ECONOMIC AND FINANCIAL PROBLEMS IN THE ANTI-JAPANESE WAR (8)

8. ON THE DEVELOPMENT OF THE PRODUCTIVE UNDERTAKINGS OF THE TROOPS

Which of the three branches of the public sector of our economy -- the government, the army and the official organizations -- is ultimately the most important in terms of directly meeting requirements most quickly and in greatest quantity? Our experience of the past few years shows that it is the army. The army's productive undertakings have become the most important part of the public sector of our economy because the army is the body which is relatively most organized and has most labour power. So long as it has no direct fighting duties, it can use all its time outside training, doing work. And under our present backward technical conditions, labour is the decisive factor in economic undertakings.

The production movement in the garrison forces of the Shaan-Kan-Ning Border Region began in 1938, and one year before that in the official organizations and schools. A joint production movement of the army and official organizations and schools together began in 1939. In 1940, 359 Brigade took on the duty of defence on the Yellow River and joined in the production movement. In 1941 and 1942, the army increased its responsibility for self-supporting production just like the official organizations and schools. However, the tasks taken on by the army were greater and occupied the most important position in the total volume of self-supporting production. It would have been impossible, if during these years the army had not for the most part provided its own means of livelihood and running costs and instead had relied on the government. Responding to the Party Central and Northwest Bureau's call for 'production self-sufficiency', the army has fulfilled its production tasks in the midst of the urgent work of fighting, guarding and training. The objective circumstances of some troop units are better than those of others; some have more duties than others, some have worked harder than others. As a result their respective level of achievement has varied. Nevertheless, in general they have all fulfilled their tasks. With very little capital and backward techniques, they have all developed agriculture, handicrafts, transport and commerce. Some have even set up relatively large-scale textile and papermaking factories. During these two years, the capital invested by the government in the army's productive undertakings has not exceeded 6-7 million yuan in total. However, in that time they have both ensured supplies worth over 300 million yuan and they have accumulated roughly 80 million yuan capital from their agriculture, industry and commerce. They have opened up several tens of thousands of mu of land, and supplied rich experience for the whole of production construction. They have not only played a political and military role in the protection of the Border Region but have also played a role in directly providing a large amount of financial supplies and in helping to develop the Border Region economy.

Let us take a look at the self-supporting production of a certain company in a certain regiment. The income and expenditure of this company during 1941 are shown in Table 8.1.

With the exception of 750 yuan production capital from upper levels, miscellaneous payments of 360 yuan from the office, supplementary production payments of 2,855 yuan and supplementary provisions payments of 3,771 yuan given by the regimental supplies office, a total of 7,736 yuan, the expenditure of 52,530 yuan shown [Table 8.1] was met by the company's own production of 44,794 yuan. This excludes the capital accumulated for use in production the following year.

According to these figures, each regiment of ten companies can be self-supporting up to 440,440 yuan.

Furthermore, there is still the self-supporting production run by the regimental headquarters [shown in Table 8.2]. The total Value of production of the companies, battalions and regiments is 703,828 yuan. The regiment's total annual expenditure (including grain and a proportion of clothing and bedding) is 896,638 yuan, which leaves a shortfall of 185,510 yuan to be supplemented from upper levels. As a result the regiment's own self-supporting production accounts for 79 per cent of consumption and supplements from above account for 21 per cent. If we add the large amount of self-supporting production carried out by the brigade headquarters, the proportion for the whole brigade far exceeds 80 per cent.

The following material is a summary by the Garrison Office of five years' production by the garrison army. We can see the general situation in self-supporting production by the army.

A SUMMARY OF FIVE YEARS PRODUCTION BY THE GARRISON ARMY

(a)    Outline

In the new and difficult environment since the War of Resistance and following Chairman Mao's call for production, the garrison army began the production movement in the autumn of 1938. At the time, production was not yet aimed at self-sufficiency and was merely making up for deficiencies in the necessities of life. We could only give each member of the force 0.05 yuan for vegetables and 1.5 jin of grain per day. At the market-prices of the time each yuan could buy 30-40 jin of vegetables, 2 jin of edible oil, or 100 jin of fire wood. With a hundred men in a company, each day they had 5 yuan for vegetables. If they bought vegetables, they could not buy oil, salt and firewood. If they bought oil, salt and firewood, they could not buy vegetables. Pork was even further beyond their reach. As for their clothing and bedding, you could rarely see a soldier whose clothing was not darned and patched. Bullet bags were so tattered they could not longer carry bullets, which had to be put in pouches. Some wore padded clothes in summer and some wore shorts in winter. Some went on parade barefoot in the snow and some could not even find a broken old leather bag for leg wrappings. These were the material conditions of the troops then.

The methods used in the production movement at that time were: (i) to set up cooperatives; (ii) to plant lots of vegetables; (iii) to set up grinding-mills, to raise pigs and sheep, to make bean curd and to grow bean sprouts; (iv) to mobilize every soldier to learn to make shoes; (v) to knit woollen clothes, socks, shoes and gloves; (vi) to promote economy and prevent waste. The result of half a year's production in 1938 exceeded the plan, and the soldiers' life was greatly improved. For example, they ensured self-sufficiency in vegetables, each week they had two pork meals, they partly met requirements for woollen clothes, socks, gloves and shoes, and they supplemented the supply of bullet bags, pouches, leather bags and leg wrappings.

The Significant achievements in production of the latter half of 1938 raised the troops' enthusiasm for, and trust in, production. So in 1939 even greater tasks for self-supporting production could be put forward, reducing the burden on the people of the Border Region. In 1939 it was stipulated that the troops in their agricultural work should plant grain as well as vegetables so as to fulfil the task of producing 4,700 tan of grain. Most production in 1939 was agricultural and 25,136 mu of new land was opened up over the whole year. At first it was estimated that 2 tou of hulled grain could be harvested per mu giving a total of 4,986 tan. But because the new land was just being broken in, there were not enough agricultural tools, leadership experience was not even and some of the land suffered natural disasters, only 2,590 tan of hulled grain was harvested. At this time the troops still had little capital and commerce had not yet developed.

In 1940 the production tasks for the troops stipulated that each section should provide grain for one-and-a-half months, a total of 3,400 tan. In that year the troops opened up 20,679.7 mu of land which should have given 4,136 tan of hulled grain. Because the harvest was poor, they only got 2,400 tan. In order to fulfil its duties, each section also took-on salt transport, digging liquorice root and felling trees (in Guanzhong they also did some commercial work). The garrison army earned a total profit of 2,236,516.16 yuan from this supplementary production. This, together with the agricultural harvest, provided grain for one-and-a-half months and also met part of the supplements for equipment.

In 1941 the operating budget for all troops was 4,479,536.40 yuan and the task for production was to provide 400,000 yuan. However, the result was entirely different. The requirement for operating expenses was much greater and the task for self-supporting production was much greater than originally estimated. Chiefly as a result of the call by Commander Zhu to select six battalions to get salt, we got a total of 56,966 packs of salt valued at 236,408.90 yuan. In agriculture 14,794.6 mu were opened up and 1,170 tan of miscellaneous grains harvested. In commerce the total profit was 12,019,592.72 yuan. Because of price inflation, the value of paper money fell. Regular expenses and clothing and bedding expenses for the whole year were 7,881,757.17 yuan. (All these excludes the income and expenditure of one regiment and the forces in Guanzhong.) The average daily expenses for provisions per man over the whole year was 0.50 yuan. Apart from the 0.10 yuan issued by the State, we provided 0.40 yuan ourselves, a total of 2,592,000 yuan. The total for the above regular expenses, bedding and clothing expenses and provisions expenses was 10,473,757.17 yuan, 5,673,804.53 yuan above the original budget. There was still a surplus after payments were made from production income.

