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6 FOREIGN PM, MONDAY, JANUARY 27, 1941 FOREIGN Neville Finds China Facing Gloomy Prospects... Food Profiteering and Hoarding Impose Privations on the Masses...Flight of Capital Unchecked by Chungking Government Robert Neville, foreign news editor of PM, has been in the Far East since late October. After spending several weeks in Manila he went on to Hongkong and Chungking. He has written a series of ten articles on conditions as he found them in Free China and in the British community in and about Hongkong. This is the first installment of his report. By ROBERT NEVILLE Copyright, 1941, The Newspaper PM, Inc. [[image]] The Yangtze Valley has become a scene of civil strife. CHUNGKING (By Air Mail).-No task is more unpleasant than to write bad news about a country for which one has the greatest admiration and affection. I came to China last month prepared to witness a heroic nation run by a national government fighting a cruel invasion to the very limits of its ability. No one can rob China of her heroism, but neither can an honest newspaper man be expected to see all white when there are considerable patches of black. At a time when international developments could not be brighter for China, the internal situation could scarcely be gloomier. Instead of optimism, there is uneasiness and uncertainty at Chungking today, and not all the brave official words can disguise the deepening discontent and bitterness. Briefly and bluntly, facing Free China today are the twin threats of civil war and economic chaos. The threat of civil war is the old story of strife between the Communist Armies and the Central Government's forces. It stems now from a recent military order of the Chungking authorities to the Communist guerilla armies to move out of the lower Yangtze Valley with their 200,000 men through Japanese-held lines to famine-stricken areas north of the Yellow River, all of which are, incidentally, nominally occupied by the Japanese. No Ammunition Complicating the situation is the fact that the guerillas have had no ammunition or medical supplies issued for 14 months and no pay for three, and that the adjoining Central Government's forces have sometimes shown more interest in fighting the Communists than the Japanese. [This article is written early in January, but has just reached here because of delays in air mail carrier service. Since it was written, the conflict between the Chungking forces and the Fourth Route Army (Communist) has come to a head. As pointed out yesterday by The General, the arrest of Gen. Yeh Ting, commander of the Fourth Army, plays directly into Japan's hands and may seriously complicate Chinking's problems unless the incident is quickly adjusted. That President Roosevelt is intensely interested in the internal situation in China is indicated by the announcement in Washington last week that Lauchlin Currie, Presidential administrative assistant, would leave shortly on a special mission to China.] As I write, the Communist generals have agreed to move provided they get paid, receive ammunition, are issued winter uniforms and are guaranteed from attack by other Chinese forces as they move. Older heads in China assure me that in all probability the present Communist-Central Government bickering will end temporarily in a compromise, with no assurance whatever that it will not break out again soon. Meanwhile, the three important embassies at Chungking--the U. S., the British and the Soviet--have all let the proper Chinese authorities know that nothing could be more disastrous than a civil war. No compromise, however, will solve China's economics, and it begins to look as if $160,000,000 in American gold and $25,000,000 in sterling plus some $100,000,000 in unused credits in Soviet Russia will not help much either. Graft, profiteering, corruption, speculation, hoarding, waste, provincial jealousies--all these factors combines have brought China to a well-nigh unbearable situation. Commodity Price Rise The whole situation is illustrated by the unprecedented rise in commodity prices. It now costs from six to ten times more to live in Chungking than it did, say, last June. During the last three weeks in November prices rose by almost 100 per cent. The same situation holds in varying degrees over most of Free China. At the base of the problem is rice, the Chinese staple. It is estimated that it costs some $60 Chinese to keep one adult in Chungking in rice for one year. A coolie, however, is lucky if he makes much more than that, and a white-collared government worker in Chungking will often make not more than $100 or $150, on which he is expected to feed, clothe and lodge himself, his wife and children. During these price rises nobody has apparently considered raising government workers' wages, although coolies are now making much more than formerly. Rice long ago became much too expensive for the peasant to eat. It is scarcely and wonder that queues are now forming in Chunking to get handouts of government rice, that the lower middle-class Chinese are reduced to wearing rags, that may Chinese are looking extremely pale and tired. What makes the situation completely ludicrous is the fact that there is utterly no scarcity of food. China has had three good harvests since 1938. Chungking still is eating rice harvested two years ago. Transportation costs can scarcely be important, since Chungking is in the very center of one of the biggest rice-producing districts in China, and still the price is greater there than in other non-producing sectors. The province of Szechwan is a land of veritable plenty. Hoarding What, indeed, causes the high prices is hoarding and what causes hoarding is apparently an archaic financial policy of the Government which puts a premium on hoarding. In other words, unchecked war profiteering is going on. Let us follow some of the steps by which China got into a vicious financial circle: 1. To finance the war the Government preferred to borrow from the banks rather than increase taxation measurably. At the MORE [[image]] Here are members of Chiang Kai-shek's well-trained infantry on parade near Chungking. Some of these troops attacked Communists of the Fourth Army. [[image]] Among the most effective fighters against Japan during China's long struggle have been soldiers of the Communist armies of which these are typical.
