South Manchuria Railway - History

History

Following the Japanese victory over Imperial Russia and the signing of the Treaty of Portsmouth, the southernmost section of the southern branch (Harbin - Port Arthur) of the China Far East Railway was transferred to Japanese control. The last station remaining in Russian hands was Kuancheng (Kuanchengtze, in contemporary spelling); the first Japanese station was Changchun.

A new, semi-privately-held company was established with a capitalization of 200 million yen to operate the railroad and to develop settlements and industries along its route. The organizing committee was headed by General Kodama Gentarō, and after his death, by General Terauchi Masatake. Count Gotō Shimpei, formerly Japanese governor of Taiwan, was appointed the first president, and the headquarters of the company was established in Dairen.

One of the first tasks of the new company was to change the railway gauge. The rail line was originally built according to Russian gauge (5 ft/1,524 mm), during the war it had been converted by the advancing Japanese troops to the Japanese gauge 3 ft 6 in (1,067 mm), in order to facilitate the use of rolling stock brought from Japan. But once the new Japanese South Manchuria Railway company took possession of the line, it had the tracks re-gauged again, now to the international standard gauge (4 ft 8 1⁄₂ in/1,435 mm), presumably with an eye to connecting the system to other railways of China.

In 1907, an agreement was reached between the Japanese and Russian authorities about connecting the Japanese South Manchuria Railway with the line to the north, which remained in the hands of Russian China Far East Railway. According to the agreement, Russian gauge tracks would continue from the "Russian" Kuancheng Station to the "Japanese" Changchun Station, and vice versa, tracks on the "gauge adapted by the South Manchuria Railway" (i.e., the standard gauge) would continue from the Changchun Station to the Kuancheng Station.

By the end of 1907, the company employed 9,000 Japanese and 4,000 Chinese. By 1910, those numbers had increased to 35,000 and 25,000 respectively. The railway used a significant amount of US-made rails and signaling equipment, as well as some steam locomotives built by the American Locomotive Company at Dunkirk, NY. A visiting executive from the Erie Railroad was quite impressed with the arrangement, and described South Manchurian Railway ca. 1913 as "the only railroad in the whole world that is like our American railroads (and they are, fairly speaking, the best)".

Mantetsu quickly expanded the system inherited from Russia to staggering proportions, building coal mines at Fushun and Yantai, and harbor facilities at Andong, Yingkou, and Dalian. At each station, Mantetsu built hotels for travelers and warehouses for goods. Japanese settlers were encouraged through the construction of schools, libraries, hospitals and public utilities. The Mantetsu Research Wing was the centerpiece of Japan's colonial program, and instigated agricultural research into development of soybean farming. Land under cultivation expanded 70% in 20 years.

From 1916, Mantestu began to spin off a number of subsidiary companies, including Showa Steel Works, Dalian Ceramics, Dalian Oil & Fat, South Manchurian Glass, as well as flour mills, sugar mills, electrical power plants, shale oil plants and chemical plants.

Until 1925, the company also operated the Korean railway system.

Company assets rose from 163 million yen in 1908 to over a billion yen in 1930. Mantetsu was by far the largest corporation in Japan, and also its most profitable, averaging rates of return from 25-45 percent per year. During the 1920s, Mantetsu provided for over a quarter of the Japanese government's tax revenues.

Over 75% of Mantetsu's income was generated by its freight business, with the key to profitability coming from soybean exports, both to Japan proper and to Europe. Soybean production increased exponentially with increasing demand for soy oil, and for soy meal for use in fertilizer and animal feed. By 1927, half of the world's supply of soybean was from Manchuria and the efforts by Mantetsu to expand production and to ship to export ports was a classic example of an extractive colonial economy dependent on a single product.

The South Manchuria Railway was also charged with a government-like role in managing the rail transportation system after the formation of Manchukuo in 1932. By 1938, Mantetsu had 72 subsidiary companies, development projects in 25 urban areas and carried 17,515,000 passengers per year. Between 1930-1940, the Japanese population of Manchukuo rose by 800,000 making ethnic Japanese the majority in many of the towns and cities served by Mantetsu. Mantetsu prided itself on state-of-the-art urban planning, with modern sewer systems, public parks, and creative modern architecture far in advance of what could be found in Japan itself. These things possible due to Mantetsu's tremendous profitability, and its political power to seize property and silence opposition and dissent at will through its political connections to the military and totalitarian national leadership.

In 1934, Mantetsu inaugurated the "Asia Express", a high speed train from Dalian to the Manchukuo capital of Hsinking (Changchun). Reaching a top speed of 134 km/h (83 mph), the "Asia Express" was the fastest scheduled train in Asia at the time.

Changchun remained the break of gauge point between the Russian and standard gauges into the 1930s, until the Chinese Eastern Railway itself was bought by Manchukuo and converted to the standard gauge in the mid-1930s.

In 1945, the Soviet Union invaded and overran Manchukuo. Rolling stock and moveable equipment was looted, and taken back to the Soviet Union, some of which was returned when the Chinese Communist government came into power. Mantetsu itself was dissolved by order of the American occupation authorities in occupied Japan.