In 1942 the budget for expenses (excluding grain, clothing and bedding) was 5,833,636 yuan and we took on the task of helping central expenses with 2,500,000 yuan. The year's production plan was for 12,400,000 yuan. By August (statistics for the later period not yet available), commerce had earned a profit of 38,969,230,20 yuan and industry had a profit of 431,773.40 yuan, giving a total of 39,401,004.60 yuan.

By June we had received 1,440,058.60 yuan running expenses, and supplementary expenses for the first issue of summer clothing of 206,825 yuan. Actual expenditure was running expenses 7,750,598.85 yuan, supplements for bedding and clothing 3,067,730.60 yuan, and supplements for provisions (the State issued 0.70 yuan per man per day and the actual cost was 3.00 yuan) over the half-year, 9,180,000 yuan. Most of the winter clothing and bedding for the latter half of the year was provided by the brigades and regiments themselves. The second issue of summer clothing, half of the padded cloth, 40 per cent of the bedding, and bindings, bullet bags, grenade pouches, padded cotton shoes, and light shoes, these eight items had a total value of 12,641,200 yuan. Other things like charcoal for heating in winter were provided by each unit itself. As for animal fodder, in 1941 we provided two months' horse-feed ourselves. In 1942 the Finance Department issued eight months' hay for horses, leaving two months' unaccounted for. In general we cut two months' supply of grass ourselves, saving roughly 1,200,000 yuan. Furthermore, in 1942 the budget for horse fodder was 11,000 tan. According to the regulations of the Finance Department 1 tou of hulled grain is equivalent to 2 tou of horse fodder. But this is insufficient and it is necessary to increase the annual amount by 2,750 tan which comes to 1,375,000 yuan at 500 yuan per tan.

The outcome of five years' production has been that, besides meeting annual running expenses, clothing and bedding expenses and provisions expenses, current financial assets include 24 million yuan commercial capital 556 transport animals (excluding plough oxen, and excluding the First and Fifth regiments) with a value of 11,232,000 yuan, and factory capital of 712,000 yuan. The combined total is 35,944,00 yuan.

(Note: The above summary does not include 359 Brigade and the peace preservation corps, [bao'an budui].)

(b) Lessons

(1) The reason why the forces of the Border Region have been able to carry out self-supporting production and solve great problems over the past few years is their immense labour power and better organizational strength, and the fact that the Border Region also has rich resources to develop. This experience proves that the troops can be entirely self-sufficient. Because the troops have solved the problem of self-sufficiency over the past few years and increased their faith in production, they have realized that self-sufficiency is one of the major tasks in building-up the army, and is one of the best methods overcoming hardships and coming through a difficult period.

(2) The production construction of the troops is part of the economic construction of the whole Border Region. Although in the past the troops did well in working hard to fulfill production tasks, ideologically they did not emphasize the relationship with the construction of the Border Region. Therefore they still had a shallow understanding of the development of the agricultural and industrial base. They were not good enough at working hard to establish a secure foundation. Their thinking on unified construction was also muddled. There was even a lack of coordination between units and incidences of serious breaches of command discipline. These shortcomings must be resolutely and ruthlessly corrected.

(3) Under conditions of backward production methods, the production base must chiefly be built us depending on the labour power and economic base of each unit. Therefore the government's financial and economic policy should look after the productive undertakings of these units. Within the confines of the government's unified policy, they should be allowed full development and profitability. Only this way can the development of productive undertakings have greater organization, greater strength, greater unity, greater rationality, and greater ability to fight the blockade in a unified way. The greatest shortcoming of the troops in production is to pay most attention to commerce and to neglect agriculture. In future they must improve and encourage agricultural production.

(4) In their productive work, the troops should grasp ideological leadership tightly and set up and strengthen the regulations and leadership organs in production. They should correct and guard against cadres doing things without coordination, becoming decadent, eating and living well, spending recklessly, not economizing, not stressing effective results and adopting other corrupt practices.

The above sums up our opinions.

The self-supporting production of 359 Brigade is the best among the various units in the garrison forces. In the first place the leading comrades of 359 Brigade have grasped the strategy of agriculture first, industry and transport second, and commerce third. They have taken advantage of their lack of active duties, the suitable environment of Nanniwan for agriculture and of The Suide special military area for light industry. They have mobilized the large amount of labour power and within three years have completed large assignments for economic self-sufficiency. In particular they have grasped the policy of taking agriculture as the core so that the economic base rests on a secure foundation. Second, the troops of 359 Brigade have carried out the following concrete economic construction: (i) Their grain production in 1940 was a failure, but they were not disheartened. They persevered in 1941 and got tremendous results. In 1942 they strengthened this foundation. They opened up 25,000 mu of land and planted grain, vegetables, hemp and tobacco, meeting the troops requirements of vegetables, lamp-oil, hemp for shoes and tobacco, and supplementing supplies of grain, vegetable-oil, horse beans and fodder. Thus after only two years' work they laid the foundation of the agricultural economy of all the companies in the brigade. Further more, the period of labour for all the officers and men was no more than two months per year. Ten months were left for troop exercises, and training was not impeded. According to the new method thought out by the brigade, each company sets up a specialist agricultural labour group of six or seven men and the masses of soldiers only provide extensive assistance during the busy agricultural seasons. In this way training time is even greater. (ii) They have used the farms to develop animal husbandry. In 1942 the whole brigade maintained 2,000 pigs which met the troops' requirements for meat and oil. Since the troops ate more meat, they saved grain. In addition they organized groups of men to gather firewood, make charcoal and saw planks, which not only provided for their own fuel and building needs but also provided a surplus for sale. (iii) They also built up industry and handicrafts. In 1941 they assigned some soldiers and rear-service personnel to establish the Daguang Textile Mill and Daguang Soap Factory. Now there are 'Daguang' products on the market in addition to those they consume themselves. They set up ten salt-wells in Suide and Nanniwan, one charcoal-pit, two carpentry factories, three iron-factories, six mills, eight flour-mills and one oil-press. They also mobilized the soldiers during their spare time after training to spin woollen thread, to make various kinds of utensils from willow and elm wands, to make writing-boards from birch bark, to make vegetable-boxes and to make lamplighters. This work done by the soldiers not only benefited the whole but also profited the individuals. The brigade stipulated that four-fifths of all the products of handicraft labour done using publicly-owned tools should come under public ownership and one-fifth should belong to the private individual, and the two-thirds of that produced not using publicly-owned tools should come under public ownership and one-third should belong to the private individuals. This method provided commodities for public use and was also equivalent to raising the soldiers' pay. (iv) They established a strong transport undertaking. Now they have a transport team which owns 600 pack mules and is fully engaged in the transport of salt and goods. Along the road between Suide, Sanbian and Yan'an they have set up ten stables and settled a group of older and weaker personnel. (v) Their commercial organ is the Daguang Store, which has ten branches besides the main shop. The profit in the first nine months of 1942 was over 6 million yuan. However, this commerce only makes up 10 per cent of the brigade's total production of 60 million yuan (at Yan'an market-prices). (vi) The brigade has implemented a unified production plan, and regulations for production and supply. The production plan for the whole brigade is fixed by the brigade headquarters. Some undertakings are directly run by the brigade headquarters such as large-scale industry, transport and commerce. Others are run by the regiments and companies such as agriculture, animal husbandry, small industry and commerce. Inspections are carried out at each level from brigade down to individual companies. The regulations for production are also fixed by the brigade headquarters. The arrangements for soldiers spinning woollen thread described above is an example of this. The regulations for supply also preserve unity. Although the agricultural, industrial transport and commercial undertakings are each run separately, all expenditure above a certain level must be approved from above. Lower levels cannot spend freely. This prevents instance where free spending of the fruits of production bring unequal blessings or waste. It ensures the utility of the whole brigade. (vii) They have not only developed large amounts of production but have also carried out the policy of strict economy rigorously. For example, they laid down that they would issue three suits of summer clothing every two years and two suits of padded clothing every three years, and that new bedding and clothing would only be issued in exchange for old. They also issued needles and thread to the soldiers so that they could repair clothes themselves. Thereafter bedding and clothing lasted longer, and the soldiers took greater care of them, greatly reducing these expenses. As mentioned above, they ordered the soldiers to make writing-boards from birch bark, vegetable-boxes and lamplighters, and issued wool to the soldiers to knit socks, gloves and so forth. This not only increased the supply of daily necessities but also economized on purchases of these things. All building construction and tool repairs for the whole brigade is done by the troops and none is contracted out. All these things have not only economized on expenditure but have also developed care for public property among the officers and men, attention to results, opposition to waste and a simple style of work that rejects ostentation.

