5. THE FUTURE OF COOPERATIVE INDUSTRY-part one

       Is this industrial cooperative movement a temporary phenomenon ? Will  it be able to continue its growth ? Will it become absorbed by a capitalist or state socialist society? Will it be destroyed by Japanese competition or other mass production? Will it be merely supplementary to other forms of industry or will it build a so-called "cooperative commonwealth" in China? Will it de- generate into the framework of the old society? All these are possibilities, and the answers depend upon many factors entirely out of the control of the experimenters. I can only offer a few speculations and mention that the field organizers of the movement seem to believe they are laying the permanent foundation for a new society in China and that it will hold its own so long a China does not become completely a colony.

The first consideration is that the potentialities of this movement should not be underestimated. Though it has at this writing less than 2,000 small factories and workshops in relation to perhaps 500 larger factories, including about thirty sizable modem plants in Free China, it is more dynamic and future possibilities are many times greater. It is basically stronger than any other form of industry in interior China.

Secondly, one must consider the future growth of the movement and its secondary social and political effects as a factor in judging the future conditions of its existence. Many present limitations will fall away as the work progresses. On a large scale, the movement can be of very great importance in the Far Eastern situation. On a small scale, it is, of course, not a decisive factor.

There are so many variable factors that it is almost impossible to take them all into consideration, but it is my opinion that under all probable conditions in the next few years the industrial cooperative movement in China could continue successfully during those years, provided that it receives enough capital within the next year or so to build a broad productive system.

 How much capital would be required is a question. It would take at least Ch. $65,000,000 and probably $100,000,000 due to rising costs, to create the chain of 30,000 cooperatives projected by the C.I.C. as its initial goal. Ten times that amount would certainly be enough to build a solid base in all provinces, with extensions into guerrilla territories. An investment of, say, US $50,000,000 (which would exchange at ten or twenty to one probably), would definitely affect both the war and political situation, by directly building war industry, defeating Japanese economic plans for the interior, and building a democratic movement in China.

Is this capital available? The C.I.C. will soon have a total capitalization of nearly Ch. $40,000,000 if all present loans go through, and negotiations are practically completed. Chinese banks should be able to invest three or four times that much easily. Some of that three billion dollars idle in Shanghai, $700,000,000 idle in Hong Kong and US $90,000,000 of Chinese capital in the United States, should be available, especially if those two cities go to the Japanese.

 Nothing would be more important, however, than an immediate US$50,000,000 or $100,000,000 Productive Relief Loan from the American Government, for the purpose of keeping up Chinese resisiance and morale. It is the cheapest as well as the most effective method I can think of for solving the immediate Japanese problem in the Far East, and may enable the Chinese to solve it permanently. If our Congressmen and President would look into this method very carefully, I believe they would not delay voting such a loan. It would immediately result in drawing large quantities of Chinese capital into the interior, if not for the cooperatives then for other investment. It might save that three billion in Shanghai for China, instead of letting it fall into Japanese hands, for one thing. We may well ask why these Chinese don't, invest In their own country. The answer is complicated, but it is largely because they simply haven't the far-sightedness to understand the meaning of industrialization, especially in relation to fighting a national or civil war. That is no excuse for Americans.