TREASURY, GRANARY, AND WAREHOUSE SYSTEMS OF THE PEOPLE'S REPUBLIC OF CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700200273-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 16
• Document Creation Date: December 22, 2016
• Document Release Date: August 31, 2011
• Sequence Number: 273
• Publication Date: January 6, 1955
• Content Type: REPORT

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50X1-HUM
COUNTRY China
SUBJECT Economic - Fiscal, budget accounting,
system
HOW
PUBLISHED Monograph
WHERE
PUBLISHED Shanghai
DATE
PUBLISHED Sep 1953
LANGUAGE
. e n.. or r?, u... cooo'? ?.,,am. ,r.fr nwo, o. .nc.
uno. o. ,n ce?rur. m o.,.mu.r ?. ? .? , .,no rcno, u
DATE OF
INFORMATION
1953
treasury
DATE DIST. 6
Jan 1955
THIS IS UNEVALUATED INFORMATION
Chen fu Yu-suan Hui-chi Chiao--ch'eng (Textbook of Government Budget
Accounting), published b L - ^in Hui-chi T'u-shu Yung-p'in-she, Vol II,
Chapter XV
pp 46-64 Chinese Annotated Bibliography Item 384,
(Comment: This report presents in full Chapter XV of Chen fu Yu-
suan Hui-chi Chiao-ch'en (Textbook of Government Budget Accounting ,
by Wang Pang-hsin and Liu Wen-ch'uan, a textbook designed for use in
technical colleges and intermediate vocational accounting schools.
Major subjects discussed in this chapter include the nature and organ-
ization of China's treasury system, the receipt and forwarding of reve-
nues, the disbursement of treasury funds, the administration and opera-
tion of China's granaries, and the cor.,rol and allocation of government
warehouse materials. It should be noted that the numbering of the orig-
iral text has been retained in this report.I
15-1. Meaning of the Treasury System
What is meant by the treasury? In essence, the treasury is that organ
through which the government controls its currency, notes, and securities.
All revenues collected by various government organs are remitted to the treas-
ury for custody, and all budgetary expendituredO are paid out of the treasury.
The treasury, then, is an institution set up for the purpose of receiving,
storing, and disbursing public funds.
50X1-HUM
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CENTRAL INTELLIGENCE AGENCY
INFORMATION FROM
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lu wi the heavy respo of -
ministering the fiscal-Policies cofrthe state. Consequentlynstheltr asuryd
Y must
be subject to the Jurisdiction and direction of financial departments in its
day-to-day activities. By concentrating all revenues in the treasury,
departments can take the steps necessary to ensure the implementation ofina-cial
tional policies and construction plans.
A strong treasury system is vital to an effective system of financial ad-
ministration. However, the treasury system is the product of historical develop-
ment, having progressed from a stage of instability, dispersion, and irration-
ality to the present stage of stability, centralization, and rationality. various types of treasury systems and the special characteristics of China's
treasury system will be discussed in the The
following sections of this chapter.
5-2. Unified and Inde endent Treasur S,;tems
(1) A unified treasury system is one in which all receipts and expenditures
are funneled through a single treasury. To facilitate the handling and disposi-
tion of funds, a number of subtreasuries are established throughout thcountry.
This system is very efficient for unifying and balancing national revenues and
expenditures.
(2) The independent treasury system is one in which a number of treasuries
handle state revenues and expenditures, acting independently of each other.
This system may be subdivided as follows:
1. Enterprise treasury system. Under this system, enterprises set
up their own treasuries to handle receipts and expenditures in their business
operations. For example, a publicly-operated enterprise or its superior organ
establishes its own treasury for the storage and disposition of public funds at
its disposal. There are occasions when the enterprise treasury system and uni-
fied treasury system exist side by side, when certain types of enterprises are
permitted to establish treasuries independent of the central treasury.
at various 2. levelsDispsetersal treasury system. Under this system, government organs
accounts in designated banks. their own treasuries or deposit their funds in separate
The unified treasury system has been adopted by most nations. With the
exception of the enterprise treasury system, which is still found in some countries,
the independent treasury system has nearly disappeared. China has adopted the
unified treasury system and established a national treasury for the centralized
control of all public funds.
