Report

of the
Commission Sent by The Rockefeller Foundation to China

to Study the Problem of

the Development of Medicine and Public Health

 

Alan Gregg, M-.D., Chairman
C. Sidney Burwell, M.D.
Harold H. Loucks, M.D.

November 15, 1946
At the meeting of the Trustees of The Rockefeller Foundation on the
3rd of April 1946, the following action was taken:

RESOLVED that the Chairman be, and he hereby is, authorized to appoint a Com-
mission of three or more to proceed to China and study on the ground
the problem of the development of medicine and public nealth, reoport-
ing its findings and recommendations at a subsequent meeting of the
Board of Trustees or of the Executive Committee, and that te sum of
Fifteen thousand dollars ($15,000), or as mich thereof as muy be
necessary, be, and it hereby is, appropriated to cover expenses of
the Commission.

As a result of the above authorization, Mr. Walter W. Stewart, Choir~
man of the Board of Trustees of The Rockefeller Foundation, appointed a Commis—
sion consisting of Dr. G. Sidney Burwell, Dean of Harvard Medical School, Dre
Harold H. Loucks of the China Medical Board and formerly Professor of Surgery
at the Peiping Union Medical College, and Dr. Alan Gregg of The Rockefeller
Foundation to visit China and prepare, for the use of The Rockefeller Founda-
tion and the China Medical Board, a report on the medical needs of Chinas The
Commission was instructed to study the present situation in broad terms, not
limited to the Peiping Union Medical College, nor to medical education ex-
clusively, in order to present the needs of China that might properly be the
concern of The Rockefeller Foundation and the China Medical Board and to aid
in the formlation of an effective program for the future.

The Commission arrived in Shanghai by air from San Francisco on May
15, 1946. Visits were made to Shanghai, Nanking, Peking, Kalgan, Chengtu,
Chungking and, on return, Nanking and Shanghai. From Shanghai on July 22, the
Commission returned to the United States. A narrative account of the visit
appears in Dr. Gregg's diary. Thanks to the constant help and hospitality of
Chinese authorities, and with aid from General Marshall's Executive Headquar-

ters, the time available was well employed and a number of otherwise inacces-

sible places were visited.
This report will present (1) our estimate of the present situation
in China and the major needs of that country, (2) general considerations bearing
on the formation of a program, and (3) specific measures which we recomend,
including certain changes in the relationship of The Rockefeller Foundation,
China Medical Board and Peiping Union Medical College. It should be noted
that in August 1946, after the Commission had returned from China and written
the first draft of the report, the official exchange rate was changed fro
ow $2,020 to CNC $3,500. This is noted in Appendix 7.

Statistical support for some of the statements will be found in an
apyendix since we wish to present our impressions and conclusions in compact
and conclusive form. For convenience we use the device of placing the ke;

sentence at the beginning of each paragraph.

* 4 Present Situation in China

Rapid, profound and continuing change marks the present situation in
China ~ change in the material, economic, political and moral aspects of
Ghinese lifes The final breakdown of 500 years of control by nnother race ~
the Manchus - took place only 34 years ago in 1912. Since that time China has
been changing, at a pace of late greatly accelerated by the war with Javane
The rate of change now causes bewilderment and confusion as well as pride and
hope. Although Nationalism and the desire to be independent of outside contre]
increasos, the greatest changes relate to the increasing knowledge and accept-
ance of modern inventions, ideas and values. Travel abroad has become the
hall-mark of an educated person. Travel within China, especially the wartime
displacement of probably 50,000,000 persons, has diminished regional provin-

cialism. The use of Xuo Yu (National Language) as the medium of instruction
Se

in all schools throughout the country is also of significance in breaking down
regionalism, while English is the chief bridge to the rest of the world. Sci-
ence, as contrasted with empiricism and superstition, has now so usny converts
that the major task is no longer that of demonstrating that science works but
that of finding enough competent teachers to explain its nature to all who
want to learn. The Western World is in China and China now becomes a tremen=
dous factor in the future of the Western Yorld. But the changes are much more
complex than a mere increase of contacts and an enlargement of horizons.

What had been an agrarian fcudal society could hardly avoid tremen-
dous difficulties in its efforts to adjust to an industrial technology and a
democratic ideal while overshadowed if not indeed threatened by foreign imperi-
alism. The land-owning class competed with the government for any agrarian
wealth or surpluses and foreign powers crowded in for revenues derived from
customs and the management of state monopolies or new exploitation of national
TESOULCES e

In these transitions and many others the greatest degree of changs
shows in the cities and among the educated Chinese. Change does “3t yet appear
so clearly in the rural population, isolated as it is by illiteracy, poverty
and lack of easy transport. Rural China contains an enormous population. But
leadership comes often from the cities and the educated classes. If these are
changing, rural China will eventually experience, even if it does not es yet
show, the changes that are more evident elsewhere. The potentialities of such
great change in so great an aggregate impressed us deeply. If China moves
there can be no greater movement anywhere in quantity or quality. To exocct
profound changes to affect 450,000,000 people in a brief space of time would

be unrealistic; orderly and dependable developments will require time.
Peacetime change can occur in a relatively orderly and predictable
way; postwar change is all too often violent, unstable and unpredictable. Man-
kind is prone to expect that victory will solve all difficulties. China's
newly won sovereignty from outside control is deeply satisfying, but faces the
somewhat disconcerting realization of its own responsibility for domestic wit:
It is easy — perhaps too easy - to place the blame for civil war on one party
or the other, or on the intervention of world politics in Chinese domestic gov-
ernmente But to do so does not reduce the complexity or the unpredictability
or tne incessant change of postwar conditions.

Materially the war has left China horribly impoverishe¢c: Villages
destroyed; the Yellow River inundating millions of acres; houses and public
buildings in disrepair: railroads, bridges and rolling stock in bad condition;
factories destroyed or worn out; equipment of every kind lost, exhausted,
broken or otherwise useless. A frantic need exists for replacement of houses,
of roads, of boats, of machinery, of coal and timber, of textiles and of food.

