FOOTNOTES:

FOOTNOTES:[1]An excellent bibliography, providing further references to the Japanese side of the war, is found in Borton, Hugh,et al.,A Selected List of Books and Articles on Japan, Washington, D. C., 1940. An outstanding short discussion is Colegrove, K. W.,Militarism in Japan, Boston (World Peace Foundation), 1936.[2]Bisson, T. A.,Japan In China, cited,passim, for many instances.[3]It is unfortunate that work on the nature of old Far Eastern international relations has no more than just begun. Descriptions from the viewpoint of Western international law often possess the unreal lucidity of dialectical materialism or of theosophy, since it is necessary to read into Chinese and other Far Eastern political institutions the characteristic features of a European invention—the juridical, omnicompetent, secular, territorially limited state. See Djang Chu,The Chinese Suzerainty, unpublished doctoral dissertation, the Johns Hopkins University, 1935; Nelson, Melvin Frederick,The International Status of Korea, 1876-1910unpublished doctoral dissertation, Duke University, 1939, particularly Part I, "The International Society of Confucian Monarchies" and Part II, "Korea in Conflicting Societies of Nations"; both attempt to reconstruct the working Asiatic theory in terms comprehensible to the West. Clyde, Paul H.,United States Policy Toward China, Durham, 1940, Section XXIV, gives a succinct statement and relevant American public documents.[4]Taylor, George,The Struggle for North China, cited, p. 66.[5]Statements to the author, by persons not in Chungking.[6]Nyi, P. C., "Plans for Economic and Political Hegemony in China," cited, p. 239. Compare this with the chart in George Taylor, work cited, p. 204. Professor Taylor's study covers the entire history of the Provisional Government, significantly aligned with that of its rival, the guerrilla Border Region.[7]The Japan-Wang Ch'ing-wei Secret Agreements, 1938-1939-1940, Shanghai, 1910; these also appeared in theChina Weekly Review, January 27, 1940, p. 318; February 3, 1940, p. 341.[8]Statement of the Japanese Prime Minister, Prince Fumimaro Konoye, December 22, 1938, Jones and Myers,Documents on American Foreign Relations, 1939-40, Boston (World Peace Foundation), p. 299.[9]Ch'ên Lo died, and the only persons with any diplomatic experience had, in the past, been only casually connected with the Foreign Office.[10]SeeThe People's Tribune(Shanghai), XXIX, p. 130ff., August 1940. This is the semi-official English organ of the regime; each issue contains a selection of public documents. It is edited by the volatile T'ang Leang-li. The other English-language journal isThe Voice of China, fortnightly, Nanking, edited by Mr. L. K. Kentwell, a graduate of Oxford and Columbia Universities, Hawaiian-born of British and Cantonese parentage. The journal is spirited, and very anti-British.[11]Such a chart is found inThe People's Tribune, XXIX (March 1940), p. 214, together with a list of incumbents on the following pages. The issue is headed by an editorial, "The National Government Returns to Its Capital" and "Peace, Struggle, and Save China" by Wang Ching-wei (sic). The official outline of the government is to be found in [Reorganized Government],K'ao-shih Yüan Kung-pao(Public Gazette of the ExaminationYüan), Nanking. Vol. I, No. 2 (June 1940), following p. 80.[12][Reorganized Government],Ssŭ-fa Hsing-chêng Kung-pao(Public Gazette of the Ministry of Justice), Nanking, gives a well-edited résumé of the work of the Ministry and its policy in prosecutions.[13][China Weekly Review; J. B. Powell, editor],Who's Who in China, Fifth Edition, Shanghai, [1937], p. 145. For further information see the supplement on the pro-Japanese leaders inWho's Who in China, Supplement to Fifth Edition, Shanghai, [1940]. This presents a hall of notoriety for all the major Chinese leaders affiliated with the enemy. ThisWho's Whois regarded by the present author as one of the most valuable sources on all Far Eastern politics. It is engrossingly good reading and entertainment, the pictures of the subjects being included in most instances. Behind these simple and short biographies, there lies more drama than Hollywood dare produce.[14]For an account of this see, "Wang's Farcical C.E.C. Session,"China At War(Hong Kong), III, No. 6, p. 57; January 1940.[15]The full text of the treaty is to be found in China Information Committee,News Release, December 2, 1940, together with the Generalissimo's comment. For a brief account, clearly interpreted, see Steiger, G. Nye, "Japan Makes Peace—with Wang,"Events, Vol. 9, No. 49 (January 1941), p. 60-2. The Generalissimo's comment on the Nanking regime will also be found below, Appendix III (A),No. 7.

[1]An excellent bibliography, providing further references to the Japanese side of the war, is found in Borton, Hugh,et al.,A Selected List of Books and Articles on Japan, Washington, D. C., 1940. An outstanding short discussion is Colegrove, K. W.,Militarism in Japan, Boston (World Peace Foundation), 1936.

[2]Bisson, T. A.,Japan In China, cited,passim, for many instances.

[3]It is unfortunate that work on the nature of old Far Eastern international relations has no more than just begun. Descriptions from the viewpoint of Western international law often possess the unreal lucidity of dialectical materialism or of theosophy, since it is necessary to read into Chinese and other Far Eastern political institutions the characteristic features of a European invention—the juridical, omnicompetent, secular, territorially limited state. See Djang Chu,The Chinese Suzerainty, unpublished doctoral dissertation, the Johns Hopkins University, 1935; Nelson, Melvin Frederick,The International Status of Korea, 1876-1910unpublished doctoral dissertation, Duke University, 1939, particularly Part I, "The International Society of Confucian Monarchies" and Part II, "Korea in Conflicting Societies of Nations"; both attempt to reconstruct the working Asiatic theory in terms comprehensible to the West. Clyde, Paul H.,United States Policy Toward China, Durham, 1940, Section XXIV, gives a succinct statement and relevant American public documents.

[4]Taylor, George,The Struggle for North China, cited, p. 66.

[5]Statements to the author, by persons not in Chungking.

[6]Nyi, P. C., "Plans for Economic and Political Hegemony in China," cited, p. 239. Compare this with the chart in George Taylor, work cited, p. 204. Professor Taylor's study covers the entire history of the Provisional Government, significantly aligned with that of its rival, the guerrilla Border Region.

[7]The Japan-Wang Ch'ing-wei Secret Agreements, 1938-1939-1940, Shanghai, 1910; these also appeared in theChina Weekly Review, January 27, 1940, p. 318; February 3, 1940, p. 341.

[8]Statement of the Japanese Prime Minister, Prince Fumimaro Konoye, December 22, 1938, Jones and Myers,Documents on American Foreign Relations, 1939-40, Boston (World Peace Foundation), p. 299.

[9]Ch'ên Lo died, and the only persons with any diplomatic experience had, in the past, been only casually connected with the Foreign Office.

[10]SeeThe People's Tribune(Shanghai), XXIX, p. 130ff., August 1940. This is the semi-official English organ of the regime; each issue contains a selection of public documents. It is edited by the volatile T'ang Leang-li. The other English-language journal isThe Voice of China, fortnightly, Nanking, edited by Mr. L. K. Kentwell, a graduate of Oxford and Columbia Universities, Hawaiian-born of British and Cantonese parentage. The journal is spirited, and very anti-British.

[11]Such a chart is found inThe People's Tribune, XXIX (March 1940), p. 214, together with a list of incumbents on the following pages. The issue is headed by an editorial, "The National Government Returns to Its Capital" and "Peace, Struggle, and Save China" by Wang Ching-wei (sic). The official outline of the government is to be found in [Reorganized Government],K'ao-shih Yüan Kung-pao(Public Gazette of the ExaminationYüan), Nanking. Vol. I, No. 2 (June 1940), following p. 80.

[12][Reorganized Government],Ssŭ-fa Hsing-chêng Kung-pao(Public Gazette of the Ministry of Justice), Nanking, gives a well-edited résumé of the work of the Ministry and its policy in prosecutions.

[13][China Weekly Review; J. B. Powell, editor],Who's Who in China, Fifth Edition, Shanghai, [1937], p. 145. For further information see the supplement on the pro-Japanese leaders inWho's Who in China, Supplement to Fifth Edition, Shanghai, [1940]. This presents a hall of notoriety for all the major Chinese leaders affiliated with the enemy. ThisWho's Whois regarded by the present author as one of the most valuable sources on all Far Eastern politics. It is engrossingly good reading and entertainment, the pictures of the subjects being included in most instances. Behind these simple and short biographies, there lies more drama than Hollywood dare produce.

