893.154/254

Memorandum by Mr. James K. Penfield of the Division of Far Eastern Affairs

It is felt that the following brief survey of the operation of the Yunnan–Burma highway during the approximately five months that it has been open to traffic may be of interest at this time.

Arrival of Munitions in Rangoon 62

The first vessel carrying war materials for China was reported to have arrived in Rangoon on November 3, 1938. By January 18 it was reported that there were 9,000 tons of war materials at Rangoon; on March 16 the Chinese Vice Minister for Foreign Affairs stated that approximately 15,000 tons had arrived at that port of which some 2,000 tons had been shipped to Lashio; and by April 13 it was reported in Chungking that there were 30,000 tons of munitions at Rangoon awaiting shipment into China and a Southwest Transportation Company officer stated that 3,600 tons had been shipped to Lashio. Calculated on a basis of duty paid the value of war materials formally cleared for shipment from Rangoon up to March 4 was estimated at about United States $9,676,800. The Consul at Rangoon reports that munitions continue to arrive at that port direct and in relatively small amounts via Singapore and Colombo.

The amount of Burma customs duty payable on war materials re-exported overland to China (in most cases slightly over 3% ad valorem) constituted a burden to the Chinese but recent reports from Rangoon indicate that the Governor of Burma has now ordered that duty on such goods shall not exceed 1% ad valorem.

Munitions are said to include high explosives, machine guns and ammunition, shells, anti-aircraft guns, small arms and ammunition, trench mortars, two tanks and a few field guns. They are reported to be of Russian, German, Czechoslovakian, Italian and French origin.

Transport Facilities

High explosives have been stored in a barge in the Rangoon River and storage facilities for other war materials have been established at Rangoon. Storage facilities for about 6,000 tons of both dangerous and non-dangerous goods are reported to have been established at Lashio and for 1,500 tons at Chefang. Most of the war supplies are sent by rail from Rangoon to Lashio and from there are transported by a Rangoon haulage contractor, who is reported to be employing 185 Chevrolet trucks in this service, to Chefang, some 150 miles from Lashio and 24 miles across the Chinese border. From Chefang they [Page 754] are carried on to Yunnanfu and other parts of China in Southwest Transportation Company trucks. By April 8 over 500 American truck chassis had arrived in Rangoon and more were reported to be en route. They are being supplied with bodies and reportedly put into service by the Southwest Transportation Company between Chefang and Yunnanfu.

It is reported that many truck chassis as well as large quantities of petroleum products are being purchased in the United States under the Export-Import Bank credit to the Universal Trading Corporation.

In this connection it is of interest to note that the Consul at Yunnanfu reports that grading work on the proposed Burma–Yunnan Railway is progressing rapidly but that in as much as there appears to be no bridge or culvert construction carried on there is no assurance that the roadbed will be completed at an early date.

Movement of War Materials into China

Reports from Yunnanfu indicate that during December small shipments of supplies arrived in that city from Burma over the new road, but it is believed that the road was later closed to heavy traffic for a short period and that, due principally to lack of trucks, regular transport of war materials did not start until March.

Reports from various sources indicate that although the transport is not very well organized or very efficient some 900 to 1200 tons of war supplies per month are arriving in Yunnanfu. There have been no reports of any export produce carried by the trucks on their return journeys toward Burma, most trucks observed while returning over the Yunnanfu–Hsiakwan section of the road having been carrying motor fuel.

By way of comparison it may be noted that over 5,000 metric tons of freight per month enter Yunnan over the Yunnan–Tonkin Railway and that from May to September 1938 an average of 90,000 tons of goods per month were reportedly moved on the Canton–Hankow Railway. It is thus apparent that the new highway is as yet far from being a supply route over which any considerable volume of war materials enters China.

Future Prospects

It appears to be generally admitted that the road will in all probability be damaged by landslides and washouts during the rainy season which lasts from May or June through November but many observers are hopeful that some traffic will be possible during this period. An agent of the Bank of China who recently traveled over the road [Page 755] stated that there are 20,000 men employed in improvement and reconstruction and 10,000 in road maintenance work. It is the opinion of Consul Meyer at Yunnanfu that the present force will have to be considerably augmented if even the Yunnanfu–Hsiakwan section (first opened to traffic about three years ago) is to be kept open during the rainy season. In any event it appears probable that the small stream of war supplies now reaching China via Burma will, within the next month, dwindle to nominal proportions until near the end of the year at which time, with the advent of the dry season and with additional trucks available, it may be expected to resume its flow at substantially above the present volume.

  1. Throughout this memorandum the footnote citations to telegrams, despatches, and reports are omitted.