893.00B/9–2248: Airgram
The Ambassador in China (Stuart) to the Secretary of State
[Received October 1—3:12 p. m.]
A–233. Further evidence of a modification in Chinese Communist tactics, as reported in Embassy Despatch No. 267 of June 9, 1948, is contained in the North Shensi Broadcast of August 31 with an announcement that agrarian reform had been suspended in the central plains area, meaning presumably that region centering around Honan, and in place of it there would be a reduction in rents and interests. These measures were taken under the instructions of the Central Committee of the Chinese Communist Party which stipulated at the same time that benefits already gained by the peasants should be guaranteed.
An editorial of the West Honan Daily, organ of the Chinese Communist Party Central Committee’s Central Plain Bureau, justified these measures on the grounds that newly liberated areas have not yet sufficiently matured nor have the peasants been prepared ideologically and organizationally to justify agrarian reform. The reduction of rents and interests is the first preparatory step. The reduction of rents and interests will lighten the burden of the peasants and allow them to [Page 464] be prepared ideologically. Furthermore, the agrarian reform does not seek to eliminate landlords as such but to eliminate them as a class relying on the feudal system. It also is designed to form landlords into useful working people, industrialists and merchants.
This development seems to us further confirmation that the Chinese Communists are having their own serious internal political and economic troubles and that they are increasingly impressed by the necessity of consolidating their position in areas they now control before they can afford to expand territorially.