Comment on the Report on the Conference Situation
(April 10, 1960)

To the Shanghai Bureau, the Party committees of all provinces, municipalities, and autonomous regions, with copies to all ministries and commissions at the central level and all Party leadership groups:

The Shanxi six-level cadres conference was conducted very well. The problems exposed and the guidelines, policies, and measures for resolving these problems are all correct. This is a systematic document that provides a serious analysis and appropriate handling of the existing problems in the people's communes. It can serve as reference for all localities, and it is hoped that they will adopt it as appropriate in light of their own conditions. This document and its attachments may be published in Party journals.

Central Committee
April 10, 1960

After reading by Liu, Deng, Peng, and Tan, [2]
Shang Kun [3] to handle immediately.

Mao

[1]
The report from the CPC Shanxi Provincial Committee to the Central Committee and Mao Zedong on April 6, 1960, regarding the situation of the six-level cadres conference stated: Our province's six-level cadres conference was convened in a timely manner, and many problems were uncovered. I. On the issue of transitioning from the basic team ownership system to the basic commune ownership system. Before the conference, cadres at the commune level held three kinds of attitudes: first, actively creating conditions for the transition; second, rushing to transition ahead of others; third, passively waiting. Through study and discussion at this conference, there was unanimous recognition that the timing of the transition depends on the level of production development and the level of mass consciousness, and there was general agreement that the conditions for transition include the following five points: (1) Production has developed greatly, and the average income of commune members is equivalent to the income level of workers in county and municipal industrial enterprises. (2) The economy owned at the commune level has developed greatly, and the output value of commune-run enterprises accounts for more than half of the total output value of the entire commune. (3) The economic levels of all management districts, under conditions of common upsurge, are roughly tending toward balance. (4) Mechanization and semi-mechanization have been preliminarily realized, with the vast majority of large and medium-sized agricultural machinery owned at the commune level. (5) The masses have relatively high consciousness, and the management districts have backbone cadres with relatively high consciousness and strong ability. Judging from these conditions, the conditions for realizing the transition from the basic team ownership system to the basic commune ownership system across the entire province are not yet mature at present. In order to explore experience, it is necessary for the whole province to organize some pilot projects in a planned and controlled manner. Currently, the provincial Party committee has approved 34 pilot communes. II. On the issue of developing the economy at the commune level. In the plans formulated by various communes last year for developing the commune-run economy in 1960, 70% of the communes had intentions of "equalitarianism and arbitrary transfer," with methods including: (1) uncompensated requisition; (2) low-price purchase, unequal exchange; (3) non-payment of cash, having a price but no payment; (4) apportioning funds for developing commune-run enterprises; (5) arbitrarily occupying land of management districts; (6) arbitrarily requisitioning labor from management districts. After discussion, the conference pointed out three criteria for distinguishing "equalitarianism and arbitrary transfer": namely, detrimental to the development of production, unequal exchange, and non-voluntary. The development direction of the commune-run economy is large-scale, public, and new. The main sources of funds for developing the economy at the commune level are fourfold: (1) profits from commune-run enterprises; (2) accumulation drawn from management districts according to regulations; (3) state investment; (4) state loans. The main sources of means of production needed for developing the commune-run economy are fivefold: (1) self-reliance; (2) ordering from the state; (3) ordering from management districts based on the principle of voluntariness and equal exchange; (4) deploying a certain amount of labor according to regulations to cultivate orchards, forest areas, etc.; (5) transforming a certain management district first into an enterprise or undertaking directly under the commune. III. On the issue of distribution. The conference discovered the following problems worthy of attention: (1) accumulation by management districts is too large; (2) the accumulation drawn by communes from management districts is too high; (3) commune members receive very little cash in hand. To this end, the following two principles for resolution were proposed: (1) Except for key districts, it must be ensured that the income of commune members increases compared to the previous year, and if necessary, the accumulation ratio may be appropriately reduced; (2) Appropriately reduce the ratio of accumulation drawn by communes, and the public accumulation funds of management districts should increase compared to the previous year. IV. On the issues of financial management of people's communes and the work style of cadres. In the past, wasteful phenomena were relatively common: (1) engaging in large-scale non-productive construction and purchases; (2) serious phenomena of hosting guests, giving gifts, and holding banquets; (3) arbitrarily wasting labor, destroying existing buildings; (4) arbitrarily expanding organizational structures. In addition, instances of embezzlement have also increased, and the work style of some cadres is extremely bad. The conference deemed it necessary to reiterate the following prohibitions: no hosting of guests, no giving of gifts, no commune shall build auditoriums within 3 years, no arbitrary increase in organizational structures, commune office expenses shall not exceed regulations, and commune management expenses shall not exceed 1% of the commune-level income. In addition, a draft commune financial management system was formulated. V. On the issue of rural public canteens. At present, first-class canteens where all aspects of work are done relatively well account for 60%, second-class canteens account for 30%, and unstable third-class canteens account for 10%. Everyone was extremely interested in the experiences of the Party secretary taking command to run canteens well, poor and lower-middle peasants holding the advantage in canteen management committees, and implementing grain management by assigning targets to households and unified storage.

[2]
Liu refers to Liu Shaoqi. Deng refers to Deng Xiaoping, then General Secretary of the CPC Central Committee and Vice Premier of the State Council. Peng refers to Peng Zhen, then member of the Political Bureau of the CPC Central Committee and Secretary of the Central Secretariat. Tan refers to Tan Zhenlin, then member of the Political Bureau of the CPC Central Committee, Secretary of the Central Secretariat, and Vice Premier of the State Council.

[3]
Shang Kun, namely Yang Shangkun, then Alternate Secretary of the Central Secretariat of the CPC Central Committee and Director of the General Office of the Central Committee.
In 1960, Mao Zedong and Deng Xiaoping in Beijing.