The fall of Tsinan, capital of Shantung Province in Northern China, brings to a head the military crisis of the Kuomintang government of Chiang Kai-shek. Economic gloom deepens into chronic disaster. Production continues to decline while the rapacious KMT bureaucracy continues to suck the lifeblood out of trade and industry. Meanwhile the $400 million American aid is dissipated in desperate measures to keep the country going. $125 million goes to direct military purposes but this is hardly a trickle.