AN ECONOMIC ANALYSIS OF THE RAILROAD SYSTEM IN EAST GERMANY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A001600110001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 77
• Document Creation Date: December 23, 2016
• Document Release Date: June 3, 2013
• Sequence Number: 1
• Publication Date: May 1, 1960
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
ECONOMIC INTELLIGENCE REPORT
N? 850X1
AN ECONOMIC ANALYSIS OF THE
RAILROAD SYSTEM IN EAST GERMANY
CIA/RR ER 60-11
May 1960
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
SECRET
ECONOMIC INTELLIGENCE REPORT
AN ECONOMIC ANALYSIS OF THE
RAILROAD SYSTEM IN EAST GERMANY
CIA/RR ER 60-11
May 1960
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
50X1
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
CON1ENTS
Page
Summary and Conclusions 1
I. Introduction 3
II. Organization and Development of the Railroad System . 5
A. Administrative Organization 5
B. Characteristics of the Railroad Network 6
1. 1950 6
2. Pattern 6
3. Length 7
C. Demand for Rail Transport Service 8
1. Importance of Railroads as a Means
of Transport
2. Commodity Composition of Freight Traffic ?
3. Demands of Foreign Traffic
4. Demands of Passenger Traffic
D. Expansion of the Railroad System
?
?
8
8
9
9
10
1. Double Tracking
10
2. Electrification
10
3. Expansion of the Park of Rolling Stock . .
?
.
11
4. Expansion of Internal Reserves
11
5. Conclusions
12
III.
Rail Operations and Utilization of Facilities
12
A. Comparative Utilization of Facilities
12
B. Utilization of Rolling Stock
13
IV.
Relationship of the Transport Sector to the Economy
as a Whole
14
A. Transportation Price Policies
14
B. Effect of Transportation Prices on the Economy
?
?
15
C. Financial Returns of Railroad Enterprise
17
D. Labor Situation in the Transportation Industry
19
1. Results of Intensive Labor Practices
19
2. Labor Productivity
20
- iii -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Pae
E. Program for Capital Equipment of the Railroads 21
1. Investment in Railroads 22
2. Material Inputs 24
3. Future Prospects for Inputs 25
V. Interrelationships of Capital and Labor Productivity 26
Appendixes
Appendix A. Prewar and Postwar Structure of the Railroads
in East Germany 29
Appendix B. Content and Use of Operating Ratios 33
Appendix C. Statistical Tables 37
Appendix D. Multiple Correlation Between the Index of
Total Traffic Kilometers, Capital Produc-
tivity, and Labor Productivity, 1951-57 .
57
Tables
1. Composition of the Financial Balance of Railroads in
East Germany, 1956 18
2. Operating Ratios of Selected Railroads in West European
Countries and East Germany, 1956 18
3. Net Investment in Railroads as a Percent of Total
Investment in East Germany, 1951-55 and 1956-60 . ? ? 23
4. Composition of the Standard-Gauge Railroad Network
in East and West Germany, 1936, 1950, and 1957 . . ? ? 30
- v -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S -E -C -R -E -T
5. Comparison of Railroad Systems in Selected European
Countries, 1956
6. Basic Data on Railroads in Selected European Countries,
1956
7. Distribution of Inland Freight in East Germany, by Mode
of Transport, 1936 and 1946-58
8. Freight Carried by Railroads in East Germany, by Type
of Commodity, 1950 and 1955-58
Page
38
39
40
42
9. Freight Carried and the Average Number of Freight
Cars Required for Each Type of Traffic in East
Germany, 1950-58 43
10. Inventory of Rolling Stock of Railroads in East Germany,
1946-58 44
11. Revenue of Railroads in 1950-57 and Revenue Required
to Meet Expenditures in 1958 in East Germany, by Type
of Service 46
12. Profit and Loss Statement for Railroads in East Germany,
1955-57 47
13. Transport Employees in East Germany, by Mode of Trans-
port, 1950-56 49
14. Wages and Salaries of Transport Employees in East
Germany, by Mode of Transport, 1950-56 50
15. Product, Capital/Output, and Labor/Output Ratios for
1951-57 with the Estimated Annual Totals for 1958-60
Required to Fulfill the Plan for Railroads in East
Germany 51
16. Estimated Investment in Railroads Compared with Total
Investment and Investment in Transport in East Germany,
First (1951-55), Second (1956-60), and Third (1961-65)
Five Year Plans
52
17. Proposed Additions to Line Capacity of Railroads in
East Germany, 1956-60 54
- vii -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Page
18. Estimated Value of Capital Stock of Railroads
in East Germany, 1951-60 55
19. Annual Statistics for Railroad Transport in
East Germany, 1950-58 56
Illustrations
Following Page
Figure 1. East Germany: Organization of the Min-
istry of Transport (Chart) 6
Figure 2. East Germany: Transportation (Map)
inside back cover
Figure 3. East Germany: Indexes of the Growth of
Ton-Kilometers, by Mode of Inland Trans-
port, 1950-58 (Chart)
Figure 4. East Germany: Indexes of the Growth of
Tons Carried, by Mode of Transport,
1950-58 (Chart)
Figure 5. East Germany: Comparison of Rates of
Growth Between Domestic Tons Originated
and Foreign Tons Carried by Railroads,
1950-58 (Chart)
Figure 6. East Germany: Comparison Between the
Average Number of Freight Cars Needed
to Carry Railroad Tons Originated and
the Average Number of Freight Cars
Available, 1950-57 (Chart)
Figure 7. East Germany: Relationship of the Index
of Industrial Production to the Index of
Railroad Ton-Kilometers (Chart)
8
8
10
Figure 8. East Germany: Revenue of Railroads, by
Type of Service, 1950-57 (Chart) . . . 18
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
AN ECONOMIC ANALYSIS OF THE RAILROAD SYSTEM IN EAST GERMANY*
Summary and Conclusions
Rail transportation in East Germany in terms of operations and
maintenance illustrates the Soviet practice of endeavoring to achieve
maximum output from a railroad system with a minimum of material in-
puts. Through the postwar period, by dismantling the railroads for
reparations, the USSR reduced the railroad route network to essen-
tially a single-track system with the removal of about 13,000 kilo-
meters (km) of track principally from double-track and triple-track
sections. Track length had been reduced from 27,400 km in 1936 to
14,400 km in 1950, approximately 47 percent. Moreover, during the
early years after World War II, only a sufficient number of locomotives
and cars were repaired and kept in repair to meet the greatly reduced
demands for traffic. In 1938, approximately 22 billion net ton-
kilometers (tkm)** of freight traffic moved on the railroads of the
East German area. In 1946, only 8 billion net tkm were moved, but
performance had reached 16 billion net tkm by 1950.
Since 1952, performance of the East German railroads has increased
steadily, to about 33 billion net tkm in 1958, an increase of about
100 percent. Additions to track length have amounted to about 12 per-
cent -- 1,700 km -- so that in 1958 the railroads produced about 45 per-
cent more net ton-kilometers with less than 60 percent of the rail
track length available in the period before World War II (1938).
Passenger traffic also has increased, although only moderately. Traf-
fic was hauled with fewer locomotives and passenger cars than existed
during the wartime period and about one-third more freidit cars.
The density of freight traffic per kilometer of track in East
Germany in 1958 was about 130 percent higher than 20 years previously
as the result of the reduction in the length of the network and the
increase in freight traffic. In 1956, freight carried had averaged
14,256 tons per route kilometer of railroad track. Comparable data
for West Germany, Czechoslovakia, and Poland were 9,657, 11,317, and
9,765 tons per route kilometer, respectively. Passengers carried per
route kilometer per year in 1956 were 69,312 in East Germany, 46,839
in West Germany, 40,249 in Czechoslovakia, and 39,702 in Poland.
* The estimates and conclusions in this report represent the best
judgment of this Office as of 1 April 1960.
** Tonnages are given in metric tons throughout this report.
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
The average density of both freight and passenger traffic com-
bined per available route kilometer in East Germany in 1956 made the
East German system the most heavily used railroad system in either
Eastern or Western Europe, exclusive of the USSR. This relationship
has remained the same to the present time.
In spite of the considerable increase in performance of East
German railroads since 1950, the financial results of operations
through 1957 grew steadily worse. To halt the deteriorating finan-
cial situation, changes were made in tariff rates and rules in 1958
that should have done much to equate costs with earned revenue.
Factor inputs into the East German railroads for the period
1951-55 were as follows: (1) operating employees increased approxi-
mately 6 percent, with a computed increase of 26 percent in labor
productivity from 1950 through 1955 and a planned increase of 14 per-
cent in labor productivity for the years 1956-60, and (2) capital
inputs were well below the planned levels, although productivity of
capital rose an estimated 30 percent during 1951-55. The rise in
capital productivity, in terms of traffic kilometers per unit of
capital value, was due primarily to the underutilization of capital
in the early years of the plan and to an increase of only 2.6 per-
cent in the estimated net capital value of the railroads for the
period. At present rates of growth in performance, the increase in
capital productivity will be about 22 percent during 1956-60 with
an estimated increase of 8 percent in net capital value, thus indi-
cating a decline in the marginal productivity of capital additions
to the railroad system. This decline is the result once again of
underutilization of capital in early years and the fact that rela-
tively little investment has gone into improved types of capital
equipment or needed track capacity.
Materials in the form of parts for rolling stock, ties, rails,
and auxiliary metal parts are in continuing short supply. Efforts
to augment domestic supplies with imported materials have been partly
successful, but the entire quantity of materials contracted from
Soviet and other European Satellite sources has not been forthcoming.
The East German railroads generally have been able to handle the
demands of both economic and military traffic, but because average
demand is close to the capacity of the system, shortages of cars and
yard congestion occur during periods of peak traffic demands in the
fall and spring of the year. Accordingly, some delays in traffic
are experienced during these periods, but eventually the railroads
have been able to move all traffic offered. Operations are expected
to continue in the current pattern through 1960, and complaints will
continue to be voiced regarding the performance of the railroad
- 2 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
system. Moreover, the over-all traffic plan of the Second Five Year
Plan (1956-60) calls for a demand in 1960 of about 68 billion tkm, or
an increase of 32 percent above that of 1955 (29.9 percent in freight
and 2 percent in passengers).
On the basis of past trends in utilization and the additions of
capital, labor, and material inputs, it is estimated that the East
German railroads at best will complete only about 70 percent of their
planned goal for 1960. Carloadings are not growing at the rate
originally set in the Second Five Year Plan. Failure to achieve
the planned capacity for rail transport in 1960 is in large part a
result of inability to meet other economic plans and will not impair
general economic activity.
Development of a transportation plan for 1960-65 has been prin-
cipally a matter of enthusiasm and exhortation in East Germany, but
in general this plan does not contain the substance to remedy the
problems currently being experienced in the extensive program of
capital additions, repairs, and renovations. Rail operations, there-
fore, are expected to continue in the current pattern beyond 1960.
I. Introduction
The railroad network of East Germany is a prime example of the
Soviet pattern of achieving maximum performance from the transporta-
tion system with a minimum of capital input. The role of the rail-
roads in the economy of East Germany has been that of a necessary
service, tolerated because there is no substitute and improved only
to the extent necessary to meet the demands of vital economic and
military traffic.
Because of their importance in the economic growth of East Ger-
many, railroad facilities have been maintained and improved in rela-
tion to the general pattern of economic growth in other sectors.
Endowed with few of the raw materials necessary for the manufacture
of heavy equipment, the East German economy depends heavily on its
own transportation system and that of adjacent countries to provide
for the movement of necessary raw and semifinished materials in every
stage of production.
Railroad service has kept pace with the growth of the rest of
the East German economy as a result of a sustained policy of inten-
sive utilization of equipment, enforced personnel policies, and
- 3 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
absorption of reserve capacity in every phase of rail operation.
Recent levels of replacement of equipment and investment in new fa-
cilities represent a mining of earlier investment in the system that
could lead to a serious reduction in the growth of capacity, if con-
tinued beyond 1960.
In the early stages of central planning in East Germany (1948-50),
two alternatives for providing rail transport were available: (1) in-
vestment in new, modern railroad equipment possessing high technical
efficiency or (2) increased utilization of available, less efficient
equipment and continued reliance on additional increments to opera-
tional efficiencies for future increases in rail capacity.
The first choice would divert the burden of increased transpor-
tation capacity from relatively labor-intensive, low-output equip-
ment and facilities to capital-intensive, labor-saving equipment.
Such investment would seem to be the best long-run alternative for
an economy with a planned heavy industrial bias that expects to have
high-density, heavy-load traffic. The second alternative assumes
some capital additions in quantity terms, but the major element of
increasing capacity would come from intensified use of existing equip-
ment and accelerated depletion of capital.
Since 1951 the East German government has followed a plan closer
to the second alternative. This choice was a product of the follow-
ing conditions:
1. Among the industries competing for investment funds in
East Germany, rail transport could be given a relatively low priority
and still accomplish the desired traffic movement by more intensive
utilization of existing equipment.
2. There has been a disinclination to absorb the real cost
of scrapping obsolete equipment, such as aging steam locomotives and
rolling stock, in spite of the fact that the introduction of modern
locomotives (electric or diesel-electric) would increase actual route
capacity in areas of high density and would yield operating savings
which would amortize the initial cost.
3. The existing capability of the railroad system of East
Germany for moving military forces and equipment apparently is
adequate to satisfy the USSR. With reorientation of the directional
flow of economic traffic from east-west to north-south as a result
of changes in internal traffic demand, some of the rail lines torn
- 4 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
up by the USSR have had to be replaced, but the east-west traffic
capability remains adequate to provide substantial support for the
military in the event of war. This consideration also may be a
factor in limiting new additions to railroad line facilities.
4. The abundance of low-cost labor in relation to perform-
ance required per man-hour in the early years of the East German
First Five Year Plan (1951-55) probably created a preference for a
labor-intensive, capital-exploitive program. This situation has now
been reversed, and a shortage of qualified personnel exists in the
transportation industry. Wages and administrative costs both have
risen, the latter sharply.
In view of the declining priority of investment in the transport
sector, the additional tonnage carried by East German railroads has
been the result of policies designed to extract a greater average
output per unit of input of materials and labor.
II. Organization and Development of the Railroad System
A. Administrative Organization
The Ministry of Transport and Communications of East Germany
is a complicated organization, dominated by details and by a para-
mount concern for problems of the railroad system as opposed to those
of other carriers. The Minister of Transport and Communications,
Eric Kramer, a former railroad official, has been retained in the
position for many years as the best compromise between loyalty to
the Communist Party and satisfactory technical knowledge of trans-
portation. The First Deputy Minister under Kramer is the First State
Secretary in charge of rail operations, thus reflecting the importance
of the railroads as the dominant carrier.