[14]For an account of this see, "Wang's Farcical C.E.C. Session,"China At War(Hong Kong), III, No. 6, p. 57; January 1940.

[15]The full text of the treaty is to be found in China Information Committee,News Release, December 2, 1940, together with the Generalissimo's comment. For a brief account, clearly interpreted, see Steiger, G. Nye, "Japan Makes Peace—with Wang,"Events, Vol. 9, No. 49 (January 1941), p. 60-2. The Generalissimo's comment on the Nanking regime will also be found below, Appendix III (A),No. 7.

Government, wherever organized, is distinguished from other social institutions by claims to universality of scope and competence, and paramountcy of authority; the termpolitical, on the basis of such a distinction, refers to activities, occasionally individual but more usually collective, involving access to the symbols of government; and the termgovernmentalrefers to the application of such symbols in governmental sanctions and services. The process of government is accordingly one wherein groups smaller than the totality of society seek ("politically") to obtain action in the name of the totality ("governmental"), for or against other groups according to shifting interests. In the West this politico-governmental process has been further characterized by ceremonial forms ("laws") and reinforced by conceptions of amoral omnicompetence ("sovereignty").

The cellular socio-economic structure of old China, plus the Confucian employment of ideological as opposed to governmental control, kept the entire process of politics and government at a very low level of intensity. Modern China, inheritor of an apolitical past, is still the most pluralistic society in the world, and modern Chinese government—despite recent gigantism—a frail legal superstructure above a flood of extra-political power. Western societies depend upon their states; the Chinese state depends upon a society which could, albeit uncomfortably, dispense with states altogether.

This condition amounts in international politics, to both a strength and a weakness. Chinese society suffers more political ruin with less social disturbance than does any comparable society; the guerrillas, for example, probably find government helpful when available, but regard it as a luxury rather than a necessity. Chinese society is near to an orderly anarchy; uniform conditioning from the past, or uniform present opinion, takes the place of mass organization and totalitarian government. The high death rate of traitors is probably not owing to activity on the part of Chungking, but to the spontaneous action of ordinary men; on one occasion a high pro-Japanese official was shot by his own bodyguard while the two sat in a sedan on a busy street: the bodyguard had experienced a revulsion of conscience. Fu Hsiao-ên, Wang Ch'ing-wei's Mayor of Shanghai, was also killed by a member of his own household. Spontaneous but uniform action applies not only to sensational political matters; it appears in less dramatic but equally important affairs, such as commercial rivalry, landlord-tenant relationships, and the police power of the community and the family. However, in a contest for power, while the Chinese lose little by defeat, their counter-attacks are correspondingly more difficult. The fluid autonomy of innumerable groups slows down the engines of formal power. The political-governmental process is apt to be sluggish in crises.

The society upon which the National Government of China, its Left associates, and its Japanophile rivals rest is not a settled, stagnant society. An extraordinary ferment has gripped China for more than a century—arising from cadastral, agrarian, technological, economic, fiscal, ideological, political, and governmental change. The Chinese people have endured; they have also acted. Within a single century, three blazing revolutionshave swept China: the T'aip'ing Rebellion, put down with Western aid after fifteen years of war; the Boxer uprising, deflected into xenophobia by the Manchus; and the Great Revolution, which succeeded in part. Between these, there have been changes, bloody but of secondary magnitude: the Moslem rebellions; the minor uprisings of Sun Yat-sen; the Republican Revolution; the 1919 movement; thetuchünwars; the Communist communes, which failed utterly in Shanghai and Canton; the Communistjacqueries, which continued; and the present rip tide of resistance. None of these was effectively mastered by organized government; each was exploited by one government, and opposed by another. Unlike a Western state, wherein government becomes the prime mobilizer during crises, Chinese society shifts its incalculable forces, and governments leap forward to take advantage of them.

This extensive, unorganized residue of opinion and power, outside the reach of government, keeps any modern Chinese government in a peculiar condition. Like a perpetual process of revolution, social changes demand that a government exploit them, deflect them, or employ them—but not launch or stop them. The Kuomintang has failed in its attempts to launch favorable mass movements, and also failed to stop antagonistic ones. The secret of the Chinese Communist power has lain in the skill of the Red leaders, who utilized available movements. Hence the continued development of Chinese government rests upon the wills, fancies, interests, mob action, enthusiasm or dispiritedness of a people who in their own communities do not read newspapers, listen to radios, or pay much attention to the national state. Despite attempts to bring society under the control of government, in order to make it possible to bring government under the control of society (constitutionalism), the decisive forces of modern Chinese life are outside the reach of propaganda or control.

General opinion in China is not ascertainable, except through action. In vital matters this action is apt to be either violent, or the equivalent of violent: sit-down, general, or go-slow strikes; boycotts; universal derision. The National Government possesses unprecedented amounts of power by Chinese standards. By Western standards it is incredibly obliging, casual, and unsystematic. The power which the Government, with Chiang as leader, enjoys, arises from a support which it could not compel, and which it cannot ensure by any means other than the pursuance of support-arousing policies. The Kuomintang, the Communists, the National Salvationists, the independent Left guerrilla leaders—these agencies are not the organization of entire opinion groups, but the spearheads of immeasurable forces. The modernization of government, both administrative and constitutional, awaits the transformation of materials around and under government. Greatest of these is popular mentality. Ancillary are economic, organizational, educational and cultural forces. Progress toward the omnicompetent state is slowed by the fact that few Chinese wish to abandon the freedom of a pluralist society for the efficient universality of legalism. They desire modernization, but haggle at the price.

Three factors in particular are working upon and among the millions of farmers and townsmen: mass education, rural reconstruction, and the cooperative movement. Each not only takes immediate, beneficial effect, but also transforms the political material of China. These forces, not in any strict sense political, possess enormous political importance.

Literacy has risen very rapidly in modern China. Before the impact of the West, becoming literate was in itself a career. By the time one could read at all, onewas a scholar, unless one learned the limited quasi-shorthand of the merchants. Educational reforms came about as the result of modern schools, particularly British and American Protestant schools, and the action of the government. The fabric of Chinese society had begun to change even before the downfall of the Ch'ing dynasty. The literary revolution led by Hu Shih after 1915, which popularizedpai-hua(a written form of the Chinese spoken language) had extensive repercussions, and made possible the rapid diffusion of ideographic literacy. (Phonetization failed then, and later.) Almost every government in China has attempted the diffusion of literacy. The popular demand is intense.

The present status of literacy in China is revealed by official figures from the Ministry of Education, which may err somewhat on the side of optimism. These put the total population of China at 450 million (Manchuria presumably remaining unmentioned), of which 90 million are literate and 360 million illiterate. Such an estimate would give China about the same absolute number of literates as the United States. The remaining 360 million illiterates are broken down as follows: 40.05 million children below the age of six; 45 million aged six to twelve; 29.25 million aged twelve to fifteen; 79.43 million persons over forty-five; and 1.57 million dumb, deaf, cripples, or insane. The adults to be reached by the mass literacy movement amount therefore to 165 million; government estimates state that 46,348,469 illiterates were educated since 1938, of whom 25.2 million were adults between fifteen and forty-five, leaving roughly 140 million to be educated.[1]

The mass education program is supplementary to the education of children, which is far from complete or even adequate. The literacy imparted is of the most elementary kind; but in a civilized society such as China this has immediate effect. The author never knew aChinese who could read and was not addicted to it; a common sight in Western China is a knot of coolies deciphering a newspaper together. The intense reverence for learning and scholarship makes the training welcome, and the teachers who seek to teach the minimum of one thousand ideographs in six weeks never lack pupils.

