ment
moved to Hankow. All over the southern provinces there now came a
genuine rising of the masses of the people, mainly the result of
communist propaganda and of the government's promise to give land to the
peasants, to set limits to the big estates, and to bring order into the
taxation. In spite of its communist element, at the beginning of 1927
the southern government was essentially one of the middle class and the
peasantry, with a socialistic tendency.

3 _Second period of the Republic: Nationalist China_

With the continued success of the northern campaign, and with Chiang
Kai-shek's southern army at the gates of Shanghai (March 21st, 1927), a
decision had to be taken. Should the left wing be allowed to gain the
upper hand, and the great capitalists of Shanghai be expropriated as it
was proposed to expropriate the gentry? Or should the right wing
prevail, an alliance be concluded with the capitalists, and limits be
set to the expropriation of landed estates? Chiang Kai-shek, through his
marriage with Sun Yat-sen's wife's sister, had become allied with one of
the greatest banking families. In the days of the siege of Shanghai
Chiang, together with his closest colleagues (with the exception of Hu
Han-min and Wang Chying-wei, a leader who will be mentioned later),
decided on the second alternative. Shanghai came into his hands without
a struggle, and the capital of the Shanghai financiers, and soon foreign
capital as well, was placed at his disposal, so that he was able to pay
his troops and finance his administration. At the same time the Russian
advisers were dismissed or executed.

The decision arrived at by Chiang Kai-shek and his friends did not
remain unopposed, and he parted from the "left group" (1927) which
formed a rival government in Hankow, while Chiang Kai-shek made Nanking
the seat of his government (April 1927). In that year Chiang not only
concluded peace with the financiers and industrialists, but also a sort
of "armistice" with the landowning gentry. "Land reform" still stood on
the party program, but nothing was done, and in this way the confidence
and co-operation of large sections of the gentry was secured. The choice
of Nanking as the new capital pleased both the industrialists and the
agrarians: the great bulk of China's young industries lay in the Yangtze
region, and that region was still the principal one for agricultural
produce; the landowners of the region were also in a better position