The following material is a summary of three years' production by 359 Brigade, drawn-up by its leading comrade. It shows us the actual situation in the brigade's agriculture, industry and commerce.

A SUMMARY OF PRODUCTION AND CONSTRUCTION IN 359 BRIGADE OVER THE PAST THREE YEARS

In the three years since this brigade has returned to take up the defence of the Border Region, the implementation of the economic policy of self-reliance and self-sufficiency has been a new creation in building up the army. With the exception of grain received from the government, we have achieved 82 per cent self-sufficiency in all other expenses through carrying out this policy. In this way we overcame difficulties with material resources, improved our troops' provisions, consolidated our forces, promoted the physical strength of the soldiers, consolidated army discipline and strengthened the ties between the army and the people. The following outlines our experience over the past three years in agricultural, industrial and commercial operations.

(A) Agriculture

In response to the call for a production movement, we began agricultural production in 1940. We planned to plough and plant enough land to be self-sufficient for two months' grain, to be entirely self-sufficient in vegetables from the summer onwards, and to raise enough pigs to cover our meat requirement for the New Year festivities. However, since the areas where we were stationed in Suide, Mizhi and Wuqi counties were heavily populated with little spare land, we had to travel to places over 100 li away (Jiulishan and Qingjian) to open up new land and wasted a lot of time in travel. Although enthusiastic and taking trouble, we did not investigate carefully nor plan suitably. As a result the harvest did not match the capital spent on tools and seeds. However, the vegetables planted near where we were stationed enabled us to be self-sufficient for these after the summer Each provisions unit was issued 0.10 yuan provisions expenses per man per day, barely enough to buy oil and salt. The troops had to go up to 100 li away carrying charcoal for sale. They earned enough to make more charcoal and a surplus to buy pigs for raising. These productive activities laid the foundations for the companies to improve provisions. Apart from opening up all the public unused land (public cemeteries, the neighbourhood of temples, odd pieces of land near cities, stretches of old unused road, old military defence works, etc. ) around the towns of Suide, Mizhi, Jiaxian, Wuqi and Qingjian where we were stationed and along the river defences, we also rented land from the local inhabitants to plant vegetables. The spirit of bitter struggle and hard work of the commanders and troops gained great sympathy and understanding from people of all walks of life. Some of the landlords from whom we rented land (like the landlords and rich peasants of Yihezhen) would not accept our rent payments. Other poor peasants voluntarily granted temporary tenant rights. This came from the deep sympathy and concern of the people for the army. For those stationed in poor agricultural regions, particularly those where the climate only suited summer and autumn crops, agricultural production was not only necessary to solve difficulties in running expenses, but was also essential to maintain the correct relationship with the people. From the end of 1939 to the spring of 1940, the troops did not have enough expenses for provisions and were short of vegetables. Personnel sent out to buy sometimes resorted to the serious actions of forced purchase or purchase at unfair prices. In carrying out agricultural production, we ensured a good political influence among the people with the exception of the small number of people in the county towns who relied on market gardening for their livelihood and spoke angrily of the poor defence forces who offered no profit.

We solved the following problems with our production in 1940: (i) We became self-sufficient in vegetables after May. (ii) We added pig-raising to self-sufficiency in vegetables and improved provisions in the latter half of the year so that each man could eat 1 jin of meat per month. (iii) Each provisions unit made their own agricultural implements and raised over ten pigs. (iv) We proved the old saying: 'If you have vegetables you have half a year's grain, if you have no vegetables you have half a year's famine.' The troops' grain was sufficient. (v) Planting grain meant opening up new land. In the first year we got no profit from grain since it was too far from the places we were stationed. We could not weed at the right time and we wasted too much effort in travel. For these reasons, the planned grain harvest was not realized.

In 1941 the troops found land they could farm and implemented the policy of farming which the commander-in-chief himself ordered. Each man on average farmed 6 mu of land. Each mu needed seven days' work including opening up, planting seed, weeding and harvesting. Six mu required forty-two days' from which was obtained roughly 3 tou (lower-middle harvest) of hulled millet, and hay, also worth 3 tou hulled grain. The grain and hay together could be exchanged for one suit of padded clothing. If an upper-middle harvest could be obtained, the return would increase by one-quarter. Various secondary crops such as corn, hemp and sesame also gave a harvest the same as that of millet. Around the edges of the 6 mu we could plant many subsidiary crops such as castor, pumpkins, beans and so forth giving good harvest. In addition, each man planted half a mu to provide vegetables for a whole year. Also among the products were hot peppers, garlic, onions, lamp-oil, tobacco, grass rope for sandals, and so forth. Since we had field crops, it was easy to raise domestic animals such as pigs, cows, sheep, chickens, ducks, rabbits etc. As pig-raising was most profitable, it was the major subsidiary. Reckoning at one pig for every five men, a hundred men could raise twenty pigs. As well as this they could raise three sows. Every year each sow can have two litters of at the very least four piglets. With no swine fever and no untoward events, they could produce twenty-four pigs per year. Killing pigs at a rate of two a month, we would have to kill twenty-four a year. The pig-breeding rate would counterbalance the slaughter rate and there would still be surplus piglets. From birth to slaughter, piglets-can grow 5 liang per day on average. In actual practice the annual average was indeed one pig per five men.

As a result of agricultural production, there was a lot of vegetable refuse. Since we were grinding flour, we got the chaff remains from the husking, and since we were making beancurd we got the bean residues, etc. We could raise the pigs using waste and gain great benefits. Now the entire brigade has achieved all of the above. The wealth obtained from agriculture and animal husbandry by each provisions unit is increasing. And this wealth is controlled by the party branch, supervised by all the soldiers and used rationally according to the regulations laid down at high levels. As yet there is no summary for 1942, but harvests will definitely be no less than last year.

Reviewing the agricultural production movement, we can make the following summary of its merits and shortcomings.

Merits

(1) The troops carried out political mobilization concerning the performance of the tasks so that all personnel realized that the slogan of self-sufficiency in production put forward by Chairman Mao was of great significance in maintaining unity in the War of Resistance and in passing through an economic crisis. The commander-in-chief himself led the way after his return to the Border Region and strengthened the soldiers' enthusiasm and endurance.

(2) Improvements in real livelihood made us feel the advantages of the production movement.

(3) The brigade and regiments fixed the whole of the annual -production plan, stipulated the production tasks for the companies, and conscientiously supervised the regiments' guidance and supervision of the companies' production.

(4) The companies organized production committees to discuss and arrange the implementation of production tasks, to inspect and examine the economy (the companies' economies are entirely public) and to ensure the implementation of the supply regulations.

(5) Mow every company is enjoying a self-sufficient, rich peasant family standard of living because of its agricultural production.

Shortcomings

(1) We have not paid full attention to production tools, we have not organized and employed plough oxen and we have not selected some soldiers (from among the cooks) to specialize in farming throughout the year. We have generally adopted the method of all-round mobilization, wasting time and impeding troop-training.

(2) Some cadres have taken a negative attitude towards farming and do not strive to get a larger harvest by extending the land farmed.

(3) We have not been conscientious in gathering manure.

(4) We have no cadres specially directing production.

