CHANGES .‘N THE VOLUME. AND ' ' COMM-ODiTY CHARACTER OF. JAPANESE-UNITED STATES TRADE; 1925-1935 . Tbésis far the Degree: of M.’ A. p ' Victor Earle Smith _ 19,36, ' L' HA 1‘.-. . 1.4;, .. . - «a- IMWMWWWI 3 1293 01083 5324 PLACE IN RETURN BOX to roman this checkout from your moord. TO AVOID FINES return on or More data duo. DATE DUE DATE DUE DATE DUE L- MSU I. An Affirmative ActiOIVEqud Opportunity Institution Wanna-9.1 mmqazas IN THE VOLULE AITD COLLIODITY CHmm‘st OF JAPJEE-WEITLD STATES mum, 1925-1935 .A Thesis Submitted in partial fulfillment of the requirements for the degree of Laeter of Arts hfichigan State College BY Victor Earle Smith 1936 I % Jam /7.; z THESIS ACIQEOWIEDCEEN'I‘ This study has been carried on under the direction of Dr. Harald S. Patton and owes much to his suggestions and criticisms. -i i} U fJSj-g U IL.” -L "a 194.,“ C O.. 4.1. ..‘- - .... I. ‘ -52‘.: c.“ '-~}&Et;v ... mABLE LE CONTENTS INHIUDUCI‘ION SOURCES PROCEDURE PART ONE JAPANESE-UNITED SLKTES TRADE RSLAEIOIS,1925-1935 HAPTER I THE RISE OF JAPAN AS A COXEERCIAL NATION The Beginning of Commerce Government Enterprise Political Expansion Growth of Population The Effects Of the WOI‘ld War Comparative advantage External Dependence and Foreign Trade CHAPTER II JAPANESd-UNITED STATES TRADE UNTIL 1925 Development The Status at the Beginning of Our Period CHAPTER III CYCLICAL AND MONETARY CONDITICNS AFFECTING J ANESE-LNITED STATES TRADJ, 1925-1935 Prosperity The Beginning of the Depression Depression Recovery Devaluation Trade Expansion CHLPTER IV GO‘FEEfiCiifi-ITAL Pi-‘ZSJL'SURES .ZLID COST Japanese Commercial Policy, 1925-1935 Japan's Problems Page H (DQUTQCRNH 11 ll 12 15 15 17 18 r) La 21 23 . .- I .r- ' . (ti-”3". .‘l. l \‘u.' a ' --\.. " "'7‘ "3-... I. av‘ ‘9 .'. u'£54-~". '."" v_‘.~. ‘NC 3 luv. V“- . . ‘3 .‘.".C.- Ana -JOAVIC'I“ 'I- , . .,..a‘ “.1...“ ......- as.-.-3 . 1 u ’ a ‘ c. aa- a I ' .CI "" flucnog .‘vl is 571' o :r.", t'.‘ ";“ S h... '2; h.“ __- .“U C‘.‘ _'_ p. . I “. H I' “NV-u -T-J Nix 'u. d c - .em 3‘ it § 71“ ‘ L5 "'~. ~ .1 .ea ‘. ff. “. ”we”: 7523*pr‘. ‘V'QJ e ‘D .. _ L 1 T?>"1 ‘ «.~~‘ 1‘ ‘ U‘(QH *3 ‘VA 5 4r- 3 V . ..V :1;"\ _ '4'“, Government Initiative Subsidies Export Promotion Rationalization Labor Costs _ The Militaristic and Imperialistic Policy of Japan United States Measures CKlPTER V SIGJIFICANT CHARGES IN carnH53E-UHIZED STATSS TRADE Rankin/s, 1125-1935 The General movement The Bilateral Trade Balance The Relationship to the Total Trade of the Two Countries Japan's Part in United States Trade The Part of the United States in Japan's Trade CHAPTER VI unless IN FCSLL'EIOI‘J TO mime spams- Jmucssr TRADE, 19:35-19:55 Japan The United States 1);un TITO THE IXPORTS CF TIE UNITLD STATLS FROH JAPAN CHAPTER I IMPORTS FROM JIPAN BY ECONCHIC CLASSES HAPTER II AGRICULTURAL PRODUCTS Silk Raw Silk Silk Haste Tea Pyrethrum Vegetable Oils Menthol Dried Beans and Peas CHAPTER III MARINE AND FORKST PRODUCTS Edible Fish and Fish Products Crab Neat Tuna Pass 29 '2 U '2 L, 35 34 35 37 39 42 43 45 45 47 47 48 52 01 O) 57 51 2 64 66 7O 71 74 74 76 77 . \ A .- F' ‘ 1:15 \nua.‘ 3... ,ou-i II!" . figs .no A ~..'. - I' 0“‘Q1 3 aavfioo. '2‘. "- Pu)“ .1“; i" v "'H;‘- v luv. I‘QOO 6% M‘ It'll. '7“.:. “0' -. ”A“ A “-99 an. ‘ vac-o .1 . .‘nl Jvl P‘I " I ‘auv- tr; -.‘.1 tun-:1 :15. ': 'HA.'I~I u.- .‘Vu'u .:~l Inf-.o‘.’ I . Viv-cw“ I'v-“ fl ‘ ~ \‘ I -_ v-‘-~" so. u...- ‘_.:‘_ . :-~r‘i :‘ ' “.v“ u‘-:.. - . .z‘s .- .+ II ‘. , . I.“ ‘2 “‘r n H. *v:.-l".‘-;l ' ‘ Odb'er' .9" r J .-._. ' "H :_' 2.1"; . 0 ~" ‘A u ““5 21:: I 2?: 0 '~ ' “at”; "I.lc ‘7‘ (9‘ “ 11‘ Qi‘tkr Fish Scrap and Fish meal Furs Natural Camphor CHAPIER IV ILIITU FACI'U‘ '{T‘il D TILED ILE 3 Total Cotton Manufactures "Other" Cotton Rugs Cotton Chenille Rugs "Hit-and-miss" Rag Rugs Cotton Rags Cotton Fabrics Cotton Haste Silk Manufactures Broad Silks Hats Hat materials CHAPTCR V THER MAEUEACTURJE PRODUCTS Pottery and Glassware Pottery Glass and Glassware Toys Electric Lamps Brushes CHAPTER VI SUMKARY New Items Variations from the General Average Failure to Recover Commodities That Have Regained Former Levels PnRT THREE as am TS 03‘ THE mums sums TO mist CHAPTER I EXPORTS TO JAPAN’BY ECONOKIC CLhSSES CHAPTER I I AGRICULTURAL LED FOREST PRODUCTS Agricultural Hi 0') (D \1 $1- F‘ O 0} v3.6; ' 84 84 84 86 87 88 89 90 91 91 94 96 98 98 98 102 103 105 106 109 109 110 110 112 115 115 119 . 119 (b y —__—-_r— —_——____._-* A Q I 3;! .2“.th '1- O «235' "\\;c‘“ 5'd J;:L .viu “V nu ' ,. ,‘ifl, 3:185 L1 3....5 ' utter ”"N'%““} gym-u. ‘ .a,.-- r '1 inc first Profits .‘.. ,: DJ. iv); ‘T‘k' laid " l i": " “I U.‘ ' v Ii. “R 5‘ nv-Euu a.eel 'MH v- f\§ S .IJ“ and J.ee- 29“? Tsw- .. ‘ “’fl---On E“. . . 5:-3‘ ‘Jw- v. ‘4'. in.-.” ma "n v m- ‘a : “"‘ 1‘93 ETL ”A. v.'_':‘;: .. n‘; .” Laam: '_ I MC Nu d‘d IT‘J‘ i.T‘ce Afim‘ ‘H‘ ai1< . ‘~ 1‘4 { Guy ‘. ‘h A vi uiLl 253‘ Q ‘ “e‘ ‘ 39 g “Q‘ \v H“‘ ‘WQ‘ “9‘ :‘- .‘Erl ~IWA‘ shit Raw Cotton Wheat Tobacco and Manufactures Hides and Skins leather Condensed kilk Rice Forest Pmeducts Wood Pulp Wood Rosin CHAPTER III METALS AND KAHUFACEURES, EXCEP EACHINERY AND VEHICLES Iron and Steel Iron and Steel Semimanufactures Scrap Iron and Steel Other Semimanufactures Other Iron and Steel Copper .Aluminum Lead Zinc . CHAPTER IV OTLiR INDUSTRIAL PRODUCTS Petroleum and Products Crude and Heavy Other Petroleum Products thhinery and Vehicles Automotive Products Industrial machinery Electrical Apparatus Office Appliances Aircraft Chemicals and Fertilizers Fertilizers Dyes Caustic Soda and Soda Ash Photographic and Projection Goods CHAPTER V TROUT! General Trends in United States Export Trade with Japan Nev Export Items Items Showing marked Recovery Items Failing to Recover CONCLUSION I ENDIX BIRLIOGRA?HY Page 120 123 126 127 129 131 132 154 134 135 139 140 140 145 145 145 147 149 152 155 154 155 155 155 157 158 160 165 165 167 167 167 167 170 171 172 ‘174 174 175 175 175 178 181 182 —-—‘——— _———— —_ '——_— .— q .azle - in Y. C #80 1", | Q 0“. l . - .I. v - 0 w? '0. - T i... - $-10 ' 15.0 . '“O "‘V. ‘5... - va k-‘. Table II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII. XV. XVI. XVII. XVIII. XXVII. XXVIII. XXIX. XXX. XXII. LXXII. XXXIII. XXXIV. XXXV. XXXVI. XXXVII. XXXVIII. XXXIX. TABLES Bilateral Trade of Japan and the United States United States-Japanese Trade in Relation to the Total Trade of These Countries Percentage Distribution of United States General Imports from Japan and from All Countries Percentage Distribution of Japanese EXport Trade United States-Japanese Trade in Silk United States-Japanese Trade in Tea United States-Japanese Trade in Crude Pyrethrum United States-Japanese Trade in Vegetable Oils United States Imports of Perilla Oil from Japan United States-Japanese Trade in Certain Vegetable Oils United States-Japanese Trade in Kenthol United States-Japanese Trade in Beans and Peas United States-Japanese Trade in Edible Fish and Fish Products United States-Japanese Trade in Fish Scrap and Fish Meal' United States-Japanese Trade in Furs United States-Japanese Trade in Camphor United States Imports of Rag Rugs from Japan United States-Japanese Trade in Certain Cotton Kanufactures United States-Japanese Trade in Silk Tissues United States-Japanese Trade in Hats and materials United States—Japanese Trade in Potter and Glassware United States Imports of Pottery from Japan United States-Japanese T ads in Toys United States-Japanese Trade in Electric Lamps United States-Japanese Trade in Brushes Percentage Distribution of-United States Domestic Exports to Japan and to All Countries Percentage Distribution of Japanese Import Trade United States Agricultural Exports to Japan United States-Japanese Trade in Raw Cotton United States-Japanese Trade in Wheat and Tobacco United States-Japanese Trade in Hides and Skins and Leather United States-Japanese Trade in Certain Hides and Skins United States EXports of Certain Leathers to Japan United States LXparts of Condensed Milk to Japan United States-Japanese Trade in Broken dice United States-Japanese Trade in Paper Base Stocks United States-Japanese Trade in flood United States-Japanese Trade in Iron and Steel United States-Japanese Trade in Certain Iron and Steel Semimanufactures United States Exports to Japan oprertain Steel Mill Products and advanced Lanufactures United States-Japanese Trade in Other metals and Manufactures 75 79 8O 82 85 88 92 95 99 101 104 106 107 116 118 119 121 124 128 129 150 162 155 154 156 141 144 ' 148 150 “If“ 6 .‘..-U a??? Jud-ca. r... thug-.. “QC, t..-" 11?. 1171. E. II. '5‘--. LII. hi Table Page XIII. - United States-Japanese Trade in Petroleum and Products 156 XLIII. - United States LXports to Japan of Petroleum and Products 159 XLIV. — United States-Japanese Trade in Automobiles and Parts 161 XLV. - United States EXports to Japan of Certain.hhchinery and Aircraft 164. XLVI. - United States-Japanese Trade in Fertilizers 168 XLVII. - United States-Japanese Trade in Certain other Chemicals 170 XLVIII. - United States Exports to Japan of Photographic and Projection Goods 172 XLIX. - Prices and Exchange Rates 181 m“ “‘1 1 3:19:51 mi. of : fizz: of thin as 1:: to 3170 3 Pic ' ufih‘m hm 19: l Writ! (1nd“: crimes through Items years i list for the U:- ‘H mm of an Wan tb two co: sat'nmonetary I laid States 33' 15118 irate mow “m that the .2 13 'mCific cm: INTRODUCTION Purpose and Scepe A great deal has been written in various places concerning the foreign tnde of Japan and of the United States. This study makes use or much of this material, combining divers sources and complementing them to give a picture of the bilateral trade between the United States and Japan from 1925 to 1935. The period considered begins in a time of prosperity (indeed, the peak year of Japan's fared: trade was 1925) and continues through a great world depression well into the recovery phase. It covers years in which Japan has attained added significance as s. market for the United States and has lost some of her tanner importance ass source of supplies, in which the balance of merchandise traded be- tween tln two countries has reversed, and in which the Japanese govern- ment's monetary and commercial policy and, to a lesser extent, the United States government's action have been significant factors deter- mining trade movements. The commodity character of the trade is dwelt upon that the effects of these rather unusual conditions may be observed in specific commodities. Statistical u! a! indiviiua' Inns of the 1': 35:93 statistic: 1:. 