The different names, dates and ceremonies for the second festival for the dead, celebrated around the middle of the Seventh Month, have caused much confusion. Taoists simply called this festival the "Fourteenth of the Seventh Month" (七月十四）and performed ceremonies on two consecutive days of the fourteenth and fifteenth. The first ceremony was for the ancestors, and the second for the hungry ghosts. Some families reversed the order of the ceremonies, while others combined them, observing them both on the fourteenth.
Taoists and Buddhists believed that the souls of the dead imprisoned in hell were freed during the seventh month. From the last night of the sixth moon, when the gates of hell were opened, through the last night of the Seventh Month, when they were closed again, the released souls were permitted to enjoy the feasts prepared for them. Taoists also believed that the spirits of the dead, most active at night, were capable of assuming different forms, appearing as snakes, moths, birds, foxes, wolves, tigers and so on. They were also able to appear as beautiful men or women in order to seduce the living. When they possessed an individual by entering the body, they caused illness and mental disorders. Ancestral spirits that were well fed and well cared for were benevolent and brought good fortune. Hungry ghosts with no descendants or those who were neglected were malevolent, causing droughts, floods and various misfortunes, including illness and death. Therefore it was essential for the ancestral spirits and the neglected hungry ghosts to be properly fed and cared for.
On the fourteenth day of the Seventh Month, families worshipped their ancestors and provided their spirits with food and new clothes.
Although it was not mandatory, some families visited their ancestral graves to cut any overgrown grass, remove weeds, repair the tombs and make offerings. Families that omitted the visit to the graves worshipped at the family altar with incense, candies, paper offerings and food. Colored paper representing cloth for clothing was burned. Smooth-finished paper represented silk while coarse paper stood for cotton cloth. Following the ceremony, the family gathered for a feast.
The next night, the same offerings were made for the hungry ghosts wandering in the streets and alleys. This ceremony was performed outside the front gate in the belief that doing so prevented the hungry ghosts from entering the courtyard and home.