As their income is diminishing and as there is no hope of immediate recovery, the peasants can naturally only resort to a corresponding reduction of expenditure. In expenditure, as the Chinese peasants are concerned, there are four categories: necessary daily account, periodical ceremonial expenses, capital for production, and interest, rent, and tax.As we have seen, the villagers have already suspended ceremonies as far as possible, and even sold their rice reserve when necessary. It appears that the most rigid category is the last one. If the people are not able to pay their ever-increasing interest, rent, and tax, they will be threatened by brutal treatment from the usurers, and rent and tax collectors, and by legal enforcement through imprisonment. But when hunger is stronger than the fear of being shot, peasant revolts take place. Perhaps, this is the situation that has resulted in the disturbance of the Red Spear Club in North China and the Communist movement in Central China. If the author of Red Star Over China is right, the main force that drove millions of peasants in the heroic long march was nothing but hunger and its derived hatred of landowners and tax collectors.

In the present study, I have tried to show that it is incorrect to condemn landowners and even usurers as wicked persons. When the village needs money from outside to finance their production, unless there is a better system to extend credit to the peasants, absentee-landlordism and usury are the natural products. Without them, the situation might be still worse. At present, owing to the insecurity of rent, there is already a tendency for urban capital to move into the treaty ports instead of into rural districts, as seen in the recurrence of crises in Shanghai speculative enterprises. The scarcity of capital available in rural districts encourages the development of usury in the town. The more depressed is the country, the less capital is available, and the more active is the usury—a vicious circle which saps the life of the peasants.

There was another dilemma in the Chinese land problem. The national government with all its promises and policies on paper was not able to carry out any practical measures owing to the fact that most of the revenue was spent in its anti-communist campaign, while, as I have pointed out, the real nature of the communist movement was a peasant revolt due to their dissatisfaction with the land system. Despite all kinds of justification on either side, one thing is clear: that the conditions of the peasants are getting worse and worse. So far no permanent land reform has been accomplished in any part of China since the recovery of the Red Area by the government.