53m eons-.111 The date an fireman, t: at .‘am Proper 1 "shit, and Pie 1" the! these a 13:12.13. Chosen, 2"“ Nrritory 4132mm” Date «a: 3‘” ”Par 1. m" M the 0:11 this“. “Spits out “Bldg a“ “We the . SOURCES Statistical data were needed to show the movements of trade totals and of individual items. These were obtained principally from publi- cations of the United States Department of Conmeroe. The Foreig Comoros 393 Navigation 93 the United m has furnished the United States statistics and the Commerce Yearbook and consular reports from the Tokyo consulate have furnished the Japanese government figures. The date are not perfectly comparable by any means. Among other discrepancies, the Japanese statistics distinguish between the trade of Japan Proper and that of the Empire, and do not include Alaska, Hawaii, and Puerto Rice with the United States, while the United States includes these territories in compiling its own trade figures and also includes Chosen, Taiwan, and other possessions, although not Kwantung - Leased Territory and Msnchukuo, with Japan. Transshipmentsmay be differently entered in the two countries; goods in transit at the year's end may appear in the statistics of one omntry in one year end in those of the other the next; valuations are on different bases. Never- theless, despite these and other failings of the data the more signifi- cant trends are sufficiently well indicated.1 Among the sources of descriptive and analytical materials my be mentioned the Tariff Commission reports, the Bureau of Foreign and Domestic Commerce Trade Information Bulletins and Trade Pranotion Series, and the consular reports fran Tokyo, beginning with 1930, which the Departmnt of Compares loaned the writer, Of greatest use has been the Tariff Omission Report No. 105, Second Series, Recent Developments in the Parole Trade 2; Japg. ; l e? #105, p. 30, 32; 1, p. 374. PROCEDURE After a brief statement of Japn's rapid conmercial development and her trade with the United States at the beginning of the period to be studied, the factors of general importance with regrd to the comodity trade of these countries during this period are discussed. Significant chngee in the values of Japanese-United States trade, in the bilateral balance of trade, and in .the importance of the trade to the two countries receive considerable attention. A discussion of the tariffs of the two , countries in relation to their bilateral trade completes Part One. In Parts Two and Three, imports from Japan into the United States and exports frm the United States to Japan, respectively, are studied, first with respect to their general nature, and second by an analysis of the movements and nature of the trade in many of the more important ccmodities. However, the factors that were discussed in Part One are not treated again unless it appeared that certain ccmnodities were particulary affected. 1. PART OMS 'J’APAMSE-UNITED STATES TRADE RELATIONS, 1925-1935 CIL’LPI'ER I THE RISE OF JAPAN AS A COLL-LEICIAL NATICgN The Beginni_n_g of: Commerce For over two centuries before the uninvited visit of Admiral Perry's four warships in 1853 Japan had prohibited intercourse with foreigners, save for a very limited trade with the Dutch and Chinese at Nagasaki. in previous attempt by Commadore Biddle had failed, but accounts of the confinement of carts in American seamen, some shipwrecked and others deserters, who had happened upon Japanese shores and the annexation of California with resultant direct voyages to China,bringing merchant ships as well as Whalers into Japanese waters,led to the decision to try again. This time the Japanese were more willing and a treaty was signed on lurch 31, providing for the opening of certain ports for supplies, the preper treatment of shipwrecked Americans, trade to be carried on through Japanese officials, and the dispatch of an American.consul or agent after eighteen months, if either government deemed it necessary. Stmilar treaties with other countries soon followed.1 Conventional tariffs fixed the duties at rather low rates~for sometime, those of the final treaty of 1866 approx- innting five per cent. The 1894 treaty with the United States exacted no tariff concessions although this country received the benefit of those 2 granted to European powers. l 18,p.5-9; 22,p.16-30. 2 22,p.74-6,115,130,131. 2. After the Heiji restoration of 1868 intercourse with western nations proceeded at a faster pace. Already the development within Japan of a Ioney econonw and a wage-system had begun to undemine the feudal system, formally'abolished in 1871 to strengthen the central government. The restoration itself grew out of the increasing poverty among the samurai (Kr lords) that accompanied this development and the growth of house- hold and handicraft industry and the rise of a commercial class. These tendencies were furthered by the liberal policies of the new government, instituting a national code of laws, a national army, universal educa- tionsl opportunity, and certain democratic forms of government. Economic advancement was actively sought, though less so in the earlier years,of course. The currency system was reorganized, railways and telegraph lines were built, foreign trade was encouraged, a postal system was set up, and Japanese students were sent abroad to bring back western knowledge and western methods} Aggvernment Enterprise The first entries into the field of’modern industry were often by government establishments. Foreign engineers, technicians, and nachinery were imported and model mines and factories built and operated until they could be turned over to primate concerns. Silk reeling and spinning, cement, glass, shipping, iron and steel, railway transportation, and sugar production were thus aided. In many fields the government remains an important enterpriser. Less spectacular, but effective, methods have been subsidies and financial grants and loans in aid of specific industries, shipping, agriculture, forestry, and fishing. Public credit had scarcely been touched when the centralized government was established. Extensive bond issues furnished capital for industrial projects, for subsidies, for L 1 12,p.7-11; ' 22.12.99 3. colonial development, and for the extensive construction of public works by the local divisions. Through the central banks of Japan proper, Taiwan, and Chosen, large private banks, and special investment banks and coopera- tive institutions abundant credit has been supplied. Public credit has often been used to guarantee these banks against losses in financing comp :lsrcial transactions of doubtful safety, several instances of which oc- curred within the period selected for especial study. Tariff protection has been given in increasing measure since the early days. The rates under the 1899 treaties averaged about 10 per cent to 1906, and about 15 per cent to 1911. Under the general tariff law of 1911 protec- tion was afforded principally to finished manufactures and raw materials entered free of duty. The average late rose to about 19 per cent in 1913, fell during the world war to about 8 per cent because of higher prices ( at a time, however, when foreign countries were less able to compete ), and approximated 17 per cent in 1927 under the act of 1926. The 100 per cent luxury duty imposed in 1924 was retained on many commodities. Shipping subsidies, government inspection of exports, and other measures have been adopted to promote trade.1 Political EXpansion Trouble with China arose fromia dispute over the allegiance of the Ryukyu Islanders, claimed by Japan, and the murder by savages of a number of tham‘who were shipwrecked in 1871 on the coast of Formosa, a Chinese possession. A.Japanese expedition to punish the savages was resented by the Chinese government, but the difficulty was smoothed over for a time. Recurring offenses of the Koreans against Japanese cannon and, after the signing of the treaty of 1876 providing for the peaceful opening of the country, attacks upon Japanese residents there led to Japanese inter- 4. vention at the time of the 1894 rebellion which the Korean Government seemed unable to Impress. China, upholding her refusal to recognize Korean inde- pendence, also sent tr00ps and the Chino-Japanese War resulted. Winning, in 1895 Japan received Formosa and the Pescadores Islands as well as rec- ognition of Korean independence. The opposition of European powers pre- vented her taking also the Liaotung Peninsula.l Subsequently, Russia acquired certain rights in China by secret treaties and extended her influence in Manchuria and Korea. , Instead of evacuating in accordance with her treaty with China she continued to strengthen her forces until Japan sought to protect her interests by military resistance. Her decisive triumph won her the recognition of the world, the railway rights in southern Manchuria formerly held by the Russians, recognition of her paramount interests in Korea, the southern half of the island of Saghalien (Karafuto), and a 99-year lease of Kwantung Province. In 1910 the treaty of 1904 guaranteeing Korean independence was superseded by another formally annexing Korea. Japanese influence and enterprise continued to expand in Southern Manchuria, culminating finally in the episode of 1931 and 1932. As a result of harassistance to the Allies in the World War she received a nandate aver the Brianne, Pelew, Caroline, and Marshall islands in the South Seas, which she did not trouble to turn over to the League of Nations upon her withdrawal in connection with the Manchurian dispute.8 m g Pagination Meanwhile, the population, that had been more or less stationary at around 50,000,000 before the beginning of foreign intercourse, was increasing, roughly paralleling the economic growth of the country, that is, at an increasing rate, particularly marked from the beginning of the __* l 13, De 2‘; 22' Pa 106-8, 134-59e 2 22, p. 177-82, 199, 200; 12, p. 24; 6, p. 349-54. .s’l'hu‘ trivial! e 5. Iorld lar period. This