Republic of China: Ace Pilot

Chapter 188, Section 187: Establishing Red Army Trade Routes, Taishan Brand Cigarettes
A letter and a stack of US dollars.

These two items were in an ammunition box that wasn't fully loaded with bullets.

The regimental commander didn't recognize the colorful US dollars, so he opened the envelope first.

"30,000 rounds of ammunition, plus an additional $10,000 to help you through this difficult time. If you need more ammunition, please contact us."

The regimental commander was excited and headed to the military headquarters with the letter, US dollars, and some bullets.

Meanwhile, the F.220 that carried out the airdrop returned to its origin and parked on the runway of Xiangxi Airport.

Airport staff held torches to guide the planes into the hangar.

After parking the plane, it was already 4 a.m., and Fang Wen and Huo Duanyang, feeling exhausted, walked out of the hangar and headed to the house across the street.

Before the break, Fang Wen said, "Tomorrow, after Fang Shouxin and the others return, we'll have a meeting to discuss the division of responsibilities between Guangyu and Xiangxi Airport and Yangon Airport."

Huo Duanyang nodded, yawned, and went into his room to rest.

September 18th, noon.

Fang Wen, who had slept for eight hours, got up, stretched, and then took out the toiletries his wife had prepared.

He went out to fetch water from the water room.

The water supply here is drawn from a mountain spring, which is piped in through sealed rubber tubes.

The spring water is very cool and can be used for washing and brushing teeth. There is also a large jar next to it containing boiled and brewed herbal tea. If you want to drink water, you can remove the stopper and pour it yourself.

Washing up with cool spring water is the most refreshing thing on a hot summer day.

He packed his toiletries, went out, and walked around the airport, essentially inspecting the operations of Xiangxi Airport.

Everything here is proceeding smoothly, and the 100 members of the security team have already begun their drills.

Under the training of their instructor William, they practiced throwing grenades.

The security team is equipped with two different models of Mills grenades, No. 5 and No. 23, and is currently practicing with No. 23.

When Fang Wen bought it, he saw the groove on the bottom of the No. 23 Mills grenade and thought it was for attaching a wooden handle.

Actually, no, the groove at the bottom of the No. 23 Mills grenade is for receiving a rifle grenade launcher.

But here, since that thing wasn't available, they simply attached a wooden handle to the groove at the back, turning it into a wooden-handled grenade that was easier to throw.

Fang Wen learned that the security team members all preferred to use the wooden-handled throwing method.

Because that way you can throw it farther and more accurately. Throwing a British grenade the size of a fist directly is easy to slip out of your hand, and the accuracy and distance are unstable.

Therefore, William adapted to the soldiers' habits and conducted new throwing training.

After inspecting the security team's training, Fang Wen then visited the bomb factory and the airport.

Huo Duanyang had already gotten up and was working in the airport office.

Shunzi oversaw production at the bomb factory.

Fang Shouxin, on the other hand, had nothing to do and spent his time with Fang Wen, wandering around everywhere.

As they walked, Fang Shouxin brought up Shunzi's matter.

"General Manager, my son Shunzi wants to get married."

"Really?" Fang Wen stopped. "He's getting old, you should make some arrangements for him."

"He chose it himself. There's a Miao girl in a village 30 kilometers northwest of the airport. Shunzi took a liking to her and wouldn't change his mind," Fang Shouxin explained.

"Any questions?"

"Yes, that girl's family works for the Communist Party. I heard there are rules there, but I don't know how to handle it."

"It's just going to his house to propose marriage," Fang Wen said with a smile.

"Her parents said to listen to the girl, but the girl said to listen to the organization," Fang Shouxin replied helplessly.

So that's how it is. Fang Wen didn't know how to solve the problem either, so he decided to hold a work meeting first.

Subsequently, Huo Duanyang, Fang Shouxin, and Shunzi attended the meeting.

The meeting had only one topic: how to keep the relationship with the Red Army a secret.

This is a very serious issue. If the information is leaked, it will be a devastating blow to all participants and Taishan Airlines.

Fang Wen said, "Currently, only the four of us know about the matter with the Red Army. I hope everyone will keep quiet and not leak it. You all know the consequences, so I don't need to say more."

Huo Duanyang, Fang Shouxin, and Shunzi nodded, indicating that they understood.

Huo Duanyang asked, "General Manager, are you planning to give them all the output from the bullet production line?"

This is also a question that Fang Wen has considered.

With a cost of 1.5 cents per launch, a monthly production capacity of 10 launches would cost only $1500. Even if the production line's potential is fully developed and production capacity is doubled, the expenditure would still be less than $5000, which Taishan Airlines can afford.

But it would be a bit strange to keep sending them.

It would be better to establish a trade system with the Red Army, enabling the Red Army to generate its own economic resources; this would be a more sustainable approach.

In that era, there were industries that were easy for the Red Army to acquire and that could generate high profits.

