New Industries

When the history of 1940 is written, a strange paradox will be recorded. The main repository of democratic hopes in the Far East was a military dictatorship: China.

Generalissimo Chiang Kai-shek's Government is one-party, his authority total.

His People's Political Council is scarcely more representative than Adolf Hitler's Reichstag. But what sets China apart from stock-in-trade totalitarian states, and what has kept the people of Britain, France and the U. S. behind her, is that China wants to be a democracy. Long ago Generalissimo Chiang promised his country a republican constitution. One of the main reasons for Communist hostility to his regime has been his failure to implement that promise. But Chiang Kai-shek believes his people must hang on the vines a little longer before they will be ripe for democracy.

Nevertheless he has set a time--next November--for the transition. Last week the People's Political Council met in Chungking for its last session. Its members were allowed to worry a little over China's rising commodity prices, gloat a little over her rising military hopes. At its last sitting they listened to the Generalissimo make a radiantly confident speech.

Then they adjourned--to make way for democracy. Most promising device by which Chinese may learn the ritual of democratic discipline is an amazing phenomenon which calls itself Indusco.

Guerrillas. A phrase heard often in China, where things are always breaking down, is: "hsiang fa tze"--"let's cook up a scheme." By January 1938, Shanghai's industry--which was about 70% of China's--had been turned into acres of scrap steel and broken brick. Unless some scheme could be cooked up to replace this wrecked beehive, China's economy would have very little sting left.

A number of Chinese sat down with four smart Westerners: Edgar Snow (Red Star Over China); his wife Nym Wales (Inside Red China); John Alexander, secretary to British Ambassador to China Sir Archibald Clark-Kerr; and Shanghai Municipal Council's factory inspector, Rewi Alley. Their conclusion: China's only military skill was in small, mobile, spontaneous units; why not build China's economy in similar units--develop a guerrilla industry? John Alexander broached the idea to his boss. Sir Archibald was enthusiastic, at once took the plan to Madame Chiang Kai-shek and Finance Minister Dr. H. H. Kung. They, too, were keen. Dr. Kung allotted $2,000,000 (Chinese), promised $3,000,000 more. On Aug. 5, 1938, the leaders met and constituted themselves as a central committee of the Chinese Industrial Cooperatives. Fittingly this economic defense against Japanese penetration was born in the commandeered building of the Yokohama Specie Bank in Hankow.

50,000 Democrats. Into the field went organizers. Their success was immediate. By last week they had formed 2,000 units of from seven to 100 workers engaged in innumerable handcraft industries--tan-mng, spinning, weaving, printing, mining, making over 300 types of articles from boots to boats, from candles to light bulbs. Indusco last week boasted 50,000 cooperating members producing at the rate of $6,000,000 (Chinese) worth of goods every month.

The advantages of cooperatives were many. They fitted much better than huge plants into the ancient Chinese tradition of household craft industry. The units were mobile, easily disguised, easily housed, and were not, like big factories, obvious targets for Japanese bombers.

They supplied military needs which no other source in China could produce so efficiently--gloves, caps, greatcoats, padded clothes, gauze, tents, field cots. They saved many a soldier on the northern front from freezing last winter by producing 100,000 woolen blankets. Operating near sources of raw materials and usually for local consumption, they eliminated transportation costs. Above all they provided millions of refugees who trekked west on the heels of freedom with the hope of lasting relief in the form of jobs. At initial cost of only $7, the cooperatives can give a man work which permanently supports him.

Cooperatives entirely revitalized whole towns. In Shuangshipu (Shensi Province), Indusco enrolled 1,200 people--one-tenth of the town's total population. The other nine-tenths live almost solely by supplying services to Indusco members and their families.

Zeal. Lion's share of credit for organizing cooperatives goes to Rewi Alley. Descended from an early Scottish-Irish family of New Zealand settlers, he took his first name from a native New Zealand chief. He served in World War I, then went to China and to work for the Shanghai Municipal Council. In 15 years he made himself the best-informed man in the world on Chinese industrial conditions.

Short, forceful, 40, he worked at Indusco with the nervous energy of a dye-stamping machine. He won Chinese workers by being able to tell jokes in many dialects, by adopting two Chinese sons, by repairing broken machinery with string, bamboo, chewing gum. All his work and hard travel (thousands of miles by bicycle) he endured not for personal gain but simply because he believed in China, in cooperative effort, in democracy.

Chinese Industrial Cooperatives teach coolies not only how to manipulate strange machines, but also how to manipulate ideas, how to work for a common cause, how to subordinate personal means to group ends. Each cooperative governs itself, elects its own officers, makes its own rules. If China ever succeeds in becoming truly democratic, it will be because the crankshaft has been turned over by democratic self-starters like Indusco.

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