According to experience, we must use oxen for ploughing, carting manure and harvesting (using ox-carts), prepare sufficient tools, assign cadres with special responsibility for directing production (a deputy battalion leader for production and company leaders with special duties), assign soldiers (from among the cooks) to carry out agricultural production throughout the year, mobilize all the officers and men to take part at planting, weeding and harvesting times, and stipulate the number of workdays so as to use a fixed amount of time. In this way the total work per man to farm 6 mu and cut a year's fire wood will not exceed two months, and we shall not only get grain but will also become entirely self-sufficient for all daily vegetables, meat, straw shoes, firewood, shoes and socks. The last few items alone make up one-third of all running expenses so they cannot he considered a small problem. The grain harvest can sustain 2,000 men.

The above is a brief summary of the brigade's agricultural production.

The following list shows how much work and time it would cost a provisions unit for a hundred men to travel over 60 li to make its purchases if it did not plant vegetables itself.

Monthly vegetable consumption (1 jin per man per day)	3,000 jin
Number of purchases (each time buying 100 jin)	30 times
Labour days per purchase (each time using 2 men)	4 days
Actual days per purchase (there and back 2 days)	2 days
Labour days per month	120 days
Actual days per month	60 days
Labour days per year	1,440 days
Actual days per year	720 days

Using this table alone we can explode the lie that 'agricultural production is profitless and hinders training' .

(B) Industry

There follows a summary of our experience in establishing and developing the Daguang Textile Mill and of other handicrafts.

(1) Motivation and intentions.

The troops need clothing and bedding every year. The raw materials for bedding and clothing are the chief problems in supply work. In the winter of 1939 after the troops returned to the defence of the Border Region, we had difficulties in buying these raw materials and also had no money. In response to the call by Chairman Mao for self-reliance, self-sufficiency and overcoming difficulties to build up the Border Region, we made a long-term plan to run a textile mill.

(2) Trial beginnings.

We began to think of running a textile mill in September 1940. At the time there was a man from Hebei in the short-term training class set up by the supply department who could weave cloth. We set up a small wooden loom, bought some foreign yarn and tried it out. Within ten days all the yarn was woven and the cloth was quite good. We could weave 100 feet per day [Chinese measurement] and costs worked out one-third cheaper than buying cloth.

Since there were weavers among the troops we decided to set up a factory and undertook the following: (i) we bought wood and built nineteen small looms in our own machine-repair shop, and we bought four metal looms from Shanxi; (ii) we bought yarn from local merchants on credit; (iii) we selected twenty skilled men from places like Gaoyang in Hebei who were among the troops.

In this way the factory got going. It was not only profitable and convenient, but also solved problems in buying cloth.

In December 1940 we decided to enlarge the factory in order to achieve self-sufficiency in cloth for the whole brigade.

Early in 1941 we abolished service personnel at all levels throughout the brigade, and collected together over a hundred youths as apprentices to study weaving.

We again bought two iron looms from the northwest of Shanxi and made a further eleven large wooden ones ourselves. In February and March we made another sixteen large wooden looms, and fourteen more towards the end of March. We thus had sixty-six looms of all kinds. At the same time we made spinning-wheels and other essential small implements.

As regards raw materials, in 1941 the government issued the brigade with 400,000 yuan capital for production. Of this, 250,000 yuan was divided among the regiments. Of the remaining 150,000 yuan, 100,000 was spent buying 300 bales of yarn (each bale was 7 jin 14 liang and cost 280-90 yuan) and some things that had to be bought (such as the wire for the looms which we could not make ourselves and had to purchase outside).

Administered by the supply department accountants, the workers divided into yarn-starchers, weavers, thread-joiners [luoxian], and threaders [daxian]. Each group had twenty to thirty men. About ten skilled men became master workmen and took charge of the technical work in starching and reeling the yarn. Intelligent youths studied weaving, and the less bright and the younger did threading and thread-pining.

As soon as the looms started working, we became aware of a need for more labour power. So taking the name, the Daguang Textile Mills, we employed fifty young boys and girls from the Suide areas as apprentices. We also took captured bandits and people who had committed mistakes from the military courts. In this way we assembled our labour force. There were then over 200 workers administered by the military training unit and the supply department. They were divided into four platoons and twelve squads (including one women's platoon; each platoon had three squads of ten or more people).

The factory was roughly taking shape. But there were still two difficult problems to be solved, first the supply of capital and raw materials, and second the control, education and training of the workers.

(a) The problem of the supply of capital and raw materials
In May 1941 we borrowed 200,000 yuan from the Border Region Bank but it still did not provide support for long. After that we had to make friends, built up relationships, liaison with rich merchants and buy raw materials on credit, making repayments at fixed periods.

Before May 1941 most foreign yarn was bought from Shanxi. Afterwards, because supplies were cut off, we could only buy from Sian and Yan'an (Shenxin and Guanghe brands). We also bought raw cotton from Sian and Yan'an.

The supply of local yarn came as a result of the government's encouragement of local women to spin. At first the wage for spinning 1 jin of yarn was from 3 to 7 yuan (raw cotton cost 4 yuan per jin ), and it was divided into three grades. In July and August this was clanged to issuing 11/2 jin of prepared Cotton in return for 1 jin of yarn. In February and March of 1942 this was again changed into 2 jin or 2 jin 2 liang for 1 jin of yarn.

Because the supply of yarn from the people was insufficient and of poor quality, we set up our own yarn-spinning factory with four cotton-bowing machines and forty spearing machines in October 1941. By July 1942 we still lacked skilled workers and the cotton bowed by the machines could not all be used on the machines (the raw cotton was poor). Now only the four bowing machines are still going and spinning has stopped.

(b) The problem of controlling, educating and staining the workers.
The number of workers has increased but there are many different elements and they are not easy to control. They young service personify in particular were used to a free life and had not taken part in labour before they left home. At first they would fight, curse and carry on every day. They would say 'We've seen all the grocers, big and small' and would not accept any controls.

Most of the women from the villages had come because of marriage problems. They had been sent to the factory by the women's aid committee of the government. Whenever they talked of marriage, some cried and some laughed. They often asked for help in solving their marriage problems.

Persuading captured bandits to work was difficult.

Many of the people being punished for mistakes were company and platoon cadres who maintained their old character, were unwilling to work and were troublemakers.

From January to March 1941, the head of the supply department tried hard to correct them and achieved some success.

During this time, approximately twenty skilled workers acted as master-workers and taught the youths in the weaving group. First they used the small looms (needed little strength and easy to manage). The master-worker did all the preliminaries and told them how to start the loom, how to connect broken threads, how to handle the shuttle, and how to coordinate hand and foot. At the beginning they only wove for two or three hours a day. After one or two months, this group had mastered these looms and moved onto the large wooden ones, and another group came to learn. Thus group-by-group the teaching went on until March 1941.

The work of joining the threads and threading was easy to learn and only needed patience. Once you had learned to join the threads properly, you were all right. But it needed practice. When unpracticed, the results were not good enough for weaving.

When the work began and the young apprentices sat at the looms or did their joining and threading, their backsides ached after a short time, yarn easily broke, tempers rose, there was little patience and they wasted a lot of thread and broke some looms. So before March 1941, products were no good.

Apart from strengthening technical training and raising technical skills, the chief way of dealing with this was political encouragement and education in revolutionary labour discipline. This made the workers consciously realize the important significance of production, made them patient in their work and improved their enthusiasm for production and their labour discipline.

Various methods of education were used to implement military discipline. The head of the supply department, He Weizhong, the head of the military training unit and the branch Party secretary personally came to give guidance every day, explaining that production at the rear was equal to fighting at the front, that they should accept organization, that work was glorious and that they were the working class. We proposed a competition with emulation between apprentices and emulation between male and female workers. We implemented a system of rewards and punishments and a system for getting time off. At the same time each person was given some writing materials every month, and we bought some entertainment equipment.