The program of the National Government was summarized by Ch'ên Li-fu, the Minister of Education, speaking over the radio after the Mass Education Conference of March 1940:

Accordingly, our first step is to wipe out illiteracy. In this respect we proceed simultaneously with the enlightenment of the masses of adult illiterates, both men and women, and with the education of children in order to put an end to illiteracy that may otherwise arise in the future. At the National Conference on People's Education held from the twelfth day to the sixteenth day of this month in Chungking, thefive-year plan for the people's education, adopted by the ExecutiveYüan, was further deliberated and promulgated. The proper enforcement of this plan will help to convert at least one hundred and forty million (140,000,000) adult illiterates into intelligent citizens for China within the coming five years.At present there are already 44 per cent of the entire number of children of school age (from six to twelve) in school; that is, nineteen million and eight hundred thousand (19,800,000). By the enforcement of this plan, there should be, during the first two years, at least one people's school in every threepao. And each village should have a nucleus school, according to the plan. In this way there should be at least more than 260,000 people's schools for the 800,000paoof the entire nation at the end of the first two years. Each people's school consists of three divisions or classes, namely, the children's division, the men's division, and the women's division. During the second two years there should be at least one people's school in every twopao. In the fifth and last year there should be at least one people's school in eachpao. That is to say, at the end of the fifth year there should be at least 800,000 people's schools for the 800,000paoof the nation, besides the 80,000 or more nucleus schools and the 200,000 schools of thesame grades now already existent which can be improved, to provide education for at least 90 per cent of the entire number of children of school age. As a matter of fact, certain provinces have already succeeded in establishing one or even two people's schools in eachpao. Kwangsi Province, for instance, has at present one people's school in eachpao, while Fukien Province even has two people's schools in eachpao. The fulfillment of this five-year plan needs at least $2,932,000,000 and 1,600,000 properly trained teachers.Our vocational education aims at building a sound middle cadre for the various professions and industrial enterprises. There are training schools and short-time classes for mechanics, electrical communications, metal work, etc. Also, special classes are opened in more than ten colleges and universities for advanced studies along such lines.Our attempt to universalize productive education may be evidenced by the incorporation of productive education courses into the middle school curriculum, besides instituting organizations for the same in the various vocational schools in order to facilitate the practice of students along such lines.... In 1938, for example, only 53.0 per cent of the entire number of students who took part in the examination studied science and engineering, but in 1939 it jumped to 59.4 per cent.[2]

At present there are already 44 per cent of the entire number of children of school age (from six to twelve) in school; that is, nineteen million and eight hundred thousand (19,800,000). By the enforcement of this plan, there should be, during the first two years, at least one people's school in every threepao. And each village should have a nucleus school, according to the plan. In this way there should be at least more than 260,000 people's schools for the 800,000paoof the entire nation at the end of the first two years. Each people's school consists of three divisions or classes, namely, the children's division, the men's division, and the women's division. During the second two years there should be at least one people's school in every twopao. In the fifth and last year there should be at least one people's school in eachpao. That is to say, at the end of the fifth year there should be at least 800,000 people's schools for the 800,000paoof the nation, besides the 80,000 or more nucleus schools and the 200,000 schools of thesame grades now already existent which can be improved, to provide education for at least 90 per cent of the entire number of children of school age. As a matter of fact, certain provinces have already succeeded in establishing one or even two people's schools in eachpao. Kwangsi Province, for instance, has at present one people's school in eachpao, while Fukien Province even has two people's schools in eachpao. The fulfillment of this five-year plan needs at least $2,932,000,000 and 1,600,000 properly trained teachers.

Our vocational education aims at building a sound middle cadre for the various professions and industrial enterprises. There are training schools and short-time classes for mechanics, electrical communications, metal work, etc. Also, special classes are opened in more than ten colleges and universities for advanced studies along such lines.

Our attempt to universalize productive education may be evidenced by the incorporation of productive education courses into the middle school curriculum, besides instituting organizations for the same in the various vocational schools in order to facilitate the practice of students along such lines.... In 1938, for example, only 53.0 per cent of the entire number of students who took part in the examination studied science and engineering, but in 1939 it jumped to 59.4 per cent.[2]

This statement gives the official view, which is highly optimistic. In terms of practical politics, however, the Generalissimo has given the movement his cordial backing, and sees in it a preliminary to democracy. Although final results might fall far short of the hopeful estimate, the effect would still be considerable. Diffusion of literacy creates a momentary satisfaction with the political system which makes literacy possible, but the after-effect of literacy is to make men of any nationality easier to govern well and harder to govern badly. A government which diffuses literacy without advancing reforms is sharpening weapons against itself. The National Government's American-inspired trust ineducation as a panacea implies that Chiang and his fellow leaders expect to remain popular, and do not contemplate appeasement, reaction, or other unpopular measures.

An even more interesting aspect of the mass-education movement is its connection with rural reconstruction. In this field much is owed to Dr. James Y. C. Yen, a graduate of Yale and Princeton who began his work with the Chinese labor corps in France during the 1914-18 war. The war-time work of the correlated mass education and rural reconstruction movement was summarized by Dr. Yen himself:

The most hopeful factor in the whole China situation is that her greatest and most valuable resource, the three hundred and fifty million farmers, has not yet been tapped for the upbuilding of the nation. The Chinese farmer has had a measure of freedom and responsibility, of dignity and independence. He is thrifty and industrious, intelligent and an expert in intensive farming. A great number of our national leaders are sons and daughters of our farmers. The fathers of Dr. Sun Yat-sen and Generalissimo Chiang Kai-shek were farmers.These nearly three years of terrible war have proved beyond doubt that our faith in the Chinese farmer has not been misplaced. It has revealed his greatness. Our nation is rediscovering the "forgotten man," the tiller of the soil. Most of our soldiers come from the farm. To a remarkable extent he has also financed the war. He is the real hero of this war.The Chinese Mass Education Movement was organized in 1923 to explore the potentialities of the rural masses and find a way of drawing out the best in them. Since the first publication of the "thousand character test," it has been estimated that some thirty million illiterate people have been taught to read during the past five years.Beginning with 1929 the point of emphasis of the Movement shifted from extensive promotion of literacy to intensive study of the life of the farmers in the rural districts. As a living social laboratory in which to do our researchand to work out principles and techniques, we selected Tinghsien, a district of four hundred thousand people, one-thousandth of the total population of China, in Hopei Province. This was the first time in our history that an organized group of Chinese intellectuals went deliberately to the country to live among the rural people to study their life and find out how to develop their latent possibilities. The Movement has evolved what is known as the "Tinghsien Four-fold Reconstruction Education" including the cultural, economic, health, and the political.Several other experimentalhsien,—Hengshan in Hunan, Central China, and Hsintu in Szechwan, West China, were established in cooperation with the provincial governments. One of our special emphases in these experimentalhsienhas been the reform of thehsiengovernment, i.e. the local government.The Tinghsien Experiment with its "laboratory approach" to social and political problems and with itscorrelatedprogram of rural reconstruction as demonstrated in the district attracted attention from all over China and inspired similar experiments in various parts of the country. As a result the movement for rural reconstruction gained great momentum in China.Since the outbreak of hostilities the Mass Education Movement has thrown itself unreservedly into the task of assisting the Central and Provincial governments in strengthening the nation's struggle against the enemy. It was most gratifying that at this hour of China's supreme struggle we have been able to help the government to revitalize thehsiengovernment, to train civil service personnel and to mobilize the farmers. Extensive application of the new system as developed in the experimentalhsienwas made to an entire province such as we did in Hunan—a rich province with a population of thirty million.In order to insure that the new political machinery should function effectively a School of Public Administration to train administrative and technical personnel from the magistrate down to the village elders was established with the senior members of our Movement taking full charge. Altogether the School trained about 4,000 higher officials for the local government and some 35,000 of the village elders. Since Generalissimo Chiang Kai-shek assumed concurrently the governorship of Szechwan, a new system ofhsiengovernment (chiefly modelled after the experimentalhsienof the country) with the object of releasing the new life of the rural masses has been promulgated. Under his order the same is taking place in neighboring provinces.Unless serious and painstaking study of rural reconstruction is made by scientists and scholars on the one hand, and administrative and technical personnel are systematically trained and imbued with a spirit of service to the rural masses on the other, the movement for rural reconstruction may dwindle away as so many other movements have done in the past.It is most heartening to state that Generalissimo Chiang Kai-shek has given his public approval and backing to the new National Institute of Rural Reconstruction which he considers to be of fundamental importance to China's post-war reconstruction. The inspiration of the Institute has already helped to mould the principal rural reconstruction groups in the country into one national force. The rural reconstruction movement has achieved a united front unparalleled in its history. Today it is a great unifying force, an outstanding national platform upon which all Chinese can agree. It will meet the needs of China today and lay the foundation for the China of tomorrow.[3]

These nearly three years of terrible war have proved beyond doubt that our faith in the Chinese farmer has not been misplaced. It has revealed his greatness. Our nation is rediscovering the "forgotten man," the tiller of the soil. Most of our soldiers come from the farm. To a remarkable extent he has also financed the war. He is the real hero of this war.