was possible only because of the economic develop- ment, for other countries rarely welcomed Japanese immigrants and their new territories did not provide room for any significant numbers. The latter were already settled, for the most part, and the inhabitants lived so cheaply that the Japanese immigrant could not compete with them . That the proportion of the pepulation living in towns of over 10,000 rose from.16 per cent in 1894 to 36.6 per cent in 1925 reveals the increasing dependence upon industry.1 not only did industry expand more rapidly than the population, but the production of agricultural materials and foodstuffs also, so that the standard of living has risen. But, the rate of increase of the food supply has declined since 1920 and that of industrial production since 1926 while the growth of population continues and new workers are continually coming of working use.8 The Effects gthhe werld Ear By far the greatest part of the expansion enabling Japan to support her people came during the World war. In 1913 native domestic industry had not been widely superseded by modern factories; 890,000 were employed in manufacturing where the work was done mainly by machinery, while nearly 1,100,000 were employed in.industries depending chiefly upon hand labor. By 1921 these numbers had become 1,465,000 in factories where machinery perfomed most of the work, and only 737,000 in industries principally dependent upon hand labor. The number of factories increased from.9,403, of which.6,408 were not worked by power, in 1913 to 30,128 in 1920, 16,022 of which were not worked by power. The movement continued at a slower rate until, in 1926, there were 41,514 flactories, of which only 10,392 were not worked by power.3 ¥ 1 12, b. 385, 595; e, p. 245, 246, 249. 3 15, p. 62; 12, p. 396-9.- 3 59 #642, p. 4, 5. 6. Large orders for military supplies from the Allies and curtailed Euro- pean competition in Japanese markets and an opportunity to enter competitive foreign mrkets promoted a tremendous boom.l Modern equipmnt was installed and more advanced manufactures were developed. The textile industry advanced from the stage of coarse-goods manufacturing to the manufacture of finished goods; the machinery, tool, and chemical industries did likewise; and the metallurgical industry arose.5 The prosperity of the United States brought a demand for silk that sent sericulture to new heights. Foreign trade, adjusted for price changes by the Bank of Japan index of wholesale prices based on 1900 as 100, rose from ¥l,029,396,000 in 1913 to ¥1,424,742,000 in 1918. This was exceeded by the total in each year fran 1924 to 1929, however. The trade balance, unadjusted for price changes, turned positive from 1925 to 1918 for the first time since 1909.4 In nearly every other year since Japan entered world markets her merchandise balance has been passive. Most of the commodities that first became important during the war almost immediately lost most of their importance upon its close. Iron manufactures, machinery and parts, and, to some extent, drugs, chemicals, and medicines maintained their wan-time position. 0n the other hand, exports of copper and imitation Panama hats entirely lost their pro-war position. Japan's major activity remained concentrated upon the pro-war staples.5 Certain unfavorable results were also brought by the war, notably, inflation, disorganized exchanges, a belief among business men that the extraordinary war profits were the usual accompaniments of medern business,6 and an influx of workers to the cities unfitting them for rural life.7 E1711 effects were especially felt in the depression of L l 12, p. 304e 2 59 #642, p. 4. 3 21, p. 1. 4 12, p. 504, 594. 5 59 #642, p. 9-14. 7. 1930, although they contributed also to the difficulties of 1927. Comparative Advantage The population of Japan on October 1, 1936, according to the last national census, was 69,254,148, nearly five million more than in l930.1 The area of the country is 147,416 square miles, and the density of population about 450 per square mile. The population density in the United States was 41.3 per square mile in 1952. hereover, only about one-sixth of the land is arable, the rest being too mountainous or too sterile. Japan is a small, densely populated, highly industrialized country, dependent upon free commerce and a large navy. *Highly industrialized" is the only part of this description that would fit the United States. Japan has an extremely long coast line (1 mile per 8.5 square miles of land area) which facilitates commerce and fishing. Nearness to Asian.markets and water routes to nearly all markets are conspicuous advantages.2 Nevertheless, save for those industries dependent upon a natural advantage, such as camphor production, her exports to such highly industrialized countries as the United States' are apt to be those things in which a great deal of labor is required. The use of large amounts of capital in contrast to labor is not her ESEEé' Nevertheless, rapid advances have been made in the use of machinery; mountain rivers fUrnish abundant water power; rationalization has height- ened the efficiency of the organization of her industries; and the wide use of public credit has permitted rapid industrial expansion. In textile exports to Asiatic countries she besidecided comparative advan- tage, but she has not been able to compete successfully in our1markets over our tariff walls on any large scale. With relation to the United Sflates under existing tariff conditions her natural advantage in the production of raw silk, tea, pyrethrum, camphory and acquatic foods 1 40.1. 2 12, p. 25, 26. 8. he been inportant. These things are largely non-competitive. In other lines such as pottery, straw-braid, brushes, and toys low labor costs have been a predominant factor, along with experience and available raw materials. Labor also is a large item in raw silk and tea production. In the latter case, Japanese workers have not been able to compensate for the lower wages paid in other tee-growing regions by greater effectiveness. Household imustriee, with low capital costs, continue to producefl'rather important part of her cxports.1 whether it be in actuality an advantage to Japan or e disadvantage, the not remains that labor is only factor of production that she has in abundance. Therefore it is to be expected that it will be relatively cheap and that large accounts will be used. External Dgpendence 22.“. Foreign M Clay for pottery, limestone and other cement materials, and cOpper are about the only minerals which Japan possesses in adequate amount.2 at. has fairly large depoaits of coal of a poor quality, but has been on an import basis in recent yearns Other important raw materials met be imported. Timber, wood pulp, and sugar come mostly from her colonies, but raw cotton, wool, iron ore, pig iron, aluminum and nickel, petroleum, and rubber must be brought in free abroad.4 Therefore it is not surprising that 56 per cent of Japan's imports in 1926 were raw materials and 15 per cent were semi-manufactures. Raw materials, principally raw cotton, wool, and oil cake, had increased relatively from an average of 47 per cent in 1909 to 1913. Old and scrap iron and steel and wood pulp were the leading semimanufactures, which had declined slightly in proportion from an 1833 per cent average in 1909 to 1913 after being higher in almost all intervening years. In all these items her resources were limited. Finished manufactures constituted 13 ¥ 1 7.5, p. 39-41; 71, p. 457, 458, 467, 468. 71. p. 1840 81, p. 6-8; 8, p. 250. 8’ P. 9-19e #010) Ellis. .Pflrn...tcm._1.l. . '5 9. per cent in 1926, having declined proportionately from 21 per cent in 1909 to 1913 pursuant to the increased industrialization of the country. The pincipal item, machinery and parts, was imported, in practice, to be used in furthering manufacturing within the country. As yet the Jamnese had not been able to equal the technical and industrial advancement of western countries. Foodstuffs hid amounted to 12%,; per cent of the total imports in the years from 1909 to 1913, on an average. By 1926 their proportion lad risen to 15 per cent. Beans and peas were the principal import for domestic consumption; large proportions of the wheat and sugar imports 1 Considering the density were processed and exported to Asiatic countries. of her population Japan is remarkably self-sufficient in her food supply. The average adverse balance in the 9 years ending 1927 was '7 per cent of the total trade in all cormnodities.3 Japan's dependence for export marinate is fully as serious“ Should she lose these markets she could not procure the needed imports. Especially precarious was her position because raw silk, a raw material and luxury product particularly susceptible to the effects of the business cycle, ‘ Eighty-eight per cent accounted for 36 per cent of her exports in 1926. of the total production was exported, of whichthe United States took over 96 per cent. Over 40 per cent of her exports of all comadities nut to the United States and over 25 per cent of her imports came from the same country. Nearly 60 per cent of the Value of cotton textiles and over one-third of the production of tea and ceramics are sold in export markets.a kw silk, classified as a salinanufacture because of the reeling Process required for the fibers, composed most of the class of semi- Ll «1 42; 71, p. 193-200; 12, p. 596. a ,1. De ale 3 71, p. 189. {a e 59 #6‘2. ’9 15. 13. Fe 419; 15, DeGZe 10. nnnufactures which accounted for 42% per cent of Japan's total exports in 1926. This class 1nd declined relatively from an average of 50 per cent in 1909 to 1913. Manufactures had increased in comparison from 30 per cent in 1909 to 1913 to 41 per cent in 1926, marking the rapid advance of Japan in modern factory production, especially of textiles. Her advanhge in raw silk production and handicraft products, largely depend- ent upon low-priced labor and such raw naterials as she had, was giving way to developing industrial prodm tion. Wheat flour, refined sugar, and acquatic products led the food exports, which tonlled .7 per cent, having decreased in proportion from 11 per cent. Japan was becoming less self-sufficient with regard to food. The first two of these exports were in effect manufactured products since the raw natarial was largely im- ported. Consonant with the advancing industrialisation also was the relative decline of raw naterial exports (principally coal) from an 8% per cent average from 1909 to 1913 to 'I per cent in 1926. The blance of the exports were miscellaneous and reexported products.1 In 1925, Japan's world trade, in tame of gold, amounted to 3 per cent of the total trade of the world. The year was the highest for Jann's trade before the depression, but the gold figures discounted this sanewhat, for the yen was at a substantial disceunt.2 2 41’ 1926. v01. II. p. 590’ 591. 