Thereafter the workers felt that to work was glorious. After work they wanted to study culture and politics and to live a military life. As a result life became organized on military lines. In this way we gradually set up the soldier-worker system, and the factory got going in the right way. Before breakfast there were early-morning exercises and running. After breakfast they went to work. In winter and spring there was a ten-hour day.

We then encountered new difficulties.

The factory site was a hired house. As it was not convenient for work, we built ten or so cave houses ourselves for the workers to live in. Unexpectedly the cave houses were moist and damp, the workers developed sores and many of them could not work. So we changed the new caves into storerooms and the workers moved into the hired house. In June we began to build five stone cave houses for the looms and these were not completed until October. During this period there was nowhere to put the looms. The only thing we could do was to put them in the courtyards and work under tents. In May and June there was early morning dew and it rained often. Wet thread is no good for weaving. In July the weather was hot and the sun strong. The threads became very dry which was also no good for weaving. The only thing we could do then was cover the looms in wet army blankets and pour water on the ground. But this only worked for two or three hours and, as can be imagined, gave a lot of trouble.

The months from June to September passed in this way. The new caves were completed in October and we also built one-story houses with a total of twenty-seven rooms for the workers to live in. Only then were all these problems overcome.

As for raising the workers' technical level, after June the youths gradually became skilled, and some even exceeded the master-workers.

In the first week when they were apprentices they generally only worked for two or three hours a day and made four or five feet of cloth. Alter two or three weeks they worked for seven or eight hours a day and could weave 10 to 40 feet. After April they could do 40 to 50 feet, and by May, 60 to 70. After June, they had all become skilled workers and the best could weave 120 to 130 feet a day. During this time the quality of cloth continuously improved.

We can say that after June 1941 the factory was consolidated and began to develop, having overcome all kinds of difficulties.

(3) Establishing the soldier-worker system

The factory expanded and needed to be regularized. It was very inconvenient for the administrators from the military training unit. And so under the supply department we set up a factory head and a commissar to provide leadership, and drew-up a draft outline for the administration of the factory.

Under the leadership of the head and commissar, the administration was divided into four sections: labour, operations, accounts and general work. These sections divided the tasks and worked together, each with its own responsibility. We stipulated a variety of regulations for meetings, minutes, reports, inspection, livelihood, pay (according to technical skill with the top rate of 10 yuan)and for rewards and punishment. We settled the times for work, study, rest and relaxation. We fixed the scope for democratic life and all kinds of principles for the workshops, dormitories, canteen, days off, leaving the premises and so forth.

By October 1941, everything was properly set up.

After October we felt that the wooden looms were not as good as the iron ones. The cloth the latter produced was of good quality and needed less work. We planned gradually to replace the wooden looms with iron ones. Between January and October 1942 we built iron looms ourselves. However, as one had to be strong and skilful to weave with these looms and there were not enough workers like that, we could not convert entirely to iron looms and we did not build any more. The total was forty-five iron looms and sixty-two wooden looms. Apart from this, we bought thirteen wooden looms for weaving woollen blankets and woollen goods from the Longwan Factory (in spring 1942) and built thirteen wooden looms ourselves. This gave a total of 133 looms. On average we produced about 1,000 bolts of wide cloth, 500 woollen towels and 100 blankets per month.

After May 1942 the pay system was changed into a piecework system giving .70-80 yuan per month at the most ( roughly one-tenth of wages in a privately-run factory), and 20-30 yuan at the least. This increased the workers' enthusiasm to produce. Same workers did not take their noon rest and did not stop work at the end of the working day but kept an working. After some persuasion and education, we overcame this excessive enthusiasm.

We persisted in the soldier-worker system. The factory workers also grew vegetables and raised pigs for their food.

In the winter of 1942 we stopped work for one month to make padded clothing.

In 1941 after all expenses, the factory made a profit of 3,900,000 yuan. In the first ten months of 1942, the profit was 8 million yuan. The value of the factory site, looms, yarn and raw cotton is 5 million yuan ( yarn and cotton 1 minion yuan). We intend to invest several million more to maintain reproduction.

In sum the lessons of experience in running industry are as follows:

(i) The profit earned by the soldier-workers working in textiles, that is the Daguang Hill led by the brigade supply department, is the largest of all the profits earned by the various industrial enterprises. In 1941 the total number of employees was 250 and in 1942 it were 225. After all expenses, its profit in 1941 was 3,900,000 yuan equivalent to the price of 4,000 tan of millet at year-end price (300 jin per tan).

Profit by October 1942 was 8 million yuan, again equivalent to 4,000 tan of millet at current prices in Suide. The average net profit per worker was roughly 18 tan.

In the light of two years' experience and the present circumstances, we shall invest 25,000 yuan per head for the 225 employees of the factory during 1943, not counting buildings and tools, making a total of 5,625,000 yuan. The cloth required for uniforms will be bought from the factory. In this way production for 1943 will earn a net profit per man of 20 tan of millet (because of inflation, it is best to take millet as the standard ) .

Each regiment has a cloth-weaving factory which can produce enough cloth for a hundred men.

In addition, apart from undertakings purely for producing equipment and clothing for the troops such as shoemaking, cloths-making and leather-tanning, the brigade also has roughly 200 blacksmiths and carpenters. In the light of the past two to three years' experience and the prospects for the continued development of the Border Region economy, these craftsmen could make an annual profit roughly equivalent to 6 tan of millet in return for an investment of 1,000 yuan per man.

There is also a papermaking factory and an oil-pressing shop which use as raw materials the sesame seeds and straw coming from the troops' agriculture and malan grass cut by the soldier-workers, for which the factories pay a cheap price. These enterprise employ sixty people with an average net profit per head of 6 tan of millet.

(ii) Besides agriculture, effective operation of the system of soldier-workers is a way of realizing self-sufficiency and solve both commodity and financial problems. Commerce is definitely not as reliable as agriculture and industry. Commerce relies on others, not on oneself, so it is not suitable to do too much of it.

(iii) Shortcomings are: in running a large factory there is a lot of expenses and waste, and there is no fixed amount of capital. This influences reproduction. Therefore in future we must strive to set up a fixed amount of capital.

(iv) In the past we did not take the whole Border Region economy into consideration. Nor did we make a unified plan for the troops' agricultural and industrial production. We could not interlock agriculture, industry, transport and commerce. This was a great failing. Henceforth, we should have unified plans and interrelated management.

The above is a summary of our opinions.

(C) Commerce

Our commerce began with a cooperative and it took six years to develop into large-scale commerce.

In 1937, the brigade was sent across the Yellow River to the area around Guoxian to fight the enemy. After the loss on Taiyuan, commerce was disrupted and city goods could not be moved into the countryside. The common folk did not dare to travel to buy goods. As a result there were great shortages of daily necessities. Oil and salt were out of supply for a while. Both the army and the people had to eat plain food. In these circumstances we set up a cooperative at the request of the people. We allocated animals to go to Ningwu and elsewhere for salt. The supply department put up 300 yuan to buy goods belonging to merchants which were stored in the countryside. We contracted the merchant, Li Maolin, from Yangwu as manager and set up business at Yangwu. It was called '359 Brigade Army-People Cooperative'. The aim was simply to solve difficulties in the supply of salt, oil and so forth, and to handle other necessary goods. At the time the currency had not yet lost value, so, although the capital was small, business was successful. In the short period of six months from October 1937 to April 1938 when the troops moved east, we gained great sympathy among the people of the county. Thousands of people praised us saying that if it were not for the cooperative, they would have died without being killed by the enemy. Making a profit was not the aim at the time, so although business was good we did not earn any money. At the end in April, the capital and profit of 490 yuan was handed over to the troops and used.

