GOVERNMENT TRANSPORTATION POLICY IN SELECTED COUNTRIES VOLUME I MERCHANT SHIPPING INLAND WATERWAYS

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A004300050001-8
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• Document Creation Date: December 27, 2016
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• Content Type: REPORT

GOVERNMFINT TR A TTSIDt1Prri rrTrUtT nrvr rinv
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IN SELECTED COUNTRIES
VOLUME I
MERCHANT SHIPPING
INLAND WATERWAYS
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This report, issued in two volumes, has been pro-
paired at the request of the President's Air Policy Com-
mission. Tho 44 individual studios, contained herein,
form the second part of a survey covering governmental
policy with regard to transportation in eleven selected
countries. The first portion of the survey, previously
submitted, covered civil aviation in those eleven coun-
tries.
In order to maintain uniformity in preparation, the
information was collected on the basis of questionnaires,
copies of which are bound at the end ofeach volume. The
questionnaires may be laid open and used ooncurrently in
examining the studies. It has been accordingly unnecessary
to repeat the individual questions in the text of each
study. Omission in any study of an item included in the
questionnaire indicates 'that the question was inapplicable
to the respective country or that satisfactory information
is unavailable.
Otter agencies have assisted Central Intelligence
Agency in collection of data. The Department of State
instructed several US diplomatic missions in foreign
capitals to prepare studios covering the countries for
which they were respeetively responsible. .This informa-
tion was supplemented by additional data prepared in the
Department of State. The Department of Commerce pre-
pared studios covering the USSR and facilitated arrange-
ments with the Department of State for obtaining data
from abroad. The Library of Congress prepared a'study
on pro-war Germany, most of which has been included in
this report.
Central Intelligence Agency has supplemented this
data with additional information available from other
sources. The opinions expressed in this report therefore
do not necessarily refloct'the views of agencies other
than Central Intelligence Agency.
A general analysis or the report has been prepared
by Central Intelligence Agency and placed as the first
document in Volume I. It states certain over-all con-
elusions which zero dream after analysis of the individual
studies.
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DDA Memo, 4 Apr 77
Auth: DDA REG. 77/1763
Date: IC102/2"_ By: all
NO. 30
CENTRAL INTELLIGENCE AGENCY
24 December 1947
STAT
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WORLD SURVEY OF TRAYSPORTATION POLICY -
The studies contained in this too-volume report were prepared
at the request of the President's Air Policy Commission. The Com-
mission suggested the analysis of certain features of transporta-
tion policy with respect to merchant shipping, railway, inland
waterway and highway transportation in the eleven countries which
were selected for a similar study on civil aviation pplicy. These
studies, accordingly, should be considered in connection with the
results of the civil aviation survey contained in a.previous volume,
of this series.'
The President's Air Policy Commission desired to have the survey
include other forms of transportation, as well as civil aviation, on
the grounds that a study of pOlicy concerning these media might have
a bearing on its consideration of civil aviation policy.
In many countries, there are differences which set civil aviation
apart from the other meane of transportation and exert an influence on
policy. The most basic of these are due to the effects of the tar.
The hostilities disastrously affected Surface transportation systems
throughout Europe and in the western part of the USSR, as well as in
China. Furthermore, the necessity for deferring maintenance through-
out the world, an indirect result of the war, caused serious deteriora-
tion in the transportation systems of most countries. .
The effects of the war with respect to merchant shipping were also
far-reaching, although they manifested themselves in other ways. A
substantial redistribution of the world merchant fleets was caused by
(a) losses of ships through military action, and other causes related
to the war, and (b) the great productivity of shipyards in the US, '
Canada and the United Kingdom. As a,result of these factors, total
world tonnage was materially increased while merchant fleets of some
nations were greatly reduced or eliminated. During this period, on
the other hand, air transport enjoyed an unprecedented stimulus from
the enormous requirements for transportation created by the war.
The foregoing circumstances have determined the main post-war
problems connected with merchant shipping, railway, inland waterway
and highway transportation in many countries concerned primarily with
overcoming the effects of the war and re-establishing pre-war levels
of activity. Civil aviation, on the other hand, can still draw on a
large stockpile of commercial transport aircraft and a total potential
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world production far in excess of world peace-time demands, The prob-
lems which confront civil aviation are discussed in the preceding vole
UM of this aeries.
Transportation policy is influenced frequently.by a further funda-
mental difference between civil aviation and the other forms of trans..
portation, This difference lies in the relative ease with which air
? communications between remote and isolated areas can be established.
(This is particularly conspicuous in South America, Which has been
backward in .organizing adeouate surface transport') In such areas,
emiihasis is now being placed on civil aviation development, rather
than on the extension of existing rail facilities. It is true that
the capecity of airlines cannot approach that of rail or highway
carriers and that air.operatione, accordingly, cduld nbt satisfy the
transportation demands of a large-scale regional economic development,
On the other hand, the political, strategic and economic advantages pf
air communications can be made available almost without delay,
This survey has revealed that in all eleven countries under con-
' sideration, n !finistry responeitile for transportation has been estab-
lished, In several cases, however, ,the :anistry of Transport does not ,
handle all forms of transportation. Civil air policy is separately
administered in five of the countries, In fact, there are instances.,
for example in the United Kingdom, where responsibility for ?kill avia-
tion has been removed from an existing Yinistry of Transport And placed
in a newly-created Ministr7 of Civil Aviation.
The efficiency with which transportation policy is implemented in
the eleven countries varies greatly. As was pointed out in the pre-
vious volume on civil aviation, however, it appears impossible to
identify efficiency with any specific form of governmental organization,
The integration of transportation policy has' not necessarily guarrntped
efficiency, The efficiency of those agencies has been perforce ad-
versely affected when, severe political strains complicate the adminis-
tration of a government, In France, for example, a recent Communist
7iinister was more occupied with promoting his party's.interests than
in raising the efficiency of his organization. Under such 'circum-
stances, the 'integration of all forms of transportation under one in-
dividual seems at times to have involved a sacrifice of efficiency as
compared with the results O'f a more decentralized treatment.,
The survey indicates that subsidixation of all forms of transporta-
tion is effected wherever the national interest is sufficiently com-
pelling and the financial condition of the country permits. However,
there is a basic .difference between civil aviation and the other forms
of transportation, which bears on this question. All of the other media
are older and have had time to stabilize their operations. Civil avia-
tion, on the other hand, is So 'important strategically to msny countries,
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that they?are not willing to await its normal development under its ovm
resourcds.
Participation by other forms Of transportation in civil air opera-
.
tions has been found to.be almost universal. Its most frequent form is
that of non-managing minority stocX evmership. In several countries,
hovevero shipping interests or railway companies directly operate air,
tran ort lines. In some countrieso on the other hand
government policy seem to be antagonistic to such direct
operations. participation. ?
The surface forms of transportation do not now raise world-wide
questions of international policy to the same extent as civil aviation.
This is explained-by: (a) the long tradition of international negetia-
tiara regarding surface transportatieni (b) the basic organization of
this activity, which is recognized with few exceptions by all interested
parties; (c) the large number of international treaties which legally
regulate surface transportation; and (d) the absente of a multilateral
agreement on civil aviation? and the continued existence of sharp dis-
agreements over the principles which should govern international air
transport operations.
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TRANSPORTATION - PRANCE
THE SUPREME TRANSPORTATION ADVISORY BOARD
ROE: The following information was not available during
the preparation of this study.
1. The most important development in French transportation since
the war is the establishment by the National Assembly in August 1947 of
a Supreme Transportation Advisory Board., The Board will advise the
Minister of Public 7orks and Transport on all transportation matters
submitted to it, but may also formulate recommendations on its own
initiative. The Advisory Board's immediate mission is to presents
.within one year, plans for the coordination of rail, highway, inland
waterway, air and ocean transportation. It *ill include in its Plans
coordination of domestic transport with colonial and international
transportation. The Board will study all social, technical, financial
and economic matters relative to the organization and functioning of
the various modes of tranAportation; it will also study matters ccincern-
ing stock and equipment, technical and commercial development and the
social, economic and administrative problems arising therefrom.
2: The Supreme Transportation advisory Board is established under
the Minister of Public 7orks and Transport and consists of 69 members,
including representatives from various government agencies, members of
Parliament, specialists from the large transport organizations, employee
representatives from the operating companies and public organizations
such as tourist travel agencies. Feven permanent commissions are estab-
lished under the Board, charged with examining questions of transport
coordination. These are as follovsi
Rail -
Rail -
Rail ?
Rail -
Highway -
Highway -
Sea .
highway
inland waterway
air
sea
air
Inland waterway
air
3. The Supreme'Transportation Advisory Board is financed through
a special fund provided by the Minister of Public 7orks and Transport.
The sum expended shall be reimbursed to the state by the various trans-
portation operators under conditions to be set forth by decree of the
Minister of Public -orks and Transport and the Minister of Finance.
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PRAVCE WERCHANT SHIPPIKG
POLICIES
IMPI???????????????11T
I. The French merchant merino is not nationalized, although it
receive* substential subsidies from the Governvent for pur-
poses of ship conrtrOction and operation. Traditional French
policy has permitted freedortotaction by the merchant marine
providing to conflict arises with state interests. The mere
ch!cnt realm, howsver, ie st present under eovertrent requi-
sition, due to surviving wer-timo controls. This situetion
does tot represent a permanent government policy, and it is
intended to return the merchant merino to private hands as
soon at conditions permit. L'ention should be made, deverthe-
lose, of 6 growing tendency by the government in recent years
to &smarm a Greeter control of shipping companies through
state participation in capital reorganization af companies
in state receivership. There is agitation in sorts quarters
for nationalization of the merchant marine, but thus for,
proponents or governnent onnorehip have made little progress.
3. (a) French Goverirmnt policy is to Subsidize both merchant.
& ship construction and operation. The subsidies take var..
(b) tout forms ...such as: construction loans, low chatter -
rates on government-ownedveseels, operating and.mail
subsidies. Tho government also grants exclusive rights
of cabotage in domestic and colonial areas to French
flag vesicle. This letter form of aid is not unique since
it is provided by most maritine nations...
France is quite liberal with regard to use of Pareign-
built vessels and foreign labor on French vessels. French
shipping interests ordinarily prefer to use French.
constructed bottoms9 but there is no real restriction
upon purchasing foreign vessels.
(b) France,. at present, is'opereting a number of American-
built Liberty ships purchased under the US Ship Sales
Act (1946).
(a)
. (c)
tlth respect to labor, there appear to be no require-
vents; regarding the nee of French natioeals on French
vesselsa with the exception that a certain percentage
of licensed personnel must be French.
5. (a) The French Government has always taken at active interest
& in the development of international agreements. both
(b) official and private, regarding the merchnnt marine
industry and is active in the International Labor Qffice,
which promote, international agreestnts regardirg rorking
and. living conditions aboard ship...
6. Merchant shipping policies aro closely coordinated with civil
Ur policies, since the government is heavily interested fi-
nancially indboth media of trnesport. Like Lanny other coma-
trioa, Prim cc in considerably more liberal in its policy toward
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FRANCE e. ?MERCHANT SHIPPING (A-6 CONT'
the free flow of merchant shipping than in its policy toward
"freedom of the air."
7. There are no legal restrictions upon ownership of air car-
riers by merchant shipping interests. . In fact, COMPAGNIE
GENERALE TRANSATLANTIQUE (the French Line) has a substantial
ownership interest in Air France. Coordination of sea-air
activity is emphasized and achieved through the authority of
the Ministry of Public Works and Transport rhioh has control
over both sea and air activity.
B. ORGANIZATION
1. Merchant shipping is under the control of the Ministry of
? Public Works and Transport, and all regulations proposed by
other agencies, public or private$ must Channel through the
Ministry. The principal agency in the Ministry concerned with
- merchant shipping is the Secretary General for. the Merchant
Marine (SECRETAIRE GENERALE a la MARINE MARCHANDE), the other
' agencies in the Ministry having charge of purely subsidiary
? activities, such as ports and the fishing fleet. In addition
to the Secretary General for the Merchant.Marine (exercising
noninal jurisdiction), the Transport Maritime virtually con-
trols all French shipping through its powers of requisition.
Transport'Maritine, organized as a war agency, is still in
operation and receives all revenue earned by the operators,
and in turn pays out .fees somewhat on the plan of the General
Agency Agreement originated by the US War Shipping Administra-
tion with respect to American flag operations during the war
and for some time thereafter. Transport Maritime is not
planned as a permanent agency, but is scheduled for dissolu-
tion as soon as practicable.
2. Determination of policy and planning relating to the merchant
marine_ is the responsibility of the Secretariat General re-
ferredito in 1. above. Departments and bureaus deal with spe-
cific problems such as: finance, personnel, materiel, train-
ing, freight rates, the fishing fleet, merchant marine hospitals
and temporary conditions arising out of the war. Two of the
eight bureaus are concerned with the interests of the state in
the COMPAGNIE GENERALE (the French Line).
./
3. The agencies dealing with shipping operate under the Ministry
of Public Works and Transport 'where they are subject to con-
trol and coordination. The merchant marine is directed through
the Secretariat Generale de la Marine Marchande, which is in-
dependent of the various other agencies in the Ministry dealing
with other forms of transport, such as rails, roads and air ?
transport. The tight compartmentalism of these agencies in the
. Ministry appears to eliminate any substantial degree of admin-
istrative overlapping or conflict.
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FRAKCE EHIPFIT.G (B-4)
4. The present Secretariot General; de is 1:urine Narohande has
evolved over a long period through several adainistrative
forma. flume originally an independent Unistry until on
orders of the Vichy. Government the Lerchant Earine Services
were taken over by the Admiralty in 1940. They were subse-
quently placed by de Gaulle under the authority of the
laniatry of Public t-orke ate Trencport shire they not remain.
VI-tile there is no official evidence that any consideration
is being given to reorganisation or creation of new agencies
dealing vith the merchant marine, there is little doubt that
the organization of the f.ecreteriat will be greatly changed
if the proposed reorganization of the French Merchent L'arine
stressing national control should occur.
5. It is difficult to determine vhether the criticisms currently
leveled at French shipping are valid or are simply manifesta-
tions of dissatisfaction over the present disorganization of ,
French transportion in general. The principal controversy is
centered on whether or not the larger companies (those pos-
sessing 100,000 tons of shipping; equivalent to about 9
Liberty ships) ahould be subject to control by h government .
commission. This is being hotly contested but little progress
is reported.
C. AltalISTRWITa
2. Rates charged by shipping companies are determined by the state
which decides such netters in the light of the national inter-
est, the interests of the operation being secondary. The
French Government fosters and the componies participate in
international nate conferences.
5. Conrpottionibr the purpose of bettering service is encouraged,
but any action toward "cut-throat" competition whichlovad
.strengthen one company at the expense of another in uhich the
state has an interest would not be tolerated. All policy on
competition is evaluated in the light of the ultimate profit
to the state.- Fzhnoe is party to racy international and bi-
lateral treaties,rogardinc traffic, rates and other related
matters through the conferences referred to in 2 above.
4. There are established rules and procedures regarding inspection
and investigation of accidents. The Council of Security (C3e-
SEIL de SECURITE) in the Ministry of Public 75:irks and Transport
is charged with enforcement.
. 5. The goverment sponsors training Of technicians for the merchant
marine and has established arm fostered technical schools for
that purpose. Technicians of the officer class ere licensed to
perferm certain duties in accozennce with rigid examining pro-
cedures prescribed by the government eimilar to tins? ,f the
United States.
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NETHERLANDS MERCHANT SHIPPING
A. POLICIES
10 The Netherlands merohunt fleet normally is privately owned
and operated and the state exorcises little control over the
policies of merchant shipping operators. (Tho governMent
position with respect to the merchunt marine has paralleled
to a considerable degree that of the UR.) Strict war-time
-state control over shipping was terminated in March 1946.
The present partial state control over the merchant marine is
a result of current .heavy expenditures of public funds re-
quired to rehabilitate the war damaged industry.
It is the intention of the Netherlands Government to lift
eventually the present partial control over merchant
shipping and restore the industry fully to private industry,
Conditions in Central Europe and political developments in
the colonial Empire, however, may cause indefinite post-
ponement of these plans.
2. Merchant shipping policies of the Netherlands are based
largely upon political and economic consideratians, relative-
ly little attention being paid to military considerations,
although in the lute war, the Dutch merchant marine was of
considerable assistance to the flied cause.
.S. The state normally does not diroctly'subsidise ship construc-
tion. Before the Par, the industry was aided primarily by.
loans and loan guarantees for construction, isssietance has
also boon given through duty exemptions on imports for.
construction purposee. Shipping interests also received
government mail contracts, contributions to the Scumon02 fund,
and assurance of all government overseas shipments on vessels
of Dutch nationals. Present policies continuo such aids.
At the present time, however? the state is granting oporutors
additional assistance in the form or considerably more direct
aid for constructionof new shipping to replace losses sustained
during the par.
4. Shipping operators mgy construct ships in Dutch yard?, buy
abroad, or build abroad, as tits desire. There are no
limitations on the use of foreign craws in the unlicomed ranks.
There ere restrictions, however, on the use of foreign nationals
in licensed positions.
Jo Tho Netherlands is u party to the Intornutional.labor Office
agreements concerning working conditions and wages aboard .
ship. Dutch shipping companies are party to numerous inter-
national state and privuto agreements rogarkj..1k; rates, traffic,
etc.
?
6. The ,state is endeavoring to work out policies coordinatinz
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esaciptrz.
NETHERLANDS MERCHANT SHIPPING (Ae6 CONTcD)
sea and air traffic. It is wall aware of tho importance of
air transport and is participating financially in JUL: to
an increasin;; degroe. The st..te policy of freedom of tItp
seas is matched by its willingness to grant freedom of its
air space to other countries upon a reciprocal basis.
7. Throo shipping companies atm n a minority interest in thu
Dutch airline nil and are currently protesting the stato'
proposal to ostablish u state monopoly of civil aviation.
D. URGaNIZaTION
1. torchant shipping is under the over-all control of the Director
Genoral of Navigation in the Llinictry of Transport and under
the immediate control of the Department of Shipping, (formorly
an independent anistry, but now under the iinistry of Trans-
port). Direct government control, similar to the 113 War
Shipping Ldministration, ended as of 2 March 1946. Tho
Dopartriont of Economic tffairs issues safoty regulations.
2. The agency dealing directly with the merchant merino is
the Dopartmynt of Shipping. The agoncy contains a number of
bureaus, each dealing with specific problems such us finance,
wolfaro, inspection, training and qualifications; etc. '
.' 3., Tho Dopartlent of .Shipping is copurato from the dopartMents
concerned with other forxm of transport but is, Ma the
others, directed and coordinated by the Ninistry of Transport.
