Abstract: At the end of 1931, the new-born journal Culture Review refused to advocate "national literature and art"; instead it proposed that "literature and art are free unto death". The debate on whether freedom was the basic value of literature arose between the "free man" and the left wing. Soon the so-called "the third type of person" joined the debate, claiming they spoke for "the group of authors", asking both sides to spare the life of literature. The debate happened at the point of the value transition of the New Literature in 1930s, and neither side, with their respective arguments, could persuade the other. Rereading the process of this debate, it can be seen that the side of "liberal literature and art" was not defeated, as said in some textbooks' narrative. In fact, it even had an upper hand for some time, or at least the debate ended in a tie. A careful reexamination of the debate is conducive to understanding the multiple structure of the new literature in the 1930s, the essential basis that each of the parties held for its argument and the later developments of the May 4th new literature tradition.