Inflation has produced disastrous effects especially in the form of
distress among salaried groups, particularly government employees, and in
destroying the stability of the middle class. Personal fortunes are disappear—
ing and malnutrition proves the degree of impoverishment even in previously
wealthy families. The official exchange rate of ONC $2020* to U. S. $1, which
was adopted in April 1946 to favor manufacturers in their purchase of raw
materials and machinery, places an almost impossible burden upon export busi-~
ness and upon American philanthropies whose dollar now does sixteen or twenty

cents! worth of work in China. For most undertakings planning and budgeting

* See Appendix 7.
5.

has become a monthly affair. The vasic salaries of 1939 for government em-
ployees that in May 1946 were miltiplied by a factor of 160* were for June mul—
tiplied by 300 (380 for Nanking and Shanghai). Marked regional differences in
the cost of living further complicate the picture. But China is not industri-
alized as was Germany in 1923 so the inflation is not like a quick infection
but more like a prolonged hemorrhage. The country areas are agricultural and
there the losses are transmitted more slowly than in such nervous and sensitive
centers as Shanghai. But the people on fixed income face a serious issue. To
the salaried employees of an almost bankrupt government but few alternatives
remain: multiple jobs on part time, graft or misuse of funds, desertion to
seme other occupation, or the sale of additional personal effects while they
hang on in hope. In spite of this situation the loyalty and integrity of many
a teacher deserves our unqualified admiration and respect.

Almost without exception the Chinese insist that the political situa-
tion underlies the economic instability. They say that if 84% of the govern-~
ment's expenditures were not on military upkeep (c.f. 4.5% for all forms of
education), if railroads were allowed to carry the existing food and raw mate~
rials to and from all parts of the country, if civil justice and domestic peace
and official honesty were at a satisfactory level, the country would right
itself with surprising speed. If it be said, "Oh well, there has always been
political wrest in China, so what of that?", we would reply that there has
never been in peacetime so disastrous an economic effect as that which the
present political turmoil is producing.

The political situation defios a brief and adequate formulation. The

Revolution of 1911 was brought about by the Kuomintang in protest against the

* See Appendix 7.
6

Manchu tradition of using public office for private aggrandizement. Since 1927,
the Kuomintang Party has controlled the government. It started with a great
deal of passionate patriotism and radical idealism, but it has been a one~party
government in complete political control over a period of twenty years - with
all which that implies. The Generalissimo is a soldier. He had his political
as well as military rivals long before the Japanese in 1937 focussed the atten-
tion of warring Chinese factions on a csmmon external enemy. And now that wit.
American and Russian aid the Japanese have been driven out, a thoroughly impov—
erished set of lifelong enemies resume their resort to force. It is an old
feud. The principals dislike and distrust each other. This struggle for powez
leads to division and civil conflict among a people who overwhelmingly desire
and need unity and peace. The Chinese Communists have almost nothing to lose.
Tney have announced principles and programs of land reform that attract the
frrmers' interest. Until the Kuomintang begins to uttor nnd to enforce some-
thing of benefit to the agrarian proletariat and the dispossessed in cities,
the Chinese Communists will prefer to fish in troubled waters, to bide their
time and court the support of the farmers and factory workers. They form an
armed minority in a republic whose government is a single party also armed and
no longer free from the charge of corruption.

The Chinese army is another factor in the political situation. Its
recent modernization may have created over—confidence and over-willingness to
see China's internal difficulties settled by force. Conservative in leader-
ship, it is one of the most important factors in hindering the government in
reaching an understanding with its radical opponents.

International politics further complicate the situation. What is the

role of Russia? Do the Russian Commmists actually aid the Chine-e Communists?
Ve

Do they do so to disturb the American government which has equipped and trans-
ported Nationalist troops and is attempting to compose the differences between
warring factions? Certainly the political quarrels of the Chinese today have
more implications than in earlier years.

Tac Communists are short of technically competent personnel — even
shorter than the Kuomintang. They are short of money and equipment and foreign
exchange to purchase what cannot be made in China. Furthermore, the Communists
do not as yet attract the seekers after personnal financial gnin.

Morally postwar China offers a somber picture relieved by mony ad
mirable individual exceptions. The stimulus and the danger of war have gone>
Many of the mornrl and intellectual leaders emerged from the war tired; some
are ill and malnourished. The black market further discredits a government
apparently powerless before inflation. In contrast to the reputed corruption
and indifference of some members of the National government or the Kuomintang,
the Chinese Communists have a reputation for honesty, high morale and relentless
activity in behalf of a peasantry bowed down by impossible taxes and land
rentals. We would add a doubt, however, as to how effectively the Commmists
would survive prolonged possession of power.

Criticism and recrimination alienate those who went to Free China
during the war from those who stayed in Occupied China. The exact status of
many an alleged collaborator is being settled with what is probably more emo—
tion than justice or equanimity. Apprehension alternates with disillusionment
and one marvels at the Chinese capacity to endure and to hopo. There is a
heroic quality in the character of the honest and public-spirited Chinese mon
and women who have come out of the war with unimpaired integrity and devotion

to the welfare of their long suffering country.
The Needs of China

The immediate and primary need of China is peace. Insofar as the
American effort led by General Marshall and Ambassador Stuart contributes to
this end, it is the best American contribution that could be made and the use
of the Peiping Union Medical College buildings by Executive Headquarters may
prove the most effective immediste use of China Medical Board resources that
could be made.

Almost every forward step waits on currency stabilization, ie 6 the
arrest of inflation ana the establishment of a stable rate of foreign exchange.
On such certainly depends the effective use of China Medical Board funds in
China. One of our advisers observed that a managed currency means business
controlled by politicians, a laissez-faire policy would mean that government
would be managed by business. The cost of living in China when reckoned in
Chinese dollars has increased from 1,000 to 3,000 times over the period from
June 1936 to June 1946.* For Nanking and Shanghai the figure would be nearcr
=,000, in remote country towns it might not exceed 1,000. When reckoned in
U. S. dollars, the cost of living in China is from four to five times what it
was in 1936. The present unpredictability of the extent and rapidity of infla-~
tion paralyzes planning as much as present costs hinder the execution of exist-
ing plans. There is talk of changing the U. §. dollar exchange rate to 3,000
or 4,000 or 5,000 or more, but when and if that change will come is pure guess-
work. Meanwhile, U. S. greenbacks sold in exchange shops bring CNC $2,500 in
contrast with the official rate of $2,020**. Interest ratcs of 5 to 20% per
month represent protection demanded against further inflation, as does the

* See Apnendix 4.
** See Appendix 7.
Ge

current demand that house rentals be paid a year in advance. Despite the dis~
turbing economic conditions observed at the time of our visit, we are convinced
that even though the short-term view of the economic future may be pessimistic
the long-term view is rightly optimistic. After exhausting and destructive
war, a8 experience has shown, the financial and economic structure in most
countries reflects for a time the immense strain. Since the predominantly
agricultural nature of China will protect and assist the country to a solid
recovery, we are optimistic for "the long pull" even though the present situa-
tion is dark.