In May, 1938, the cooperative personnel went to the Shanxi-Chahar-Hebei Border Region with the troops. When they got to Lingqiu there was another shortage of daily necessities. Both the people and the army suffered. They wanted to continue with the cooperative but had no capital and could think of no way. In August, the cooperative personnel went to the county town of Laiyu county to build up relations with merchants. Through friendly connections they bought goods worth 3,042 yuan on credit. Most of it consisted of bolts of cloth, writing-materials, paper, soap and so forth totaling eleven packs. They returned to Donghenanzhen east of Lingqiu and set up a shop. The suppliers of the goods also came along. Within five days the goods were entirely sold and they got a net profit of 800 yuan. They paid the suppliers 2,042 yuan and presented 1,000 yuan to the frontline troops for buying provisions. With the 800 yuan left over, they returned with the suppliers to Laiyuan to get more goods. This process was repeated several times up until December when the hill for goods was fully repaid. From August to December the operations of the cooperative provided supplies of oil, salt and cloth needed by the people of the Lingqiu region and earner 2,800 yuan to supplement the troops' expenses. In addition there remained goods worth 1,500 yuan.

In January 1939 we moved the 1,500 yuan worth of goods to Xiaguanzhen. We mainly dealt in oil and salt, on the one hand supplying the troops and on the other helping the ordinary folk. since the troops were continuously engaging the enemy at this time, we had over 1,000 wounded. It was not easy to get Western medicines and nutritious foods so the cooperative set up good relations with various merchants and through them got Western medicine, milk, arrowroot and so forth from Tianjin, Beijing, Baoding and other places. This ensured the supply of necessities for the wounded. In September 1939 the brigade received the order to take on the defence of the Yellow River between Shanxi and Shaanxi. The cooperative was closed down. The nine months' business brought in 9,400 yuan. When the troops set off they had no money so 5,400 yuan was paid out in expenses. The remaining goods worth 4,000 yuan were brought west with the troops in five donkey packs. In October we got to Wuliwan in Suide in the Border Region, we sold them for 20,000 yuan and we sent people to Loufan, Wenshui and Jiaocheng to buy writing-materials and cloth. By the end of the year we had 31,000 yuan in goods and cash.

In January 1940 the cooperative moved to Nanguan in Suide. At that time the troops' economy was in great difficulties. We could only rely on the earnings of the cooperative to help pay expenses, so we felt the name 'Army-People Cooperative' was not suitable and changed it into the ' Daguang Store' showing that its goal had changed into making a profit. During that year we built up friendships with some merchants and bought goods either for cash or on credit. We bought writing-materials, cloth, paper, shoes, socks, towels and so forth, and made a profit in the market. We worked hard and by the year-end earned 191,700 yuan. We apportioned 101,700 yuan to the troops to help with the expenses, and kept 90,000 yuan as capital for 1941.

In 1941 the brigade decided to expand its commercial activities as a supplement to the major undertakings in agriculture, industry and transport in order to meet the urgent requirements of the troops. Besides the existing 90,000 yuan capital, a further 250,000 yuan was given from the 400,000 yuan issued to the brigade by the Finance Department for production capital. In addition all the small shops run by the regiments were closed, and their capital of 60,000 yuan collected together. The town capital was 400,000 yuan. Beginning in January 1941 we set up ten branch shops. After a year's operation we got a profit of 2,982,377 yuan of which 982,377 yuan was used to supplement the troops' expenses and 2 million was kept as the store's capital.

In 1942, the store and ten branch shops got a profit of 6,720,080 yuan from operations during spring, summer and autumn. Two million yuan were used to supplement expenditure for the troops and the remaining sum of 4,720,080 yuan in use.

The lessons of experience are:

(i) We helped the ordinary folk to buy cloth, paper, oil, salt and other necessities, and we strengthened relations between the army and the people.

(ii) We helped the troops to buy daily necessities by making it possible for the soldiers' income of 1 yuan to purchase soap, towels, toothbrushes, toothpaste etc., at a time when the Eighth Route Army was in difficult economic circumstances. On the other hand, the troops rightfully bought daily necessities with their money which reduced improper and wasteful behaviour among the troops.

(iii) Building friendships is very important. If we had not had good relations with the merchants of Laiyuan, we could not have bought goods.

(iv) Surplus income supplemented expenditure for our forces.

(v) We sold local products and put limits on goods from outside. However, since we did not inspect strictly and provide firm leadership, some shops could not carry out this work in a pleasant and integrated manner. They only looked after narrow departmental interests and neglected all-round economic construction.

(vi) Before 1940 we did not know much about setting up a Commercial information network, and only knew how to work hard. As a result we suffered quite a few losses from rises and few in prices. In 1941 we set up such a network to report on the situation in various places and built up liaison with some big merchants. We learned of rises and falls in prices at the right time. Therefore we did not make losses of this kind in 1941 and 1942.

(vii) We liaised and worked together with local experienced merchants able to operate outside the Border' Region. When we encountered difficulties in the supply of raw materials for spinning and weaving, we obtained great help. However, we also encountered some rogue merchants who used us to carry out their own business, damaging our operations.

(viii) There were too many people working in the store not earning their keep and adding to expenses.

(ix) Frequent contact with merchants from outside enabled us to understand each other's policies and attitudes, reducing misunderstandings and building friendships.

(x) We tested the cadres' Party spirit, thought and ability.

(xi) Only with strict administration and a correlate system of regulations could the store reduce waste.

(xii) To help stabilize the currency, in 1940 the store changed Guanghua banknotes.

(xiii) Comprehensive preparations, correct and lively application of trading policies, staying within the scope of non-prohibited goods, selling local products and selling necessities solved difficulties in the supply of goods for the army and provided a profit.

(xiv) With the aim of earning money, after January 1941 all the brigade and regimental cooperatives became part of the Daguang Store. The organization took Suide as its centre and set up branches in Suide, Mizhi, Jiaxian, Wuqi, Anding, Yanchuan and Yanchang. The brigade had the Daguang Store, and the regiments had the branches.

(xv) Most personnel in the shops were soldiers given payments according to their jobs. Employees were paid a wage according to their ability, strengths and weaknesses.

(xvi) Most of the goods were bought from northwestern Shanxi during 1941. Afterwards because of the enemy's mopping-up campaigns and the economic blockade (the decline of the nationalist currency and the use of the puppet currency), commodity prices rose. In addition because of our problems with capital, we could not get much money to buy goods. Therefore using the slogan ' resist the enemy's goods and sell local products', we sold the cloth we wove ourselves, and the leather shoes, woollen towels and cloth shoes we produced ourselves. We also sold Daguange soap in even greater quantities. To prevent unprincipled merchants from raising market-prices and to promote the Border Region currency we changed Guanghua banknotes, and lowered the rising market-prices. For example, the salt we extracted ourselves we sold at 2 jin 4 liang per yuan compared to the market-price of 1 jin 4 liang per yuan. Thus we enabled the ordinary folk to buy at cheaper prices. So we can say that in a certain period our aim was not to earn money but to stabilize prices and secure the people's livelihood

(xvii) 'If you knew what would happen in three days' time, you would be rich for thousands of years.' It seems as if trading is a question of finding the right way by accident. If you find a good opportunity, then you can earn money. In fact it is not so. Trading relies entirely on correct estimation, understanding of the situation locally and elsewhere, and understanding the difference between imports and exports. Then you can forecast the rise and fall in commodity prices, and fix the policies for attention in a certain period.

(xviii) A stable currency and secured finances are the: primary conditions for developing business. During the past three years the sudden rise and fall in the value of the Border Region currency and the disruption of finances has influenced trading in commodities and made everything difficult. Another aspect is that this situation has enabled speculative merchants to deal in currency notes. They have earned a lot of money and influenced the economy of the Border Region.

(xix) The various regimental shops have in practice not thoroughly implemented centralized leadership and have competed with each other. They have lacked coordination which is an unhealthy tendency.

(xx) The various regiments have set up an accounting system run by specialists who keep the accounts. However since too many of them were merchants in the past, they did not use new methods of recording and still used the old.

