CHINA'S FOUR GREAT FAMILIES, TRANSLATION OF A COMMUNIST BOOK

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CIA-RDP83-00415R000400020015-8
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January 26, 2006
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15
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December 1, 1948
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REPORT
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Approved For Release 2006/02/01 : CIA-RDP83-00415R0004000 CENTRAL INTELLIGENCE GROUP Washington 25, Ds Co SUBJECT : China's Four Great Families, translation of a Communist book DATE OF PUBLICATION : December 1946 CH' EN Porota, member of Central Committee of Chinei'e Communist Party The attached is a translation of China's Four Great Families 1-91 %V t '" ~ ), a book written by CH'EN Po-ta (CH'EN Pai=ta ? . 1 O' )o The author is a member of the Central Committee, Secretariat and Politburo of the Chinese Communist Party and a known economist and research analyst. The book is admittedly Chinese Communist propaganda; however, some of the facts and figures are relatively unknown and may be useful; the detailed reference list and the biographical data are also of valuer, The book has been banned by the National Government of China, and much comment has been made in press releases about the'contents. This translation was completed at the request of some American Government agencies in China and a minimum number of copies have been distributed. Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 R E S T R 1 CTBD TI TLE AUTHOR PL B LISIIER DATE OF PUBLICATION REMARKS CENTRAL INTELLIGENCE GROUP Washington 25, D. C. s China's Four Great Families CH'EN Pot ( ~~ ) Chiang Chiang_ Publishing Agency December 1946 it is to be noted that, except when otherwise stated, the monetary unit used in this document is the Chinese dollar. It is to be noted, further, that "China's Four Great Families" has been banned by the National Government of China and that, according to Anna Louise Strong in a radio broadcast from Yenan, "this book of CH'EN Po.ta may be regarded as semi-official, for the author is a member of the Central Committee of the Chinese Communist Party"o TABLE OF CONTENTS I. Last Rulers of "Old China" II. Family Fortunes Built on Civil Wars and Compradore Practices (A) "A Pair of Bloody Hands" (B) Profits Gained from Civil Wars (C) munitions Compradores (D) An Economic System that Aims at Killing People III. The Feudal, Compradore and Military Absolutism in Finance (A) Fusion of the Four Great Families and the Four Great Banks (B) Financial Monopoly and the Rapid Concentration of Wealth (C) The "Fa Pi" (Chinese National Currency) System is tantamount to a Feudal, Compradore and Military Robbery of the People (D) Financial, Military Dictatorship, Feudal Robbery and New Developments in Compradore Practices (E) Robbing the People of the "Fruits of Victory" (F) Hastening Final Ruin (G) Countless Treacheries IV0 The Feudal, Compradore and Military Monopoly in Commerce (A) Beginning of the Commercial Monopoly (B) The Most Concentrated and Open Cora eroial Monopoly in History (C) The Barbarous Crooked Practice of Buying Low and Selling High (D) Tremendous Profits Obtained by the Four Families and The Enemy Through Smuggling (E) Further Cruelty After the "''Take-Over" (F) Compradores of American Goods (0) "Squeeze First and Don't Worry About the Consequences" V. The Feudal, Compradore and Military Monopoly in Industry (1) Cooperation With Fascist Geritany As the Main Monopolistic Activity (I3) Rapid Establishment of An Absolute Monopoly Based on the Elimination of Free Enterprise and on the Robbery of the Farmers (C) The Sphere of Monopoly Widens After the "Pyrrhic Victory" over Japan (D) Transforming China into the "Industrial Frontier of the United States" (E) A Death Blow.to Free Enterprise (F) A Thing Rotten to the Core Cannot Exist R E S T R I C T E D Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 20"/02/01;.: CIA- RDP83-00415R000400020015-8 V;R.:: The Feudal, C.rripradore r:nd d J.l.i are :aonftip~ly in -griculture (,A) Pbation-~. de Feudal a+ ave i,_.asters (b) P:ation-l.-.de Usurers (C) ; gr3 cull rra.s 4h i, are bobbing the farmers CD) Coilause ui' The ,t -icultural r conomy ?nd the sislavement `of '.fie i~'arz . V1:l.,Newspaper, Liagazine, etn f,s,nopoli.es, VIII-, .ealth of the Four Great Fandlie i, I _~ The Begi.me of the Four Great Families is China's Greatest Sham and Misfortune .verythinIg that is '.ritten in this took is based upon irref3atabl.eofacts_ GC Ci,:G t d ) , KUNG ( ) and Cki' " : ( 13` far ilies, r:ith ( 1.,.Cr Kai 'aek ( /J y ) as their head, have stolen the national wealth by trans- for-aing it into their private r;roaerty, of how in the ..rime' of the "countr?y", the "government", etc., they have ruthlessly robbed the :-reople of what ri -ht'futly te-- leni?ed to them. The,,, have become tae richest and most blood-thirsty men. in his-- tory, whose record even the monarchs of old could riot e~_ual. For the PL si 19 years, according to a rough estiu.ate, the total :^ealth, (including the ;;roper` and de')osits in foreign banks) that +rcs accumulated by the four ?_great their monopolies in the financial, commercial, industrial, agricultural, real estate, newspaper and publishing fields, e~,c,,, amounts to at least US v 2U,UuU,0UU,U)U. 3e-- cruse of this theft, innumerable Chinese people have become bankcrupt, anc. even :starved to death, Not only have the co,imon people suffered ~:uch -,isfortur.es, e>u:, i;any of those persons h-, were formerly rich have also become ienrriless. .:very important fact that we could .Earner wreyhave tried our best to include in this book. The analyses of the various : roblerns discussed in this book are all based or. true facts; there is not one statement .hat does- not have its foundation in fact. The suppression of the frD does of ,,)res:a by the Ci11..i'C k ai.-.ihek entourage can never con- ceal the truths that are now bccorr.anfr known by all the peoples of the b.orlc. hhls?- :ry has always ridiculed the rashness of those dictators who have tries to con- ?,uer the world singia handed.: From the analyses of the facts contained in this book, we can arrive at -lie following conclusions: 1, The reason v;hy the Four Great Families, with CHl..NG Kai-a;hek as their- head, favor the civil v; r, is that their fortunes were acquiredby civil tsars. ?. he accumulation of their wealth would have been impossible without the occurrent.- Civil wars. They realize too that warp and war alone, can furnish then= the advzn- tat-eous means by r"hich they can rob the geo ale. anus, it is utterly , sel.es- to };ore that the Four Great Families .will ever stop the civil war and establish peace. 