15 vernment Treasury and Authorized Trea urn Systems
Treasury systems may be classified according to their methods of storing
funds as follows:
a special ooverontttreasuri system. Under this system, the state establishes
This system has a number of shortcomings, ofdwhichnthe mo of treasury fund
efficiency in the utilization of funds and waste in them handling of a mn i
tive expenses, of dmiistr
a-
(2) Authorized treasury system. Under this system, the state entrusts
the responsibility for managing all financial receipts and expenditures to the
state banks. This system may be subdivided as follows:
- 2 -
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1. Bank agency system. Under this system, the state banks
establish treasuries and carry on treasury functions as agents of the state.
All treasury functions and funds must be kept separate and distinct from the
operations and capital of the banks themselves. In other words, the banks
act only as the custodians of the public funds received and have no authority
to make use of them.
2. Bank deposit system. Under this system, the state banks handle
the receipt and expenditure of state funds as a part of their normal functions.
All receipts become deposits of the government and at the same time are freely
utilized as operating capital. All government expenditures must receive the
prior authorization of financial departments.
The authorized treasury system is the better of the two systems discussed
above. By using the network of state banks already in existence, there will
be no need to establish separate treasury organs. By combining treasury deposits
with bank deposits, it is possible to carry out more effectively the regulation
of currency, the supply of funds, and the construction of large-scale industry.
China's national treasury system is based on the authorized treasury system.
Nominally, it has been designated a bank agency system. Actually, it functions
as a bank deposit system, with the special characteristics of an integrated
treasury-banking relationship, the coordination of fiscal and currency opera-
tions, and the assured distribution of funds as needed.
15-4. National and Local Treasuries
Although China's present financial system may be said to have three
levels of organization, a more clear-cut distinction may be drawn between
national and local finance. It is natural that the treasury system should
be organized along similar lines, with both national and local treasuries.
At present, only national treasuries exist. But actual developments show
the need to distinguish between national and local treasuries on both an
organizational and operational basis.
As a matter of fact, national treasuries throughout the country are
already performing the functions of local treasuries as well as those for
which they were originally established. In addition to distributing revenues
which are clearly allocated between national and ?local governments in the
budget, the national treasuries must compute the amounts of various taxes to
be forwarded as income for the central, administrative area, and provincial (or
municipal) governments. The responsibility for allocating these revenues
rests, as in the East China Administrative Area, on the subdivisions of the
national treasury located in the provinces (or municipalities). A similar
situation prevails with regard to expenditures. As a result, local treasuries
already exist on the administrative area and provincial (or municipal) levels.
In the East China Administrative Area, General treasuries have been
established on the administrative area and provincial (or municipal) levels
to handle local financial receipts and expenditures. On lower levels of
government, subdivisions of the national treasury perform the functions of
local treasuries. The working relationship between national and local
treasuries, aside from the practice of keeping their accounts strictly
separate, is not yet clearly defined.
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15-5. Relationshi Betxeen iational Treasur
and PeoDle' c a. ,.
t
reasury system, the Central People's
established a Nationnl
Treasury, the administrative areas have Government
estblisheds
National Regional Treasuries, the provinces (or municipalities) have established
National S,?bregional Treasuries, and the hsiens cipalitie
established National Branch Treasuries (ortreasurmuni
and, when necessary,
fOffices. Each treasury for e y unit is responsible to the Revenue Collection
lre
thesdmini)strtstratihavevve
e
Y
is direxa ple, the regeotoltheeaJsury in n the
North China Administrative
Treasury.
The functions of treasuries on all levels of government are performed by
branches of the People's Bank of China on the corresponding level. In each
case, the manager of the ban}; serves also as the manager of the treasury. In
localities where branches of the People's Bank have not been established,
independent branches of the treasury may be set uunder the control of the
People's Bank on the next higher level. The Main-office of the People's Bank
of China functions as the national Treasury; the regional offices of the
People's Bank in each administrative area function as national Regional
Treasuries; the branches of the People's Bank in provinces and municipalities
directly under the central or administrative area governments function as
palities
National Subregional Treasuries; and field offices of the Peo le's Ban
lower levels of government function as National Branch p` on
Treasuries.
In principle, one branch treasury should be established in each hsien.
Furthermore, revenue collection offices may be set up in important cities to
function under the control of the hsien branch treasury.
