bucharest in8 andplans for the exchange of research aids and technical documents on the subject of transportation and for familiarization trips into the various countries of the Sino-Sovlet Bloc by experts of all railroads. It was agreed that no authors' royalties would be charged and no licenses required for the exchange of documents or films and other

visual aids. Tbe committee has under study the automatization of yards, the types of electric power most suitable for adapting to railroad electrification, and the use of reinforced concrete in The functions of the committee are comparable with those of the Office of Research and Experiments ln the International Union of Railroads (union Internationale dea Chemins de FerUIC) in Paris. All European Satellite rallroeda are members of the UIC, and the committee undoubtedly' will make use of and apply the findings of the UIC when they suit its purpose.

6. Committees responsible for the standardization of railroad cars (including both passenger and freightpare parts, and track and is under the chairmanship of the delegate from East Germany, lk/ The committee has prepared standard specifications, which have been adopted, for the manufacture of new rolling stock and the alteration of existing rolling stock. The specifications providetandard freight car of one design that Is currently ln use ln tbe USSR but is not identical with all Soviet freight care. Brakes, bearings, wheels, axles, and practically all components of thegear of this freight cor are standardized down to the lastincluding the size of the spring leaf and the type of threadoltut. Tho specifications Include the maximum width and heightreight or passenger car as well as the maximum permissible axle load. The axle load limit has been raised from5 tons, thereby peimittlng the construction and use of higher capacity cars In International traffic. This standardization, although legally binding only on cars for International traffic, will obviously be reflected In all production and may Leadreater degree or standardization and specialization in production facilities. The standards adopted for cars conform to similar standardE adopted for route construction on the recommendation of Committee No. 9- Committeeas beento develop designs for cars adaptable to conversion for use oo brood-gauge and standard-gauge track. If the committee is successful In this venture, all European Satellite core would be suitable for use on Soviet routesreater number of Soviet cars would be suitable for use on European Satellite and Western European track than atprovided, of course, that vertical and lateral clearances on routes are altered to accommodate the larger cars.

7- Committees responsible for the study and solution of problems pertaining to safety equipment, signaling, and operating rules and regulations and is under the chairmanship of the delegate from Poland. In8 the committee met in Sofia and worked out recommendations for the establiahment of direct telephone andcommunicationa among member railroads. Although the exactare not available for study, the ultimate goal la todirect telephone and telegraph service, operated and maintained

by the railroads, among all member railroads at all levels. yctem could be patterned after the direct dial BASA system ublch was designed by the Germans before World War II and is still in use ln both West and East Germany. This system is independent of ordinary telephone service and, for that matter, of the regular railroadservice. The caller simply dials the code numberiven -railroad division headquarters or principal atation,ecording device identifies the station and the caller dials thedesired. If this system is established, it willighly secure land line of ccemainlcation among all railroads which would be extremely useful economically and militarily. The third issue of the official bulletin of the OSShD published in WarsawG reported that by8 the following long-distancelines were in operation: eking, Warsawlan Bator, andoscow.

8. Committeea responsible for studies of train movements and use of motive power and ls under the chairmanship of the delegate from the USSR. The committee met in Warsaw, Budapest, ami Sofia8 to discuss and solve problems of electrification and dlesellzatlon. The results of the conference are not available, but lt la presumed that standardization of electric aad dieselami the selection of the most economical traction equipment for each country, depending on traffic density and availability of power and fuel, are the problems under study.

9* Corralttee* responsible for the study and solution of problems relating to route construction and ls under theof the delegate from Communist China. It has made racosmendatlons, which have been adopted, for minimum clearances ln routexact specifications for clearance between double-track lines andtrack and station, for overhead clearances, and for other fixed line facilities have been prescribed. The aaTaamaa pressure per axle or per meter of track haa been prescribed and corresponds to rolling stock limitations prescribed by Committee No. 6. In East Germany, action is being taken to increase the minimum vertical clearanceand the minimum horizontal clearancecorresponding to present Soviet It has been reported that at least fivo main lines ln Bast Germany were surveyed foras early as It was also reported that thc Berlin Outer Ring provided for the clearance of rolling stock of the Soviet type when it was originally constructed If such conversion is taking place in the occupied zone of East Germany, it Is apparent that similar action must have taken place in Poland;estrictive barrier between the USSR and East Germany would be imposed, if and when these clearances become fact, there will be do physicalon the movementoviet freight car from thc USSR to the border between East aad West Germany.

No.s responsible for the coordinationactivities vith other organizations engaged in similar workunder the chairmanship of the delegate from Czechoslovakia. has been instructed to cooperate with the Economicfor Europe (ECE) of the UN ln Geneva, the Berne Central OfficeCTM in Berne, and CEMA. The OSShD has been invited by thcof the transport committee of the ECE to send observers tomeetings. At the third conference of the Council ofTransportation the question of cooperation with the Westernof Ministers of Transportation vusas instructed to make no Immediate contacts but toactivities of the Western organization. The committee alsoto cooperate more closely with CEMA, and lt vas resolved

to coordinate tbe transportation plana of all member countries.

No.s responsible for motor vehiclehighway systems and is to be under tbe chairmanship of theEast Germany. This committee vaa established by unanimousof the Council of Ministers of Transportation ln functions are not knovn.