There is a Soviet consultant attached to the Ministry of
Transport and Communications* who serves as an adviser to the Minister
on rail operations and acts as referent on military (particularly
Soviet) movements requiring the use of rail service. Other branches
of transportation have deputy ministers, each with equal status but
subordinate to the Minister.
Under the Central Administration for Railroads there are
five Main Administrations, each responsible for a particular phase
* See the chart, Figure 1, following p. 6.
- 5 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
of rail operations throughout the country. The country is divided
into eight districts (Reichsbahn Directorates -- RBDis), each of
which operates separately from the others but subordinate to the
Central Administration. Coordination of RBD activity is handled
by the five main administrations, which in turn get policy and co-
ordination from the Central Administration and the Minister of Trans-
port and Communications.
Subordinated agencies of the railroads operate directly un-
der the Central Administration, with functional units in each RBD,
and consist of social, supply, health, and other subsidiary functions
intrinsic to rail operations.
Heavy repairs (other than standard maintenance) are separated
from the Central Administration for Railroads and are supplied by an
autonomous service agency from which the railroads purchase major re-
pairs on locomotives and rolling stock.
Administrative personnel below the level of the Minister
have changed numerous times during the period 1957-59, mainly to
eliminate the more obviously incompetent and to move into positions
of responsibility those Party members who can work with Kramer.
B. Characteristics of the Railroad Network
1. 1950
The physical damage from World War II and the postwar
Soviet policy of dismantling almost all second tracks (on double-
track lines) for reparations claims left the East Zone of Germany
with virtually a single-track railroad system by 1950. As a result
of this change, some of the less significant single-track routes
were eliminated, and the major traffic flow was reoriented from pre-
dominantly east-west movement to north-south movement. The redirec-
tion of traffic from east-west to north-south came as a result of
changes in the internal traffic pattern of East Germany and simul-
taneously achieved a degree of isolation from the Federal Republic
of Germany by severing some east-west lines that formerly connected
the two zones of the country.
2. Pattern*
The basic configuration of the East German railroad net-
work has not changed appreciably from the pattern that existed before
* For a map of the railroad network of East Germany, see Figure 2,
inside back cover.
- 6 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
EAST GERMANY
ORGANIZATION OF THE MINISTRY OF TRANSPORT
Soviet Consultant
TRANSPORT MINISTER
KRAMER
TRANSPORT MINISTRY
Figure 1
Deputy Minister
First State Secretary
Deputy Minister
Deputy Minister
Political Administration
Deputy Minister
Deputy Minister
Director
AGENCIES RUN ON
TRANSPORT MINISTRY BUDGET
Savings (and loans)
Bank of
German Railroad
I I
Central Technical
Bureau
Drafting and
Surveying Bureau
of German Railroad
Experimental
Stations
27467 4-60
Chemical
Testing Station
German Railroad Field Units
and Subordinated Agencies
Central Administrations and
Administration Sections
5 MAIN ADMINISTRATION DEPARTMENTS
Main Administration
Department
Operations and Traffic
Main Administration
Department
Engine Technics
Main Administration
Department
Railroad Car Economy
Main Administration
Department
Railroad Installations
Main Administration
Department
Signal and
Communication Systems
Main Administration
Department
Railroad Repair Plants
Main Administration
Department
Railroad
Construction Trust
Main Administration
Department
Shipping
and Waterways
Main Administration
Department
Motor Vehicle
Transportation and
Highways
Main Administration
Department
Air Transport
SUBORDINAT.ED AGENCIES
Railroad-owned
Bank
Administration
Department
Railroad
Recreation Centers
Railroad
Medical Service
Railroad Tank car
Dispatching Office
Central-accounting
Section of
Transport Ministry
Central Purchasing
Office
for Roadbed
and Track Material
Central Reserves
Depot
Central
Printed-matter
Depot of
Transport Ministry
Railroad
Tie Plant
Centralized
Train-Radio Service
of German Railroad
27 Railroad
Repair Plants
Railroad Switch
Plants
50X1
FIELD UNITS
Railroad District
Railroad District
Railroad District
Railroad District
Railroad District
Railroad District
Railroad District
Railroad District
Headquarters
Headquarters
Headquarters
Headquarters
Headquarters
Headquarters
Headquarters
Headquarters
also
also
also
also
also
also
also
also
Railroad District
Railroad District
Railroad District
Railroad District
Railroad District
Railroad District
Railroad District
Railroad District
Berlin
Cottbus
Dresden
Erfurt
Greifswald
Halle
Magdeburg
Schwerin
Railroad Subdistrict
Central Supply
Bureaus for New
Headquarters
also
Depot
(On Railroad District
Construction
also
Direct chains
of command
Indicating
Railroad Subdistrict
Headquarters Level)
Relevant Districts
personal responsibility
Individual
Installations
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
World War II, but its capacity was reduced considerably by dismantl-
ing for reparations. The railroad network is adequately dispersed
and probably will have few new lines installed in the immediate fu-
ture.
The railroad network of East Germany is oriented around
two rail hubs -- one large, one small -- with spokes radiating to
cover the traffic needs of outlying areas. The most important hub,
Berlin, has radial lines going to all parts of the country but with
a preponderance going toward the south into the heavy industrial
areas. The second most important rail hub, Leipzig, is in the heart
of the industrialized, southern portion of the country. From this
point, double-track lines deploy to the other industrialized cities
in the area, and single-track lines radiate to outlying districts
forming a dense rail coverage. Other important rail hubs are Halle,
Dresden, Magdeburg, and Chemnitz, all located in an elongated tri-
angle comprising the area of heaviest concentration of domestic
traffic.
Berlin and the industrial triangle to the south are both
connected by rail with the Soviet and Polish mineral resources that
are necessary to continued industrial production by East Germany.
These rail lines to the sources of raw materials will become increas-
ingly important as anticipated increases in traffic between East
Germany and the USSR are realized. The capacity of several of these
routes is to be increased by double tracking (largely restoration of
removed second tracks) as soon as materials and labor become avail-
able.
The East German railroad network is complemented by a
good system of inland waterways and a reasonably adequate network
of long-distance highways and first-class and second-class roads.
3. Length
The total route length of rail lines in East Germany in
1958 was 16,093 kilometers (km).* Of this total, 1,318 km were nar-
row gauge (less than 4 feet 8-1/2 inches) and 14,775 km were standard
gauge (4 feet 8-1/2 inches). 1/** Approximately 1,475 km of the
standard-gauge route have two or more tracks, and at the end of 1958
approximately 160 km were electrified.***
* The latest year for which significantly complete data are avail-
able on East German railroads is 1958.
50X1
*** For analysis of the structure of East Zone railroads, see Appen-
dix A. For a comparison with other railroad systems, see Tables 5
and 6, Appendix C, pp. 38 and 39, respectively, below.
- 7 -
S-E- C-R-E- T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
C. Demand for Rail Transport Service
1. Importance of Railroads as a Means of Transport
Railroads are the major carrier of inland freight and
passenger traffic in East Germany. In 1958, railroads carried
48.4 percent of all tons originated and 82.1 percent of all ton-
kilometers, motor transport carried 48.3 percent of all tons origi-
nated but only 11.3 percent of all ton-kilometers, and inland water
transport carried 3.3 percent of all tons originated in 1958 and
6.6 percent of all ton-kilometers.*
The relative growth of the two major carriers (railroads
and motor transport) under the First Five Year Plan (1951-55) was
approximately equal. The 5-year trend showed an increased ton-
kilometer performance but at a decreasing rate. During the first 3
years of the East German Second Five Year Plan (1956-60), the rail-
roads continued to grow but at a decreasing rate. Motor transport,
however, increased ton-kilometer performance at a faster rate than
the railroads. Data on tons originated show a different pattern of
growth.* Loadings of both motor and rail carriers were growing at
an increasing rate, with motor carriers growing faster than rail-
roads.
The disparity between the rate of growth of tons origi-
nated and of ton-kilometers is a result of the declining average
length of haul by motor carriers -- from 22.3 km in 1950 to 18.8 km
in 1957. The efforts of the East German planners to divert short-
haul traffic from the railroads to motor carriers apparently have
been somewhat successful.
2. Commodity Composition of Freight Traffic
The nature and composition of freight traffic in East
Germany remained relatively consistent through the period 1950-58
with few changes of significant magnitude. Coal and coke, the major
commodities in rail freight traffic, increased from 42.7 percent of
the total of tons loaded in 1950 to 46.3 percent of the total in
1958.**
The second major commodity grouping -- other industrial
and agricultural products -- represented 21.2 percent of total load-
ings in 1950 and 12.7 percent of the total in 1958. The sharp decline
* See Table 7, Appendix C, p. 40, and the charts, Figures 3 and 4,
following p. 8, below.
** See Table 8, Appendix C, p. 42, below.
- 8 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
300
250
200
150
100
EAST GERMANY
Indexes of the Growth of Ton-Kilometers, by Mode of Inland Transport
1950-58
1950
27468 4-60
1951
1952
1953
1954
1955
1956
1957
Figure 3
50X1
Motor Truck Transport
Railroad Transport
Total Inland Transport
Inland Water Transport
1958
Declassified in Part- Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
300
250
200
150
100
EAST GERMANY
Indexes of the Growth of Tons Carried, by Mode of Transport
1950-58
1950 1951 1952
27469 4-60
Figure 4
Motor Truck
Transport
Total Inland
Transport
Railroad
Transport
Inland Water
Transport
1958
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
is explained in part by the introduction of a "piece goods" category
in 1952 that accounted for almost one-half of the decline. The abso-
lute tonnages in other industrial and agricultural products retained
the same ratio of loadings after 1952.
The third most Important commodity group, building ma-
terials (excluding cement), continued to represent a fairly consist-
ent.percentage of total loadings.
3. Demands of Foreign Traffic
Foreign freight received at the border that is destined
for domestic consumption is included as part of total tons carried
when such freight crosses the border into East Germany. Transit
traffic is believed to be included in the figure for total tons car-
ried, although East Germany does not indicate what proportion of
total freight traffic that transit traffic represents.*
Althouet foreign loadings generally have been less than
10 percent of total loadings, there is an implication of increasing
imports and perhaps an implication that domestic production is be-
coming more heavily dependent on foreign sources. Foreign loadings
increased from 6.6 percent of total tons originated in 1950 to about
10 percent of the total in 1958.** Althouel this increase is diffi-
cult to discern, it becomes more apparent when seen in terms of the
growth of import tonnage alone. This increase was more than twice
that of domestic tons or of total tons hauled during the same period.
4. Demands of Passenger Traffic
Passenger traffic has changed little during the period
1950-58. In terms of the number of passengers carried, the increase
was only 3 percent in comparison with the 9-year period, althoUgh
passenger kilometers increased 15 percent during the period, indi-
cating a gradual increase in the average distance each passenger.
traveled.
Although the total number of passengers has not grown
appreciably since 1954, the density of passenger trains remains high
and contributes to make the East German railroad system one of the
most intensively used systems in Europe in terms of the average number
of trains per route kilometer.
* For a comparison of the relative growth of tons of domestic freight
originated and tons of foreign freight received, see Table 9, Appen-
dix C, p. 43, below.
**. For a comparison of rates of growth of domestic loadings and of
foreign loads coming into East Germany through border stations, see
the chart, Figure 5, following p. 10.
- 9 -
S-E-C -R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
D. Expansion of the Railroad System
The relative maturity and the uniform distribution of the
East German railroad network tend to reduce the need for new routes.
The situation in Berlin in 1948-49 caused East Germany to decide to
construct a new outer railroad ring around the city in order to cir-
cumvent Allied control, and the construction of the Schwarze Pumpe
project (a coke-chemical plant utilizing low-grade lignite) required
construction of a new railroad line to service it. Aside from these
two projects, construction of new railroad lines in East Germany has
been kept to a minimum.
Most main lines, however, have such heavy traffic that alter-
native routes involving longer distances have to be used to relieve
them. 2/ Rail facilities have been expanded to meet increased demands
of traffic. Thus increases in track capacity that were added during
1950-58 have come from double tracking and from reinstallation of
some double track removed by the USSR. High-density traffic has been
aided further by electrification of lines, by increases in rolling
stock and locomotives, by heavier loading, and generally by more in-
tensive utilization of existing equipment.
Any efforts at expansion probably will be confined to annual
additions to the following projects, the rate of completion being
largely determined by the priority of each project.
1. Double Tracking
Double tracking has been limited to stretches of line on
which there is high-density traffic, such as Leipzig-Dresden, Halle-
Songehausen-Nordhausen, j Gothe-Neudietendorf, Leipzig-Torgau-
Falkenburg, Lq and some lines to the expanding ports of Wismar and
Rostock. The new double track has been laid on roadbeds that re-
mained after Soviet seizures for reparations. Annual additions to
double track have been small, but future additions may be greater
because traffic is expected to continue to grow and present capacity
is very close to the present demand for traffic.
2. Electrification
Electrification has been limited to the rail line between
Halle, Magdeburg, Leipzig, and Rosslau. Eighty-six km of this line
were under electric operation at the end of 1957, 2/ and an additional
, section of 74 km became operable in 1958. Y This stretch of track
originally was electrified and double tracked but was reduced to
single-track steam operation by dismantling for reparations in 1946
and 1947. The electrification, therefore, is basically a replacement
- 10 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
300
250
200
150
100
EAST GERMANY
Comparison of Rates of Growth Between Domestic Tons Originated
and Foreign Tons Carried by Railroads
1950-58
1950
27472 4-60
1951
1952
1953
1954
1955
1956
1957
Figure 5
Foreign Tons
Carried
Domestic Tons
Originated
1958
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
effort and does not portend large-scale conversion of East German
railroads to electric traction.
The Second Five Year Plan calls for an increase of elec-
trified line to a total of 400 km by the end of 1960, 1/ although
this plan probably will not be achieved. The plan substantially ex-
ceeds demonstrated ability for construction in recent years.
3. Expansion of the Park of Rolling Stock
Additions to inventory of 17,000 new freight cars, an
unknown number of double-decker passenger cars, and 485 locomotives
originally were planned for 1956-60.* _8,/ These targets are consider-
ably higher than the annual rate of new car acquisitions made in the
past, and, in the light of previous performance, the possibility of
fulfilling such a plan for acquisition seems remote. Failure to in-
crease the rate of car replacement in an aging car park (the average
age being from 30 to 35 years) will lead to accelerated depreciation
of existing cars and locomotives through more intensive use.
4. Expansion of Internal Reserves
Increases in the capacity of the railroad system of East
Germany have depended on improvement in operating efficiency and will
be reflected in improved operating ratios.** Attempts to make ra-
tional use of the inherent advantages of each of the modes of trans-
portatlon through schemes to shift short-haul freight and less than
carload lots of freight to highway transport and to shift certain
bulk freight to inland water transport was primarily directed at re-
lieving future expenditure for added rail capacity.
