also
contained many landlords, but production was more in staple foods such
as wheat and rice which could be transported. Exploitation in this
second circle was not much less than in the first circle, because of
less close supervision by the authorities. In the third circle we find
independent subsistence farmers. Some provincial capitals, especially in
Szechwan, exhibited a similar pattern of circles. With the shift of the
capital, a complete reorganization appeared: landlords and officials
gave up their properties, cultivation changed, and a new system of
circles began to form around the new capital. We find, therefore, the
grotesque result that the thinly populated province of Shensi in the
north-west yielded about a quarter of the total revenues of the state:
it had no large landowners, no wealthy gentry, with their evasion of
taxation, only a mass of newly-settled small peasants' holdings. For
this reason the government was particularly interested in that province,
and closely watched the political changes in its neighbourhood. In 990 a
man belonging to a sinified Toba family, living on the border of Shensi,
had made himself king with the support of remnants of Toba tribes. In
1034 came severe fighting, and in 1038 the king proclaimed himself
emperor, in the Hsia dynasty, and threatened the whole of north-western
China. Tribute was now also paid to this state (250,000 strings), but
the fight against it continued, to save that important province.

These were the main events in internal and external affairs during the
Sung period until 1068. It will be seen that foreign affairs were of
much less importance than developments in the country.

3 _Reforms and Welfare schemes_

The situation just described was bound to produce a reaction. In spite
of the inflationary measures the revenue fell, partly in consequence of
the tax evasions of the great landowners. It fell from 150,000,000 in
1021 to 116,000,000 in 1065. Expenditure did not fall, and there was a
constant succession of budget deficits. The young emperor Shen Tsung
(1068-1085) became convinced that the policy followed by the ruling
clique of officials and gentry was bad, and he gave his adhesion to a
small group led by Wang An-shih (1021-1086). The ruling gentry clique
represented especially the interests of the large tea producers and
merchants in Szechwan and Kiangsi. It advocated a policy
of _laisser-faire_ in trade: it held that everything would adjust it