GENERAL ARTICLES

Japan Against the World

Charles Lugrin Shaw September 1 1934
GENERAL ARTICLES

Japan Against the World

Charles Lugrin Shaw September 1 1934

Japan Against the World

GENERAL ARTICLES

Charles Lugrin Shaw

A WORLD WAR is on, and Canada, dangerously close to the front line, is likely to be under fire almost any day.

Canada has occupied a unique position in this war so far. She is the only major country that has not been a casualty in one way or another ; but it becomes increasingly difficult as time goes on to hazard a worth-while guess as to how long this invulnerability will continue.

The present war, of course, isn't one of howitzers, tanks and submarines. It is a trade war the biggest in the history of the world, and the consequences in the final reckoning may easily be, in an economic sense, as vital as those of the great military struggle that ended on November 11,1918 You probably haven't realized the significance of the trade war, first, because Canada has so far been comfortably neutral and, second, because the factors involved are mostly intangible. Sidesmen with order books are not so impressive as khaki-dad shank troops; nor are price lists, currencies and spinning wheels as convincing as high explosive shells, bayonets and lxmibing planes. Nevertheless the war is definitely on. For confirmation, watch the business news in your papr or ask any foreign trader ; anyone w ho has been in an advantageous position to witness the economic struggle of Japin against the world.

The rapidity with which Japan has upset the trade machinery of the world is without a parallel in history. Cheap money, low' wages, industrial efficiency, government sponsorship, aggressive sides tactics and a unique combination of plitical and economic circumstances have been the chief agencies which Japan has used to bedevil and harass markets everywhere. Where and how will it end? And when will Canada lxdrawn in, as inevitably she must be?

Upsetting World Trade

THE ANSWER to these questions is of vital concern to Canadians. The issue is not between Japan and Canada. It would lx1 quite simple then, because we are as a nation doing very nicely in our trade with Japin incidentally selling to Japan much more than Jajxm sells to us. As Japan’s friendly neighbor across the Pacific, we are anxious that our satisfactory trade relations with her should continue. But there am other countries besides Japan and Canada to be considered. Great Britain is one of them. British industry is in a desperate struggle with Jajxm for trade supremacy. Should Canada continue to watch such a contest from the side lines?

Then there is another issue of jxiramount imjxirtance. Exjxprt trade is Canada’s lifebkxxl. Jajxm is jxmring her goods into many overseas markets that logically might lx* considered Canada’s and thus, sooner or later, the comjx'tition between Canada and Jajxm must become intensified not at home, where tariffs and anti-dumping laws are our {Protection, but in foreign lands where our exjxxters are finding it increasingly difficult to meet the low prices of comjx'ting Japanese products.

Jajxm now controls seven JXT cent of the world’s trade. That in itself may not seem a high jx*rcentage, but the significance lies in the fact that five years ago Japan's share

was less than three JXT cent. In other words, during a dejpression, when the aggregate trade of the world was shrinking by more than sixty JXT cent, Japan more than doubled her share!

There is no need to emphasize here the dejpendence of Great Britain on her foreign trade; it has been the sinew's of her empire. Well, Britain’s foreign trade declined six JXT cent during the first six months of last year, while Jajxm's exjxirts were skyrocketing fifty-five JXT cent! Is there any wonder that British business men should feel disturbed? During the last few years they have been humiliated to see Japan surjpass Britain in the expert of commodities once regarded as virtually a British monojxfiy. Take cotton cloth, for instance. The textile mills of Lancashire owe much of their tremendous development to the unceasing demand of the Asiatic markets for their products, yet even in the exjx>rt of cotton goods Japan has at last exceeded the British total. Irast year Japan exjported 2,090,000,(XX) yards, Britain, barely 2,000,000,000 yards; with the gap lx*tween the two nations rapidly widening.

There is hardly a country in the world where Japan has failed to increase her exjxirts in sjxx'tacular fashion during the last five years. It is not surprising that Japan should increase her «îles in Tokio's jnijppt state, Manchukuo, by •1(X) JXT cent in a single year. But what is there to be «fid about the fact that a country like Peru increased her {Purchases of Japanese goods by 330 JXT cent in a year; New Zealand, 173 JXT cent; Brazil, 113 JXT cent; South Africa,

89 JXT cent; Australia, 54 JXT cent; England, 44 JXT cent and so on? In view of these figures, it is, jperhajps, surprising that Japan’s experts to Canada actually droppd last year.