The Second Five Year Plan provides that inland transport
carry 32 percent more goods in 1960 than in 1955. 2/ The plan also
calls for more intensive utilization of rolling stock by the reduc-
tion of the amount of cross-haul traffic, of uneconomic long-haul
traffic, and of the turnaround time of freight cars. Loading and
unloading practices are planned on an around-the-clock, 7-day week
schedule, with a total increase of 4.9 percent in the average load
per car during the 5-year period. 12/
The improvement of operating efficiency should enable
the railroad system of East Germany to increase over-all capacity
to some degree, with little capital outlay. The result, however,
will be continued depletion of what little reserve is left in the
system.
* See Table 10, Appendix C, p. 44, below.
** For an explanation of operating ratios, see Appendix B.
- 11 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
5. Conclusions
Future expansion of facilities and inventory of the rail-
road system of East Germany will depend on increases in the quantity
and the quality of labor, the availability of necessary material in-
puts, and the cooperation of shippers and railroad men in improving
the operating indexes. Train density is so great on this essentially
single-track system that rerouting traffic to avoid congestion on
main lines is standard practice. This situation calls for restora-
tion to main lines of significant amounts of second track removed
for reparations to the USSR. Electrification of the rail lines of
very high traffic density would be advantageous, and more flexibility
and reserve operating capacity in signaling facilities and dispatch-
ing techniques can be achieved and would be useful.
The planning organization of the Ministry of Transport
and Communications of East Germany must be acutely aware of the de-
lays and consequent cost of current operations of the railroads.
The planners also must be aware of the need for greater investment
as well as for improved operating indexes. These same planners con-
stantly plan in terms of goals that are unattainable because of the
priorities given to inputs in other sectors. With the given alter-
natives and with current East German industrial goals, the choice has
been to exploit the available capital structure of the railroads (and
other nonindustrial sectors) in favor of industrial objectives. Should
rail transportation become a significant and costly bottleneck to in-
dustrial expansion, the structure of priorities may be expected to
change. Additional funds would have to be invested in the railroad
network to assure its satisfactory performance. If domestic resources
were not adequate to remedy the situation, greater external aid from
the Soviet Bloc would have to be forthcoming.
III. Rail Operations and Utilization of Facilities
A. Comparative Utilization of Facilities
Rail operations in East Germany emphasize rapid turnaround
of transport equipment. The railroad system is characterized by a
high density of train movement with relatively low net loads per
freight train and frequent passenger train service. This type of
rail operation requires both an efficient dispatcher and an effi-
cient car control system, with the essential ingredient for success
being coordination and smoothness of all the operating phases.
The above operational procedure leads to a high average
density of freight trains per route kilometer per day -- approximately
16 trains in East Germany compared with 7 in Czechoslovakia and 14 in
- 12 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Poland. For a railroad system using steam locomotion that has ap-
proximately 10 percent of its length double tracked and only 1 per-
cent electrified, the East German railroad system has very high train
density. The performance of East German railroads on the basis of
tonnage per route kilometer per year for 1956 is 14,256 tons compared
with 11,317 for Czechoslovakia, 9,765 for Poland, and 9,657 for West
Germany.*
The basic test of performance of any railroad system, however,
is that of freight ton-kilometers in relation to the total railroad
network for a period of time. In such a comparison the freight ton-
kilometers per route kilometer per year of the East German railroad
system is about 77 percent of that of the Czechoslovak railroad sys-
tem and about 90 percent of that of the Polish railroad system.
East Germany, considering its small size and its method of operation,
has one of the most intensively used railroad systems in the Soviet
Bloc and certainly one that is more intensively used than the rail-
road systems of Western Europe.
B. Utilization of Rolling Stock
The working freight car park of the East German railroad sys-
tem on the average is adequate to meet domestic demands for loadings,
although there are localized and temporary shortages of particular
types of cars. These shortages result from problems of distribution
rather than of an insufficient supply of cars. Shortages of most
types of cars do occur during peak traffic periods (normally March
through May and September through December) when the greatest vol-
ume of carloadings occurs. Requirements for cars during these peak
periods are met by withdrawing cars from economic and military re-
serve parks and by holding more foreign cars on the system. In
recent years the management of East German railroads has found it
more and more difficult to return such reserve cars to their parks,
indicating that there is a growing need for more working freight
cars than are maintained on the average.** The use of foreign cars
may be easily accomplished, if such cars are available, through
rental agreements. In the short run, such a policy is a less ex-
pensive means of providing the necessary cars to meet peak load traf-
fic than investment in new cars would be.
The plan for 1956-60 calls for the addition of 17,000 new
freight cars to the East German car park. To meet this goal, the
annual rate of acquisition would have to average 3,400 cars. During
the first three quarters of 1957, only 1,704 freight cars, 11/ or
* For additional comparisons, see Tables 5 and 6, Appendix C, pp. 38
and 39, respectively, below.
** See the chart, Figure 6, following p. 14, and Table 9, Appendix C,
p. 43, below.
- 13 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
one-half of the requirements to fulfill the annual Plan. were added
to the car park.
failure to fulfill plans for acquisition of cars has been a normal
occurrence in past years, and unless commitments by countries of
the Soviet Bloc to export cars are changed or unless production is
increased, there is small possibility of East Germany acquiring its
planned number of new freight cars by 1960.
IV. Relationship of the Transport Sector to the Economy as a Whole
There has been a direct, almost coincidental, relationship in
the rates of growth of transportation and of industrial output in
East Germany, with a very high positive correlation.*
A. Transportation Price Policies
The rate and fare schedules of the East German railroads
are believed to be largely a result of historical precedent. From
1949 through 1957, no major adjustments were made either in freight
rates or in passenger fares, although costs during the same period
increased sharply. Efforts to bring revenues in line with costs,
principally through attempts to decrease operating costs, have been
unsuccessful.
In September 1957 the Minister of Finance issued an order
instructing railroad officials to increase freight rates in 1958 in
order to raise the revenues from rail transportation by 90 million
DME** above the level of 1957. 12/ In execution of this directive,
a new system of freight rates, which was to become effective on
1 January 1958, was set up. Di The essential features of this new
system are as follows:
1. A basic rate of 20 DME is charged for each axle
of the car regardless of the commodity to be shipped or the distance
that it is to move.
2. Each car is to be weighed at the dispatching station
(or at a station en route) at a charge of 5 or 6 DME. The previous
charge was 1.60 DME.
3. The number of classes of tariff are reduced to a
maximum of 10, of which Classes I and II are reserved for special
rates on favored commodities. Rates run from 1 pfennig per ton-
kilometer for Class I to 10 pfennigs per ton-kilometer for Class X.
* See the chart, Figure 7, following p. 14.
** Deutsche Mark East (East German marks). Values of DME in this
report are expressed in current marks and may be converted to dollars
at the rate of exchange of 4.2 DME to US $1.
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
EAST GERMANY Figure 6
Comparison Between the Average Number of Freight Cars Needed to Carry Railroad Tons Originated
and the Average Number of Freight Cars Available
1950-57
[_]
V*17,
Number needed
Number available
81,400 82,028
1950
28815 4-60
1951
1952
1953
1954
1955
1956
1957
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
50X1
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Figure 7
100
EAST GERMANY
Relationship of the Index of Industrial Production to the Index of Railroad Ton-Kilometers
1950-58
11
Industrial Production
Railroad Ton-Kilometers
z
142
127
160
149
176
161
190
176
202
181
1950 1951 1952 1953 1954 1955 1956
27470 4-60
217
191
241
201
1957 1958
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
100
50X1
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
4. Zones of freight distances are established for com-
puting distance of each haul.
5. A wide variety of special rates on such items as
fertilizers, coal, milk, and animals is discontinued, 1V and the
postal system is charged higher rates.
6. Rebates are given to those consignors who can ship
trainload lots of 80 axles or more from one area to another with
little need for classification and handling in freight yards. II/
These rebates are designed to accommodate bulk shippers of coal,
coke, ores, fertilizers, and perhaps the uranium ore shipped to the
USSR and provide a convenient device to decrease rates on domestic
freight if shippers of bulk commodities can organize consignments
in 80-axle (or more) train lots to a single consignee. These con-
signments reduce considerably the handling costs en route, and the
savings are passed on to consignors as an incentive to ship in large
quantities.
The reasons given for these charges in freight classes and
rates are numerous: the need to increase total revenue derived from
railroad service, diversion of certain types of freight to other
modes of transport, convenience and simplification of computing
freight rates by shippers, and better utilization of freight loading
space. The major impact of the changes is going to be a higher cost
to shippers for transportation service and a closer equating of rail-
road cost with railroad revenue.
The new changes in rail freight rates are not a radical de-
parture from the system formerly used. They represent a simpler
classification but still incorporate a computation of rates on the
basis of weight, distance, and commodity carried. The charge per
axle may reduce the tendency of shippers to order more capacity than
they need to insure getting a fixed amount of space required. This
charge should exert its greatest influence in reducing the use of
rail service for short hauls. Indeed the net effect of the rate
changes has been to increase the individual charge per year by a
fixed amount that will have the effect of improving the position of
the long-distance user.
B. Effect of Transportation Prices on the Economy
Under the First Five Year Plan the subsidization of rail-
roads and other carriers had the effect of spreading the cost of
transportation among enterprises and individuals with little regard
to the degree to which these groups used transport services. Thus
transport prices favored heavy users of the transportation system,
- 15 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
and in turn the transportation system was subsidized by groups that
provided the bulk of state revenue. Such practices, not uncommon
in many Western European countries where transportation is a government-
owned service, do not diminish the over-all cost to an economy of
transportation services but do distribute that cost among the eco-
nomic sectors somewhat differently than would prevail if users were
required to bear their full share of the cost.
The major effect of such subsidy payments on the transporta-
tion system may well be caused by the operators themselves who, faced
with a seemingly uneconomic ratio between cost and revenue, attempt
to make the situation appear more favorable by cutting away at those
costs that in the long run are necessary but in the short run may be
deferred. Such costs include maintenance of facilities and reserve
for depreciation. Reduction of these expenditures tends to increase
the hazard of current operations and to defer replacement of equip-
ment but does not reduce the cost of transport operation, rather de-
ferring what is logically a current cost to future years.
The immediate impact of the new freight rates will be a
larger domestic freight bill. This larger freight bill will cer-
tainly be accompanied by many internal readjustments in prices
(factor costs) because of the increase in the percentage of total
industrial costs represented by transportation charges. Industries
that formerly occupied favored positions because of preferential
freight rates may now find that they can no longer maintain the price
structure of 1957, absorb increased freight charges, and still show
a profit.
This change will mean an increase in cost for every industry
that uses rail transport. This higher cost will temporarily disrupt
the established patterns of factor costs, and the planning organiza-
tion will have to make internal price adjustments to compensate for
the distortions that will result.
The changes that do occur in the price structure will affect
the production function of each industry that uses significant quan-
tities of transportation as a component part of its processes. The
nature of the manufacturing process will determine whether or not
each plant can substitute inputs with a lower relative transport cost
into its production. In most industries, substitution will not be
possible, and the increased cost will have to be absorbed or passed
on in the form of higher prices. No matter what the final effect of
increased transportation costs is, a close approximation of railroad
revenue with real costs should enable East German planning authori-
ties to assess more accurately the position of transportation as an
economic sector in the East German economy.
- 16 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
C. Financial Returns of Railroad Enterprise
Information available on the financial status of East German
railroads shows that deficits have occurred from rail operations
every year since 1951, if profits are computed on the basis of plan
expectations. A computation based on actual revenue derived minus
incurred costs (it is not known whether these costs are current
operating costs or total costs) shows that deficits from rail opera-
tions have occurred in every year since 1953. Deficits have in-
creased steadily since 1953, and the annual subsidy required from
central government sources has become a very significant proportion
of total revenues, reaching 29 percent of railroad revenue derived
from all sources and expended in 1957.*
The annual cost of total rail operations to the East German
economy may be expressed by comparing total incurred cost with total
earned revenue, thus reflecting the total gross subsidy required
from central budgetary sources to keep the railroads in operation.**
This comparison contains all costs from current operations, includ-
ing reserves for obsolescence and depreciation plus annual capital
charges and expenses, and can be referred to as the gross operating
ratio.*** This ratio in 1956 was 134, indicating that 134 DME were
incurred as costs to the economy for every 100 DME of earned revenue.
The net operating ratio, which includes only current operat-
ing expenses exclusive of annual capital charges and expenses, was 118.
These operating ratios are compared with the operating ratios of rail-
roads of Western European countries in Table 2.****
Because of different internal financing arrangements, the dif-
ferences between the two ratios for each country are accounted for
by the annual capital charges and expenses that are included in the
gross operating ratios. For East Germany this annual difference is
equal to the amount of net capital expense incurred during the given
* The total revenue in 1957 was comprised of earned revenue of
2,600 million DME, government subsidy on current account of 601 mil-
lion DME, and 482 million DME for capital investment, for a total of
3,683 million DME collected and expended by the railroads.
** See Table 1, which follows on p. 18, below, and the chart,
Figure 8, following p. 18.
*** Gross operating ratio as defined above should be distinguished
from net operating ratio, which is a measure commonly used to express
a quick, although crude, picture of the current financial position of
a railroad. A ratio higher than 100 indicates that current operating
expenses are higher than earned revenue. For a complete explanation
of the concept of gross operating ratio, see Appendix B.
xxxx Table 2 follows on p. 18.
- 17 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 1
Composition of the Financial Balance of Railroads
in East Germany 2/
1956
Million Percent
Item Deutsche Mark East of Total
Operating expenses 2,949 88
Capital charges and ex-
penses12.1 398 12
Total cost 3,347 100
Earned revenue 2,506 75
Subsidy 841 25
Total revenue 3,347 100
a. See Tables 11, 12, 18, and 19, Appendix C, pp. 46,
47, 55, and 56, respectively, below.
b. See Table 16, Appendix C, p. 52, below.
Table 2
Operating Ratios of Selected Railroads
in West European Countries and East Germany
1956
Operating Ratios
Railroad
Gross
Net
East German Railroad System 2/
134
118
West German Federal Railroad12/
132
105
Austrian Federal Railroad b
129
129
French National Railroad b
109
105
Swedish State Railroad b
103
99
a. See Appendix B.
b. ly
-18-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Figure 8
Million DME
5,000
4,000
3,000
2,000
1,000
900
800
700
600
500
400
300
200
100
90
80
70
60
1950
EAST GERMANY
Revenue of Railroads, by Type of Service
1950-57
..
.
1
? ?
.
i 4 ..
.,,.....2..4...?L_ILL.----:-t.:,-_----7.

:..
_
.._
.
1,4,-
,
,
f .
it t- ! ?