There is no apparent overlapping between dopartftents except
in the case of inlandwator and ooeun-going transport
occacioned,by the nature of port operations.'
4. Tho development of the merchant marine Lnd the agencios of
government concerned -with it may be attributed largely to
the geographic position of the Netherlands, Situated on an
outlet of the Rhine, Rotterdam has long boon one of the
leading ports of the world. Tho ports of the Hethorlands
functioned before World Vier II as ontropots for northwestern
Europe, serving a groat European hinterland. This strategic
position of the Netherlands, together with extonsivotrade
with the Dutch colonial empire, resulted in the development
of a largo merchant marine which has been traditionally a
valuable source of foreign oxchungc.
No reorganisation of the existing Departmont of Shipping is
contemplated, nor aro new agencies to deal with maritime
affairs to be croated,
5. The Department of bhipping is apparently operating efficiently
and the Dutch merchant marine is fact recovoring from the
.effects of the var.
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MFRCHANT SHIPPING (C01)
C. ADMINISTRLTION
1. T.lo government, normally, does not at4:empt to control the
' inauguration of new shipping services, but requires thLt
' papers of incorporation be filed.
2. In contrast to the strict control exercised by the gGvornment
over rail rates, no interest is manifested by the State in
the establishment of either minimum or maximum freight rates
in merchant merino traffic. Tie government is not concorned
with the activities of shipping companies in regard to Maritime
conforencos, since it coneiders such activities as Commercial
arrangements of little interest to the state.
3. Competition between Dutch ocean carriers is not controlled.hy
the government but is somewhat regulated by the carriers them-
selves throazh the widespread practice of pooling facilities
and traffic. Participation in international rate pools is
subject .only to approval by the Department of Shipping.
4.
Safety regulations afilocting the merchant marine are issued
by the Department of Economic Lffairs, and maintenance of
standards is required by law.
5. The state is interostod in the training of technicians for
the :aoroluint merino. There are schools for tho training of
nustors, mates and engineers Gt.Hottordam,,einstordam, (two),
Don Holder, Flushing. and .other locutions.
- G. tnnual reports by the steamship lines are required by the
Shipping Directorate of the Ministry of Transport. The reports
include financial statements and statistioal data on opera-
tions.
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USSR MERCHANT SHIPPING
la P1=4ng ;.ith respect to merchant shipping is controlled by the,
?evict Act?. .1:erchant shipping in the lijSR is an instrument
of national policy0 is the case c. ith all elements .of the
?evict economy, merchant shipping can only justify its existence
to the extent that it furthers the over-all program of the :-arty.
The official statement of the ;:oviet Government that yhe volume
of sea-going freight shall be increased to 220 per cent of this
pre-lwar level by 1950 and the merchant marine increased by
6C0,000 tons is noteworthy in the light of the Soviet position
in world trade. hile tha value of eoviet exports and imports
moving by ocean-going trade appears to have accounted for only
about one per cent of the value of totaltorld chi?ping tvaiiict
joviet-flag vessels constituted, in 1939, about two per cent of
tho world ocean-going merchant fleet. This rates the question
of whether the eoviet merchant marine is already larger than
Lioviet world trade justifies,
assuming that worlu construction programs are sufficient to .
replace vesL.els scheduled for the scrap heap, the merchant
fleet of the world in 1950 will be about 20 per cent larger
than. the 1939 fleet. In contrast to this over-all increase,
Soviet plans call for ship?construction equivalent to about
70 per cent of their present fleet. In the absence of ineica-
tions that the USSR intends to abandon its relative isolation
from world trade, it must be assumed that domestic considera-
tions have dictated these c.xl,ansion plans. Some increase in
aoviet coastwise traffic will undoubtedly result from the
ambitious industrialization and relocation features of the
current Five-Year Plano Additional new tonnage can be absorbed
through replacement of obsolete tonnage. A large part of the
incentive for the expanded merchant marine, however, mustztem
from strategic ruquir,ments and prestige considerations. The
uc:as, LD L major power, dislikes to parade a minor merchant
marine before the vorld0 ample factor of safety in the,
size of its merchant marine, mormvar? would be of great im-
portance, if part of its merchant fleet vaare to be sacrificed
in the course of a future military eventuality.
2. Prior to Z:orld.:lar IIt the 1L3R had been a secondary power, .
possessing wannwatur ports, the approaches to which it could
not certainly control in case of hostilities with major powers.
This and other limitations prevented it from becoming a sea
power, and overseas mi)itary teventures tore beyond its capabil-
ities. There tas, therefore, no place for global military or
political planning in its merchant shipping policy. As a
result of .orld :ar II, however, tho IJUjR has become a major
power, anu has launched a erogram of industrial expansion
which, if successful, vastly increase its capabilities
for major construction projects, such as tho Levolopment oi a
powerful Navy, a large _dr ibrcet and an extensive merchant
marine0 hile its positiontith respect to Larmwater ports
has no certainty of solution, the can at least visualize
the possibility of political uevelopments improving its
position in this regard. Thus, global ,,olitical and military
analysis can begin to be applied to planning in the field of
nrc
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USSR MERCHANT SHIPPING (A-2 COMM)
merchant shipping, although the basic renknesr of the UrER
in overseas military operations cannot be qui-kly changed.
On the other hand, local situations adjacent to tlap UTfP now
call for direct pelitichl-military elann:ng in merchant ship-
ping affairs. Soviet development of th- :Torthern :ea hohte,
its improv-d position in the Baltic, ',Lc e];mination of
Japan, the Soviet contractuhl position in the :anchuriar porta,
and tension in the Black rea have all created situations in
which the advantage of a merchant rine is clearly indiceted.
Military-political considerations, therefor-, are nor un-
Aeubtedle reflected in merchant marine olannina, In reite of
the fact that merchant shipning project: for the imeeditte fu-
ture will not basically alter the Soviet rorld position in
shipping. ?
From the point of view of purely domestic politics, Soviet
merchant shipping policy is dominated by political considera-
tions, because all planned activity in the roviet Union is a
manifestation of the Party's political will.
3. Because of the political organization of the rovict Uninn, the
question of stute tebnidies for. shipconstruction and operation
is academic. Subsidies are generally defined as extra-economic
payments or privileges granted by a stete to private operators
for the performance of a service deemed to be in the public
interest. It is apparent, therefore, that there can be no
Soviet subsidies in the usual sense for the reason that there
are no private operators. In a broader sense,. all shipping ac-
tivity in the USSR is subsidized, as it is controlled by the
State, and can be. maintained, regardless of its degree of eco-
nomic self-sufficiency, if it serves the State interest.
4. The Soviet Union is actively engaged in expanding domestic ?
construction of merchant vessels. Present plans call for doub-
ling 1940 shipyard output by 1950; one yard building freighters
is to be constructed on the Black Sea and another for trawlers
and sea-going tugs in the Baltic. There is no apparent state
policy forbidding the use of foreign-built vessels, despite the
drive toward Soviet self-sufficiency. In the pre-war years,
there was considerable construction for foviet decount in for-
eign shipyards, notably Germany, Denmark, France and the Neth-
erlands. At the present time, however, little such construction
appears to be under way. SoViet use of foreign vessels is cons
fined to vessels operated under charter party agreements and
the vesaele aggregating 603,400 gross tons procured under Lend-
Lease from the US. the merchant marine of the USSR is manned
by Soviet nationals.
5. Soviet policy with respect to international merchhnt shipping
has evidenced general indifference toward multilateral agree-
ments. Numerous bilateral agreements have been concluded, how-
ever, which 'include understandings on shipping problems as a
part of economic arrangements. The Soviet Union is not a party
to the various international agreemente relating to such mari-
time problems as rates, working conditions, vessel classifica-
tion, etc. (The USSR, however, was signatory to some of the .
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c
USSR ' mEnTIELLTILUTLISLOalti
pre-war Conventions reg rding ocean safety, for example, the
1S29 London Convention on Safety at Sea.) Since private
operation of merchant shipping does not exirt in the Soviet
Union, there are no inter-company agreements. Dn the other
hand, shipping agreements exist between State agencies,
The most important international question facing the UFSR in
the field of merchant shipping is the disposition of the
603,400 tons of UF Lend-Lease shipping still operated by the
roviet Union. This fleet is equivalent to about 50 per cent
of the UFSR's own fleet, and its disposition is a matter of
prime importance to the UFSR strategically, as roll as eco-
nomically.
6. Merchant shipping and civil aviation are administered hy sepa-
rate ministries; but it appears that their functions are ac-
tively integrated in over all planning by the State Planning
Commission (Caspian). thile the Eoviet Union favors freedom
of the seas in principle, it frequently enforces restrictions
on foreign shipping using its ports. The USSR, furthermore,
has attempted to secure civil aviation rights into foreign
are:ts; ...41though it does not permit airlines of even its satel-
lite states to fly into Soviet territory.
7. Schedules of shipping lines and air communications are pre-
sumably coordinated in remote areas of the USSR. The state
agency operating merchant vessels, however, does not operate
air carriers, and there is no administrative control exercised
by either medium over the other.
B. ORGANIZATION
1. State ag-ncirs concerned with the merchant marine or closely
related aspects of it are:
State Planning Commission
Ministry of the Merchant Uarine
Ministry of the Shipbuilding Industry
Ministry of Trade
2. The Ministry of the Merchant Marine is specifically charged
with operation and maintenance of the Soviet merchant fleet,
including its operations in the Caspian Sea. The Ministry of
the shipbuilding Industry is responsible for planning and con-
struction of the merchant fleet; the Ministry of Trade is re-
sponsible for providing both foreign suppliers and foreign
outlets. Merchant marine planning is included in over-all
national planning undertaken by the state Planning Commission.
Supplementing the official USSR Government agencir:, are Party
organizations which exercise direct influence on administration
at all levels. Major decisions, in fact, are taken within
the Party's Politburo.
3, The Ministries mentioned above are in themselVes separate agen-
cies dealing with specific problems, but all are subject to
over-all control of their economic aspects by the State Planning
Commission. The Ministry of the Merchant Marine has no direct
connection with linistries resnonsile for other media of
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USSR - MERCHANT SHIPPING (B-3 corrIp).
transport. The extent of conflict between the agencies dealing
with transportation is not known. Howevers.since Coviet ocean-
going vessels also ply the inland waterways, and operations
on the Caspian Sea, an inland waterway, are under the juris-
diction of the Ministry of the Merchant 7orine, it is apparent
that there is some overlapping which provides areas of potential
conflict.
40 The structures of the agencies mentioned in 13-1 have been re-
peatedly changed in the course of the various economic planning
programs adopted since 8 February 19180 rhen the merchant fleet
of the country and subsidiary shipping property were taken over
by the state. (Vessels which were used as a direct means of
livelihood, those belonging to cooperative enterprises, those
Owned by municipalities or state::, and thoce in certain other
minor categories were excepted.) Some of this requisitioned
-fleet was handed over to the various staYs and state a7encies
for operation, hut the bull: of the fleet was put under the con-
trol of a section of the Commissariat of Communications. In
1930, the Soviet trend toward a highly contrIlled and fully
socialized economY vac reflected in the establishment of the
Commissariat of :Liter Transport, which was created to assume
control of all forms of rater transport. In March 1946, juris-
diction over inland-water transport having been removed, the
Commissariat was renamed the Ministry of the Merchant Marine.
There is no evidence of impending further changes in merchant
Shipping organization,
5. To esk whether the agencies administering Soviet merchant
shipping policy are operating in the public interest is tan-
tamount to asking whether the Communist Party is ruling the
USSR in the true interests of the Soviet people, which is be-
yond the scope of this study. The question of administrative
and operational efficiency is susceptible of more objective
treatment. The CoViet merchant marine has unquestionably
raised the efficiency of its equinment and personnel in recent
years through the acquisition of improved vessels and the em-
phasis on extensive training programs. On the other hand, the
shortage of port equipment and extensive war damage have kept
over-all efficiency far below the standards of the leading
maritime nations. The bureaucratic efficiency of the merchant
shipping agencies is undoubtedly similar to that of the Soviet
Government generally, which is characterized by an unwieldy
system of numerous agencies (52 Ministries are officially
listed) contending with obvious problems of overlapping, and .
subject to numerous factors which retard the processes of admin-.
istrntion.
C. ADMINISTRATION
1. The establishment of new scheduled shipping services between ?
the USSR and specific foreign ports is under the complete juris-
diction of the State. The usual economic eepects of such ques-
tions, carefully weighed in countries rith free competition, are
subordinated in the USSR to over-all political and economic
planning.
4 -
1; ::77) r: FN ?
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USSR as MERCHANT SHIPPING (Ce2)
2. The procedure for the determination of freight rates for Sviet
Merchant Marine traffic falls into two categories. Rates on
goods hauled for the account of one of the state agencies are
determined by negotiation between the agencies concerned. The -
State Planning Commission, horever, has the authority to review
and to revise any rates established at loeer levels. The power
to establish freight rates* therefore, may be said to reside in
the State Planning Comminsion. Then Soviet bottoms are not
available and foreign charters are resorted to, the rate?nego-_
tiations are carried out by the :artistry of the Uerchant terine
and the foreign operators concerned. In the rare cases where
roviet vessels operate hetreen tro forigp. ports for foreign
account, rorld freight rater are applied.
3. .Since the merchant marine is State-owned, there is no dompeti-
tion in the true sense hetneen merchant narine operators. The
crews of the various vessels do, however, engnge in vigorous
"Socialist competition"' to attain orficial approbation of' their
efficiency in seamanship and freight handling, in the fulfill-
ment of freight traffic plans and the lowering of costs. The
State MS found it advantageous to offer medals, prizes, etc.
for the attainment of stated objectives. It is state policy
to avoid competition betreen the media of transportation, if
such competition would adversely affect !?',ate planning.
4. Safety and inspection rules and their enforcement are the re-
aponsibility of the Division of'flavigation Inspection in the
Ministry of the :!erchant ,farine. Accidents are investigated
in an orthodox manner with investigations-relying to a consider-
able degree upon eyewitness accounts. Failure to observe safety
regulations invites serioun penalties.
5. The governe;nt maintains numerous schools throughout the country
for the training of shipping technicians as part of the plan for
Ministry of Labor Reserves. This program, inaugurated in 1940,
is being currently extended. Graduates of there schoolr with
training in shipping are assigned directly to jobs according to
their specialization.. Training of technicians is given to those
with the equivalent of a high school education after selection
? of students: is made on a basis of previous scholemtic record and
aptitudes. Trade schools also enroll boys who have only finished
elementary schools, but rish to prepare for a career on shipboard,
usually not in a highly skilled technical capacity. All Soviet
labor is supposed to be documented, and written evidence of edu-
cation and previous work record ordinarily is demanded before
applicanie are accepted for any nonition.
6. (See A-5)
7. All enterprises are required to submit exhaustive report:: on many
phases of their activities, These reports are used (a) by the
enterprises themselves, (b) by the State Pianning.Commission, (c)
for the preparation of whatever statietical and economic data the
UPSR is willing to mien, including that for propaganda pur-
poses, and (d) for the implementation of the Soviet systen of in-
centive rewards.
Ort'intevr...
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mca 11% I t? I L
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gra c LER.CHaNT
. POLIClEE
1. mo bade policy, of Sweden with respect to merchant
shipping is to encourage private interests in such
operations with as little state control as possible.
L11 uspects of merchant shipping policy are formulated
by tho individual operators. State controls are in-
voked only' in mutters of 4he national interest.
2. aorchunt shipping policy does not reflect considerations
of, a political or military nature. Economic considerations
are dominant in tho attitude of Sweden toward merchant
shipping.
3. .Swedish policy permits private ownership of morchnnt ship-
ping tad relatively little government aid is given to such
operators. Ship construction, however, is. aided by govern-
ment loans or loan guarantees. Concessions to ship ouners
permit accelerated depreciation of vessels in evaluation
fur tax purposes, and include minor benefits to promote
domestic ship construction; Other forms of government hid
to Swedish operators include. mail subsidies and reservation
of the coastal trade to Swedish-flag vessels. It is be-
lieved that no change in the petioles outlined above uro
contemplated in tho immediate future.
4. Tho government does not require that construction of
Swedish-flag vessels be undertaken in Swedish 'yards, nor
dues it require that 8wodish ship operators use Swedish-
built vessels. Such requirements on the part of the state
are considered to be unnecessary since Sweden ha a. long
record of efficient and low-coot shipbuilding. neva:nor,
it should be noted that all largo Swedish vessels, such
as the luxury liners, are built abroad, since Swedish yards
are nut equipped to construct vessels in that category.
Government restrictions on the use of foreign Libor either
.in the construction or operation of merchant shipping also
is'unnocossary as Swedish toilers and shipbuilding person-
nel are accounted among tho bent in tho world. There in,
however, a legal requiremont that Swedish citizens must
constitute two-thirds of tho crow.of%Swedish flag vessels,
and 'this requirqnent is rather closely checked both in
home ports and by Consuls abroad. Tho government has re?
contly imported foreign labor, both skilled and unskilled
from outside Sweden, notably Italy, in order to meet a
'critical shortage of manpower. The shipbuiloinz industry.
hohever, nue objected to the importstion of Italian labor
.
and has made strong recomondations that :Turman tochni-.
clans, more familiar with Swedish construction methods, be
furnished. ?
.5. Sweden is a party tonumerous international agreements
concerning shipping. Sweden, in fact, has led the way in
promulgating such agreements,. and has boon particularly
autivc_in promoting shipping between northern and western.
Euroi.ean countries; an example of this is their active
participation in the Baltic Conference and in the lorth
ntluntic Yreight Conference.
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?
SWEDEN - SIIIPF11IG (a-6)
G. Merchant shipping policies are not coordinatod with those
of civil aviation, but the policy of freedom of the seas,
traditional with Swddon, has boon matched ,by a policy of
froodom of the air, insofar as Sweden has received the
cooporution of other states.
7. T:ero is no state policy against ownership of air linos
by shipping companies, nor is there any restriction a-
gainst participation of s4pping companies in such under-
takings. 1,ith respect to the intogration of such opera-
tions, it shduld be npted that 40 per cent of the capital.
of SILa (Swedish Intercontinental air Linos) ia owned by
sevoral, shipping companies, particularly the.Swedioh-
Lnorican, Swedish Lloyd, and Johnson Linos.\,Tho Swedish
Government, furthermore, has recently approved tho.opera-
tion of a dew air line which will .he directed by Atom
,Lloyd, an affiliate of Swodish Lloyd. It is not likely,
howaver, that Swedish maritime interests will enter; the
field of aviation, to an large extent, except on a
minority stock basis.