A concrete plan for agricultural production In 1943 has been prepared by 359 Brigade. It is really clear and definite and may be supplied to all units for consideration. The text follows.

359 BRIGADE'S 1943 AGRICULTURAL PRODUCTION PLAN

The military farming system of the troops stationed in the Border Region is one of the basic duties of our army in carrying out the policy of the anti-Japanese national united front and in establishing new democratic politics. Persisting in carrying out this duty enables us to lighten the people's burden, improve the quality of the army and achieve close unity with the people from a position of self-reliance and self-sufficiency. Therefore, in the light of the experience and achievements in carrying out the call from upper levels for production during the past three years, the brigade has drawn up the following plan to strengthen the implementation t of this call and to increase he quantity of production in 1943 .

(A) How should we organize the troops' agricultural production?

(1) All the defence areas where the regiments and troops are stationed have arable land, so we stipulate that each provisions unit should carry out agricultural production according to its manpower and the land situation.

(2) In circumstances where the army is stationed in one place, each provisions unit only needs three cooks for every hundred men. Therefore each provisions unit can select six or seven strong comrades with agricultural experience from among the cooks to specialize in farming.

(3) The deputy battalion head with responsibility for production in each battalion, the head of the special duties in each company, and the deputy officers with responsibility for production in the brigade and regiments have the task of planning and inspection. During spring ploughing, summer weeding and autumn harvesting, they should organize and lead all personnel to take part.

(4) We stipulate that the provisions unit of each combat company, apart from supplying all their own vegetables, should plant 600 mu of grain. Table 8.3 lays down the tasks each unit can shoulder.

(B) The year's plan relies on the spring. This winter we must prepare for the work of the coming spring

(l) Each provisions unit must make a clear register of the land to be planted, how much mountain land, how much river land, how much land that has been farmed, and how much uncultivated land. It must also work out what is going to be planted and how much work, seed and so forth will be required for planting, hoeing and harvesting.

(2) Farming requires oxen, ploughs, and other agricultural tools such as hoes, rakes, baskets and sickles. These should be fully prepared in winter. Actual requirements per provisions unit are three plough-oxen, three ploughs and sixty other implements.

(3) If you do not use manure, the crops do not grow well. Every unit must collect manure. All nightsoil, animal manure, and wood and straw ashes must be gathered. Pay attention to control of lavatories, pig-sties, sheep-pens, and oxen and horse-stables. We must put at least 4 tan of manure on each mu of land. In many places there are grass roots from flooded land and tree leaves. These can be moved to the farmed land for burning.

Table 8.4 lists the amount of preparatory work to be undertaken by all units and by the brigade as a whole.

TABLE 8.4 -- PREPARATORY WORK NECESSARY BY SPRING 1944

(C) How much money is needed and how many workdays?

(1) Oxen, ploughs and other implements all cost money to buy or make. This is capital. In addition there is manure and seeds which come to at least 800 yuan for 600 mu. Total capital for 600 mu, and for the land formed by the units and for the brigade as a whole, is shown [in Tables 8.5 and 8.6].

TABLE 8.5 -- CAPITAL NEEDED TO FARM

600 mu

NB (i) Each ox is reckoned at 4,000 yuan.
(ii) Each plough at 200 yuan.
(iii) Each implement at 100 yuan.
(iv) Ox fodder at 900 yuan per animal.

TABLE 8.6 - CAPITAL NEEDED FOR THE LAND FARMED BY THE UNITS AND BY THE BRIGADE AS A WHOLE (yuan)

(2) How many workdays are required on 600 mu, from opening up the land and sowing seed to harvesting? It is estimated that opening land and sowing seed requires 500 days; preparation and spreading of manure, 800 days; three weddings, 1,800 days; and harvesting, 450 days. This makes 3,550 days in all.

Note: six cooks farming 600 mu throughout the year can do at least 1,000 workdays; 3,550 work days minus 1,000 leaves 2,550. Each provisions unit has a hundred men so each man has to do twenty-five days' agricultural labour during the year.

(D) The type of crops and the harvest

(1) Find out what is the most suitable grain to be planted according to the land. In general, plant spiked millet [gu (zi)], millet [su], goaliang, maize [baogu], beans, rice and so forth. In addition, also consider the needs of the troops and plant hemp for sandals, lamp-oil and cooking-oil Some units can plant cotton.

The seventh regiment can plant 200 mu of cotton. Estimating a harvest of 30 jin of cotton per mu, the total will be 6,000 jin. At a value of 50 yuan per jin this will be equal to 300,000 yuan.

Each company in the special duties battalion [tewuying] should plant 80 mu of cotton in addition to its 600 mu of grain. This can give an estimated harvest of 2,400 jin worth 120,000 yuan. The battalion headquarters can plant 20 mu giving 600 jin worth 30,000 yuan.

(2) Reckoning at 4 tou of hulled grain for every 3 mu, 600 mu can produce 80 tan of hulled grain, and the 39,000 mu of the whole brigade can produce 5,200 tan. At a value of 1,250 yuan per tan, the crop from 600 mu will be worth 100,000 yuan, and that of the brigade's 39,000 mu, 6 5 million yuan.

(3) In each 600 mu, it is estimated that 300 will be planted to spiked millet. Each mu will Produce 300 jin of hay giving a total of 90,000 jin. At a value of 1 yuan per jin, 600 mu will produce hay worth 90,000 yuan, and the whole brigade will produce hay worth 5,850,000 yuan.

The harvest totals are given [in Tables 8.7 and 8.8].

TABLE 8.7 -- HARVEST TOTAL ON 600 mu

TABLE 8.8 -- HARVEST FOR 359 BRIGADE

After each regiment and unit has received this plan, it should at once call a meeting of production cadres to discuss implementation. The general plan for the regiment or unit and the plan for each provisions unit ( including their own plans for vegetables, edible oil, lamp-oil, hemp for making sandals and so forth for which they have been self-sufficient for three years) should be reported upwards by the end of November. It is important that this should be obeyed.

The above materials show us that the army's self-supporting production has undoubtedly achieved a great deal. What have these achievements depended on? These have depended on the active leadership of the cadres and the labour enthusiasm of the troops. The cadres have given active leadership to the production movement consciously in order to overcome difficulties in the course of the revolution. The troops have taken part in productive labour consciously in order to overcome difficulties in the course of the revolution. If these two groups had not had this conscious awareness, if they had not felt that their work was not for others but for themselves, not for some worthless cause but for the sacred cause of the revolution, there would have been no ways for them to fulfil these difficult production tasks. If they had felt they were hired labourers, if they had felt that the production they carried out had no relationship to their own interests and no relationship to the common revolutionary cause, there would have been no way to fulfil these production tasks.

Above we have discussed the fine experience and great achievements of our army in self-supporting production. Below we shall again discuss the shortcomings in our work.

Our work has shortcomings, and these shortcomings are not only found in the army but also in the official organizations and schools. Some of these shortcomings were unavoidable in the past. However, after five years' experience we should be able to correct them. Some have already become serious abuses. If we do not correct them, they will hinder the interests of the Party and the revolution.

What are these shortcomings?

First, in order to solve urgent problems of self-sufficiency quickly some army units and some official organizations and schools have relatively or specially stressed commerce and neglected agriculture and industry. They do not realize that only agriculture and industry produce value. Commerce is merely a medium of circulation. It cannot produce any value itself. Warned by experience, the production task for all forces and official organizations and schools in 1943 is gradually to transfer the again emphasis to agriculture, industry and transport. In our present circumstances, agriculture is particularly important since the majority of the things we need are agriculture products (staple grain, miscellaneous grain, vegetables, hemp, meat, vegetable-oil, animal-oil, cotton, horse-fodder, timber, firewood, etc.). Agricultural products can also be exported in exchange for industrial products. If we also undertake some possible and necessary handicrafts (spinning yarn, spinning wool, making shoes, weaving woollen thread and garments, digging coal, sawing wood, pressing oil, etc.) and large light industry (textiles, papermaking), we can meet the majority of our daily requirements and produce enough for trading.