. 4-
71--7-"r...."-4-:.:47-..;:i
..
tTotal Reichsbahn7ReVentie:-.--,--?z-
.. -
?
-
--.
147. '1:
' '`
,
., ..,
4 . ..
4-_-..-4--?
? . .44_
? -- ----17.
".-t -..L '-.1 '.- : -..,
47.t:74.41:444.1. --77.4-4 -4:. 74.:''
'7' -'-.t-:
i -.4.-1
? ', ?
-: -, - t
--`-.-1--t-
. 7 i ? 14.
t
r -
- :-.,:...:
'
..-- j'
'.. ?:. --"1:.*r.
;
---:-F-rle.:1 ht.Revenue
? 'I,
'.1....
--,?-t-
:
- 4- '---i?
.
.
- -
.
!
? t
T ?
t
.I
.
i
. .
.
? ,-,9 -t-,
? 4 i ?
. i . 1
.-
- - -. -

.
- .-.71-...
? ?.-1,-.-
_
,-
- ,? ? --..., .?--,:.-.' ..-:-.-.-.....----????1---.."..i'-..-7::''-' ?Passenger,.
""" 77
Revenuii....,--
--,????.-i- 7"
-,-
-
-"-.-------.
' .---.-
1
1-
.,...,
-1-1--- ,- :--7?:-,-1-4-2-,
? , 4 1 . ? , - 7 ----7-
t , ,
-4_ 4-7--
.-.---.--11-1.74::: .7
,--!---,--
.-
'
-t-- ,- ,
Fr . 77
+1 . -T-1
7.- .. -7- -..+-1741--'17i-....
4.4.7
-7 ,...,.4. 1.- ,
:1- I
?_--_;-.4.. .
? .-T -
T1- ?
! :r
---4.
_
,..,..1._,._,..... 1-.....1.:,----4-_,"-7---'1:-. J 1- .1
. ? ., .
- -? _.,
' 44 .1. i .
i-..---....-,- ? -.t-----.: ,L .,----- ,
' ..... --:.z.t.....f.
1 t." . i ..1-?.1..:. .,7 ----r ? 47,-
-.
.,
...,..
-
, r
- ? . t- .I.
t
-+.,
;-4 l'
: .; 4
ft
..
-. ? ,, ,_,_ I +4:=-1,1.
'
_.
. -.
; ?
I ... -rt
"
. ' -....4. ? - , -
4--_-__.4 '; . ??
-1,-+ .
"
' ___
. ;4
1
-.--.?

.
, , ; ; -
. ? i ; , ;
1, . : , 1 ,
.. -:.,..-_!--0,-=r-,,
I f 4 I, I -
? -...',-1-_?j_........._,.:
'
_4. S-Bahri-Reitenue1-
-,.., _....
?
' .4 .
- 1 i ; t
,....._.....
-..t-H-'-- t-1-4--.4
_LI_ / Trrt-
..
--- t---,..
._
.,...,... .
? ?
? I:-
__ _ _
-1 - -----
_i_ ? ,! ___,_ . ,
.1-4------ ? ."-. 7' : '4-1: 4.
?
? . ? . , - - -? -
.4..
i-i- ? ? -,., -4------------t 1: : ; :4 t"i; ? ? .:
. -t- .....; i - . : .4 . ?
1:'??"'
? -1:-.7.. -4 . fff
.
:74t4 fr ' . 7F.!--- .-.:.----_-.4--,..+
27471 4-60
1951
1952
1953
1954
1955
1956
1957
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
50X1
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
operating year; for other countries, capital charges from previous
periods also may be added. For a period of time this disparity in
computation would not affect the comparison.
? D. Labor Situation in the Transportation Industry
Rapid growth in labor productivity is the device that East
German planners hope will provide the increased capacity needed on
East German railroads through 1960 and probably through 1965. An
article on the prospect for the railroads for 1961-65 in the official
railroad newspaper of East Germany states: "There should be no
doubt about the fact that the Deutsche Reichsbahn gast German rail-
roadE7 cannot count on a larger number of workers and employees un-
til 1965 and that the higher tasks can only be solved by an increase
in the productivity of work." 1// The objective and problem of all
East German rail operations is to rationalize the available working
force into a system whereby the available equipment is continuously
used in assembly-line fashion on an around-the-clock, 7-day week
schedule.*
The necessity for the continued intensive organization and
use of labor arises from the shortage of qualified personnel for
skilled positions and the consequent necessity of using those un-
skilled laborers available in positions for which they can seldom
be properly prepared. Because of general labor shortages and prob-
lems of replacing employees lost through attrition of one form or
another, administrative reorganizations and employee innovations
have been introduced in both the East German First and Second Five
Year Plans, each ostensibly designed to make the role of labor in
greater railroad capacity an increasing proportion of the total.
1. Results of Intensive Labor Practices
The effects of the reorganization of operations to uti-
lize both men and equipment more efficiently have not been up to
original expectations. Deputy Minister for Transport Robert Menzel
wrote on 16 December 1958 that it is "quite clear that organiza-
tional shortcomings in the Deutsche Reichsbahn gast German rail-
roadg have reached a point which calls for drastic countermeasures." lf./
Continuing, he pointed out that in spite of achievements in gaining
high loading capacity in tons, the quality of handling both cars and
freight is low.
* For a breakdown of the total labor force in transportation and of
the wages paid for the years 1950-56, see Tables 13 and 14, Appendix C,
pp. 49 and 50, respectively, below.
- 19 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
The serious increase in delayed arrivals of trains, the
increasingly high rate of damage to cars and freight, the multitude
of work competitions, and the extensive number of shunting operations
per average distance moved are all outward manifestations of the
drive for greater performance per man-hour and the overriding em-
phasis on increases in quantity. The real economic cost is increas-
ing rapidly. The rate of damage to cars in the Schwerin railroad
district rose in 1958 more than one-third above the rate of damage
noted in the first half of 1957. 12/
Other evidence of the effects of the intensive pressure
on railroad personnel is the growing incidence of illness, which in
itself may be a passive form of counteracting the long working hours
that are often required (mostly unpaid) in spite of a legal maximum
45-hour week. In the first quarter of 1958 the average absenteeism
because of illness alone rose to 9.8 percent of the railroad working
force; the average for 1955 was 5.8 percent. At any given time, ap-
proximately 29,000 employees are absent because of illness. The
annual loss in man-hours from this type of absenteeism, the loss of
hours from normal vacation.leave, and the actual loss of men through
defection to West Germany compound an already serious shortage of
personnel that the East Germans themselves concede does not have an
immediate solution.
Although increases in labor productivity have occurred
recently, the significance of such increases in terms of man-hours
is difficult to assess, for the total number of hours, including all
overtime hours, required to complete the work is not available. The
emphasis on performance in quantity evidently has had an adverse ef-
fect on the quality of work performed, thus reducing to a degree the
advantages of increased productivity.
2. Labor Productivity
Although the total labor force on the railroads has de-
clined since 1954 and currently is believed to be about the same num-
ber employed in 1953, these losses of personnel have been mitigated
to a degree by quantitative improvements (apparently at the cost of
quality) in average performance per employee. The average perform-
ance per operating employee in 1951 was 176,300 traffic km per year;
by 1957 it had increased to 239,900 traffic km, an increase of
36 percent in comparison with 1951.*
Between 1954 and 1957, East Germany achieved an increase
of about 5 percent in average annual performance per operating employee
while sustaining a reduction of 5 percent in the number of operating
employees for the period.
See Table 15, Appendix C, p. 51, below.
- 20-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Future increases in the productivity of railroad operat-
ing personnel will depend primarily on the performance of those
operating and service personnel employed in railroad construction,
maintenance, and repair and on technical improvements in railroad
equipment. Turnaround time, average load per car, speed between
stops, and total tons per train often depend on factors not involv-
ing operating employees, maintenance crews, repair mechanics, load-
ing and unloading labor, and shippers.
For the above reasons and because of the currently high
average number of man-hours worked per employee per week, future
increments in labor productivity must come increasingly from labor-
saving additions to the capital plant rather than from the further
reorganization of labor practices.
E. Program for Capital Equipment of the Railroads
Of the 55 billion DME scheduled for investment in the East
German economy during 1956-60, about 5.9 billion DME are allotted
to transportation. Investment in transportation during 1956-60 can
be summarized as follows*:
Planned Investment
for All Transportation and Telecommunications Million DME
Transportation
Railroads, approximately 65 percent of
total transportation (an average of
770 million DME per year) 3,848
Other transport, 5-year period (an average
of 400 million DME per year) 2,052
Subtotal 5,900
Telecommunications (approximately 10 percent
of total) 700
Total
6,600
* For more detailed analysis of investment relationships, see
Table 16, Appendix C, p. 52, below.
- 21 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
1. Investment in Railroads
At the current rate of investment, East Germany will not
be able to fulfill the investment planned in railroad transportation
under the Second Five Year Plan (1956-60). In order to achieve
under the plan the investment of 3,848 million DME in railroads, the
average annual rate of investment would have to equal 770 million DME.
In 1956, investment was planned to be 673 million DME, or approxi-
mately 100 million DME too low on an average annual basis. The in-
vestment plan of 1956 was fulfilled by only 59.1 percent, with an
actual expenditure of 398 million DME, or 275 million DME below the
plan. In order to compensate for this lack of fulfillment in the
first year of the Second Five Year Plan, investment for the remain-
ing 4 years would have to be programed at an average annual rate of
863 million DME, a goal far beyond the capability of East Germany un-
less that country drastically changes the structure of investment
priorities.
Estimated investment in railroads under the Second Five
Year Plan is not expected to be more than 68 percent of the original
plan figures of approximately 3,848 million DME. On this basis it is
estimated that maximum investment in railroads will not be more than
2,620 million DME for the 5-year period and that minimum investment
could be as low as 2,000 million DME.
If the plan is fulfilled by 68 percent (2,620 million DME),
this figure in itself will represent an increase of 65 percent, a con-
siderable increase in absolute terms above actual investment under the
First Five Year Plan (1951-55). This figure, however, will represent
a decrease in the share of total investment allocated to the railroad
system by East Germany.
The proportion of net investment in railroads to total in-
vestment in East Germany for the First and Second Five Year Plans is
shown in Table 3.*
In spite of a proportional decline in relation to total
investment, investment in railroads in 1956-60 will represent a siz-
able increase above that of 1951-55. An increasingly larger propor-
tion of actual capital expenditure, however, will be invested in
capital maintenance, capital repairs of over-age locomotives and roll-
ing stock, and extensive replacement of track instead of in capital
acquisition or formation.
* Table 3 follows on p. 23.
- 22 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 3
Net Investment in Railroads as a Percent of Total Investment
in East Germany a
1951-55 and 1956-60
Percent of Total
Investment
1951-55
1956-60
Planned
Actual
7.0
5.5
7.0
4.8
(Estimated)
a. From Table 16, Appendix C, p. 52, below.
Evidence of the increasing necessity for an accelerated
program for replacement of track is that plan announcements for
1961-65 call for doubling the track renovations under the Third Five
Year Plan (1961-65). 22/ The renovation plan is designed to elimi-
nate the slow-speed stretches that currently act as a bottleneck and
are a prime contributor to the increasing number of late train ar-
rivals.
Plans for renovation of tracks include installation of
heavier rail so that loadings of 21 tons per axle would be permis-
sible on all main lines. Such an improvement would permit heavier
trains and would contribute significantly to increased capacity for
tonnage.
The considerable discrepancy between planned and accom-
plished renovations and additions to capital equipment from 1948 to
1958 has been a major factor in the limited Improvement in the capital
structure of the railroads. Much of this discrepancy has come from
the inability of the Ministry of Transport and Communications of East
Germany to procure the quantities of materials and finished capital
equipment necessary to utilize fully the investment funds provided.
The problem has resolved itself (particularly in the early years of
the First Five Year Plan) into one of inability to procure the planned
investment goods rather than a problem of getting a sufficient allot-
ment of funds with which to buy these goods. Under the Second Five
Year Plan (1956-60), both the allotment of funds and the procurement
of materials have become increasingly serious problems. This situa-
tion results from two conditions: (a) the need of East Germany to
put heavy investments in sorely lagging sectors of the economy, such
- 23 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
as electric power and coal, and (b) the fact that the capital struc-
ture of the railroad system is falling further and further behind the
level necessary to maintain some equilibrium with the demands placed
on it. Future plans, therefore, will require proportionately larger
outlays to attain given requirements for capacity than would have
been necessary in previous planning periods simply because of the
necessity for large-scale replacements of existing capital equipment.
Future outlays of capital will not add greatly to total numbers of
freight cars, althou& capacity will increase if there is sufficient
substitution of new 4-axle cars with capacities of 25 tons to 30 tons
or more for 2-axle cars of 15-ton to 20-ton capacity. Because indus-
trial shipping arrangements are geared to the smaller cars, the East
German railroads will have to create the prerequisites for the em-
ployment of these cars. 21/
2. Material Inputs
A major problem confronting the East German railroad sys-
tem (in the past and the present) is obtaining materials in sufficient
quantities to maintain adequately and to improve the railroad network
and rolling stock. War damage and reparations for the USSR left a
single-track railroad system that was adequate to haul the 38.7 bil-
lion combined freight and passenger kilometers in 1951. In 1958,
however, combined freight and passenger kilometers had increased
about 40 percent and yet were being carried on about 12 percent more
track capacity than was available in 1951.*
Much of the track structure in current use has not been
adequately maintained or replaced since before World War II. This
condition has been one of the principal causes of the accelerated
rate of rail breaks, which in turn have been the result of a "patch-
work" maintenance program largely dictated by shortages of necessary
materials.
The shortage of materials stemmed from Soviet confisca-
tion of all available maintenance materials during 1946-49, when the
tracks were being dismantled. Subsequently the First Five Year Plan
for reccnstructing 2,300 km of track was only about 5 percent com-
pleted by the end of 1953. 22/ In 1954 and 1955, 450 and 772 km,
respectively, of track reconstruction were scheduled. 23/ Actual
completion in those 2 years is not known but is estimated to have
been 150 to 200 km of track per year.
The First Five Year Plan for reconstruction of track was
largely underfulfilled. The reconstruction of track seems to be
* See Appendix A.
- 24 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
programed on a smaller average annual rate of increase than it was
during the first plan period in spite of the need for greatly ac-
celerated reconstruction. Current planned reconstruction of rail-
road track is about 250 to 300 km per year, with hopes of completing
an average of 350 km of track annually under the Second Five Year
Plan. This planned figure is 110 km less than that planned for
1950-55 and represents about one-half of the normal annual addition
of 770 km recommended by a commission appointed in 1953 to determine
what capital additions should be made to the railroads from 1956
throudi 1960.*
Availability of material is one of the major problems
currently facing the East German railroads. This desperate lack
has forced a policy of "patching" for current maintenance and a
virtual moratorium on replacement of significant quantities of rail
line. The situation has reached the point at which limited line
capacity and yard capacity are making it unprofitable to add large
amounts of rolling stock because of the inability of the railroads
to handle the additional numbers without causing increased periods
of congestion.