B. ORGAMIZATION,
1. The agencies of the goVernnent concerned with merchant
shipping are:
The Ministry of Commerce
The Ministry of Foreign Affairs
The Ministry. of ComUnications
2. Tho Ministry of Commerce, which administers policies with
respect to trade, industry and shipping, also directs
merchant shipping:, an distinguished from coastal and in..
lend shipping. The Ministry of Commerce also integrates' .
all aspects of merchant shipping with the domestic trans-
port policies formulatod by the Ministry of Communications.
liewever, the Ministry of Communications directs coastal
and inlend shipping together with other forms of inland
transport. Questions of international shipping policy
also come within the authority of tho Lanistry f)r -
'Foreign Affairs.
?
3, Tho Ministry of Commerce and the Ministry for Foreign
affairs are autonomous within their own spheres, being
subjoct only to control, direction and coordination by
the action of the Primo Minister of the kiksdag. Thera
is no direct administrativo relationship between the above-
mentioned Ministrios and the Lanistry of Communications,
which deals with domestic transport problems. Mot-over,
all the activities of the three Ministries are subject to
overall coordination in the national interest. There ap-
pears to be no administrative conflict or overlapping
other than the normal and unavoidable operational overlapping
of the various media of ,transport.
5. Both the Ministry of Commerce and the Ministry for Foreign
Lffeirs are oonsidored to be operating officiontly in the
public interest with respect to the various problems of
merchant. shipping.
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S1.1:DE,11 LtailCilan SILIPixi riG (C..1 )
C. i,illallISTItaTI ON
1. It is necessary only for opertors to announce their in-
tention. of establishing such services, end to secure the
approval of both the.ainistry of ComMorCe and the Ministry
for Foreipt Affairs, inasmuch as state policies nay be
affected by the establishment of proposed services.
2. Shipping' rates are determined by the individual. operators.
The Swedish Goverruaont vigorously supports the activities
of its nationals in the formulation of international rate
agreements, since it is to the advantage of Sweden, having
substantial maritime interests, to proraote stabilization
of World shipping rates.
3.. The state follows' a policy of non-interference with respect
to competition and will intervene only in instances where
such competition is inimical to the national interest. It
,should be noted, however, that if a Swedish flag line wore
..to become bankrupt, or otherwise suspend operations through ?
other financial difficulties, it is likely that the state
iyould intervene to continue operations for reasons Of
prestige and. trade position on the route in question.
.Swedibh operator:, may parti6ipute in ouch international
shipping pools as they see fit. The Swedish Government and
individual Swedish operators are parties to 'many international'
agreements concerning -traffic, facilities and rates.
4. Rules and regulations concerning safety and inspection of
merchant shipping facilities are under the jurisdiction
of the Board of Trade of the Lanistry of Comore?. Vessels
of the Swedish merchant marine must moot standards of con-
struction and operation as laid down by the Ministry of
Commerce ch is responsible for establishing and erica* Ging
such regulations. -Safety-rogulatichis are sot forth bylaw
ane enforced by the Board of Trade. Ship inspectors make
theLr reports to the. bead?offices, of the Board. Standards
are roughly comparable to US and british standards, with
the exception that Swediskregulationo are less strict on
fire-proofing than is the US. In case of accidents, the
:Laster' naLes a report to the Board of Trade and there is
a complete investigation.
5. Tho Swedish C-overruzmnt, at the present time, is establishing
several training schools for merchant marine technicians.
These schools will be supported largely with state funds:
In addition to these contemplated schools, tho Board of
Trade presently operates four schools offering training in
navigation. The Board is also responsible for establishing
specifications for licensing of technicians and enforcing ?
such regulations. Student personnel will be sole cted on
the basis of qualifications laid down by the sta i13 , and
must meet state proficiency requirements before being licensed
us dock officers,und engineers. Those state requireronts
conform to established World standards.
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- MENEM ?- MERCHANT SHIPPING (0-61
6. The government requires shipping operators to submit annual
reports which include comprehensive statistics on all aspects
of operations as well as financial statements. Such require-
ments are not peculiar to the shipping industry since the
government requires the filing of such reports by all corpora-
tions.
?
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PRE-WAR GERMANY MERCHANT SHIPPING
Note; The study on Railway Transportation includes data of a
general nature which applies in part to merchant shipping.
A. POLICIES
10 In summary, the German mercantile marihe was a forthright mani-
festation of post-war economic nationalism. The Treaty of
Versailles had deprived Germany of nearly all of her ocean
shipping, although the short-sea and coastwise trading companies
were not affected. As early as 19170 the German Parliament was
formulating plans for the post-war extension of shipbuilding,
? During the three years following the war, grants in subsidy
amounting to 30 billion marks were made. Early in 1935 the
Government provided a'loan fund, granting loans up to 50% of
the vessels cost, and for the next 6 years construction was
aided by a fixed annual sum, In the world economic depression
? of the 301s, the Government provided loans to assist in the
scrapping of Vessels, and guaranteed the obligations of the
shipping companies, In this way, the Government became the
principal shareholder in the two leading companies, the Hamburg-
Amerika and the Norddeutscher 'Lloyd lines, which between them
controlled 70% of German ocean traffic?
The Nazis transferred Government shares in the shipping companies
back to private ownership, and a decree of February 1935 gave
the individual companies within the Hapag and Norddeutscher
Lloyd "complex" opportunity for indeoendent action, At the same
time, party control was maintained by the packing of the 'board
of directors of both companies with favorites, The North concern,
formed by the Hamburg-Amerika and Norddeutscher, Lloyd, for the
North Atlantic service, was given spezial assistance. The result
of Nazi measures was a well-balanced mercantile marine0 which
served the peacetime needs of foreign commerce, and at the same
time prOvided the navy with sufficient auxiliary vessels* The
reduction Of unemployment within the shipbuilding and subsidiary
industries0 and the construction of vessels suitable for conversion
to naval purposes were probable the secondary aims of German ship-
ping policy, .
3. Germany has always violently denied the legitimacy of the sub-
sidizing of ocean shipping, while at the same time granting
subsidies surreptitiously. Immediately after the warp a group.
of Shipping banks 0 with strong Reich participation, was formed
to extend credit to 'shipping lines and shipbuilders, One third
of the tonnage lost during the war was replaced by a grant of
30 billion paper %A in two installments, one of 12 billions and
one of 184billions; advanced against the assets of the individual
shipping companies. A loan fund of 50 million RM was established
in 1925. Subsequent direct financial assistance up to 1932 con-
sisted of a loan of 18,000,000 marks in 1926 to finance the construe-
tion of six tankers; an export credit scheme in' 1930 for the build-
ing of ships for foreign account; a Government guarantee in 1932
of a loan of 200000,000 marks to. German shipowners; a further
guaranteed loan in 1932 of 77,000,000 marks, of which 7 million
went to tramp companies; a grant in 1932 of 12,0000000 marks in
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PRE?VcAR GEMANY ? ? MERCHANT SHIPPING (A-3 CoNTyD)
loans to subsidize the scrapping of some 400,000 tons of obsolete ?
German vessels--about 10 per cent of the total German mercantile
marine--one of the objects being the relief of unemployment.
In 1933 loans of Up to 45,0009000 marks were authorized for assis?
tance to shipping; and these were followed in the same year by
further grants of 20,000,000 marks, the grants to be repaid if
possible. At the end of 1933 grants were authorized towards the
cost of repair and overhatl of seagoing ships from a subsidy fund
of 500,000000 marks originally provided as an unemployment relief.
measure in Connection with housing. In 1934 this scheme was ex?
tended to apply to the construction of new vessels, which were not
to be sold for the first ten years without the permission of the
Government.
When England, the ua, and the Scandinavian states left the gold
standard, the shippers were given a "currency equalization" sub?
sidy: 3 reichspfenning for each gross ton in operation daily,
and 20% of crew and personnel salaries, roughly equivalent (in
the aggregate) to 20% of the operating costs of a 6,000 ton ,
vessel. Because costs for new. construction were 35; higher in
German than in foreign yards, construction grants, outright and
unconditional sUbsidies? were given the shipbuilding industry,
During the world trade slump of the early 30ys, the Government
had subscribed capital, and thus became one of the principal
shareholders in the two main shipping lines. The existence of
other subsidies can be taken for granted, but their extent and
the bases of their administration have not yet been revealed.
The Nazis nominally returned administration to the companies, in
1937, At the same time, the career of Philip Reetsma. Gar-Ines
favorite, in the Hamburg?Amerika line, indicates that the Govern?
ment retained its influence.
4. In 1939, the total seaborne cargo carried in or out of German
ports was 56,695,000 Metric tons, of which it is estimated that
70% was transported in German bottoms.
5. Germany belonged to the Baltic and International Association of
Navigation Congresses, the International Shipping Conference and
the International Shipping Federation. .
6. These questions are irrelevant here, since Deutsche Lufthansa,
the only German civil air carrier, was a state owned, state
controlled, and state subsidized monopoly. Similarly, the German
shipping lines, for the larger part of the period between the
wars, were government owned, and they were always dependent on
Government subsidies. There was no question of coordination or
regulation: both means of transport were directed from the top
in the same aggressive campaign for foreign trade.
7. The dapping lines had early manifested their interest in aviation:
Hamburg?America by the incorporation of the Luftschiffbau Zeppelin
in-1918? Norddeutscher Lloyd by the erection of Lloyd Luftdienst
in 1920. Hapag and Norddeutscher Lloyd air interests were amalgam.
ated into Deutscher Aero Lloyd in 1923. *ken Deutsche Lufthansa
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PRE(4AR OMANI ? ARCHANT SHIPPING (A-7 CONTfD)
was formed in 1926, therefore, Hapag and Norddeutscher Lloyd
each had interests amounting to 6875 million RM.of its 25
million RM capitalization. In the 25 million RM expansion of
Deutsche Lufthansa capital in 1942, the Hapag and Norddeutscher
Lloyd combines the Deutscher Aero Lloyd, took up another 6 million
RM.. Since Deutsche Lufthansia was usually on a 50% subsidy basis,
and the excess of subsidies over deficit were returned to the
subsidy 'givers, there was no economic ground for a "seaair" problem.
B. ORGANIZATION
1, Two divisions within the Transport Ministry were concerned with
chipping. The Nautical Fngineering Division was responsible for
the construction of channels required for safety, and the location
and maintenance of lighthouses, light ships and buoys. The Central
Administrative body for shipping was, however, the Division of
Shipping (Schiffahrtsabteilung), charged with the integration of
shipping within the national economy.
3. The liaison between the Navy and the merchant marine was maintained
by a special office, t.he Verbindung Schiffahrt?Marine, which also
coordinated matters of telecommunications, .distress at sea, and
ice patrol. Closely related to the Transport Ministry was the
national trahsport group for shipping, the Reichsverkchrsgruppe
Seeschiffahrt. This corporative organization, like the others,
was designed to resolve internal conflicts to eliminate competi?
tion, and to represent the shipping industry before the Minister
of Transport in a consultative capacity,
4. (nee the study on Railway Transportation for a general discussion
of this question.)
5. (See the answer to this question in the study on Railway Tran.sporta?
tionn),
C. ACLINISTRATION
2. Liner rates inienerally were fixed by conferences 'which, in distant
trades, usually included a wide range of territory in their scope,
For example, the Continental Far East Conference included the
following territory: Norway, Sweden, ports on the Baltic Sea
other than Russian ports, Denmark, Germany, Netherlandsl, Belgium,
and French Ports, Dunkirk to St. Nazaire (both inclusive) to the
Straits Settlements, Malay Peninsula, Siam, Hong Kong, China (in?
cluding Manchukuo), Japan (including Taiwan), Dairen, and Chosen.
The conferences applied the deferred?rebate system in some trades
and the contract system in others. Shipper representation appears
to have been informal and_without distinctive character. The
Government did not exercise any regulator", authority over rates,
but was in a position to bring its influence to bear through its
controlling interest in the principal shipping companies, the
North German Lloyd and the Hamburg?American Line, athout direct
bearing on rates, the Government affords assistance to shippers
in the'form of export subsidiesn
? 3
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P11E71'4111 GEtchiA N Y ? ? MERCHANT SHIPPING (C CONT D)
There were no Peculiarities in the German administrative system
of safety regulation and inspection which require enumeration
here, The only difference from commonly accepted practices lay
in the high degree of centralization within the Ministry Of
Transportg
5, The training schools for merchant seaman and marine emgineers
were maintained by the various states rather than by the nation,
However, the Reich deputies for the Seamen's Schools (Fteichs?
beauftragte Air das seemannische Fachschulwesen) had the power
to examine their curricula. Other boards in the Ministry of
Transpbrt examined candidates for officers in the merchant
marine,
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8R1Z1L c' MERCHANT MIPPING
A. ' POLICIES
1. Basic Brazilian policy with res2ect,to merchant shipping is
aimed at (a) the replacement of losses incurred during norld
Y:ur pubstantiul increase in the total size of the
pro-war fleet, and (o) improvements in the quality of vessels
constituting the fleet. 'Brazil considers those objectives .
? to be necessitated by the leek of hiGhwuys und rsilreads? ,
connecting the isolated population concentrations along the
coact, and by the.demande of Brazilian foreign trade. To? '
achieve the,goals Set for the merchant marine, Brazil is '
willing to (a) purchase large nttrioers of foreign vessels,
? involving substantial expenditures, (b) grunt preferential
treatment to her own vessels, even to the point of risking
accusations of discrimination; and .(c) subsidize the opera-
- tions of its merchant vessels.
Through Llojd-Brasiloiro, the Brazilian Government- owls and '
operates the major portion of the merchant fleet, partioulurIy
those vessels in overseas service. 4 large amazon river
4 shipping company (Booth), which was owned by British interests,
was taken evur by the Brazilian governMent in 1946;
. The. current program for the fleet's expansion culls for the
'expenditure of More than 04,000,000. This involves prima-
? rily purchases from the US'and Canada. It ia expected that
? the program will provide Brazil with a bettor merchant marine
than she had in pre-war years.
2. Policy in respect to the merchant marine does not appear-to
, haw boon dominated by military eonolderations. although the
Brazilian contracts for euilding chips in the US during v':orld
r II probably reflected nilitary concern at shipping losses'.
.?
;idle ownemic considerations are the basis for Brazilian
- merchant shipping policy, prestige and local aspirations, in-
volvinG both international and domestic polities, have played
. a purt in the doterMinution of brazilian.objectivel.
3, (a) There is no subsidy for ship building- in Brazil', (The.
small Brazilian industry merely ,builde a few fishing
vessels and.coustal luggore.) .
? (b) The government alio aids its merchant marine by'requiring
that all Epvernsent purchases made abroad be transported
in Brazilian ships. In order to encourage foreign exporters
to utilize Brazilian bottoms, various-devices are employed' .
including: (a) ?0% discount on consular fees is .granted
if the shipMent is made in Brazilian ships; and (b) free'
'passage in Brazilian ships is afforded to reprosentLtives ,
of large foreiGn,exporteri; Until recently Brazilian ships ,
were given priorities in the assignment of dock space in
Brazilian ports whore space is at a premium... This practice
has now been discontinued as a result of foreien protests
.against such discrimination.- .
, The foregoing .support is granted primarily to..ilevernmenteowned
ships. There are SOMB small privately-owned coastwise shippers
. who do ra:A receive any subsidies:
? 4
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BAA2II. c MERCRANT SHIPPING (Act) ,
4. T.:ere Is no large ship construction Lad hence aiazilicn policy
-moots:4./1y permits the purchase of foreign built ships. In
fact, 'Brazil is actively acquiring as many feroigh chips as
possiblelor its expanding trade: Bruziliun law requires that
oaners, captuinsund two-thirds of the crows of Brazilian
Vessels be.latzilitnntationtic. The two-thirds itwi is also
applicable to'shipyurd und stevedore labor.
5. Brazilian mortaluat shipping companies are mombersof various
international conferences. 6
The navigubility of, scverul rivers for deep-draft shipping
hut given rise to internationel azreomcnts covering
reciprooal treatment uhd free trantit.for vOssols eacaged
in river .navigation. drusil haS specific international agree-
moats of this type with Brazil, 'cantina, Chile, Uruguay-,
Paraguay, Poru
C. Ho coordinationappoars to exist botweon shipying and civil-
air policies in thruzil.
7. :aril? no prohibition exists Lcfrinst the oporation of airlines
by steamship coup-nice, .thero aupoar to be.no casos of ouch
activity.
B. oRIL:azitoJ
1. The :artistry of Tranc-Jort and Public 'Corks controls ull shipping
through the folleting departments:
(a) jorchunt 'IL:sine Commission.
(b) 'Department of Ports, divers rind Canals, and River
Plato Basin Navigation Commission.
? The Brazilian Navy (sea 5 2) ,
2. L11 phases of mercaant shipping aro under the jurisdiction of
the Bruzilian.siorchant.:Xsine commission. xthich uas organized
in 1941. The .:crehant Conincion detorminoo schodules,'
fixes rates, distributes tonnano, netorMines port occupation
ttmo, correlutes traffic with other transport services, deter-? ?
.mines freight 4.atos salaries of peruonnul, approves sub-
sidies for ..ierc?iant :Iasi= deficits, controls the churtor and
sale of nationul vessels, end opyrovos the acquisition of
'iMportod materials for the inrchunt .1arino. Tho Co:lilts/on
also'liconses,unschoduled voyages to nutionul'or foreign porta.
The .iutional Department of Ports, xivors 4;nd Canals has
jurisdiction over port construction, muintonance of equip.
ment, operation of ports und ccasteiso_navigation facilities;
it is dividod into four soetions:
ilydrographic
Uorks und planning
Lconon? und co:zmercial
.L.dministration
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BRAZIL MERCHANT f7HIPPINGIR.2 COHT6)
Tho Brazilian Mavy, whioh?had exclusive jurisdiction over
shipping prior to 1941 still pusses on the plans for ships
built in foreign shipytri.e. Since Brazilian merchant ships
fort armval reserve elect,. a direct naval intoreot.exists.
The Navy enforces safety regulutions through the Cupitunia
'dos Porton.
3. There is practically no relation between the Merchant Marine
Commission and the ar Ministry. War-time coordination be-
tween the various forms of transportation is rapidly die-
appearing.
