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enforcing an economic blockade, unscrupulous merchants and reactionaries are disrupting our finance and commerce, and the trade of our Red areas with the outside is seriously hampered. Will not the revolutionary war be seriously affected unless these difficulties are overcome? Salt is very dear, and sometimes even unobtainable. Rice is cheap in the autumn and winter, but it becomes terribly dear in spring and summer. All this directly affects the life of the workers and peasants and prevents any improvement. And does it not affect our basic line -- the alliance of workers and peasants? If the workers and peasants become dissatisfied with their living conditions, will it not affect the expansion of our Red Army and the mobilization of the masses for the revolutionary war? Therefore it is utterly wrong to think that no economic construction should be undertaken in the midst of the revolutionary war. Those who think this way often say that everything should be subordinated to the war effort, but they fail to understand that to dispense with economic construction would weaken the war effort rather than subordinate everything to it. Only by extending the work on the economic front and building the economy of the Red areas can we provide an adequate material basis for the revolutionary war, proceed smoothly with our military offensives and strike effective blows at the enemy's "encirclement and suppression" campaigns; only thus can we acquire the resources to enlarge the Red Army and push our front outwards to points thousands of li away, so that when the circumstances prove favourable, the Red Army will be able to attack Nanchang and Kiukiang free from all anxiety and, thus relieved of much of the task of provisioning itself, give its undivided attention to fighting; and only thus can we to a certain extent satisfy the material needs of the people so that they will join the Red Army or undertake other revolutionary tasks with even greater enthusiasm. Subordinating everything to the war effort means just this. Among those engaged in revolutionary work in various places, many do not yet understand the importance of economic construction in the revolutionary war, and there are many local governments which give little attention to discussing the problems of economic construction. The economic departments of the local governments are not yet well organized, and some are still without a director; in others some incompetent has been assigned simply to fill the post. The formation of co-operatives is still in the initial stage, and only in a few places has the work of regulating food supplies been started. There has been no propaganda among the people for the work of economic construc

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tion (though such propaganda is very important), and mass enthusiasm for it has not been aroused. All this is due to the failure to recognize the importance of economic construction. Through the discussions at this conference and through the reports you will make when you return to your posts, we must create mass enthusiasm for economic construction among all government personnel and among all workers and peasants. The importance of economic construction for the revolutionary war should be made clear to everyone, so that they will do their best to promote the sale of economic construction bonds, develop the co-operative movement, and set up public granaries and storehouses for famine relief everywhere. Each county must establish a sub-department for the regulation of food supplies, with branch offices in important districts and market centres. On the one hand, within our Red areas we should send grain from places with a surplus to those with a deficit, so that it will not pile up in one place and become unobtainable in another and its price will not be too low in one place and too high in another; on the other hand, we should send our grain surplus out of the Red areas in a planned way (i.e., not in unlimited quantities) and bring in necessities from the White areas, thus avoiding exploitation by unscrupulous merchants. We must all do our best to develop agriculture and handicrafts and increase the output of farm implements and lime in order to ensure a bigger crop next year, and we must restore the output of such local products as wolfram, timber, camphor, paper, tobacco, linen, dried mushrooms and peppermint oil to former levels, and market them in the White areas in quantity.

    Judged by volume, grain ranks first among the principal outgoing commodities in our trade with the outside areas. About three million piculs of unhusked rice are sent out yearly in exchange for necessary consumer goods, or an average of one picul a head of the three million population; it cannot, surely, be less than this. But who is handling this trade? It is handled entirely by the merchants who exploit us ruthlessly in the process. Last year they bought unhusked rice from the peasants in Wanan and Taiho Counties at fifty cents a picul and sold it in Kanchow for four yuan, making a sevenfold profit. Take another instance. Every year our three million people need about nine million yuan worth of salt and six million yuan worth of cotton cloth. Needless to say, this fifteen million yuan trade in salt and cloth has been entirely in the hands of the merchants; we have done nothing about it. The exploitation by the merchants is really enormous. For

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instance, they go to Meihsien and buy salt at one yuan for seven catties, and then sell it in our areas at one yuan for twelve ounces. Is this not shocking profiteering? We can no longer ignore such a state of affairs, and from now on we must handle this trade ourselves. Our department of trade with outside areas must make a great effort in this connection.

    How shall we use the three million yuan from economic construction bonds? We plan to use it in the following way. One million will be allotted for the Red Army's war expenses, and two million will be loaned as capital to the co-operatives, the Bureau for the Regulation of Food Supplies and the Bureau of External Trade. Of the latter amount, the greater part will be used for expanding our external trade and the rest for expanding production. Our objective is not only to expand production but also to sell our products at fair prices to the White areas and then purchase salt and cloth cheaply for distribution among our people, so as to break the enemy's blockade and check the merchants' exploitation. We must bring about the continued growth of the people's economy, greatly improve the livelihood of the masses and substantially increase our public revenue, thus laying firm material foundations for the revolutionary war and for economic construction.