The Chinese Mass Education Movement was organized in 1923 to explore the potentialities of the rural masses and find a way of drawing out the best in them. Since the first publication of the "thousand character test," it has been estimated that some thirty million illiterate people have been taught to read during the past five years.

Beginning with 1929 the point of emphasis of the Movement shifted from extensive promotion of literacy to intensive study of the life of the farmers in the rural districts. As a living social laboratory in which to do our researchand to work out principles and techniques, we selected Tinghsien, a district of four hundred thousand people, one-thousandth of the total population of China, in Hopei Province. This was the first time in our history that an organized group of Chinese intellectuals went deliberately to the country to live among the rural people to study their life and find out how to develop their latent possibilities. The Movement has evolved what is known as the "Tinghsien Four-fold Reconstruction Education" including the cultural, economic, health, and the political.

Several other experimentalhsien,—Hengshan in Hunan, Central China, and Hsintu in Szechwan, West China, were established in cooperation with the provincial governments. One of our special emphases in these experimentalhsienhas been the reform of thehsiengovernment, i.e. the local government.

The Tinghsien Experiment with its "laboratory approach" to social and political problems and with itscorrelatedprogram of rural reconstruction as demonstrated in the district attracted attention from all over China and inspired similar experiments in various parts of the country. As a result the movement for rural reconstruction gained great momentum in China.

Since the outbreak of hostilities the Mass Education Movement has thrown itself unreservedly into the task of assisting the Central and Provincial governments in strengthening the nation's struggle against the enemy. It was most gratifying that at this hour of China's supreme struggle we have been able to help the government to revitalize thehsiengovernment, to train civil service personnel and to mobilize the farmers. Extensive application of the new system as developed in the experimentalhsienwas made to an entire province such as we did in Hunan—a rich province with a population of thirty million.

In order to insure that the new political machinery should function effectively a School of Public Administration to train administrative and technical personnel from the magistrate down to the village elders was established with the senior members of our Movement taking full charge. Altogether the School trained about 4,000 higher officials for the local government and some 35,000 of the village elders. Since Generalissimo Chiang Kai-shek assumed concurrently the governorship of Szechwan, a new system ofhsiengovernment (chiefly modelled after the experimentalhsienof the country) with the object of releasing the new life of the rural masses has been promulgated. Under his order the same is taking place in neighboring provinces.

Unless serious and painstaking study of rural reconstruction is made by scientists and scholars on the one hand, and administrative and technical personnel are systematically trained and imbued with a spirit of service to the rural masses on the other, the movement for rural reconstruction may dwindle away as so many other movements have done in the past.

It is most heartening to state that Generalissimo Chiang Kai-shek has given his public approval and backing to the new National Institute of Rural Reconstruction which he considers to be of fundamental importance to China's post-war reconstruction. The inspiration of the Institute has already helped to mould the principal rural reconstruction groups in the country into one national force. The rural reconstruction movement has achieved a united front unparalleled in its history. Today it is a great unifying force, an outstanding national platform upon which all Chinese can agree. It will meet the needs of China today and lay the foundation for the China of tomorrow.[3]

This program possesses obvious merit. Lacking a foundation of dogma, it requires no implementation through terrorism. The politically innocuous character of the movement is attested by the frequent demands by provincial officials for personnel from the Mass Education training centers. Since the purpose is to improve the entire community without revolutionizing its class structure, the enlightened landlords are as favorable as the peasants themselves. Unfortunately, enlightened landlords are not always prevalent. Despite the modesty of the program, it finds stumbling blocks in actual corruption, extortion, and illegality. Manyhsienare under local machines which permit wealthy conservatives to evade tax payments, steal government funds, and repress genuine farmer organization. The consequence has been that the movement succeeds only when it hasthe immediate backing of a provincial or central authority; its progress has been slow. Many critics, both Chinese and Western, have become disgusted with the slowness of social reform on the land, and despair of anything save reconstruction through implicit class war.[4]

The present period of resistance and reconstruction opens a very promising period in rural modernization. In the first place, war-time stress puts great power in the Generalissimo's hands. Ubiquitous armies can, on short notice, enforce orders from Chungking. The shift of troops among provinces makes the central government an outside power now physically present in tens of thousands of communities. Devolution of watchfulness by the Commander-in-Chief and his staff results in slow but irreversible accumulation of governmental authority.

Secondly, the proclamation of manifold programs has the effect, obviously, of drawing attention to each of them. The Kuomintang, anxious to retain its paramountcy, promotes new local government changes. These face frustration by mass illiteracy. Mass education is impeded by local economic injustices. The Whampoa andErh Ch'êngroups in the Kuomintang, while they have landlord connections, are interested—even assuming a strong economic-class interest—in themaintenance of government. Action is appearing, slow and haphazard by Western standards, but indisputably present. The minimum of good government in China is a very low minimum, but it is rising in the face of the Communist and Japanese pressure. One may be sure that the National Government will not pass below that minimum if the state's existence is in danger.

Thirdly, there is a very genuine boom condition in Western China. The movement of the government to the West, and lightening of intolerable but long-enduredtuchünexactions, would in itself have led to sudden prosperity. To this are added more than twenty millions of new population, a growing network of communications, a sharp but controlled inflation. These further stimulate speculation and construction and development. The most important factors in a new prosperity have been, however, the reappearance of handicraft-type industry as a consequence of blockade, and governmental advocacy of every conceivable development. The author beheld, during the summer of 1940, conditions of prosperity in Szechwan which he had not expected to find in China within the space of one lifetime. Narcotics were eradicated. The working population was commanding high wages, but suffering from high prices; the prices were somewhat ahead of the wages, but not so far that social morale was troubled. Skilled labor was in a superb bargaining position; chauffeurs, electricians, good carpenters, etc. were in considerable demand. The salaried classes were suffering at all levels, a factor which was patently wholesome in stimulating working-class morale. The clerical class, which had held itself aloof from manual labor with a persistence which boded ill for China, was placed more nearly on a par with its American equivalent. While poverty was still universal by Western standards, the pathological squalor endemic to the coast was nowhere visible.

The Chinese Industrial Cooperatives (Chung-kuo Kung-yeh Ho-tso Hsieh-hui) are an important and widely publicized outgrowth of the war, and are perhaps the only feature of domestic Chinese affairs—outside of the Communist area and the roads program—which is as well known beyond China as within. The purpose of the cooperatives is to launch an enormous program of decentralized industry throughout Free China, with thirty thousand separate industrial cooperatives for the first major goal. The purpose is to develop an industrial system which will keep China autarkic for resistance and reconstruction; long-range, the purpose is to circumvent impending evils of concentrated industrialism, slums, megalopolitan crowding, extra-legal oppression. China might thus proceed directly from a decentralized half-handicraft economy to the decentralized power economy of the future. Four principles underlie the program: sound technical design, cooperative organization, voluntary self-discipline, and social welfare on the basis of Sun'smin shêng.[5]

Formally, the C.I.C. Headquarters is a social organization sponsored by the ExecutiveYüan. H. H. K'ung, Minister of Finance and Vice-President of theYüan, isits Chairman. The Secretary-General and Associate Secretary-General, Messrs. K. P. Liu and Hubert Liang, are both American-returned students; the former once worked in the Ford factories while studying at the University of Cincinnati and later was a banker in Manchuria. The most inspiring force in the movement is Mr. Rewi Alley, a New Zealander strongly interested in cooperatives and in labor welfare, formerly factory inspector in the International Settlement. Familiar, because of his Shanghai experiences and famine-relief work, with the problems of economic organization in China, he presented his plan to Generalissimo and Mme. Chiang through the intervention of that extraordinarily popular British Ambassador, Sir Archibald Clark-Kerr. The Chiangs were impressed with it, and the Generalissimo gave it his support. A headquarters was established at Hankow in August 1938, with the following five departments:general, for secretarial and administrative housekeeping;financial, administering funds for the headquarters and the cooperative units;organization, in charge of planning and inauguration of cooperatives;technical, devising simple industrial techniques; andaccounting, an independent agency of audit.[6]The ExecutiveYüanhas continued to make administrative funds available; the central headquarters near Chungking now has a staff of about seven hundred. Professor J. B. Tayler of Yenching University, a noted economic expert, is consultant for staff service.