D. Strategic Significance

There is no evidence at this time that the over-all functions and activities of the OSShD are directly dictated by the requirements of the Worsav Pact. Nevertheless, the coordination achieved to date and the plans for further coordination and standardization willa unified complex of operational conditions and practices that in time of war or other emergency would facilitate the Integration of the roll transport system throughout the entire Sino-Soviet Bloc under the directioningle civilian authoritynifiedcommand. The most Important features of the programtrategic point of view are those dealing with the standardization of line clearance profiles, rolling stock, and signals and theof railroad-operated telecommunication facilities throughout the entire Bloc network. There is some evidence that strategicdo have some Influence ln these matters.

The first logical step in improving the strategicof tbe railroads vould be to Increase the clearances along fixed line facilities on the standard-gauge systems of the Satellites and to strengthen the roadbeds, thereby permitting the movement of vlder, higher, and heavier rolling stock of the Soviot type over standard European-gauge track. There is considerable ovidence that action to accomplish these objectives is underway, at leant on the mainstrategic routes. The second step would be to design all new rolling stock so that it could be converted easily to either Soviet

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or European standard gauge by changing wheel sets. Action Isto accomplish thia. When these two steps are fullyonversion of rail from standard to Soviet gauge in case of war or other emergency vould be possibleelatively short period of time. niform Soviet-gauge railroad line from the Pacific Ocean to the borders of Western Europe overew main routes vouldhave great strategic as well as economic significance,tandardized system of railroad operations would greatly facilitate military operations.

TRANSIT FREIGHT RATES IN THE SINO-SOVIET BLOC

Transit freight rates for the Sino-Soviet Bloc are published ln the uniform Transit Tariff (Einheitlicher TransittarifETT) only for movements of carload lots in regular service. Special provisions in the tariff, however, provide for corresponding increases in rates for express service, fast freight service, and shipments or lessarload. The various services are defined as follows;

Expresscarload freight In scheduled passenger trains.

Fast freightcheduled freight trainsatem perours.

Regular freightscheduled freight trainsatem perours.

Less than carloada shipment of less than the weight norm (carload minimum) proscribed by the tariff.

The following rateB are for regular freight service In carloads:

Rate (Kopecks

Ton-Kilometer)*

Telephone

Canned5

Bread

Iron and steel

* For express service, multiply by three; for fast freight, multiply by two; and for lesBarload, the rate iscrceat higher infast freight, or regular service. One hundred kopecksuble. Ruble values in this report are expressed In current rubles and may be converted to US dollars at the official rate of exchangeubles to This rate of exchange, however, does not necessarily reflect the true dollar value.

or

6 the average revenue received per ton-kilometer in the USSRopecks, or just between the transit rates forndhat average iacludes short-haul traffic of coal, ore, buildingand other low-class, low-rate goods, whereas transit traffic vould ordinarily consist of higher class goods such as machinery, chemicals, and food products. It is evident, therefore, that transit traffic is profitable for the USSR. omparison of transit rates across the USSR with internal rates for an equal distance reveals that transit rates are lower than internal rates. Thisapplies equally to the long0 km) from Communist China -to Poland or to the comparatively short0 km) from Finland to Poland. Transit rates per ton-kilometer are identical in all Sino-Sovlet Bloc countries. Trans loading of freight at change-of-gauge pointseparate charge in the tariff and must be paid by the Therefore, assuming that line-haul costs per ton-kilometer are reasonably uniform throughout the Bloc, the short-haul railroads of the European Satellites earn as much net revenue per ton-kilometer of traffic as the Soviet railroads.

APPENDIX B

Tbe gaps in intelligence on coordination and standardization of rail transport in the Sino-Soviet Bloc arc general rather than specific. Until very recently, little effort had been made to collect information on the subject, but that situatioa has now been corrected, and moreis beginning to be obtained, although not yet io the detail desirable.

appendix c

SOURCE REFERENCE'S

Evaluations, following the classification entry and designatedave the following significance:

Source of

Doc.

Documentary

Confirmed by other sources

-

reliable

Probably true

-

reliable

Possibly true

-

reliable

Doubtful

-

usually reliable

Probably false

-

reliable

Cannot be Judged

-

be Judged

"Documentary" refers to original documents of foreign governments aad organizations; copies or translations of such documentstaff officer; or information extracted from such documentstaffall of which may carry the field evaluation "Documentary."

Evaluations not otherwise designated are those appearing on the cited document; those designated "RR" are by the author of this report. Ho "RR" evaluation is given when the author agrees with the evaluation on the cited document.

1.

A Surmary cf the Ir:tcrr.atz.or.il Trade and

Transport of Cogaiunist

C. Ibid.

State, OIR. IR rpt C. Eval. RR 2.

CIA. RR 2.

Ibid.

CIA7 CS, RR 1.

-

9. Ibid.

Publications Hesearch Service. b U. Eval. RB Ibid.

PRS (KY) rptO. U. "Eval. RR 2.

5 U. Eval. RB 2.

13- State, Berlin. , OFF USE. Eval. RRb. US Joint Publications Research Service.

ct 5S- U. Eval. RR Army, ACSI. Intelligence Translation,A,

U. Eval.

USAREUR, ACSI. Intelligence Suanary,,

RR 2.

Joint Publication* Research Service. ,

. OFF USE. Eval. Doc.

Original document.

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