Japan’s Need for Markets

IF FOREIGN trade is essential to Canadian prosjxTity, it is even more so to Jajxm's welfare. That is why Japan fights for it with a stubbornness that has antagonized half the world. \\ ith a population of more than sixty millions in an area less than that of Ontario, Japan's salvation lies in the intensive development of her industries. To find an outlet for the products of these industries Jajxm’s need for world markets is even greater than was Britain's during the latter’s industrial rise, because Japan's empire «ties territory, unlike Britain's has been limited and Jajxm has been denied free access to new lands for her fast-growing surplus population. No wonder

Japan lias been described as the povder-box of Asia. No wonder she struggles for breathing space, for territory capable of commercial exploitation and for foreign markets with a desperation that at times has seemed bordering on madness.

W hat a contrast to the Japan that some of us can still vaguely remember—the Japan of forty, fifty years ago, when the mysterious stranger among the trading nations of the world was just beginning to feel her strength. In a way, the Western world is responsible for what has hap pened. Had it not been for the threats and cajolery of other powers who sought access to Japan’s markets, the country might have been content to continue in isolated medieval feudalism—a national anachronism.

But once committed to a policy of fraternizing with the traditional enemy, the foreign trader, Japan plunged into the new doctrine with a splash that has troubled the seas of trade ever since. Almost overnight Japan abandoned the traditions of centuries and substituted industrialism for feudalism, and the suddenness with which the transformation came about is a factor that underlies the entire Japanese economic situation. Japan has been in a terrific hurry to catch up with her predecessors in the fight for world trade. That she has taken many short cuts has annoyed her competitors to the point of distraction. Sometimes in her determination to win, Japan has ignored the rules of the game: but in a serious business like that, who does abide by them?

Low Prices Gain Business

JAPAN liad her big chance during the Great War and she made the most of it. Most of the great manufacturing countries were too busy with munitions to concern themselves with general merchandise. Japanese factories worked overtime making everything from hair pins to ocean liners. Japan’s amazing genius for imitation was given full scop.

The two ships, Fushimi Mam and Katori Marti, were a striking illustration of this characteristic. They were sister ships and, so far as the unpractised eye could sec, identical.

“There is one difference, only one," the Japanese agent told me proudly. “Fushimi was built in Scotland, Katori in Japan. We had Japanese engineers on the Clyde watching the Scottish shipbuilders as they worked on Fushimi. Then our Japanese engineers went back to Kobe and built Katori. Very clever.” It was clever; and so was the duplication of a certain well-known American sewing machine. The New York sales manager wondered why his sales in Japan had suddenly dropp'd to the vanishing point. He went to Japan and found that Japanese factories were turning out vast numbers of machines exactly like his own so exact, in fact, that they all bore the identical serial number of the American machine that had served as the model !

Japanese manufacturers have been charged with violation of copyright laws and infringement of trademarks. Indeed, according to some authorities, the traders of Nippon have not overlooked a thing in the way of questionable business practice. But the fact that, in spite of this unfortunate reputation, they have been able to go right ahead and take business from under the noses of more circumsp'ct comptitors is significant.

“No one can accuse us of forcing unwanted goods upn the market,” a Japanese shippr told me. “The world wants our stuff, and don’t let anyone fool you on that score. They want it largely because it is cheap, but that isn’t the only reason, even if it may lx* the chief one. We are able to make prompt delivery in huge volume. And another thing: Don’t believe all you hear about inferior Japanese quality. That charge was valid once and it may still lx* in a few lines; but our factories are becoming more efficient all the time and they are producing better goods. We don’t have to send our salesmen out. The buyers come to us. Go to Osaka and our other big industrial cities and you will find buyers there from Abyssinia to Zanzibar, from Buenos Aires to St. Louis.”

This Japanese shippr had something to say about Japan’s well-known practice of imitation, too.

“We try to give buyers what they want," he said. “We don’t originate. We scour the world for ideas; make a note of what is selling

elsewhere. We find out the fashions on the Riviera and Palm Beach and the next week our factories art* making goods according to that style. Remember those Japnese dolls we used to sell? Well, they commanded a limited sale because every child d;x*s not want a Japanese doll. Now we make no more dolls with Japanese features. We make dolls with European faces and dresses because that is what the world market wants. We make toys so well and so cheaply that even Germany buys from us."

No wonder Germany g;x*s to Japan for toys! Osaka factories are making celluloid dolls at ten cents a gross and model automobiles—up-to-the-minute teardrop design—at two cents each. Toy autos that run by clockwork sell at eighty cents a dozen.

