Evening star., 1935-05-19

cation implies to the competing ma
tions in the markets of the world.
In discussing the causes Of that in
tensification, Prof. Gregory concludes
that neither the low standard of liv-
ing nor the depreciation of the yen
can be accepted as the main reason
for Japan's success in the export mar
ket. though both have helped
The decisive factor has been the
very great increase in the efficiency
of japanese industry, resulting from
the adoption of naturalization in a
very whole-hearted way" Take the
cotton trade, for example Prof.
Gregory quotes figures TO show that
the output of the average worker in
the cotton spinning industry has in
creased by more than 60 per cent in
10 years. Lancashire cannot show
any figures comparable to that and
in so far as greater efficiency has
been the secret of Japanese success,
there is clearly no excuse for char
acteriZing it as unfair.
Il II n r
The idea that Japan's irruption into
world trade on a spectacular scale is
a flash in the pan is dismissed as
untenable. Japan has come to stay
as an increasingly good customer for
the raw material producing countries
and an increasingly formidable COM
petitor to the industrial countries. It
is significant Of the trend of things
that. while Great Britain is protest.
ing against the raising Of the tariffs
on British manufactured exports to
Australia, that country is profiting by
the increasing sales Of her wool to
Japan and is making vigorous efforts
to improve her trade relations with
that country.
How is Britain to combat this COM
petition? Its full force Is felt in the
Far East, in the colonies and in South
America. So far as the foreign coun-
tries are concerned, Britain is OBJ
viously powerless, and in the case of
the colonies she could only attempt
to influence their commercial policy
at the risk of creating grave Difficult
ties such as those which have recently
arisen in Ceylon. Moreover, even if
Britain succeeded in keeping Japa-
nese goods out of the empire the re-
suit would be that Japanese compe-
tition in foreign markets would be
intensified.
In the face Of these considerations,
1t Is suggested that the best course
Is for Britain: % to come to terms
with Japan over a division of markets
and (2) to recognize that Japan can
beat us at the cheaper goods, leave
that market to her and concentrate
upon goods Of finer quality. That has
been the tendency of British trade for
q half century, and 1t is argued that
as the standards of living of Eastern
peoples rise they will provide an in
creasing market for the better goods
Britain can supply.
The plain fact Is that it is not
Japanese competition which is the
chief trouble, but the alarming re-
striction in the purchasing power Of
the world everywhere. The extent to
which that restriction Is paralyzing
world trade Is shown in the annual
report Of the London Chamber of
Commerce II states that in 1888
world trade had fallen to one-third
of its value in 1929 and that in 1884
there was a further fall. Every coun-
try, in seeking to establish a trade
balance, has endeavored to increase
the ratio Of its exports to its i'm
ports; this has involved continuous
reduction Of imports, and, If presisted
in, must lead to the complete ex-
tinction Of international trade. Every
economist in every nation is aware OF
the vicious circle.
The economic ice age that has set
In cannot be broken up by COM
mercial war with Japan. It can only
be broken up by removing the re-
strictions under which international
trade Is perishing.
tcopyrisht. 1850