2 The so-called Kuoraintanir one-party autocratic -overntnent is in reality only a fascist, despotic goverru::ent of the Four Great Families. The e?esire of these families for an economic r:ioriopoLy is insatiable. In order to effect this econo;~.j.c :;oropoly, they must first achieve n: political ruonopiy, which in t rn could .not be gained except through civil war anc: terroristic activities. Thus, it is obviously useless to hope for the your Great Families to dive up the Fascist, despotic form of r;overn::mert and establish democracy. The accumulation of voalth by the four great far.:ilios, ,.ith. C::IrJG t,ai-S3hek as their head, is also closely related with the compradore ntover.enr,, 3r order to control absolute economic and aelitical :..oropolies, they have Y.,, c,.i war on nil the "people. Thus, standing absolutely alone, they could rely only on ;'oreigr help to slaughter the people. This help was obtained by selling to the our ifn po,!!ers . the national rights of China. They have thus rr:ade China Into a der endenc-,r and a colony of the foreign nations. 'therefore, it is absolutely futile to hope t.i.at the Four Great Families -,rill evoo:rwor:c for the independence of our peo;.le and act continue to be the instrument of the imperialistic United Mates. The strur -le bets een the your Great Vari:ilies and the Chinese cue is one between four feudal coiapradores and the ::Tole Chinese race. This is ,- battle of Life and death. .ii tti!s is amply proved by the facts stated in this book. iz' ti-he, our Great Families of feudal co,;,;pr,;:3ores continue to have a i:.oao ,olr con- 1., r?ol: over the e conoriii.c aand political si.':exrtic.zsr, it will mean the extinct or of Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 D Chinese people. On the other hand, the collapse of the our Great Feudal 1'r:;; :; I.:in s will mean the regeneration of the Chinese people. There is no middle way, arid. there can never be one. Naturally, quite. a number of the Chinese people are misled by he Con-. tray airs yt ,ency and other news organs which are ,Y_.?.?t6 o .. t by the Four Great. Furra.lies. -Further, many are illiterate because of the ""ignorant r,eor,2.e?' Holley of C1ilh1`,'G Kai-shek?s government. These people have certain illusions of atta-riling peace, democracy and independence through the rer;.aJrie of the your Great F~..rnaljes. ;veil among the liberals there are some who, not having yet seen the light nor having been given the opportunity to learn the true facts, are also laboring under similar misapprehensions. The purpose of this book is to collect all. t ;lei necessary materials, to analyse them and then to ,)resent their to the f,eneral ?ublic, - In order to clarify the true Mate of affairs, v,e had to include in this book a on- side able amount of figures as refereeices, but these figures are not unirrtere.,3t:inn in themselves for they show how the your .,'eat, r'ariilies are daily destroying the lives of innumerable Chinese people. The historical events of the lost and th present prove all that is said in this book, and ,se firmly believe the future - ellts will still continue to confirm the state rents made. The way )f life of the uk;i.rla;:,e pcorle is absolutely clear and fi'xced.. yep people of China. I. 'TIL L..1T I UL,G;R OF ""OLD C1U,%Y0" The total population of China is approximately 450,OOO,OGO, Of these, 140,O00 ,0O0 in the liberated areas have alread r heco>re their own :".asters, but there are still 310 ,UCiU,UG0 i;ho are being ruled by the tour Great Feudal Gorl pradore Banks, which, in turn, are controlled by the Four feudal 0ompr?adore Families. The Four Great :tanks are The Central Jank of 0hirta, the .lank of China, The i.3ank of Conuaunications and The Farmers' bank of China. There is a Central ui'fice controlling all four banks, known as the Combined i..ain Office of the Four Banks.. The four ? r at families are l) the C' 1-~ aG Family of C:iI K a n' of ate- he k, ~2) the :~OO':G T.V. ;~UGi.i: (r~ 4 , (3) the i.?U; C Family of t'= ,i. U NO Xf 1 ~, (4) the CU?;~X Fa:::ily of C1:'-I. Kuo,fu ! ) nd Li-fu ( ,, , J rind ~J~ '~ ' "Supreme !, Their leader" is Ui.l.aivG' rai- hekj t:hcair',nan of the "Combined ..,in Office of the Pour Banks" and head of the Kuo;t:intang., The outstr:ndir characteristic in the rule of the Four r'eudal. Go;..pracore Banks and the Pour Feudal Oo;;:pradore rarrJlies is that they directly combine their economic and political controls into one, making use of their pol.i tical ,_oovc,er to obtain economic control, i,,oreover, thoy continue to use their political :rower openly and maintain it through force, so as to increase their overall power. The four banks have direct political control over the Kuomi.ntanrg, and.,,as "nati.anal banka11 of the Kuomintang regime, directly control the economy of semi-colonial nd semi- feudal old Ctli.na. he heads of the four families not only .have direct control over the four banks, but also over the military, the party, the secret service, the poli- tical and the financial affairs of the Kuomintang regime, thus giving theaelvr: the opportunity of maintaining a one-party, feudal and ,fascistic dictatorship. The so-called "i ndarin c-apital." of modern china represents the profits of imperialism and feudalism. Thus the "; :ndarin capital" is none other than the capital accumulated by those persons with political ;cower, who used their corer to rob the farmers and the small-scale producers, and to suppres:3 the free enterprise of the people. The four banks arid the four families are examples of the most concentrated form of such "";,;andarin capital". The ";randnrin capital" is therefore the financial capital of the semi-colonial and semi-feudal modern China. It differs completely in its fornative )recess and fundamental nature from the financial capital r:.ono::oLi_zed by the imperialistic nations. .Is the "rft..andarin capital" is supported by forci i imperialism, it can only be subsidiary to the monopolized financial capital of the foreign imperialistic nations. Thus the "..nrldarin capital" is just another n:=ire 41-or the "cor-tpradore capital". It is the "mixed-blood child" of the compradore and f=ucisl. systems. It is the product of the economic union between the compradores and the land- lords. The four banks and the four families are its last and most ice, ort re- t chaa na ons . Approved For Release 2006/01/0.:-' A=k26F~83 OO i"5R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 li ~S'ii~1C ~D The four banks and the four families are mentioned in Comm2nr?9 $ This, according to :,,401 is a period of the most~int pile t~id~ c e , '~ , s , ruegle between the common people and those that are against the common people, be- tween revolution and counter-revolui:ion. between liberation and ixiprison.ent, and between light and darkness. The Chinese people, under the leadership of the en- lightened working class, must stand up bravely against imperialism and feudalism and fight for the survival of their liberty. s comrade uU Tse-#,ung has said, ";s great transformation is taking place in China, it is unquestionably the greatest in China`s :.istory. A new CI'iaa is already standing at our doorstep". However, in order to maintain control over China, and to keep forever as slaves the 450,000,000 Chinese people, the imperialists, the compradores of foreign firms,and the feudal slave- rmasters created a counter-revolution, around the four great families; thus they have established a last feudal comprarlore regime of the rulers of "old China". The four families, relying on foreign nations for financial support, have ruthlessly massed the wealth of the nation into their own hands, thereby threatening, the very existence of every individual in China. They Lave thus become the greatest, the cruelest and most destructive force in cripl-:ling the productive power of modern China, ?. .1 this, however, only shows that the imperialists, the compradores and the feudal slave-masters are having.