Expanding in South America

"OVEN CANADA has not escap'd the deluge of cheap Japanese goods entirely. The Rubber Association of Canada not long ago became alarmed by repris that Japanese rubber footwear was being offered for sale in Montreal at thirty-five cents a pair —a price which Canadian manufacturers could not begin to meet. Stores in Western Canada were fkxxled with hosiery recently, priced so low that most buyers suspected a mistake had been made. The only mistake was that a Japanese shipment had slipp'd through the customs in some way. Dumping duties have usually been an effective check against such comptition at home.

But how about the countries that Canada may reasonably regard as her foreign market? South America, for instance. Japan has been making a drive there for several years. Japanese good-will ambassadors have been touring up and down the coast, drumming up business for the factories of Osaka, Kobe and Nagasaki and scouting for return freight for the Japanese ships that bring out the manufactured goods. These Japanese ships incidentally play a major rôle in Japan’s quest for a large place in the economic sun. Heavily subsidized by the Tokyo Government, they are able to slash freight rates whenever they please, to the exaspration of less favored vessels of other countries. Recently, for instance, Japanese ship lines cut rates sharply from Brazilian p>rts to Japan, the explanation being that Brazil was an important ptential source of raw cotton — like Abyssinia where Japan recently acquired 1,000,000 acres for cotton production, to the consternation of Signor Mussolini.

Ever since Canada and the United States restricted Japanese' immigrants, Japan has regarded Latin America as a fertile field lor expansion. Last year, Japan’s expats to that territory increased thirty-two p*r cent. In addition to doubling her sales to Brazil in 1933, Japan sent 24,000 settlers there. In almost every South American republic Japanese g;x>ds have been gaining supremacy, in defiance of the aggressive trade campaigns engineered by United States expa ters. Officials in the Panama Canal Zone were greatly incensed recently on discovering that the American flags used in a Fourth of July celebration were made in Japan!

Tariff barriers have not lx*en sufficient to check the flow of Japanese goods into the United States. Many times during the past year President Roosevelt has taken executive action to stem the deluge. Tariff commission hearings were recently ordered on such products as rag rugs, pencils and matches. Anti-dumping orders were issued against: rublx/r-solod shoes and electric lights from Japan. Those light bulbs cost two cents each in Japan - about five p*r cent of the cost of the American product. An American shipping line until recently used to carry 500 tons of light bulbs from Japan every month; and until the tariff authorities acted on frantic protests from American manufacturers, the United States was being fkxxled with sixty-seven jx.*r cent of Japan’s total output of matches; also imports of Japanese pencils advanced in a single year from 7,000 gross to 170,(XK) gross. The Japanese traders t(*>k full advantage of the increasing costs of pnxluction in the United States as a result of the N.R.A.

British Business Suffers

BUT IT IS in the Far East that Japan has made her greatest commercial inroads and where British prestige has suffered most. Japan, of course, feels that the Orient is her logical field because of geographical proximity and a certain racial affinity between the races of the East. Ten years ago Britain sold 8,7(X),(XX.) yards of cotton g;xxls in Ceylon alone a typical Asiatic market. Japan was then a negligible factor, selling only 60,(XX) yards. But last year Britain’s sales had slumped to 4,200,(XX) yards and Japan's had risen to the amazing aggregate of 12,000,(XX) yards. While Britain's business had been cut in half, Japan's had lx*en multiplied 2(X) times!

India and Ceylon, with their 380,000,000 potential customers, have been a prize worth fighting for since the days of the great Nabob. Britain d(x*s not propose to stand idle while Japan digs in; the great British Empire of the East, won at inestimable cost, is not to be sacrificed. Yet four years ago, when British business with India first showed a

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Japan Against the World

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severe decline and Japan started her stubborn penetration, Lancashire mill operators and the textile interests of Bombay began to scent danger. Gandhi and his civil disobedience and cotton-mill sabotage soon were regarded as trifling nuisances as compared with the new menace of Japanese competition. Last spring Britain fired the opening gun in the great trade war when the Indian Government established arbitrary restrictions on Japanese imports and increased the British preference. Japan replied with a boycott on Indian raw cotton that threatened Indian growers with ruin. Eventually a temporary compromise was reached, under which Japan was to supply India with 400,000,000 square yards of cotton goods under a duty of only fifteen per cent, while India was entitled to ship to Japan 1,500,000 bales of raw cotton. But Britain’s fears had not been dispelled, and a few days later Sir Walter Runciman, President of the Board of Trade, was declaring that it might become necessary for the countries of Europe to band together to protect themselves against Japanese competition.