That's the tobacco business.

He remembered seeing news reports about this on the internet before, saying that the New Fourth Army had run a cigarette factory during the War of Resistance against Japan and made a lot of money.

That was still the tobacco business done domestically.

Fang Wen had better conditions; he could not only sell domestically, but also expand his tobacco business overseas, from South Asia to Europe.

As long as the Red Army base areas can provide a large quantity of high-quality cigarettes, these cigarettes can be sold to various parts of the country and overseas through Taishan Airlines' distribution channels.

He shared part of his thoughts and instructed Fang Shouxin to handle the matter.

Fang Shouxin was quite enthusiastic about this. He really wanted to see Shu Zhitao to discuss business and, incidentally, inquire about his son's marriage.

Therefore, as soon as the meeting ended, he couldn't wait to pull his son out of the airport.

Fang Shouxin, along with Shunzi and five security guards, disguised themselves as merchants again and headed to a village 30 kilometers to the northwest.

There, Shunzi knocked on the door of the Miao girl he admired.

The Miao girl opened the door, saw Shunzi, and immediately blushed: "What are you doing here?"

"I...I'm looking for it," Shunzi stammered, somewhat incoherently.

The security guards behind him couldn't help but say, "He's looking for his wife."

"Pah! Yellow teeth and a foul mouth, what's it to you?" The Miao girl glared at the security guard.

Shunzi quickly explained, "Don't listen to his nonsense. We're looking for Brother Shu; we have important business to discuss."

The Miao girl withdrew her glare from the security guards, said goodbye to her family, and went out.

In the afternoon, she brought Shu Zhitao back, and Fang Shouxin and Shu Zhitao discussed things in the inner room.

"Are the bullets alright?" Fang Shouxin asked.

"I've tested the guns, and they're much better than our reloaded bullets; there are practically no misfires. Even if you hadn't come looking for me this time, I would have gone to the airport to find you," Shu Zhitao replied. From his eager expression, it was clear that the Third Red Army recognized the quality of these bullets.

He then asked, "Thank you for the bullets and dollar funding. I'd like to ask about what you said in the letter you left in the airdrop: what's the deal with the subsequent bullet supply?"

Fang Shouxin took out several packs of cigarettes from the bag he was carrying; these were all popular brands in the United States.

Camel, Good Luck, Van Damme, and Marlboro.

"If you can make cigarettes with the same taste, we will buy as many as you produce, and the profits generated can be directly converted into bullets or silver dollars."

Shu Zhitao was stunned; this was something he hadn't expected.

The other party actually wanted to do tobacco business with the Red Army. The economy was a huge problem facing the Red Army at the moment.

With the surrounding Kuomintang army and local militias blocking their way, it was difficult to establish an economic order, and there were no industries that could generate income.

Now, the other side is providing both bullets and a source of income.

This is so important.

Shu Zhitao himself was a heavy smoker, and many people in the base area grew tobacco, since it was the best source of energy they could obtain.

However, growing and consuming the produce yourself does not generate economic value.

If we can meet their demands, our base will have money! We'll also have bullets and equipment!
The current problem is whether we can produce tobacco that meets the requirements.

Shu Zhitao put away the packs of cigarettes, stood up and said, "This is what I'll report back to you. If it's done well, I'll send it to the airport so you can see it."

Just as Shu Zhitao was about to leave, Fang Shouxin stopped him: "Friend Shu, don't rush off, I have something else to do."

"What is it?" Shu Zhitao asked in surprise.

“My son has fallen for your intelligence agent, Long Yumei, and I want to help him propose marriage, but I’m afraid you won’t agree.”

"This matter is a matter of free choice between us. As long as Comrade Long Yumei is willing, no one will stop her," Shu Zhitao said with a smile.

Fang Shouxin breathed a sigh of relief, but he didn't understand how to do free love. He talked with Shu Zhitao for a while before he figured it out.

Fang Wenben thought that the cigarette trade cooperation with the Red Army would take some time to yield results.

After all, figuring out the manufacturing process of a good cigarette is not an easy task.

But he underestimated the collective creativity of the Red Army.

Once it was realized that cigarettes could generate economic value and be exchanged for bullets, how to produce cigarettes with a flavor similar to those foreign brands became a very important matter for the base area.

They immediately noticed the difference between the tobacco they were smoking and those foreign cigarettes.

The tobacco produced by the Red Army was mainly for quick processing to avoid insufficient time for drying after harvesting.

Roasted tobacco is stronger and more invigorating, making it more suitable for smokers among the soldiers than sun-dried or air-dried tobacco.

The foreign cigarettes that Fang Wen provided were different; they were not made from the same type of tobacco.

These cigarettes have complex flavors and are more commercially oriented to cater to a wider range of users.

These blends of tobacco include strong flue-cured tobacco, as well as sun-dried and air-dried tobacco, which together create different cigarette flavors.