- their last death-struggle. This is the last period of their decadent rule. No matter how perverse or cruel their actions are, they are but di in ? their own g~''~ bra~ae,>, and nothing can ever save them. The people shall. ultimately become j1dependerit, peace- ful and democratic masters of all China. is demonstrated in the past, this is inevi- table, because the people will, beyond the shadow of a doubt, eventually learn to under- stand the real situation. =ILY ;?'C M"! iaS 13UILT i;r: CIVIL x,.,135 (ii) "A Pair Of Bloody !land;;" In this book, we are not, concerned with the family histories of the four families, CHL I+G 1 ai_g;aek, in his "China'.a Destiny" has declared himself to be 4 descendant of ;J,; ?ang ) Further, there is a certain person neared ChIL,, G l ) who in his bio rah of 0111 ?;G s g A y i ? Kai- 'rick, stated that the latter is definitely cdesn i,ded from. !.anF and Ci1CU hug ,:.ii. K'UI;G has also contended that he himself is descended from Confucius. Though they may try their best to seek historical justification for becoming, rulers of China by proving their superior ancestry was done b?- those Fascist rulers of German (asst as y; Italy, and japan), these.1ascist fairy- tales are, at ir;ost, only ridiculous. They need not be considered in our scientific study of the su') ec'., because the leF*.erid about their superior ancestry concocted byjaeta~aers of the four families has nothing; to do with their actual lives. 1'urt.her, a scientific study must be based on actual facts and not on fairy-tales. Ci11 NG Kai-Shek comes from a salt-merchant's family, and he himself was, at one time, a broker in the ahanghai Sock exchange. C11I.;I~G Kai-Shek" by ~ '( (in the boob, "The biography of Cif Jii 3hou-o1 ~. l ??) and published by the jitanl_hh San tsaan Book Co, "Y the e ,a d 6& statements as the. following. "tie is very good as a s;:ra culacot. ... , ... he was only in business for not longer than a half year when he was already making tremendous profits? _..... He is a ealthy man."/ See page 34 of "The Biography of C11LLhG Kai-Shek" /). 11.14. 1 'U1 G's family controlled a small. "native" bank in Shansi, (a bank that issued bank drafts), and he too has been in the banking business. T.V. SUUIvG and CH'::dd Kuo-?fu have also been in the Stock ~ahanee business, CIIP i.V Kuo-, u working together --'.ith CIiL:.1'G Kai-t9hek during the boom years in the Shanghai Stock xchangc. Their wealth then, when compared e.,ith what they have no,; was so small as not to be worth mentioning-.. At present they are so wealthy that there is not a single Chinese ,:-ilitarist nor official that can hold a candle to them, as far as private fortunes are concerned. ,nd never in all Chinese history has there !?:een ail emperor as wealthy as they. Undoubtedly, their origins and their experiences in the Stock Lxchange and in other businesses prepared them for their future plunge into politics. However, this alone could not have made them intOA'r'Dtka- noaolistjc, feudal and financial autocrats they are, nor could it alone .r.--eke them into the wealthiest men in China's his- tory Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 A reporter once wrote that "The Profit- rning Class" and "The Profit itealing Class" are really one and the same. "zarning" is really the same as "Steal- ing". Every, member of the "Profit L.arnirig Class" has "a pair of bloody hands". (see Ref. No,l at nhd of this chapter) . This describes clearly how the four families built up their family fortunes. The heads of the four families are all military and political figures in China. dght up to 1927, before the split between the icationa- lists and the Coraunists, the wealth of the four families was riot very large. It was not until the Bloody Incident of 12 .pril (Try-the purge of the Communists) that the four families became really wealthy. This Moody Incident was the result of the re:uest made of CHLI.G Kai-shek by the imperialists, the land-lords, the compra.- dores and the kers. ,.meter the beginning of:. the amino-Jap a se iar of tilggression, there wa "d-erititled "The Jelling of The Jund" (~1 j+ ~.,ritten by a foreigner, in which e find the following passages - An %angli i........ the attitude of the compradores has changed towards the Comruander-in-chief,Ctil.;I,G Kai-Shek,. After seeing with their own eyes his sincerity in :urging the city of the Co;nmunists......,... they immediately collected 3,0U0,U0O.00 for the Commander-in-chief, and promised to collect more in. the future........" .,lso, "the anti-Co:nrr:unist action of was welcomed by the co:npradores........ It goes vithout saying; that ChIaI;G, the Cor:,r..arder- i_n-chief, was demonstrating his ability........ he chose i%ariking as the capital of China and established an anti-Communist r'uor:.intang Government.... , Thus the finarcial circles in Shanghai increased enthusiastically their support of the anking Govern-- ment." CFII:dITG Kai-4diek has replaced-the v;z r-lords of .orthern China and become the new political representative of the compradores, landlords. and anti Co:arur:ist. anti- people, and anti-democratic group . he has established V. C scist, feudal and dicta- torial rer'i;.te around the "financial magnates of i iangsu and Lhekiang".' mt the sere time, he has used the bloody methods of the fascists and his dictatorial power in politics to build a feudal, rionopolistic power in financial circles around the four families, with himself as the head and the three families of i.?UI.G (his brother--in" l vr) , SCUiiG (another brother-in-law) and GE' -Il as his assistants. Step by step, yet. speedily, the four families have crushed their former supporters, the old, feudal coa.,-- pradores. Thus came about the downfall of the "Financial Magnates of r.iangsu and Chekiang", they becoming; only satellites of the four Families. , ?:;'~ ecorro:?,ic control of the pour Families has led to political doaacr, and their political power has further strengthened their economic control. Thus, the feudal, co; ,pradore :-wealth ,ray be said to be the cause, while CIiI:,I.G nai-#hek' s Vscist military dictatorship, the result. But the result also has beeotae the cause. Thus, the Fascist military dictatorship of C1ll,J.G Kai?