China hae always needed better transportation - roads and railroads
particularly - and wartime destruction followed py the interruptions effected
by the Commmists leave transportation as one of the greatest nec.s. The
country is rich in resources but poor in the ways to distribute the mineral
and agricultural products whose movement and exchange would prevent industrial
paralysis, regional starvation and social disorder. The need for improved
transportation in China far exceeds the power of any single foreign organiza-
tion to helps

The most important long-term need of China is education - primary,
secondary and university or professional. No country in the world could assure
a greater scope to any organization in the field of education. It is reasonable
to expect primary education to be an undertaking of the Chinese authorities,
local, provincial and central. Primary education during the war suffered as
mach or more than the other forms of education. This was largely due to the
disruption of schools (use of buildings for other purposes), and to the low
salaries of teachers who had therefore to seek other occupations. This loss is

fundamental and will have a deleterious effect on all forms of hicher education
10.

during the next two decades. Nevertheless we believe The Rockefeller Foundation
has less to offer in primary education than at the university level - less
qualitatively and certainly less in ratio to the Quantity required. No foreign
effort could be of quantitative significance where primary education involves
at least 70 million pupils.

Ve would call attention to the reduction in birth rate that in other
countries has accompanied the spread of modern education and the improvement c”
the standard of living.e Perhaps an increasingly powerful argument for general
education will be that it appears to diminish the birth rate and so reduce there
population pressures which have served, at times as the cause and at timcs as
the pretext, for civil as well as aggressive wars. Incidentally, no public
health program can ignore the immediate effect of increased popul-tion growth
as a result of its hygienic measures.

Secondary education in China affects as yet only a small number;
50,000 graduates a year from senior middle schools was given us as an aporoxi-
mate figure. Secondary schools are either private, municipal cr provincial;
they have suffered severely both directly and indirectly from the war. Ade-
quately trained teachers especially for English and the natural sciences are
rare. Persons possessing these abilities were all too often taken from the
schools to assist in some more immediate part of the war effort. Middle schools
today in China present an extremely wide range, from good to execrable, in part
according to the wealth and tradition of the province or private agoncy supoort-
ing theme One curious feature of educational practice in China deserves mentions:
Only in the private middle schools are Chinese parents at present accustomed tc
paying for any serious fraction of the cost of education. Qualitative improve--

ment in a few such middle schools may take place in the next few years, stimu-
il.

lated in the main by the standards set by colleges and universities. No doubt
assistance in the improvement of middle schools would produce valuable results
especially if such schools could be enabled to accept on scholarships able
children of loyal government servants whose increasing poverty precludes their
giving their children a middle school education. We would regard the provisic:
of English teachers to Chinese middle schools as an appropriate and relativel;
easy program for a temporary United States governmental agency, but not a pro-
gram of equal importance to some in higher education.

College education of the preprofessional type offers an important
field for aid. There are probably three times as many students in senior middle
schools and colleges as there were before the wear. What can be expected of
students in the Peiping Union Medical College depends in considereblie measure
upon the quality of their premedical college training, and we would recommend
attention to the present needs of such colleges as now contain any appreciable
number of students preparing themselves to apply for admission to the Peiping
Union Medical College.

Among the needs of China for professional education a good case can
be made for research and education in agriculture. James Yen's insistence upon
general education, government reform and public health as necessary concomitants
of agricultural progress expresses the view of most persone who have studied t:a
state of agriculture in China. They believe that a complete prog:am of rural
reconstruction includes and exceeds in importance mere agricultural education.
Mr. Gunn's diversified program in this field reflected a similar conviction on
his part. Genetics and the control of plant and animal disease offer immense
and attractive opportunities. Agricultural bacteriology and agricultural eco-

nomics might well provide great returns to this major "industry" of China» The
12.

magnitude and variety of rural reconstruction in China exceed our competence
to evaluate but will probably be well reported by the Commission led by C. B.
Hutchison under the U. S. State Department and Department of Agriculture.

In a comtry so predominantly agricultural, the effort to provide
higher education in engineering - civil, mechanical, chemical, electrical and
biological - would be a sensible and a welcome undertaking. The Japanese in
1942 gave aid to China in agriculture but withheld it in all other forms of
sciencee The Chinese kmow why Japan took this position; they know that in a
world where engineering and technology play their present role China cannot
afford to be incempetent in those fields. Engineering is presently the most
sought after professional course in the wiversittes. There are about twelve
engineering schools with Tsing Hua in the lead, but no school in engineering
compares in equipment or standards with that which the Peiping Union Medical
College has offered in medicine.

Whether the universities could offer in government and political
science a training of immediate value to reforming administration in China is
open to doubt. Ne faintest doubt exists as to the need for trained and compe—
tent administrators whether in government or in private enterprise. The ques-
tion is whether the inevitable political implications of such a school would
leave it free from political interference. Hardly less dubious is the task of
securing competent teachers and intelligent direction of so politically delicnie
an enterprise. Training in administration as such is needed and a contribution
could be made by teaching administration in schools of business administratior.
as an indirect help to the level in the political field.

Indeed attention must be drawn to the administrative instability of

universities in China, their dependence upon politicians in the central govern-
13.

ment, the intensely personal form of their administration, the frequent inex-
perience of their heads, the naivete of their professors vis & vis the duty of
academic self government. Inevitably the presidents of most of the Chinese
universities are finding their administrative way without the penefit of finan-
cial stability or freedom from political interference by government. They

lack a long tradition of academic experience and popular support. A lot of
Chinese come to the United States. Many of them later will hold academic posi-
tions in China. They ought to have opportunity for contact with the adminis-
trative machinery of American education as a part of their training.