As projected by Rewi Alley and his fellow-enthusiasts, the C.I.C. had to adjust itself to three zones of China's war-time economy. A guerrilla zone in and around the combat area, as well as behind the Japanese lines, concentrated on the creation of immediate war-time necessities. Some of these were in the form of directmedical and military supplies; others, replacements of indispensable articles which otherwise would have been procured from the enemy. The second zone, of light industry, was within easy reach of Japanese air raids and espionage, and consequently given to enterprises having light capital investment, mobile, and readily concealed. The third, or inmost Chinese zone, being best protected, was the proper area for the development of the heavier industries, although even here no grandiose or heavily centralized works are planned. The ultimate aim, peace-time as well as military, of the C.I.C. is to distribute industry across the countryside, replacing the once flourishing handicraft industries, and allowing Chinese society to develop naturally and continuously.

The author attended a C.I.C. exhibit in Chungking which presented a startling array of modern goods. Ford tools and auxiliary parts, matches, lamps (electric, kerosene, and an improved wood-oil lamp which equals kerosene), light electric appliances, lathes, machine-shop tools, medical kits, Western shoes, toothpaste, canned foods, paper, printing presses, books, and fountain pens—all were produced in areas which did not even have the spinning wheel in some instances, and which until recently imported all Western or modern goods from the coast or from outside.

The organization and practical accomplishments of the C.I.C. are well summarized in a recent article by K. P. Liu, Secretary-General:

INTRODUCTION: When it became clear that in order to continue economic resistance against Japan China must at all costs develop production in the rear of the fighting line, one of the steps taken was the founding of the Chinese Industrial Cooperatives by Dr. H. H. Kung.The plan was to construct throughout China chains of small industries which should use local materials to supply the manufactured goods fundamentally necessary to the life of the people.Industrial cooperative societies are organized around about 60 depots over 16 provinces. An average depot of about 25 cooperatives is supervised and advised by a group of men consisting of depotmaster, accountant, technician, and two or three organizers.For the coordination of work depots are divided among five regions: the Northwest (NW), the Southeast (SE), the Chuankang (Szechwan and Sikang) region (CK), the Southwest (SW), and Yunnan (Y). Each is headed by regional headquarters, which are responsible to the Central Headquarters at Chungking which represents the C.I.C. on general questions and negotiations, and decides, in consultation with regional chiefs, on broad lines of policy. The Central Headquarters also supplies the services of traveling advisers on engineering, accounting, and organization problems.The staff of 700 is financed by Government funds, since the C.I.C. has been named a social organization responsible to the Executive Yüan. Further, the C.I.C. was given $5,000,000 by the Central Government to be used as loan capital for cooperatives. More recently, negotiations with various banks have made new large sums available, so that the amount which can now be used for the capitalization of cooperatives is near $30,000,000.The above two sources of income provide no money for education, research, evacuation of workers from occupied areas, technical training, refugee work relief, medical help, or capital loans in guerrilla regions. Necessary auxiliary activities as these are provided for to a certain extent by gifts from interested men and women in China and abroad....FORMING AN INDUSTRIAL COOPERATIVE: When a depot is first set up, the depotmaster advertises the objectives of the C.I.C. by posters and speeches. But as soon as a few workmen get to know about its activities there is no more need to advertise. There are always plenty of workers who will prefer the security and freedom of a cooperative to unemployment or to working for a master.The number of men needed to form a cooperative is at least seven, but there is no upper limit. They first come to talk things over with a C.I.C. organizer, present their plan for setting up a factory or workshop, with proof of their qualifications and a tentative budget showing how much loan capital will be needed to start work. The organizer explains to them the cooperative system of self-government,Chinese cooperative law, and the C.I.C. Model Constitution. Then they take some descriptive literature home, and discuss among themselves whom they want as their officers.Meanwhile, their plans are talked over by the depotmaster, accountant, organizer, and engineer, and modifications suggested. If, as often happens, it turns out that they are only merchants anxious to get rich quick and notbona fideworkmen ready to work hard, the plans are rejected.If all is satisfactory, a meeting is held for the election of officers, determination of share capital, voting of wages, and work begins as soon as the loan is put through. At least one quarter of the subscribed share capital must be paid up immediately, and the total loan—long-term and short—cannot exceed 20 times the subscribed share capital.... The actual ratio of share to loan capital averages about 1 to 6.INDUSTRIAL DISTRIBUTION:Distribution of industry is shown in the following condensed table:Textiles610[cooperatives]Engineering49Mining118Chemical206Pottery69Foodstuffs83Transport4Miscellaneous395———1,534There are no less than 114 types of cooperatives, and almost every daily need of the people can be met.Before any cooperative is organized, investigations are made to ensure that (I) there are raw materials near at hand, (II) there is skilled workmanship available, and (III) there is a market for the finished product. Where these three do not co-exist at one place, a compromise of the most reasonable kind is effected if possible. Some examples—by no means exhaustive—of the adaptation of types of industry to meet local conditions are described as follows:Wool... In the beginning of 1939 woolspinners of Chentu were still using either the simple old whorl or the handturned wheel. The volume of production was verysmall. But during 1939 the C.I.C. embarked on a huge program of blanket production for the army, and improved streamlined treadle spinners were introduced, and thousands of men and women taught the technique of using them. Blankets were made at eight centers of west and northern China; everywhere improved woolspinning and woolweaving machines and techniques brought new productive power. During the winter of 1939-40, 400,000 blankets were turned out, and another million and a half will be made during the remainder of 1940.The wool used by the blanket-making cooperatives comes from the highlands of Chinghai, Kansu, Ningsia, and Shensi, and now instead of being carried raw to Tientsin or Shanghai as in the old days, it is being spun and woven near to the source of supply. Improvements are constantly being made—better machines, finer spinning, use of waterpower, better carding and finishing—so that the whole project works to raise the efficiency and living standard of the local people.Cotton. Wherever cotton is grown spinning and weaving cooperatives are numerous, for clothing is one of the fundamental needs of life....Grass Cloth. Linen, or more correctly grass cloth, was introduced into Szechwan from Kwangtung generations ago, and now fine cloth is woven. Production thereof from ramie thread was at its height 20 years ago, but since then the craft has declined until recently, when the partial blockade of the war made the industry profitable again....Goldwashing. Placer gold exists along every river in West China and in many parts of South China too. Even in Chungking one may see needy coolies scraping up and washing riverside mud for its tiny precious content.The gold is easily available by simple methods, though certain difficulties have hitherto prevented its extraction on a larger scale. But now every grain is an asset to China in economic warfare, and so many goldwashing cooperatives have been organized. In the whole country there are 66 cooperatives, most of which are in the Han valley.... Now the cooperatives ... are self-supporting and produce 60 to 70 oz. of gold a day.Coal and Iron. Throughout the hinterland of China new sources of coal and iron are being needed continually by newly transplanted industry. Szechwan has good coal, widespread, but rather thin in seam....At the same time plans for the construction of blast furnaces have been worked out by C.I.C. engineers, and only wait for adequate financing. It is planned first to set up in South Shensi at a point within easy distance of coal and iron supplies a coke-making and a smelting plant, the total capitalization being $105,000.Alcohol.A first experimental plant for the production of 96 per cent pure alcohol has been running nearly a year with a maximum output of 350 gallons a day. Since the cost of such a plant is comparatively small, and available supplies of grain make the cost of alcohol much less than that of gasoline, other plants have been set up. There are now six in operation and greater production in the future is envisaged. The sites of alcohol plants are naturally at key positions on the highway, where good supplies of coarse grain meet with the traffic line.Prime Movers.In many cooperatives one may see a quaint mixture of old and new, where big flywheels are turned by human labor to maintain the spin of lathes, carding machines, and the like. This is a useful temporary expedient, possible where labor is cheap. Animal power is also used.But C.I.C. engineers are not satisfied with this state of affairs; they are always on the lookout for new sources of power. So charcoal-or gasoline-burning internal combustion engines are commonly employed.But most popular are waterwheels, and in every part of China will be found old wheels adapted for modern uses—driving textile machinery, turning lathes, grinding flour—undershot or overshot, single or in series. Gradually the wheels are being made of better materials and more efficient. Iron wheels are constructed at present weighing about one ton, at a cost of $3,000, and generating over 30 H.P.In the plains waterpower is rarely available, but in the foothills of Tibet, the Tsingling Shan, or in the rough country of southern China this cheapest of all forms of power will come more and more into its own as C.I.C. machine shops construct improved waterwheels.ACCOUNTING:During the past two years the C.I.C. staff has tackled the question of modern accounting wholeheartedly in every depot, and training classes in cost accounting have been given for cooperative accountants who only know old style Chinese bookkeeping. C.I.C. trained accountants have been allocated to cooperatives—for big cooperativesone accountant is employed by each society, for small, one accountant serves two or three. Emphasis has been placed on the presentation of monthly balance sheets and yearly closing of accounts with profit sharing.Profits are divided among the members once—or in rare cases twice—a year. The usual method of division, all claims including interest on loans and shares having first been paid, is as follows:Reserves20 per centEmergency Fund10 per centBonus to Officers of Society10 per centCommon Good Fund10 per centDivided among Members50 per centThe division accords with Chinese Law. The bonus to officers is usually made to include gifts to apprentices and hired workers such as cooks, and the Common Good Fund is used for education, medical welfare, and other social service. The division among members is made in strict proportion to wage and time worked.Local conditions and various industries differ so much that no wage-policy has at present been applied. In general it may be said that wages in cooperatives—fixed by the members themselves—are about the same as those in private factories of the district. The products in general sell at prevailing rates, though in some cases the prices have been lowered and profiteering prevented by the action of the cooperatives.COOPERATIVE FEDERATIONS:Wherever the societies have passed the first short period of infantile dependence on the C.I.C. they have been associated into federations, sometimes according to trade, but more often and more wholesomely, according to districts. The most important immediate function of the federation is to open a supply and marketing agency, which by its centralization, specialization, and greater supply of circulating capital is able to relieve the cooperatives of most of their problems of buying and selling....TRAINING:Training of organizers is of vital importance, for it is they who will succeed or fail in giving to the workers true conceptions of cooperation, industry, and business, and in inculcating efficient methods and habits. Classes for organizers have consequently been held in every region.Training of cooperative chairmen in their duties is alsoundertaken. They "learn by doing,"—how to conduct meetings, business principles, cooperative law, history of cooperation, scope and significance of industrial cooperation in China.... The most usual training is by weekly night classes and meetings. There is also constant informal training by the organizers, who devote about one day a week to each cooperative, and work with the members on the solution of immediate problems by the application of cooperative principles. Popular education of workers will be described later.Another important aspect of training is technical. In no case is a society organized until the technical ability of the members is adequate for making a successful business. So, with refugees and unskilled peasants it is usually necessary to give preliminary training—mainly in textiles. Wherever there is textile work, training classes have been held in spinning and weaving....SOCIAL WELFARE WORK:No statistics have been compiled about the social contribution of the C.I.C. to the communities around its depot. The work varies according to local needs and opportunities, and according to available resources in funds and manpower....OUTLOOK:After the war there will undoubtedly come a period of readjustment, when the renewed influx of machinery and machine-finished goods will demand a shift of emphasis—for instance handspinning cannot survive indefinitely, no matter how essential it is at present. It is to be expected that at that period the C.I.C. will continue to use in some industries methods now employed, but that in others there will be a transition to rationalization and mechanization. With a soundly integrated network of skilled workmen, experienced engineers, and bankers' confidence, the C.I.C. will be able to make this transition without severe dislocation.The C.I.C. is essentially a non-political organization; its functions are all technical, and its staff is composed of experts in various lines—cooperative methods, accounting, engineering. Success does not depend on political position or power, but on the simple and essential condition that this type of industry produces efficiently the goods that China needs. The C.I.C. objective is just Dr. Sun Yat-sen's Third Principle—People's Livelihood—practically expressed.The success of cooperative movements in other parts of the world—their ability to weather economic crises anddepressions—has been due to the solidarity that comes when the motive force in industry and commerce is not the profit of a few but the livelihood of many. In the same way the C.I.C. can become a permanent force for national stability and strength.[7]