11. CHAPTER II JAPANE$~UNITED STATES TRADE UNTIL 1925 Developnent As early as 1879 the United States became Japan's leading customer as raw silk exports increased rapidly. In 1919 exports from Japan to the United States reached their highest point before 1925, ¥328,000,000. Raw silk, silk textiles, refined tea, straw-braid, fancy mats, and porcelain were the principal exports from the beginning.l Imports likewise advanced rapidly, but did not exceed exports in any years from 1875 to the World War except 1900 and 1905. In the early days the United States was 4th in importance as a source of imports, behind Great Britain, China, and France. The development of the spin- ning industry nquired Indian cotton and in 1893 India became the first supplier followed by Great Britain, the United States, and China.2 is a result of the World War and the completion of the Panama Canal in 1914,3 lowering transportation costs between Japan and Atlantic ports, the United States assumed a position of new importance in Japan's trade. In 1913 China, taking 34%; per cent of Japan's exports, was_the leading customer and the United States was second, buying 29 per cent of her experts, or H84,000,000.‘ In 1919, however, the United States was agin in first place,5and by 1923 the preportion sent to China tad fallen to 27 per cent and that going to the United States had risen to 42 per cent. a similar change occurred in the position of the United States as a source of Japan's imports, but in this case British India, supplying 1. p. 384s 1, p. 384. 3, Vol. VIII. 1). 6445e 59 #6‘8, 9. 19s 1; Fe 384, 385e “fiasco- ' 12. 24 per cent in 1913, and Great Britain, supplying 16,8 per cent, were sup- planted during the war. The proportion from the United States rose from 16.7 per cent in 1913 to 37% per cent in 1913 while that from British India declined to 16 per cent and that from Great Britain to 4 per cent.1 Iran 1913 to 1927 the percentage of raw cotton imports coming from the United States rose fran 27% to 55, that of iron bars and rods from 8 to 36, and of machinery from 21% to 40. In the last two items great gains in the war period were lost to a large degree as European countries ree'ntered the market. Wheat and lumber imports into Japan expanded tremendously during this time; about 35 per cent of the former and 70 per cent of the latter came from the United States in 192?.2 Silk and cotton yarns and tissues accounted for over 65 per cent of Japan's total exports in post-war years. Of these, the United States was the leading market for raw silk, taking 66;; per cent in 1913 and 94 per cent in 1927, and, in 1927, the second market for silk tissues. Although the proportion exported to the United States rose from 14 per cent in 1913 to 24 per cent in 1918, it had fallen to 13 per cent by 1927. Cotton yarns and tissues are sent chiefly to Asiatic markets.3 During the war years imports frcm the United States increased so greatly as to cause a reversal of the bilateral balance of trade in 1918, 1920, and 1921. In 1920 imports from the United States reached ¥873,000,000, tl'e all-time high. In 1920 and 1921 the balances with the United States and with all countries were negative, for Japan still required large amounts of raw materials while her exports declined greatly under the depression of 1920 and revived foreign competition.4 2h; Status g_t_ the Beginning 930113 Period In 1925 Japan took 433- per cent of the exports of the United States —_¥ g 59 #642, p. 18, 19. 3 559’ #342, p. 20, 21. 2548, p. 21, 22. lo Do Ran '10:- an n- e of e‘ EEi'.w4ro-rrwv.f.. rt- . .t. 13. and supplied 9 per cent of the general imports; the United States, much more important in Japan's trade, took 43% per cent of her exports, principally raw silk, and supplied 26 per cent of her imports (largely raw cotton). Despite her rather small percentage, Jenn ranked third as a source of imports for the United States, following Canada and the United ‘ .7 Kingdom, and fifth as a market, after Canada, the United Kindom, Germany, 1 and France. Crude materials, including raw silk, formed a much larger part and finished manufactures a much smaller part of Japan's exports to the United States in 1928 tlan of her total exports. Therefore her exports to this country would be particularly subject to falling prices and declining denand diould a depression come, the more so since raw silk was a luxury as well as a raw material. ' Imports from the United States \ried less from the norm of Japan's trade, the principal difference being a larger proportion of finished nanufhctures. for the United States, crude materials were a far more important element in imports from Japan in 1928 than fran all other countries, while other classes were correspondingly less important. In exports to Jenn, crude materials and semimanufactures were of more importance rOlatively than in all exports, while the other classes were considerably less significant. .In “I! M. The predominance of raw silk and cotton/\between Japan and the United States is in itself sufficient to make it canplementary for the most part. ’11. other comedities important in trade are largely complementary, how- '“1', although they often are dutiable. Japan's imports of crude petro- l’ml. lumber, old and scrap iron and steel, wood pulp, hides and skins, 1 41. 11" I..." 4 I ilfhllfltll-l’lr.§u§b$flu . ......... 14. and phosphorite are all necessary materials for her economy. These or substitutes are all to be had in Japan, but in limited amounts which must be supplemented. Moulton estimates that only 40 per cent of our - exports to Japan were competitive. Tea,undressed furs, camphor, pyrethrum, some vegetable oils, and certain fish and fish products are exported to the United States and do not compete significantly with domestic products, although there is domestic production of synthetic camphor. Only about 4 per cent of Japan's exports were "competitive" products before the depression, according to H. G. Moulton.1 1 lz. p. 47" 4'75. 15. camera III CYCLICAL AND momma? CONDITIONS momma JAEaNESE-UNITED STATES TRADE, 1925-1935 1.3enera1.correspondence exists between the trade of Japan and the 'United States with the world and with each other, the more so because of their mmportance in each other's total trade. Certain of the factors affecting their'mntual trade affect trade with all countries; others, of more limited incidence, may account for variations from the norm. Three phases are distinguishable in United States-Japanese trade during this eleveneyear period. The first, from.l925 to 1929, was a time of ostensible normality; the second, 1930 and 1931, was composed of depression years during which the trade of all countries, as of the United States and Japan, declined at an astounding pace; the third, 1932 to 1935, was characterized by marked recovery, beginning for Japan in 1932 and appearing in the statistics of United States trade in 1933. Prosperity The high points of JapaneseéUnited States trade corresponded with those of the total trade of the two countries. Japan's trade with all countries reached Y4,878,000,000 in 1925; her trade with the Uhited States amounted to ¥l,67l,000,000. While yen values of Japanese-United States trade declined until 1928, rising sharply in 1929 to Y1,568,000,000, United States statistics showed a rise from $612,000,000 in 1925 to $690,000,000 in 1929. The total foreign trade of the United States in the latter year amounted to $9,640,000,000 the highest in history save for the phenomenal year 1920.1 1 7.5, p. 136; 41; 42. 16. Wholesale prices declined in both countries during these years, part of a world-wide movement. Japan had not returned to gold since the war and her prices might not have been affected so greatly had she not been following a pregram of general retrenchment and deflation after the inflation and boom of the war period and the later reconstruction boom following the 1923 earthquake. The fall of yen prices largely accounts for the decline in the yen values of her trade with the United States. Tb external value of the you was moving upward, however, so that the gold value of her trade actually increased, as shown by the United States statistics.1 In 1925, Japan was following a program of retrenchment and recon- struction in an effort to come back to normal.2 War-time expansion had left her particularly susceptible to the troubles of the post-war depres- sion. Furthermore, the severe earthquake of 1923 had caused enormous damage in an area in whichwere located factories producing about 55 per cent of her output of electrical equipment and 30 per cent of the output of other machinery:5 The replacement of temporary structures was responsible for a large amount of building activity.4 Attempts to carry on this program in 1926 met with less success owing to unfavorable business conditions. A general tariff increase on mrch 29 failed to stimulate business as much as had been hoped.5 The year was eharacterised by rather general depression and financial stringency.6 The panic in 1927 was the result of a large volume of "earthquake bills", estimted at ¥207,000,000, which wereto fall due that year and which business menwere not able to meet. The government, closely connected with the banks, had guaranteed them against losses on commercial paper held at TableXLIXJppendix, p. 181. 51, p. 440. 59 #505, 1). 83s 42, 1925, p. 673. 51p p. 440, 441. 