When modern medicine is understood and accepted more widely in China,
there will be an even greater demand for doctors than exists at the present
time. Probably three or four times the present yearly number of graduates
could be used now. The present ratio of 12,000 doctors to 450,000,000 people
is the basis for various proposals for immediate mass production of medical
personnel. To infer, however, that 37,500 Chinese are accessible to and clamor-
ing for the services of a single doctor would ignore the ignorance, the geo-
graphical remoteness, the superstition and the abject poverty of millions of
Chinese. None the less China could now use from two to four times the present
number of young graduates. There are 34 medical schools in China, 12 of which
are in universities maintained by the National Government. About 2,000 stu-
dents enter these schoole each year but not much more than 750 graduate. Cb--
viously the number of newly trained doctors could be almost tripled without
creating more schools.

War has destroyed the equipment of medical schools, allowed their
buildings to deteriorate and shattered their organization. Medical students

have been separated from parental suport and their full or almost full mainte-
14.

nance has been assumed by the impoverished school budgets. This is a policy
immensely costly to the schools and wasteful since 75% of the entering students
do not gradvate. The premedical training of medical students will with few
exceptions be poor for another two or three years, but the greatest limitatior.
on the effectiveness of medical education in China is the dearth of competent
teachers. In the official list of 28 schools there are reported to be 975
teachers, or 35 per school, a very inadequate ratio to the number of students .*
The shortage, already desperate, is made worse by salaries so slowly adjusted
to rising costs that medical teachers must look elsewhere, or go elsewhere,

for their livelihood.

To moet these needs the government supports its existent schools from
inadequate allocations ~- which inflation spreads still thinner. The mission
medical schools struggle on from month to month with few young teachers coming
out from North America. One mission has found that it takes more American
dollars to support 26 missionaries this year than 126 in 1936. The first need
of medical education in China is to hold the existing teachers, the second to
bring back Chinese qualified to teach who are still abroad, the third to start
the recruitment and training of teachers for the future.

If we reflect upon the needs of China for peace, for economic sta~-
vility, for better transportation and for all forms of education, we shall
realize that all these needs act directly and intimately one upon the other,

that anything which partly satisfies any one of them will aid the others.

General Considerations Regarding a Program in China
China's present needs for nearly every type of aid could exhaust the

total resources of any private organization. Both in variety and in volume the

* See Appendix 5.
15.

needs of the 450,000,000 living in China under their present circumstances pro-
vide ample arguments for almost any kind of aid if one believes that there is
need wherever there is lack. In the face of these almost infinite needs, the
present inflation and arbitrary exchange rate reduce the obviously finite means
of the China Medical Board to far below their previous effectiveness. Although
the needs are more than numerous and more than great, only with selection and
by emphasis can a limited sum of money accomplish results that will endure and
mitiply. Selection involves the rejection of a large number of alternatives
not because they are not good but because any project will require emphasis

and comprehensive support if it is to endure the handicaps of a vioneer envirci-
ment.

A tangible example of how to conduct a good medical school is a more
important contribution to medicine in China than its teaching alone. To raise
the number of young doctors graduated each year in China by thirty or forty
would not be of great significance.* But to demonstrate how excellence in
higher education may be obtained offers something to the Chinese which is of
almost immeasurable value.

We may therefore say that a major consideration in selecting any
project demands an answer to the question, ‘What influence will it have?" No
more remarkable example of influence could be found in the Orient than the in-
fluence of the Peiping Union Medical College. With only some 500 (350 doctors,
178 nurses) graduates and some 3,000 who have done postgraduate study there its
influence in the history of Chinese medicine is remarkable. But as an example

its effect on higher education in other fields is quite as noteworthy. The

* See Appendix 3.
16.

Peiping Union Medical College has become the symbol and synonym for high qual-—
ity in professional education. The example should continue to be one of scien-
tific and personal quality. It is hardly less important that it also be one of
integrity, social consciousness, wise administration, and economy of money and
of time.

Good will plays a considerable part in the success of an enterprise
in Chinae The connection between the name Rockefeller and medical education
and preventive medicine in China already represents so large a measure of good
will, understanding and appreciation that withdrawal or discontinuance of work
in the medical field would produce a profound reaction. No Rockefeller enter—
prise in any other field could overcome the handicap of so deep a disillusion—
ment. For this reason we would consider the substitution of a program in agri-
culture, engineering or government entirely impractical. Medical education,
in which the China Medical Board has an unparalleled amount of good will, is
one of the major needs of China, and we believe it is wiser and cheaper to con-
centrate effort there than to switch to any other equally pressing need. Med-
ical education contributes to both industry and agriculture and indeed to all
classes of the population. It has proved on ideal means of establishing in the
Chinese mind the value of scientific met:.od and induetive reasoning. Through
the development of public health as a function of government, medical education
has shown the Chinese politicians that the welfare of the masses can be advan=
tageously one of the concerns of wise government. Medical education is no
longer merely on trail — it is in demand; in this sense also it is greatly
needed.

Let no one underestimate either the difficulty or the permanent value

of transferring so complicated a series of functions and standards as find ex-
17.

pression in a modern medical school, from one country or culture to another.
Time is required as well as hard work, good sense, good faith and good will.
The historic significance of the Pelping Union Medical College in offering per-:
haps the best that Americans could offer to the Chinese, equals if it does not
surpass the accomplishments of the Foundation in any other country. Such a
transfer cannot possibly be at the level of mere imitation. Adaptation and
fresh pioneering have to accompany the task of recreating a function instoad
of copying a form. Such a transfer can be aided by a clarification of the
relationships of The Rockefeller Foundation, China Medical Board and Peiping

Union Medical College - a matter to be considered in a later section.

What is Worth Doing

Training of teachers of medicine is the most valuable, efficient and
influentinl activity for the Peiping Union Medical College to discharge. for
such a task we believe that the maintenance of a school of medicine, as well
as graduate or advanced training, is essential. Medical education is funda-
mentally an educational procedure. Therefore, teachers of medicine need to
participate in teaching medical students as one of the most important parts
of their training. We kmow of no teacher training of the highest quality that
js done outside faculties of medicine. Training in research can be and usually
is performed in active teaching departments. The major product of the Peiping
Union Medical College should be well trained teachers and prospective teachers
in medicine for the schools of China (and occasionally other countries).