4. By Decree Law 3119 March 17, 1941, the Merchant Marine
Commthsion Was subordinated to the Ministry of Transport and
Public Works to improve coordination. The functions of the
Cormission and the National Department of
Porto, Rivors and Canals wore clarified to avoid ovorlupping
and 'conflict. L reorganization is undor consideration by -
which the composition of the Merchant Marine Commission'would
be altered without changing its functions. The now Commission
would be' called the Merchant Marine Department, having one
? Director with an advisory board composed of representatives
of the Ministry of atrine, the Ministry of Transport and
Public tsorks, and representatives from the throe principal
shipping companies plus onb representative for the remaining
smaller companies. (Lloyds Mogister reports that the three
largest Brazilian shipping companies are Lloyd-Drusileiro;
Companhia Nacional do Commercio 3avegapao Costoria; and
Companhia Commercio o Navogasno.)
5. The shipping agencios are sincoroly attempting efficient opera-
tion in the public interest, but are handicapped by political,
military and financial considerations. The BruziliunAerchant
Marino Commissthn is considered to be well organized and on the
whole to havu good personnel, although there have been intl.
mations of graft and political intorferonco. Operating
officioncy does nut compare with US standards. Some of the
older Brazilian vessels aro obsolescent, and cannot compoto
with tyre modern foreign ships. The vessels now under
construction for Brazil, however, will be fully capable of
meeting intornationdl competition..
C. idtrill1STRI,TIOU
1. The Brazilian MerchantMarine Commission Pusses on all plans
to establinh steamship companies. It decides tailor a ship .
is serviceable and whether it may be operated in Brazilian
waters.. It has also tried, though unsuccessfully, to dictate
to the steamship cenpaniosfthich ports are to be served.
2. Rutin are controlled by a Conferenoo of the various Brazilian
linese The Merchant Marine Commission, howevor, has a VOU
right on rates, and actually rejects rztob vhon they are
found to be discriminatory or excessive.
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BRAZIL 0. MERCHANT SHIPPING (C.3)
?
$. Broadly speukinr., tho predominant position of the Government
in 3razilian shrpping has hud the effect of reducing .
. ,corpetitiori donestioally. Competition between Brazilian
and -foreign lines has been restricted by tho.constitutional
exclusion of foreign vessels fron coestwise trade. (Thia.
can be, and has been, temporarily lifted when in the country's
intereste.) Brazilian ships are favored, in their competition-
tith?fbreign ships, by measures .cited in L-3 (b), and by
subsidization..
?
International ugreements.a:e described in
4. Safety standards follow the. 1929 International Convention
for:Safety of Life at Sea. The Department of the aUvy, mhich .
4
has jurisdiction, enfbrees safety regulations through the
Capitania dos fortes. Inspection of a vessel is rade once
?yearly afloat and every 'second your in drydook.. During those '
inspections hulls, decks, engines, crew quarters; etc. receive
a rigid examination, upon the satisfactory completion of
which an inspection certificate is icaued. Classification
Society certificates are accePtable in lieu of government
? inspection. ,Standards fellow the Lloyds.Rogister and the
America:kis:in:au of Shipping requirer.,ents. Legal provisions.
governing surety are generally patterned after US laws..
In tee event of an accident a report must be made to the
nearest port captaincy who institutes a survey. Uccidonts
in foreign waters are reported to the nearost Brazilian
? censurer Classification Society.
5. The Pederal,Government subsidizes inatitutione for training
sailors. The Merchant :rine Training Urogram has been
assigned a ship and u small number of ?Java orricors and -
crewmen. The Navy conducts final examinations. . Candidates'. .
are rated us cadets, after theoretical instruction, and
assigned to ships for deck and engine room training. License
requirements. for deck and engineer personnel eic'belioved to
be about the sane as those prevailing in the US.
G. Article 33.of the Uerchunt ;:ktrine Commission Regulations
Decree It; 7838, September 11, 1941, requires shipping - -
companies: (a) to forward by the fifteenth of each -month
data concerning traffic during the previous Month; (b) to
supply quarterly; bi vessel, details on maintenance; (c) to
submit annual balance sheets, profit and lose statements; and
(d) to permit any examination or investigation the jerchant
Aarino Commission doom justifiable.
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-ARGENTINA MERCRANT SKIPPING
A. POLICIES
.1. The basic Argentine policy with respect to merchant shipping
is characterized by a determination to lessen the country's
dependence on foreign shipping, and to obtain preferential
treatment for. Argentine vessels by Means of international .
commercial agreements. The implementation of this policy has
necessitated a program of expansion for the merchant fleet.
This was facilitated in its initial stages by the acquisition
of war-immobilized vessels caught in Argentine harbors. The
expansion of the merchant fleet represents one phase of a
more basic Argentine policy of encouraging the country's
industrialisation and.diminishing the economic dependence
of the country on the rept of the world.
Argentine tactics in the negotiations of trade agreements with
-western countries have revealed the Argentine intention of
exploiting the current world shortage of foodstuffs to further
the interests of Argentine marine shipping.
Argentine merchant shipping policy is determined solely by
the state.
2. It is reasonable to conclude that military and political con-
siderations play a substantial part in the determination of
Argentine policy with respect to merchant shipping. The'con-
trol of merchant shipping by the Ministry of the Navy and the
Government's determination to diminish the country's depenp
donee on foreign interests are circumstances which strongly
suggest this conclusion.
. No subsidies are knoWn to exist with respect to the opera-
tion of privately owned vessels. On the other hand; the
Government makes generous loans in order to encourage the
acquisition of additional bottoms by private owners and is
actively pressing its own program of purchasing ships,.
While the operation of Government-owned vessels does not
receive a subsidy, strictly speaking, it does enjoy certain
advantages inherent in Government ownership and the'consee-
quent direct Government interest in the welfare of this
activity.
4. (a) There is nci new shipping construction under way in
Argentina. The Government, however, has. included in
the Five-Year Plan an item of $57,000,000 for develope
ment in the ports of Buenos Aires and Rosaries, as well
as $50,000000 for port development in southern Argentina.
(b) Argentina allows perforce the use of foreign-built ships
in transporting Argentine commerce. It is the policy, '
however, to reduce the amount of commerce so carried.
In some cases a.temporary increase in the Argentine mere
chant fleet is effected by the charter of foreign ships
and their operation under the Argentine flag. 'Dock space
is assigned impartially to Argentine and foreign-owned
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ARGENTINA MERCHANT SHIPPIt (A05)
? 5. (a) During 1947 Argentina announced the conclusion?orsev-
eral international trade agreements which contained '
preferential shipping clauses for the protection of
Argentine merchant shipping interests.
(b) Argentine shipping companies are members of th&Inters
American Maritime Conference established attashington
. in 1940.
? 6, The NOtional Economic Conference attempts to coordinate and
integrate all transportation policy. Domestically, there
?
is no evidence that merchant shipping and air policy are,
integrated. On the other hand, Argentine international
policy exhibits in both fields the tendency to protect
? Argentine interests through arbitrary. terms in commercial'
agreements.
7, The only shipping company which has introduced itself into
. the air transport field is, the Dodero. This company holds ?
the controlling interest in the 'Alfa Airline, resulting in
a practical monopoly, over flier passenger transportation. '
To a limited extent Dodero has established ticket inters '
change facilities between its shipping and air interests.
B. ORGANIZATION'
1. The General Administration of the National Merchant Marine.
is subordinate to the Ministry of the Navy. Under the
General Administration are (a) The Advisory Commission for
the Coordination of Maritime Traffic and (b) the General
Maritime Prefecture. ' .
2. General Administration 2t the National &mos Marius*
Advisory CoMmission fps 1112 Coordination ag
Maritime Traffic s created to foment, orient,
regulate and protect the activities of
Argentine Merchant Shipping;
?
The General Maritime Prefecture s controls
ports,. shipinspection, pilotage, crews and
ship registration. .
3. The coordination of all formn of transportation policy is ,
effected theoretically by the National Economic Council.
The NEC is supposed to integrate the policies of (a) .
Secretariat of Aeronautics, covering Civil Air, (b) the
Ministry of Navy, which is responsible for the merchant
marine and (c) the Ministry of Public troths, which is
responsible for other forms of transportation. The prob-
lems of overlapping of functions between various agenoies?:
and the resultant conflicts, were clearly revealed re- ' -
cently when an "interventor" was appointed for the port
of Buenoe Aires, After his appointment the "interventor"
stated that "too many agencies are concerned with shipping
mattiera." ?
2
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All.GSMNA_TSWEAn ?
4. The former Advisory Commission for the Coordination of
Maritime Traffic proved to be inadequate for the implemen-
tation of resolutions adopted at the Inter-American con-
ference held at Mexico City. As a result the present
General Administration of the Merchant Marine was estab-
? lished. Further reorganizations are not contemplated.
5. Archaic and outmoded Argentine procedure pertaining to the
merchant marine, as well as its inefficient application,
have been denounted by none other than the "Interventorfl
of ports. \Hie frank admission reflects common knowledge
among tho Argentine public of these deficiencies.
.C. ADMINISTRATION'
1. The establishment of new shipping services is dependent on
approval by the General Administration of the National
Merchant Marine, though a request to this end may be int*
tiated at any time by a shipping company. ,
2. Rates applying to interAmerican
. traffic are based on the
provisions of the 1940 Vashington.Conference. Other freight,
rates are proposed.bk the individual companies and are sub-
? ject to apProval by the General Administration of the
? National MerOhant Marine. The state-owned merchant marine,
as well as other Argentine shipping companies, are members
of the River Plate and Brazil conferences of Freight Tariffs
in effect between Argentina and the US. Generally tweaking,
rates approved by' the General Administration of the National
Merchant Marine are applied uniformly to all Argentine. .
companies.
3. The competition of foreign shipping lines is somewhat
restricted by the preferential treatment for Argentine bot-
toms which has been inserted in certain trade agreements '
(See A-1). Argentine participation in shipping pools does .
not appear to exist. In fact, Argentine law specifically
prohibits monopolistic contracts, agreements or combinations
in both fluvial and maritime Shipping*,
4, The General Maritime Prefecture has issued voluminous regu-
lations pertaining to safety, which govern the inspection
of equipment and personnel, and the investigation of acci-
dents. These regulations are enforced by the Maritime Police.
5. Argentine regulations require that bridge officers and en-
gineers.be graduates of the State Nautical SchooL Their
diplomas must be certified by the General Maritime Adminis-
tration.
:61 Specified shipping agencies are required to submit annual
reports covering financial operations to the Ministry' of
the Navy. Financial and operating statements must also be
published annnally by all private shipping companies.
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RESTR I CTED
PERU
lA The economy of Peru depends heavily on coastal and overseas ?
? shipping, which is almost 'entirely provided by foreign-flag
vebsels. The laissez-faire,policylof the Government merely
Attempts to provide 'shipping at points not othemise Served,
by foreign ships0 aerchnnt shipping and inland water policies
? are-determined and &ministered by the ainistry of Navy,'' and
? are subject to no substantial coordination with policy re-
garding other forms of transportation. ,?
? .?
2. ChiPping policy is largely determined by ?Ono Au rather
than. nautical And military considerations,.-
? ?
3, AlthoUgh direct goVernmont subsidies to Peruvian shipping do
not exists stateAid is granted in Other fort. The exclusion
?of foreign shipping from coastwise operations (cabotale)s for
? exaMple, is of great advantageto the ,F.tate-orned Peru Steam-
..ship Corporation. The state also aids shipping through the
Navy, which provides facilities and lighterage then needed to\
overcome unloading difficulties cauted by the tpabifIc swell".
? Preferential treatment is'g!ven,Peruvian ships by coordinating
? trucking. services with Peruvian ship movcments at the new Port
of Matarani, '
? ,
4. There is'no.construction of large.sbips in Peru. .The ships
acquired since the war are predominantly U,S. vessels. Labor
engacted:in local small craft construction and ship repairs, as
well as crews of-Peruvian flag vessels are Subject-to the.- '
.provision that at least eighty percent of any personnel unit
- must be Peruvian nationals. .
6. Thege is no.particular coordination between policies govern-
ing Civil Aviation and merchant shipping.
7. Mile shipping interests riay own and operate air carriers, no
Instance of this appears to eXist.
\
?
1. The Ministry of the Navy is responsible for. all merchant chip-
ping and inland, waterway policy.
2. The Ministry of the Navy regulates and polices shipping
through captains of 'the ports. A high naval officer directs
the state-owned steamship company.
The ainistry of the Navy is generally considered to be dis-
charging-its responsibilities efficiently in the'puhlic
interest, 7
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PE2U'17.7nl4ANT SUIP1'LA12:21
6,;
2. Approval of shipping'rates,by the Ministry of Finance is
required. The schedules proposed by the carriers are
usually based on rhat the traffic will bear. .
3. Peru is indifferent toward internatidhal:shipping pools
and is not a-.party to: an international agreeviente concern'
f ing the pooling of traffic, equipment or facilities.- Inter-
\ national'arrangments concerning rates in which' Peru has an'
interest are the West Coast South American 'Conference for
? Atlantic and Gulfitariffs,' and the U.S. Pacific Coast Tariff
? Conference.
4., The investigation of marine disasters and shipping accidents
is handled by the Navy. Enforcement Of port regulations' is
the responsibility of the respective port captains.
<
5. The training of civilian shipping persOnnel and technicians
is supervised by the Peruvian Navy, and is carried out under
sfandarde meeting Naval requirements for the variousservice
ratings. '
6. The usual forms in connection with the registration of
vessels are required in Peru, and customary commercial docu-
ments.pertaining to ships' cargoes are used, but no periodic
or special reports'need be-submitted to the Government by
ship Operators:
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I
CHINA - LERCNANT SHIPPING
A. Issas. .
I. It appears that Chinaes policy with regard to pnet.war merchant
shipping will call for: (a) replacement of tonnage lost during
the wars; ,(b) protection of the coastal fleet by exclusion of
'foreign shipping from coastal operations; and (c) development
of a small fleet for world-wide operations. In implementation
of this policy, Chita will continue its traditional subsidies
to shipping. Policy will be largely determined by the state.
Vested interests, however, strongly influence government ship-
ping policy0 quasi government.owned companies have in fact
come under the control of important individuals. (The China
Merchants Steam Navigation Company is one snob powerful semia
autonomous body.) .
2. _Political considerations strongly influence Chinese shipping
policy. They explain China2s determination: (a) to obtain-a
token share in trans.oceanic phipoing, (b) to replace Japan
and the UK in Near Seas trade; And (o) to reserve coastal traf-
fic exclusively to Chinese vessels. Military considerations
will perforce affect Chinese shipping policy as long as the
Civil Uar continues.. Control of northern ports enables the
National Government to move war materiel and military personnel
by sea into organized base aress..
30 Subsidies are currently granted to shinning, including certain
privately-owned -companies which carry government -cargo or pero
sonnel, chiefly military. The government thus supoorts the '
development of shipping-facilities to the extent of its limited
resources. ?
4. the Chinese Government desires to develop greater ship-
building facilities, little has been accomplished to'date.
. There is no objection to-the use of foreign built ships, as .
evidencedby the Considerable number of vessels purchased
abroad by the government and by subsidized private interests.
The chief obstacle to this program is the.governmentes meager
foreign exchange position. Foreign labor is not generally
wanted: 'it is sought only when Chinese technicians are not
available.
? 5; China has concluded no internati-nal shipning agreements other
'than those inherent in or incidental to the provisions of exist-
ing commercial treaties.
6. Chinese civil air and merchant shipping policies are both ed.
ministered by the Minister of Communications and are thus subject
to his coordination. /It is Chinese policy to exclude foreign
ships and airplanes from the benefits of cabotage, local Service
being reserved to predominantly nationallrorned and operated
facilities. China limits foreign shipping lines to strictly
international traffic by restricting the ports of call, as well
as the kind of Passengers and freight. These restrictive Policies
reflect?the determination of the Chinese to support their out
transportation interests in' every possible way.
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, CHINA a NERCHANT SHIPPING (A.?) ?
Currently, there is no joint ownership of shipping and Sr ,
interests.
B. OSAIWAYIPPl.
1. All forms of transportation, ,including civil aviation? are the'
-responsibility of the Ministry of Cosmamdcations. -
2. The Ministry of Communications has delegated merchant Shipping
-responsibilities to its Department of Navigation and Civil
Aviation. According to Article IX of the orgenic law, the De-
partment of Navigation and Civil Aviation is charged with the ?
following matters pertaining to merchant ehippings
(a) planning, constructing and equipping all navigation
facilities;
(1:4 'control And operation of all navigation facilities;
(c) all other matters relating to navigation; -
(d) _supervision of shipping facilities, both publicly and
privately owned;
?
'(e) settlement of all Maritime affairs;
?
.(f) matters concerning all ship and operating personnel;
(E). construction and operation of harbor installations; end
Within the above framework, the dePartment supervises suth im-
portant companies and administrations as the Chins ILerchants.
Steam Navigation Company, Ltd., the Commission 'onShanghai
Harbor Administration-and Adjustments, the Directorate General
of Ports, etc.
. There is no dircct relationship between the Departments of the .
Einistry of Communications; except through whatever over.ell
coordination may evolve from Consultative aotinn among the re-
sponsible officials for the four forms of transport, the Miniso
. ter and the two vice-Ministers., The highest level of coordina-
tion for policy and planning is the Executive Yuan - roughly
comparable to the US Cabinet. In most matters affecting the
national interest, the rinistry of,Communicatiens is required '
to obtain the apriroval of the Executive Yuan. The Einister of
Communications discuSses with other Ministries any problems '
affecting their interests, but the government, usually supports
the Minister of Commmications in problems primarily within his
jurisdiction.
, ?
4. In 1530, the government took responsibility for shipping sway
' from the Maritime Customs and placed it under the Linistry of
Communications. At the same time, more' direct government control
of dhines'shipping was established -than had been previously -
2
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I
CHINA - LatCPANT SHIPPING (Bol, Can't)
. .
exercised0 ails no major reorpanizatione of -Chines merchant
shipping agencies appear isminent, it was reported recently that
control of pilotage affairs has been transfertpd from the Laritime
Customs to the Department of Navigation and Civil Aviation.'
5 Theyinistry of.Comxunientions is headed by US and German-trained
General Yul Ta-ret, who is'unquettionably interested in improving ,
the efficiency of China's verchant shipping establishment. His- A'
efforts are compronised? however, by a serious lack of vessels,
inadequate facilities for their efficient operation and the
selfish attitudes of various preisure groups., ,For example, vested
interests such: as the Chiba Eerchants Steam NeVigation.ComPany, ?
