Hankow, Aug. 27.
Inhabitants of Changsha, _the strategic Yangtze city which ha: recently been looted and burned by the Communists, are now caught between the devil and the deep sea. On the one hand the Reds are threatening to recapture the city and start another reign of terror} and on the other hand the military authorities in control of the are are determined to bleed the population while having increased the de-maned of Mex $400,000 to $2,000,-
Troops that helped recapture the provincial capital from the Reds must be rewarded and soldiers at} present engaged in the campaign against bandits must be paid, General Ho Chien explained in makig the request for loans and contributions. Houses that escaped. destruction by the Communists are to be taxed, the Finance Bureau Ihaving been authorized to collect, stead of the property owners two. months? rents. Banks that did not) suffer any damage are also asked to contribute- to the "Relief Fund."
From latest reports to hand the Communists in Hunan are still a possible menace and Changsha is again in a state o€ panic. Foreign' wireless reports indicate that the} Red Army routed General Ho} Chien's troops at Liuyang and is threatening to make a further] Jassault on the city.
This looks, however, more of a. scare than an actual menace asthe Reds are concentrating on the Hunan-Kiangei border and would not benefit by retaking a city which they have already demolished. The} policy of the Communists is only. to loot and there are only a few houses in Changsha that have escaped looting. It is not likely that the! outlaws would get into an area where they can be more easily] attacked and besieged. Latest information is to the effect that, Changsha remains quiet and that the advance of the Communists have been checked by the Provine cial forces.
Meanwhile plans for pushing the! bandit suppression campaign are iboing formulated in Hankow. Tho} Three-ProvinceConferenoe for cussing measures for exterminating, the outlaws is opening at once, delegates from Changsha and: Nan chang having arrived, The meet= ing has a big programme to discuss and adopt and in official circles cone fidence is expressed that satisfac tory results will be achieved; In Wuhan the situation continues: to improve and even the Government's request fora $3,000,600 loan {from the local Chinese banks is not causing any excitement, Finance Minister Mr. T. V. Soong's flying trip here has achieved the desired result, the bankers having agreed: to lend. the money with Tresemy Notes as security:
The financial outlook in Hupeh province and in Wuhan is by no' means bright but the Minigter's }personal influence has proven to be very useful in the negotiations with the bankers, Like every other war-torn province, Hupeh is in a bad fix finantially a8 the provincial revenue: hi dwindled on account of the stagnation of trade, but all the same' it: must continue to share the task filling the war chest of the Nationa} Government in order to make the ultimate extermination of the rebels postible—United Press:
Government Troops in Changsha:
Hankow, Sept. 1.
'A Changtha message states. that excepting for a minor skirmish which took place at Tatopu on Saturday night, there has been no flighting between the Government troops and the Communist troops. As a result of reconoitering by the Government planes, which was made on Sunday, {twas found that the Communist troops under Chu Teh and Mao Tse-tung had made connections with another Communist band under the leadership of Lin Piao: and Huang Kunk-hich, Peng Tu-huai's red' sol-Jiers appear to be acting independently.
According to the same message, the town of Changsha is being narded by two Government. reximerts as well as by the self" defence corps, consisting of 3,000 anembers, The police and gendarmes are busy' in rounding up suspected secret Communist. agents, The town of Yichiawan, which is jocated upriver region along the railway, is reported to have, been captured by a detachment, of Red troops, while the Government gun-toat Yung-sheng is standing by, at Kuanyinkuo, about. eight miles. up he river from Changsh The N. K, K, Str. Shoko Maru, with a capacity of passengers, consisting mostly of refugees from [Changsha, on board, arrived here this morning from Changsha, where she left yesterday morning.
According to the story told by the captain of the Shoko Mavu, the situation in Changsha is extremely disturbing with various wild rumours being circulated and it was extremely shore. The families ints in Changsha, who had returned there from Hankow a week ago, are still staying. en, board steam launches being' une able to go ashore*in view of the restless situation in town.—Rengo, A City in Communist Hands Although it appears almost cer tain that the Reds will shortly regain possession of Changsha, the events of the Inst few weeks have shown that the feeling of the inhabitants generally, if not of the Reds themselves, is amazingly di of 1927. This the opinion of an experienced: resident of Hunan, who has recently favrived in Shanghai in an interview with a "North-China Daily News" representative yesterday.
In 1927, the evacuated foreigners suffered a good deal from the: cooperation of their servants with the invading marauders. This year, the outbreak. has: been remarkable for the extraordinary loyalty of the Chinese servants and the Chinese colleagues of the foreigners. Instance after instance has occurred where the servants deliberately removed their masters? furniture' and effects in order to preserve them from the impending orgy of looting:
Foreigners: returning to Changsha the other day after the first evacuation were received with demonstrations of friendship and: affection which surprised even the most experienced of them, The truth of the matter is that the factors responsible for the present situation.
'The Reds in town' or country' are jrathlecs in their attempt to compel
Text read from the printed page and cleaned; old type leaves the occasional error.