Evening star., 1950-03-26

the Marshall Plan Is producing in
something like so per cent greater
volume than preWar. In spite Of
the iron curtain drawn through
the middle of the continent. the
foreign trade of Western Europe
is close to or above the prewar
volume. Industrial production in
Japan, however, is still only two
thirds of prewar and foreign trade
has not yet reached the so per
cent mark. The japanese popu-
lation, unlike that of Western
Europe. goes on increasing by
about a million a year. The pre-
war 10 million japanese are now
80 million. Their real income is
only about 10 per cent of prewar
and it was a long way below
luxury then. Little has been
accomplished to restore the several
billion dollars in war damage to
housing, utilities and industrial
plant.
Possibilities of Disaster
The sluggish Japanese economy
contributes greatly to the lack Of
economic recovery in the rest OF
free Asia and the Pacific islands.
Except in the dollar standard Phil
ippines, there is no such thing as
multilateral trade in the whole
Pacific. What limping trade ex-
lists is carried out exclusively
through bilateral agreements.
with embargoes on non-essentials.
import quotas on all commodities
and all of the trappings Of ex-
change control and other restric-
tive practices. The whole area,
which should be booming in the
production of minerals and COM
mercial agriculture and which
lacks almost everything in the
way of consumers goods. is drift
ing into the same sort Of eco
nomic chaos which preceded the
debacle in China.
The plague of communism is
rampant. What little remains
free of Soviet direction can be
taken over by the Soviet when
ever they wish to expend the
money and effort. All of it plays
into the Soviet hand in the Far
East.
We face a situation, therefore,
with almost incalculable posi-
bilities of disaster for us. It Is
in many ways worse than that in
Western Europe two years ago
for it always contains the explo-
sive spark of anti-westernism.
Our naive belief that the Soviet
will not be able to control China.
and our most naive reliance on
the hoary tradition that China
will always absorb her conquerors
amount to childish whistling in
the dark, disregarding entirely
the ample evidence of the efficacy
of modern weapons and the use
of terror in government. We ad-
mitted in 1912 that Japan had
conquered an Eastern empire as
rich as any the world had ever
known, and fought a bitter war
to the finish to break it up. It
is time that we face the posi-
bility of the Soviet doing the
same thing and take determined
action to prevent it. The Soviet
seems sure to control China and
absorb much of the rest of the
Far East unless we quickly pro-
vide something positive for the
Orient to follow as an alterna-
tive.
Dollar Aid Urged
If and when we do face the
facts in the Far East, the solution
will probably be found to lie in
the same economic improvement
which has countered the Com
munist threat in Western Europe.
ECA dollars stemmed the Com
munist advance there. A consid-
erably smaller amount of ECA
help can stop its advance in the
Far West and might reverse it
if we make intelligent use OF
Japan. Without Japan and its
industrial base little worthwhile
economic improvement is possible.
Aid to areas dependent upon sub
sistence agriculture simply cannot
show quick results except as a
dole.
Unlike Europe, the Far East is.
or can be, largely self-contained
unit with japanese industry as a
core. The japanese realized that
and evolved their East Asia CO.
prosperity sphere. We can do the
same. American dollars, far from
making up a large and chronic
foreign exchange shortage as in
Europe. need only be used in the
Far East as pump-priming de-
vice and a means for stabilizing
the internal economies of the in
dividual countries. The principal
need is a foreign trade revolving
fund large enough to spur the
production and movement Of
goods in commerce among the va
rious countries and particularly
to restore the prewar volume Of
raw materials and manufactured
products to and from Japan. The
actual money needs for stabilizing
the primitive internal economies
would be pitifully small in COM
parison to our expenditures in
industrial Europe.
Japan, as the industrial main
spring of the Far. East, would re-
quire the greatest amount Of
initial help. Her industry needs
repair and modernization. She
must make up a lag in tech
nology of more than 10 years.
japanese business is without cap
ital or credit, and must acquire it
from outside. The japanese econ
omy has had a continuous net
capital deterioration since the first
year of the war. The one most