"Kung Hor Sun Hay!"*

Pinging bullets and popping firecrackers accompanied the celebration last week of China's New Year. The bullets were pinging a scant 150 miles outside Shanghai, but in that city and most others green paper dragons a block long were writhing through the streets borne by scores of coolies. Over 500 wounded soldiers were brought in during the week from the battle lines defending Shanghai;/- but simultaneously Shanghai Chinese were calling at one another's homes to pay off debts contracted during the old year and to present huge New Year's "cards" on thin red paper. New China was embattled; but old China was celebrating.

The Powers. At Washington, U. S. President Coolidge and Secretary of the Navy Wilbur prepared stealthily to deal with the Chinese. Lest it be thought that the U. S. was rushing too many armed forces to China (TIME, Jan. 31) these statesmen designed a stratagem. They caused the transport Chaumont to sail from San Diego, Calif., loaded to the scuppers with U. S. marines last week, but announced that she was merely sailing for "a secret destination in the Orient." British statesmen, not so subtle, baldly admitted that 12,000 British troops were being rushed to China last week--thereby enraging both the northern and southern factions of the Chinese Civil War. Retaliation. The northern War Lord, Chang Tso-lin, expressed his displeasure by knocking out the kingpin of the whole fiscal structure upon which foreign loans to China rest. The structure is the Chinese Maritime Customs Bureau, the duties collected by which are pledged to the repayment of the foreign loans. The kingpin was Sir Francis Arthur Aglen, the Inspector General of Customs, under whom 1,000 foreign customs clerks have worked since his appointment in 1911. Last week Chang dismissed Sir Francis, threatened to replace him and all his foreign clerks with Chinese. If this is done, and "gotten away with," the customs revenues will most certainly be diverted from repayment of the foreign loans. Defy. The southern faction likewise retaliated upon Britain. Nationalist (southern) Foreign Minister Eugene Chen promptly broke off negotiations concerning the safety of Britons and their property in China (TIME, Jan. 24); and took the unprecedented and insulting course of ignoring the British Government and cabling over its head an appeal to the British Labor Party. Chen declared that "the British decline in Far Asia" will continue "until British Labor is entrusted by England with the task . . . of substituting the statesmanship of peace and productive work for the [British] Tory statesmanship of imperialism, war and Byzantine glory." Churchill Explodes. Though the British Government could, of course, take no official notice of Chen's deliberate insult, an explosive retort was made ex officio by Chancellor Winston S. Churchill of the British Exchequer, who compared Chen to A. J. ("Emperor") Cook, famed ringleader of the British Coal Strike (TIME, May 10 to Nov. 29). Cried Arch-Tory Churchill: "Last year we had Mr. Cook. This year we have Mr. Chen. One rose among the murky coal pits in Britain, and the other was nurtured in the balmy air of far Cathay. When I say the balmy air of far Cathay, I am not certain that balmy elements have not found representation in both cases. Cook is an orator, Chen is a literary man. Both, curiously enough, seem to draw inspiration from the same fount: air.

"Nothing is further from our intentions than to be drawn into an adventurous, aggressive or ambitious Byzantine policy in China. All we want to do in China is trade with China. We regard the 400,000,000 of Chinese as potential friends and customers. Almost the last thing you usually do with a potential customer is to shoot him. The last thing to wish is that the potential customer should shoot you."

Eugene Chen. Who is this Chinese with whom the august Chancellor of the Exchequer deigned to bandy words? In 1878 he was born in Trinidad, British West Indies; went to London, qualified as a solicitor (lawyer) and enjoyed a successful practice for some years in the capital of the very power he is now fighting tooth and nail.

In 1912 he emigrated to the land of his race, joining the Chinese Government service in Peking. Later he edited, and still later bought the Peking Gazette. At the close of 1917 he was in jail for writing anti-Japanese articles. Pardoned, he joined the Nationalist party of the late Dr. Sun Yatsen, at Canton, and was sent to the Paris Peace Conference with the Cantonese representative, Dr. C. C. Wu. When the new Nationalist Government began its conquest of South China (TIME, April 5) he became its "Foreign Minister.

Chen's luck is proverbial. In 1925 he was kidnaped by soldiers of Chang Tso-lin, against whom he is now fighting, and carried in chains before Chang. That barbaric War Lord, who slaughters even his own followers if they displease him (TIME, July 19), yielded to a whim and let Chen go. "Eugene Chen" is, of course, merely the Anglicism which he adopted as a London lawyer to translate his Chinese name: Chen Yu-jen.

* "Happy New Year !" /- (TIME, Feb. 7, et ante) The Civil War now going on is between North and South China, the northern factions holding Peking and Shanghai, and the new Nationalist army which has conquered the southern hah! of China pushing northward with Shanghai as its immediate objective.