1 -6. Marra ement and Su ervision of Treasur Units
Chinas treasury system operates on the principle of "centralized manage-
and "localized responsibility." According to law, the National Treasury
is managed by the Ministry of Finance and the authority to expend treasury
funds is vested solely in this ministry. Regional treasuries in the various
administrative areas are controlled by the National Treasury and are forbidden
to make expenditures without the prior authorization of the national
The authority to transfer public funds from one treasury also reserved to the National Treasur Treasury.
also fonal treasuries are handled y' Fund t National and
transfers between treasury directly by the he National Treasury
meat are ' and
the regional treasuries atingyfornthekNational Trre es aBsury.
ury. handled by
Governments on all levels are empowered to supervise and examine the
operations of their respective treasury units. Needless to say, they are
not empowered to disburse treasury fundr,, with the exception of funds deposited
in local treasury accounts. It is the responsibility of treasury all levels to supervise the work of tax-collection agencies. If it develops
that these agencies are not units on
treasury units must report theseiirregularitiesitoJtreasury unitslon,higher
levels and to the Ministry of Finance for a formal investigation.
15-7. Recei t and Forxardin of Revenues
All revenues are collected and paid into the treasury according to law.
At present, there are two methods for the payment of revenues into the treasury.
Under the first, the taxpayer makes his payment directly into the treasury
after receiving notification of the amount due from a tax bureau or other
collection agency. This is the procedure followed in large or medium-size
cities. Under the second method, a collection agency mikes payment into the
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treasury of revenues received. An example of this is the collection and pay-
ment into the treasury of various administrative fees and legal fines. More-
over, production enterprises make direct payments into the treasury of pro-
fits, depreciation funds, and income from clearing warehouses.
Regardless of the method employed, the usual procedure is for the payer
to prepare a notice of payment before handing in funds. The individual tax-
payer, after the amount of his tax has been approved by the appropriate tax
bureau, makes out five copies of the notice of payment, and the collection
agency makes out the same number when it prepares to hand in funds. This
notice serves as a formal notification of payment, as well as evidence in
written form that the payment has been made.
Every treasury unit is required to transfer its daily receipts to the
treasury on the next higher level by means of a telegraphed or mailed bank
draft. This treasury in turn transfers its daily receipts of revenues (for-
warded by subordinate treasury units) to the National Treasury by means of
a telegraphed bank draft. After the National Treasury has received and
audited the day's revenues, it reports the total amount of treasury funds
on hand to the various ministries of the Central People's Government. This
report enables the ministries to estimate the amount of funds available for
expenditure and to make their plans accordingly.
15-8. Statement of Revenue
At the end of each day, all income received by a branch treasury must
be reported and forwarded to a subregional treasury. The report form ac-
companying this transfer is known as a statement of revenue and is drawn
up according to the following format:
Account Title
Statement of Revenue of the Branch Treasury Account
Unit: Type of Transfer
Yuan Year Month Day Voucher No Seal
Collection Agency Higher Transfer Year Montn Day
or Paying Unit Organization
Budget Account Amount of Revenue
Today's Monthly Total
Receipts to Date
Manager Department Chief' Auditor Person who
prepared report
This statement is compiled from the audit copies of the notices of payment
received that day. In filling out the form, care must be taken to distinguish
between collection agencies and paying units and to specify the "class" or
"type" of budget account to which the revenue payment belongs. The disposition
of the five copies of this statement is as follows: two copies, together with
the return copy of the notice of payment, are returned to the collection agency
or paying unit; one copy is retained by the branch treasury as a voucher for
payments into the Treasury Fund Transfer Account and to this is attached the
information copy of the notice of payment; and two copies are forwarded to the
subregional treasury along with the audit copy of the notice of payment.
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The total amount of revenue shown on these statements is transferred
to the subregional treasury by means of a mailed bank draft or, as with branch
treasuries in key tax-collection cities in the East China Administrative Area,
a telegraphed bank draft. The temporary receipt for the bank draft serves as
a voucher for payments out of the Treasury Fund Transfer Account.
15-9. The Summary Statement of Revenue
The subregional treasury audits the two copies of the statement of revenue
(with the attached audit copy of the notice of payment) received from the branch
treasuries. It then compiles summary statements of revenue according to the
provincial level higher organization of the collection agency or the paying
unit. The summary statement is drawn up according to the following format.
