Red Star over China (33 page)

Additional help was given to the poor farmers in the form of loans at very low rates of interest or no interest at all. Usury was entirely abolished, but private lending, at rates fixed at a maximum of 10 per cent annually, was permitted. The ordinary government lending rate was 5 per cent. Several thousand simple agricultural implements made in the Red arsenals, and thousands of pounds of seed grain, were supplied to landless peasants breaking wasteland. A primitive agricultural school had been established, and I was told it was planned to open an animal-husbandry school as soon as an expert in this field, expected from Shanghai, had arrived.

A cooperative movement was being vigorously pushed. These activities extended beyond production and distribution cooperatives, branching out to include cooperation in such novel (for China) forms as the collective use of farm animals and implements—especially in tilling public lands and Red Army lands—and in the organization of labor mutual-aid societies. By the latter device great areas could be quickly planted and harvested collectively, and periods of idleness by individual farmers eliminated. The Reds saw to it that a man earned his new land! In busy periods the system of “Saturday Brigades” was used, when not only all the children's organizations but every soviet official, Red partisan, Red Guard, women's organization member, and any Red Army detachment that happened to be nearby, were mobilized to work at least one day a week at farming tasks. Even Mao Tse-tung took part in this work.

Here the Reds were introducing the germs of the drastically revolutionary idea of collective effort—and doing primary education work for some future period when collectivization might become practicable. At the same time, into the dark recesses of peasant mentality there was slowly penetrating the concept of a broader realm of social life. For the organizations created among the peasantry were what the Reds called three-in-one: economic, political, and cultural in their utility.

What cultural progress the Reds had made among these people was by advanced Western standards negligible indeed. But certain outstanding evils common in most parts of China had definitely been eliminated in the score of long-sovietized counties in north Shensi, and a crusade of propaganda was being conducted among inhabitants of newer areas to spread the same elementary reforms there. As an outstanding achievement, opium had been completely eliminated in north Shensi, and in fact I did not see any sign of poppies after I entered the soviet districts. Official corruption was almost unheard-of. Beggary and unemployment did seem to have been, as the Reds claimed, “liquidated.” I did not see a beggar during all my travels in the Red areas. Foot binding and infanticide were criminal offenses, child slavery and prostitution had disappeared, and polyandry and polygamy were prohibited.

The myths of “communized wives” and “nationalization of women” are too patently absurd to be denied, but changes in marriage, divorce, and inheritance were in themselves extremely radical against the background of semifeudal law and practice elsewhere in China. Marriage regulations
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included interesting provisions against mother-in-law tyranny, the buying and selling of women as wives and concubines, and the custom of “arranged matches.” Marriage was by mutual consent, the legal age
had been moved up sharply to twenty for men and eighteen for women, dowries were prohibited, and any couple registering as man and wife before a county, municipal, or village soviet was given a marriage certificate without cost. Men and women actually cohabiting were considered legally married, whether registered or not—which seemed to rule out “free love.” All children were legitimate under soviet law.

Divorce could also be secured from the registration bureau of the soviet, free of charge, on the “insistent demand” of either party to the marriage contract, but wives of Red Army men were required to have their husbands' consent before a divorce was granted. Property was divided equally between the divorcees, and both were legally obliged to care for their children, but responsibility for debts was shouldered by the male alone (!), who was also obliged to supply two-thirds of the children's living expenses.

Education, in theory, was “free and universal,” but parents were obliged to supply their children with food and clothing. In practice, nothing like “free and universal” education had yet been achieved, although old Hsu Teh-li, the commissioner of education, boasted to me that if they were given a few years of peace in the Northwest they would astound the rest of China with the educational progress they would make. Further on I was to learn in more detail what the Communists had done and hoped to do to liquidate the appalling illiteracy of this region, but first it was interesting to know how the government was financing not only the educational program, such as it was, but this whole seemingly simple and yet in its way vastly complex organism which I have called soviet society.

It was imperative for soviet economy to fulfill at least two elementary functions: to feed and equip the Red Army, and to bring immediate relief to the poor peasantry. Failing in either, the soviet base would soon collapse. To guarantee success at these tasks it was necessary for the Reds, even from the earliest days, to begin some kind of economic construction.

Soviet economy in the Northwest was a curious mixture of private capitalism, state capitalism, and primitive socialism. Private enterprise and industry were permitted and encouraged, and private transaction in the land and its products was allowed, with restrictions. At the same time the state owned and exploited enterprises such as oil wells, salt wells, and coal mines, and it traded in cattle, hides, salt, wool, cotton, paper, and other raw materials. But it did not establish a monopoly in these articles, and in all of them private enterprises could, and to some extent did, compete.

A third kind of economy was created by the establishment of cooperatives, in which the government and the masses participated as partners, competing not only with private capitalism, but also with state capitalism! But it was all conducted on a very small and primitive scale. Thus although the fundamental antagonisms in such an arrangement were obvious, and in an economically more highly developed area would have been ruinous, here in the Red regions they somehow supplemented each other.

The Reds defined the cooperative as “an instrument to resist private capitalism and develop a new economic system,” and they listed its five main functions as follows: “to combat the exploitation of the masses by the mer
chants; to combat the enemy's blockade; to develop the national economy of the soviet districts; to raise the economic-political level of the masses; and to prepare the conditions for Socialist construction”—a period in which “the democratic revolution of the Chinese bourgeoisie, under the leadership of the proletariat, may create energetic conditions enabling the transition of this revolution into socialism.”
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The first two of those high-sounding functions in practice meant simply that the cooperative could help the masses organize their own blockade-running corps, as auxiliaries to the blockade-running activity of the government. Trade between Red and White districts was prohibited by Nanking, but by using small mountain roads, and by oiling the palms of border guards, the Reds at times managed to carry on a fairly lively export business. Taking out raw materials from the soviet districts, the transport corps in the service of the state trade bureau or the cooperatives exchanged them for Kuomintang money and needed manufactures.

