ECONOMIC POLICY OF THE CHINESE SOVIET REPUBLIC

1 December 1931.

[Text] For the development of agrarian revolution and anti-imperialism, and for the consolidation of the revolutionary union of workers and peasants, the First National Congress of the Chinese Worker-Peasant-Soldier Soviet sets forth the following articles as the basis of the current economic policy of the soviet.

I.  Industry

1. To ensure a completely independent government of the soviet, all economic life lines in the hands of imperialism (such as concessions, customs, banks, railroads, navigation, mines, and factories) are to be nationalized. Land-lease contracts will be re-negotiated on some foreign business enterprises currently being allowed to operate and production will continue. However, they must abide by all the laws of the soviet, implement an 8-hour work day system and carry out various other regulations. Should the owners of these enterprises contravene these conditions, engage in work slowdowns, shut down the enterprise, or interfere in the domestic affairs of the soviet government and support the counterrevolution, then the enterprises are to be immediately confiscated and nationalized.

2. With regard to business enterprises and handicraft industries run by Chinese capitalists, the soviet will not nationalize them, but allow them to remain in the hands of their original owners. However, they will be operated under the supervision of workers, the Factory Committee and the trade union. But, should the owners of these business enterprises slow down production, sabotage the laws of the soviet, or participate in such counterrevolutionary activities as bribery or sabotaging or slowing down production, these business enterprises will be confiscated immediately and, in accordance with concrete conditions, handed over to the workers labor cooperative or the soviet government to manage.

3. Strive strenuously to further the development of industry. The soviet government pays special attention to ensuring the development of all business enterprises that supply the Red Army (factories, workshops, handicraft industries, home enterprises, etc.).

II. Commerce

1. The soviet should guarantee freedom of commerce. It should not interfere with the routine workings of the commodity market. But the soviet must strictly prohibit such speculative activities by businessmen as the raising of prices. It should disband chambers of commerce, and prohibit big and small merchants from monopolizing prices in the name of the chamber of commerce. Should it discover sabotage or economic blockage by businessmen, thereby endangering the supply of basic daily necessities needed by the masses, or because the Red Army needs it, the soviet government should set price ceilings on basic commodities. These measures are to be taken only when they are necessary, and, when it becomes possible, freedom of commerce is to be restored.

2. In trade with non-soviet areas, "monopoly of foreign trade" absolutely cannot be implemented as yet, but, at the same time, the soviet government should supervise such trade in order to ensure a supply of basic necessity commodities to the soviet area. The outflow of currency must have the permission of the soviet.

3. For the trade of the entire soviet area and to ensure the interests of the working poor and to improve the supply of necessary commodities to the masses, the soviet must extend all-out assistance to the organization and development of consumer cooperatives. The soviet should give financial aid and grant tax exemptions to cooperatives, and it should turn over in part some of the buildings and shops that were confiscated for the use of the cooperatives. Moreover, in order to guarantee supply to the laboring masses, the government should promote public warehouses to store food grains so as to be able to give aid to the masses or sell the grains to them at a low price.

III. Finance and Revenue Laws

1. Wipe out the entire tax system of the warlord government of the Kuomintang and its unlawful levies, the soviet will promulgate a unified progressive tax so that the burden will fall, instead, on the capitalists. The soviet government should exempt from taxation the Red Army, workers, and families of the poor in urban and rural areas. In cases of unforeseen disasters, taxes should either be remitted or reduced.

2. Negate all past verbal and written agreements of slavery and usury, void all usurious obligations of peasants and the poor of the cities, prohibit anticipatory taxation or debtor bondage. The revolutionary laws should be applied so as to strictly guard against and also prevent all attempts to restore relations between slavery and slavery. All items passed by the urban and rural poor are to be returned to their original owners without compensation, and the pawnshops are to be turned over to the soviet.

3. Old currency notes, for the present, are to be permitted to circulate in the soviet areas, but market differences must be eliminated. However, these old currency notes must be given scrutiny and verification to facilitate

supervision. The soviet should issue its own currency notes and exchange them for the old, and, at first, the old currency notes may be kept in circulation with the addition of a stamped marking. All currency notes from other areas must be exchanged for the soviet notes or the stamped currency notes.

4. As a step toward helping all the working poor and to implement a uniform currency system, the soviet should establish a Worker-Peasant Bank and open branches in the various areas of the soviet. This bank has the special authority to print currency. It will provide loans to people engaged in peasant family enterprises, and to cooperatives and small businessmen for economic development. It shall carry out currency exchange, and its branches will, in addition, act as the taxing agency.

5. The soviet should dispatch representatives to keep an eye on the activities of this bank and all other big, privately owned banks and money changers, and prohibit them from hiding any kind of currency. The soviet shall strictly prohibit all attempts by bankers to utilize local banks and engage in counterrevolutionary activities.

IV. Municipal Administration

1. Necessary adjustments should be made by the soviet to lighten the rent burden of the urban poor. The houses and assets of landlords, despotic gentry, warlords, bureaucrats and police clans are to be confiscated, the houses are to be turned over to workers, laborers, and apprentices for residential purposes, and the assets are to be divided by the urban poor or applied to public enterprises by the soviet. The urban soviet should utilize all means to improve the housing conditions of the poor.

Hsiang Ying, Chou I-li, Tseng Shan, Teng Fa, Chang Ting-cheng, Chen Cheng-jen, and Chai Ch'iu
Executive Committee Chairmen,
The Presidium,
The First National Congress of the Chinese Worker-Peasant-Soldier Soviet,

Mao Tse-tung, Chairman
Central Executive Committee of the Chinese Soviet Republic

Hsian Ying, Chang Kuo-tao, Vice Chairmen

1 December 1931

* "Soviet China," Soviet Union Foreign Workers Publishing House (Moscow) 1933