Account Title
Summary Statement of Revenue of the Account
Subregional Treasury Type of Transfer
Voucher No Seal
Unit: yuan Year Month Day Transfer Year Month Day
Higher Organization of the Collection Agency
or Paying Unit
Amount of Revenue
Budget Account Today's Monthly Total
Receipts to Date
Manager Department Chief Auditor Person who prepared report
The disposition of the eight copies of this statement is as follows: one
copy is retained by the subregional treasury as a voucher for payments into
the Treasury Fund Transfer Account; one copy is sent, together with a copy of
the statement of revenue and the audit copy of the notice of payment, to the
provincial level higher organization of the collection agency or paying unit;
and the remaining six copies are forwarded respectively to the administrative
area level higher organization of the collection agency or paying unit, the
administrative area financial committee (or finance department), the regional
treasury, the Ministry of Finance, the central government level higher organi-
zation, and the National Treasury. Copies intended for departments on the
administrative area level must be sent via the regional treasury, and copies
intended for central government ministries must be sent via the National
Treasury.
The total amount of revenue shown on these summary statements is transferred
to the National Treasury by means of a telegraphed bank draft, with the temporary
receipt for the bank draft servinL:, as a voucher for payments out of the Treasury
Fund Transfer Account. A copy of the statement of revenue received from the
branch treasuries is retained as a voucher for Payments out of the Subordinate
Treasury Fund Transfer Account. When the ban]: draft forwarded by the branch
treasuries is received, it is necessary to make out a voucher for payments into
the Subordinate Treasury Fund Transfer Account.
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15 10n1 Treasury and u +
~casurv
The function of the regional treasury in the reporting and forwarding
of treasury funds is relatively simple. As explained in Section 15-8 above,
revenues received by subregional treasuries are forwarded directly into the
National Treasury and only the summary statements of revenue are sent to the
regional treasury for approval and transfer. Consequently, the regional
treasury audits each day's receipts of summary sta' 'cments of revenue submitted
by subregional treasuries and, after raking a copy for its records, transfers
them to the National Treasury. However, since the regional treasury also
serves as the general treasury for administrative area revenue, this revenue
must be deducted from the total revenue reported by the subregional treasuries
and transferred to the administrative area general treasury account. This
process is discussed in Section 15-11 below.
On receiving the bank drafts telegraphed by the subregional treasuries,
the National Treasury makes out a voucher for payments into the Subordinate
Treasury Fund Transfer Account and a voucher for payments out of the Current
Transactions With Bank Account, thereby indicating that the revenues forwarded
by subordinate treasuries have been deposited in the bank. On subsequently
receiving the summary statements of revenue forwarded by the regionl treas-
urieq the National Treasury audits them and, as explained in Section 15-9
asl.,, transmits copies to the various central government ministries concerned.
u., tL.. basis of a copy of the summary statement of revenue retained for its
own use, the National Treasury then makes out a voucher for payments into the
Central Government Financial Income Account and a voucher for payments out of
the Subordinate Treasury Fund Transfer Account. With this action, the entire
process of reporting and forwarding treasury income is completed.
For revenues paid directly into the National Treasury, the notice of
payment serves as evidence for the accounting transactions undertaken oy the
organs involved. The method of transmitting copies of the notice of payment
is similar to the one discussed in Section 15-7 above, except that the audit
copy is sent to the Ministry of Finance.
15-11. Allocation of Revenues
The allocation of revenues between the central and local governments
has already been discussed in Section 5-5 and 5-6 above. Under the present
system, all tax revenues received by branch treasuries must be forwarded
to subregional treasuries for disposition. Each day the subregional treasury
computes the total amount of tax receipts on the basis of the statements of
revenue submitted by its branch treasuries. In accordance with ratios deter-
mined by law, the subregional treasury ascertains the respective shares of
the National Treasury and local treasuries. The amount forwarded to the
central government is recorded in the summary statement of revenue sent to
the National Treasury, accompanied by an explanation of that day's total
receipts under each budget account. The amount retained for the use of
local governments is recorded in the summary statement of revenue sent to
the regional treasury. the administrative arregiaonal
revenue treasury sialso nce the v provincial u and Inunicipaltreasury cubor
regional treasuries also'serve as the general treasuries for provincial
and municipal revenues, the subregionl treasury merely forwards the ad-
ministrative area share of revenue to the administrative area general
treasury account and transfers directly the provincial and municipal shares
of revenue to the provincial and municipal general treasury account;;. The
treasury-bunk relationship in these fund transfers is the same as the re-
lationship, described in Section 15-10 above, between the National Treasury
and the Main Office of the People's Bank of China.