42, 1926,701. II, p. 338. Generator- 17. the time of the earthquake in 1923 and made of little value by that event, up to ¥100,000,000. Failure to enlarge this guarantee in time resulted in the panic} Tb panic was part of a world-wide recession, also felt in the United States, but it struck with particular severity in Japan, and actually did her good by forcing reorganization on a sounder basis. financial readjustmnt and some progress in rationalizing industry occupied the next two years. In nany ways Japanese industry was on a sounder basis in 1928 than it had been for sometime. Importers and manufacturers bought cautiously, fearing the projected removal of the gold anbargo would result in falling prices.2 Business activity was generally greater in 1929 despite the deflationary pragram of the new 3 This government came into office on a platform of Minseito government. retrenchment, a balanced budget without borrowing, and no loans to private business, looking toward the lifting of the gold embargo.4 As a result of this policy and the first signs of the world depression many projected enterprises were postponed. I The. Beginnigs £333 Depression In the United States, on the other hand, the recession of 1927 had given slight pause to most business men and the years 1928 and 1929 were nrked by great activity. Unfortunately, however, far too much of this ns‘in real estate and the stock market. Although price levels did not rise, credit inflation as present, for the rapidly increasing produc- tivity should have resulted in lower prices than existed. Loans to our European debtors helped to hide the danger here and generated an almost world-aide credit expansion. In 1927, partly to help Great Britain maintain the gold standard, and partly to halt the downaard trend of business in the United States, the Federal Reserve System initiated a “e 42. 1929, V01e II, Pe 390s 12. p. 310e 18, p. '74.. |goiter-- 18. policy of purchasing securities in order to lower interest rates, including the call loan rate. By 1928 the inflation was out of control. The stock market boomed and call rates went so high as to draw funds from domestic business corporations and from abroad. With the crash of security prices 1 Other factors of as great in October, 1929, the world depression had begun. importance were the result of the post-war maladjustments. New producing areas had entered world markets during the war, both in agricultural products and in manufactures. Japan is an outstanding example of the latter, while the United States benefited in both fields. By 1925 or so the combatant countries were ready to resume their old places, but found them filled. Intensified canpetition and the larger amounts of raw materials and foodstuffs being produced and no longer in as great demand by the countries that had largely finished reconstruction activities forced prices downward. Trade barriers rad been generally raised since the war by countries seeking a larger degree of self-sufficiency. Nationalism was more pronounced. Add to these factors the burden of war debts and re- parations payments, impossible to meet after the cessation of loans by the United States in 1928, because of the high tariff barriers in that country and the maldistribution of gold, and we have sufficient cause for a depression such as resulted. ‘ Depression During the depression period the Japanese government continued its conservative policy.2 The gold embargo was removed in January, 1930, in accordance with its announced program,3 despite the opposition of business men who thought their prosperity depended upon a currency not tied to gold. This move necessarily reduced the inflated currency and 1 19’ p. 48-540 8 18, p. 74c 3 67 #105. D. 15s 19. lowered canmodity prices1 at a time when the effects of the world depres- sion intensified the difficulty of adjustment. The government followed its "no loan“ policy very closely with the possible exception of the ¥70,000,000 agricultural relief loan, but attempted in several other ways to ease the situation and improve the condition of industry without much noticeable success. The index of yen prices fell from 175 in 1929 to 122 in 1931. As a result of this combination of circumstances the situation in 1931 was characterized by the United States Consul as one of the worst slumps in Japan's economic history.2 In a country where the government had typically taken the lead in industrial matters and come to the rescue of business men whenever hard times struck, the force of deflation under these conditions was particularly obnoxious to the individual. Japan was not alone in her difficulty. World prices in general fell 30 to 40 per cent by 1932;:5 prices in the United States fell from an index of 95.3 in 1929 to 64.8 in 1932.4 The demand for protection led to higher tariffs in nearly all countries of the world. The United States was among the leaders with the 1930' Shoot-Henley tariff. is the depression wore on and trade fell to new levels quotas and exchange restrictions were imposed in efforts to safeguard the balances of trade and the financial positions of countries. Intense agricultural distress in most countries and a rapidly growing nationalistic spirit led to further restrictions on trade, protection for agriculture, and attempts to develop self-sufficiency. These measures did not reach their utmost intensity until after 1931, but the retarding effect on world trade of the numerous obstacles that were in existance during this period was pronounced. Even had there been no 31, p. 4. 32. Pa 1e 19. I). lle Table XLIX, Appendix, p. 181- teaser-a \ lilac. ‘1‘ 20. such changes, falling prices enhanced the protective effect of specific duties making them a greater barrier to trade.1 Japanese exports to oriental markets were greatly handicapped also by the decline of silver values making Japanese exchange more costly.2 Monaured in gold dollars, the total world trade declined from $69,000,000,000 in 1929 to $30,000,000,000 in 1931, a fall of 57 per cent. The total trade of the United States in the same years fell 53 per cent from $9,496,000,UOO to p4,467,000,000 and the trade of Japan fell 42 per cent, from $1,965,000,000 in 1929 to $1,136,000,000_ in 1931.3 In yen the fall was 45 per cent, from ¥4,365,000,000 to ¥2,383,OOO,OOO,4 the higher exchange value of the yen causing gold figures to show a somewhat smaller fall. Japan especially, but also the United States, suffered smaller losses than did the world in general. The decline of United States trade with Japan in the period was from $690,421,000 in 1929 to $361,188,000 in 1931, or 48 per cent. It is apparent that Japan’s trade with the United States declined more than her trade with all countries although this same trade fell less than did the trade of the United States with all cmntries. The former was to be expected in view of the larger proportion of mw cotton and raw silk, both agricultural raw materials and raw silk also a luxury product, in her trade with the United States than in her trade with all countries. Nor is it unreasonable that the trade of the United States with Japan should decline less tlnn its trade with the world when we consider that the trade of Japan declined considerably less than world trade in general. The importance of raw materials in Japan's trade makes her smller decline rather unusual since raw materials are typically the most severely affected by a depression. However, the dependence of Japan 71. De 6. g, l°e 18. p. 3110 '71, p. 7. 71’ Fe 503. fiGNH for so many things needed for her industry may have helped to keep her trade nearer pre-depression levels. Recovery Devaluation .thhough the recovery period was said to begin with 1932, it really dates from the reimposition of the gold embargo in Japan in December, 1931. The British suspension in September appeared to be the sign for an outflow of gold frothapan, which, following a cabinet crisis and the replacement of the Minseito government, preceded her departure fromgold.l The depreciation of the yen preceeded at a rapid pace in terms of gold in 1932, falling at a slower rate in 1933 and 1934, and holding fairly steady in 1935.2 The domestic price level rose but much.mmre slowly.3 The new government increased expenditures and borrowings at a.rapid pace. Currency inflation was promoted in 1932 but did not go far enough to cause a very great rise in prices. An abundance of funds was available at relatively low interest rates. lhen the gold embargo was reimposed gold shipments could no longer be used to balance the more intense demand for foreign currencies by holders of yen than for yen exchange by holders of foreign moneys. The resultant rail in the exchange value of the yen enabled foreign buyers to pay the same price in terms of yen with smaller amounts of their own money, which gave a tremendous impetus to experts from Japan. Since inflation did not take place within the country to any marked extent there Ias nothing to send domestic prices up as long as their stocks of raw materials lasted. has it became necessary to import raw materials the yen had much less purchasing power in world markets than formerly 1 32, p. 1e 4 33, p. 20 2 9, 3 Table XLIX, AppeIfiiX, p. 181. 22. and prices were found to be correspondingly higher. Higher raw material prices tended to force up costs and thus domestic prices. An increased denand for capital and labor from the export industries wouldalso tend to force up the prices of these factors of production. However, in Japan opposing tendencies such as the over-supply of labor and the appeals of the government actually resulted in lower wages. In any event wages and prices of domestic goods would have responded but slowly. Export prices, partially determined by slowly-rising domestic costs thus advanced much more slowly than the prices of imports in which the adjustment for the depreciated exchange took place almost at once. The Japanese Minister of Finance was given the power to prohibit or restrict dealings in foreign exchange, but it does not appear that he used it very extensively. His power was later extended under the Foreign homnge Control Law and dealers in and holders of claims to foreign currencies were required to report their holdings or transactions. The 1 Although primary object of this was to prevent the flight of capital. the depreciation of the yen was probably not actively encouraged by government intent, the administration was certainly not anxious to stop it as long as the results seemed beneficial. Agricultural distress reached new depths in 1932, but industry was practically booming due to the favorable export situation and the demand for military goods that accompanied the sine-Japnese conflict.2 L spirit optimism deve10ped in 1932 that faded rather rapidly in 19333 with the panic in the United States. The unit holiday of that year assured very serious proportions for a time and an extremely large number of banks remained closed after the moratorium. Exports of gold were not renewed, however. As in the case of Japan there had been a change of administration i 1 See also p.31. 