-*hek has created the most feudal, co. - pradorecoricentration of wealth,,.s represented by the four great fa.:tilies. The wealth and power of the Four Families were created as a result of the military might of C11l".MU, Kai-vghek. In short, the Four Families are "robbers" with "a pair of bloody hands". .ithout the military might of CHIA.G Kai-ohek, the Four Great Families would not be in existence, l,herever the m litary rrrightt of GIIL.IvG Kai-shek ext;,ended &there the mmcnopo- listic and financial power of the Four Great Families was also felt. Therefore, there is a feudal, compradore, and military concentration of capital which is generally knov:?r_ as the " :?.aridarin capital." In the past, ":?? ndarin capital" exerted a tre:,,endous in- fluence on the Chinese banking business. It started to acquire its feudal rind coznpra- dore nature about the end of the Ch'inr Dynasty when the modern banking system tins just introduced in China. however, during the regime of CIiI:t;.G Kai-,;hek ar d the Your Families, the influence and the feudal, corr.pradore nature of the'`mandarin car after year, the faster were CI1I.;i;G's goverrnment bonds issued. find the speed with which these bonds were issued f r' sur,~asscd that with which the bonds of the war lord, of Northern China had been issued,; "From 1911 to 1936 the amount of ?overn ent bo ;d issued totalled ;;,2,888,000,000.; of this, the bonds issued after 1927 a rouni.ed to 2;268,000,000., which is a little less than 80,E of the total, while the bond.=a i.s sued from 1912 to 1927 (15 years all told) only amounted to ;.620,000,000,, which izi onr.?:7 a little over 20S' of the total". (See i;,ef. ,o,5). Thus; during only 9 years rule . the amount of government bonds issued by C11L,hG was already four times that issued by the war lords of I orth China in their 15 years of rule. This is additional -roof to the effect that the continuous civil war durirr the ten tears of C1I1..1:G's r eiErt rpere far more intense and far more cruel than those during the reign: of the ,air lord.-, of Northern China. Iaow, it must be remembered that such domestic bonds :nul tip1i::d three wealth of the feudal, corapradore financial magnates. Thus the interests of the f-iran?- cial agnates became tied up with the military successes of C 11..WG and the ;'onr Great Families, ,hen CIILdJG had succeeded in obtainirirr the support of the financial n,agy-r'n es, he speedily made the Four Great Families into the monopolistic, feudalistic ay..tocrtis of finance. Thus the profits derived from the government bonds became the ionopol st .c profits of the Four Great Families. ,ccordini--; to the "Year book of the ban;:s in Chh_ina" published in 1937, the bonds held by the Four Great i3anks in 1934 were 45,1.1 o all the bonds in all the banks in China. (Almost all these bonds were Government 4-r 1935, it increased to 59;u and in 1936 it became 30 (the decrease in 1936 being c? _L..sce by the issuance of paper notes by The Central Hank of Lhina). The above fLE,tu es -show clearly the profits the Your Great i3anks, that is to say, the Four Great Fam:ili es, mace from the issuance of the Government bonds, Thus, there resulted the fol.lovi .n'?. Para do)': In order to lira; e civil bar, the Four Great Families, representing; `uk:e hat ional. Government,borrowed from the banks which they themselves controlled; then again re i re- ;senti.r,g_? the Government, they spent the money on their otrri families. rafter this, once again representing the Government, they .paid the debt back to themselves. Thus the Four Great Families profited tremendously from the borrowing of money for the, r?overnrncmt,, in the spending of the money, and in the payment of the debt to the Four (,ireat I3~ink.s? In such manner, the Four Great Families and their satellites made immense. Profits D"cm c,lhe issuance of government bonds and thus, accumulated more and more " n:ndar5rr ra.'At:i111, Government bonds must be backed up by money taxation; therefore, the rmor?e Government bonds issued the higher would be the taxes and ,consequently, the 1;eav:i.er v:ould be the burden to be borne by the people. In China, the burden of taxation rests 1.:iinly on the shoulders of the farmers. Thus, the more Government bonds i ; ue , tie raider would become the chasm between the r i.ch and the poor. ?he issuance o tends raos:'_d therefore have the effect of robbing= the ;x~or and iracini- the rich vicher; for ,ho noor people, the issuance of bonds has not the slightest advantage. (vee :.~=f. ;:c 6), 41,;ve1 in a reactionary book published in 1934 it b?:a ,s .! ted that "arious banks r,.at fits from the issuance of government bonds. ThouG h it mir-ht be said that Ves , ro came directly from the Governrm~erit. indirectly they came from the rural dis trictsl:. lief. i o:?). The actual purpose. tlien,for the issuance of the r-overnrnent bonds ti?ass i.o transfer speedily the wealth of the people (::costly that of the farmers) into the hands of the Four Great Families and their satellites. much robbery was founded on-the ~;c: u and semi-colonial s,yster: of suppression of the farmers, the common , ec ale =k.nd free enterprise 4 .;_, t:'LonsGcmpradores In 1.1-modern Chirr-A. co,:,prador. e activities cannot be di tingaist;ed from feudali.srn, and, furthermore, from those activities connected with a;nti-peo: '.S: civil wars, The Four Great.; Families created their wealth through the waging > 1. 1.4 arrs, that is to sass., from their, corapradore activities.. CH1h1iG za_ I: kr. j ,,;s T'1.ICT D Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 1 C that the imperialists who were oppressing China desired civil vwar, and that.., -eith out the support of the foreign reactionaries, he would never be able to carry on this 'civil war. Thus he knew he must associate with the foreign reactionaries Ir, order to succeed in his designs. and thus, the Four Great rariilies, with Call LG hae_- ?hek as their head, became the greatest compradores of modern China, starting just as "munitions compradores". In a book published in 1'*36 an American wrote the following. concerning the nature of the Chinese civil war:-+ "China depends almost completely on foreign countries for its munitions and, therefore, has become the world's greatest munitions customer.... The amount of munitions -supplied by Japan to China in 1930 was 37.50;x; of the total amount of munitions imported by China in that year ........ 'hour_h the importing of munitions was prohibited for a time, this only resulted in the s;.'ringing up of middle-men and in foreign countries taking advantage of the free-pert facilities of Shanghai, but the flow of munitions from Japan to China did not meet with any obstruction. The China ..eekly Roview stated that,if all the foreign countries stopped supplying China with munitions, the numerous civil wars in China would come to an end. The militarists of China can do nothing if they do not get any foreign help........ !,,hether the supply of munitions comes front Japan, Great Britain, the United States or Germany, it is an indisputable fact that the civil wars of China must depend heavily on the munition supplies received from foreign countries." (See Ae?. No:8). Everything ,-,tated above has been based on real facts, the truth. If the war lords of the Northern China were guilty of these crimes, what can then be said,in this connection, of the regime of ChiAEG Kai-dick, .which is far more war-like, far more cruel and far more foreignized ': tis stated previously, 86% of the income from the issuance of the domestic bonds was used on civil wars, and it can be said with certainty that most of this was spent on munitions. C11:IZ-G"s militarists were anxious to show off before the people such modern .