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15-12. Custody and Distribution of State Funds
All revenues collected by collection agencies must be paid into the
treasury within a specified period. At the end of each day, the receiving
treasury must report and forward its receipts to a higher level treasury
for transfer to the National Treasury. This transfer is effected through
the Current Transactions With Bank Account. For its part, the Main Office
of the People's Bank of China makes an appropriate entry in the Treasury Fund
Account, thus indicating the current relationship between the bank and the
treasury. The People's Bank of China must guarantee the payment in full of
all treasury fund deposits. No distinction is made in the handling and dis-
tribution of treasury funds, bank operating funds, and note issues. In
general, the banks do not charge for their services in forwarding revenues to
the National Treasury or in disbursing treasury funds. All treasury income
is recorded in yuan. If revenue is received in the form of gold, silver, or
foreign currency, it is the responsibility of the collection agency to con-
vert it into yuan at a branch of the People's Bank before making payment
into the treasury.
15-13. Disbursement and Transfer of Treasury Funds
Control over the disbursement of treasury funds is exercised by financial
departments on all levels of government. Disbursements out of the National
Treasury are handled by the Ministry of Finance, and disbursements out of
administrative area and provincial (or municipal) general treasuries are
handled by financial departments and offices on the corresponding levels of
government. Each treasury must receive authorization, in the form of a war-
rant drawn up by a financial department, before it can disburse treasury
funds. The warrant is drawn up according to the following format:
Treasury Warrant
Voucher Serial No
Year Month Day
Disbursing Treasury Receiving Organ
Account Year Month Amount Remarks
Amount received in full Seal of receiving organ Account of receiving
organ
Manager Accountant Auditor Bookkeeper
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At the beginning of each monthly or quarterly period, the finance depart-
ment issues a treasury warrant prepared in accordance with the approved allo-
cated expenditure budget and a formal request for funds. Of the three copies
made, one is retained for the record and the other two are sent to the disburs-
ing treasury and receiving organ. On receiving its copy of the warrant, the
receiving organ makes arrangements for the actual disbursement of funds with
the disbursing treasury. Although the procedure for disbursing treasury
funds is discussed more fully in Chapter XVI, it should be noted that appropri-
ate bank accounts must be established to handle different types of treasury
disbursements. The methods of distributing the three major types of treasury
disbursements are as follows:
(1) Expenditure funds for administrative organs are paid into current
accounts established by these organs.
(2) Enterprise working capital is paid into clearing accounts established
by individual enterprises.
(3) Enterprise basic construction capital is paid into supervisory
accounts established by individual enterprises.-
Enterprise basic construction capital is paid into supervisory accounts
established by individual enterprises..
When organs receive funds intended for the use of subordinate organs,
they must effect the transfer of funds the same day by means of a check
or bank draft. When the organ in question does not receive its funds from
a central ministry, the National Treasury may authorize the bank, in ac-
cordance with a treasury warrant, to send a draft to the organ's local
bank for disposition in one of the three accounts listed above.
All warrants for the advance disbursement of funds for use in the
following year must be clearly labeled as such. The procedure for spend-
ing funds allocated to the accounts of organs and enterprises is discussed
in Chapter XVI.
l5-14. Refunding of Revenues
Revenues paid into the treasury are refunded on the discovery or
overpayments or erroneous payments. In each case, the transaction rust
be verified by the higher organization, on provincial level or above, of
the collection agency or paying unit concerned. The first step is for
the original payer, whether an individual or an organ, to make out a
Refund Application. After this has been endorsed by the proper authori-
ties, it serves as the basis for drawing up a Revenue Refund Voucher in
quadruplicate. The formats to be followed in preparing these docu:aents
are as follows:
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Yea: Month Day
Applicant Budget Account
Evidences
of
Pa ent Month Da
w Serial No em,,,.....
To Be Filled put b
An licant T B
o
enQO
Date of n Seal of reviewingJagent
Pplication gency
Date of endorse:,
Revenue Refund Voucher
Original Collection Agency aeTM?-,
M Ori inal Pa ?eat
Notice of Budget
Month Dad Payment
Account
Amount Payer Amount of Signature of
er Refund Reci`_
Reason for Comaent of
Refund Reviewing Apencv
Agency Nandli~r Referdd Refunding Treasury
Seal---- Manger's seal
individual seal
Date filled out t_
Date of re-
Of the four copies of the Revenue Refund Voucher, one is retained
file and. the remaining three are presented to the refunding treasur for the
for reimbursement. The treasury retains one copy, returns one co
original payer, and forty Y as evidence
to the higher or ards one copy to the subregional treasur pfor the yto ganization of the collection agency or paying y unit for involved.
In the case of tax refunds, corrections must be made in red ink in the appropriate
accounts of the statenent of revenue for the day .