The prospects of any large-scale Improvements in the sup-
ply of materials are almost wholly dependent on increases in supply
coming from outside sources, probably from the Soviet Bloc. With the
exception of the USSR, which fulfills a greater proportion of its ex-
port commitments to East Germany than does any other country, few
countries have been willing or forced to supply the quantities of
material needed by the East German railroads.
3. Future Prospects for Inputs
If replacements and additions of railroad equipment and
rolling stock can more than compensate for the rate of deterioration
plus the increased traffic demands, the current operating difficulties
of the railroads can be solved. There is no evidence that these
operating difficulties are being solved. On the contrary, many breaks
in the rails, late train arrivals, damaged freight, labor problems,
inefficient repairs, and shortages of materials are increasing.
In an address to senior officials of the Ministry of
Transport and Communications in January 1959, the Minister, Eric
Kramer, criticized the above problems as the "calamitous conditions
prevailing within our railways in some fields." ELV Calling for
support from senior officials and threatening "functionaries who are
not living up to socialist efficiency," 22/ Kramer predicted that a
* See Table 17, Appendix C, p. 54, below.
- 25 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
solution to the outmoded and careless methods would be worked out.
Although he was speaking primarily of shortcomings of personnel and
physical deterioration of equipment on the railroads, he was imply-
ing that solutions to shortages of factor inputs have not as yet
come forth.
Problems of administration, capital, and labor have
grown more complex as traffic demands have increased. With no ap-
parent change in the fundamental economic approach to solving short-
ages of rail transport, these problems can be expected to remain
largely unsolved in the next few years.
V. Interrelationships of Capital and Labor Productivity
If the volume of traffic increases in accordance with the direc-
tives of the original Second Five Year Plan (1956-60), performance
in traffic kilometers will increase 32 percent above that of 1955.*
In absolute terms this figure means that the volume of traffic in
1960 may equal approximately 68 billion traffic kilometers (the
volume in 1955 equaled 51.6 billion traffic kilometers), 76 percent
greater than the volume in 1951.
Discounting such intangible factors as large increases in ad-
ministrative efficiency, there are only three ways that East Germany
could hope to gain the desired performance of 68 billion traffic
kilometers by 1960: (1) by increasing labor productivity sharply
and making large additions to the operating labor force while hold-
ing capital relatively stable, (2) by making large net additions to
the capital structure of the railroads in the form of labor-saving
equipment (a difficult task in 2 or 3 years), and (3) by increasing
both capital and labor, maintaining the approximate ratio of capital
to labor that existed under the First Five Year Plan (1951-55), and
hoping for a combined increase in productivity to equal the desired
performance in traffic kilometers.
By 1960, according to its own announcements, East Germany has
planned to increase labor productivity 14 percent -- no increases in
the labor force being mentioned -- and to provide twice the volume of
funds for investment that were provided under the First Five Year Plan.
These planned factor increases are supposed to achieve the expected
performance in traffic kilometers. It is estimated, however, that
the plan for doubling investments will not be fulfilled.
Therefore, by interposing computed index values of estimated
labor and capital inputs for 1960 into a formula involving the
* See Table 15, Appendix C, p. 51, below.
- 26 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
coefficients of each (as derived from the correlation),* it can be
shown that the plan for traffic kilometers for 1960 is beyond the
expected capacity of the railroads. Indications are that the level
of performance will be between 60 billion and 62 billion traffic
kilometers, or approximately 6 billion to 8 billion traffic kilo-
meters fewer than the plan goal. The planned growth in factor pro-
ductivity and additions is not adequate to fulfill the traffic plan.
Because the investment plan is not expected to be fulfilled, the
assumption is that the ratio between capital and labor will remain
relatively constant during the period 1958-60, with neither factor
likely to increase sharply during such a short period of time. In
view of existing labor conditions, the possibility of large increases
in the operating labor force in the remaining years of the Second
Five Year Plan are extremely remote, and East German officials indi-
cate that no relief can be expected until 1965. Therefore, expansion
of either labor numbers or of labor productivity sufficient to ful-
fill the plan for traffic kilometers by 1960 seems unlikely.
Capital productivity under the Second Five Year Plan is more
difficult to assess than labor productivity because of the inherent
difficulties in finding the total capitalized value of the real
assets of the railroads. From an announced figure of capitalized
value of 7,774 million EME in 1951, 2.Y net capital additions show
an approximate increase of 5 percent in capital value for the 7-year
period ending in 1957.** The net annual additions to the capital
structure were extrapolated to 1960 on the basis of estimates of the
expected fulfillment of investment plans for the 5-year period.
The estimated fulfillment of the plan for investment for 1956-60
is a maximum of 68 percent. This estimate may be too high because
of the increasingly severe situation in supply of materials and the
actual fulfillment of only 59 percent of the investment plan for
1956. Each of these two factors would tend to indicate that inten-
sive problems still exist in expanding investment outlays.
The productivity of railroad capital in 1960 should be approxi-
mately 7,900 traffic kilometers per unit of capital,** 59 percent
above that for 1951 and about 22 percent above that for 1956. The
increase of 22 percent is 8 percent less than the rate of growth of
30 percent in capital productivity in the last 4 years of the First
Five Year Plan.
* See Appendix D.
** See Table 15, Appendix C, p. 51, below.
- 27 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Although performance of traffic kilometers per unit of capital
by 1960 is expected to grow, at the most, 59 percent above that of
the base year 1951 (instead of 76 percent), the relative efficiency
of capital in the two plan periods will have changed considerably.
From 1951 to 1955 an increase of 3 percent in total capital value
(a measure of capital additions) was associated with an increase of
30 percent in capital productivity. For 1956-60 an increase of 8 per-
cent in total capital value (on the basis of an estimated degree of
fulfillment of the investment plan) will be associated with an esti-
mated increase of 22 percent in capital productivity. This situation
may be indicative of two things: (1) in the early years of the First
Five Year Plan the available supply of capital was utilized to only
a fraction of its capability as economic carloadings were well below
existing railroad capacity, and (2) the marginal productivity of the
type of capital addition being made is decreasing, indicating that
the additions to capital have only been increased quantities of the
same inefficient equipment (that is, steam locomotives of the type
used on the railroads for 30 years with few technical improvements
and 2-axle cars of the same average capacity). In spite of larger
total capital additions, the decreasing marginal productivity of
each capital unit has kept the railroads from achieving proportional
increases in capacity from each given unit of capital invested. This
fact indicates a need to invest in capital equipment of higher tech-
nical efficiency, such as electric or diesel locomotives; large quan-
tities of double track; expanded yards and sidings; and improved,
labor-saving signaling mechanisms.
In part the plan calls for just such investment, but the invest-
ment outlays are so much larger for such equipment -- and improved
equipment now constitutes such a small proportion of the total --
that the greater marginal productivity of the new equipment probably
will have little aggregate effect in the plan period 1956-60.
If the domestic supply situation improves or if large amounts
of external aid are forthcoming, increased investment in technically
efficient equipment will be possible, and this investment will even-
tually counterbalance the preponderant, technical inefficiency of
existing equipment. All statements concerning the 1961-65 plan in-
dicate that much of the modernized equipment will become available
during the period of the Third Five Year Plan. If so, technical
efficiency and total capacity of the East German railroads will be
greatly enhanced.
- 28 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
APPENDIX A
PREWAR AND POSTWAR STRUCTURE OF THE RAILROADS
IN EAST GERMANY
In 1936 the area now called the East Zone of Germany had about
19,400 route kilometers of track (see Table )4.*). The estimated length
of track of this system at that time was approximately 27,400 km of
standard-gauge track and about 2,000 km of narrow-gauge track.
Dismantling by the USSR for reparations during 1946-49 was re-
ported to have been about 13,000 km of railroad track. The dismantling
left approximately 13,200 route km -- about 12,000 km of single-track
line and about 1,200 km of line with two or more tracks -- and a total
length of track of approximately 14,400 km, excluding sidings and narrow-
gauge line. The amount of dismantling done on sidings, spur lines, and
narrow-gauge lines probably never will be known, but the damaging effect
to the total capacity of the system came largely from reducing the length
of lines with two or more tracks from an estimated 8,000 km in 1936 to
1,200 km in 1959. Soviet dismantling resulted in a total reduction of
about 32 percent in route kilometers; or 6,200 km. The total reduction
in length of track was approximately 47 percent, or approximately
13,000 km.
In 1957, East Germany had about 14,789 route km of track, of which
10 percent, or about 1,479 km, was double track, leaving approximately
13,310 km of single-track line. These figures would indicate that in the
period 1950-57 about 1,310 km of single-track line and about 279 km of
double-track line had been restored or newly constructed, thus yielding
an average of approximately 227 km of new construction for each of the
7 years. Actual construction, however, was concentrated largely in the
years 1954-57.
* Table 4 follows on p. 30.
- 29 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 4
Composition of the Standard-Gauge Railroad Network
in East and West Germany 2/
1936, 1950, and 1957
Kilometers
Item
East Germany
1936
West Germany
Single track 12/
11,400
17,970
Two or more tracks 12/
8,000
12,600
Total 12/
19,400
30,570
Track length 2/
27,400
43,200
1950
Single track
12,000 1/
17,970 2/
Two or more tracks
1,200 1/
12,600 2/
Total
13,200
30,570 2/
Track length 2/
14,400 1/
43,200
1957
Single track
13,310 5/
17,897 12/
Two or more tracks
1,479 5/
12,54611/
Total
14,789 5/
30,443 12/
Track length 2/
16,300
43,000
a. Excluding pre-World War II German areas outside the present zonal
boundaries.
b. L7_1. In 1936 the area now known as West Germany had 30,570 route
kilometers (km), and the area of East Germany had 19,400 route km.
The distribution of lines with single track and with two or more
tracks was based on the percentage distribution of West German track
existing in 1957.
c. Derived by adding the length of lines with single track plus two
times the length of track with two or more tracks, which gives a
minimum track length. There is a greater track length in each of the
3 years, but it is impossible to derive because of the lack of infor-
mation on lines with three or more tracks.
- 30 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 4
Composition of the Standard-Gauge Railroad Network
in East and West Germany 2/
1936, 1950, and 1957
(Continued)
d. In 1945-46, 6,200 route km, or 36.6 percent of total route length,
was dismantled by the USSR. Most of this dismantling was reported as
removal of the second track on double-track lines. Single-track lines
were therefore estimated at 12,000 km and lines with two or more tracks
as 10 percent of the single-track line.
e. Assumed to be the same as in 1936.
f. "By March 1947, 11,800 kilometers of railroad 50X1
tracks had been dismantled in the Russian Zone of Germany. Additional
dismantlings reported variously as between 1,200 and 3,000 kilometers
are to continue." Deducting the minimum total of dismantled track
(11,800 + 1,200) of 13,000 km from the total track length in 1936 of
27,400 km, a track length of 14,400 km is derived. These derived data
agree with the data as derived by using footnote c, above.
g.- a total route length of 14,789 km. Lines with 50X1
?
double track were estimated at 10 percent of the total (1,479), leaving
13,310 route km of single-track lines.
h. q. Including sidings, the total track length was reported as
70,15 km.
- 31 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
APPENDIX B
CONTENT AND USE OF OPERATING RATIOS
The concept of operating ratios was used in this report in an at-
tempt to indicate the relative cost of the railroad, over a period of
time, in relation to its own earning power and to the economy. The
net operating ratio is useful for a fiscal comparison of the earned
revenue and current operating expenses of the railroads and shows the
amount of external subsidy required to cover the current operating
deficit. This ratio indicates the drain on central budgetary sources
caused by operating expenses being larger than revenue and shows that
the rate structure is not compensatory.
The net operating ratio, however, does not reflect the capital
costs (a portion of capital repairs and all additions other than re-
placements) that are necessarily attributable to railroad operation.
Such capital costs are not included in the current operating accounts,
at least not insofar as the capital additions are concerned. It is
true that in the current operating account there is a payment to
"amortization" that ostensibly covers annual depreciation and obsoles-
cence of rolling stock and right-of-way. This sum can be considered
as comprised primarily of capital depleted in production of the trans-
port services for that year and is therefore a current cost item.
The problem remaining is to attribute the cost of capital additions
on an annual basis and to derive a reasonable idea of the total annual
cost of railroad service to the economy. This derivation, called the
gross operating ratio, is identical to the concept used by the Inter-
national Union of Railways and will show the annual current cost plus
the annual capital cost of rail operations in East Germany.
1. US Practice
Comparable US concepts of operating ratios are derived as follows
(with hypothetical percentages to indicate the portion of total cost
each represents):
Earned Revenue
Percent
Total Cost
Percent
Freight
Passenger
70
25
Current operating costs (labor,
materials, and taxes)
81 (net)
Other
5
Depreciation and obsolescence
4 (net)
Capital payments (principal and
interest
9
Distributable profit
6 (net)
Total
100 Total
-33-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
100 (gross)
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Therefore, the current net operating ratio (N) is 91, and the gross
operating ratio (G) is 100.
The current operating costs (including depreciation, obsolescence,
and profits) do not require an explanation. The problem is how capi-
tal payments arise, the reason for their existence, and discovering a
comparable Communist counterpart.
If a US railroad borrowed $100 million to buy 50 locomotives in
a given year and for the next 25 years* (the life of the locomotive)
repaid the loan, the annual capital (principal) payments excluding
interest, would be $4 million. On the assumption that the total in-
vestment was made in the first year, the full capacity of the 50 loco-
motives would become available immediately. During the service life
of the locomotive, there are made capital repairs that increase the
length of serviceable life and add something to the annual capital
expense. This same principle would apply to roadbed and facilities.
The interest charge does not exist (as such) in a Communist coun-
try. Therefore, the problem is how to allot capital charges on an
annual basis in a Communist economy such as that of East Germany so
as to cover these same financial outlays.
2. East German Practice
In East Germany, current operating expenses contain an amount
that ostensibly covers obsolescence and depreciation. Railroad capital
equipment is added and paid for on an annual basis from fiscal receipts
of the economy.
The acquisition of 50 locomotives in East Germany, if cumulated at
the rate of 2 a year for 25 years, would add 50 locomotives to the in-
ventory as in the US example. Annual capital charges, which represent
principal only -- there is no interest as such -- are, in the East
German example, payments from current revenue from various sources and
are expended from investment funds during the fiscal period. The an-
nual payment ($4 million) would equal the cost of two locomotives
in each year in the US or in East Germany, with one difference -- East
Germany is on a "cash-and-carry" basis, whereas the US uses credit. In
East Germany the expenditure is called investment, in the US, capital
charges. In the US the expenditure is allotted over a period of years
once the locomotives are received.