-_uipments an airplanes, carnonB etc.: arid as the Four Families could not manufacture this themselves, they had to buy it from foreign countries. Thus the instigators of the civil wars were the munitions compradores. The our amilies gained their wealth not only from the manipulation of domestic bonds, but also as a result of their being munitions compradores. In the book mentioned above, (lief i:o.8), there is also the following state~,ent: "un r'ebrua.ry 28, 1933, !Lorgan Jones, a Laborer member of the British 1-arliamert, reported befor~?; the House of Co:-:rmons that a certain munitions company was supplying both Japan and Chinta with munitions. One day the Chinese and the Japanese representatives rrret, a:.cidently> ire the reception room of the same company. Instead of being angry with each other they compared the prices they were paying for munitions; then the two of them went in to see the president of the munitions coApany and requested ..over prices. The price is said to have bee calready cut down ;A4 (See lief. 1,0. 9). Japan's purpose in purchasing munitions was to invade China, and CHli G's purpose, to conduct the civil wars, both had a common aim, i.e. to slaughter the Chinese people. it was therefore no wonder that the representatives of the two nations did not flare up in anger at each other. From this little anecdote we can also see that CHIri ;G had obtained a discount f_r= the munitions company, but in China''s ''.reasury reports, there was, of course, no mention made of the reduced price. 't long and t ens. v,e civil war requires a large supply of munitions, which has become an importart~1 but secret) item of international trade in ChIaL''~G's regime. The greater part of t>-,e profits gained 'from such international trade was of course shared by the ,,our Great ar.ilies. Besides earning profits from their cornpradore activities in connection with rrruritions, the Four Great Families ' ,ade tremendous profits from their various conimer. ia1. enter- prises and from the borrowing of foreign loans. As an example of such large ccmpradore profit, we can cite the American Cotton and l?heat Loan of 1934. 17his loan wns an important factor in supporting CHI;J;G Kai-Shek through the civil war, and it made T.V. 50017 4G so popular that it even caused a rift between him and CH1iJG Kai--ttek. Generally speaking, the Four Great Families built up their fortunes From t he civil wars and fl-am cornpradore activities. The civil wars and the comprador activities made the four families rich, and r ade it possible for them to gain control of a monopoly in China's finance. Thus the Four Great Families are extremely militaris'.ic and consider the civil wars as the sine ua non of their existence. They also bow their heads low before the imperialists because their monopoly in China's finance depends on the latter' s support. Naturally) the above--mentioned historical facts are only a Pc art of. what the Four Great Families have done, and do not cover the whole story o.1.7 how hey acquired their vast wealth 1 C I iL, D Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 N S i F. .1 C i .; D (D) An LIconomic System that aims at Killing People The P bur Families openly used utter brutality and treachery in overcoming the democratic power of the people and in protecting the interests of a minority, the financial magnates; then, after winning the support of the latter, they used that very same pawner to suppress the financial maiates :rte t,'La, to become the undisputed leaders in finance themselves. Then, continuing their brutality and treachery, they sacrificed the interests of the whole Chinese race for their ov+n personal gains. This is a truly fascist .method of acquiring wealth. The Four Families have represented Chinese Fas lisrn and have followed the same course taker by the Fascists of othel? countries. But there is one difference between the Fascists of the semi-colonial and s end-feudal China and the Fascists of the capitalistic countries. The principal source of wealth of the Chinese Fascists lies in the robbery of the farmers; thus their main economic policies are concerned rrith preserving the feudal and colonial state Of the agricultural society and with acting as compradores of foreign capitalists. Thus the Chinese Fascism is feudalistic and compradore in nature, and the methods used by the Chinese Fascists in the acquisition of wealth have their own special characteristic. C11ANG Kai-:ihek has written in his book, "China's ,:conomic Principles" _"CUna s economic principles differ from the economic principles of the western untries i'. that China does not take one individual person or one individual thing as the unit, but the human race and society; as a wnoLe, as the unit... ',e take human nature as our starting point, and the livelihood of the people as our aim. All economic systems and policies must be in accordance with human nature, and must serve to improve the livelihood of the people". However, if we expressed the above statements in a scientific way, what CIil:1:G meant by "the human race and society, as a whole, as the unit" was simply that the Four Great r*udal Compradore Families were to be considered the unit, and what he meant by "human nature as our starting point" was that the homicidal and grasping nature of the Four Great families w - to be considered the starting point.. and by "the livelihood of the people" he meant the death of the people and by " 11 economic systems and policies must be in accordance with human nature and must serve to improve the livelihood of the people", he meant "all economic systems and policies must be in accordance with the homicidal and grasping nature of the Four Great Families and must serve to bring about the death of the pc ople.1 l "Ta Kung I'ao" (/ J 1. ) Chunking Ldition, ;.' 3, 1946. t.o Ref . . Ref. No. 2 "T"he Financial i roblems of China Today" (4 N2 I r r,., r rr ?r\' r'.hi a--Ch i u C .~ '1. M'J i . taken from ' asr41 :.aeazine" ( ,~`Jj'!/ %j No..13l, --`32nd Vol. 011 1 Ref. t;o. 3 t'l~txtn"ifil `],Jrj J.:P 5++l Q. Las ib +`y 'I \) by C:il .Chia-.Ch' u, taken from the ":astern 41 Page 25., h o.4, 30tb vol. Ref. No. 4 "Banking in China d ring t~.e vrar" IM Pf 1, by SHOU Chin-,.en ( 1, t age 51 arid 52. Q -161 fief. No. 5 "The Financial Pr leery of, Nina" 4 1l fie' by UUSU Hsieh-Han ( ~ - ' ,4iscussions of ,,c:oxromic I roblems of Ghina" (,cf lief. No. 6 "Th 3 mks ,pf China" W Ch a eng'-Hsi ( f, C I-lage 81. Ref. No. 7 "itural :;,concmy in iiiangsi" ~ Page 91 Ref. I o. 8 "Lunitions and i'rofitp^" 'J $ )by an 4perican - :ti slai :,rh Teh See ( VU (32 lransliteratior , from the Chinese), trarr,sla?ed by SiL, 'Tsang-Tian (P, cages 76 to 80. Ref. No. 9 Sarre book. as in Ref. No.8, Page 124. T P. 1 C T . ~. I) Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 1i r, 5 `1' it 1 C T D IJI a A k' UD,.L, OILPRj aDUR6.'D 1LIT LRY nBSL'LUT1SiL i.