I,,, question. Propriate
15-1~? gePa~nent of Trea urnd
ing tRepaourents If e8sury funds occur when disbursements are handed back dur-
inguthed to the Of tttrheurYear and when fund surpluses from the
are
Y. In either case, the procedure is t h Pr year a evsaue as tt
for paying revenue into the treasury and requires the filling ou of notices
of Payment (see Section 15-7 above). When handing back disbursements, the
organ or enterprise must specify the category, class, and type Of the original
budget account. When returning fund surpluses from the previous year, the
e Filled out b
Reviewin A enc
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organ or enterprise should make reference to the Previous Year's Current
Account. Turning to the accounts of the treasury, it must deduct the
amount of disbursements handed back from the original expenditure account
and dispose of fund surpluses in the Previous Year's Surplus Account.
15-1. Granaries and the Control of Public Grain
Granaries are state organs charged with the responsibility of the
receipt, custody, and disbursement of public grain. Public grain is used
to supply construction projects, as an equivalent for money, and as military
rations. Consequently, granaries are actually a part of the treasury system. s Public grain is divided into the two categories of y
maryl-
laneous grains. Under the system presently in effectii n China, the primary
grains are principally rice and wheat, with all other ? Puiery
the miscellaneous category, grains falling under
The organization of China's public granaries and administrative control
organs is as follows:
(1) The Main Office of Food Control of the Central People's Government,
under the jurisdiction of the Ministry of Finance
(2) The administrative area food control bureaus, under the joint
jurisdiction of the Main Office of Food Control and the administrative area
departments of finance.
(3) The provincial food bureaus, under the joint jurisdiction of ad-
ministrative area food control bureaus and provincial finance offices
(4) The special administrative district food subbureaus and district
public granaries
(5) The hsien food bureaus (departments) and hsien public subgranaries.
The primary responsibility of food bureaus and public granaries on all
levels is the control of public grain. Such related work as the investiga-
tion of agricultural taxes, the conducting of land surveys, and the collec-
tion of public grain is handled by the various levels of people's?govern
ments under the leadership of financial departments.
Public granaries are responsible for the custody of public grain. In?-
storing public grain, it is necessary to distinguish between grain. belongiag
to the national and to the local governments. Whether it be the liquidation
of old grain or the reception of new grain, separate storage facilities: must.
be provided and separate accounting maintained.
Public granaries may be classified as financial granaries or commercial
granaries, depending on the purpose for which the grain is stored. 'Public
granaries which, together with their Processing mills, furnish.grain for
use in the fina,.:ial supply system are designated financial granaries. The
responsibility for the construction and maintenance of these granaries be-
longs to the Ministry of Finance or may be delegated by the ministry to
administrative area departments offinance. Public granaries which, together
with their Processing mills, furnish. grain to commercial departments, for-use
in regulating supply and demand on the market are known as commercial, grana-
ries. The responsibility for constructing and maintaining these granaries
belongs to the Ministry of Commerce. Plans for the construction or expansion
of either type of granary (or processing mill) must be approved by the Com-
mittee of Finance and Economics of the Government Administration Council.
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Whenever possible, granaries should be constructed at locations where
they may serve jointly as financial and commercial granaries. tlhen it is
necessary to construct separate granaries, commercial granaries should be
established in rail and shipping transportation centers so as to facilitate
the control of food markets. The selection of Sites for financial granaries
should be governed by the requirements of key-point construction and scat-
tered food supply.
Grain received in public granaries must meet certain standards. The
objective in grain-custody work is to maintain an adequate supply on hand
and at the same to build up a centralized reserve supply. The scientific
storage of grain requires that effective measures be taken against insects,
rotting, dampness, fire, and theft. This requires in turn an effective
security organization to ensure the safety of the granaries.
15-17. Reporting the Receipt of Public Grain
The
cconvenieprontlycess grain can be discussed
(1) Reporting the receipt of agricultural taxes. Public grain con-
sists largely of agricultural taxes in kind. Each time agricultural taxes
are paid into public granaries under the jurisdiction of hsien-level food
organizations, the granary must fill out a public grain receipt notice in
triplicate. Thagdaily disposition of these notices is as follows: the
record copy is retained, the receipt copy is forwarded to the hsien tax-
collection department, and the information copy serves as the -basis for
drawing up the daily report of the hsien focsd bureau (or department).
