In one year, opium solved Mao’s problems. On 9 February 1943 he told Chou that Yenan had “overcome its financial difficulties, and had accumulated savings … worth 250 million fabi.” Fabi was the currency used in the Nationalist areas, which Mao had been stockpiling, along with gold and silver, “for when we enter Nationalist areas,” i.e., once all-out war began against Chiang. This sum was six times the official Yenan region budget for 1942, and it represented pure saving. In 1943 the Russians estimated Mao’s opium sales at 44,760 kg, worth an astronomical 2.4 billion fabi (roughly US$60 million at then current exchange rates, or some US$640 million today).

By early 1944 the Communists were “very rich,” according to Chief Secretary Xie. The huge fabi reserve “is without doubt thanks to the Special Product,” Xie wrote in his diary. The lives of Party members in Yenan improved dramatically too, especially for senior officials. Cadres arriving from other base areas marveled at how well they ate. One described a meal with “several dozen dishes,” and “every table left many dishes unfinished.”

Mao put on weight. When Opium King Teng met him in June 1943 after some time, his first words of greeting were: “Chairman Mao has grown fatter!” He meant it as a compliment.

FOR THE PEASANTS, the main benefit opium brought was that it lessened the impositions visited on them. Up till now, they had been liable to have their meager household possessions and vital farm tools commandeered. After he became opium-rich, Mao ordered steps to improve relations with the locals. The army began to return goods it had taken, and even to help peasants work the land. Mao himself later admitted that the locals’ attitude towards the Party until spring 1944 had been to “keep an awe-struck and fearful distance as if it were deity and devil,” i.e., to try to steer well clear of the Reds. And this was seven years after the Communists had occupied Yenan. Throughout, the Communists had little contact with the locals, except when their work required it, or on token New Year visits to villages to exchange ritual greetings. Intermarriage, and social relations, were rare.

Opium wealth, however, did not improve the locals’ standard of living, which remained far below that of the occupying Communists. The lowest-grade Communist’s annual meat ration was almost five times (12 kg) the average local’s (2.5 kg). While conserving its vast hoard of cash, the regime still lost no opportunity to milk the population. In June 1943, on the grounds that Chiang was about to attack Yenan (which he did not), civilians were made to “voluntarily donate” firewood, vegetables, pigs and sheep, and what little gold they had, which was often their life savings.

A mention of the CCP’s huge reserves in Xie’s diary on 12 October 1944 is sandwiched between dire descriptions of peasants’ lives: the mortality rate was not only rising, it was vastly outstripping the birth rate, in one district by nearly 5 to 1. The reasons, Xie noted, were “inadequate clothing, food and accommodation,” foul drinking water, and “no doctors.” The regime had introduced a major cause of mortality by banning firearms. Wolves sauntered into people’s front yards, and leopards roamed freely in the hills. So people had to bring their precious livestock into their dwellings, or risk losing them. The resulting abysmal hygiene led to many diseases. Access to game as food was also strangled by the firearms ban.

Mortality was highest among immigrants, who formed a sizable part of the population. They had been moving to the Yenan area because it had spare arable land. Mao encouraged them to keep coming, but then did little for them when they got there. Herded into mountain country and left to fend for themselves, they died like flies—31 percent within two years in one area. Mao knew that the mortality rate for children was 60 percent (and nearly all who survived grew up illiterate). And yet, as a top administrator recalled, “the massive death tolls in people and livestock were never given proper attention.” When pressed to do something, in April 1944, Mao said: Let’s discuss this in the winter. Public health did become the focus of discussion in November that year, for the first time since the Communists had arrived in the area nearly a decade before; but there was no mention of spending money on it.

FOR THE LOCALS, opium also brought astronomical inflation, much worse than in Nationalist areas. “We have caused great inflation,” Xie wrote in his diary on 6 March 1944, “not because we are poor, but because we are rich.”

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