We would recommend a change of policy however in some aspects of the .
China Medical Board's work. Rather than exclusive allocation of its funds to

the work of the Peiping Union Medical College the China Medical Board should
18.

earmark from eight to ten per cent of its funds for strengthening other medical
institutions in China by grants-in-aid of particularly effective departments.
The Trustees of the Peiping Union Medical College might lend the services of
Peiping Union Medical College professors to other medical schools upon their
invitation, share where feasible the physical equipment - books, demonstration
material, instruments -— with other schools, continue the system of demonstra~
torships and research fellowships, and make grants to former research fellows
or demonstrators after return to their own schools. In general, such change of
policy should seek to multiply and tighten the bonds that tie the Peiping
Union Medicnl College to the service of other medical schools in China. The
administration of this part of China Medical Board income sets an interesting
problem. It is suggested that the loan of Peiping Union Medical College pro-—
fessors, the sharing of facilities, the support of fellows and demonstrators
and grants to these men after transfer from the Peiping Union Medical College
should be under the administration of Peiping Union Medical College. The
grants-in-aid to departments of other schools should not, however, be controlled
by the Peiping Union Medical College Trustees. (See under Measures to be Taken,
page 21)

In another direction the policy of the Peiping Union Medical College
in the past few years should be confirmed. We believe that an entering class
of forty with the probability of graduating thirty students should be accepted
as the norm for student numbers.

The present policy of Chinese government universities is to provide
practically free university education ~ nominal tuition, nominal room rent and
nominal food costs- Bad results of this policy include diminished sense of

responsibility for his own education on the part of the student, diminished
19.

sense of responsibility for university education on the part of local communi-
ties, inadequate support of university education, wasteful indecision as to his
career on the part of the student (50 to 75% of the entering class in medical
school may shift to something else). Its only good result is thet it makes
university education available to the able student who has no money.

Modest charges for tuition, room and board would tend to increase
the sonse of responsibility of student and community and to prevent the en-
trance of students on the basis that they might want to study medicine and it
did not cost anything. The danger of closing off opportunity to the able and
honest but impecunious student can be avoided by an adequate system of scholar~
ships financed at first by a part of the increased tuition. These charges,
even moderate, should also in the long run add to the financial resources of
medical schools. The current custom of Chinese medical schools of providing
virtually free education makes an elastic scholarship program at the Peiping
Union Medical College more important lest young men of the highest ability but
no financial resources be drawn elsewhere.

Wo would insist that thoroughness and quality of work are more impoi-
tant than large classes or the rapidity of training. Entering students ovor
the next fow years may show the effects of the war in the quality of their
preparation and their resistance to disease, but they should be retained or
dismissed on the basis of character and competence. Students may fairly be
expected to match in character and ability the quality of the opportunity
offered them.

We believe that in the Peiping Union Medical College the teachers
both preclinical and clinical should be on full time. By this term, we mean

they would not engage outside the hospita: in the practice of medicine pri-
206

vately or receive fees personally for services rendered to individuals in the
hospital. Only such a policy will give enough time for adequate contacts be-—
tween teachers and students. Part-time private practice would dissuade clin-
ical teachers from leaving Peiping for academic posts elsewhere and thus tend
to narrow the influence of the college as a source of teachers and to lead to
"inbreeding" at the Peiping Union Medical College. And only full time encour-
ages research and the scholarly example a teacher should set. The Peiping
Union Medical College was perhaps the only medical school to opeiate on the
“yull-time principle over a long period of years, and there is reason to believe
that this was one of the major reasons for its influence. Before the war,
over 95% of its graduates had gone into governmental and institutional work.

It would be useful for the Trustees of the College to bring out
every year one or more experienced medicnl educator to the Peiping Union Medi-
cal College for a visit of at least six months as "visiting professor." The
comments and counsel of such visitors could prove a very substantial help to
the Peiping Union Medical College and the needs of Chinese fellowship holders.

One other strategic point deserves emphasis - the peculiar import once
of public henlth and preventive medicine for Chinn.* Somewhat illogically the
National Health Administration pushes curmtive medicine by the maintenance of
"central hospitals", thus making a demand for clinicians when they are scarce
and when an equal expenditure and equal personnel could prevent much more i11~-
ness and death by preventive measures. We were much impressed by the economy
and practicality of preventive medicine including the use of public health

nurses and sanitary inspectors. The pressure of immediate and urgent illness

* See Appendix 3.
21.

absorbs the attention of the medical officer of health to the detriment of his
preventive work. As an example, the inclination of the Health Center person-=
nel in Peiping to develop a hospital of its own for curative work seemed to us
unsound; close collaboration with the admitting office of the Hospital of the
Peiping Union Medical College would be far better for all concerned. The
training and use of auxiliary personnel, nurses, attendants, inspectors, clerks,
seerctaries and technicians all to work harmoniously under doctors! supervision
seems to us a more economical and exemplary contribution to the shortage of
doctors than the dubious schemes of shortened and cheapened medical education
to produce a large number of deliberately inferior practitioners. Particular
care should be given to the example set by the Peiping Union Medical Collego
Department of Public Health and Preventive Medicine in training teachers and
leaders of public health whose contribution under Dr. J. B. Grant has already

achieved such remarkable results for all China.

Me o be

The step recommended as the first to be taken after this report has
been presented to those principally concerned is definitive action by the
Trustees of The Rockefeller Foundation in transferring to the China Medical
Board, Ince, such capital or other grants as will provide the China Medical
Board and the Trustees of the Peiping Union Medical College a clear idea of
the income in U. S. dollars on which they may count in the future. In the
light of administrative measures already urgently needing consistent and prompt
attention it would be highly desirable for the Trustees of the Peiping Union
Medical College to be urged to name a Chinese director even before The Rocke—

feller Trustees take any action, and even though such administrative procedure
could be based on nothing more definite than the assumption that the Peiping
Union Medical College Trustees have existent obligations calling for efficient
management. Such obligations include operation and management of the School
of Nursing, the First Health Station, the Library and the physical plant. The
choice of an American vice director with administrative experience and the
highest professional qualifications could be left for subsequent decision.

A definite decision that the school and the hospital will be onencd
should be made and if possible the date determined. This should be announced
snd notice given to Executive Headquarters as to the time when they would be
expected to vacate the premises. We believe that September 15, 1947 is the
earlicst practicable date for opening the school and the hospital.

Staff appointments should be under study during the autumn and ap-
pointments made when the resources of the school are assured. Where indicated,
refresher fellowships for future staff members should be made since such prep—
aration is of great value after the isolation and interruptions of the war.