This notice is drawn up as follows:
flame of Bureau (or Granary)
Public Grain Receipt Notice
Serial No Year Month Day Unit: Shih-chin 1.,5 kilogram)
Paying Organ
Location of Granary
General Account
Subsidiary Account
T-e of Grain Amount of Grain
level is similar to the above. -The d ilyusummary reportsisadrawntup asofollows:
p
o
On receiving the information copies of public grain receipt notices
submitted by its public granaries; the hsien food bureau (or department) com-
piles a daily summary report and forwards it, with the original information
copies attached, to the special administrative district food subbureau.
After checking and recording in its own account books, the subbureau compiles
a similar daily summary re
ort t
,
Bureau (or Granary) Manager Chief Accountant
Person preparing report
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Nar,:e of Bureau (or Granary)
Daily Summary Report of Public Grain Receipts and Disbursements
Serial No Year Month Day ,! Unit: Shih-chin
Receipts
Account Title Enclosures Comment
Type of Grain Type do
Amount of Grain
Total
Disbursements
Account Title
Type of Grain
Amount of Grain
Total
Bureau (or Granary) Manager Chief Accountant
Person preparing report
(2) Reporting of other receipts. Income resulting from the clearing of
granaries and the appreciation of stocks on hand is included under this heading.
Also, income received from other organs, such as the handing in of public grain
produced by the armed forces, the return' Of surpluses at the end of the year,
and the repayment of granary disbursements, falls under this headings To dis-
tinguish between these receipts and agricultural tax receipts, each bureau (or
granary) must draw up a report ref other receipts to accompany the daily summary
report of public grain receipts and disbursements forwarded to higher authorities.
The method of reporting local public grain receipts for the use of
administrative area and provincial governments is the same as that outlined above
for national public grain receipts. When posting the receipts of local public
grain into the various inccW accounts (above-quota agricultural tax receipts,
other receipts, subsidies from the central government, previous year's surplus,
repaid disbursements) etc.), accounting and reporting organs at all levels
must maintain separate records for administrative area and provincial grain
receipts.
15-18. Disbursement of Public Grain
Control over the disbursement of public grain is exercised by financial
departments on all levels of goverment. At the beginning of each monthly or
quarterly. period, the finance department issues a granary warrant prepared in
accordance with the approved allocated expenditure budget. Of the three copies
made, one is retained for the record and the other two are sent to the food rtment designated asrestheponsgrainible
pient.lg Onthergrain to arr nt, the
organ makes out an application for grain en of the ndrrcop she
to the financial department and responsible food department. Then responsible
food department, after checking the application for grain payment against the
granary warrant, then issues a public grain disbursement voucher in triplicate.
Of the three copies made, one is retained for the record, one is forwarded.to
the disbursing granary, and one is sent to the recipient organ: to serve,as an
authorization for the actual disbursement of grain. The granary warrant and
public grain disbursement voucher are drawn up as follows:
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Year Month Day
Account Year Moth
e o, f G -rain
Rice Rice Equivalent
Amount paid in full by Food bureau Food bureau chief Food bureau
this bureau manager
accountant
Amount received in full
Seal of respon- Recipient organ
by this organ sible official
of this organ account
Name of Bureau (or Granary)
Public Grain Disbursement Voucher
Serial No
Year Month Day
Disbursing Bureau (or Granar General Account
Y) Account Subsidiary Account
Receiving Organ Voucher Received
Year Month Day
Grain Received Year Month Day
la-2 -of Grain
Amount
Bureau (or Granary) Manager Chief Accountant
15-19? The Accounting Unit f Public Grain
Person preparing report
In keeping records of grain receipts and disbursements, a physical unit
of measurement, known as the grain unit, is employed. In the accounts of
food bureaus (or granaries), the grain unit is used exclusively. However,
entries in general and unit accounts must be made both in grain units and
in equivalent amounts of people's currency (calculated at a standard conversion
rate). Under the present system, the accounting unit varies according to the
level of food organization as follows:
(1) On the central government level, entries are made in units of the
three primary grains: rice, millet, and wheat. Other miscellaneous grains
are recorded in equivalents of these primary grains.
(2) On the administrative area and provincial levels, entries are made
in units of the various types of grain collected, such as rice, millet, wheat,
corn, kaoliang, soybeans, unhusked rice, etc. If the varieties of grain are
excessive in number, it is permissible to group them into major categories
and make entries in units of these categories. However, the method of classifi-
cation must be approved by the Main Office of Food Control of the Central People's
Government.
