to say, the
farms for some 400,000 peasant families were taken from the peasants and
no longer paid taxes to the state. The peasants, however, had to make
payments to the temples. Some 200,000 _ch'ing_ with some 450,000 peasant
families were turned into military settlements; that is to say, these
peasants had to work for the needs of the army. Their taxes went not to
the state but to the army. Moreover, in the event of war they had to
render service to the army. In addition to this, all higher officials
received official properties, the yield of which represented part
payment of their salaries. Then, Mongol nobles and dignitaries received
considerable grants of land, which was taken away from the free
peasants; the peasants had then to work their farms as tenants and to
pay dues to their landlords, no longer to the state. Finally, especially
in North China, many peasants were entirely dispossessed, and their land
was turned into pasturage for the Mongols' horses; the peasants
themselves were put to forced labour. On top of this came the
exploitation of the peasants by the great landowners of the past. All
this meant an enormous diminution in the number of free peasants and
thus of taxpayers. As the state was involved in more expenditure than in
the past owing to the large number of Mongols who were its virtual
pensioners, the taxes had to be continually increased. Meanwhile the
many peasants working as tenants of the great landlords, the temples,
and the Mongol nobles were entirely at their mercy. In this period, a
second migration of farmers into the southern provinces, mainly Fukien
and Kwangtung, took place; it had its main source in the lower Yangtze
valley. A few gentry families whose relatives had accompanied the Sung
emperor on their flight to the south, also settled with their followers
in the Canton basin.

The many merchants from abroad, especially those belonging to the
peoples allied to the Mongols, also had in every respect a privileged
position in China. They were free of taxation, free to travel all over
the country, and received privileged treatment in the use of means of
transport. They were thus able to accumulate great wealth, most of which
went out of China to their own country. This produced a general
impoverishment of China. Chinese merchants fell more and more into
dependence on the foreign merchants; the only field of action really
remaining to them was the local trade within China and the trade