The plan was to construct throughout China chains of small industries which should use local materials to supply the manufactured goods fundamentally necessary to the life of the people.

Industrial cooperative societies are organized around about 60 depots over 16 provinces. An average depot of about 25 cooperatives is supervised and advised by a group of men consisting of depotmaster, accountant, technician, and two or three organizers.

For the coordination of work depots are divided among five regions: the Northwest (NW), the Southeast (SE), the Chuankang (Szechwan and Sikang) region (CK), the Southwest (SW), and Yunnan (Y). Each is headed by regional headquarters, which are responsible to the Central Headquarters at Chungking which represents the C.I.C. on general questions and negotiations, and decides, in consultation with regional chiefs, on broad lines of policy. The Central Headquarters also supplies the services of traveling advisers on engineering, accounting, and organization problems.

The staff of 700 is financed by Government funds, since the C.I.C. has been named a social organization responsible to the Executive Yüan. Further, the C.I.C. was given $5,000,000 by the Central Government to be used as loan capital for cooperatives. More recently, negotiations with various banks have made new large sums available, so that the amount which can now be used for the capitalization of cooperatives is near $30,000,000.

The above two sources of income provide no money for education, research, evacuation of workers from occupied areas, technical training, refugee work relief, medical help, or capital loans in guerrilla regions. Necessary auxiliary activities as these are provided for to a certain extent by gifts from interested men and women in China and abroad....FORMING AN INDUSTRIAL COOPERATIVE: When a depot is first set up, the depotmaster advertises the objectives of the C.I.C. by posters and speeches. But as soon as a few workmen get to know about its activities there is no more need to advertise. There are always plenty of workers who will prefer the security and freedom of a cooperative to unemployment or to working for a master.

The number of men needed to form a cooperative is at least seven, but there is no upper limit. They first come to talk things over with a C.I.C. organizer, present their plan for setting up a factory or workshop, with proof of their qualifications and a tentative budget showing how much loan capital will be needed to start work. The organizer explains to them the cooperative system of self-government,Chinese cooperative law, and the C.I.C. Model Constitution. Then they take some descriptive literature home, and discuss among themselves whom they want as their officers.

Meanwhile, their plans are talked over by the depotmaster, accountant, organizer, and engineer, and modifications suggested. If, as often happens, it turns out that they are only merchants anxious to get rich quick and notbona fideworkmen ready to work hard, the plans are rejected.

If all is satisfactory, a meeting is held for the election of officers, determination of share capital, voting of wages, and work begins as soon as the loan is put through. At least one quarter of the subscribed share capital must be paid up immediately, and the total loan—long-term and short—cannot exceed 20 times the subscribed share capital.... The actual ratio of share to loan capital averages about 1 to 6.

INDUSTRIAL DISTRIBUTION:Distribution of industry is shown in the following condensed table:

Textiles610[cooperatives]Engineering49Mining118Chemical206Pottery69Foodstuffs83Transport4Miscellaneous395———1,534

There are no less than 114 types of cooperatives, and almost every daily need of the people can be met.

Before any cooperative is organized, investigations are made to ensure that (I) there are raw materials near at hand, (II) there is skilled workmanship available, and (III) there is a market for the finished product. Where these three do not co-exist at one place, a compromise of the most reasonable kind is effected if possible. Some examples—by no means exhaustive—of the adaptation of types of industry to meet local conditions are described as follows:

Wool... In the beginning of 1939 woolspinners of Chentu were still using either the simple old whorl or the handturned wheel. The volume of production was verysmall. But during 1939 the C.I.C. embarked on a huge program of blanket production for the army, and improved streamlined treadle spinners were introduced, and thousands of men and women taught the technique of using them. Blankets were made at eight centers of west and northern China; everywhere improved woolspinning and woolweaving machines and techniques brought new productive power. During the winter of 1939-40, 400,000 blankets were turned out, and another million and a half will be made during the remainder of 1940.