2 33. p. 8’ 5. 3 36. January, 1933, Do Is .ns4juljlmtsnmnla Us, “.94.. w . . . A 23. and radically changed policies ensued. The departure from gold was to facilitate a policy of reflation; certainly there was no suggestion of a loss of gold sufficient to force the United States from the standard.1 This episode temporarily halted Japanese trade with this country and caused great uncertainty there as to the effects upon yen exchange and her export trade of the fall of the dollar.2 This fall did check the decline in yen- dollar exchange, and it rose to somewhat higher levels in the next two years.3 The British devaluation had given that country an advantage over the United States in selling to Japan, for the yen was worth '78 per cent of per in terms of sterling in 1932, but only 56 per cent in terms of dollars.4 Afterthe fall of the dollar in 1933, United States exporters improved, their positions, although rising commodity prices in this country largely offset the exchange advantage.5 The upturn of prices that began in 1933 in the Undted States6 was partly the result of better conditions that prevailed throughout the world, partly the result of the depreciation of the dollar, and partly the result of the NBA and the AAA. The upturn in the trade of the United States with all countries and with Japan also began in this year. On January 31, 1934, the gold value of the dollar was provisionally fixed at 59.06 per cent of the old parity.7 Trade Expansion Japan‘s trade expansion continued in 1933 and 1934 despite diffi- culties. The rapid depreciation of the yen mant rapidly rising prices of imported raw materials which are so essential to Japanese experts. at first accumulated stocks postponed the ill effects of this; in later years rising costs from this source have been nearly balanced by increased effi- ciency and lower wages as motioned above. Production costs have probably risen less with recovery in Japan than the United States. 19, p. 121, 122. 5 36, June, 1933, p. 1. 36, lurch, 1933, p. l. 6 Table XLIX, Appendix, p. 181. Table XLIX, AppendiX,.p. 181. 7 9. 33, p. 6 IFCflNI-I' a. xiiifiiflfl.§m¥§. Hid. ... 34! N . . 2. , ... a . New investments had fallen off greatly from 1929 to 1932, but were resumed in 1933 and 1934 in large amounts, although still far below those of 1926 to 1928. In many cases these were projects postponed in 1929. There was a temporary lag in business during the first half of 1935 resulting from apprehension over international exchange and currency developments, uncertainty over United States condition, fears of a curtail- ment of exports as a result of foreign restrictive measures, and tightness in the money market during March and April. A marked improvement in busi- ness in tin United States and the speculative incentive offered by the Bale-Ethiopian War Joined with the continuing favorable factors of the recovery phase to send foreign trade above the peak year 1925. Pregress toward rationalization, the coordimtion of exporters, and the diversi- fication of exports continued.2 I Government expenditures on a mammoth scale accompanied by unbalanced budgets and extensive borrowing marked the recovery period in both Japan and the United States. Japan's national debt increasedfrom ¥6,032,393,000. on December 31, 1929, of which ¥l,446,896,000 was foreignz,5 to ¥9,982,902,000 at the end of November, 1935, of which ¥l,396,613,000 was foreign? The United States had reduced its national debt under previous administrations, but during this period it rose to a new peacetime high of over $30,000,000,000. This, honver, is wholly internal and our resources are such as to make it a utter of less concern than is the debt of Japan. Even when measured in old gold dollars, the part of Japan in world trade increased during this period. Her share roae from 2.9 per cent of the world's import trade in 1931 to 3.4 per cent in 1934 and fron. 3.0 per cent of the export trade in 1931 to 3.5 per cent in 1934. The United States in the same period lost in relation to total world imports, falling from 10.1 per cent so, Jamnry, 1935, p. e, 7. 38, _pe 1. 2e 12, pg. 242s . 37, December. 23, 1935, p. 10. IFGNH kw... . :r . ivnmhuawflrflflj \ to 8.3 per cent. Its share of world exports fell from.13,0 per cent in 1931 to 11.5 per cent in 19:34.1 Using the countries' own currencies we find that the proportion of trade with Japan in the total trade of the United States Jumped from 8.1 per cent in 1931 to 9.2 per cent in 1932, but it failed to hold this gain and was back at 8.3 per cent in 1935.2 .A similar movement took place in the relationship of JapaneseéUnited States trade to the total trade of Japan, measured in yen. The proportion was 32 per cent in 1931, Jumped to 35 per cent in 1932, and thereafter declined to 27 per cent in 1935.3 This movement may be accounted for in large part by the following facts: Exports of raw silk to the United States rose in value in 1932 over 1931, but fell in subsequent years. Raw silk also accounted for a larger proportion of the total exports of Japan in 1932 than in following years, although not as large a prOportion as in preced ing years. Imports from Japan cmstituted 10 per cent of total United States imports in 1932, more than in any other year of this eleven-year period. Raw cotton, an important item.in.Japan's import trade, was secured more largely from this country in 1932 than.in the years before and after, the spread between the prices of United States and of Indian cotton having been such less than usual in that year. Japanese imports of raw cotton from the United states doubled from 1931 to 1932. The increasesin.these two commodities in 1932 were the principal causasfor the relative increase in importance of'Japanese-United States trade in 1932. Since that year -eilk hmports into the United States- have declined and Japan's cotton has come more largely from other sources. Imports from the United States have become larger than exports to it.reversing the pro-depression situation. The tremendous expansion of Japan's exports has taken place 1 42: 1935. De 376; 1933, P. 348s 2 General imports and domestic exports, 41 and 58. 3 71, p. 503; 42; 39. ' 10 26. principally in commodities not adapted to the needs of this country, so exports to us lave become much less important than formerly. This decline Ias tongreat to be balanced by the increasing importance of imports from the United States. 1 1 67 #105, Tables p. 4, 5, 8, 16, 19, 34-6, 100. See also p. 43 below. 27. CHAPTERIV GOVERIWAL LEASURES AND COSTS Government activities rather closely connected with cyclical and monetary conditions have been briefly mentioned in the preceding section. This was done in order that the effects of governmental policies might be seen and that the cyclical changes be explained in some degree. How- ever, many of these measures and others less directly related to the above deserve the fuller treatment which is given here. Jagnese Commercial Poli , 1925-1935 Japan's Problems A long history of economic leadership has perhaps given the Jap- anese government a greater feeling of responsibility for the economic welfare of the country tlnn other governments have whose recent past has been somewhat less concerned with such subjects. Probably of more imediate importance is the peculiar social and financial structures wherein some lelf dozen families hold about 90 per cent of the national wealth. They c00pe1ate closely with each other and exert a great influ- ence upon the government} thus effecting an extensive control over the industry of the whole nation. Another factor of great and increasing importance is the threat of an excessive population. Until 1926 the increase roughly paralleled the country's economic growth. The latter has slowed down since 1926, however, while the rate of population increase has advanced. The former growth was accompanied by higher standards of living, but a continued economic expansion as rapid as that during the World War ani the following years is hardly to be l 605, P0 154.5; 70.7, Pe 186s 28. expected. Furthermore, although population pressure has already resulted in extensive overmanning of both private and government working staffs, with the caing of working age of large numbers already born, the problem will become intensified.1 Another problem of great concern to the government was Japan's persistent import balance of merchandise trade. The negative balance of Japan proper averaged about¥250,000,000 from 1925 to 1928 and about ‘¥70,000,000 in the next 6 years, far less than the normal post-war bal- ance. In 1935 the balance of trade reversed and Japan preper had an export balance of7¥27,000,000 although the balance of trade of the Empire rmined negtive as it had been previously, although by only ¥15,OOO,OOO.2 In the first half of 1936 tariff pressure on major exports and large imports for the munitions.industries gave Japan the largest import balance for the six months since 1931.:3 For the period from 1923 to 1928 a positive balance of invisible items was not»enough to offset the trade deficit and there was an adverse yearly 4 lsummaryof net balance of payments of ¥102,000,000 for Japan proper. the balance of paymnts of the Japanese Empire, 1927 to 1934, reveals that active balances from shipping and other services rendered to foreigners exceeded the passive merchandise balance by small amounts in 1929, 1932, 1933, and 1934. Before 1929 there was a net capital movement into Japan, offsetting debit balances on account of merchandise and gold movements and services.5 In 1929 she was a net international debtor to the amount of !