Instructions to the Logistics Departments to Prepare Review Reports on Violations of Fiscal Discipline
(April 22, 1952)

To all Central Bureaus and Sub-bureaus, with copy forwarded to the Party committees and financial commissions of provinces, municipalities directly under the central government, and prefectural-level cities, as well as to their respective financial organs; to all Major Military Regions and the Party Committees of the Chinese People’s Volunteers, with copy forwarded to military regions at all levels and to corps and divisions together with their logistics departments:

(1) Following the nationwide liberation, certain standards governing fiscal expenditures proved unsuited to the prevailing circumstances. Moreover, central financial authorities sometimes imposed overly strict controls on funds that ought to have been disbursed more freely; local financial systems had yet to be fully established; and revenues and expenditures at the township and town levels had not yet been systematically coordinated. As a result, local finances encountered a number of difficulties. This constituted one factor contributing to violations of financial regulations and discipline by local financial and logistical agencies. However, there were also shortcomings within the leadership bodies of financial and logistical services at various levels, which cannot be entirely attributed to the absence of comprehensive and sound institutional frameworks. Since the launch of the Three-Anti Campaign, in-depth investigations conducted across the country have revealed numerous serious breaches of financial rules and discipline both within local financial systems and in the army’s logistics apparatus. Examples include: inflating public projects to siphon off funds; withholding surplus balances that should have been remitted upward; falsifying budgets; engaging in clandestine stockpiling; arbitrarily imposing additional grain requisitions; and the widespread prevalence of arbitrary levies in rural areas. Such practices not only disrupted fiscal order and led to corruption and waste but also severely alienated the masses. It is therefore imperative, as this phase of the Three-Anti Campaign draws to a close, to undertake a comprehensive review of these issues. This exercise will greatly assist in summarizing experience, restoring fiscal discipline, and establishing a complete set of financial regulations.

(2) In March, the Finance Committee of the Jiangxi Provincial Party Committee submitted a written self-criticism, admitting that the actual amount of grain collected exceeded by 500 million jin the figure they had previously reported by telephone. That report was circulated to all local finance committees for reference. In addition, the Central-South Finance Committee also prepared a similar review, which has already been transmitted to the major administrative regions. We have now received another such report from Guangdong Province’s finance department and are forwarding it herewith for your consideration.

(3) The Central Authorities hereby instruct the finance committees at three levels—namely, those of the major administrative regions, provinces (autonomous regions), municipalities, and special administrative zones—as well as the logistics departments of the army at divisional level and above, to conduct thorough reviews along the lines of the reports prepared by the Central-South Region, Jiangxi Province, and Guangdong Province. These reviews must be comprehensive, truthful, and free from any concealment. Upon completion, each unit should take a proactive stance and be able to address its subordinate units with confidence and justification. Failure to do so would leave unresolved problems lingering, necessitating a subsequent re-examination at some future date—a development that would place the reviewing body in a defensive position and expose it to criticism and disciplinary action.

(4) The aforementioned review reports are to be submitted hierarchically to the Central Finance Commission and the General Logistics Department of the Central Military Commission no later than the end of May; no delays are permitted.

The Central Authorities
April 22nd