Ltd., have been able to prevent foreign carriers from engaging in
traffic from overseas ports to Yangtze river porta. In spite Of
China's nationalistic attitude toward foreign interests, the
,Chinese Government, wishing to bolster the merchant marine, re.,
cently announced that steamship lines owned jointly by Chinese end
foreigners will be permitted to operate in local territorial waters*
provided, however, that Chinese nationals hold a two-thirds inter-
? est in the capitalization and directorship. The. Ten Year Plan
moreover, originally sponsored by.Sunaatonen and still favored
?by Chiang Kcienhnk, callm for: (n) incrwase in port capacity
of 100 million tons of cargo annually; (b) 'a merchant fleet of
3 nillion toms; and (c).18,000 kms of rivers navigable, to peter
vessels. Unless a radical change in China's capabilities occurs,
however, the above objectives are likely to remain indefinitely
? no more than an expression of the countrY's aspirations.
C. ADM11IISTRATiON
. _
,.1. Plans for new routes and facilities originate in Sections, and
Departments of the Vinistry. They are discussed at various
-levels, and if approved by the Linistry are' submitted to the
Executive Yuen which, after weighing the pressures exerted by
' political and other groups, makes the final decisions..
.2. Since Chinese merchant shipping does not engage in overseas
' operations to any appreciable degree, Chinese shipping does not
participate in international rate conferences, und the establish-
'Cent of ocean rates for Chinese vessels is entirely academic.
Rates for coastal and.river shioping, on the other hand, are
subject to government approval. The companies are permitted to -
negotiate conference rates, submitting them to the Ministry of
- Communications. After consideration, the Uinistry forwards rate
proposals to the Executive Yuan for final approval. 'In practice,
the Executive iben,apnears to believe that low freight rates act '
as a deterrent to the'inflationery'price trend, and rate ine
creases have' therefore lagged behind costs. The result of this
policy.is to burden the nsti-nal budget with subsidies, while - ? .
protecting the- economy from increased costs. ?
?
,
It can hardly be said that competition 'is fostered in China.
Shipping and other traranortation faeilities are ad scant' that
competition between shipping companies or between the media of
.transportation is largely an academic issue. .The combination of
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CHINA 0 lotitCHANT MEP= (CO3 Conut):
economic conditions and government control measures has in fact
effectively restricted competition. The US and DX, nwreover, -
have protested the monopolist practices of the government..
backed Chins rerchants Steam Navigation Corpany, Ltd.; An So
treating exorbitant Lighterage Costs for unloading foreign '
carriers; at the Taku Bar. These methods; and other abusee?
are designed 'to discourage foreign flag missile, and thus
tend to restrict competition. China doer not participate in
international pools or other shipping agreements.,'
4; Detailed regulations are in effect governirg inspection of
equipment, choice of personnel; and investigation of marine
accidents. While the Ministry of Communicatione'initiates such
regulations, all major regulations are passed upon by the Sh-
ecutive Yuen. HStatutory regulations governing navigation (the
Code of Earitime Law) are voted by the Legislative Yuan and
the State Council. r
? " ,
All engineers and pilots Must be licensed by the government;
based on written and competency tests. The requirements are
high in comparison with airline pilot requirements.
. 6. Detailed reports on tonnage, tariffs, revenues, personnel, in-
spections and.accidents.are supplied to the Department of Navigac
tion and Civil Aviation of the Linistry of Communications. -
IC ?
?
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TRANSPORTAITION PRANCE
' f ? t ?
THE SUPREME TRANSPORTATION ADVISORY BOARD,
? /
, 'Elk The following information was .,not atonable during .
the preparation of this .study.
?
? ?
? ?
?
4
1. The most important development in French transportation since
the war is the establishment by the National Assembly in August 1947 o1 '
. a-Supreme Transportation Advisory Board. The Board.will.advise the
.Mipister of Public 7orks and Transport on all transportation matters '
submitted to it, but may also formillate.recommendations on its own ?
initiative. The Advisory Board's immedifite mission is to present,
within one year, plans for the Coordination of ran, highway) inland
waterway, air and ocean trinsportation.' -It Will inelude in its plane
'coordinatipn of domestic transportwith.colonial and international ;
' transportation._ The Board Will study all social, ,tochnical?.financial
and economic matters relative to-the organization arid fUnctioniag of?
the various modes of tran.sportation; it will also study matters concern-
ing Stock and equipment, technical and commercial deVelopeent and', the
social, -economic and administrative problems aribing therefrom..
a
?
2. The Supreme Transportation hdvisory Board ikestablished under.
? the.Minister of Public7orks and Transport and consists of 69 members,
? including representatives from various goveratent agencies, members of
? Parliament, specialists from' the large trantportforganizations, employee
' representatives from the operating companies and public organizations
such as touririt travel agencies. Seven permanent commissions are estab-
lished under the Hoards, charged with examining questions of transport
coordination. These areas
?
?
7.*
-
Rail ...'
Rail-
-
Nighway-p=
? Highway
'Sea -.
highimy "\-
inland waterway .
air et
?
sea ?
?
air ? ?
inland waterway
,
3. The Supreme Transportation Advisory Board is-financed threugh
'a special fund provided by the Minister of Public -orks and Transport.
the sum expended shall -be reimburseirto the-state by the various trans=
portation operators under conditions to be'set,forth by decree of the
Minister of Public "brks and Transport and the Canister of Fihance.
?
? ? ? ?
?
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. '
' A. POLICIES
-
,
1. The immediate concern of the French. Governmentdwith respect
? to initnd water traaspert is to restore war-damaged waterways
and equiPment as rapidly as possible in order' to rej.ostublish
this, important channel of domestic and international trade.
' ?The government is therefor? rebuilding and improving existing
waterways by deepening ?awls to permit passage of barges of
grouter capacity; improving facilities on tho Seine and Saone
river's; and extending Canal-works in kW-north.
IL
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INLAND WAltRoAY TRANEPORAZItha
The long-range policy of Franco is to encourage domestic in-
land water carriers vialpromote international use of inland
1 Water facilities. A French fleet on the Rhino, for example0
has bean of prime importance to the French economy with
respect to the transport of coal, cereals, Petroleum products
and other bulk materials.
Political considerations have dominated French policy toward
international, questions affecting inland waterways. For ex-
ample, France .participated us a. non-riparian state in pre-war
negotiations concerning Danube traffic. In view of Communist
strength at home, however.- the French Government is new un-
willing to antagonize the USSR and the French Cora-mists by
voicing- its desire foie a resumption of the former statue of
the Danube.
,
With respect. to the Rhine,' the French attitude refloat? fear
of a revived Germany. France is determined to maintain its
leadership in the Central Rhine C017111li4AOris not so much be,
cause Rhine traffic is important to the French economy, but
because- France is afraid that relaxed vigilance might later
invite a bid on the part of Gormuny to vitiate international
control and substitute German domination of this important .
artery.
2. Policies for' inland waterways aro determined by the Ministry of,
? Public terks and Transport through the Department of Navigable
? taterways (DIRICTIUN dos VOIES NhViGaBEE S). This department
is administered independently from those dealing with other
forms of transport. TheilAinistry, however,. coordinates policy
for all transport.
-
Strategic and military' considerations huve'net greatly influ-
enced. state policy in respect to the inland waterway system
'and the operation of its 'facilities (i.e., docks,' bqeipment.
vehicles, etc.). The relative, importance of inland waterways
to other forme of. inland transportation' iS .indicated by u pro-
? ver esti:rat:to' that of all French freight tenet:go, about 10 per
cent Vas carried by water, 10 per cent by road and aboUt, ,
80 per cent by- rail.
. . ?
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FRANCE INLAND rAIERWAY TRANSPORTATION (Agq.)
2. Inland vaterta;fs receive considerable bid from the stt.te
throush iraprovenents in facilities Lad the assi:;nr-ent of
new equip:snt to operators the nay roi:iburae the z;avornment
w:lon firn--ioially able to do so. The :tirrIstry has entered
Lute t six-year. stLte-finenced cooperative plan with the
waterway operators, dosictud to restore and renew -the river
fleet. much of which is notably obsolete. State aid is
also inherent. in the policy of permittin7; the water carriers
to charge si)ecial rates for transport of equip:tont ,nd
materials of strategic value to the state scenery.
S. Governnent .policy toward initatd ;Lterviufrs is principally
influenced by economic considerations; the import :ice of
naVing .cortain ,:elf.ids, such ts; coal; bud the financial
interest of the state in the waterways, which accordin;; to
the latest available estinatos upproxi:auted te600,000,000.
.B. Oilfm-ifIlaT10:1
1* Al quections deLlin:; with vaturauys in France are .ursier the
jurisdiction of the iiinistry of Public Lurks and Transport
throue;h the Departhont of Javi;able 7.aturwLys, and tar:ouch
the Dupbrtment of Litritime Ports which in responsible for
colt-bin construction and maintenance problona in port areas.
In addition to the 4;470 Deja.rizmuts, there is an autAmorous
.ostgblisisaunt blown Ls the Ufrice thAtional de la liavigationo
which has considerable authority concornLig inland navir;ation.
2. The Ocpurtnent of Etviuble 7i-tem:a:Ts is con,:erned with now
construction, imintenance and. technical 2roblenn. The Office
-..a.tional de lit i:avigation has jurisdiction over the equipment
of river ports and traction facilities on the banks. The
Offleu :s also chari;ed with co:nercial exploitation .of -the
waturwa:a cute the i.:roblems of labor relations between barzenen
Lad owners.
, 3.1 .L11 transport a;encies tre subject to coordinv.tion by the
:::inistry of Public ;?oritt Lad Transport. The agencies dualinz,
with inland waterways usid the aT;ehoies concerned with 34erchant
such as the Depart:snit of i.:aritine Porte, have certain
comion problens, et-hal-rise their functions do not overlap.. ilo
inter-a:,;oncy conflict is Lint-rant.
4* inland water transL-ort ;uncies were Gricintaly
the law of 5 4.11;;ust 1879, df.vidin: the mtonruys into
, principal and secondary systems. The transport crisis of
the twenties L-nd the natizmalization or the, rail systina
little effect upcin the administration of French inlan4 - ?
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FRANCE e INLAND 7MTER7AT TRANSPORTATION (9-51
5. Tho ?ranch inland watorwayo,systom was badly disargunisod?
, by rur damage and is just now in the process of rehabilitation.
Steps now beindtakon by the govOrnment in this Connection
uppeur to moot with public approval.
C. ADUIDISTRLTION
le The Iiinictry of Public Tiorks'and Transport authorizes the
opening of new waterway routes. Thore must be ovidence of:
public need; strategic necessity (in this rospeot,
views of defense ostublishmente are authoritative); or ad-
vantage to the ova/nal-transport coordination program of the
Llnistry. -
- 2. In 193G, A laittra6 passed proviCing that freight rates be
fixed undor Sint action by a delegate of the Offico-Uational
do la Navigation and delegates of\the'curriors, shippers
and consignees. FroiGht rates.sinco tho war have boon
? established by decrees of.tho ;artistry of Public '?orks and
? Transport und the LI/misty of the Hational.oconemy: Such rates
are subject to strict Control by the state And aro subject to
considorable opposition from the carriore..who desire:rxre
flexibility, than is not/ pormitted.
3., Inland water transport is favored by the state over highway
transport, but not to the extant or providing competition to a
? the state-ownod ruilnaye. 'eronch policy is to control trans-
port competition from the standpoint of ?tato interosts,
regardless of the position of the private ,operators.
toporation, however, that is aimed at coordination of. existing
services is givon every aid not oontrury to the roquiromonts
stated above.
5. Uovormlent subsidised training schools arc?aVailablo far
traininG in ongineoring and navigation.
?
G. France has for many youro participated in international water-
? ways ugroemonts concerning traffic, rates, facilities and
relatedmatterse it the prdsont tine, the state is engaged
An negotiations of a gonoral nature with a view to rostorint
normal operations on the European international waterways es
quickly as possible. As a riparian state, France for over
100 years has maintained an votive interest in cauropean. river
, traffic conventiond and the internatienal.sionventions dealing'
with canal systems. (Soo 1.-1 for dlpoussion of Fronoh policy
rodurding the Rhino and Danube.)
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4
NEV1EItLANDS 0 INLAND WATERWAY$
he POLICIES (See C?6 for Dutch attitude on Rhino:Commission)
1. The most urgent objoctive of Retherlando inland waterway
policy in theroostablishment of the country's traditional
position us gutowuy to the industrially important Rhineland.
Abscessing excellent harbors and lying .across all channols
of the lower Rhine, the Nothorlands controlled, prior to the
wur, u substantial share of ull traffic on the Rhine in both
directions. This included loading and discharging of ships
at deep water; as well as warehousing of transit goods, and
,u certain umount of processing. With the collapse of Germany
and the control by occupational forces of international
shipments, this activity was drastically curtailed. The
effect oh the Dutch oconony was sorious. Tho complete re.
establishment of the Netherlands position will require a
resumption of normul trude.movements throughout testorn
Gormany, as well as the concurrence of the occupational
authorities, who aro still Using tho ports df Aamburg and
Dronen for largo quantities of goods destined for Western
CarJany.
Because of tho indiepene&bility oi the :iethorlf.nds inland
'waterway ofotem 4S a carrier of freight; and the vast in.
vostaouts of the state in its phyoical improvomont, the
government has traditionally faVorod inland tutor transport
over other media. Sinco the rise of the railroads, however,
and the advent of modorn highway transpOrt,' state policy
has tended toward a balanco bccvoon the various media.
Policia? regurding operation of the waterways uro determined
entiroly by the state as a part of the ovor-all control,
despite the fact taut the water carriers barges and
motor-drivon vessels) are largely privately owned.
2. 'Policios concerning water transport. are normally dotormined
'by the Duroau of :atorways, under the authority of tho.
:Anistry of Transport. at the present time, however, a
Dirtiotor General of Tranaptirt (superimposed upon the trUnsporta-
tion.administration agencies of the country during the war)
coordinates reconstruction mousurus and policies:
3. Inland waterway tranaport policies, while originally basod to
ontualloorable decree upon Strategic and military oonsidora-
tiuns, today primarily rofloct the oconortic needs of the
country. (The waterway system of tho.ictherlands was
developed originally not for transport alone, but as a st.fe.
gdard against flooding; more'rocont construction also has
been designed for drainage purposes.)
4. inland waterway transport is not Subsidizod beyond the in-
diroot aid giVon by the sti.to in maintonanoo and administrative
sorvicos inoidontal to operation of the waterways. all
inland waterways are entirely state owned.
6. State policy concerning inland waterways has been greatly 'in-
fluoncod by vestod interests, economic and geographic
conditions. Political conditions have had relatively little
influence upon inland waterway policy, 'except whore ouch
waterways traverse national boundaries.-
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NMERLANDS INLAND WATERWAYS (24)
ORCELITZLTIOII
I. The'nureau of haterways in the.ianistry of Transport has
complete responsibilitY for operation of iletherlands water-
ways. ()their Ministries must coordinate their plans and
policies, as they affect waterways, in accordance with the,
over-all policy of the Ministry of Transport. 1. Rate
? Commission establishes rates for inland water carriers as
? woll as for all ether forms of trumportation.
.2. The Bureau of Waterways is composed of several offices,
each dealing with specific problems of waterway transpcirt.
functions relating to railway barges and those relating to
ordinary typos of carriers, are handled by separate sub-
divisions in the Bureau. Waterway management is decentralized,
and the provincial authorities have considerable responsibility
regarding maintenance of ways and other works, ,subject to
the 'over-all control of the Ministry.
34: There is no direct relation between the Bureau of Waterways
and the other transport a'concies within the Ministry. The
activitius of the eurcuu, however, are subject to coordina-
tion trith other transport policies of the Ministry. There
is no administrative relationship between inland tit-ten/a:pa,
ocean shipping and civil aviation, other than that occasioned .
by the interests of inland and coastal Oarriers,with respect
to usuge of certain common trunsport-rucilitios.
4. :tor a manlier of years there has been relatively little chance
in the organization or the agencies directly responsible for
waterways, although there have been changes shifting water-
s/ay administration from one Ministry to another, as from the
:artistry of Public Works to the present Minietry of Transport.
Such chances have boon nominal rather than functional. The
organization of now agencies does not appear to be under con-
sideration. The agencies dealing with waterways in the
iietheriands are believed to be operating as offidiently as ?
possible wider the, present limitations imposed by war darnigo.
The public, however, is critical, of the' waterway agencies, due
to administrative delays and government regulations which
affect operations. ?
C ? 41E12111 STE, TIOil
? r
1. Plans for ostubliskunant of now waterways or improvement and
extension of existing waterways must be approved by the
Ministry of Transport. In view of the state's financial
responsibility, approvals are subject to buddetary
?
2: ShiPping rates must be submitted to a Rate ?omission which
is responsible for the adjus t-ment of rates for all tonal; of
transport. 'Waterway rates aro notably lowor than those for
other forms of transport. This is a policy developed by the
state in' order to insure that bulky low-value cenzaodities will
he handled by the slower moving 'outer carriers rather than
by the limited facilities of the rail systems and hi-Jiway
ci.rriers. It should be noted that present legislation regard-
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4,-
in; water carrier rates is comparatively new, dating from
1934. Prior, to thil, waterway/traffic rates wore un-
rogulutod, and carriers operated in a completoly free system
of competition. _
,
s3. Stato policy does not permit any competition botweon media
? of transport which would eventually weaken the over-all ,
position of-any'ono of them.- Rail transport has been
? potential throat to the rater carriers for a hundred yours.
Tho inland water carriers, at first, fought the development'
of rails vigorously, but in the latter part of the 19th
century, it became ovidont that railroads and waterways,
despite their inherent competitive positions. supplemented
each other to the ultimate benefit of the state coonomy.
In the years immediately followlig -Orli War I, road transport
bocamo inorousingly important and state policy was of ?
necessity adjusted to this now situation.
6. Safety regulations with respect to rater oparations aro the
responsibility ?the Department of iconomio Lffairs. Such
regulations, While definitely prosoribod bylaws covering
safoty of equipment and oporations, have not boon strictly
enforced.
5. The state encourages the training of technicians in the field
of transport and the-schools, state supported as roll as
private, cover training in all- branches of seafaring. In
rocont years thoro has been a continuing interest in the
. study of inland navigation. In 1937, almost 1400 students
rem undergoing training in navigation. In order to qualify
for high, technical positions in. the inland waterway transport
system, it is nocossury to moot certain qualifications re.
,quired bY the state. qualifications are doterminotby the
Ministry of Transport the advico of various Private
technical organizations and the Uinistry of Education. Tech-
nicians in nen-operating aspects of waterway transport, euoh
as construction and equipment, also receive technical training
4
at Delft and other institutions.