Artificial restrictions on Japanese shipments have not prevented the development of chaotic conditions in the Indian textile industries, however. Efforts of Bombay mill owners to meet the Japanese trade invasion by reducing wages and rationalizing their plants have led to strikes and shutdowns. Capital invested in the mills by wealthy Parsees and others has been endangered. Bankers in Calcutta and Bombay assert that not more than fifty of the eightyseven big Bombay cotton mills are equipped to operate on a basis that will effectively compete with Japan, and possibly the same proportion holds good for Lancashire. Among financiers there is a feeling that Japan’s next move will be an attempt to acquire at sacrifice prices, directly or indirectly, some of the heavily mortgaged Indian factories; to modernize them with Japanese equipment and oixrate them with the same efficiency that has characterized the Japanese mills in China. Despite the imposition of a duty of fifty per cent on Japanese fabrics, against a preferential tariff of twenty-five per cent for British imports, Japan is said to be putting a severe crimp in the sales of British rayon cloths throughout India by offering pure silk printed cloth at prices lower than the British rayon materials. Representatives of Lancashire firms in India wag their heads in perplexity. What can be done about a competitor like that?

British business enterprise has suffered in China, too. Scores of Japanese spinning and weaving mills, employing Chinese labor at not much more than $2 a week, are wresting from the British and Chinese plants a choice slice of the big yam and cloth business of China’s tremendous lowpriced market, which Britain once dominated. Efficient management, abandonment of the traditional and costly comprador system and the manning of all departments with comparatively low-salaried Japanese executives, have enabled the Japanese to undersell the British and Chinese, although the latter have been in the textile field much longer. What has happened with textiles is typical of events in other lines. A recent development has been the trend toward utilization of Japanese machinery in the Far Elast. The time when Japan was compelled to equip her plants with British machines is past. Japan makes her own now and in at least one field claims definitely higher efficiency.

The Philippines are overrun with Japanese goods, notwithstanding high tariffs. Japanese diplomats have started negotiating already for free trade with the islands as soon as the United States relinquishes sovereignty. Ever since the United States agreed to independence for the Philippines, American control of trade has slipped and

Japan’s grip has strengthened. Japanese rayon cloths, paying sixty per cent duty, are being sold in Manila at fifty per cent below the price of American duty-free fabrics; and that is only one instance. The Japanese business man doesn’t pass up many bets. When American houses protested against an invasion of cheap Japanese shoes and a higher duty seemed inevitable Nippon factories heard about it, and when the belated duties finally became effective the Japanese had shipped in a sufficient quantity of shoes to meet the islands’ requirements for three years. Japanese stores in the Philippines, some financed by factories at home, have been rapidly crowding out old-established American, Filipino and Chinese business houses.

Japanese Goods in Great Britain

' I 'EXTILES in the Orient do not tell the

whole story of Japan's bombardment of the British trade front; not by any means. The attack has been carried right into the British Isles. A Member of the British House of Commons recently exhibited a shirt—spun, striped, cut, stitched, lined, neckbanded and buttoned in Japan— which, when shipped to England, had been sold, duty paid, for one shilling. Other Members told of socks offered at twopence a pair, underwear at sevenpence and felt hats for three shillings. Japanese rubber boots were being retailed in England for three shillings a pair. British automobile manufacturers were warned that Japan wTas planning a little surprise in the shape of a motor car which would sell at $300—a motor car with three speeds forward and one reverse, with a British self-starter and British balloon tires. Japanese motor cycles at $75 and bicycles at $8.35 were also reported on the way.

Britain’s action in imposing import quotas on Japanese cotton textile and rayon cloth in the British colonies and deixmdencies is still fresh in most people’s memory. It was a bold and arbitrary move to halt Japan’s aggression in spheres where British trade had hitherto been dominant. It is still too early to check the results of this course, but it is reasonably safe to predict that it will not stop the trade war. Publicly, Japan is not greatly upset by the British reprisals, even though her exports to the colonies will probably be cut by fifty-five per cent. Her spokesmen say that textiles will be chiefly affected, but that only about 100 million yards of cotton sales will be hit out of a total cotton export of two billion yards.

However, there is little doubt that Japanese manufacturers do feel rather keenly about this action. Japan’s foreign secretary referred to it as an unjustifiable tampering with a nation’s fundamental freedom. The self-governing units of the British Empire, such as Canada, Australia, New Zealand, South Africa, were not involved in the British quota. They, of course, are masters of their tariffs; but it was made quite clear by the British spokesmen that if Canada and the other dominions chose to stand by the Motherland it would be gratifying.