    This is a great task, a great dass struggle. But we should ask ourselves, can it be accomplished in the midst of fierce fighting? I think it can. We are not talking about building a railway to Lungyen or, for the time being, even about building a motor road to Kanchow. We are not saying that there should be a complete monopoly of the sale of grain, or that the government should handle all the salt and cloth trade, valued at fifteen million yuan, to the total exclusion of the merchants. This is not the point we are making or what we are trying to do. What we are talking about and trying to do is to develop agriculture and the handicrafts, and send out grain and wolfram in exchange for salt and cloth, starting temporarily with a fund of two million yuan plus the money invested by the people. Is there anything here that we should not undertake, or that we cannot undertake and achieve? We have already started this work and achieved some results. This year's autumn harvest is between 20 and 25 per cent larger than last year's, or more than our original estimate of a 20 per cent increase. In the handicraft industries the production of farm implements and lime is being restored, and we are beginning to restore wolfram production. The output of tobacco, paper and timber is recovering. Much has been accomplished this year in the regulation of food supplies. A

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start has been made on importing salt. It is on these achievements that we base our firm belief in the possibility of further progress. Is it not clearly wrong to say that economic construction is impossible now and has to wait until the war is over?

    It is thus clear that, at the present stage, economic construction must revolve around our central task, the revolutionary war. Today the revolutionary war is our central task, which economic construction should serve, centre on and be subordinated to. It would likewise be wrong to regard economic construction as the centre of all our present work to the neglect of the revolutionary war, or to conduct it apart from the revolutionary war. Not until the civil war is over will it be possible and necessary to regard economic construction as the centre of all our work. In the midst of a civil war, it is sheer delusion to try to carry out such peace-time economic construction as can and should be done in the future but not at present. The tasks for the present are those urgently demanded by the war. Every one of them should serve the war; none is a peace-time undertaking separate from the war. If any comrade entertains the idea of carrying out economic construction apart from the war, he should correct this mistake at once.

    It will be impossible to get a rapid campaign going on the economic front without a correct style of leadership and correct methods of work. This, too, presents an important problem which this conference must solve. For the comrades here will have a great deal to do as soon as they return, and will have to give guidance to the many people who will be working with them. In particular, the comrades who are working at the township and city levels and in the co-operatives, the food departments, the trade departments and the purchasing offices, are personally engaged in the practical work of mobilizing the people to organize co-operatives, regulating and transporting food supplies, and managing our trade with the outside areas. If their style of leadership is wrong and if they do not employ correct and efficient methods, the work will be immediately affected, we shall fail to win mass support for the various tasks, and during the coming autumn and winter and next spring and summer we shall be unable to carry out the whole of the Central Government's plan for economic construction. For these reasons I want to direct our comrades' attention to the following.

    Firstly, mobilize the masses by various organizational means. In the first place, comrades on the presidiums and in the economic and finance departments of the government bodies at all levels must regulady put on their agenda and discuss, supervise and check up on

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such items of work as the sale of bonds, the formation of co-operatives, the regulation of food supplies and the promotion of production and trade. Next, the mass organizations, chiefly the trade unions and poor peasant leagues, must be moved into action. The trade unions should mobilize all their members to join these economic struggles. The poor peasant leagues are powerful bases for mobilizing the masses to build up co-operatives and subscribe to bonds, and they should be given vigorous leadership by district and township governments. Furthermore, we must conduct propaganda for economic construction at village or household meetings, explaining dearly how it is related to the revolutionary war and discussing in the most practical terms how to improve the livelihood of the masses and increase our strength for the struggle. We should appeal to the people to subscribe to bonds, develop co-operatives, regulate food supplies, consolidate finances and promote trade; we should call upon them to fight for these slogans and should heighten their enthusiasm. Our objectives cannot be attained unless we use various organizational means to mobilize the masses and conduct propaganda among them in the manner described, that is to say, unless the presidiums and the economic and finance departments of the government bodies at all levels actively attend to discussing and checking up on the work of economic construction, unless they spur the mass organizations into action and hold mass propaganda meetings.

    Secondly, we must not be bureaucratic in our methods of mobilizing the masses. Bureaucratic leadership cannot be tolerated in economic construction any more than in any other branch of our revolutionary work. The ugly evil of bureaucracy, which no comrade likes, must be thrown into the cesspit. The methods which all comrades should prefer are those that appeal to the masses, i.e., those which are welcomed by all workers and peasants. One manifestation of bureaucracy is slacking at work due to indifference or perfunctoriness. We must wage a stern struggle against this phenomenon. Commandism is another manifestation. To all appearances, persons given to commandism are not slackers; they give the impression of being hard workers. But in fact co-operatives set up by commandist methods will not succeed, and even if they appear to grow for a time, they cannot be consolidated. In the end the masses will lose faith in them, which will hamper their development. To push the sales of bonds in a commandist way and impose arbitrary quotas, regardless of whether people understand what the bonds are for and of how much they can afford, will ultimately arouse the people's

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displeasure and make it impossible to achieve good sales. We must reject commandism; what we need is energetic propaganda to convince the masses, and we should develop the co-operatives, promote the sales of bonds and do all the work of economic mobilization in accordance with the actual conditions and the real feelings of the masses.