6. Intornational agreements ooncerning waterways are important
to the Aothorlands'sstorway system, since so much of the
traffic moving over the oystom is international in character.
While vessels of Dutch nationals account for the bulk of the
traffic in normal times, Gorman,,Fronch and Bolgian carriers
also participate to u considerable degree in traffic over the
Dothorlands watorways. Uatcrway policies concerning traffic;
equipment, miss and related problems have been the sub joot
Of numerous treaties and conferences between the Netherlands
and neighboring states. Soms.of those trot-ties date back
over 100 years, and thoir administration has become part of
the international policies of the state.
The most important current problems affecting 'Netherlands in-'
land waterways through the activities of international organi-
zations are those connected with the Central Rhine Commission.
'
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KULEa----sq _DS INIAND VATERUAYS (C6
(see A-1 for discussion of the Ahine port problem) 1. While 1
the Dutch are reasonably satisfied frith the Rhine Commission
as presently constituted, there are indications of apprehen-
sion in the Netherlands concerning the possibility that the
Soviet Union might later obtain participation in control of
Rhine traffic. There is a feeling in the Netherlands that
ifa future Danube Commission is placed under the Economic
Commission fer.Europe (ECE). in which the Soviet Union par-
ticipates, a precedent would be created which might give the
113M membership in a future Rhine Commission; The?Natherlands.
is also alert to foresttll any attempt of the Central Rhine
Commission to expand its authority and to obtain jurisdiction'
over such questions as-bridge construction On .the Netherlands
waterways.:,
'I. .1.
? '
t4
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USSR 3111.AUD MUMMY TRil:USPUltrATIOI:
A. Pale ILS
1. The Soviet State exclueively dominctes the evolution of
all economic pelicy including that governing inland
waterways, ts revealed by the Fourth five-Year Plan0
the basic Soviet policy uith respect to navigable 'inland
waterways calls for an extension of the system (from '
nbout 65,000 miles in 1940 to. nbbut 70,000 miles in 1950).
Valle the Plan forsees an increase of 30 parcent over pre-
war traffic by 1930.it is evident that the major maphesis.
wilt be an restoration of war-denrged fecilities; and tat
no substantial chance in the relative importance of inland
vaterway transportation (accountinz; in 1940 for less then
10 pereent of total Soviet traffiC) will occur during the
current. Pive-Yoar Plan. In view of the fact that ortemsive
additions to the present network would be both -practical
and advanta;;eous, lonc-ranco policy aspires to an mibitious
program of inland ...ration:pc development. The main features
or this program, uhichwill be instituted under the Five-
Year Plan, are as followc:
a) Keconstruction.and improvement of the existing
water system connecting the upper Volga and the
Daltic,Sea.
b) Joiuing of the Volga and the Don rivers by means
of a canal below Stalingrad] designed to permit
Volga traffic to proceed directly to Rostov.
'c) Construction of four cenals which will afford
Unepr river traffic, includini; large size vessels,
access to the black Sea and the Baltic.
2. As in the instance of the other media of transport, policies
for inland water transport are determined and administered
by the responsible Ministry with same latitude for independ-
ent action, subject to the over-all control-of the State
-Planning Comnission (UUSPLC). At tho Cabinct.level, there
is of Operations of theMinistry.of the laver.
Fleet and those or the Ministry of the Merchant Marine which,
under the Soviet administrative organization, is responsible
for operations on the. Caspien. despite the fact that the
Caspian is landlocked. There may be some minor coordination
of air transport and inland water transport in remote nrecs.
3. Vfailt economic factors aro dominant in Soviet in1Lnd tater-
tray policy, stratezie and military considerations are care-
fully weighed in.both current and lonz;-rani;e plannin.;: It
St significant, for extmple, :that e Soviet artificial water-
wuy nel:es it possible to transfer licht naval craft bciArcen
the Baltic end:61tc. 11ite Lca.. ?ateninys also proviac the ?
only.ortanized transportation in lar;;e areas of northern
Siberia, and the rivers west or the train, navigable on a'
north-south axis, demonstrated in *k)rld V:ar II their
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tiLbIKR:It.1,7
USSR illIAUD WATERT.? TRAIISPORTATIO (A-3 CWT'D)
?
logistic value ns letcral arteries. Soviet policy vith
respect to the landbe suggcste that the tUSR, new a ripar-
ian state0.intends.to capitalize on its control of the
lower Danube throuch vhich it has acquired a vcapon of
great strategic significance in Southeantern Europe. ?
40 On subsidisation, the reharki contained in the Lerchunt
Shippina and ichway Transportation studies (1.-4) are ap-
plicable to Inland 74terway Trensportrtion.
5. Stute policy an inland voter transport is influenced
principally by economic end googrnphic conditions. The .
need for a cheap form of trennportotion to ettiment and.
supplement rail capacity hes Loon the principal economic
factor. Tho extensive netnerk of rivers available for ex-
ploitation and difficultien of terrainInnd climete have
provided opportunities as well ns proLlems of a geogrsphic
nature. Politicll and historical conditions and Vested
interests have played unly. minor roles in the determine-.
tion of inlend water trensportetion policy.
B. (EGAIIIZATIOB.
lo The state.aL;encies concerned with inlnnd water transport
are:(n) the Einistry of the iiivcr Fleet, (b) the Linistry
of tho.:./orchant (c) therinistry of Inttn1
Lffairs. Over-r11 planninfL of inland tinternays nnd trens-
portation is the responsibility of the State ilmnninz Loh-.
miscion (GLentA::)..
2. It is the function of the :Unistry of the hiver Fleet to
Propose policy at the Cabinet levela to supervise ths oper-
ation of river transport facilities'end.to control tll nd-
ninistrttive and technicrl natters relating to inland water
tr:nsport (except those under the jurisdiction of the ;anis-
try of the Lierchant :inrine). The :Amistry of the ::serchant
larine is similarly responsible for that portion of the
Soviet fleet operating on the Caspian Sea. The Einistry of
Internal AfTeirs is responsible for actuel construction
vork on the csital systems of the statc.-rhich form valuable
links between the inland Vaterveys. Tho :Unistry hoe no
administrative authority over operction on tho canals, how-
ever, that Leing the province of the Liaistry of the Aivor
kleot. The operations and plans of those 'artistries are,
like all other economic matters, subject to the over-ell.
control of the Ltato ?limning Commission. The iiinistrics
ere organized into divisions, venich have voll-dofined re-
sponsibilities such cc finunce, inspection, cdministretion,
,technical aspects, etc.
S. Ihe Linistries mentioned in 2-1 above tree not directly re-
lated to each other, but their nctivitioe are controlled.
and directed at the Cabinet level by the Ltete ilannik;
Catlission. The breakdown of the Linistry of the'::ivor
:loot into a -Teat number of s',:bdivisions has probealy
resulted in the thlost inevitable titer:bleu o: administra-
tive conflicts typical of thin type of orunization.
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?LV511,4VO4.10
USSR - Imam TaTtIMAY TWISPCRTATIOL (0-4)
.4. To administer various Communist government functions.
Coeurissariats were established in the'USSR in 1918.
The Commissariat of Coli.anunications, far example* was
responsible for inlmad.waterways until 1930 when -a
Commissariat of Uater Transport was established. In
1039 this. Commissariat-waa abolished and two Conmds-
saridts were formed to adrinister garitithe and River
Transport respectively. In Larch 1946 the various
Comadcsariats were replaced by.Llnistrias. with no
apparent change in function. ,
5: DiosatisfectiOn in hichcr govemmmit circles with the
accouplichmonts of lower ndministrativo levels has been
reflected in the 'Soviet press by unusually severe criti-
eisM of negligence* burenuerney* end delays which have
impeded the restoration?of Ledly dereagod facilities and
disrupted services to their prez,wer.levels of efficiency.
.11vidence of inefficiency is so unmittakable that the
publicized zintouncoment of tho early attainment of 1047
froic,ht transport objectives by the :4ndsti7y of the :aver
Flect.is'thouht to have been. ri:.:ed throur,h a prior
dutword revision of the oriimal
C. AtE:ISTRATIVE
.1. The state establishes net: inland water lines in accord-
r.nce with the batic pThnv as determined by the .'tate .
flaaning Commission and the L'-lnistry of the ?iver rleet.
*ejects for inlnntl waterway development must compete
for approval with n11 other items or the &evict Lud;int.
The allocation of the USCR's strained resources is .
rigidly established in ncoordance -with the Ce=unist ?
earty's conception of &evict interests.
_ '2. Rates fpr inland vnter transport are established by the
enrriere at leVelp calculated to Produce masonelle ?
operating profile. The trnnsportine. agency may be over-
ruled, however, iv -the State ?lannin, Commission in the
over-ell interents of the staLc, and ac,crieved shippers
can carry complaints to hizher administrrtivo echelons
for resolution.
3. in the sense of coupetin::: for business, there it now
little occasion for cempotition in the USSR, because
over-all trans:tortation capncity is inadequate, and ship-
pore are norc.likoly to Corapcto for space. to-petition
hotweon medic of transpOrt in the sense of interference
by one form of trasportation in the lccical province
of another is effLetively discourtged by tho Soviet '.
Covermaent. L'ho :)ervasive control of ,all transpertation
in the ussn enables the rovernment, in theory et bast,
to direct the operations of rny tramspertrtion activity
into chanels'coasidered to present tho zrentest national
advanta;;e. A discussion of "socialist competition" which
is orcanized for the purpose of'directiug unit rivalry
toward improved acComplishments is contuined in the
liorchant Shipping study (see C-3)0
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RES1K,
?
G.. The inlaudvnter transportation system is covered by
specific rules dealing with safety and inspection.
. Equipment and facilities are supposed to be pariodicallj
inspected: derelictions call for soccre.punishment. The
Linistry of the :.:iver,Fleat is charwadwith the adninis-
traten of Safety and inspection malaticnc for all c ?
inland rato trensport. Lnxity in the applicaion of '
? munitions is frequent. Accidc4t investiontions arc ' ?
? carried out uith each rolienoc upon local vitnessos.
Soviet authorities rsintain that in ouch -,woceedinLls
the loci? Of a situation, ruthor. than 1a:2d:tec1nic:I1i-
? ties, is the detnaiininclactor.
?
-
5.- The state sponsors technical truinfak; schools under tho ,
al.:tiority of thai.i.nistry of lal:or.aeserves. Traininc
in inland tnter,transport is included in the curricula
as part of the General prop-impel' thn state to develop '
transportation. technicians. ?.
Go In ?moral0 the inland umterwnys used by the USSR lie '-
wholly within the Soviet Union, or. in satellite and
? dominated. areas where the USSR is Ole to dictate the
terms, of theirsinternntiosal used In sone of. these
oases, such terms have Leen formelised in economic
? dueeinentscontaininG clauses applyinz to various es-
? poets of inlandisztervay operations. .In the case of
.the Danube. Soviet policy has prevented the post-mer
?resunption of the,agreamonts which formerly mulatod
its internationsl use. The USSR,' ncerstiloo has estob-t
lished joint conpunics in satellite riparict countries
on toms which solidify Eoviot control Of the river.
below the ',4estern boundary of the Loviet Zone inkustria.
'
At the sane tine, chippia: of other countries Stich
forncrly used the 14.nube is.ozcluded frau this area.
'
7.. The -inistry of the Ri7c1: 'lett requires detailed
reports colicrinz mew ezpocts of operatiOns. Such , -
reports are'used in thabnsic planninc of the
tries, and contribute inbortant economiC end statistical
data r0quire'd by the top-level procrrp.:Aint; work of the
State Plcnilint Connissionp
so.
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?WEDEN - INLAND WATERVAY ITANammalo
a. PoticxEp
1. State policy permits a considerable portion of the canal
system and other artificial ways to be operated under private
enterprise, corporations orning the ways and operating them
under their own management. In the case of natural waterways,
however, the state, having developed the facilities, retains
control and administers them, but does not engage in actual
operations.
1
Inland shipping facilities of Sweden provide a valuable ad-
junct to the othei media of transport (i.e., rail, road and
coastal shipping). Sweden's rugged coastline and the prevailing
strong seas limit the importance of coastal carriers and result
in considerable reliance being placed upon natural inland water-
ways and canals. The state has been vitally interested for a-
long period it the development of inland waterways as a means
of exploiting Swedish natural resources such as iron ore and
lumber. The Swedish lumber industry, in fact, could not compete
in European markets without the aid of the inland miterway sys-
tem, developed over the past hundred years.
2: Inland waterways policy is determined and administered inde-
pendently of policies for other media of transport. Such poli-
cies are, however 'integrated with the over-all transport policy
planning of the Ministry orCommunications.
3. Inland waterways policy is based primarily upon economic consid-
erations. Sweden's traditional policy of neutrality makes stra-
tegic and military considerations secondary. The German military.
policy of denying free passage to Swedish coastwise traffic in
war-time, however, has caused the Sredes to construct certain
inland waterways which serve as alternate shipping routes.
4. The government does not directly subsidize waterway transporta-
tion, but it is interested as a matter of policy in the-develop-
ment of equipment and the maintenance of facilities.
5. 7aterways policy is conditioned by: (1) the geography of the
country; (2) economic conditions; and (3) the influence of corn-
-. mercial enterprises having a vested interest in rater -transport.'
These latter forMulate policy to a large extent: The government
exercises a minimum of control., .
.B. ORGANIZATION
1. Inland waterways are. administered by the Board of Roads and
taterways in the Ministry of Communications.
2. It is the function of the Board to 'formulate and administer
over-all policies for all inland waterways in Sweden. The
Beard is directly charged with technical problems concerning'
.the waterways.
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SWEDEN - INLAND WATERWAY TRANSPORTAZIOILLUI:
3. The Board of Roads and raterweys has no direct relation to
the other transport agencies except as its policies and plans
are subject to control by the Ministry.. There is no edmin48-
trative relationship, 'and little occasion for any working re-
lationship between the Board of Roads and -aterways and the
state agencies dealing with merchant shipping and civil avia-
tion.
4. The present organization of the dinistry as it affects water-,
ways has undergone ED significant change in the last ten Years,
and there is no evidence that any changes are contemplated.
5. The state agencies dealing with water transport are considered
to be highly efficient by both Swedish and foreign observers,
and little criticism of operating policy is voiced.
C. ADMINISTRATION
1.' The state interposes no objection to the establishment of new
inland waterway services sponsored by private capital.
2. Rates for inland ester transport are determined by the operas
tors of the transport facilities, and are not subject to state
relation.
3. The state policy of non-intervention in the itlationships
between the various forms of transport is reflected in its
attitude toward waterways. Despite its financial interest
in.the rail lines (the state owns 74 per cent of all mileage),
there is no evident policy of discrimination in favor of the
railroads.. The policy of non-intervention probably is based
on: (1). the fact that the waterways in Sweden are more suit-
able for the transport of certain types of goods than are the
railroads; and (2) the tiaditiopal policy of free competition.
, 4. The Labour Inspectorate in the Ministry of Social Afrairdrese
? tablishes safety rules for shipping and is responsible for '
.their enforcement.
? 5. The Swedish Government has a long record of interest in the
training of personnel for the maritime industry, and these
technicians are also employed in inland water transport.
There are several state-sponsored and state-operated schools.
for technical training.
6. Sweden has promoted traffic agreements between the Scandinavian
states as a. matter of policy for many years.
-2.'
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I
PRE-UR GERMANY - INLANU WATERWAY TRANSPORTATION
A, 'POLICIES
1
? L. 'The German policy was to foster the construction of waterways
as a practical means of combatting unemployment, of.providing-
effidient and cheap means of transportation of low-cost bUlk
commodities, and,' following the dietum.laid down by von Moltke
? in 1875, or forming an alternate transport system capable of
relieving the railways in time of war. Even before the Third
.heich? Germany owned an extensive and well-kept system of water.
? Ways, The Nazie wished to expand and revive water transportation
.not only for its potential usefulness in the German industry, tart
for the needs of total war. By increasing the capacity of the
Dortmund-Ems canal and the terminal port of Emden, a valuable
' alternative all-German route was provided between the heavy
?
industries of Rhenish Westphalia and the sea,' The completion
? Of the Kittelland canal in 1938 met the long-felt need of a link,
, between the hitherto separate eastern and western waterway systems,
The increase of port facilities, rationalization, ancf a radical
? series of administrative reforms were toestablish facilities
that might relieve the Reichsbahn of the maximum tonnage of '
? commercial goods, thereby increasing the latteres capacity for.
? ? ,the transport of troops and military goods for which speedy trans-
port was essential,'
'
2. Under the,Ministerithe Secretary of State for Railroads was
also 'Incharge of the two departments concerned with inland
navigation: the Department of Administration and.Inland.Shipoing,
to whieh,was attached a Group for National Defense; and the De-
partment"of Waterways, to which Was attached a Special grouU "
? for administration and legal 'affairs.
? Is. The costs of the building and maintenance ot the inland waterways
sSrstem were borne entirely by the municipal0'state and national
authorities, There' was no appreciable subsidy of individual ship- .
ping concerns, because, as will be shown, the German policy, was
to keep to a minimum the number of such concerns while at the.
same time expanding the waterway net.' In the worst of the depres.:
? sic% under the Drning administration?. 20% to 50% subsidies on
constructiOn costs were given to 5,206 firms, with 13 million RM
given to the shippers and 3 million RM to the-ship builders, The
payment of interest on debts was temporarily 'cancelled. 'The law.
of April 250 1932 gave the Minister of Transport the right to? .
eliminate shipping heconsidered unnecessary. The Nazis continued.
the policy of restriction until 1936 when the tax on the transporta.:
tion of freight was abolished,. Because of the handicraft character-
istics of much of German inland shipping, there was no Nazi attempt '
at nationalization.
5. Refer to Reilway Transportatien 4.'5.
D, ORGANIZATION
1, See Railway Transportation, B. 1,203,4,5.
The "Inland Chipping" ilivision (Abteilung Binnenechiffahrt) of
the Ministry of Transport controlled the general Affairs of inland .
?
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ci?
?
Pid.-VAR GERMANY a INLALD WATERWAY TRANSPORTATION (Bra Wilton)
,
shipping; especially policy; economic research; collection of
statistics; and personnel matters; although the actual adminis-
trative work was carried out by subordinate agencies,
. The Department of Administration and Inland'Shipping? (see. A-2)
was concerned with general affairs of inland shipping; policy;
economic research; collection of statistics, and personnel. It
also- supervised the work of the Transport Groups composed of
'private, and public, enterprises in the Inland shipping industry,
The Jepartment of Waterways was in charge of planning, construe-"-
tion, and maintenance of waterways, Regionally this control was
? established by means of Waterways Directorates, and looally by
waterways Officers which were subordinate to the Directorates.