A clear-cut policy on staff salarics, foreign and Chinese, senior
and junior, must be determined to meet the completely changed conditions of
living costs and exchange rates.

Inventories of present equipment and supplies will probably be com-
pleted by October. Ordering of essential equipment for opening the school and
hospital will properly fall in the winter months since delivery may be delayed.
Further ordering should await appointments of department heads.

Measures for the training of technicians could well be taken espe-
cially during the spring and summer months of 1947. This would greatly improve
the effectiveness of departmental work if such training is completed before the

school opense
2o6

The Trustees of the Peiping Union Medical College will doubtless wish
to establish the most friendly and effective relationships with other Chinese
medicnl schools, especially with the Medical School of Peita University.

Dircct control in the hands of Peiping Union Medical College Trustees of insti-
tutional grants to other medical schools would prove embarrassing. Since the
American Bureau for Medical Aid to China will be in large measure mecting this
need in the next two years we recommend that the arrangements for grants to
other institutions be left for future settlement after the administration of
the Peiping Union Medical College has found its way in the numerous other

problems confronting it.

The Rockefeller Foundation - Chinn Medical Board - Peiping Union Medical
College Relationships

Perhaps the major consideration to bear in mind at this decisive
point in the history of the Feiping Union Medical College and the China Hedicel
Board relates to the immense improvement that would attend a final clarifica-
tion of the question of how much income the China Medical Board cm count upor
to support the Peiping Union Medical College. Uncertainty always strains
human relationships. The Peiping Union Medical College Directors and Trustees
have never known how much to ask The Rockefeller Foundation for. Nothing would
so greatly help the task of administering the Peiping Union Medical College as
settling a stipulated and final capital amount and transferring it from the
Foundation to the China Medical Board, Inc.

There has been no time since the idea of the Peiping Union Medical
College was conceived that great faith has not been necessary. Without it,

the College could never have carried on, and withent it, there is no hope for
24.

the future. If The Rockefeller Foundation Trustees are prepared to believe that
medical education in China continues to be a field with immense potentialities
despite present unfavorable conditions then the most important action they can
take is the creation of an organization able to deal with the Pei.ing Union
Medical College in the future.

The preceding pages have made it abundantly clear that exceptional
strains are now imposed on any American organization supporting work in China.
In our opinion, the relationships of The Rockefeller Foundation - China Medical
Board - Peiping Union Medical College must be radically and promptly changed
if The Rockefeller Foundation status and past accomplishments in China are to
survive the present strains. In the light of the confusion and near disasters
inherent in The Rockefeller Foundation - China Medical Board - Peiping Union
Medical College relationships an appraisal of long-term policy would indicate
that the major responsibility of The Rockefeller Foundation Trustees is to
establish the China Medical Board as an agency capable of independent and
responsible action.

In 1940, in an address to the Trustces of The Rockefeller Foundation
at the time of his retirement as their Chairman, Mr. John D. Rockefeller, Jr.
said, "Before expiration of the five-year period covered by the $2,000 ,000
grant for current deficit made by the Foundation and included in the operating
budgets mentioned above, the question of the relation of the Foundation to the
future of the College will come up. It is the hope of your Chairman that if
at that time world conditions justify, the Trustees will see fit to add to the
present $12,000,000 endowment fund of the China Medical Board with the state-
ment that that was its final gift and that the China Medical Board and the Col-

lege must so plan the future as to operate on a self-supporting basis." It has
256

long been the expectation of the China Medical Board and the Peiping Union Med-
ical College that such a terminal grant would be given. Wot to make it would
be considered a clear breach of faith both in China and in the United States.

The question would appear to be, "When can The Rockefeller Foundation
best grant independence and responsibility to the China Medical Board?" Our
conviction is that this should be done now, without further recourse to the
system of annual supplementary grants.

Te alternatives to our recommendations may be mentionci but with ovr
explicit disapproval of each. They are: (1) The abandonment of any further
support for the Peiping Union Medical College, (2) The elimination of the China
Medical Board with the administration of the Peiping Union Medical College re-
turned to The Rockefeller Foundation, (3) Resumption of annual, or triennial,
or cinquennial grants to the China Medical Board by The Rockefeller Foundation.
Only the third is likely to find any measure of support. We are opposed to it
because it has proven confusing, expensive, unwieldly and inefficient; it post-
pones if it does not extinguish the chance of Chinese support to the Peiping
Union Medical College; it concentrates power over the conduct of the Peiping
Union Medical College inevitably in the hands of too few officers of The Rocke~
feller Foundation; it discourages the Chinese Trustees of the College and de-
prives them of their rightful responsibilities; more than any other circum~
stance among many that have been difficult it divides responsibility and ex~
hausts the patience and enthusiasm of all concerned.

We reccommend that The Rockefeller Foundation make a capital grant to
the China Medical Board, Inc. which will be sufficient to allow the China Medi-
cal Board to carry on its program of medical work in China without further re-

course to the Foundation for financial aid. We regard the future role of the
266

China Medigal Board as being most wisely that of financing the work of the
Peining Union Medical College or other institutions of medical education in
China, but not as assuming or accepting educational or administrative duties 11
the field of medical education. We suggest that the appointment of a Chinese
to membership on the China Medical Board would provide a wise element of part-
nership and mutual confidence. The obvious change in responsibility of both
the China Medical Board members and Peiping Union Medical College Trustees

will in our opinion focus increased attention upon any measures that improve
the effectiveness of their work and their availability and usefulness for

their tasks. We would call attention to the known advantages in similar organ-
izations of providing that no Trustee or Board Member be re-elected to succeed
himself except after the lapse of one year. Such an arrangement could sensibly
be adopted at the time when the new responsibilities come into effect, i- 6.
after January 1, 1947. The function of the China Medical Board would be the
guardianship of funds and, as has been the case in the past, the ownership of
the buildings of the Peiping Union Medical College.

Tho China Medical Board should transfer to the Trustees of the Pein-
ing Union Medical College nll responsibility for educational policy and aca-
demic administration. As a result of final and definitive separ:.tion from the
Shima Medical Board, The Rockefeller Foundation would then be free to regard
the Peiping Union Medical College as it regards the University of Chicago, i. &
on precisely the same footing as any other medical school.