~~~t, r T GE (A) .Fusion of the Four Great Families and the Four Great Banks The 'Four Great Banks are The Central Bank of China, The Bank of China, the Bank of Communications and The Farmers' Bank of China. The Central Bank of China was established in November 1928. This bank is completely different from the one with the same name established in Kwangtung by SUN Chung-Shan ( ,j ?.f If 1 ), for it is a product of CHLU;G Kai-:ghek's financial monopoly after his establishment of a fascist, military dictatorship in Planking. The capital of the bank care from the government bonds issued by the CHIANG Kai-&hek government for that very ^urlaose,, CIII: dG3s political power has created the nonopolistic position of the bank in finan- cial circles; thus the bank enjoys special priviliges in the management of the "State Treasury", the issuance of drafts, the printing of national currency, and the issuance of domestin, as well as foreign bonds. The C11LiLG Kai-shek ?-overnment calls it the "national bank", but it is a "national bank" in which the people of China do not have any share; it is merely a "national bank" of C:EI.d.G's feudal, fascist and dictatorial regime. Thus, what C111:.1:G meant by "national bank" ' was "private bank", and what he meant byt'%:reasury" was "family wealth". i 11 that which the bank controls be.lon to the people, yet the people have absolutely no right to look into its business trans- actions and its records. The first Governor of the Central Bahk of China was T.V. SOLING, brother-in-law of CUI,aT-G Kai- .ek, and the second Governor was h.1L. K' Ul.G, another brother-in-law of CHIE.IIG Kai- *iek. At present F,:I Tsu- i ( ;o ) of the SWING clique is the Governor of the Central Bank of China. 1 ` ~-' n t7 I.hen CHIATSG Kai-Jhek established his fascist military dictatorship at Nanking, he used his political power to gain control over the Bank of China and the Bank of Communications. (These two banks had been established towards the end of the Chin Dynasty and had become the twin financial pillars of the regime of the North China war lords). In 1927, the main office of the Bank of China was. Moved to Shanghai, and $5,000,000., in so-called "Covebruaaent shares" were added to the ca;vital, of the bank. In 1928, the Bank of Communications also moved its main office to Shanghai, and CHI.;PG increased the capital of the Bank to the extent that he fini_ ly controlled 20% of ths zzapi,tal, Thus Ch1r,t,G insinuated his way into control of these two banks. But this was not enough for C11Irt14G. the capital of the Central Bank of China was still only :20,000,000, while that of the bank of China as but "25,000,00X),. (including the 5,000.-000 in "government shares" which resulted in the capital of the Central Bank of China being smaller than that of the Bank of ChinaS0 Therefo,e., CHIANG thought it necessary to increase the capital of the bank in order to insure his monopolistic control. Further, the C111L;ZYG government paid to the Bank of China x,5,000,000 in "~iovernnient shares", which was equivalent to only one-fifth of the total capital; and of the total. w10,000,C00 capital of the Bank of Communications, only half (i.e. X1,000,000) of the promised "government shares" of one-fifth of the total capital has been paid up. Therefore, Clil,U,.G felt the nece sity of also increasing the "government shares" in these two banks in order to maintain his monopoly. There- fore, in the spring of 1935. CH1, G, using as an excuse the financial crisis caused ?r,: the American "silver rxolicyi', issued X100,000,000 in government bonds as a reserve fund for the three banks- The Central. Bank of China, The- Bank of China, and the Bank of Communications. He further increased the capital of the Central Bank of China to X100,000,000; to the Bank of China he added "15,000,000 in "government shares" w hi.ch., together with the original 5,000,000 in "government shares", amounted to half of the total amount of the capital of the bank. To the Bank of Communications, ,l0,000.CCOO in "government shares" was also added, so that, together with the original "government shares" of x1,000,000., the "governnent shares" became 551'a of the total ruiank while HGH. K'U1~G, then Bead oa ~tfle Llinistr ~ of Finance and concurrently Ciover or o'? Central Dank of China, became a "private share" director of the bank. After the general meeting of the shareholders of the Bank of China in 1944, ".V. aUutG and IEyianu-- facturers' Sank of China, the$ ixi dua Trust & Baviri s Bank, and the Bank of Cantor. z.ere lso considered, then the percentage viotild he 47,) The total capital of .the Four Great Banks amounted to 59, of the total capital of all the banks in China. If the total capital of the L.anufacturers' Hank of China, fhe$;;in Bua Trust & Ravings Bank and the Bank of Canton were included, (there are no data 4ivin- the total capital of the other three banks), then the ercentage would be 61;:. The percentage of the deposits in the Four Great Banks was 59;,m (If the deposits in the above-mentioned three banks were included, then it would be 61,sj. The percerita::e of drafts issued by the Four Great Banks was 7f?;~ and the percentage of their net -profits was 44;6; however, if some of the other provincial and municipal banks which have connections i-ii.th the four families were included, then the percentages would naturally be much ii-her, Thus, the monopolistic position in the financial circles of the four Great Banks (vrl-iich are under the control of the Dour Great Families) can be clearly seen. The rapid concentration of wealth in the tour Great Banks can also be clearly seen from the above diagram. Taking the index of the total capital in 1934 as 100, in 1935 the index of the Four Great Banks increased to 161, that of the provincial and municipal banks to 116, but that of the other banks in Chima decreased from 106 to 84. In 1936, the index of the four banks further increased to 225, that of the provincial. and municipal banks jumped to 290, but that of the, other banks in China .remained at 100. Takin. the index of the deposits in 1934 as 100, in 1935 Lite index of the Four Great Banks reached 166, that of the provincial and municipal banks, 171, while that of the total deposits in the other banks in China decreased to 137. In 1936, the index of the tour Great banks became 2.1 t, that of the provincial and municipal banks became 209 while that of the other brinks decreased to 98. Taking the index of the drafts issued in 1934 as 100, in 1935 the index of the Four Banks Increased to 166, that of the provincial :Dnd municipal banks to 189, while that of other banks decreased to 58. In 1936) the index of the Four Banks further increased to 311, that of the provincial and municipal, banks became 457, while that of the other banks dropped to only 67. In other .?,ords, the "mandarin capital",represented mainly by the Four Great Fandlies,had rapidly increased, while all the other capital had steadily decreased, If we wished to know, in greater detail how rapidly