The wool used by the blanket-making cooperatives comes from the highlands of Chinghai, Kansu, Ningsia, and Shensi, and now instead of being carried raw to Tientsin or Shanghai as in the old days, it is being spun and woven near to the source of supply. Improvements are constantly being made—better machines, finer spinning, use of waterpower, better carding and finishing—so that the whole project works to raise the efficiency and living standard of the local people.

Cotton. Wherever cotton is grown spinning and weaving cooperatives are numerous, for clothing is one of the fundamental needs of life....

Grass Cloth. Linen, or more correctly grass cloth, was introduced into Szechwan from Kwangtung generations ago, and now fine cloth is woven. Production thereof from ramie thread was at its height 20 years ago, but since then the craft has declined until recently, when the partial blockade of the war made the industry profitable again....

Goldwashing. Placer gold exists along every river in West China and in many parts of South China too. Even in Chungking one may see needy coolies scraping up and washing riverside mud for its tiny precious content.

The gold is easily available by simple methods, though certain difficulties have hitherto prevented its extraction on a larger scale. But now every grain is an asset to China in economic warfare, and so many goldwashing cooperatives have been organized. In the whole country there are 66 cooperatives, most of which are in the Han valley.... Now the cooperatives ... are self-supporting and produce 60 to 70 oz. of gold a day.

Coal and Iron. Throughout the hinterland of China new sources of coal and iron are being needed continually by newly transplanted industry. Szechwan has good coal, widespread, but rather thin in seam....

At the same time plans for the construction of blast furnaces have been worked out by C.I.C. engineers, and only wait for adequate financing. It is planned first to set up in South Shensi at a point within easy distance of coal and iron supplies a coke-making and a smelting plant, the total capitalization being $105,000.

Alcohol.A first experimental plant for the production of 96 per cent pure alcohol has been running nearly a year with a maximum output of 350 gallons a day. Since the cost of such a plant is comparatively small, and available supplies of grain make the cost of alcohol much less than that of gasoline, other plants have been set up. There are now six in operation and greater production in the future is envisaged. The sites of alcohol plants are naturally at key positions on the highway, where good supplies of coarse grain meet with the traffic line.

Prime Movers.In many cooperatives one may see a quaint mixture of old and new, where big flywheels are turned by human labor to maintain the spin of lathes, carding machines, and the like. This is a useful temporary expedient, possible where labor is cheap. Animal power is also used.

But C.I.C. engineers are not satisfied with this state of affairs; they are always on the lookout for new sources of power. So charcoal-or gasoline-burning internal combustion engines are commonly employed.

But most popular are waterwheels, and in every part of China will be found old wheels adapted for modern uses—driving textile machinery, turning lathes, grinding flour—undershot or overshot, single or in series. Gradually the wheels are being made of better materials and more efficient. Iron wheels are constructed at present weighing about one ton, at a cost of $3,000, and generating over 30 H.P.

In the plains waterpower is rarely available, but in the foothills of Tibet, the Tsingling Shan, or in the rough country of southern China this cheapest of all forms of power will come more and more into its own as C.I.C. machine shops construct improved waterwheels.

ACCOUNTING:During the past two years the C.I.C. staff has tackled the question of modern accounting wholeheartedly in every depot, and training classes in cost accounting have been given for cooperative accountants who only know old style Chinese bookkeeping. C.I.C. trained accountants have been allocated to cooperatives—for big cooperativesone accountant is employed by each society, for small, one accountant serves two or three. Emphasis has been placed on the presentation of monthly balance sheets and yearly closing of accounts with profit sharing.

Profits are divided among the members once—or in rare cases twice—a year. The usual method of division, all claims including interest on loans and shares having first been paid, is as follows:

Reserves20 per centEmergency Fund10 per centBonus to Officers of Society10 per centCommon Good Fund10 per centDivided among Members50 per cent

The division accords with Chinese Law. The bonus to officers is usually made to include gifts to apprentices and hired workers such as cooks, and the Common Good Fund is used for education, medical welfare, and other social service. The division among members is made in strict proportion to wage and time worked.

Local conditions and various industries differ so much that no wage-policy has at present been applied. In general it may be said that wages in cooperatives—fixed by the members themselves—are about the same as those in private factories of the district. The products in general sell at prevailing rates, though in some cases the prices have been lowered and profiteering prevented by the action of the cooperatives.

COOPERATIVE FEDERATIONS:Wherever the societies have passed the first short period of infantile dependence on the C.I.C. they have been associated into federations, sometimes according to trade, but more often and more wholesomely, according to districts. The most important immediate function of the federation is to open a supply and marketing agency, which by its centralization, specialization, and greater supply of circulating capital is able to relieve the cooperatives of most of their problems of buying and selling....

TRAINING:Training of organizers is of vital importance, for it is they who will succeed or fail in giving to the workers true conceptions of cooperation, industry, and business, and in inculcating efficient methods and habits. Classes for organizers have consequently been held in every region.

Training of cooperative chairmen in their duties is alsoundertaken. They "learn by doing,"—how to conduct meetings, business principles, cooperative law, history of cooperation, scope and significance of industrial cooperation in China.... The most usual training is by weekly night classes and meetings. There is also constant informal training by the organizers, who devote about one day a week to each cooperative, and work with the members on the solution of immediate problems by the application of cooperative principles. Popular education of workers will be described later.

Another important aspect of training is technical. In no case is a society organized until the technical ability of the members is adequate for making a successful business. So, with refugees and unskilled peasants it is usually necessary to give preliminary training—mainly in textiles. Wherever there is textile work, training classes have been held in spinning and weaving....

SOCIAL WELFARE WORK:No statistics have been compiled about the social contribution of the C.I.C. to the communities around its depot. The work varies according to local needs and opportunities, and according to available resources in funds and manpower....

OUTLOOK:After the war there will undoubtedly come a period of readjustment, when the renewed influx of machinery and machine-finished goods will demand a shift of emphasis—for instance handspinning cannot survive indefinitely, no matter how essential it is at present. It is to be expected that at that period the C.I.C. will continue to use in some industries methods now employed, but that in others there will be a transition to rationalization and mechanization. With a soundly integrated network of skilled workmen, experienced engineers, and bankers' confidence, the C.I.C. will be able to make this transition without severe dislocation.

The C.I.C. is essentially a non-political organization; its functions are all technical, and its staff is composed of experts in various lines—cooperative methods, accounting, engineering. Success does not depend on political position or power, but on the simple and essential condition that this type of industry produces efficiently the goods that China needs. The C.I.C. objective is just Dr. Sun Yat-sen's Third Principle—People's Livelihood—practically expressed.

The success of cooperative movements in other parts of the world—their ability to weather economic crises anddepressions—has been due to the solidarity that comes when the motive force in industry and commerce is not the profit of a few but the livelihood of many. In the same way the C.I.C. can become a permanent force for national stability and strength.[7]

The Model Constitution for an Industrial Cooperative[8]establishes safeguards to keep the cooperatives from becoming profiteering sweatshops. Bankrupts, drug addicts, persons incapable of working, and persons already members of a unit are forbidden to join a unit being formed (Art.7). No member may subscribe more than 20 per cent of the share capital of a single society (Art.9). A general annual meeting, with the quorum set at one-half, and action requiring the majority of a quorum, is the highest authority in a unit (Art.19). This meeting elects a board of directors and a separate board of supervisors (Arts.22 and 23). Sweeping disqualifications keep members from mixing personal or outside interests and cooperative matters (Art.32). The design of the unit constitution is such that each unit is an authentic, autonomous cooperative, governed well or badly in accordance with the abilities and needs of its members, and is not a mere fraction of state capitalism.

The C.I.C. taps a level of Chinese society hitherto largely unused[9]—the family, guild, village, and volunteer-society devices of the peasantry and townsmen who lived beneath the lowest limits of the scholastic bureaucracy. TheCommunists act as the inheritors to temporarily fanatical peasant rebellions; the National Government and Kuomintang, to ascendant mandarinates; the C.I.C. brings into play the rich experience of the Chinese with collective action. The resources of the social power so mobilized cannot easily be estimated, but general success would reshape much of Chinese society.