Although it did not completely imitate any of the best-selling foreign cigarettes, it developed a cigarette with a unique taste.

This cigarette is mellow yet has a kick, with a lingering flavor.

This is something that has never been seen before on the market.

After the successful development, Shu Zhitao brought the first batch of prototypes to Xiangxi Airport.

He left after handing over the cigarettes, and Fang Wen flew to Xiangxi Airport to pick them up and took them back to Shanghai.

Fang Wen didn't know anything about the quality of this batch of cigarettes, so he specially invited a group of people who knew about cigarettes to hold a cigarette tasting event.

The invitation read, "Taishan brand cigarettes, initial sample for trial."

Among these people were smokers from all walks of life, and their reactions after smoking Taishan brand cigarettes varied.

Not everyone likes it; heavy smokers don't like it, but the remaining 70% of smokers give it a good review.

With 70% approval and a wide range of data types, it's enough to prove that this type of cigarette has a market.

Subsequently, the tobacco trade of the Third Red Army officially began.

Large bundles of cigarettes were transported by mules and horses from the base area to the trading point outside the airport.

After receiving the cigarettes, bullets will be airdropped to the designated destination that same night or shortly thereafter.

In early October 1933, Taishan Airlines completed its first cigarette trade.

Subsequently, the price was nearly 10 cigarettes per bullet, and 4 bullets were exchanged for 40 cigarettes.

These cigarettes still need to be packaged before they can be sold.

Soon after, a tobacco processing plant was established outside Shanghai Airport, and tenders were issued to paper mills and printing plants in Shanghai for the production of cigarette pack paper.

Two sizes are available: cigarette holders and cigarette boxes.

The recruited workers only need to do two things: pack cigarettes into tins and boxes, and then seal them.

Taishan brand cigarettes were then produced.

The tobacco tin contained 50 tobacco sticks and cost 5 silver dollars. Now the exchange rate is 1 US dollar to 3.5 silver dollars, which is equivalent to 0.14 US dollars.

A box of 20 cigarettes cost 2 silver dollars, equivalent to 0.06 US dollars.

At about 0.28 cents each, if it works out, it will be a long-term win-win trade for both the Red Army and Taishan Airlines.

Once the cigarettes are finished, the next step is sales.

These cigarettes were directly distributed to domestic airport airline distribution companies and sold under designated channels.

According to the requirements of Taishan Airlines' distribution subsidiary, for every five packs of other cigarettes purchased, one pack of Taishan cigarettes must be purchased as a gift.

Retailers who were already accustomed to the distribution channels of Taishan Airlines were somewhat reluctant to bundle Taishan cigarettes with sales, but no one objected.

By leveraging air distribution channels, Taishan brand cigarettes were successfully distributed in five cities.

After these cigarettes are distributed, it will take time to see if they will be popular with consumers.

Meanwhile, a series of events occurred in China and the world, attracting Fang Wen's attention.

In early November 1933.

While handling various company matters in his office at Taishan Airlines headquarters, Fang Wen was also waiting for the intelligence package from Shanghai to arrive.

As a valued client of Shanghai's intelligence brokers, Fang Wen receives a summary of intelligence gathered every two weeks. This is the kind of information Fang Wen prefers, since intelligence is more timely than newspaper news, and some intelligence even includes special analysis.

At 9 o'clock, a man got off the airport shuttle bus and entered the Taishan Airlines headquarters with a bundle in his hand.

Chuncao arrived at the general manager's office with her bundle and knocked on the door.

"Sir, your things have arrived."

"Come in." Fang Wen stopped working, got up, took the package, and took out scissors to cut open the seal.

He pulled out the first intelligence report.

On October 3, the Nationalist Government decided to issue 100 million NT dollars in customs treasury bonds, based on the customs duties of the 23rd year of the Republic of China.

Fang Wen frowned as he looked at the intelligence report.

In recent years, the Nationalist government has been constantly borrowing money, but the things it has done have been outrageous.

In May of this year, T.V. Soong went to the United States to negotiate a cotton and wheat loan, borrowing $5000 million from the American "Revival Finance Corporation".

Such a large loan, yet the contents of the agreement raise suspicions about whether there is anything fishy going on.

The loan agreement stipulated that four-fifths of the total loan amount would be used to purchase American cotton, and the remaining one-fifth would be used to purchase American wheat flour.

Borrowing money to buy American agricultural products makes absolutely no sense. We didn't even get a single airplane, ship, or cannon in return, and we ended up with huge debts. What's the point of buying a bunch of Depression-era cotton stocks that are much more expensive than domestic cotton?

It's unknown how many kickbacks were generated here.

And this tariff treasury bill, which will be implemented next year, will definitely be another great opportunity for the top brass of the Nationalist government to make money.

He wanted to see what tricks these people were up to this time.

Fang Wen flipped over the intelligence report and moved on to the next one.

(End of this chapter)