[1] Commentary on “The Shandong Experience” (March 17, 1959) Comrade Xiaoping [2]: Just now I asked you to circulate the Hebei Provincial Party Committee’s report of March 16 [3], deeming it highly instructive. Now I have also reviewed the Shandong Provincial Party Committee’s report dated February 16 at 8 p.m., which I likewise consider very valuable for reference. Please promptly forward this as well to the party committees of all provinces, municipalities, and autonomous regions.

At present, accumulation should not be excessive, and all three levels of the people’s communes—commune, management district, and production team—should maintain some reserves. Hubei has set varying accumulation ratios, generally around 18 percent. Of this 18 percent, approximately 7 or 8 percent is allocated to the commune, 3 or 2 percent to the management district, and 8 percent to the production team, while the county makes no deductions for accumulation. This approach is worthy of consideration.

Mao Zedong, 3:00 p.m., March 17, 1959  Printed from a document of the CPC Central Committee. (With manuscript)

Notes [1] Refers to the third report submitted by the CPC Shandong Provincial Committee to Mao Zedong and the Central Committee on the evening of March 16, 1959, at 8 p.m., concerning the situation at the six-level cadres’ conference. The report states: (1) Regarding the organizational structure of the people’s communes, our preliminary view is that, in principle, either the production brigade (management district) or the production team—equivalent to the former advanced cooperatives—should serve as the basic accounting unit. As for units larger than the present production teams but smaller than the existing production brigades, two methods are to be adopted: (a) Where economic conditions are relatively similar, with the consent of the masses, the current production brigade may be designated as the basic accounting unit; (b) Where there are significant disparities in economic conditions and the masses wish to separate, the production brigade may be appropriately subdivided on the basis of the original advanced cooperative to form the basic accounting unit. (2) Concerning the ratio of accumulation to consumption, we believe that, broadly speaking, various deductions may account for about 47 percent of total income (national taxes and assigned quotas comprising roughly 7 percent, commune accumulation around 18 percent, and production expenses approximately 22 percent), leaving approximately 53 percent for distribution among the members. At present, the savings fund is primarily used for basic construction in agriculture, forestry, animal husbandry, sideline industries, and fisheries, and is managed and utilized at different levels by the commune and the brigade or production team, typically with the commune controlling two-thirds and the team one-third. The public welfare fund is mainly employed for public welfare projects, usually with the commune responsible for one-third and the team for two-thirds. Within the communal accumulation, the county joint association may draw 3 to 5 percent, up to a maximum of 10 percent, from the portion retained by the commune itself. When endorsing and forwarding this report from the Shandong Provincial Committee, Mao Zedong changed its title to “The Shandong Experience.” [2] Xiaoping refers to Deng Xiaoping, who at that time held the posts of General Secretary of the CPC Central Committee and Vice Premier of the State Council. [3] Refers to the second report submitted by the CPC Hebei Provincial Committee to the Central Committee and Mao Zedong on March 16, 1959, concerning the situation at the six-level cadres’ conference; see note [2] on page of this volume.