Not so much stuff is smuggled over these days, and the prices of everything have risen aga: n. A late frost dd' a lot of damage io the wheat and fruit in some districts: 50 that the price of wheat is now $110 a dan, Buta cool:é earns at. Toast $4°a day. The people most hit are the™ official and teaching classes. There Is still a shortage of small change; plenty of $80 and $100 notes improving. ical situation is still obscute, a double game is being played. the main object being appeasement, while the attitude of the Soviet vis: avis Japan does riot help to clarity anything. At the same time the blockading of the Chinese Soviet. while adroitly avoiding major clashes.
a very real thong. Forts and watch. fowers have been extended Into Kansu. separating the Soviets from Kuomintang territory. Somet'mes the people are reported to pull down at night what has been built during the day, Censorship is rigid and Red pond their relatives. Chinese comrades are not allowed to corres-
fapi is discounted 30 per cent,, in Yenan~$70 Chinese Soviet currency for $1 fapi.
Gen, Yen Hsi-Shan Acts As Buffer Gen, Yen Hsi-shan still keops_one foot in Shansi for the Central Government and acts as buffer to the Reds fo foil for the Central Government. The Reds would appear to have lost all power of propaganda in central Breas. no one dares read their news Paper. I see it and it contains very Aittle subversive material. They. do not, seem fo have any anti-religious policy, as evinced: by the recent build Ing of a mosque in Yenan, Christian churches {ill exist in the territory though they are not allowed to expand.
Shensi is not making the strides in opium suppression and education that Szechuan is but Tallway communications continue to spread using materials of 30 years ago, brought from the old Ping-Han. The line. to the north of Shensi is nearly finished, Also the irrigation systems built by the Famine Rel'et Commissions are in full working order and are bong extended, Land that was bought for '$2 is now worth $500 to $1,000.
Text read from the printed page and cleaned; old type leaves the occasional error.