WITH the removal to Formosa of the seat of the National Government, two governmental mechanisms became established on the island. Formosa continued to be a province of China, with its own provincial government. But this government now had to operate side by side with the National Government. It is therefore necessary to describe briefly the organization of both governments and their relation to each other. It is also necessary to examine the economic situation in Formosa as it relates to the operation of both governments.
When the National Government of China established itself in Formosa in December 1949, the political system that was put into operation followed generally the patterns that had been evolved on the mainland. Notwithstanding the fact that the dictatorship of the Kuomintang was declared at an end in April 1947, the party continued to be the predominant force in the functioning of the National Government. The Kuomintang was organized vertically to comprise a national congress and four descending regional bodies: the provincial councils, the county (hsien) councils, the district (chu) coun