Here is a problem charged with all sorts of potentialities and complicated enough to cause some sleepless nights for all the Empire’s statesmen and economists. The British reprisals against Japan, in a sense, have split the Empire right down the middle —with the colonies on one side and the selfgoverning dominions on the other. The attitude of the dominions, as the trade war continues, becomes of increasing importance —and delicacy. Apart from the immediate advantage of Empire co-operation in checking a foreign power’s trade aggression, the larger issues of Empire solidarity are involved. It becomes apparent that the Empire Economic Conference neglected one big issue when Japanese trade was lightly passed over.

At the moment, Canada and the other ! commonwealths do not feel disused to take sides. Canada’s trade balance with Japan is too large to be ignored, and no country jxzssesses greater promise as a market for Canadian exports than Japan. Last year Japan bought $16,000,000 worth of Canadian gfxxis, and almost every section of Canada benefitted by the diversification of orders—pulp, lead, zinc and lumber from British Columbia, nickel from Ontario, aluminum, asbestos and felts from Quebec, grain from the prairies. Canadian pulp has helix*d Japan materially in winning a world market for her rayon goods, so vital to Japan since the decline of the silk trade. Canadian exporters are not keen to disturb our trade with Japan if they can help it.

Australia feels a good deal the same way about it. In spite of her celebrated “White Australia” policy, the commonwealth has not shown any objection to taking money from the yellow races, and during the past few years has built up her wheat exports to Japan to such an extent that Canada’s shipments to that market have suffered.

! Japan and Australia have recently been exchanging trade missions and showing the utmost friendship in business affairs. Japan has been stocking Korea with ewes and lambs from Australian sheep stations and continuing her wheat purchases, apparently on the understanding that in return Aus| tralia will not snub the drummers from Nippon’s commercial houses. “If restrictions are placed on our trade with Japan, it will not be Australia that takes the initiative,” remarked Premier Joseph Lyons recently; and from the general trend of events it would appear that such a sentiment is shared by New Zealand, too.

Government Assistance

JAPAN’S astoundingly successful drive for business has not been due merely to luck and what many of her enemies have described as a deliberate attempt to wreck the living standards of the world. Her leaders 1 have shown great perspicacity in launching their offensives at a time when other nations have been concerned with other problems such as the Great War and the Great Depression, and there is no questioning the fact that cost of production in Japan is out of all proportion to that of other countries . because of the extensive employment of unmarried girls at what we could call less than “sweat shop rates.”

But there is more behind Japan’s trade triumph than these considerations. Japan has, first of all, made industrial production a form of patriotism. One of the complaints of Indian cotton-mill owners has been that their workers, about eighty-five per cent of whom are males, are lacking in the spirit to work. You never hear of a Japanese industrialist deposing sabotage in his plant.

Another advantage is the wholehearted co-operation given to Japanese industry by the Government, a condition encouraged by the fact that a score of wealthy families control most of the industries and dominate public policy. No other country has given the same degree of assistance, financial and otherwise, to exporters as has Japan. Depreciation of Japanese currency with an accompanying lowering of wages—in most countries the reverse has been more common was no haphazard gesture. It has given Japan a tremendous advantage in markets everywhere. Manufacturers’ guilds have nowhere reached the same point of organization as in Jajxm, and this is largely the result of Government sponsorship, the chief objective being co-ordination of production and distribution. Government subsidies to Japanese shipping, which have played havoc with freight rates on every ocean, are said to aggregate $10,000,000 annually. Many exporters are practically guaranteed against loss owing to the generous policy of the Bank of Japan. Money grants are said to be easy to obtain by Japanese companies able to produce the gixxis that the world is eager to buy. Factories are encouraged to gain control over sales agencies in foreign countries. If they need funds for this and their own treasury i is inadequate, loans can usually be arranged.

In other words, Government and industry work hand in hand in Japan. A smoothly running machine of gigantic proportions has been set up, specially geared for effective functioning in foreign trade. For foreign trade, as we have emphasized before, means everything to Japan; and, fortunately for her, she has not been in it long enough to be compelled to scrap old methods and jettison ancient traditions, as has been the case notably with some of Britain’s industries.

The feature of Japan's industrial progress that commands most admiration is her efficiency, and this is exemplified in her textile mills where one girl is sufficient to oversee twenty weaving machines and where only two overseers are required to care for 800 spindles. With only twenty-five per cent of the equipment required by the textile industry of the United States, Japan utilizes half as much raw cotton.