Consumption, sales, production, and credit cooperatives were organized in the village, district, county, and province. Above them was a central bureau of cooperatives, under the finance commissioner and a department of national economy. These cooperatives were really constructed to encourage the participation of the lowest strata of society. Shares entitling the purchaser to membership were priced as low as fifty cents, or even twenty cents, and organizational duties were so extensive as to bring nearly every shareholder into the economic or political life of the cooperative. While there was no restriction on the number of shares an individual member could buy, each member was entitled to but one vote, regardless of how many shares he held. Cooperatives elected their own managing committees and supervisory committees, with the assistance of the central bureau, which also furnished trained workers and organizers. Each cooperative had departments for business, propaganda, organization, survey, and statistics.

Various prizes were offered for efficient management, and widespread propaganda stimulated and educated the peasants concerning the usefulness of the movement. Financial as well as technical help was furnished by the government, which participated in the enterprises on a profit-sharing basis, like the members. Some $70,000 in non-interest-bearing loans had been invested by the government in the cooperatives of Shensi and Kansu.

Only soviet paper was in use, except in the border counties, where White paper was also accepted. In their soviets in Kiangsi, Anhui, and Szechuan the Reds minted silver dollars, and subsidiary coins in copper, and some also in silver, and much of this metal was transported to the
Northwest. But after the decree of November, 1935, when Nanking began the confiscation of all silver in China, and its price soared, the Reds withdrew their silver and held it as reserve for their note issue.

Paper currency in the South, bearing the signature of the “Chinese Workers' and Peasants' Soviet Government State Bank,” was excellently printed, on good bank paper. In the Northwest, technical deficiencies resulted in a much cruder issue on poor paper, and sometimes on cloth. Their slogans appeared on all money. Notes issued in Shensi bore such exhortations as: “Stop civil war!” “Unite to resist Japan!” “Long live the Chinese revolution!”

But how could merchants sell articles imported from the White regions for currency which had no exchange value outside the soviet districts? This difficulty was met by the state treasury, which had fixed an exchange rate of soviet $1.21 to Kuomintang $1. Regulations provided that “all goods imported from the White districts, and sold directly to the State Trade Bureau, will be paid for in foreign [Kuomintang] currency; imports of necessities, when not sold directly to the State Trade Bureau, but through cooperatives or by private merchants, shall first be registered with the State Trade Bureau, and proceeds of their sale for soviet currency may be exchanged for White paper; other exchange will be given when its necessity is established.”
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In practice this of course meant that all “foreign” imports had to be paid for in “foreign” exchange. But as the value of imported manufactures (meager enough) greatly exceeded the value of soviet exports (which were chiefly raw materials, and were all sold in a depressed market as smuggled goods), there was always a tendency toward a heavy unfavorable balance of payments. In other words, bankruptcy. How was it overcome?

It was not, entirely. As far as I could discover, the problem was met principally by the ingenuity of Lin Tsu-han, the dignified white-haired Commissioner of Finance, whose task was to make Red ends meet. This interesting old custodian of the exchequer had once been treasurer of the Kuomintang, and behind him lay an amazing story.

Son of a Hunanese schoolteacher, Lin Tsu-han was born in 1882, educated in the Classics, attended normal college at Changtehfu, and later studied in Tokyo. While in Japan he met Sun Yat-sen, then exiled from China by the Manchus, and joined his secret revolutionary society, the Tung Meng Hui. When Sun merged his Tung Meng Hui with other revolutionary groups to found the Kuomintang, Lin became a charter member. Later on he met Ch'en Tu-hsiu, was much influenced by him, and in 1922 joined the Communist Party. He continued to work closely with
Dr. Sun Yat-sen, however, who admitted Communists to his party, and Lin was in turn treasurer and chairman of the General Affairs Department of the Kuomintang. He was with Sun Yat-sen when he died.

At the beginning of the Nationalist Revolution, Lin was one of the several elders in the Central Executive Committee of the Kuomintang who held seniority over Chiang Kai-shek. In Canton he was chairman of the Peasant Department and during the Northern Expedition he became political commissar of the Sixth Army, commanded by General Ch'eng Ch'ien—the late chief of staff at Nanking. When Chiang Kai-shek began the extermination of the Communists in 1927, Lin denounced him, fled to Hongkong, and then to Soviet Russia, where he studied for four years in the Communist academy. On his return to China he took passage on the “underground railway” and safely reached Kiangsi. Now a widower, Lin had not seen his grown-up daughter and son since 1927. At the age of forty-five he had abandoned the comfortable assets of his position and staked his destiny with the young Communists.

Into my room in the Foreign Office one morning came this fifty-five-year-old veteran of the Long March, wearing a cheerful smile, a faded uniform, a red-starred cap with a broken peak, and in front of his kindly eyes a pair of spectacles one side of which was trussed up over his ear with a piece of string. The Commissioner of Finance! He sat down on the edge of the
k'ang
and we began to talk about sources of revenue. The government, I understood, collected practically no taxes; its industrial income must be negligible; then where, I wanted to know, did it get its money?

Lin began to explain: “We say we do not tax the masses, and this is true. But we do heavily tax the exploiting classes, confiscating their surplus cash and goods. Thus all our taxation is direct. This is just the opposite of the Kuomintang practice, under which ultimately the workers and the poor peasants have to carry most of the tax burden. Here we tax less than 10 per cent of the population—the landlords and usurers. We also levy a small tax on a few big merchants, but none on small merchants. Later on we may impose a small progressive tax on the peasantry, but at the present moment all mass taxes have been completely abolished.