The daily independent., 1937-08-12
By ROGER w. BABSON


II 1937.-Reports from Nanklng
indicate that Japanese soldiers
started the trouble in North
China Presumably these reports
are true from a military stand
point. Actually. however, the
great Western Powers set the
stage for the struggle! Tariff de-
cisions of the United States, Eng
land France, and other industrial
nations lie behind the japanese
aggression in North China. 1 am
not upholding the japanese
butchery. I simply want to point
ont that the roots Of this trouble
are economic and deep. They
must be dug up or the contlag-
ration will spread.
Last year s11.OOO,OOO.OoO was
spent by the leading nations OF
the world for national defense.
This is FOUR times as much as
vas spent in l913-the year before
the War to End Wars" began
Europe was described as an arm
ed camp in August, 1914. Today
-nearly a quarter Of a century
later-the standing armies OF the
leading powers are a full million
men larger. Some nations are
spending half their budgets on
armies and navieS. Even the
peaceful United States with the
thirteenth ranking army and the
second largest navy. is spending
almost twice as much on war pre-
parations as she did twenty-five
years ago!
JAPAN Needs World Markets
What is behind this mad race?
what has come over the world
since the constructive Washington
peace conference of fifteen years
ago? The answer is: Economic
pressure. While parts of the
world are proSpering, other parts
are starvig. Foreign trade. the
lifeblood of world prosperity,
dried up to just a trickle in 1888
and 1884. 1t has slowly been re-
covering since then. but is still
far under the normal level. The
economic systems of those ma
tionS who depend on others for
their raw materials and markets
for finished goods have been
thrown completely out-of-gear.
Three of the So-called trouble
maker countries of the world to-
day belong TO this group-Ger-
many. Italy. and Japan.
These nations are suffering
desperate economic pains. Ger
many and Japan particularly de
pend on commerce to maintain
their prosperity. Lack Of credit.
rising world prices. currency de-
valuation-and most important
of all-higher tariffs rave crowd
ed both these nations back against
the wall. They feel that the other
great powers have cheated them
and abandoned them. They know
that they must seek their own
salvation. that the law of the sur
vival of the fittest applies to ma
tiOnS as we'll as to individuals.
Germany's troubles date back to
the War, the Versailles treaty, and
the destruction of her credit dur
ing initiation. Japan's problems
are of more recent origin.
Japan's Big Problem
In 1854, when Japan first en-
gagged in commerce with the West
she was 500 years behind the Oc-
cident induStrially. Her tremen-
dous progress since then is one
of the greatest achievements of
the modern world. Perhaps she
has grown too fast induStrially.
At any rate. she is today a most
efficient and low-cost manufac-
turing nation. Her little island
empire, no larger than the single
State of Montana, must feed a
population over half the size of
our own and five times that Of
Canada. She has no great colonial
empire. such as Britain'S, to pro-
vide supplies for her industries
and market places for her goods.
She must draw her raw materials
from overseas and there also she
must find the outlet for her
finished goods.
1t was our own Commodore
Perry who pried open the doors of
Yokohama and started Japan on
her modarnization program. We
have secured more benefits from it
than any other nation. We have
sold millions of dollars worth of
machinery of all kinds to hasten
the process. So far this year
urz ~