The Policy of Reducing Rent and Interest

During the Anti-Japanese War, the CPC adopted a policy of uniting landlords, rich peasants and all other forces that could be united to fight against Japan. In late August, soon after the July 7 Marco Polo Incident in 1937, in late August, the CPC Central Committee held an enlarged meeting of the Political Bureau in Luochuan, Northern Shaanxi Province. “Ten-Point Programme for Resisting Japan and Saving the Nation” adopted at the meeting, put forward the idea of "reducing rent and interest" in the Article 7 which stipulated the "improvement the livelihood of the people”.

In February 1940, “The Resolution of the CPC Central Committee on the Present Situation and the Tasks of the Party” emphasized that:“We should earnestly implement the reduction of rent, interest reduction and tax reduction and improve the well-being of the workers, and give the people economic assistance in order to arouse the people's enthusiasm for resisting Japan.”

On December 25 of the same year, the CPC Central Committee clearly stipulated the basic connotation of the policy of rent and interest reduction in its inner-party directives: On the one hand, landlords should implement rent and interest reduction; Land rent reduction policy generally stipulated a reduction of 25%; when the masses of peasants demanded an increase in rent reduction, a new arrangement could be made so that the tenant farmer might keep up to 60% to 70% of his crop, but their share should not exceed this limit. Reduction in interest on loans should not be so high that credit transactions become impossible. On the other hand, the CPC policy took into consideration; “it was necessary that the tenant peasants should pay rent and interest and that landlords retain their land ownership and their other property. Interest rates should not be so low that the tenant peasants can continue to obtain loans from their creditors, nor should be the settlement of the old accounts in such a state that the peasants will be able to get back their previously mortgaged land free of charge”.

The class analysis and estimate of the CPC about the attitude of different classes towards the Anti-Japanese Warand to promote their enthusiastic participation in a balanced way was the political basis for the formulation and implementation of the policy of rent reduction and interest reduction.

In January 1942, the “Decision of the CPC Central Committee Concerning the Land Policy of the Anti-Japanese Base Areas” was issued, which laid down three basic principles for dealing with land issues:

(1) Recognize that peasants (including farm laborers) are the fundamental force of the Anti-Japanese War and of production. Therefore, the Party's policy is to help peasants, by alleviating the feudal exploitation of landlords, reduce rent and interest, and safeguard peasants’ human rights, rights to political power, land rights and economic-financial rights so as to improve their livelihood thus enhance their enthusiasm in resisting Japan and production.

(2) The decision considered that the majority of landlords demanded resistance against Japanese invasion, at the same time a part of them and the enlightened gentry were in favor of democratic reform. Therefore, at this stage the Party's policy was only to help peasants alleviate feudal exploitation, but not to fully eliminate feudal exploitation, let alone to crack down on enlightened gentry class which supported the democratic reform. Therefore, while rent and interest reduction are implemented to the advantage of peasants, they were not completely freed from rent and interest payments. While guaranteeing the peasants' human rights, their right to political power, their land and property rights, at the same time guaranteed the landlords' human rights, their right to political power and their land and property rights, so as to win over and unite the landlords in the Anti-Japanese War. Only against those traitors who were absolutely determined not to repent would the policy of eliminating their feudal exploitation should be implemented.

(3) A part of the rich peasants was involved in feudal exploitation to a degree, which was resented by the poor peasants of middle peasants, therefore, when the policy of reducing rent and interest was implemented, such rich peasants had to be targeted with this policy as well. Although rich peasants had to be targeted with the policy of reducing rent and interest, their rights and interests to receive rent and interest was protected so that their human rights, rights to political power, rights to land property and to other property were guaranteed. Some landlords who managed their land property in a capitalist way (so-called landlords) were treated with a relatively favorable policy similar to the treatment towards the rich peasants, because the “Decision” acknowledged the relatively progressive character of the capitalist mode of production.

These three principles mentioned above were the starting point and the targeted end point of both the Party's Anti-Japanese National United Front and its land policy at that period. The, “Decision Concerning the Land Policy in the Anti-Japanese Base Areas” (December 1942), was accompanied by three supplements: “On the Questions of Land Rent and Tenancy”, “On the Questions of Debts” and “On the Question of Handling of Some Special Lands”, which made detailed provisions on how to implement the policy of reduce rent and interest.

On Rent Reduction. In all base areas where rent reduction policy was not started yet, the policy of rent reduction would be to reduce the original rent by 25%, that is to say, the rents would be reduced by 25% compared to the pre-War period, regardless of whether public land, private land, tenancy land or cooperative farming land, and regardless whether money rent or tax-in-kind are in force and regardless whether floating rent system or fixed rent system are in force.

It is not appropriate to stipulate that the income of various forms of cooperative farming entities should not exceed 4/10 or 6/10 in comparison to the income of the landlords. The tenants’ rent could be reduced up to 25% in comparison to the original rent according to the amount of labor, cattle power, agricultural tools, fertilizer, seeds used by the tenant and food produced by the tenant; this rent reduction should have been decided by a mutual agreement between the tenant and landlord. In the guerrilla base areas and in the farm areas adjacent to enemy-occupied lines, rent reduction rate could be set less than 25%, with a reduction of only 20%; 15% or 10% , thus proper rates should be arranged so as to promote the enthusiasm and mobilize peasants to resist against the Japan forces.

The aim of such flexible policy was to arouse the enthusiasm of the peasants and unite people from all walks of life for the Anti-Japanese War.

On Interest Reduction. In the newly contracted loan agreements, since after the Anti-Japanese War, one and a half percent (annual rate) should be implemented as the interest rate benchmark. If the creditor demands an increased interest rate which doubles the originally contracted rate, the debtor will cease to pay the interest but will repay the principal; if the creditor demands an increased interest rate which is higher than the double of the originally contracted rate, the debtor will cease to pay both the principal and interest.

After the Anti-Japanese War began, the CPC decided that interest rate issues in the base areas should be handled among the people themselves, according to local social-economic relations and that the local governments should not set too low interest rates, which could cause stagnation in the lending transactions and cause an unfavorable situation in people's livelihood.

The policy of rent and interest reduction not only improved the livelihood of the peasants to a certain extent, but also raised their enthusiasm for production, and brought about certain changes in land tenure relationships which were conductive to the democratic revolution. On the other hand, this policy also took into account the interests of various classes against Japanese aggression, it consolidated and expanded the anti-Japanese National United Front and ensured the successful development of the Anti-Japanese War.