Foreign Relations of the United States, 1949, The Far East: China, Volume VIII

893.00B/10–2249: Telegram

The Consul General at Shanghai (McConaughy) to the Secretary of State

Shanghai, October 22, 1949—2 p. m.
[Received October 22—6:18 a. m.]

4486. Information reaching us from various private sources re conditions countryside in provinces this part of China has revealed increasingly strong and now virtually unanimous testimony that general situation such areas is substantially worse than in Shanghai and other large cities. Chinese contacts who quite ready admit Communists have scored some creditable achievements in Shanghai have entirely different view of their accomplishments in country. While we have as yet little concrete evidence to support this thesis, testimony to general fact of rural distress is becoming so persistent and universal that it must have considerable factual basis. From relatively meager information to date, we would tentatively list following as among possible causes of trouble:

(1) Landowning farmers and landlords, fearing eventual dispossession under Communist land re-division program, are sacrificing normal long range care of property for immediate profits with consequent drop in morale and in farm productivity.

(2) Poorer tenant farmers who anxiously await long-promised re-division, becoming restless as program not yet activated.

(3) Chinese peasants who traditionally resist change have little faith in Communist land reform measures as relatively small individual portions presently held in crowded Yangtze basin area not suited for effective redistribution.

(4) Farmers resent constant interference private life by Communist cadre workers. Dislike endless compulsory attendance meetings. Formerly local government not much in evidence in small rural communities with few officials seen. Communists have transformed simple rural government into elaborate regulatory system through which surveillance, restrictions and regimentation of populace is exercised to extent not yet apparent in cities. Strict control travel (with even trips to nearby towns requiring permits), together with frequent home visitations by police to verify presence all members household, results widespread feeling apprehension and insecurity.

(5) Peasants confused by high pressure Communist propaganda, which one day tells them they are backbone of revolution and next day indicates they play second fiddle to industrial workers in cities.

(6) Defaulting by landlords on tax payments (some of whom prefer surrender land rather than pay heavy assessments on property they expected shortly lose anyway) has placed tax burden directly on many tenants. In recent years Kmt farmers theoretically supposed to pay about 15 percent of produce in taxes or if tenant about 30 percent in rental. In practice both rental and taxation largely ignored or nullified through inflation and through payments in inferior goods. Farmers now held strictly accountable for prompt payment taxes in best quality rice and other produce.

(7) Large quantities rice “donated” by peasants to Communist authorities immediately after “liberation” on understanding that rice thus taken would be deducted from autumn taxes. However, at meetings of people’s representatives in various localities this area it was decided that in order support war front, spring “taxes” should not be deducted from autumn payment and receipts for advanced spring payments should be returned to government for cancellation. Farmers resentful that authorities have gone back on word.

(8) Rice and other stocks depleted by heavy rainfall, floods and typhoon making future prospects dim. Some superstitious farmers believe catastrophes signify divine disapproval of Communists.

(9) During Kmt inflation farmers could count on high prices which merchants and traders were willing to pay for food in expectation of charging even higher prices in cities. Farmers would thus hoard rice in anticipation favorable price levels. Communist authorities in seeking create artificial abundance in cities at expense countryside insist that farmers sell all rice immediately after harvest at prices determined by prevailing demand. This forces prices down and creates unfavorable market which farmers cannot avoid.

(10) Desire of Communists to take care rice needs of industrial workers in cities has led them to press various austerity measures on peasant population in some instances even going so far as to insist that peasants change from rice staple to flour and other foods. Peasant response is to hide rice for own use. Communist attempts to recover such caches could hardly avoid causing resentment on part of farmers who fail to understand why they should change diet for sake of city stomachs.

(11) Farmers now deprived of income from subsidiary occupations such as basket weaving, furniture making, carpentry, masonry, etc., by prevailing stagnation business and drying up of former markets these goods in cities through departure foreigners and other consumers.

(13) [sic] Former credit relationship between farmers on one hand, landlords and merchants on other broken down with no adequate system having yet been installed to replace it. Communists trying to utilize banks and cooperative societies for purpose with indifferent success to date.

(14) Communists widely heralded program repatriation of “refugees” from cities to countryside for “production” burdens already greatly overcrowded farming areas with surplus population which has nothing to produce. Strenuous opposition by farmers has caused at least temporary halt to repatriation program and many “refugees” have returned to cities.

(15) Peasants most vociferous in supporting Communists are generally least successful farmers who hope gain through Communist land reform what they could not achieve in normal competition with other farmers. Their support discredits entire Communist movement in mind of more able farmers who feel that any peasant should by ordinary application and diligence become self-sufficient within two generations.

(16) Communist Party workers in countryside definitely inferior calibre to those in cities and not as likely attract support.

For positive side of ledger, reportedly some farmers favorably impressed with Communist attempts keep down interest rates and willingness Communists to modify programs in light of experience. Also feel Communists achieved considerable success in mobilizing farmers to cooperate in rectifying damage caused by floods and typhoon. Communist efforts to improve hygiene, health measures and setting up service stations for assistance in fertilization and irrigation methods also appreciated. Too early for such measures to have appreciable effect on over-all discontent, however. By same token dissatisfaction has not yet approached stage of violent resistance, although rumored that farmers in several areas are passively opposing individual Communist regulations. (Reports also indicate continued activity by bands of guerrilla Kmt forces now operating under name “Paichun” (White Army) in many districts but we believe such reports tend to be exaggerated.)

Believe also well to keep in mind that present situation is product initial Communist efforts effect far-reaching changes in face tremendous obstacles and it is impossible at this early confused stage to estimate to what extent Communists may eventually succeed in carrying out rural program to point where system functions effectively with sufficient support of majority peasants to preclude likelihood continuous significant opposition.

Sent Department, repeated Taipei 401, Hong Kong 332.

McConaughy