893.77/3194: Telegram

The Chargé in China ( Peck ) to the Secretary of State

84. The Embassy learns from a reliable source that when the managing director of the Indo-China–Yunnan Railway visited Chungking a few weeks ago he assured officials of the National Government that the present annual inward transportation capacity of the railroad in question is 120,000 tons but declared that arrangements had been made for the purchase of additional cars and locomotives in Europe which would result in the shipping of the line being increased by 30 to 40 percent within a period of from 3 to 6 months. The Embassy is also reliably informed that restrictions on the shipments of goods through French Indo-China to China have been relaxed to some extent, although it appears that little if any arms and munitions are being shipped on this railway at present.

The recent session of the Central Executive Committee is reported to have passed resolutions for improvement of the trucking service [Page 740] between Yunnanfu and Chungking. In addition to the purchase of trucks in the United States and Indo-China it is reported that steps are to be taken to install service stations and repair shops, inaugurate a driving school for chauffeurs, and institute a system of highway policing to curb reckless driving, et cetera. Another factor—the opening of a new highway from Chungking to Kunming via Luchow (on the Yangtze River about 200 kilometers west of Chungking) in March of this year—will not only shorten the distance between the two cities by 20% but will relieve congestion of the Kweiyang Road.

In addition to the Southwest Transportation Company, a National Government organ under the control of T. L. Soong, which is reported to be operating about 500 trucks between Chungking and Yunnanfu, and exclusive of the Military Affairs Commission which possesses several thousand trucks, it is learned that the Asiatic Petroleum Company and the Standard-Vacuum Oil Company are entering this field in an experimental capacity, the former company with seventeen and the latter with six, 2½ ton trucks for the shipment of petroleum products from Yunnan to Szechuan. If this experiment proves profitable these firms are prepared it is stated greatly to expand the inward service as well as to aid in the outward shipment of local export products.

Repeated to Peiping.