* In practice, US railroads probably would write off such equipment in
the minimum number of years allowable by tax law, but this practice does
not change the comparability between the systems.
- 34 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
If East Germany met all of the incurred cost of the railroads
from current, earned revenue, the relation of cost to revenue would
be approximated by the following:
Earned Revenue
Percent
Total Cost
Percent
Freight
65
Current operating costs
90
Passenger
30
Capital payments
Other
5
(taken from investment
funds)
10
Total
100
Total
100
Therefore, the current net
erating ratio is 100, with
In substance the above
If earned revenue were not
penses or long-run capital
operating ratio is 90, and the gross op-
no subsidy required.
form agrees precisely with US practice.
sufficient to cover either current ex-
expenses, the relation of cost to revenue
would be as follows:
Earned Revenue
Percent
Total Cost_
Percent
Freight
65
Current operating costs
Passenger
30
(including deprecia-
Other
5
tion, obsolescence,
and taxes)
118
Total
100
Subtotal
118
Subsidy on current
account
18
Net total
118
Net total
118
Subsidy on capital
Capital charges (in-
account
16
vestment)
16
Gross total
(earned revenue
plus total subsidy)
Gross total
Therefore, the current net operating ratio is 118, and the gross op-
erating ratio is 134.
- 35
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
This accounting method is still identical with US concepts except
that two subsidies occur -- one on current account and one on capi-
tal account. By considering the East German "investment" figure as
a capital charge on an annual basis and then relating this figure
to annual earned revenue, the operating ratios become meaningful.
The necessity for a subsidy does not change the concept of operating
ratio as long'as current costs and total costs (current costs plus
capital charges) are always related to earned revenue.
The net operating ratio shows the operating condition of the
railroads and their cost to the economy on current account. The
gross operating ratio shows not only the deficit (or cost to the
economy) from current operations but the deficit from annual capi-
tal charges (investment expenditures) as well.
- 36 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
APPENDIX C
STATISTICAL TABLES
- 37 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 5
Comparison of Railroad Systems in Selected European Countries 2/
1956
Dispersion
East West Czecho-
Item Germany Germany slavakia Poland Hungary
Square kilometers per railroad route kilometer
Average performance
7.3
7.9
9.7
13.4
11.3
Thousand ton-kilometers per railroad route kilometer
2,006
1,790
2,603
2,235
985
Thousand passenger kilometers per railroad route kilometer
1,530
1,248
1,415
1,596
1,093
Thousand traffic kilometers per railroad route kilometer
3,536
3,037
4,018
3,831
2,078
Thousand traffic kilometers per employee
176
177
271
291
135
Traffic kilometers per capita
2,924
1,883
3,979
3,811
1,743
Thousand ton-kilometers per employee
100
104
176
170
64
Average traffic density
Tons per route kilometer
14,256
9,657
11,317
9,765
7,391
Tons per track kilometer
12,960
6,908
9,450
6,587
4,890
Passengers carried per route kilometer
69,312
46,839
40,249
39,702
36,880
Passengers carried per track kilometer
63,009
33,502
33,610
26,781
24,400
a. Data are derived from Table 6, p. 39, below. All tonnages in this table are given in metric tons.
- 38 -
S-E-C-R-E-T
_ Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 6
Basic Data on Railroads in Selected European Countries 21
1956
Item
Unit
East
Germany
West
Germany
Czechoslovakia
Poland
Hungary
Area
Square kilometers
107,862
245,359
127,85912/
311,730
93,030 LI
Total population
Thousand persons
17,832
49,995
13,297
27,680
9,861
Route length of standard gauge railroad
Kilometers
14,745
31,000
13,168
23,198
8,270
Total railroad employees
Persons
296,959
532,000
195,200 12/
305,700
127,300
Passenger kilometers
Million
22,560
38,676
18,628
37,030
9,040
Net ton-kilometers
Million
29,573
55,478
34,279
51,840
8,146
Traffic kilometers
Million
52,133
94,154
52,907
88,870
17,186
Tons carried
Thousand
210,207
299,374
149,020
226,523
61,124
Length of line with two or more tracks
Kilometers
1,45o
12,342
2,601
7,387
93o
Length of electrified line
Kilometers
145
2,382
278
533
372
Average length of haul
Kilometers
141
185
230
229
133
Total track length
Kilometers
16,220
43,340
15,769 2/
34,390 2/
12,500
Passengers carried
Million
1,022
1,452
530
921
305
Average turnaround time of freight cars
Days
3.55
5.3 1/
5.2
Average load per freight car
Tons
15.66
13.40 21/
16.60 L1/
18.46
14.70
Tons carried per freight car per year
Units
1,633 1/
925 1/
1,378 1/
1,296 1/
1,166 1/
2/
a. Unless otherwise
given in metric tons
c. Estimated on the
d.
e.
f. One year (365 days) divided by turnaround time
indicated, all data
are from the 1956 yearbooks of the respective countries. All tonnages in this table are
basis of the length of single
track plus two times the length of lines with two or more tracks.
and multiplied by the average load per freight car.
- 39 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part- Sanitized Copy Approved forRelease2013/06/04 : CIA-RDP79R01141A001600110001-0
Table 7
Distribution of Inland Freight in East Germany, by Mode of Transport pi*
1936 and 1946-58
Total Inland Railroad Transport Motor Transport Inland Water Transport
Transport
Year Million Percent of Total Million Percent of Total Million Percent of Total
Ton-Kilometers
1936 27,400
1946 10,000 1/
1947 11,200 Id/
1948 13,300 2/
1949 17,200 1/
1950 18,588
1951 21,289
1952 23,188
1953 26,419
1954 27,869
1955 30,584
1956 33,094
1957 35,049
1958 36,646
22,100
8,100
12/
2/
80.7
81.0 sl./
9,100
2/
81.0
1/
10,800
2/
81.0
1/
13,900
2/
81.0
2/
15,064
81.0
17,291
81.2
19,077
82.3
22,112
83.7
23,182
83.2
25,222
82.5
27,334
82.6
28,635
81.7
30,101
82.1
* Footnotes for Table 7 follow on p. 41.
80012/ 2.9 4,500 2/ 16.4 2./
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
1,500
11.2
1,000 2/
7.8 2/
1,700
10.1
1,600 2/
8.9 2/
1,945
10.5
1,579
8.5
2,201
10.3
1,797
8.5
2,404
10.4
1,707
7.3
2,569
9.7
1,738
6.6
2,945
10.6
1,742
6.2
3,194
10.4
2,168
7.1
3,492
10.6
2,268
6.8
3,916
11.2
2,498
7.1
4,147
11.3
2,398
6.6
- 40 -
S-E-C-R-E-T
Declassified in Part -_Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 7
Distribution of Inland Freight in East Germany, by Mode of Transport
1936 and 1946-58
(Continued)
Year
Total Inland
Railroad Transport
Motor Transport
Inland Water Transport
Transport
(Million)
Million
Percent of Total Million
Percent of Total
Million
Percent of Total
Tons Carried
1946
91.5 1/
54.9 2/
6o.o 1/
N.A.
N.A.
N.A.
N.A.
1947
124.1 di
73.2 2/
59.0 1/
N.A.
N.A.
N.A.
N.A.
1948
151.9 2/
88.1 2/
58.o 1/
N.A.
N.A.
N.A.
N.A.
1949
175.4 .d/
100.0 e/
57.0 1/
N.A.
N.A.
N.A.
N.A.
1950
225.8
128.5
56.9
87.3
38.7
10.0
4.4
1951
267.8
153.2
57.2
103.7
38.7
11.0
4.1
1952
291.3
158.3
54.3
120.5
41.4
12.5
4.3
1953
336.4
182.3
54.2
141.3
42.0
12.8
3.8
1954
357.1
191.4
53.6
154.1
43.1
11.6
3.3
1955
389.5
207.5
53.3
169.1
43.4
12.9
3.3
1956
411.1
210.2
51.1
187.4
45.6
13.5
3.3
1957
443.2
220.3
49.7
208.5
47.0
14.4
3.3
1958
468.6
227.2
48.4
226.5
48.3
14.9
3.3
a. Excluding ocean and air transport.
in this table are given in metric tons.
b. 15/
c. Residual.
d. Totals for ton-kilometers and tons carried are
basis of the estimate.
e.
f. These percentage figures are estimated at a declining
pected that these might actually be higher because of the
of plus or minus 10 to 15 percent is assumed.
All tonnages 50X1
estimated by using railroad transport percentages as the
rate of percentage point per year. It is ex-
lack of gasoline for truck transport. An error
41
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 8
Freight Carried by Railroads in East Germany, by Type of Commodity 2/
1950 and 1955-58
Commodity
1950
1955
1956
1957
1958
Thousand
Metric Tons
Percent
of Total
Thousand
Metric Tons
Percent
of Total
Thousand
Metric Tons
Percent
of Total
Thousand
Metric Tons
Percent
of Total
Thousand
Metric Tons
Percent
of Total
Coal and coke
50,677
42.7
85,648
46.5
87,751
46.9
92,521
47.5
92,662
46.3
Ore
5,028
4.2
2,144
1.2
1,947
1.0
1,822
0.9
1,894
1.0
Other mining products
751
0.6
1,310
0.7
1,731
0.9
1,926
1.0
2,063
1.0
Metals
6,458
3.5
6,687
3.6
6,979
3.6
7,517
3.8
Scrap metal
2,065
1.1
2,219
1.2
2,148
1.1
2,368
1.2
Chemicals (excluding fertilizers
and tar products)
3,885
3.3
5,173
2.8
5,260
2.8
5,142
2.6
5,392
2.7
Fertilizers
5,734
4.8
7,934
4.3
8,277
4.4
8,295
4.3
8,679
4.3
Mineral oils and tar products
1,234
1.0
4,194
2.3
4,694
2.5
5,001
2.6
5,408
2.7
Building materials (excluding
cement)
13,084
11.0
20,546
11.1
21,884
11.7
23,751
12.2
25,990
13.0
Cement
2,839
1.5
3,072
1.7
3,025
1.6
2,863
1.4
Wood
5,528
4.7
5,390
2.9
5,039
2.7
4,830
2.5
4,516
2.3
Grains and legumes
2,132
1.8
1,781
1.0
1,771
0.9
1,486
0.8
1,301
0.7
Potatoes
2,291
1.9
1,511
0.8
1,347
0.7
1,257
0.6
1,183
0.6
Sugar beets
2,448
2.1
3,161
1.7
2,561
1.4
3,441
1.8
3,896
1.9
Sugar
781
0.7
852
0.5
661
0.4
686
0.4
883
0.4
Other industrial and agricultural
products
25,194
21.2
25,442
13.8
24,419
13.1
24,742
12.7
25,439
12.7
Piece goods
N.A.
7,921
4.3
7,702
4.1
7,608
3.8
8,025
4.0
Total
118,767
100.0
184,369
100.0
187,022
100.0
194 66o
100.0
200,079
100.0
a. 22/. Standard gauge only.
-42-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 9
Freight Carried and the Average Number of Freight Cars Required
for Each Type of Traffic in East Germany
1950-58
Freight carried, by type 1/
1950
1951
1952
1953 1954
1955
1956
1957
1958
Thousand Metric Tons
Total tons carried
128,504
153,214
158,287
182,257
191,437
207,514
210,207
220,335
227,199
Foreign tons received
8,487
12,398
13,798
17,075
19,162
21,753
20,377
22,155
23,604
Total tons originated 12/
120,017
140,816
'44,489
165,182
172,275
185,761
189,830
198,180
203,595
Tons originated (standard gauge)
118,767
139,920
143,248
163,866
170,953
184,369
187,022
194,660
200,079
Tons originated (narrow gauge)
1,250
896
1,241
1,316
1,322
1,392
2,808
3,520
3,516
Average number of freight cars
required, by type of traffic
Units 2/
For total traffic carried
95,400
88,600
99,000
110,300
112,100
130,800
130,600
132,700
136,100
For total tons originated
(standard and narrow gauge)
89,100
81,400
90,400
100,000
100,900
117,000
117,900
119,300
122,000
For total foreign tons received
6,300
7,200
8,600
10,300
11,200
13,700
12,700
13,300
14,100
For tons originated (standard
gauge only)
88,200
80,900
89,600
99,200
100,100
116,200
116,200
117,200
119,900
Average working car park 1/
81,780
82,028
90,642
101,611
102,960
110,000
N.A.
117,300
N.A.
a. Including domestic, export, import, and transit freight traffic.
b. Tons originated includes only the tons of freight loaded in East Germany and does not include foreign freight tons received.
c. Unless otherwise indicated, data were computed by dividing the annual tonnage by the average tons carried per freight car per
which were as follows: 1950, 1,347 metric tons; 1951, 1,730 metric tons; 1952, 1,599 metric tons; 1953, 1,652 metric tons; 1954,
1,707 metric tons; 1955, 1,587 metric tons; 1956, 1,610 metric tons; 1957, 1,661 metric tons; and 1958, 1,669 metric tons.
d. Reported actual average working freight car park, standard gauge only.
Data for 1957 are as of March.
year,
50X1
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
6-E-O-R-E-T
Table 10
Inventory of Rolling Stock of Railroads in East Germany
1946-58
Units
Locomotive Park
Year Total Operating Serviceable
Freight Car Park
In Repair Damaeed Total 21* Operating In Repair
1946
7,645 2/
4,508
2/
3,395 2/
1,113 2/
3,137
2/
106,800
2/
1947
7,575 2/
5,056
2/
2,943 2/
2,113 2/
2,519
2/
94,900
2/
1948
7,015 2/
4,557
2/
2,960 2/
1,597 2/
2,458
2/
88,500 2/
1949
7,009 z/
4,827
2/
2,374:LI
2,453 z/
2,182
1/
92,500 Ei
1950 ly
6,762
4,770
3,378
1,392
1,992
99,801
1951 11/
6,456
4,850
3,142
1,708
1,606
101,647
1952 2/
6,384
4,922
3,055
1,867
1,462
137,900
1953 L/
6,230
5,119
3,529
1,590
1,111
136,674
1954 L/
6,476
5,561
4,056
1,505
915
142,220
1955
N.A.
N.A.
N.A.
N.A.
N.A.
145,669
1/
1956
6,478 E/
5,564
1/
3,898 E/
1,666 E/
914
145,585
/2/
1957
6,020 2/
N.A.
3,200 2/
N.A.
N.A.
146,000
1958
5,670 2/
N.A.
N.A.
N.A.
N.A.
N.A.
* Footnotes for Table 10, follow on p. 45.
-44-
S-E-C-R-E-T
65,600
57,400
68,225
75,850
81,780
82,028
90,642
101,611
102,960
110,000
N.A.