Other duties of the taterways.Department involved the promotion
of security in shipping, ice clearance; and the establishment
and maintenance of signals., buoys and other navigational aids, ,
All 'carriers were organized.in a quasi-public body, with repre-
sentation from the private shipping 'industry, the Reich Govern-
ment and, the National Socialist Party; called the Reich Transport
Group for Inland Shipping (Reichsverkehrsgruppe-Binnenschiffahrt)e
This corporate group vas concerned with the details of shipping
and with the improvement of traffic and facilities, ?
C. ALMINISTRATION
This question is not strictly applicable; since the governmental
'policy was 'one of restricting rather than expanding transport
facilities add enterprises, For specific information see the
relevant sections of this report,
3. On grounds of the emergency in inland shipping dauSed by unres-
trained competition with the railroad a cartel system was created
in 1932 (Or the eastern German waterways; which in 1934 was ex-
tendedto German shipping on the Rhine. The essentials for the
laws of December 23, 1931 and June 16; 1933 called for; (a) ship-
ping Unions for the different waterways, in which individual .
shippers were collected for purposes of market regulation and
corporate representation; (b) compulsory cartels of the larger
shipping companies in specific waterways like the Flbe; (c) agree-
ments between the organizations created tinder a and b on the
division of custom and a coordination of resources; (d) freight
committees, made up of representatives of the shipping unions;
the larger shipping lines, the Unloaders, and forwarders, (e)
constriction of the number of ships available through an embargo
On the building or reconstruction of vessels, By 4 decree of
1936, all shipowners, asaociations; and freight committees were
absorbed 'into the Reichs-Verkehisgruppe Binnenschiffahart. Under
the "leadership principle," the' chairman of this group was appointed
by the Minister of Transport, and in turn appointed all the direCtors
of the district groups.' It can be assumed that as long as the
Ministry of Transport was dominated b3; railroad men, the interests
of the Reichsbahn in tariff !netters were well secured,
Conbretely, the embargo on new shipping tonnage remained in' effect
until a937, rirst, construction of unpropelled barges and tankers ?
? ? ?
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4.
I
? 0 '
PRE-UR GEWANY - INLAND 7,ATMAI TRANSPORTATION (C-) CONTQD)
was permitted. pn January 31, 1938 restrictions on tug boats
and motor ships were lifted in time for the building of the West
Wall, but lack of Material prevented any real extension of the
. inland shipping fleet before the outbreak of war. Paradoxically,
it will be recalled that inland waterways and canals Were a con-
cern of the CoVeenment. .
Since the fixing of tariff rates is the single most important in-
strument of regulating transport competition, this question is '
implicitly answered in the answers to question 0-2 in the study
on Railway Transportation.
There were no peculiarities in the German administrative 'system
of safety regulation and inspection which require enumeration
, here. The only difference-from,commonly accepted practices lay
in the high degree of centralization within the Ministry Of
'
Transport.,
?
-? ? ?
5. Labor employed in themPerMan inland waterways totaled about
.130,000 workers, of whom approximately 95,000 were estimated to '
constitute persons employed on river craft. To ensure a con-
stant shptly of skilled labor trained on Nazi political lines, '
,A4'years2 apprenticeship system was dompulsorily introduced
.in 1238. Moreover, a "Professional Training Scheme for Inland
Shipping" was setup, and in 1939 re-designated the "Reich Work-
' ing'Combine for Training in Inland Shipping." The"Reich Workihg
Combine," composed jointly of representatives of the Shipping'
Association and of the Trade board "Power Transport,AdMinistra-
tion" of the German Labor frront, carried gut the compulsory
training scheme, and 'selected in each river zone a suitable
training center and hostel for trainees? This training was
carried out under strict Nazi-party supervision.
6. As of September 1, 1938 Germany had ratified the following
. international transport conventions of the' League of Nations,
which had some bearing op inland waterway transportation: '
the transit conventions, ports convention, and the declaration
recognizing the flag of Inland States, Germany belonged td the.
:following international organizations concerned with inland
waterway tranaportation:
European CaMaission of the Danube
? .International Commission of the Danube
?International Elbe Commission
?
Central Commission on the'Nevigation of the Rhine.,
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RESTRiCtEa
? ?
HMS ?? WATER174/M&SPSitnall
Poucius' .
1., Babi.o.inland waterway relicy is determined by the
Brazilian Government. ht10 the Govern:aent desires .to
? support inland waterway transportation and to improve
the existini; xaterways. it hart been unable to allocate
tne larva tazdtznts of' money neer:sea:7f to exploit the
full potential transportation capacities of its many
? rivirs. In fact, the niterways have recently deteriorated,
duo to the impossibility of soeurin;; badly needed liainte-
.nunee eqUipment.t.hich is in short supply on .,the world
? -Market.
,
2. The. :.:inistry of Transport and Public Larks determines and
? administers policies for all c.bz?ras of transportation '
;except air. -little inteciration exists' And the
various departMunts funstien almost autonorieuslY.
3. / t'hile? taw develejnent Bra7i1io inland ?..a.turtHays U.S
? boon inspired .by economic considerations, and their cur-.
rent operation reflects predominantly the ecen,.mic re-
quire:aente of the eountry4a river-basins, the system
_unquestionably has a utrata;ic si,,..;nificance 'which influenees
cover:I:aunt thinldn.:;. The .atuden sj_stOra, for example,
provides Brazil with A strony, lateral defensive artery
which would he of value in. ease of a itilitery,tareat in
tao north. It also brin;rs to seaboard stratecio materials
which are important to other countries, and thud ,:reatly
atrualcthens?orazil,s political fesitical inteniaticatally..?
Tributaries of trio ;:aazon, moreover, aro naviz;able:into
Peru, ikaivit., and Colombia: Brazil is therofere n a '
'? position to shut off the '17aturvrt.,?? eensetions but:teen the
respective areas and the oceanic 4..mazon.
i4., The nirazilian 9ov .rnment has, in effect, subsidized river
transportation from the beat:In:alp:, by payinc for the.
improve:lc:I-its necessary to cistabli sh . the yrs. etic al ?
? nthvi.:;ability of its rivers. J. 200-nib e railroad, for
? examplar was uonclajucLed.by? the f;ovurn:lont to provide a
by-pass around the .a.deirs rapids and falls. The mainte.:
nance? of river channels in also undertaken 'by the uovern-
, ;tent.
Direct subsidization of river. navi6ation companies Sc parried ?
out in the. furm of cash crania and 'reimburablc: adv.nces.
For example, the follovini; :;rants -,!.?ete made in 1944 to
ship:lint; companies :,:hich operate in varyin:; dec.:roes on
-Ttzilt3rtvursz ?
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132A21LaRTA Oltjt IDTRAN
.
?
?
In addition to the foregoing? the Merchant Aarine 2
?'Conninien Mode advoncos in 1946 amounting to thirty
. -,. million orozoiros to the tapering firms on tho in-
dicated terms: ?
. Firms in 1000 cruzoiros
?
LlOyd Brasileixe ... .: .- .. . . ...o
Ciu.Unionol do Nonagon? Costoirae .
?ServeNov,kmaronio e AdmPorto Fora.
Sorvedeneveda'Bnia do Prate
Servcido Nov, do Guapore; . %
Served? ay. do Vhdoirm '
'Served? Tranoverte do Amapa
Nevogecao dos Autasos .... a ? ? Os
? ilavegano Araguaia . Tooantihs
14avegocao FluVial do Parz4iliao 0 0 it o
Novogacao Bahia= do Sao Francisco, .
Havoc/too& do Bio Dace ..... -? ? ?
Navegamo'do Baize Sao Francisco. ?
040,000
. 8,750 -
. 7,000
-5 000 ,
700
200
3E0? '
? 150? %
486
c 350
0 440 -
? '24
? 350 .
; Clossi-tication
-
' Ant: in To be Bo- flothori.
Firm 1000 Cr. imbursed sation
flflafl-
?
oing Arent/ Campos 1,400 , You President
? Lloyd BrasilOra 3060 No President
- Servalevedo Baths .3,581 Pc President
do Prate. , . ?
" Paul's* C., Grit Gaidanhe '871 ' President
- Navegaciao Bahiona ma . Nb . President
.Esoola Prof. da LierinIn5a000 -. No ? President
hterconte
Serv.Nevede:Bacia'de
Preto
serveNht.da Boast do
Prato ?
ServeRaveda:Bnia do
Prato '
NatIlDopteliarts,Rivers
a Canals
ServAaveAmosonia e' 2,500, You President ?
adn.Port?: Pura ?
Nave Rodolphe. Souza Ltd. 700, ?Yed- President
a ? Servolievoinezenia e 7,500 ? Yes President
I
7,00 Yes 'President
100 ? , Yos. PredeilagareComm
273.5 ? Yes President
1486 Yes IfinArano.
, admePerte Para ,' ?
Servellavedm Bacia do 2,930 . Yes' President
Prate-
aid Aranti Campos ' , 20.9 No- ' Prodidenti
'
? .: ,-:- , '
,
?
2
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BRAZIL lifitTEIMAY TRi.liSPUF/2471011 (B-2 coon))
Sect. ?1 - nydrography and mapping
" .2 - Meteorology
" 3 ?.Experimental hydrotraphy
(b) Division or ringincerint and Construction
Scot...1 - Projects ?
" 2 - Construction
" 3 - Property
U,? 4 - Drodgint
, ?
Division of Economics
? Sect. 1 - Investigations - commercial
" 2 . Statistical
Division of idninistretion
Sect. '1 - Communications '
" 2 - Mutorials
? " 3-Budget
" 4 - Personnel
,
(e)..2 19 Fiscal Districts
Thore are three retional offices of the Department:*
?
North at Belem
-Northeast at Recife
South' at Rio de - &noire
3. All forms of transportation.- except civil airs, are undor
? the jurisdiction of the Ministry of Transport and Public -
Works. While coordination is thus theoretically assured
at the Dindstrylevel. there is little actual coordina-
tion Of the Ministry's various seml-autonOmous depart-
manta, and no formal relation to the Air Ministry exists.:
The temporary oar-tine integration of national transportation
policy has largely disappoarod.
4. The first predecessor of the prosent Department .of Ports,
Rivers and Canals was organized in 193:.) as the National
Dopertment of Peseta and Shipping.' It was directly sub-
ordinated to 'the Ministry of Transport and Public Works
and was charged mith all mattors relating to ports 'and
rivers. . Its responsibility further included merchant.
' shipping and transport in both flirvial und oceanic.- ports.
The DoPertment was divided into four Emotions: (1)
Secretariat; (2) Plans. and Construction; (3) Contracts and'.
Investigations; and (4). Statistics., Decroo Law No. 6166,
31 DocOmbor 1943, reorganizbd, the department and chanted ?
its naze to National ,pepurtraoht of Pbrts Rivers Laid Canals.
Excopt for too regional .offices instead of three, the
present organization (see B-2)was ests.blished.
? ?
The National Department of Ports, Rivers and Canals is
attempting to discharge its _responsibilities ofiloiontly ?
and in-the public interest. It appears, however, that
? . ?
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MUM - ? INLAND VIAWAY TRANSPORTATION (3-5 cotiT,D)
thw govuntaont is .narldicapped by political and
financial limitations. General satisfaction hos been
expressed with tho work of both the :aircht-ht
CO1.L:11:531.011 and the hit tiorsal uojiartiaout of tkirts, ktvers
Lnd Canals. J S t. consequonco ui wartino soarcities,
however, the for entity has not boon in a position
toeop the various ports and rivers in good condition.
Plans for the inprovem.:nt of port facilities and fur
the dredging of rivers and harbors are boinr, oxaninod.
C. ./..D:a::ISTRaTIO::
1. The :.lerchant :11Arino Comassion is legally ohar;:ott with,
the approval of navigation routes for1-?:,raziliun vessels
enga.ed in fluvial. transpprt,ation. This respeitsioility
:dynes, to both privately and publicly-owned vessels.
2. The ..:erchant Coaaisnian ostz.blishes inland water-
way n tea an well an those for coaSttiso shipping.
3. Co:lpetitiun is restricted by the of coastline
trade to national companies ana b5- the yantir.,:.; of sub-
sicaus to certain i;oventient-ownod entities.. The assign-
inr, a routes lac/. also be used to nistrict or foster
corapotition.
4. An mentioned above, the National Department of Ports, Rivers
and Canals establishes rules and regulations to govern safety
and inspection, equipment and personnel and investigation of
accidents. It is reported that there is no steamboat Inves-
tigation service comparable to that in the United States and
that technical examinations have heretofore been somewhat
lax. Some private criticism of this situation has been .voiced.
5. TdOillliCiC115 arc trained in throe different nanners. The
government i.:ivos a small maboidy to an institution called
the J. brino Cristo Redenter for tho trainitc of sailors.
.The Lloyd .lirasileiro operates a school for the tra:"..n.iir,_;
?
of pilots. eicinours and otter tochniciunr,. :.en released
frola the :Ivry have generally had suf2iciont'truinins to
qualify then for service in the ,:razilian .lorchant L,arine.
There is, nevertheless, u scarcity of trained toolutjoians
and ordinary SOL4.1011 in ;attn.
C. Tho Brazilian ?rovensaent has specific international a.,:ree-
nents with ...ri;ontina, Chile. Uruguay, farac;uay, :eon and
Cohabia covering reciprocal and free transit of 'respective
venools un,..,LL:oa in rivor navication...
7. *Under the ton:a ?of JrC.ole 33 of the repiulations of the
:orottant rine Comaission pursuant to uecroc,..1,at:
703C of 11 Soptonber 19C1, all shippinc, coupan:les are
6:bilged to cozt,.:unicatu by the fifteenth' of each month
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' 0-7 GONTID)
,
data concerning traffic during the previous month; to
supply quartorly, by vessel, dettails ?oncoming
conservation and repairs; to submit annual balz.noo
shoots, profit and loss statements and to ponait any
?mutation or invostigat,ion vthich the ideritimo Commis-
aims may oonsider justifiable. The information so sub.
witted. in pr0000sed by tho Merchant' Marino Commission
and an effort in rade to adapt regulations to existing
conditions. Summarized information concerning fluvial-
freight and passenger movement is published in the
? annual report of the liorohant Marine, ?omission. Tho ,
purely local and nutty? craft traffic is net capable of
inibrrood roparting, and is not subject to the foregoing -
regulations.
?
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. ? ,
?
ARGENTINA . INLAND WATERWAYS
An POLICIES
4.
4
1. The basic Argentine policy with respect to inland waterways,
is to supplement inadequate Argentine railroad, and highway
transportation and to promote trade with Uruguay, Southern
Brazil, Paraguay and Southeastern Bolivia. This format
transportation is confined essentially to the Rio de la Plata
and its tributaries, the Paraguay, Parana and Uruguay rivers.
It is notoWorthy that .regular steamer service is maintained
from Buenos Aires as far as Asuncion, Paraguay, A distance.
of 10630 river miles on the La Plata, Parana and Paraguay
rivers.
Policy is wholly? determined by the. Government;
2. Policies were determined in the tAnistry of Public ftrks
until recently0 when the National Economic Council was cre- ?
ated to coordinate and integrate all forms of transport '
policy, including civil air.
3. As outlined in 10 inland waterway policy reflects esientially
economic considerations.; Some consideration, however. As
given .to the strategic and military Value of fluvial trans.-
port,. particularly in view of.the importance of this trans-
eportation to the material resources of Paraguay and Uruguay
and to the oil fields of Southeastern Bolivia. ;
4. The Argentine Government owns and .operates a nationalized?
river fleet, ;Mile private companies and river craft
builders do not appear to be actually ;subsidisedp they do
receive generous credits from .the Government for the ac- ?
euisition of equipment. Canal 'dredging and river, improve-
ments are performed by the Government. -
Lacking technical exports, skilled ship builders and basic :?
materials0 the government buys certain types of foreign-
built river' craft. Foreign labor is not barred.
Until the establ ishmeht of the state river fleet0 fluvial
transport was alTost entirely in the hands of the Dodero
lines, whicemaintained scheduled passenger and freight
service.' Dodero now controls the Alfa Airline, operating
to cities in the area served by its river linen. Argentine
policy regarding inland;wate mays must have been influeneed
by Dodero, in view of the long-standing pre-eminence of -
this priVate interest.
B. ORGA::IZATION
1. The agencies concerned with inland waterways policy ares
. The National ' Economic Council;
The Administration of River Transportation;
a semi-autonomous entilTiander the ,Mini stry
of Public :arks; and
(I.
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? ARGENTINA . /NLAND WATERWAYS AB.1 CONT1D)
The General Maritime Prefecture, a depen-
--&ncy of the Ministry of Navy.
2a The Director General Of River Transportation operates the
state river fleet and is responsible for maintaining a
navigable channel, He issues regulations governing all
river traffic. The General Maritime Prefecture controls
ports, vessel inspection9 operating licenses and ship
registration.
3. 'No apparent relation exists between the Administration of
River Transportation and the General Feritimeyrefecture,
as they are under separate ministries, Coordination is
supposed to be effected, however, at the level of the
National Economic Council, There does not apPear to be
overlapping in the two agencies concerned with river
transport'.
4, Wartime conditions seriously handicapped rail and road
transport, because of scarcity Of fuel and lack of vehicles
and equipment, To ease this situation the Governmeht es-
tablished the Administration of River Transportation and
orcanized the state river fleet. No other agencies are ex-
pected to be created, or existing ones reorganized',
Fluvial transportation is not operating efficiently,?becauSe
of antiquated and inadequate Grafi. Expansion and impreve.
ment, however, ia actively promoted throu0 the acquisition
of new modern vessels,
C, ADNiNISTP.ATION
1, The Administration of River Transportation recommends es-
tablishment of a new water transportation service to the
'Ministry of Public Works', The Ministry Of Public ?arks,
upon advice from the Nntional Economic Council, directs'
the River Agency to establish the service, Private com-
panies wishing to-establish new services must Obtain ap-
proval of the River Agency, .
Rates are determined by the Administration of River Trans-
pertation'for the state-owned fleet as well as for peivato
companies, 'All modifications must be approved by this
agency to assure uniformity for river traffic,. Rates are
based on the nature of the cargo and distance involved in
the lift,: There is a substantial difference between up- .
river and down-river rates because of eitra fuel consump-
tion and.other factors, Since Argentina and other riparian
countries on the Rio de.la Plata river system subscribe to
freedom of navigation, the New York international .rste'cOn-
feronces apply to this river,
3. At present services are furnished only by Argentine craft.
: Since the state-owned line and Dodero have the sante rates,
comOetitiOn is limited,to the quality 'ofservice provided.