$10,000,000.“ Since that year the net movement of capital has been outward, mostly in the nature of investments in foreign securities and in 12, p. 385, 386, 396-9. 67 #105, p. 14, 23,‘24; 39, p.1. 39.5. 13, p. 419-22. 67 {105, p. 23, 24. 18, p. 2740 atlfiulk‘ 29. Inchuria and rcpatriation of Japanese securities. This has been balanced Largely by net gold exports.1 Whereas in former years the positive balance of trade of Japan proper with the United States was not large enough to offset her import balance with all other countries, from.l932 until 1934, when these balances were reversed, the import balance with the United States was greater than the export balance with allother countries.2 In 1935 her import balance with the United States was smaller and was exceeded by her eXport balance with all countries, giving a net export excess of ¥26,837,000, although the mPn-o um had an import balance of ¥14,700,ooo.3 Government Initiative Jepanfis industrial and commercial development has been accompanied by more government aid and control than that of any other country in the same era. Many industries were first begun as government enterprises, particularly mining, textiles, railways, shipping, iron.and steel, and sugar refining. These were to be turned over to private enterprise as soonmas practicable, but the government had still 371 factories as late as 1928. Emblic policy has seemed to call for the continuance of the government in the fields of transportation and communication. In addi- tion to direct activity of this sort there has been an abundance of subsidies and loans from.the regular and special banks.4 There are, several government monopolies and control schemes in Operation; there has been economic and.military penetration of the mainland; emigration to Brazil has been encouraged; and exports have been promoted by govern- ment inspection, by the depreciation of the yen, and by other methods. Of course, the protective tariff has not been omitted. Had the government . l 67 #105, p. 23, 24:. 2 67 #105, p. 8. 3 39, p. 1. See also p. 42 below. 4 13, Po 312-18. 30. not actively encouraged the industrialization of the nation, progress would have been.much slewer in spite of the fact that agriculture was in a state of diminishing returns, for, in addition to the lack of experience and of capital, the Japanese were greatly inhibited by reverence for the traditions of their fathers. or greater significance than the direct participation were the energies spent in establishing general economic Objectives, in studying and adapting the institutions of other countries, and in promoting the more or less simultaneous development of the parts as a coordinated economic system.1 Subsidies Subsidies have taken the forms of‘direct grants (more or less) and of loans (not always repaid) from government-controlled banks. Among others, there were loans to the silk industry and to shipping concerns in 1930. There have been aids given to almost the whole field of economic activity. Intensification of the effects of the world depression after Japan returned to gold on January 1, 1930, resulted in a subsidy con- sisting of half the wage cost for the promotion of local engineering works in which the wage bill would exceed 30 per cent of the cost, as a measure to relieve unemployment. Since shortly after the time of the .Restoration, the shipping and shipbuilding industries have received attention. The usual methods, reserving coastwise trade for vessels of her own nationals, granting profitable mail contracts, and putting a tariff upon imported ships, are accompanied by the admission free of duty of_shipyards' steel imports and the payment of a bounty to Japanese steel manufacturers upon the steel used in building or repairing ships in Japan. In 1930 subsidies were granted to shipping and shipbuilding. ‘— 1 18, p. 336-7 1 a s141q1a...7|..111l1..x.ww~ \ 31. These often permit the government to require low freight rates upon certain commodities when it desires. A few more samples of the range of these grants follow: automobile production, small business men and unnu- facturers, indigo and fertilizer nanufacturers, insurance commnies, and stock exchange. Particular efforts lave been trade to build up the indus- tries needed for national defense and self-sufficiency. The prevalence of governmnt aid has nude the people unusually ready to turn to the govern- ment for support in crises and to do their best to shift losses to the state.1 Export Promotion Two export guild laws were passed in 1925 permitting the combination of exporters of the same kinds of articles. Although receiving special privileges, few had attained any great mccess by 1930? but in later years they became more prominent.‘5 mued merchandise must meet the government's standards.‘ Among other measures of more recent years were the Export Indemni- tusxion Law of 1930, the Exchange Control 3111 of 1933, and the Trade Protection Law of 1934. The first of these was designed to encourage exports through indemnifying banks for losses on loans secured by exports in accordance with the law. It apparently did not increase exports vary greatly.5 Although the Japanese Finance Minister already had the power to prohibit or restrict dealings in foreign exchange (not, apparently, used very extensively),6 the Foreign Exchange Control Law was put into operation in May, 1933. It was originally intended to prevent the accumulation of Japanese funds abroad, but the provisions were extended to cover also commodity exports that the government might 6.5, p. 377-93. 31, D. 78s 38, p. 2. 12, p. 1440 31, D. 79s 7005, p. 591. ODOIO-Uihflk‘ 32. be able to limit them if necessary to prevent the raising of foreign tariff barriers.1 These things it set about to do by giving the government the authority to prohibit or restrict transactions likely to create the flight of capital. The tmnaactions included and the manner of control were set down in detail in ordinances of the Department of Finance. Remittances with the object of transferring capital, purchases of foreign securities, and loans expressed in foreign currencies might not be made without the pemission of the Minister of Firance. Holders of and dealers in foreign exchange and securities expressed in foreign currencies were required to report their holdings and transactions. The government could require holders of securities or claims expressed in foreign currencies to sell 2 them to the Bank of Japan or others to be designated. Through these ‘ , ' regulations exports could be controlled should it seem desireable. Efforts continued in 1934' toward the reduction of the restraints put upon Japanese exports by foreign countries, but with little success. There were at this time 61 export guilds maintaining strict control over produc- tion, exports, and prices, hoping to forestall retaliatory measures. The Trade Protection Law in force since May 1, 1934, was intended to protect Japan's foreign trade, particularly against restrictive measures undertaken by the receivers of her goods: The government, . given the power by this measure tenever it feels it necessary for the purpose of safeguarding comrce or adjusting trade in answer to measures undertaken or proposed by foreign countries, nay impose additional duties not to exceed their value upon specific articles for a specified time, mayreduce or remove import duties, or may prohibit or restrict imports or exports.3 1 36’ “amber, 1933' p. 1’ 36’ 37. 8 1. p. 338' 339. 3 1. p. 423. "I 1“ h ‘1 ‘v ‘I 33. not extensively treated in this section since it has been previously dealt with is the factor of greatest importance in promoting exports--the depreciation of the yen. The immediate effect of this was to lower the prices of Japanese goods in terms of foreign currencies, while yen prices did not respond immediately. While the yen was flalling Japan could buy raw materials, process them, and export them later'at a lower exchange rate. This adlantage has disappeared1 and yen prices have risen, as was bound to happen, especially since such a large part of Japan's raw materials are imported. Large stocks of certain important materials were on hand at the time of the departure from gold, however. This postponed the evil effects of rising hmport prices for a time, while falling wages and the haproved organization and greater efficiency that have resulted from the rationalisation movement to be described in the ensuing section went a long way toward nullifying the effects in later years. Nevertheless, they cannot be permanently avoided. Rationalization A.great deal has been done to lower costs by the rationalization movement, sponsored'by the goverment. Mere efficient methods, better equipment and machinery, and unified action to control production have resulted. The 1923 earthquake, the 1927 financial panic, and the 1930 deflation seeded out many concerns, leaving the others in a more favor- able position to compete. Agriculture and small-scale industries have not benefited greatly with regard to methods and equipment, but unified purchasing and selling through guilds.and‘export associations have aided them as well as the others. This programnwas pushed more intensively with the beginning of the depression. The overproduction that has deve10ped in many industries has 1 40.2. 