In fitting the C.I.C. to the general Chinese scene, however, it is important to compare the movement with some of the New Deal reforms in the United States, such as T.V.A. (Tennessee Valley Authority). Though these are important, neither the American nor the Chinese enterprises proclaim social revolution or charter Utopias. The reforms of President Roosevelt have had incalculable effect; no one knows what would have happened without them. Nevertheless, it is excessive to suggest that the existence of the United States as a political society depends upon these reforms. Similarly, the continuation of the National Government of China does not rest on the C.I.C., or on any other single institution alone.

The C.I.C. extends patterns of cooperation and farm-factory balance already tried in Europe, and also approached by such diverse agencies as the Soviet state and collective farms, and Mr. Henry Ford's worker-garden plans. Hitherto the Chinese cooperative workers have had a closer contact with Dearborn, Michigan, than with Moscow, R.S.F.S.R. The endeavor is a serious and important one. It supplements and develops the facilities—themselves very extensive—which are under full state-capitalist or private control. But Free China's markets, while they contain C.I.C.-made goods, are mostly filled with private or government products. A private Chinese business system which has survived thirty years of domestic war does not obsolesce instantaneously. The cooperative movement is, largely becauseof the integrity, enthusiasm, and tirelessness of Mr. Alley, the nearest thing to a realization ofmin shêngwhich China has yet seen; but the Right still plans for a China with vast state-capitalist and state-subsidized private industries, along with an all-pervading flow oflaissez-fairecommerce. The Marxians look on sympathetically but contemptuously.

The long one-party rule of the Kuomintang, now relaxed but not disestablished, has habituated the Chinese to the use of completely non-political groups—families and their connections; economic associations of various kinds; religious agencies—for political leverage. There are relatively few groups which possess clear public purposes and at the same time maintain unofficial status. Indeed, the stamp of quasi-official approval is so highly prized that many groups which seem to have no affiliation with the government are discovered to seek affiliation or to have acquired it roundabout.

Among the private or quasi-private groups which take most effect may be mentioned, however, the People's Foreign Relations Association, the League of Nations Union, and the China Branch of the International Peace Campaign. The first of these publishes the useful quarterly,The China Herald. The Campaign, which was launched as a world-wide center-and-left drive for peace, was under respected European leadership, and was favored by a large labor bloc in England. In the United States it was associated in the minds of some people with the Stalinist fellow-travellers—the elements who sat in the councils of the temporarily-joined forces of anti-Fascism and pro-Stalinism, who organized the American League for Peace and Democracy (a Popular Front movement), the American Friends of the Chinese People, and who dominated groups such as theAmerican Youth Congress. In China, contrariwise, the International Peace Campaign, fitting in with purposes of government and people, seemed to offer a world-wide sympathy for China's anti-aggression activities. The China Branch was among the most effective organizations in the Campaign. It developed vitality in diffusing peace propaganda—that is, for peace after the war. There was no trace of defeatism, sabotage of national defense, or obstruction to defensive war. With the outbreak of the European war, the I.P.C. disappeared almost altogether from the Western scene, but continues in China. Finally, the China League of Nations Union publishesThe China Forum, and carries on an educational campaign.

Christian activities have been extended and activized by war. Never before have the missions had as many opportunities for social and national service in China. Their schools are filled; their hospitals, crowded; their cause, related to America, to peace, and to a sane long view, is welcomed. The Chinese Y.M.C.A. has met the shock of war with extensive participation in relief, particularly among students and soldiers. Medical aid, tragically inadequate but infinitely better than nothing at all, is coming into China. The curtailment of mission activities in occupied China makes exploitation of the Christian field in the West even more desirable from the viewpoint of the Western churches. A recent work, by two Christians born in China, one American and the other Chinese, describes this situation clearly and significantly:China Rediscovers Her West.[10]

The other side of extra-political pressure comes in the form of class and regional interests. The phenomena of lobbying and special favor are less evident in Chungking than in previous governments of China. Special groups representing industries, areas, or vested interests do appear, but are apt to work through casual,untraceable patterns of personal relationships. There is no Chinese C.I.O., nor A. F. of L., but there is also no National Association of Manufacturers. The politics of economics gains by diffusion and absence of protest what it loses in sensitivity and explicitness. An economic group which feels itself outraged takes a long time to develop group consciousness; hence, it is less apt to feel outraged, and the generality of the people, the public, is often better off. There are undoubtedly scurrilous, politically vile, selfish advantages being taken in West China today; but the net outcome is counterbalanced by concrete improvement in the condition of the people as a whole, and the unquestionable morale of the leading and administrative classes.

Every government, where and however it may operate, has a double set of barriers which form its corridor of further existence: on the left it must meet the minimal needs of the governed, satisfy their physical and moral appetites sufficiently to keep itself from being ignored or overthrown; on the right it must compensate the persons who govern, and do so well enough to retain personnel adequate to government. The Marxians stress the former element; the Paretians, the latter. Both are visible in China. Had the exigencies of reform, social change, and military activity proved too sharp, too violent, too profitless, the personnel trained by experience and fitted by temperament to government might have gone over to Japan. The low caliber of Wang Ch'ing-wei and his clique is testimony to theélanof the West Chinese leaders. Chungking has ample reserves of administrative talent, military intelligence, and political acumen upon which to draw.

The last part of the picture is the most important: thelao-pai-hsing, the Old Hundred Names, the common people of China. They are the ultimate arbiters of this war, and of all future wars in East Asia: to this degree they are a superlative force in the world. Hundreds ofmillions strong, adept, flexible, trained in a culture which has flowed under (but not through) literacy for centuries, hard-working, patient, and physiologically sound, they are perhaps the greatest unified human group. Upon their anger against Japan depends the future of that Empire; if thelao-pai-hsingare determined to resist, Chiang could go, Chungking fall, the government scatter, the Communists collapse, and there would yet be war—restless, bitter, implacable, with the ferocity of a sane man employing violence as a last defense against violence not sane. Leaders exist aplenty in that sea of men, waiting for circumstance to cast them forth. Intelligence, information, cunning, power, and patience are all at hand.

The difference between a strange half-industrial modern Chinese Republic, striding toward the twenty-first century with seven-league boots of progress, and a Chinese chaos stinking with vice and disease under Japanese rule—this difference lies within the decision of the common people. The war has roused the workers, peasants, and petty townsmen. The Japanese bombers have carried ubiquitous messages of alarm. The Western world gasped when across the dusty plains of North China there rolled the tidal wave of Boxerism; but theI Ho Ch'üanof yesteryear is a passing fad in contrast to the bitterness and resolution of today's common people. There is no defeat in most of the faces in Shanghai, no surrender in the eyes of men who live, and must keep on living, surrounded by enemy vainglory. The traitors are marked by their own behavior; they bear the stigmata of a surrender to vice. Yet even they cannot be trusted by Japan. One who has visited the sources and the mouths of the rivers, who has seen the free Yangtze pouring out of Tibet and the captive Yangtze ripple past the grey flanks of Imperial Japanese destroyers, can testify that the Chinese people are not beaten now. If they are ever going to be beaten, it willtake a bigger force than Japan to do it—a morally greater, technically surer, politically wiser force.

The Chinese people know they are unconquered. They do not know it with their minds, despite hopeful calculations in terms of years and yen and reserves of oil. They do not even know it with a conscious assumption of faith, a fanatical determination to die for the new state. They know it just as men have always known the simplest things of life—things so simple that they may trouble the psychologist or elude the philosopher, and never even enter the vocabulary of political science. The Chinese sense of victory is like a reminiscent fragrance, a half-heard but poignant sound, a flash of inexpressible but profound meaning out of everyman's irrecoverable past. This omnipresent sense of victory and freedom may be twisted. Weak and cunning men rationalize this sense of victory into self-deceiving subterfuges of boring from within; they accept Japanese salaries while promising themselves sometime, always tomorrow, to subvert Japan; but even they lack no assurance of ultimate Chinese victory.

The winning of that victory lies on the sweating backs of men—in paddy-fields, on flaring highways, on flagstone pathways across a world, or behind the adobe and lattice walls of China's workshops. The war has conjured up an awareness of power. No one asks thelao-pai-hsingwhat they want; no ballots, no polls can reach them. But no people can hold such overt power and be unconscious of their own strength. China has awakened.

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