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ARGENTINA e INLAND WATERWAYS ? (G-4)
40 The General Karitime Prefecture has issued voluminous rules
and regulations in the interests of safety,. These regulate
the inspection of equipment and personnel? and the investi- -
'cation of accidents? Enforcement is in the hands of the
Maritime Police, ?
50 Officers and pilots must gradUate from the state nautical ?
School and their diplomas must be .certified by The General
-Maritime Prefecture? which istues the appropriate licenses?
Only Argentinians may become candidates Per .these commistons?
Go There appear to be no international agreement's or arrange.? ?
ments? ? The three rivers have been -traditionally considered
as international waterways and thus ?free to, navigation?
70 The latter two agencies specified- in "Bal submit annual ..re-
Porte., including financial operating statements; to their'
'respective ministries? Private companies are required to
publish a/mai financial statements including 'operating ?
reports? .
??
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ntiSTRIC1T /
A. POLICIES-
PERU INLICT 'ATER:TAYS.,
?
1., The Peruvian Government has no pronounced policy with reepect '
to inlandwaterWay transportation. The-development?of this
activity is left:to private initiative.-
.2. The Government's interest in merchant shipping tnd inland _
wate&ays is exp-r:ssed_througthe !linistry'of Navy. No? ?
particular coordinationwith policy covering other forms of
? transportation is exercised..
3. Peruvian flag steamers, operate to Bolivian ports on'interna-
tional,LLke Titicaca. For strategic and?military rebeons
the Peruvian Government is interested in maintaining this routeo
5. The upper tributaries of the Amazon provide fluvial transport'
for jungle 'Ind tropical products from the undeveloped eastern
slopes of the Andes to the river' port of Iquitos on the Upper
Amazon. The 153 mile steamer line on Lake Titicaca 'connect
rail lines at both ends, and provide:z through traffic from the?
Pacific ports ofjlolendo and E.tarani to Is Paz, Bolivia. The
short rivers of the Pacific coant'of Peru do not provide im-
portant inland retervays.
B. ORGAYIZATION
1.. (see A-2)
C. ADrISTICON
1. The entablithment ofnev- inland raterrayt is :loft to private
initiative an.' is .not subject/ to special procedures.
?3. The Government makes 'no attempt- to create -competitive condi-
? tions it- inlnd waterwa; transportation., FluVial transport,
the Only method available on the. Peruvian tributaries of the
upper Amazon, is finanded'and operated- privately ?A.thout
supuort or hindrance by the governtent. -
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nab STUMM IRANI TATION
-
1, It i3 the policy of 4e Chinese Government to ceyelop inland
waten..tyc to complmunt ncrehant shippittnd rd.). RaaliLivs.
? The Lover/went and rivete obi,ying companieu hav. Lcouirst.
rivur tenting? Lr. rapidly -as pos?ihle in ccplacesent of .Chinese-
flag lesion suffQrLd derin5 thc,viar. Tho 3overnment j3aJ the
major toile in,duterndnirc S111LL1 shippikyoliciess
2. Inland Latcmlay.shiping polities ?,-ro eeterminou anu
tared as intogral.parts of mcrchant ohiming'affairs beesuco
of the long distances open to ocean shipping on the'Yangtes
? Puarl Lne..ost rivers.. :bile theoretically contralizecLatinin-
istration of all tr-nolortetion is effected throw,h. the :iris-
? try or'ommunicationsuit'appoars that ship,digl. policitrare
.not closely integrateu with polities for'otherforms of,t11.46-
port4Lon. ? , .
,
3. Z.;trategic and mdlitery considerations had little bearing itT in.
land waterway LovelOpmunt until the navigable riv,rs of China
bogan.to play an inportant pert in Chinese military operations,- .
aesause the moveMent of goods on the inland.catemays of China .
is vitarto the suriival of Free Chine0 maintenance of, this
traffic has now.acquirce basic stratogic importance.
::.inec its beginnings the strenclY nationalistic Chinese aostblic
has desired to -develop waterway traffic.. The stale hc.s aided
Chinese tater trcnomertationcompsnies in mgr .:Lys, ;stoic them
are: government own,iohip and opEration otsone fad:little:Jo
resurvation of idlismiwat:rways to nationals or tiationa-ton-
itrollod conpaniets are direct participation in certain Chinese . .
shipping con)anics., Chip construction in iyvfarnment and private
yards of both convantiona/ tY;?es and specially-eoSianeU drat`
is fostorA to.the limit ot resources in materiel and-tec::inical
Tho ten-Year plan fot economic. reconstructions form-.
lated by ...sun Yat-sen cm reiterated by Chiang Kai-shek, includes
a comprehensive merthant Uhidping proLram calling for acquisi-
tion of considerable tonnaaes as tesi cu isvrovement of inak,ni.
waterway iLeilitiens, ..ipecific-features of this plan are: ?
HMI tonnage in inland Latars ' wt./poop tons
aivers navigable to junks
Now cinsls
Nes inland ''ter facilities
Liko building '
.?ivers novicale to steamers
(aCdio Lnd:upv.r Yanctne
systems and other rivers)
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2000G00 Paus
10000 kms
, .700 pcirts
18;600'kt:is
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clam INLAND WATEAVAY TAARSPORTATION (A-A CONT'!))
aubsidies are currently Granted to private shipping'interosts
carrying goverment cargo or personnel, at present chiefly
military.
$. Vested interests play an impOrtant part iii the determination of
policy on inland watorway.transport. Inlecenber 1946
the China :erchanta etc= EaVigation Company, for ocapiples. was
' reported tc,oun 60'vosuels comprisinG 203.0100 tons. or 4O of
the inland aid coastal flouts. ?hilo hictoricaiJ?wator transo
portation has for centuricaboun vital to the Chineue,eoonoMy.
the attitudes.manifestue toward such transport hav%:s in many
instance?, retarded. progress. Tho influence of geography upon
inland shipping has been very great because the great. riyer
- systems afford easy access to the vast interior uhich ix press
anti; poorly supplied vith both railacys anu roads. For example.
the Yangtze vcfley, which is notizabla to ,:aerad vessels for.
1500 miles, has a population of 180.000.000: the Yangtze sorra ?
'mots Chungking with the eastern provinces. ...conomic.conditions.
have clvaym influenced inland atter and fluvial policies.
..ater;rborne trade as the major fern available to the Chinese
people for centuries. .mim since the Organization or railroad
,.and .highway transport, the limited transport.tion reczirumants
of the essentiroly agrarian economy have not been fully satis-
fied. 1:olitical conditions are important in the formulation of
policy- on ittur communications. because ...-ater is the only means
of unbroken contact butween the coast aid many of the central
goiNrnmontos inturior subdivisions.
D. Oriatiai...TION
lo Inland:a:tart:ay transportation matters at undot the juristice,
tion of the Unistry of Comunioctions.
2. The Unistry is divided into two major Lepartmonto, one of .
Athicht-the ilavl,-,ation and Civil ..viatiOn iopertmentris naspon-
' sibla,for all inland uaterway transportation and related matters.
.ihe Navigation and Civil ..viation Lepartment of the :anistry of
COmmunicationa is chard Lith the Salim:int res?onslbilities
?
'pertaining to inland -aateraays:
a planning, construction and e.luipment of all
facilities;
? b control and opuration of facilities. including ?
inland ports; ?
c supervision of inland shipping. -both public
and privately owned;
d settlement of inlendwateraay affairs;
e ShipAngand operatirig )ursonnel;
. Thc.n is no formal reLrilon buth.esn the subLivisions oi the
linintry of Communications htndling inland ;:utori;cys
cooruinction.maoLev:r. may evolve from
consultative action among the officials in chcrge of the
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ON/NA INLAND n'AITWAY TRANSPORTATION (13.3 CONT'D)
various forms of trensArtetion. The higheSt level of ceordina-.
tion for inland waterway policy Lnd Aanning is the :Xecutive
Yucn. It pees not a,vear that -the Chinese trens)ortutien systems
overlap or compete with uach other, Jrimarily because they are
collectively incapable of satiefying the countryfs trana:..ortation
requirements.
4. 'Fluvial trane-ortation early r...edived the attention of the '
Chinese Government? For example, the Yangtze Aver i'egulations
, of 1898 thd 19C2 revisedregulutions that uore uco!ted first in
1862. In 1930, the Lovernment took responsibility for chipping
sway from the :aritime Customs and plLeed it under the Lanistry
of Corunirtions-$ ? thus establishing.more direct government con-
? . rtt )7' - .-
6.0:direr inland uhi0:214a,
5. The rinistry of COLtunications is undeubtedlrendeavoring to .
? operate the inland waterway routes in the public interest. Now-
?veto many of the difficulties that hamper merchant phipping
(ace Zerchant dhipping report) 41,..,p),S, also to river trans-
port. 'eurthermord, constant commndeering of bottoms by the
-Nationalist golPrnment causes troublesome backlogs in river.
ports above Ikalkow of ncsuillgers end freight destined for ..,hang
hai. tiU anotlur hadicap is the liractice by Chinese skipding
companies of. organizing their op-.rations to suit their out cone?
vonience? regardless of the national interest. Inefficiencies
are also frequently encouraged by tho government's policy
against foreign commercial domination.
C. anUlrfzeiTION
1. Plans for nui.7 inlcaulwater routes and facilities originate in
the adpropriato CoArtments of the Einistry and local .or regional
administrations concerned lyith this form of trz.nsportation.
They are discuseed at vcrious levels: and if el:droved by the
rinistry? aro submitted to thc .xocutive Yuan for final action?
The .finul decisions of the Yuen aro subject to frequently in-? ,
tenser pressure from political ends:private interests.
2. Inland 1..ct racy ratus are ,roposed by the shipping companies
which must eubmit rat, echeuules to thd Linistry and subsequently
to the ..xecutive Ma, The .xecutive Yuan endeavors in general
to make ratus lag behind prices. In this respect, the govern-
ment ajpears to follow the principle of subsidization in lieu of
increasing rates to cover costs of transortation.
Jo The Chinese Merchant ..hipping study (see C-3) outlines conditions
affecting competition in the field of transportation, and indi-
cates why competition in fluvial and other inland waterway systems'
in China is Jazrely an ecedemic Luest on0 Foreign competition
. is eliminated by the Chinese policy of forbidding the inland
tatcrs.to roreign shipping, although Chinese services are
in.Lcquete.
' 4o totalled regulLtiens aro in effect ceverning the in-it:action of
ecuipmnt, choice of personnel, Lnd lnvesti.:ation of accidents
on the via.b,rways. the Linistry of Communications is the
aiministretive authority for such ruk.s, the ixecutive Yuan
?
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PAS?T++e,TED
F?
OH/Iti INLAND ATIKIIiiAt tRANSPORTATION. CONT1D)
passou on cil major regulationo, zAstutory ruLnlationsisuch ?
co the Coda of Lcritimc Laws arc voted by the legislative Yncno
This Code t;ovorns sacitys darsonnol, navications accicentsp.-
bridce ofticor rorluiromonts? ctcp.
5. athouch tho atctc bac fostured the traininc of/transportation
tochnicimo, it is not twom tehhat.extent such trainincliao
spucialized in inicndi WaUpinc, 1,t emainuere and'pilotu vast
be, liconscdby the govornsont, based On rrittun and competency
-tests ;:nith arc ap.,arant.),y opito avareo
, Lineo thu routes ovOrthich most Chinese ink:Tidy:ant traffic
moires am ',holly within Chinose turritory, the question of
internationcl agreLtionts concerning such traffic is of little
Importance.
7.- Lotailun reports on tgnnscs? tariffs, rcv...nuos? .gcroonnal.,
inspections and accidents aru requiruu by the. Lcpertmcnt of
?Ilavigation cnc Civil ?litho 1.7inistry of Cormunioctionso
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4.
41
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P 1171Zhisa 3 2
Ouestionnai re on
MERCHANT SHIPPING
To be used in conjunction :with this study
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rITEP.TIONNAIRE ON II1ICHAI5T SHIPPING
Ao Policies
1. What are the basic policies of' the couhtry with regard to merchant shipping?-
To what decree are policies determined by the state?
20 To what extent are merchant shipping policies based on political and
military considerations?
3. Does the government Subsidize (a) ship?construction and (b) ship operation?
If so, how and to what extent?
4. MTht /are the country's poliCieS with regard td (a) ship conetruction, (b) use
of foreign built ships, and (c) use of ,foreign labor?
5e ThatV international agreements are in effect concerning Shipping (a) among
governments and (b) among companies?
6. Are merehant shiPping policies coordinated with civil air -policies? 'In
Ito internationel relations, does the country follow'the same or similar
' policies with regard to both shipping and air; or does the country follow
, a policy, for.examole, of "freedom of the seas" while opposing a polic of
"freedom of the air"?
7. Are shipping interests permitted to own and operate air carriers? In what
other wso.s are these two forms of transport coordinated or integrated?
B. Organization
1. What are the agencies of the 1,.overnment concerned with merchnnt shipping?
P. Ilat are the functions of each of these agencies, end tack R re the:: organized
to carr:: out these ? functions?
3. How are the various agencies related to each other? Are they controlled,
directed, or coordinated by any agency pr group On a higher level? How are
they related to agencies concerned with other forms of transport? Te what
extent do the wfrious agencies overlap or confliCt with each other?
4. Mint conditions or developments, led \to the establishment of these agencies
as' tho:. are now organi?ed? r4hat' circumatances led to the abandonment or
reorganization of previously existing agencies? Is any consideration being
given to reorganizing existing agencies or emoting Six ones?
50 Are these agencies considered to be operating efficiently in the public
interest?
C. Administration
i. What,procedures nre followed in determining- the establishment of new \
shi pping, se rvices?
2.' How ,are rates determined and what types of regulations govern the ratemaking
processes? lhat is the role of the 7. overnment.and of the companies in inter.
national rate "cOnferences".
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'
3, To what extent, /and by what means is competition fostered or restricted?
Is participation in international shipping "pools" encouraged, prohibited,
or regulated? 'Ghat internatio'nal agreements and arrangements exist conaernings
? (a) Exchange of traffic
(b) Pxchange elf. equipment ?
(c) Pooling of traffic, equipment and revenues
(d) Establishment of joint facilities'
(a), Fixing of rates
(f) Aliodation of routes'.
,
4, !That type's of rules and regulati ons govern the safety and inspection of ,
equipment and personnel; and the investication of accidents? How are these
regulations astablished and enforced? '
L
, Dees the 'Government foster or regulate the training of technicians In
merchant shipping? To wh.Rt extent' and how are technical classes of
personnel licensed -be perform their functions? ,/that type or requirements
must be met to obtain these licenties? How does the government determine
its procedures with respect to training Rnd licensing?
6. For the if! urpose of administering policies, enfording regulations; 'granting
financial aid, and assuring the adeqUacy, safety and efficienby of, operations.
what types at periodc or special reports and forms 'does the government
require covering::
(a') Traffic ,
(b) Rates
(c) 1.xpenses, revenues -and' investment ?,
(d) rualifications of techniCal and key personnel,
(e) Inspections
(c) Accidents
(g) Others
To what agencies are the reports submitted? How are they processed, and what
,,uses are made of them?
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.nue st onnai re on
RAIL, lit Willa AND INLAND 71ATEtAl' TRANSP.OPTATION'
To be used in o onjudoti on with this study
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? /
OUESTIONNAIRE ON RAIL,?HIGHW" AND INLAND 7,ATERWA TRANSPORTATION
A. Policies
I. ,
- 10 that are the basic policies of the dountry with regard to rad,' highway and
inland waterway transportation? to what degree are Policiee'determined by
the, state? .
2, Are policies determined and adminiatered independently for each-form,of
transportatien, or are they integrated Rnd centrally administered for all
forms of transport, including sea and air?
\
30 To what. extent are rail? highway and inland wnterway transport policies
based on. strategic and military considerations?
. 4, Does the government subsidize these foi.ms of tranaportation? promote the
development. of new typen of equipment, and. the conbtruction of railroads,'
hi ghways and canals? ?
. I
. / ..
5, To what extent is policy influenced by vested interests? historical,,
.geographio, political. and economic conditions? . .
,
13, Organi iation /
1. 'that nre the agencies of the government 'concerned with 'these forms of
? transport?
2. What ere the functions of each of theso,agencies, and how-are they
ort0anised?to carry out these functions? - ?
How are the various agencies related to. each other? .Are,theycontrolled,
directed, or coordinated by any agency or groupon a higher level? How-are
they related to agencies concerned with Shipping and civil aviation? To '
what exten1:. do the various agencies overlap or conflict with each other?
4c lrhat conditions or developments led to the establishment-of these .agencies
as the: sire now organized? What circumstances led to the hbandoninent Or
reorganization of.previously existing agencies? - Iscany consideration being'
given to reorganizing existing agenciel 'or creating new,onea?
5, Are. these agencies Considered to be operating efficiently in the public
interest?
?
C. Administration
10' Whet procedures are followed In determining, the establishment of new
highwa7;s,;motor transport lines, railrond lines' and xstenvays?
2. How are rates determined and what t7?Pes of regulations govern the rate-
making processes? / \
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4,
to what extent, and by what moans is competition fostered or restricted?
?
'phiit types of rules and regulations govern the safety and inspection of
equipment and personnel, tind the investigation of accidents? Hoy, are these
regulations established and enforced?
50 Does the government foster or regulate the 'training of technicians in the
fields of transport? To 'what extent, and how are technical classes of
personnel licensed to perform their functions? That types of requirements
Must be met to obtain?these, licenses'? Vow does the government determine
c. its procedure with reepect to training and licensing?
60 In cases where these forms, of. transport extend be:yond national boundaries,
or connect ivith- neighboring lin'eS, what international agreements and ?
. arrangements exist concerning,: ?
EXchanige of traffic
Exchange of equipment
Pooling, of traffic, equipment and
Establishment of joint Ineilities
Fixing, rates ? ,
(11), Allocating mates
. ?
For the purpose of administering .policies, enforcing regelations, granting
? financial aid, nnii assuring the adequacy, safety ?and efficiency of operations,
what typea of periodic or special reports and forms does the 'government ,
require covering: ?
(a) ? Traffic
? (b) Rates
L
(e)
(d)
(e)
(f)
(e) Others
To what agencies are the reports
? what uses are. made Of them?'
revenues
Expenses, revenues and 'investment
Oualifications of technical and key
Inspections
Accidents
31
persodrie,1
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submitted?'
I
How are they processed, and,
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