The Japanese defense of the low wages paid to their factory workers is that, in a relative sense, Japanese wage standards are fair and that there is practically no discontent.

“Cost of production in various countries is conditioned by different factors,” Dr. Kamekichi Takahashi, eminent Tokio economist, told me. “In some countries there is an abundance of raw material and the charge on capital outlay is low. In Japan both these factors are unfavorable. If our standards of wages are low, according to your conception, they are offset by the abundance of raw material and the availability of capital in your country. In Japan the national standard of wages is determined by the income of the farmers, who constitute the majority of Japan’s working population When our industrial workers lose their jobs they go back to the farms.”

Most of the Japanese textile workers are unmarried girls who are eager to earn the wages offered by the mills. Japanese students of social and economic conditions believe that if the Hon. H. FI. Stevens’s mass-buying enquiry extended its investigations to Japan, it would find a state of affairs far pleasanter than those revealed in many “black spots” in Canada’s industrial East. Many mills operate three shifts in Japan. The girls have fifteen free hours a day. One shift works from five in the morning to two in the afternoon, with a half hour’s rest at noon. Another shift works from seven in the morning until four p. m., and a third from two p.m. until eleven at night. The shifts are changed and one substituted for the other every fortnight. The workers are given bed, board, light and heat. They are furnished with mattresses, covers, baths and soap. The factories provide the food at about fifteen sen, or live cents, a day, which is deducted from the wages. They have on an average about twenty cents a day for their clothes and amusement. The wages are considered adequate because on an average they spend only about ninety cents a month and send their families the rest, which is a little more than $4.50. They stay at the factories from three to five years, usually; after that they either go home or marry.

That is the bright side of the picture, but Japanese business leaders insist that it represents the average, too. What is known as cottage industry, comparable to the farm sweating recently exposed in Quebec, also exists in Japan, and it is not uncommon to find a family working more than 100 hours a week on piece goods, toys and mechanical parts. Similar conditions also exist in some of the smaller factories; but all investigators of industry in Japan claim that the trend is toward the larger, better equipped and modernized mills where working conditions are much superior. The Government is behind the movement because it has been convinced that these new mass production units are more easily controlled as a weapon to challenge the world of trade.

Japan’s Future Course

WHAT, FINALLY', will Japan do with this weapon? So many factors are involved that even a guess at the answer seems presumptuous. The events of the last

few months have undoubtedly demonstrated to Japan that she has gained the world's antagonism with her well planned but reckless assault on the old established citadels of trade, and that there is a limit to her rivals’ patience. Will she continue the attack until the world has been compelled to take the inevitable course of erecting a rockbound barrier against Japanese goods, or will she realize that success can be carried too far?

Already there are signs that the latter path may be followed. A movement is under way to reduce the margin between Japanese prices and those of competing countries and to regulate exports. The famous guilds, so effective in booming production, are now emphasizing quality rather than quantity. They are determined to remove cause for the prejudice still widely held against Japanese goods on the grounds of cheap imitation and inferiority. Already they have achieved this in respect to textiles. In future, according to the guilds, only the better merchandise is to be made available for export.

There is also a growing conviction among Japanese that by raising standards of living at home, the domestic market would be able to absorb much of the goods now being dumped outside. Another contention is that Japan should use her trade policy as

an agency for political and economic concessions. Japan still smarts from the effects of “losing face” in the League of Nations and her military programme in China. She is also worried about her naval standing. Perhaps, it is argued, Japan could use her trade weapon in adjusting some of these difficulties. Well, we shall set1. And meanwhile Canada goes on doing business with Japan—a little apprehensively sometimes perhaps—but with the highest hopes.

In spite of the multitude of her critics, Japan has many fair-minded spokesmen who realize that prosperity is built on good will and not antagonism. One of them is that fine old statesman, Prince Iyesato Tokugawa, father of Iyemasa Tokugawa, Japanese consul in Canada.

“Please remember,” said Prince Tokuj gawa in Vancouver recently, “the destinies of Canada and Japan in the Pacific lie together. It is our common duty to keep the ocean always true to its name.”

Canada’s Pacific Coast has good reason to be thankful for theKuro Sivo.or Japanese current, which sweeps in from the East and tempers the climate of our western seaboard. Perhaps it is not too much to expect that the Japanese trade current will also be an unmixed blessing and an agency for con: tinued peace between the two great Pacific ! powers.