While we must develop the public sector of our economy, we should not forget the importance of help from the people. They have given us grain, 90,000 tan in 1940, 200,000 in 1941 and 160,000 in 1942, thus ensuring food for our troops and civilian personnel. Up to the end of 1941, the grain output of the public sector of our agriculture was meagre and we relied on the people for grain. We must urge the army to produce more grain, but for a time we shall still have to rely mainly on the people. Although the Shensi-Kansu-Ningsia Border Region is in the rear and has not suffered direct war damage, it has only 1,500,000 inhabitants, a small population for so large an area, and the provision of such large quantities of grain is not easy. Besides, the people transport salt for us or pay a salt transport levy, and in 1941 they purchased five million yuan worth of government bonds; all of which represents no small burden. To meet the needs of the War of Resistance and national reconstruction, the people must shoulder such burdens, the necessity of which they very well realize. When the government is in very great difficulties, it is necessary to ask the people to bear a heavier burden, and they understand that too. But while taking from the people we must at the same time help them to replenish and expand their economy. That is to say, appropriate steps and methods must be adopted to help the people develop their agriculture, animal husbandry, handicrafts, salt industry and commerce, so that they gain at the same time as they give and, moreover, gain more than they give; only thus can we sustain a long war against Japan.
Disregarding the needs of the war, some comrades insist that the government should adopt a policy of "benevolence". This is a mistake.
For unless we win the war against Japan, such "benevolence" will mean nothing to the people and will benefit only the Japanese imperialists. Conversely, although the people have to carry rather heavy burdens for the time being, things will get better for them as the difficulties confronting the government and the troops are overcome, the War of Resistance is sustained and the enemy is defeated; and this is where the true benevolence of the revolutionary government lies.
Another mistake is "draining the pond to catch the fish", that is, making endless demands on the people, disregarding their hardships and considering only the needs of the government and the army. That is a Kuomintang mode of thinking which we must never adopt. Although we have temporarily added to the people's burden, we have immediately set to work building the public sector of our economy. In the years 1941 and 1942 the army, the government and other organizations and the schools met most of their needs by their own efforts. This is a wonderful achievement without precedent in Chinese history, and it contributes to the material basis of our invincibility. The greater our self-supporting economic activities, the more we shall be able to lighten the people's tax burdens. In the first stage, from 1937 to 1939, we took very little from them; during this stage they were able to build up considerable strength. In the second stage, from 1940 to 1942, the burden on the people was increased. The third stage will begin in 1943. In the next two years, 1943 and 1944, if the public sector of our economy continues to grow and if all or most of our troops in the Shensi-Kansu-Ningsia Border Region are in a position to engage in farming, then by the end of 1944 the people's burden will again be lightened, and they will again be able to build up strength. This is a possibility which we should prepare to turn into actuality.
We must refute all one-sided views and advance the correct slogan of our Party, "Develop the economy and ensure supplies". With regard to the relation between public and private interests, our slogans are "Give consideration to both public and private interests" and "Give consideration to both troops and civilians". We consider only such slogans to be correct. We can guarantee our financial needs only by expanding both the public and the private sectors of our economy in a realistic and practical way. Even in difficult times we must take care to set a limit to taxation so that the burdens, though heavy, will not hurt the people. And as soon as we can, we should lighten the burdens so that the people can build up strength.
The Kuomintang die-hards regard construction in the Border Region as a hopeless undertaking and the difficulties here as insurmountable; they are expecting the Border Region to collapse any day. It is not worth arguing with such people; they will never see the day of our "collapse" and we shall unquestionably grow more and more prosperous. They do not understand that under the leadership of the Communist Party and the Border Region revolutionary government the masses always give their support to the Party and government. And the Party and the government will always find ways to get over economic and financial difficulties, however serious. In fact we have already pulled through some of our recent difficulties and will soon overcome others. We encountered difficulties many times greater in the past and surmounted them all. With intense fighting going on every day, our base areas in northern and central China are now facing much greater difficulties than the Shensi-Kansu-Ningsia Border Region, but we have already held out for five and a half years in these areas and can certainly continue to do so till victory. For us, there is no ground for pessimism; we can conquer any difficulty.
After the present conference of senior cadres of the Shensi-Kansu-Ningsia Border Region we shall put into effect the policy of "better troops and simpler administration". It must be carried out strictly, thoroughly and universally, and not perfunctorily, superficially or partially. In carrying it out, we must attain the five objectives of simplification, unification, efficiency, economy and opposition to bureaucracy. These five objectives have a very important bearing on our economic and financial work. Simplification will reduce non-productive expenditures and increase our income from production; it will not only have a direct and healthy effect on our finances, but will lighten the people's burdens and benefit them economically. In our economic and financial set-up, we must overcome such evils as disunity, assertion of independence and lack of co-ordination, and must establish a working system which is unified and responsive to direction and which permits the full application of our policies and regulations. With the establishment of such a unified system working efficiency will rise. All our organizations, and particularly those engaged in economic and financial work, must pay attention to thrift. By practising thrift we can cut out a great deal of unnecessary and wasteful expenditure, which amounts possibly to tens of millions of yuan. Finally, people engaged in economic and financial work must overcome surviving bureaucratic practices, some of which, such as
corruption and graft, over-elaborate organization, meaningless "standardization" and red tape, are very serious. If we fully attain these five objectives in the Party, the government and the army, our policy of "better troops and simpler administration" will achieve its purpose, our difficulties will surely be overcome, and we shall silence the gibes about our approaching "collapse".
These figures are the totals paid in agricultural tax (public grain) by the peasants of the Shensi-Kansu-Ningsia Border Region from 1940 to 1942.
For "better troops and simpler administration" see "A Most Important Policy", pp. 99-102 of this volume.