Directive on Rectifying the Work of the Ministry of Finance

(August 25, 1933)

At a time when the Red Army is winning victories, the Soviet areas are expanding, and the revolutionary movement is surging vigorously forward, the principles of Soviet financial policy should be: (1) To place the burden on the exploiting classes, which mainly means imposing fines on landlords and levying contributions from rich peasants in the White areas and the Soviet areas, as well as collecting appropriate taxes from merchants without harming the economic development of the Soviet areas; (2) To strive to carry out economic construction, so as to increase Soviet financial revenue by developing the national economy, breaking the enemy’s blockade, and curbing exploitation by merchants; (3) To rely on the revolutionary enthusiasm of the laboring peasant masses to collect an appropriate land tax to serve as state finance—this is the fundamental principle of Soviet financial policy.

Under this principle, Soviet financial organs should, by revolutionary means, with sound organization and strict planning, expand financial revenue so that it corresponds to the development of the revolutionary war. All conservative notions that deviate from political tasks and all unplanned, chaotic conditions are extremely harmful.

In the past, the work of the Soviet financial organs, under the supervision of the People’s Commissariat, showed considerable achievements in meeting the needs of the war and establishing an accounting system. However, with regard to the principles of financial policy, the correct orientation was not upheld. This was mainly manifested in the failure to exert the greatest effort to raise funds from the exploiters and to increase financial revenue by developing the national economy, while devoting all efforts to tax revenue, paper currency, and public bonds. At the same time, insufficient estimation of the revolutionary development led to a lack of planning in finance, which hindered large-scale financial administration. In terms of leadership methods, for instance, fund-raising did not rely on the urban and rural Soviets and the mass organizations of workers and peasants to mobilize the broad masses through them, but relied only on a small number of personnel working above the district level, so that the tasks could not be fully accomplished. This bureaucratic leadership method exists quite strongly within the Soviet financial organs. On the question of cadres, attention was not paid to training and promoting large numbers of financial personnel, and some corrupt and degenerate elements were not criticized and purged. All this is the result of failing to implement the correct class line and of an opportunist estimation of the revolutionary situation, and Comrade Deng Zihui, the People’s Commissar for Finance, should bear the greatest responsibility.

The People’s Commissariat holds that this state of affairs cannot be allowed to continue. It hereby instructs Comrade Lin Boqu, the newly appointed Minister of the People’s Commissariat for Finance, to carry out a fundamental rectification. Self-criticism throughout the entire financial system should be launched to correct erroneous understandings in financial policy, to establish financial plans suited to the development of the war, to transform leadership methods, to promote and train large numbers of financial personnel, and to eliminate corruption and degeneration within the financial system, so that the entire Soviet financial system may be rapidly strengthened, Soviet finance may suit the development of the revolution, and sufficient financial conditions may be provided for the revolutionary war, in order to thoroughly smash the fifth “encirclement and suppression” campaign by imperialism and the Kuomintang.

This directive is hereby issued.

Chairman Mao Zedong

Vice Chairmen Xiang Ying, Zhang Guotao

August 25, 1933