the Four Great Families had amassed their vwealth, it would be best to look main at the rate of increase of the total capital, the deposits, the drafts issued, and the net profits of the Cen- tral Bank of China from 1928 to 1936- he following table was drawn -..p from the data. collected prior to the Nino-Japanese ;.ar of aggression, Ta GIGO;NTH CF its::, C G Ti%:.L F UJK OF Cfi1Ndi PhUl 1928 TO 1936 1tctual ,mount c (Tt:-in Chin s dollars Index Actua: 4,010UM ("ill-in . _ Chin-:, ,:~ars index ?cturil "mo (m- n Chin llars~ Inde e net Profit actual runo (~' i 1 oa 'dr dt Index else -928 47,470,796 100 15,410,468 100 1 11,712,923 100 239,360 100 -929 86,869,794 183 39,984,707 259 15,379,292 131 1,692,683 707 {130 124,336,2.45 262 66,042,175 429 22,669,228 194 2,726,341 1239 231 145,331,820 306 89,750,920 582 25,173,349 215 4,870,404 2035 1932 7.x.6,424,748 456 133,803.,743 868 35,160,,)96 300 6,463,475 2702 933 363,561,179 765 244,678,864 1581 71,063,301 607 10,724,245 4480 934 478,240,246 1007 272,592,827 1768 86,048,617 735 14,821,505 J108 1135 931,542,769 1962 634,000,095 4114 179,923,546 1536 9,048,340 3780 936 1,231,236,273 2594 757,043,176 4912 340,375,372 2906 17,095,868 714.5 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 it "l it 1 C 1 1 In the followinn r we shall compare today's conditions ,':ith those of the past. The Research Uepartuent of the Bank of China has made a statistical report on the transactions of the 27 most important banks in China durin: (~ - the period fro-rm 1921 to 19:1 (Se Ireference 1-`5)- Of these 27 banks, the Central bank of China, the KuoIiua wank ` ) and the Land Bank of China, Ltd. were established after 1.928. Therefore, Jrior t6 1927 there ::ere only 24 banks, the total capital of these 24 most important banks in 1921 was .759,254,117 but by 1927 it had increased; to ?.?l,462,098,581; thus, if we ma .e the index of 1921 100, then the capital had increased to 192.57 by 1927. However, the total capital of the Central bank of China alone during; the space of 9 years from 1928 to 1936 had increased to 1,231,2--56,275; as can be seen, this amount is almost equivalent to the total amount of the capiti of the 24 most important banks in China just prior to the time the Four Great Fami- lies replaced the .ar Lords of Northern China as rulers of China. he index of the Central Bank of China also increased from 100 to 2594. In 1921 the deposits in the 24 most important banks amounted to .496,897,041 and by 1927 had increased to .976,122,496; its index, which was 100 in 1921 had by 1927 increased to 196.41. How- ever, in 1936 the deposits in the Central bank of China alone reached the sum of .757,043,176; the index increased from 1U0 in 1928 to 4912 in 1936. .the drafts issued by the 24 banks in 1921 amounted to j,102,751,362, but had increased to 4278,730,410 by 1927; thus its index of 100 in 1921 had increased to 271.17 by 1927. However, the drafts issued by the Central. Bank of China alone in 1936 already far exceeded the total amount of drafts issued by the 24 banks in 1927 and reached the sum of x340,375,372, the index increasing from 100 in 1928 to 2906 in 1936. The net profit of the 24 banks was X13,254,445 in 1921. I _r the index for this amount be set at 100, then in 1926 the net profit of the 24 banks being? .,6,914,797, the index reached 127.62. in 1927 the net profit dropped to the index becoming 86.33. I.evertheless,the net profit of the Central Bank of China alone in 1936 had already reached the sun: of ,"17,095,868, thus exceeding the total amount of net profit of the 24 banks for the year 1926, The net profit index of the Central Bank of China increased from 100 in 1928 to 7145 in 1936. From ::.a examination of the above figures, one can readily perceive the nuuture of the Four Great Families, financial monopoly and their methods of acquiring? ,realth. ('and yet, what . e have described above is only part of the story and not the ':hole story), Iz it because the Four Banks (especially the Central Bank of China), being the so-called "national banks" of the CIiL:I.G regime or the "barkers'banka",an ;aged in some special ":Sind:: of business neither feudalistic nor cornpradore that they hecame so very rich? The answer is no. Long ago, writers wrote the following about these bnnksa "Though there are various kinds of banks, are they not all, doing the same kind of business?" (See Reference i,16'. "i.iany bankers are dissatisfied with the Central Bank of China for not fully performing its duties as the 'bankers' bank', and some, with a sense of humor, often call it the 'goverr-snent's bank'''. (See reference ".+s a rule, the central banks of other nations do not vie with other banks to increase the volume of their bank deposits. The bank deposits business of the Central Bank of China is very prosperous. If this prosperity is the result of high interest rates being paid by the bank, then the policy being pursued is an abnormal one." (Same reference as gbove). "The nation is suffering from an economic crisis and the bank-notes of various banks are being gathered back by the banks, but the circulation of drafts of the Central ;rank of China has, on the contrary, increased. This is an abnormal situation" ( Sr-cs:e reference u:; above). ",it present all. the capital of the Central Bank of China cosies from the National. Treasury, so what is the use of issuing more government bonds.." "A central bank should not. air: at makinke profit. Thus, the increase in the net nrofit of the Central Bank of China does riot necessarily imply a sound condition of the Bank"!, (Same reference as above). "Almost all business is at a stand-still and bankruptcy occurs everywhere, but the banking business alone is prosperous. In the 1933 fiscal statea.ents of all the banks in Shanghai, that of the Central Bank of China showed a net profit of more than X12,000,000 wile even those of the small banks showed pro~ts of not less than x50,000 or .60,000. The source of profit of most banks a.i.es inhdealing with g'oveime:at bonds; there is no other possible source" , knee Reference 8). tcuoIB.IC Tall Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 R.. Tit IC'I i:1) All these facts prove that the nature of the business of the Central :auk of China and the other so-called "national banks" does not differ from that of all the other compradore and feudalistic banks. They are not capitalistic in nature but extremely compradore and feudalistic. Their expansion does not reflect a corrRess- ponding expansion of the national economy or of capitalism but rather the collapse of the national economy and the impossibility of the expansion of capitalism. the banks which were under the direct control of the Four Great Families could succeed in concentrating- the wealth of the nation so rapidly into their own hands. and in suppress- ing those banks which were not under their control simply because they had the support of the feudal, ailitary, and dictatorial power of Ctil: ;G's .ascist regime, and also because the Four Fa dlies never hesitated to use their political power to gain control of the financial. circles, The source of their great wealth ,.,as, of course, the people, and the chief source, as already stated in the previous chapter, was the farmers vtho -.were under the oppression. of the semi.