Without the least doubt this ch-nge of status of the China Medical
Board will place a much more direct responsibility upon the Trustees and Execu-
tive Officers of the Peiping Union Medical College than they have had in the

past. At the same time it simplifies the lines of responsibility and shortens
ove

the lines of communication. The Trustees of the Peiping Union Medical College
are busy men and not easily assembled for frequent meetings. As a result, the
reles and work of director and associate director will remain, as they have
been in the past, decisive for the future of the school.

In order to provide assurance to the China Medical Board of the wise
and effective use of the funds granted to the Peiping Union Medical College, it
might be desirable for a member of the China Medical Board to visit China at
intervals of not more than two years.

We are convineed that a continuation of the administrative set-up
and the arrangements used in the past as between The Rockefeller Foundation,
the China Medical Board and the Peiping Union Medical College would not meet
the now changed conditions of medical education in China, nor would they con-
tribute in the least to eliciting the interest or support of the Chinese for
the Peiping Union Medical College. We consequently strongly urge the present
legal separation of the China Medical Board from The Rockefeller Foundation be
translated into unmistakable fact, and we would add that unless the capital
transferred is considerable the separation will not occur psychologically or

morally.

Financial Problems and Recommendations

The greatest general difficulty in the administration of the Peiping
Union Medical College has been that in a land where large fortunes are rare a
foreign philanthropic organization, The Rockefeller Foundation, greatly expanded
and maintained an institution without ever defining the extent to which it would
support it permanently. Since actions speak louder than words the continuation

of essential supplements to the budget of the China Medical Board has main-
tained the impression that no Chinese support need be secured, that potentially
there is no limit to the schools! resources, and that not much Chinese contro!

is desired. If a clear separation of The Rockefeller Foundation can be effectec
these major inferences will be finally refuted - by an independent China Medi-

cal Board with known and limited resources and a Peiping Union Medical College

Board of Trustees with adequate freedom and responsibility.

Tho grentest specific difficulty in the administration of the Pelpving
Union Medicnl College has been a variant, and widely variant, exchange rate.
When the school was being built, eighty five Chinese cents bought one U. &S. dol-
lar. Today somewhere around two thousand four hundred and eighty Chinese dol-
lars buy one U. S. dollar. Secondary difficulties have attended budget making
that involved expenses in two currencies, for tynes of expense unknown in Amer-
ican medical education and under circumstances where charges of unfair dis-
crimination and unnecessary luxury easily arose. Without any fear of contra-
diction we would say that the budget of no other medical school in the world
presented and still presents so complicated relationships and considerations
as that of the Peiping Union Medical College.

Not only is exchange the controlling factor in financing any enter-
prise in China from American sources, but also tho present extreme price rises
in China render the task much more difficult. The present official rate of
U. 8S. $1 = CNC $2,020 finds a counterpart in a permissive, non-official sort in
the rate of U. S. $1 = CNC $2,480 (or $2,640 a few weeks ago). The general
impression is that the official rate may be changed substantially — but when
and to what figure no one knows. December lst %, to CNC $3,000 7, or to

CNC $5,000? On every side we found proof that our visit to China came when
29.

inflation and rising prices were certainly actively operative even if they may
not have reached the uncontrollable stage.*

We cannot assume that the cost in American dollars will soon return
to the levels of 1938 or 1939 even though it might descend substantially with
a revaluation of the Chinese currency and the end of the present inflation and
a reduction of living costs.

Two purposes should be served by any plan of financing the Peining
Tnion Medical College in the future: The Trustees and the Administrators of
the Peiping Union Medical College should know well in advance what minimum sum
they can plan upon having as income for a year's operations; and the Peining
Union Medical College Tructees and Directors must have freedom, responsibility,
familiarity and interest in managing the operating funds of the college. To
reach these ends, the China Medical Board should be enabled to guarantee before
January 1, 1947 a fixed operating income in U. &. dollars for each of five
successive years to the Peiping Union Medical College Trustees. Such a proce-
dure would give the Peiping Union Medical College Trustees an immediate and
clear view of what annual support from the China Medical Board they may count
on during a five-year period. Before January 1, 1948, the China Medical Board
should inform the Peiping Union Medical College Trustees what they can count
upon for the sixth year (1951-1952) , basing this declaration on the dollar in-
come from capital received during the year 1947. Similarly before January 1,
1949, the China Medical Board investment income of 1948 would be announced to
the Peiping Union Medical College for their use in the seventh year (1952-1952)

and so on, always so far in advance that no serious surprises, defaults on

* See Appendix 4.
30.

teaching contracts, or unforeseen stringencies would arise. This plan is in
highly effective operation in the Nutrition Foundation of New York and has
entirely obviated the uncertainties of future support to research and teaching
from a series of supporting companies.

But a further arrangement should be made to mitigate exchange fluct--
ations. Since about half of the Peiping Union Medical College expenditures ar.
in Chinese currency the Peiping Union Medical College Trustees s’ suld take th.
responsibility of holding and investing until it 1s needed one half of the
yearly allotments by the China Medical Board, the other half being held in
dollars by the China Medicel Board until called for. Each half would amount to
U. S. $300,000 annually. Obviously a holding period of some months offers op-
portunities to increase the original allotment by intercst carned, and these
earnings could be expected to protect the school from unfavorable exchange
rates.

But by all odds the most important and valuable purpose served by
this plan is the foreknowledge it gives the administration of the school of
what it must plan for well in advance, and the responsibility, familiarity and
interest in school finance which it would give the Peiping Union Medical Col-
lege Trustees.

The Peiping Union Medical College costs more to run than medical
schools in the United States and for a variety of reasons:

(1) The tuition charges have been hardly more than nominal and al-
though they should be increased could not possibly be raised to a point of pro-
viding any large fraction of the college's income.

(2) Similar comment can be made on the charges for board and lodging

of students as compared with charges in the United States.
Sle

(3) Health services to students and staff is supplied free or at
Minimal cost. This service should not be omitted.

(4) No important share of hospital costs is borne by the Peiping com-
munity except that received as income from patients, amounting to about
$100,000 a year. No large private gifts or subscriptions to the hospital. Wo
hospital endowment.

(5) A sum of U. $. $20-30,000 yearly has been required to provide
periodic repatriations and study furloughs for the staff.

(6) Services such as water, electric current, gas, and fire protec-
tion must be provided by the college. They cost more than tax-free institu-
tions in the United States have to pay for similar services.

