On May 7, Mr. Lu Hsin-yuan, an Oxford graduate, was pointed President of the Provisional Court. Mr. Lu was a member of the Kuomintang and an experienced jurist, and at the same time as ho' assumed office, a number of other judges were appointed. It was during the summer period that perhaps the most outstanding indication of authority on tne part of the Chinese Municipality was shown. Dr. H. T. Liu, in charge of the Health Department of the Municipality, served notice on the Chapet Waterworks that unless they modernized their plant 80 that they could serve clean water to Chapel, he would take Grastic steps. They had been serving cholera-laden water the summer before, and in spite of constant protests and the most widespread publicity, they had failed to make adeqi provements. Dr. Liu's in: brought about an improvement. ists in this district became more secure as Marshal Sun Chuanfang's troops retreated in Shai they reached within tance of Tsingtao. The Red Spears, a secret society f armed farmers, had been as-isting the Nationalists in the Northern provinces, and now General Chiang Kai-shek's troops troops took Haichow and proceeded to push on to Tsingtao and Tsinan. At this point it became necessary to change the character of the Peking Govern. ment, for the loosely bound feudal system, without a definite head, was producing defeats on it was announced that Mr. Pan Fu would serve as Premier of the Peking Government, while two days later, Marshal Chang Tso-lin's assumption of the position of Generalissimo of the Army for the Suppression of the Communists was made public, His title of Tayuanshui indicated more than a mere Generalissimo: he was practical ly dictator of the northern armies. This decision was taken as a result of a military conference in Peking, which was attended by all the principal northern generals including Marshal Sun Chuan-fang,' General Chang Chung-chang, General Chang Hsueh-liang and others. In a statement made at the time, Marshal Chang Tso-lin explained that it was necessary to have a united head for the northern armies and navy to fight Russian influence and Communism, and that each of the northern generals had surrendered personal control over his armies to the Dictator. On June 19, Marshal Chang Tso-lin was installed in his new position with ceremony and the new government was established. An attempt was then made to find peace with Governor Yen Hsi-shan of Shansi, but this failed.
The economic policies of the Hankow Government brought. on a rice shortage in July, so that at times rice was as high as $25 a picul and at other times was altogether unobtainable. Martial law was declared Wuchang on June 17, when it was believed that large number: of General, Chiang Kai-shek's plain-clothes men were in the city, while at the same time, General Yang Sen, who was in alliance with Nanking, took up his headquarters at Ichang from which he could effectively interfere with Hankow's revenues, particularly as regards opium and salt.
During the last week in June, a conference took place at Hsuchowfu between Marshal Feng Vu-hsiang and General Chiang Kai-shek, attended also by many members of the Nanking Government, This conference was a complement to that at Chengchow, already referred to, between Marshal Feng and the Hankow Government, and arrangements were made for cooperation between Marshal Feng and General Chiang; the decis-fon was reached that Comrade Borodin and his Russian advisors were to be sent away and Marshal Feng undertook to suppress the Communists at Hankow; General Chiang was to supply Marshal Feng's army with funds (presumably $2,000,- 000 a month) which were sorely required; Marshal Fong's pos tion in Honan and and the northwest was to be recognized, and both he and General Chiang Kai-shek were to participate in. the Northern Expedition. Marshal Feng Vu-hsiang thereupon sent a number of telegrams to Hankow instructing General Tang Song-chi to take decisive action against the Russians and the Communists. The cupidity of Marshal Feng, who at Chengchow had agreed to help Hankow against Nanking in now going over to Nanking, came as a political shock to Hankow and added to the numerous factors which were making for the destruction of that government.
It was on July 1, that the Nanking Government entered upon an exceedingly elaborate and complex programme of illegal taxes, There was to be a 50 per cent. tax on tobacco with a tobacco monopoly in Chekiang; a 50 per cent. increase in ton: nage dues; a two and a half per cent. export surtax; a coal tax of $1.08 a ton; a rental tax to. be collected in' the International Settlement and the French Concession as well as in Chinese territory; a 50 per cent. increase in tonnage dues, In
Text read from the printed page and cleaned; old type leaves the occasional error.