-feudal and semi--colonial ??overrm.ental s -ste;. "Over 85' of the total population of China consists of farmers, and, therefore, every eriterurise is built on the foundation of the farming po ;ulation - itihy not then the financial enterprises:" (:See reference f9). The ?our Families pat only made use of their political power to create the above-:mentioned financial monopoly, but also to win over to their side h.e formerly prominent persons in the financial circles by making them either directors of the your Ean)s or me .bers of the Cla,-IX government.. For example, after Gh, G Kung.- h'4 an was removed from his original position in the bank of China, he was ;riven an or icial ra and the post of Vice-Governor of the Central Pik of China. ,.U Ting-Chang manager of the Jalt Industrial Bank aria Head of the aauirigs :Jocxety of the 'four Banks (,;{k P , was a^' 1so''iV n an official rank and the concurrent post of a director of the Bak of Communications, h ? I1 Kuang- u ( ~`` j j general-nanager of the Hhanhai Commercial & Javir:,-s Bank, was given the pd t director of the Central. Bank of China and of the wank of Communications and also that of standing member of the Board of Directors of the sank of China; he also dida good deal, of diplomatic work in the financial circles for the . C:Il.,IdG regime. LI Lj.n[? '4i. ij./ . chairman of the directors' board of the Chek- iang Industrial Bank (";It / and concurrently the general-:rkanrrger, became also a director of the h nk 1C na and of t he Bank of Communications and, at the same time, an Inspector of the Central Bank of.China, Conversely, the important persons of the Central Bank of China, the Bank of China, Bank of Communications, and the Farmers' ~3ank of China also took concurrent posts in the so-called "privately ov.ned" banks. For exajrcpl H.H. fi' UI'NG became a director of the ahar,.,ghai Commercial & Savings Bank, F~:;I Tsa- i became an Inspector of the Chekiang Industrial Bank, etc. rtilmost all the so-called ";riddle-class" banks had such types of "mixed" personnel andkconseguentiy, became the s -bsidiarics of the four families. The "mixed" personnel served as a means for the Four Great Families to gain absolute control in the financial circles and to concentrate all financial power into their own hands. 1"h e feudal, co:_.t radore regime of CLLZG used such means to form a nation-wide financial dragnet of the Four Families. Thus the iso- nopolistic position of the Four Great Families in the financial circle became much _:ore x.tensive, and the concentration of wealth .as much more rapidly effected than ever before, (C) The "Fa i?i" (TIN-Chinese hati.onal. Currencyj .iysterc is "aritamount to a Feudal, Compradore and military i oI , . ; is `r ys, .'4 y , , ~r r : / is also t~l-I ;f" LL Just before the remova of restrict- ions on or t gSra e Iiange i.n march of 1946, he bought ' meric an r~.::ittances totaling Zl,,190,000 at the official e.~ change rate of CNCV20 to 1,'$ 1, and thus made a great deal of rmoney0 (see Reference ,1123) , This self--styled "moralist'" has innumerable ways of be comeing wealthy, the above mentioned way being but one of them, and an insignificant one at that! lak Yin- h u severely criticized the ''members of the Luomintarag"" Gleaning, of course, the Four Great Families) on their ta..ing advantage of their rroaorpoly in foreign exchange to hay foreign re ittances at the rate of CLC~20 for one U cial)_ar, while the common people had to pay C1,CW4-,OG0 or ChC :5,000 for one U..a. doi.l ar. lie Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 Approved For Release 2006/02/01 : CIA-RDP83-00415R000400020015-8 ib aTRI C T ,;D declared that "such a vvay of making money does not demonstrate ability; only beasts like pigs and dogs use such methods ! " (See Reference ti 24) . lioweves', among the methods used by the Four Families to enrich themselves , are there any which could be con- sidered "nobler" or "kinder" than the above'. Let us take another example to prove our point. Let us discuss the dealings in gold bars. One writer once wrote the following:- "',`..s a result of the ""gold bar policy"' it is not known how many parvi wtus were created by the sudden circulation of rumours, Of these parvenus, only those who were in a position to create the rumours were sure of becoming wealthy. Let us observe what happened from the star, of the war to the end of the war and up to the present. The government first announced that all told bars were to be government-owned; then it reversed its decision and annulled the order and restored free transactions in gold bars. On one occasion it would advocate free transactions in cold bars. then suddenly it, would fix an o fi c .al mate and buy cold. rafter V-J Day, the buying and selling of -old no longer were uncontrolled, but the prices were officially fixed by the government. Later the official rate of gold bars was cancelled and free transactions were once again allovred._:sefore and after each change )rumou.k's spread like wildfire in the market, Lind 90,:: of these rumors always proved true later. Jo it is easily iraaFlinahle what Kinds of treacheries were played behind the st ere:;:`` (See lheference , 25) , The puppeteers behind the scenes were the Four Families, while the puppets were the people. wince they v.ono olized the [old market, 'they could employ any treachery at any time they saw fit to enrich themselves. A mosquito newspaper in Shanghai, writing about the transactions of the Central Bank of China in gold bars Tbetweeni pri1. and!L ay 1946, stated on 2" ipril ""that last week's black market price in the old market suddenly jumped from G[:CN1,63O,OOC per gold bar to over CNC I,9OO OOQ? The sudden rise is said to be chiefly the result of the Central Bank of China's chang ink; on that day the official price of the ;-;old bars allotted to the various banks frota CNCI;.1,600,00O per gold bar to CNCvi,68O,OQU, an increase of CNC~,8Q,OOO"". a.hat were thee, reasons for the change "if the Central Bank of China sells gold to call in the CNC, will riot the gold in the National Treasury be soon completely depleteth The fact: are riot this sitple. lthoug*h the Central Bank of China often sells out large quantities of gold, it also just as~often buys it back; and thus between the buying and s elling, the bank can make profits. nor example, suppose that the bank had bought in the pad; 866 gold bars at CrCVr1.60O,0O0 and sold them at the present rate of CTrc 1,68Uyoo0. It would then have made a profit of CNC:69,200,000",It must be remembered that this was only one of the numerous tricks employed by the Four Families to enrich themselves by means of gold transactions. One of the outstanding tricks played by the Four Families in f inane in order to make themselves wealthier was that of lending money at hi? h in- terest rater. In order to indulge in such feudalistic robbery, they organ zed various ban