117,300 Ei
N.A.
bJ
12/
4./
15,100 Li/
9,600 1/
7,400 1/
7,765 E/
8,494
9,722
16,586
8,220
10,024
11,761 1/
N.A.
14,000 2/
N.A.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Total
Passenger
Car
Park
17,095 2/
6,860 2/
N.A.
7,696 2/
7,799
8,111
9,015
10,179
10,507
N.A.
N.A.
N.A.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 10
Inventory of Railroad Rolling Stock in East Germany
1946-58
(Continued)
a. The total freight car park is composed of the number of cars in operation, the number of cars under-
going repairs, and an unknown number of cars that are either in a pool of damaged cars or in a nonoperative
reserve.
b. LI-1/
c. Total park minus damaged park.
d. )42/
e.
f.
g.
h. Serviceable park plus locomotives in repair.
i. Total park minus operating park.
j.
k.
1. Li/. ,Information as of August 1955.
m. _2/. Information as of 30 September 1956.
n. 22/. The total planned freight car park for 1956 was to have been 159,000 cars, with the working
freight car park equal to 129,982 cars; for 1957 the planned freight car park was to have been 136,114 cars.
p.2g./
- 45 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 11
Revenue of Railroads in 1950-57 and Revenue Required to Meet Expenditures in 1958 in East Germany
by Type of Service
Freight Revenue Passenger Revenue
Municipal Railroad Revenue
Average h/ Average 2/ Total Revenue
Million Current (Current Deutsche As a Percent Million Current (Current Deutsche As a Percent Million Current As a Percent (Million Current
Deutsche fprk Mark East per of Total Deutsche Mark Mark East per of Total Deutsche Mark of Total Deutsche Mark
Year East 21 Ton-Kilometer) Revenue East 2/ Ton-Kilometer Revenue East 2/ Revenue East)
1950
1951
1952
1953
1954
1955
1956
1957
1958 g/
753.8
954.8
1,064.9
1,270.4
1,368.1
1,435.4 2/
1,478.6 2/
1,559.4 2/
2,468.2 h/
0.046
0.050
10.051
0.052
0.052
0.050 s/
0.050 s/
0.050 s/
0.061 1/
47.2
50.9
52.8
57.4
56.7
58.0
59.0
60.0
70.8
745.3
803.9
837.9
846.0
944.4
939.1 2/
925.0 2/
934.2 .41
877.4 2/
0.040
0.041
0.040
0.041
0.041
0.041 s/
0.041 s/
0.041 2/
0.041 s/
46.6
42.9
41.5
38.2
39.1
37.9
36.9
35.9
25.2
98.9
116.4
114.2
96.6
100.2
101.5 f/
102.8 fi
106.6 f/
139.4 1/
6.2
6.2
5.7
4.4
4.2
4.1 f/
4.1 fi
4.1 f/
4.0 11
1,598.0
1,875.1
2,017.0
2,213.0
2,412.7
2,476.0
2,506.4
2,600.2
3,485.0
a.
b. Unless otherwise indicated, freight revenue divided by ton-kilometer performance, from Table 19, p. 56, below. All tonnages in this table are given in
metric tons.
c. Unless otherwise indicated, passenger revenue divided by passenger kilometer performance, from Table 19, p. 56, below.
d. Estimated by applying performance data from Table 19, p. 56, below, to the estimated average revenue.
e. Estimated on the basis of data for 1950-54.
f. Estimated as 4.1 percent of total revenue.
g. Estimated requirements.
h. Composed of 1,989.2 million Deutsche Mark East (DME) from freight charges, 426 million DME from a charge of 20 DME per axle for every car loaded, and
53 million DME from a charge of 5 DME for car weighing. For a discussion of increased rates, see p. 14, above.
i. Average revenue per ton-kilometer necessary to provide the 1,989.2 DME for freight charges.
j. Assumed to be 4.0 percent of total revenue.
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04 : CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 12
Profit and Loss Statement for Railroads in East Germany
1955-57
Constant Prices in Million 1955 Deutsche Mark East
1955
1956 1957
Item
Current Cost
1955
Percent
of Total
Current Cost
1956
Increase
Above
1955
(Percent)
Current Cost
1956
1957
Increase
Percent Above
of Total 1956
Current Cost- (Percent)
Current Cost
1957 2./*
Percent
of Total
Current Cost
Wages of operating employees
(not including repair) 2/
952
34
1
959
33
6
1,014
32
Social cost and wage tax
120 sj
4
4
125 s/
4
4
130 1/
4
Administration wages sj
223
8
3
230
8
3
237
8
Amortizations
298 1/
11
7
320 I/
11
8
346 g,/
11
Rolling stock repair costs
Labor 2/
234
276
290
Materials
86
104
158
Total
320
12
19 .
380
13
18
448
14
Cost of expendable materials
320 1/
12
19
380 1/
13
18
448
Coal for locomotives and dif-
ferential
185 1/
7
3
190 1/
6
4
198 h/
6
Individual expenses 1j
95
3
5
100
3
5
105
3
Taxes 2/
Transport
145
146
151
Turnover '
5
5
5
Total
150
5
1
151
5
3
156
5
Cost of railroad's own freight 2/
70
3
6
77
3
4
80
2
Directors' fund 2/
36
1
3
37
1
5
39
1
Total current operating cost
2,769
100
6
2,949
100
8
3,201,
100
Total earned revenue li
-2,476
1
-2,506
3
-2,600
Subsidy or loss
293
443
601
_-,---=?
.-_---._---
Net operating ratio 2/
112
118
123
* Footnotes for Table 12 follow on p. 48.
- 47 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 12
Profit and Loss Statement for Railroads in East Germany
1955-57
(Continued)
a. Estimated.
b. 256./. Including salaries of operating employees and apprentices.
c.
d. Estimated as 4 percent greater than in 1956.
e.
f. if/. Depreciation of fixed assets and rent.
g. Estimated on the basis of an increase slightly greater than that between 1955 and 1956 of 7 percent. The increase of 1957 above 1956 was estimated to
be 8 percent.
h. . The wages of labor employed in the repair of rolling stock were derived by subtracting the wages of operating and administrative employees from
the total wage bill.
i.L)/. Plan.
j. Projected through 1957 on the basis of an 18-percent increase above 1956. The figure for 1956 was 19 percent greater than that for 1955.
k. Four percent greater than that of 1956. This increase was about 1 percent greater than that of 1956 above 1955. In 1957, greater quantities of coal
were used, and although the coal was of a lower grade and thus less expensive, the volume more than made up for the decrease in unit cost.
1.F. Projected to 1957 on the basis of a 5-percent increase.
m. 2/. Transport tax in 1955 was equal to 0.0028 Deutsche Mark East (DME) per traffic kilometer. Turnover tax was 3.5 percent of transport tax. Total
transport taxes for 1956 and 1957 were computed by multiplying ton-kilometers by 0.0028 DME and then taking 3.5 percent of the result as turnover tax.
n. In 1955 the cost of the railroad's own freight was equal to 0.0028 DME per ton-kilometer operated. This cost also was used for 1956 and 1957.
o. /. Computed as 2.5 percent of the total wage bill.
p. See Table 11, p. 46, above.
q. Total operating cost divided by total revenue.
S-E-C-R-E-T
Declassified in Part -Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 13
Transport Employees in East Germany, by Mode of Transport 2/
1950-56
Year
Total
Personnel
Operating
Personnel
Apprentice
Personnel
Other
Personnel
All Transport
1950
331,398
241,064
11,585
50,155
1951
362,826
248,436
17,136
58,255
1952
385,908
265,885
22,008
63,087
1953
406,490
283,013
23,632
64,651
1954
421,610
294,971
22,129
71,365
1955
416,320
323,270
20,483
72,567
1956
417,581
324,327
18,444
74,810
Of Which:
In Repair Work
1956
71,097
49,541
7,337
14,219
Railroad Transport
1950
252,492
204,003
9,258
39,231
1951
279,061
219,286
14,223
45,552
1952
293,263
225,180
17,871
50,212
1953
298,295,
232,416
18,943
46,936
1954
306,490
236,850
17,227
52,413
1955
298,894
232,297
16,289
50,308
1956
296,959
229,289
14,252
53,418
Of Which:
In Repair Work
1956
53,428
38,586
4,835
10,007
Main Administration for Shipping
1956
9,995
6,998 578
2,419
Private Transport
1956
19,084
17,333 110
1,641
a. L/. Data are from official East German sources. Total per-
sonnel for 1950-54 does not equal the sum of the components, but
no explanation is given for this discrepancy.
-49-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 14
Wages and Salaries of Transport Employees in East Germany
by Mode of Transport 2/
1950-56
Million Current Deutsche Mark East
Wages and Salaries
Year
Total
Personnel
Operating Apprentice
Personnel Personnel
Other
Personnel
All Transport
1950
1,073.8
777.9 9.6
189.8
1951
1,315.1
947.1 13.8
243.2
1952
1,488.2
1,047.4 18.5
289.6
1953
1,676.8
1,209.0 21.4
308.9
1954
1,876.0
1,346.1 19.9
374.7
1955
1,904.9
1,528.6 19.2
345.5
1956
1,998.2
1,596.9 17.0
356.9
Railroad Transport
1950
826.6
664.8 8.2
153.6
1951
1,026.8
818.6 12.0
196.1
1952
1,140.6
892.7 15.8
232.1
1953
1,257.9
1,007.3 18.1
232.4
1954
1,391.7
1,090.2 16.4
285.1
1955
1,408.4
1,117.3 15.9
275.2
1956
1,465.5
1,166.9 13.7
285.0
Motor Transport
1956
209.0
166.7 2.4
39.9
Main Administration for Shipping
1956
49.9
37.0 0.6
12.3
Private Transport
1956
71.1
64.5 0.1
6.5
a.
Data are from official East German sources.
-50-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 15
Product, Capital/Output, and Labor/Output Ratios for 1951-57 with the Estimated Annual Totals
for 1958-60 Required to Fulfill the Plan for Railroads in East Germany
Product
Million Traffic
Year Kilometers
1951 38,654
1952 41,621
1953 44,905
1954 48,983
1955 51,613
1956 52,133
1957 53,972
1958 54,223
1959 61,176 1/
1960 68,129 LI/
1 Actual
4-Year
Increase
34 Percent
Planned
5-Year
Increase
32 Percent
Capital
Index
Capitalized Value 12/ Ton-Kilometers
(Million Current per Unit
Deutsche Mark East) of Capital 2/
Index
Operating
Employees 21/
100.0
7,774
4,972
Actual
100.0
219,286
107.7
7,738
5,379
4-Year
108.2
225,180
116.2
7,762
5,785
Increase
116.4
232,416
126.7
7,878
6,218
30 Percent
125.1
236,850
133.5
7,979
6,469
130.1
232,297
134.9
8,060
6,468
Probable
130.1
229,289
139.6
8,140
6,630
5-Year
133.3
225,000
140.3
8,280
6,549 Increase
131.7
225,000
158.3
8,401
7,282
22 Percent
146.5
225,000
176.3
8,624
7,9oo
158.9
225,000
Labor
Ton-Kilometers
per Operating
Employee
176,272
184,834
193,210
206,810
222,185
227,368
239,875
240,991
247,141 E./
253,291 Ei
111* Actual
4-Year
Increase
26 Percent
Planned
5-Year
Increase
14 Percent
Index
100.0
104.9
109.6
117.3
126.0
129.0
136.1
136.7
140.2
143.7
a. Unless otherwise indicated, passenger kilometers plus net freight ton-kilometers are from Table 19, p. 56, below. All ton-
nages in this table are given in metric tons.
b. See Table 18, p. 55, below.
c. Traffic kilometers divided by capitalized value.
d. Data for 1951-56 are from Table 13, p. 49, above. Operating employees for 1957-60 are estimated to have been about
25,000. Actual data for 1957-60 may decline, making the possibility of plan completion even more remote.
e. Unless otherwise indicated, traffic kilometers divided by operating employees.
f. Interpolated between the actual performance for 1958 and the 1960 Plan.
g. Data for 1960 were estimated by applying the planned increase of 14 percent for labor productivity; data for 1959 were
interpolated.
h. L71. Of the increase in total traffic kilometers, 29.9 percent was to be freight ton-kilometers and 2 percent passenger
kilometers.
- 51 -
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 16
Estimated Investment in Railroads Compared with Total Investment and Investment in Transport in East Germany
First (1951-55), Second (1956-60), and Third (1961-65) Five Year Plans
Million Current Deutsche Mark East
Investment in Railroads
Plan
Total Investment
1951h/
Investment in Transport
Estimated
Planned
Investment
Percent
of Plan
Fulfilled
Actual
Investment
Five Year Total
Five Year Total
Yearly Totals
28,600 2/
2,403 I/
2,403
N.A.
N.A.
1,036 1/
1,060 EV
1,075 I/
1,344 2/
1,385 2/
5,900
281 2/
329 2/
464 L/
466 Ej
46o 1/
2 000
i
70 12/
8o Ea/
8o 5./
81 E/
82!!
79
59 1/
70 2/
70 2/
70 2/
70 2/
68
197
263 2/
371 g/
376 hi
378 1/
1,585
55,000 12/
55,000
5,900 s/
>,900
673 2/
689 E/
700 E/
886 E/
900 E./
3,8118
398 1/
482 2/
490 2/
620 2/
630 2/
2,620
N.A.
8,850 I/
N.A.
5,785 11/
N.A.
First Five Year Plan (1951-55)
1952
1953
1954
1
1955
Total28600
Second Five Year Plan (1956-60)
1956
1957 g
1
1
1960
Total
Total Third Five Year Plan (1961-65)
a. Estimated on the basis of data for 1950 and 1952.
b.
c. Plan.
d. The railroad investment plan was 74 percent fulfilled on 30 November 1952. The estimated completion by the end of the
year was 80 percent.
- 52-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 16
Estimated Investment in Railroads Compared with Total Investment and Investment in Transport in East Germany
First (1951-55), Second (1956-60), and Third (1961-65) Five Year Plans
(Continued)
e. _2/
f. Total investment in transport and telecommunications minus 10 percent estimated as having been invested in post and
telecommunications equals actual investment in transport.
g. Estimate based on reported data for 1954 and 1955.
h. 12/
i. 11/
k. ii/. Transport investment in 1956 was to be 46.4 percent above that in 1955; taken to mean above the plan for 1955.
1. L/
m. Estimated. No investment plan is available for 1957.
n. Sixty-five percent of the total investment in transport.
o. Estimated as 70 percent of plan. If the .scarcity of material becomes worse, 70 percent may be too high.