The second shortcoming is that we lack unified planning and unified inspection. Lower levels act without coordination and upper levels either do not have or lack sufficient unified direction, planning and inspection of policy principles and work content. As a result the various branches do not know what they should not do, or do know but still do it. Thus instances of lack of coordination or struggling for independence often occur. Incidents have arisen where policy principles and government orders have been broken, where the people's interests have been damaged, where various economic units have not only not cooperated but have competed and hindered each other, where the upper levels have been deceived and not the lower levels, or where both have been deceived, where things have been kept back or where lies have been told. There has been great waste, reckless spending, concentration on show and not on results. Particularly serious are cases of the evils of bribery and corruption among cadres. Some cadres have been enticed by material things and are not loyal to the sacred cause of communism, having become completely corrupt. Other cadres, have been poisoned, and can only get back to health by drying out in the sun. All these bad things and all this corruption have occurred to a lesser or greater extent among some parts of the army and in some official organizations and schools. Henceforth, all upper-level leadership organs in the army and the official organizations and schools must place emphasis on looking after the whole situation and on grasping policy. They must provide unified planning and inspection for the productive activities of all subordinate units. They certainly must not permit the abuses described above to occur again. If they do occur again, they must be strictly disciplined. Less important cases should be criticized and serious ones punished. We certainly cannot condone them or, to use a flattering term, 'have a liberal policy'. These are the three work styles for rectification in economic work. We must carry them out without the slightest delay.

The third shortcoming is that in the production activities of many army units, official organizations and schools, the cadres responsible for administration and control do not take many pains. A minority even pay no attention at all and merely entrust every thing to the supply organ or to the general office. This is because they still do not understand the importance of economic work. And the reason they still do not understand it is because they have been poisoned by the deceitful corrupting words off metaphysicisis like Dong Zhongshu, 'Conform to the required meets and do not seek gain, be concerned with the way and do not plan for merit', and have not yet cast them fully aside. It is also because they consider politics, Party and army affaires come first and are most important, while economic work, although also important, is not important to the same degree. They feel that they themselves do not have to divide their attention or to give much attention by being concerned. However, these attitudes are entirely wrong. In the present situation in the Shaan-Kan-Ning Border Region, the great majority of people have work to do. If you talk of revolution, then in the final analysis apart from economic work and educational work (including theoretical education, political education, military education, cultural education, technical education, professional education and national education) what other work is worthy of the names central or primary work? Is there any other work that is more revolutionary? True, there is other work and a lot of it, but the central or primary work for the majority of comrades in the present situation in the Border Region is certainly economic work and educational work. All other work is only significant in the context of these two. If we conscientiously carry out these two items of work, we can consider that we have done well in supporting the war at the front and in helping the people of the great rear areas. Of the two, education (or study) cannot. be carried out alone. We are not in a time when 'official rank lies in study'. We cannot go and 'conform to the requirements and illuminate the way' with hungry stomachs. We must get food to eat. We must pay attention to economic work. Talking of education or study separately from economic work is merely using superfluous and empty words. Talking of 'revolution' separately from economic work is like making revolution against the Finance Department and against yourselves. The enemy will not be in the least hurt by you. Because we have many comrades with leadership responsibilities who still take the attitude of neglecting or not paying much attention to economic work, many other comrades copy them, being willing to do Party; government, army and educational work, or to work in literature and art but unwilling to do economic work. Some female comrades are unwilling to marry economic workers, imploring that they consider them dishonunrable. They consider that marrying the head of a mule-and-horse-team would be an insult and they would rather marry a political-worker. In fact all these view-points are very wrong and do not match the situation in this time and place. We must make a new division of labour. We need some revolutionary specialists who are separate from production affairs. We also require some doctors, literature and art workers, and so forth. But we do not want many people like this. If there are too many then danger arises. If those who eat are many and those who produce are few, if those who are employed suffer and those who benefit are comfortable, we shall collapse. Therefore many cadres must be transferred from their present work or study to economic posts. Chief responsible cadres at all levels in the Party, government and army must at the same time pay full attention to leading economic work. They must investigate and study the content of economic work, be responsible for making plans for economic work, allocate cadres for economic work, inspect the results of economic work, and never again entrust this extremely important work to the supply departments or general offices alone and wash their hands of it.

The fourth shortcoming is that in the past some army units and official organizations have not had a division of labour between levels when allocating production tasks. All levels from brigade to company and from upper level to lower level have been permitted to run commerce without any limits. Thus many defects have arisen. Henceforth most commerce, industry and transport should be concentrated in brigades, in regiments working in independent areas and in upper-level organs. Furthermore these must work according to correct principles. Trade with the outside must be united under the direction of the Commodities Bureau. Units under regiments working in an independent area, units at battalion level or below, and most lower-level organs should be instructed to carry out agriculture, handicrafts that can be done by troops or miscellaneous personnel and business or trading of the consumer cooperative type. They are not allowed to do other work.

In the light of achievements and Shortcomings over the past five years, the concrete tasks for the various units of the army in 1943 are as follows:

(1) With the exception of most of the grain and some of the bedding and clothing which are supplied by the government, the great majority of army units should provide 80 per cent of their own supplies. Some units (such as 359 Brigade) should provide 100 per cent. Only those in special circumstances (such as the cavalry) can be allowed to bear a lighter production burden, and they too should think of ways to provide more in 1944. All forces should prepare to increase self-sufficiency in grain and clothing and bedding in 1944 so as to reduce the burden on the people and to let them build up their strength.

(2) With the exception of 359 Brigade, which is already fully carrying out the military farming system, or the cavalry, which would find it difficult because of special circumstances to implement that system at once, and of those with garrison duties, all other forces should carry out the policy of military farming in individual units or several units together so as to increase agricultural production.

(3) All units from top to bottom should carry out production in an organized, led and planned way. Set up production committees at all levels from brigade to company, and carry out collective planning and inspection at each level. Study in production techniques so as to increase production and improve supplies. Correct all irregular phenomena.

(4) Select cadres strong in politics and ability to administer production and supply work in each department. Existing economic cadres should be examined. Incompetents and those who have committed corrupt and decadent errors must be transferred. Particularly serious cased must be punished. Every unit must set up a deputy battalion head with responsibility for production and personnel to administer production in companies. These people should specially control production and the distribution of tasks for whole battalions and whole companies. Brigade units and regimental units should establish deputy officers with responsibility for production to administer the production work of the units themselves. The commanding officer of each level must personally plan and inspect economic work.

(5) All economic and financial work of the Party, government and army in each sub-region should carry out coordinated cost-accounting under the leadership of the finance sub-committee of the sub-region. In order to stimulate the activism of the production and working personnel of all units, it should permit them to spend a suitable amount of the results of their production on improving their livelihood. Everything apart from this should be distributed in a coordinated way so as to avoid the problem of unequal benefits. Some coordinated distribution should be applied throughout the Border Region as a whole, some within the sub-regions, some within the various systems, and some within units. It can be decided according to the nature of production and the economic situation.

(6) Implement the policy of 'giving consideration to both the army and the people'. The economic activities of the army, Party and government should harmonize with the economic activities of the people. Anything which damages the people's interests or causes them dissatisfaction is not allowed.

(7) Production and education cannot be out of balance. All units must carefully plan both kinds of work and their mutual relationships. Correctly share out the time for each so that production and education in 1943 can be greater and better than in 1942. We have had five years' experience and it is entirely possible to achieve this aim..

(8) The core of the army's political work is to ensure the fulfilment of its production and education plans, to ensure that while it is carrying out these plans there are correct relationships with the Party, government, and people, to ensure the correct relationship between upper and lower levels within the army itself, and to ensure the purity of economic cadres. If political work does not fulfil its own task in these areas then it will be defeated.

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