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Disbursement Notice Serial No
Receipts Notice Serial No
Receiving Organ
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(3) On the special administrative district level, entries are made
generally in units of the various types of grain collected.
The public grain unit of measurement is the Shih-chin. On the special.
administrative district level and above, amounts more than one-half chin are
counted as one chin and amounts less than one-half chin are omitted. Entries
in the accounts of hsien food organizations nut be calculated to the nearest
ounce.
Among the various rates employed to convert miscellaneous grains into
units of primary grain, there are the agricultural tax conversion rate, the
supply conversion rate, and the market value conversion rate. Agricultural
tax receipts are computed according to the agricultural tax conversion rate.
With regard to grain disbursements, the nature of the disbursement determines
the rate employed. T1+us, grain intended for the supply system is computed
according to the supply conversion rate, and grain intended for business and
trade is computed according to the market conversion rate. Uniform conversion
rates have been established by the Main Office of Food Control of the Central
People's Government for use by all levels of food bureaus (or granaries).
Any losses or gains resulting from the use of these conversion rates must be
reported each month by food bureaus on the provincial level and above to the
Ministry of Finance.
15-20. Liquidation and Allocation of Warehouse Materials
In March 1950, the Central People's Government issued the Decisions Re-
garding the Liquidation and Allocation of Warehouse Materials. These decisions
provide for the disposition of the large amounts of goods and equipment stored
in government warehouses during the period of Kuomintang rule. To dispose of
these materials rationally and on a nationwide basis, it was necessary to dis-
tinguish between those suitable for use in basic industry and those suitable
for conversion into cash. Moreover, it was necessary to overcome the tendency
of enterprises and military and government units to hoard goods and equipment.
To achieve these objectives, it was decided to establish the National Committee
for the Liquidation and Allocation of Warehouse Materials (hereafter referred
to as the National Committee). Subcommittees were created by administrative
area governments and central government departments to carry out checking and
liquidation work under the direction of the National Committee.
Goods are allocated by the National Committee, acting in cooperation with
the Committee of Finance and Economics and the People's Revolutionary Military
Council, according to the following principles:
(1) Industrial, mining, and transportation departments (and enterprises
under their jurisdiction) are assigned scccified amounts of goods and equipment
in the form of fixed and working capital, and must turn over any excess materials
in their warehouses to the Committee of Finance and Economics for distribution.
(2) All materials in warehouses under trading departments (or trading
companies) must be checked and appraised, including both materials taken over
and materials in commercial inventories. After the Committee of Finance and
Economics has determined the total investment figure for trading organizations,
any surplus materials must be transferred to this committee for allocation.
(3) Goods and equipment in warehouses under the jurisdiction of financial
departments, with the exception of purchased ite;..s, are to be appraised and
turned over to the Committee of Finance and Economics for allocation.
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(4) All goods in military warehouses must be checked and the resulting
inventories reported to the National Committee. The actual distribution of
these materials shall be effected by the Rear Services Department of the
People's Revolutionary Military Council.
All income from the liquidation of warehouse materials shall ba paid
into the national treasury. These revenues are realized and disposed of
as follows:
(1) Industrial, mining, and transportation departments may request
more warehouse goods for their operations, in addition to the materials
distributed by the Committee of Finance and Economics and transferred by
the Ministry of Finance to their accounts as investment. On approval,by
the Committee of Finance and Economics, these warehouse goods may be dis-
tributed either in the form of increased investment or in the form of
purchases at prices determined by the Ministry of Finance.
(2) Daily-use items to be liquidated nay, on the decision of the
Committee of Finance and Economics, be turned over to?various trading
companies for sale to the public. Contracts between the Ministry of
Finance and the Ministry of Commerce shall determine the selling prices of
these commodities and indicate whether the proceeds shall be regarded as
investment in trade or as credits to be returned to the national treasury.
(3) Miscellaneous and obsolete goods shall be turned over to the
Ministry of Finance for sale at auction, and the proceeds shall.-be paid.
into the treasury..
(4) Goods stored in military warehouses Thal} at such time as the
National Committee and the People's Revolutionary Military Council say
determine, be allocated by the Rear Services Department of the People's..
Revolutionary Military Council.
(5) Materials and equipment which cannot be handled by any of the
above methods shall be classified and stored in appropriate warehouses
under the control of the National Committee.
Since warehouses are entrusted with the custody of goods and equipment
representing major sources of investment and capital, they must be regarded
as a part of the treasury system.
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