P. 75/
q. investment in transportation and telecommunications would be
13 percent o? total economic investment -- 6.6 billion Deutsche Mark East (DME) is 13 percent of 51 billion DME, the esti-
mated "rammed" investment in economic means of production for the 5 years. Transportation is estimated to represent
90 percent of total investment in transportation and telecommunications.
r. 11/
s. Total investment plan for the 3 years 1956-58 equaled 3,171 million DME. The difference between the 1956-58 data and
the 5-year plan was divided arbitrarily into 1,344 million DME for 1959 and 1,385 million DME for 1560.
t. Estimated on the basis of planned investment in railroad for 1960-65.
u. 1.?./. Railroad investment under the Third Five Year Plan was to be 50 percent greater than under the Second Five Year
Plan.
- 53 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 17
Proposed Additions to Line Capacity of Railroads in East Germany 2./
1956-60
New Line
Replacement of Track 12/
Reconstruction
of Second Track
Construction of Station Track
Miscellaneous Track
Total Track
Year Kilometers
Million Current
Deutsche Mark East
Million Current
Kilometers Deutsche Mark East
Kilometers
Million Current
Deutsche Mark East
Kilometers
Million Current
Deutsche Mark East
Kilometers
Million Current
Deutsche Mark East
Kilometers
Million Current
Deutsche Mark East
1956
1957
1958
1959
1960
Total
Average
Per Year
50.5
69.5
76.0
216.0
150.0
103.5 2/
29.5
57.0
124.0
67.0
381.0
770
770
770
770
367
3,447
200.2
200.2
200.2
200.2
95.4
896.2
413.0
773.5
535.0
177.0
136.0
2,034.5
106.5
204.1
136.0
48.0
34.0
528.6
97
72
29
22
15
235
47
138.5
102.9
42
37
28
348.4
90
30
20
20
20
180
36
18
12
8
8
8
54.0
1,420.5
1,715.0
1,430.0
1,205.0
688.0
6,458.5
566.7
548.7
443.2
417.2
232.4
2,208.2
562.0
112
76
689
179
407
106
70
11
1,292
442
a. /2/. These data do not represent the Second Five Year Plan (1956-60) as finally accepted, but represent the best judgment of a commission of railroad experts as to the actual needs of
the railroads for the years shown. The totals in this table are much larger than those agreed on in the actual plan (see p. 12, above).
b. The cost was computed on the basis of an average unit cost estimated to be equal to that of reconstructing second track, or 260,000 Deutsche Mark East per kilometer.
c. The average cost per kilometer of new line in 1956 (2.05 million Deutsche Mark East -- DME) appears to be unusually large in relation to the average unit cost for subsequent years (0.42 million
DME in 1957, 0.75 million DME in 1958, 0.57 million DME in 1959, and 0.45 million DME in 1960).
- 514- -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 18
Estimated Value of Capital Stock of Railroads in East Germany 2/
1951-60
Gross Amortization
Capital Value12/ Net Investment s/ Net Annual Addition f/ Net Capital Value gi
(Million Current (Million Current Million Current (Million Current (Million Current Index of Net
Year Deutsche Mark East) Deutsche Mark East) Percent 1/ Deutsche Mark East 2/ Deutsche Mark East) Deutsche Mark East) Capital Value
1951 7,774 197 3.0 233 -36 7,774
,738 100.0
7
1952 7,969 263 3.0 239 +24 99.5
1953 8,232 371 3.1 255+116 7,762 99.8
1954 8,603 376 3.2 275
+101 7,878 101.3
1955 8,989 378 3.3 297 +81 7,979
8,060 102.6
1956 9,367 398 3.4 318 +80
8,140 103.7
1957 9,765 482 3.5 342 +140
88:420810 104.7
+121
1958 10,247 490 3.6 369 106.5
1959 10,737 620 3.7 397 +223
,624 108.1
8
1960 11,357 630 3.8 432 110.9
a. All data are subject to an error of plus or minus 5 percent.
b. Li. Data are as of the first of the year.
c. See Table 16, p. 52, above.
d. The amortization rate (amortization is here regarded as provision for depreciation) is estimated for 1950-54 on an increasing basis of
0.1 percent per year -- the experience found in 1955, 1956, and 1957, when amortization equaled 3.3, 3.4, and 3.5 percent, respectively. 8j/
Data for 1958, 1959, and 1960 were projected on the same basis of 0.1 percent per year. This increase coincides with a growing awareness
by the East Germans of the increase in real costs in terms of depreciation.
e. Amortization rate (percent) multiplied by gross capital value.
f. Net investment minus amortization.
g. Li. Data are as of the first of the year and are derived by subtracting the net annual additions from the net annual capital value for the
previous year.
- 55 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Table 19
Annual Statistics for Railroad Transport in East Germany 2/
1950-58
Item
1950
1951
1952
1953
1954
1955
1956
1957
1958
Million net freight ton-kilometers
Million tariff ton-kilometers
Thousand tons carried
Average daily carloadings (tons)
16,350
15,064
128,504
21,18612/
19,127
17,291
153,214
25,27112/
20,820
19,077
158,287
27,840 h/
24,376
22,112
182,257
32,072 h/
26,351
23,182
191,437
33,77512/
28,708
25,222
207,514
N.A.
29,573
27,334
210,207
33,500 2/
31,187
28,635
220,335
34,000 2/
32,824
30,101
227,199
N.A.
Average length of net haul
(kilometers) 2/
127
125
132
134
138
138
141
142
144
Average length of tariff haul
(kilometers) 2/
117
113
121
121
121
122
130
130
132
Turnaround time (days)
4.12
3.46
3.47
3.38
3.25
3.53
3.55
3.51
3.47
Average net tons per train
15.2 1/
16.4 I/
15.2 1/
15.3 1/
15.2 B./
15.352/
15.662/
15.662/
15.97
12/
Million passenger kilometers
18,576
19,527
20,801
20,529
22,632
22,905
22,560
22,785
21,399
Million passengers carried
954
1,006
1,056
997
1,008
1,016
1,022
1,011
980
Average passenger distance traveled
(kilometers) 1/
19.5
19.4
19.7
20.6
22.5
22.5
22.1
22.5
21.8
a.
b.
C.
d.
e.
f.
g.
h.
1.
Net ton-kilometers divided by tons carried.
Tariff ton-kilometers divided by tons carried.
86
_-/
Passenger kilometers divided by passengers carried.
All tonnages in this table are given in metric tons.
-56-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
APPENDIX D
MULTIPLE CORRELATION BETWEEN THE INDEX OF TOTAL TRAFFIC KILOMETERS,
CAPITAL PRODUCTIVITY, AND LABOR PRODUCTIVITY
1951-57
Problems of multiple correlation always involve three or more
variables, one dependent variable (the value that is to be estimated)
and two or more independent variables which for one reason or an-
other may have some significance in estimating the value of the de-
pendent variable. In many problems, there are numerous factors that
are interrelated and have some influence in considering the value of
the dependent factor, not as a causal force but as an interrelation-
ship.
Because the independent factors do not all have the same rela-
tionship to the dependent factor, the relationship of each must be
weighed according to its contribution to the total of the independ-
ent factors. Only a multiple correlation can derive the coefficients
of regression that are the correct weights of each of the independent
factors in their relation to the dependent factor after the influence
of each of the other factors has been considered or eliminated. In
this way the ability to predict the level of the dependent factor
from given levels of the independent factors can be determined.
In this problem, two independent factors were considered to have
extensive relationships to the level of total traffic kilometers (ton-
kilometers added to passenger kilometers): (1) capital productivity,
which has as its component parts the total amount of capital for use,
the efficiency of the capital goods used (for example, steam locomo-
tive power, aging rolling stock, and older types of signaling) along
with some measure of the increasing efficiency of the capital goods
being acquired, and (2) labor productivity, which considers the total
number of employees, average productivity per employee, and probably
some measure of the efficiency of the aftinistration and organization.
The linear multiple correlation for the three factors -- total traffic
kilometers (the dependent factor), capital productivity, and labor
productivity (the independent factors) -- showed that the degree of
relationship was high enough to permit the use of capital and labor
productivity in predicting the approximate capacity of the railroads
in 1960 in terms of total traffic kilometers.
Two separate correlations were run, one from the original data
and one from the indexes of the data available or estimated for the
years 1951 through 1957. Data for 1958 were not used in the
- 57 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
correlation inasmuch as the values for labor and capital inputs
were considered to be tentative. Both of these correlations pro-
duced the same basic result. The correlation coefficient was found
to be sufficiently high to be used quite accurately for forecasting
if the assumption is made that the relative weights (the coefficients
of capital and labor productivity) will not be changed drastically
during the period 1958-60 by disproportionate additons to either
capital or labor supplies. The estimate is that no disproportionate
additions can be made during the period, although some change is
bound to occur.
To show what portion of any given increase in total traffic
kilometers is directly attributable to the increase in productivity
of capital and labor for the given years, the following values were
assigned in the multiple correlation problem, using the indexes of
x = total traffic kilometers (TTKM), dependent factor
y = capital productivity
independent factors
z . labor productivity
The multiple correlation coefficient was found to be high,* with
R = 0.98
The coefficient of determination was
R2 = 0.96
The computed coefficients of y and z for the linear multiple re-
gression equation Yc = a+by+cz are
b = 0.5384
c = 0.6106
Substituting the coefficients b and c in the regression equation
with the constant "a" equal to -13.97, the value of total traffic
kilometers (the unknown Yc) for any year can be approximated. For
example, for 1956 the estimate of TTKM capability can be derived as
follows:
* There are two indigenous factors that contribute to the high degree
of correlation. The primary factor is the amount of autocorrelation
in the economic series, and the other is the use of ton-kilometers in
all three of the variables. The exact degree of stochastic relation-
ship existing in this problem is therefore difficult to interpret.
58
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
Ye (TTKM) = -13.97 + 0.5384 (130.1) + 0.6106 (129.0)
Yc = 134.85 (index of TTKM, base year 1951)
This value (Ye) differs from the actual index (134.9) by about
0.1 percent.
On the assumption that the ratio of capital to labor productivity
is relatively constant for 1958-60 and by the application of the es-
timated increases (index) of capital productivity and labor produc-
tivity, the estimate of TTKM capability for 1960 can be derived as
follows:
Yc = -13.97 + 0.5384 (158.9) + 0.6106 (1)43.7)
Yc = 159.3 (index of TTKM, base year 1951)
Thus TTKM capability in 1960 would be approximately 62 billion
ton-kilometers instead of the required 68 billion ton-kilometers. On
the basis of annual growth in traffic kilometers during 1951-57, a
total of 6 billion traffic kilometers would indicate that East Germany
is 2 to 3 years behind the 5-year planned rate of increase in total
traffic capacity.
The results of the above correlation and its projection to 1960
are subject to separate check by projecting the growth in traffic
kilometers on the basis of an average annual rate of growth.
If the average annual rate of growth during the period 1951-57 is
computed, the following results are achieved:
Year
Million Traffic Kilometers
Annual Rate of Growth
(Percent)
1951
38,654
5.7
1952
41,621
5.7
1953
44,905
5.7
1954
48,983
5.7
1955
51,613
5.7
1956
52,133
5.7
1957
53,972
5.7
1958
57,048
5.7 (Projected)
1959
60,300
5.7 (Projected)
1960
63,737
5.7 (Projected)
-59-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
On this basis the capacity for 1960 would be about 64 billion
traffic kilometers, or 4 billion traffic kilometers less than set
forth in the plan. This computation is not too conclusive, however,
because a declining average annual rate of growth was noted in the
years after 1954, and the actual increase between 1957 and 1958 was
only 0.5 percent. Projections also were made on the basis of the
average annual increases between 1954 and 1957, as follows:
Year
Million Traffic Kilometers
Annual Rate of Growth
(Percent)
1954
48,983
3.3
1955
51,613
3.3
1956
52,133
3.3
1957
53,972
3.3
1958
55,753
3.3 (Projected)
1959
57,593
3.3 (Projected)
1960
59,494
3.3 (Projected)
On the above basis, traffic kilometers are more than 8 billion
less than the planned goal of 68 billion traffic kilometers. The
latter method, which reflects a recent rate of growth of 3.3 per-
cent, is believed to be closer to the actual rate than the rate of
5.7 percent computed for the years 1951-57.
Data on plan fulfillment for 1958 indicate a 5.2 percent rate
of growth in freight traffic and a decrease of 6 percent in passen-
ger traffic above that of 1957, thus giving some support for using
the latter figure for the years 1959-60.
No definitive explanation can as yet be provided on the actual
reasons behind the apparent discrepancy between planned traffic goals
for the railroads in 1960 and the trend of annual performance. At
best, the plan can be estimated as being slightly more than 1 year
(approximately 4 billion traffic kilometers) behind the anticipated
1960 schedule. By 1960, in all probability, there will be a lag of
slightly more than 2 years (8 billion traffic kilometers) behind the
1960 goal.
In the absence of large quantities of freight that have not been
shipped (there was a considerable backlog at the end of 1958, but it
was eventually moved), it can be assumed that the lag is due to the
fact that demands in rail traffic have not been as high as anticipated
(that original plans of industrial demands were wrong) or that other
modes of transport have taken over much of the increased traffic
- 60 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
S-E-C-R-E-T
burden of the railroads. In view of the increase in motor transport
traffic kilometers of 14 percent in 1958 above that of 1957, the
logical assumption would seem to be that the demands on rail traffic
have not grown to the proportions originally anticipated in 1955 by
East German planners and that some shifts of traffic to motor trans-
port have taken place.
- 61 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
R
Next 4 Page(s) In Document Denied
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0 50X1
Figure 2
10
11
12 13
14 15
55
BORNHOLM
(DENMARK)
55
Reichsbahn Directory
Berlin
Halle
Magdeburg
Schwerin
Dresden
Erfurt
Cottbus
Greifswald
International and interzonal rail connections
Single-track railroad
Double-track railroad
Electrified railroad
Autobahn
Road
Canal
Stralst.
0 10 20 30 40 50 60
Greifswald
POMMERSCHE
54
P*V'N
USEDOM
S7TTINERJ HAFF
BUCHT
ch erin
BOCHEN
1
Ne brandenbur
Maritz
See
8
ANTOW
Ludwigslipt
zollern
FEDER
Stendal
REPUBLIC
POLAND
POT SA
Frankfurt
3
HELMSTEDT
GUBEN
Ir14
GERM NY
Spree
Stassfurt
Dessau
Cottbus
Forst
tide bee
LEIPZIG
ji_HORKA
12
GORLITZ
11
abets
Mau
ZVVICKA
u-- cI1IEMNITZ
Z TTAU
8
.RADIUMBAD-BRAMBACH
OV AKI
13
PRAGUE
(,)
Boundaries are not necessarily those
recognized by the U.S. Government.
14 15
27591 3-59
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04: CIA-RDP79R01141A001600110001-0
50X1
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
SECRET
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/06/04:
CIA-RDP79R01141A001600110001-0
50X1
50X1