(7) The municipality of Peiping contributes only a small >art of the
Health Station costs. This can be remedied with the passage of time but only
50.

(8) Administration expenses which in the United States are carried
as the expenses of the university (e.g. treasurer's office) appear in the
Peiping Union Medical College budget as expenses of medical education.

(9) No medical school in the United States has a counterpart of the
China Medical Board expenses nor exchange fluctuations to cover nor such costly
and difficult repair problems.

(10) All American medical schools draw upon private practitioners
in the commmity for a large amount of free clinical teaching. The Peiping
Union Medical College possesses no such support from the medical »rofession in
China; trained men are too few.

Wo believe that the China Medical Board should dispose of an income

of at least U. S. $780,000 annually, of which about $90,000 should be devoted
to programs outside the Peiping Union Medical College and $690,000 for the work
of the Peiping Union Medical College. The cost of re-equipping the school and
the permanently increased cost of living in China will reduce the purchasing
power of the income to a degree far below that of 1941. The resultant expense
level cannot possibly be luxurious nor even generous. It will i~ ose the most
thorough-going economies and indeed change in some particulars the range of te
school's activities. But the finiteness of income, the cessation of an indef-
inite dependence on The Rockefeller Foundation and the greatly increased par-
ticipation of the Trustees will provide a healthier and more hopeful environ-
ment for ths school. For the first time, it might attract income from other
sources than the hitherto unpredictable grants of The Rockefeller Foundation
and China Medical Board.

To provide funds over a five-year period and thereafter, of apnroxi-
mately $780,000 a year endowment income for the China Medical Board, the Founda-
tion should transfer capital in the amount of $6,000,000 which at 4% would
yield $240,000 additional to tho present $440,000 income of the China Medicel
Board. Further, The Rockefoller Foundation should make a supplementary grant
of $3,000,000 or as much thereof as shall be necessary to provide the China
Medical Board for yearly transfer to the Peiping Union Medical College Trustees
of $600,000 at the beginning of each of the five fiscal years of 1947-1948 to
1951-1952 inclusive. The increased cnpital of the China Medical Board would
nccumilate during this five-year period to a fund presumably capable of supply-
ing permanent income in the order of $780,000 annually.

It will be objected that the total of $9,000,000 is considerably
larger than the $6,000,000 that was at first contemplated as a reasonable sum

for the final endowment of the China Medical Board. It is obviously a larger
33

amount. But it is for work in a country where the cost of living as expressed
in American dollars is now 400 to 500% greater than before and as expressed in
local currency 2 ,000% greater. As a result of our studies, we would regard this
increase in capital funds as a minimum below which money invested in medical
education in China would progressively lose its effectiveness. After all, the
most important ends to be secured are a real separation of the China Medical
Board from The Rockefeller Foundation, an arrangement by which the Peiping
Union Medical College administration may know well in advance what income it
will have to work with, and an increasing independence, familiarity and inter~
est of the Peiping Union Medical College Trustees for the financial and academic

future of the school.
l.

34.

Summary
After a century of contact with Western kmowledge and ideas, China is now
in a decisive stage of transformation. Folitical, economic and cultural
changes, already clearly manifest at the formation of the Republic, have
been quickened by the war to a stage of extraordinary and critical fluid—
ity. Because of this fluldity and the size of China and its politico
geographical position, the possibilities and the opportunities in that
country today are extraordinary.
The major needs of China are peace, economic stability, better communica-
tions and the improvement and extension of education - primary, secondary,
and professional. These needs act upon each other closely, and yet they
are s0 vast and so pressing that probably no private organization could be
of effective help if it undertook a diversified and widely spread program.
Selective emphasis on some one field is essential.
The professional education of doctors especially for work in the field of
public health and preventive medicine serves one of the most important
needs of the Chinese people. It is of equal importance with higher educa~
tion in agriculture, engineering or administration, and has the further
advantage, already operative, of eager acceptance by the Chinese and a
considerable part of its preliminary cost already paid in the form of
buildings and experience at the Peiping Union Medical College. As a means
of conveying humanitarian ideals as well as the methods of scientific
thought, medical education compares favorably with any other form of pro-
fessional education.

We recommend that The Rockefeller Foundation contribute to the supvort of
medical education in China by further assistance to the China Medical

Board, Inc.
35-6

5. We recommend that most of this support be directed toward re-establishing
the Peiping Union Medical College and operating it as a medical school of
high quality especially devoted to teacher training and the field of pre-
ventive medicine and public health; and that a definite proportion of this
support be devoted to assisting other medical institutions in China.

6. We recomend that these general purposes be implemented by the following
actions:

a. Appropriation by The Rockefeller Foundation to the China Medical Boar ,
Inc. of such funds as will enable the China Medical Board to support
the work of the Peiping Union Medical College and aid for other medic l
institutions in China without further or subsequent recourse to The
Rockefeller Foundation for such purposes, and in accordance with a
schedule that will allow the China Medical Board to inform the Trustees
of the Peiping Union Medical College five years in advance as to what
funds they may expect from the China Medical Board for maintenance of
the Peiping Union Medical College. The amounts we recommend are as
follows:

For additional ondowment of the China Medical
Board, Ince .-.-ee eee eee seve eee eceteeenees .- $6,000,000
For support during the first five years of oper-

ation of the Peiping Union Medical College in

annual payments of $600,000 ....--seeeeeeee «+. 3,000,000
Total occ. ece ee eeeeeeecee $9,000,000

b. A roorganization of the China Medical Board ~ Peiping Union Medical
College relationships such that (1) the Peiping Union Medical College

Trustees shall have full responsibility for the academic administra-
36-6

tion, educational policy and the management of funds received from the
China Medical Board and from other supporters; and (2) the China Medi-~
cal Board continue its present responsibilities associated with the
guardianship of its endowment funds and the ownership of the land and
buildings to be used by the Peiping Union Medical College. Wo also
recommend that in the interests of mutual understanding the China
Medical Board contain always one Chinese member.

7, We record our conviction that the time has come in the development of the

Peiping Union Medical College for the transfer of responsibility and con-

trol, as above described. ‘Ye believe this to be in the interest of sound

administration and further adaptation to the Chinese milieu of that cx~-

ceedingly complicated but precious service, a medical school of highest

scientific and moral integrity.