The New Fourth Zone, the Border Region, and the Frontier Area--together with a wide scattering of guerrilla areas and governments individually of less but collectively of equal importance--are the military step-children of the Chinese government. They all receive subsidies for their work, varying in amount. Usually this is calculated on the number of _hsien_ actually occupied as bases, so that the sum provides for a far smaller number of villages than those directly affected. In the case of troops, the salary allowances are based on the permitted size of the units, in almost all cases below the actual numbers. The money is paid to the commanders or other leading officials, who then set salary rates incomparably lower than those of the central forces. The money thus saved is applied to the general budget of the forces. Corruption, while occasional and inescapable, seems to be more sharply punished in the guerrilla than in the government areas. In January 1941, the New Fourth Army was officially abolished, following a clash with regular National Government forces. The clash arose from a fundamental difference between the Generalissimo and the New Fourth leaders concerning the nature of the Chinese government. The Communists and their sympathizers held that the unity of China was a political union between separate groups. When the Generalissimo ordered the New Fourth Army to move North, and oppose the Japanese forces above the Yangtze, the New Fourth countered with a demand for arms and funds. Treating this as military insubordination in war time, the central forces attacked the New Fourth--each side claiming that the other opened hostilities--capturing Yeh Ting, the commander. The rest of the Army was officially abolished, although its main forces were within the occupied zone and outside the Generalissimo's reach. A full Communist-Nationalist clash was avoided, however, and the Red leaders unwillingly acquiesced in the Generalissimo's interpretation of the episode as a military and not a political affair. The conflict brought forth the fundamental Communist question: are the Chinese Communists loyal first to the Chinese government, or first to the Communist Party? No answer was forthcoming, although the Communists failed to rebel elsewhere. The Generalissimo, by military swiftness and political acumen, had triumphed in one more particular instance.