34. been largely controlled through the associations that have been set up. The Government is Opposed to price-cutting in foreign markets and flood- ing them with goods, fearing retaliation.1 Labor Costs wages are far lower, in Japan than in the United States, but less so than is cannonly believed. In December, 1934, the average daily wage for _male workers in 59 classes of industry was 2.03 yen for 10.27 hours work, and the average daily wage for female workers in 14 classes of industry was .76 yen for 9.27 hours.8 Hours were out about 15 per cent in 1929 for women and children under the factory law passed in accordance with the Geneva Labor 3 Convention. In addition to regular wages, workers receive bonuses and supplementary services of many kinds. Many factories employing women furnish dormdtories, recreation, and other conveniences, besides feeding the workers at low cost.4 The small industries and household enterprises usually offer lower wages and fewer advantages, while they demand longer hours. Simple tastes and a cheap standard of living may be satisfied reasonably well with these wages.5 The large surplus of available labor in agriculture,where 6 conditions have been much worse, especially since 1929, presses wages down. 7 and industrial Industrial workers form a very small part of the whole prosperity depends so Largely upon export markets that to a considerable extent wages have depended upon the prices that could be obtained in them.8 However, despite increasing prosperity, wage rates in 1934 were 8.9 per cent below these of 1931.9 Other factors making this possible were the acceptance by'the'workers of the government's claim that such a trend was necessary in ¥ 1 '37 #105, p. 27, 28; 37, July 24, 1935, p. 15, 1e, 18, 19; 1, p. 687-90. 3 355p. 137. 4 65913642. Po 7- 71*105 p. 26; :55, p. 134. 5 57 e 6 3 $103. p. 26“ 35' P. 134-0 Ifs‘a’ p. 7. 9 35' p- 6 Po 27s 35. the national emergency and the rapid growth of population (nearly a million per you-Ll Actual labor costs are higher than the wage scale would indicate. The effectiveness of Japanese workers and industry is less than that in Western countries in almost all industries but.textiles.2 Nevertheless, being a newly industrialized country, her efficiency has been rising relative to 3 that of the older industrial countries and faster than wage rates. The Militaristic and Imperialistic Policy of Japan The army and navy have always been unusually influential in government affairs in Japan.when they chose to exert their influence. Under the conserwative Minscito government the expenditures for military purposes were reduced markedly. As a consequence, the military party was active in securing the overthrow of that government in 1931 and outdid itself when it again received power. Large army and navy budgets since that time have meant heavy expenditures contributing largely to industrial prosperity and to_the national debt.4 The army,apparently, began the trouble in Nanchuria without the consent of the government,which found itself obliged to support the action. Sizeable exports from Japan to the new state of Mhnchukuo have resulted from the change in control, but shipments to China have declined. Although it is difficult to be certain Just what is the Japanese policy, linehnkuo is the most recent step in a long-developing program.of penetration of the mainland. She had previously made extensive investments in China and Manchuria, but after the establishment of the state of manchu- kuo, a more definitely planned program seems to have been instituted. Japan has been given the right to maintain certain of her’military forces in Menchukuo for cooperative maintenance of the national security; the Japanese- 67 #105, Pa 27e 6, Po 204-5e 35, p. 15, 15. PUMP , -. 3.2.11. minimise-154.”... s 36. government-controlled South manchuria Railway Company is to operate all Manchukuo-owned railroads and carry on.mmch new construction; and, in general, Japan has pretty largely financed the development of the state. The Hanchukuo Information Bulletin, No. 37, published March 1, 1933 by the Department of Foreign Affairs of the Manchukuo Government states, "The principle of the open door'and equal opportunity will be observed..." Discrimination against others than Japanese has been charged, but upon uncertain foundations, though it is said that Japanese oil companies receive a different classification and, in that way, a lower rate. How- ever that may be, Japan, including Korea, took over 48 per cent of Manchue kuo's exports in 1933 and furnished over 66 per cent of her imports. Euro- pean and Amrican firms are leaving or losing out, save where there is little Japanese competition.1 According to H. F. Timperley, manchukuan officials are unable to suggest any openings for American capital. Japan has many legitimate trade advantages, but the foreign merchants complain of smuggling across the Krantung leased territory from Dairen and of Japanese merchants importing piece goods through the Japanese parcel post, thus evading the duty.8 Host of the Japanese in Manchukuo are advisors, engineers, officials, skilled workers, merchants, etc., but there are practically no permanent settlers. The Japanese farmers live too well in comparison with their efficiency to compete with the Chinese, but colonization schemes are being continued, nevertheless. Many say that the resources and market have been overestimated and that many of the investments made so far can only be justified as stragetic measures. In any event, it will be long before the returns Justify the economic expenses, let alone the political and military disturbances.3 lhny believe that the pressure of population has been the cause for 1 6.8. s 20.5, p. 300, 301. 3 6.8. r . 3.34 managimlfifl . w 37. such an adventure as this in Manchukuo. H. Vere Badman, an English Observer in Japan, differs,stating that in his Opinion the increase of population has served more largely as a defense for policies actually carried out for national political reasons. In any event, if the economic pressure continues unalleviated by the expansion of exports the nation will probably resort to war before the people will accept lower standards of living.1 United States Measures The attention of the United States government has been given princi- pally to domestic recover. Foreign trade is far less vital to the econo- mic welfare of a country as large and abundantly supplied with raw materials 2 as ours. The balance of merchandise trade has been positive ever since 187% and thus has given little concern to the government although this may not be a very sound situation for a creditor country as regards the world at large. In 1929 and 1930 the export balance amounted to over $700,000, but it averaged only $276,000 from 1931 through 1935. Trade with Japan appears not to have been a decisive factor. Such measures for the promotion of exports as the export banks set up under government sponsorship‘and the trade agreements have not affected trade with Japan directly to any large degree. Two measures for domestic recovery have been far.more important, the NRA and the AAA. The former increased costs in most industries by requiring higher wages and shorter hours at a time when recovery had scarcely begun, if that. It permitted combination within the industry which resulted in higher prices, thus minimizing the flavorable effects upon exports of the depreciated dollar. Quotas or additional fees were imposed on several imported commodities under this law in order to protect domestic producers uner the codes. 1 18, p. 26, 27, 32.4, 218. 2 7.5, p. 110. 38. The AA; achieved the same results in a different way, with the aid 01' a severe drought. Crop reduction, government loans on surplus cotton at a fixed price, and processing taxes helped raise the prices of agri- GIIltural prod uc ts . . .e an L J \V { Isl .llll . NF... t.. .I—, n .l .2423. ...._ .. .. ul . . .... . a 39. CHAPTER V SIGNIFICANT CHANGES IN JAPANESE-UNITED STATES TRADE RELATIONS, 1925-1935 The General movement movements of United States-Japanese Trade, 1925'22'1935 Table I, page 40, presents the values of United States-Japanese trade from 1925 through 1935. The Japanese currency givesgketter indication of the movements as they affected Japan, while United States dollars are more significant with regard to our own economy. .Aside from currency differences, the import statistics are likely to be more accurate than export figures for the same trade.1 In yen, the high point for the total trade was in 1925, with a value of 1.7 billions of yen, although dollar values show the high point to have been 690 millionsof dollars in 1929. Falling price levels and the rising exehange value of the yen account for this variation in large part. Measures of the physical volume of trade have been found only for the trade of these countries with the world. Furthermore, they so frequently disagree with each other that it has not been thought worthwhile to present any in this study. It is probable, however that the trend of Japan's exports and imports, by quantity, was upward before the depression. It is presumed that trade with the United States, who filled a larger place in the total trade than any other country, followed similar lines.2 1 For other variations see footnotes to Table 1, page 40. 2 a? #105, p. 15. Illrlu 1IJIAI .‘ Inna l4n.l lilll' CIIII. 40. ; .mn new .a .ma a .lmnmal on use .Aon-mmmal as “sous ooaoosooom ooomsm sooasp ..muenaav an ego .Aonnmmaav non .o .as "Scam mofipmapsum cmommmsh “moonsom .om¢.oamw use enoa now seam» wsaomommonnoo one .mpnomwooe woaooaosfi apnomum .soHpnsommoo Hog apnomaH .ensdaoe can sense on» weapons» than he cosaspno one: monsmfiu rooms» no ooqmasnc one .uoo oo moospm oopHsD one no cmpnomno oapmoeoc: on» .mpnomuo non condos“ smash ho upsomuc asnonom one .ncssanfigHsnmnsE one .osfiaonso .soaom .oqnsaumfi couscous on» use .mosmamfi Hamsm someones one AmosoMV nomono .Asmgsnom morass omas wounded“ meansm smoosesh one .ooasxxom one .smmshM .sxouanm .onmnom one acceded“ magmas“ mwnma know one .Opdmousu encodes“ .nomompsn Hmowpmfipspm you .enomoun_ssnmh¢ .Ammma ow woosaosfl poo neuroses one ammonov onaqsmaomoosmoh on» one nopspm devasb.aspoosfipsoo you one nofipofipspm mopspm copaop mempmpm copasD Hansonfipeoo new: moHHOpHspop mousem osquD oceans“ use noeonm swash you one mafiumflpspm emoqsnsh s esn.on + ooom.nom comm.mma omm.osm- meo.mom www.msm ones mso.oo + omo.mom ,Hmm.msa ane.oss- onn.oos www.mon «was non.ea + Hmm.mea mao.mma Hmm.mwa- mos.omo ssm.mme mama and + soa.ema Hao.ona ems.eo - nsm.mom sea.moo «was oam.sn . anm.ema oes.oom Heo.nm + www.men onm.mme Hams moo.eaa- meo.eoa oao.msm www.mo + www.moe omm.oom ones nmn.nsau mam.mmm nsm.ane emo.oom+ ooo.omo _ omo.eam omma mos.om . Hmo.smm omo.emn moo.oom+ onn.omo Hea.omw mama oom.ooan mma.snm moa.moe mHH.ooH+ omo.nso eom.mnm smoa man.oee- as».oom noo.ooe mmo.oma+ oma.omo amm.oam owes mmn.oma- oom.smm eao.emn Hom.san+ mom.ooo nmm.ooo.a need 0688 H0 u flank. 00 « flay—u 59H.“ « QUE MO n novdvm dmvddb. on». “ nondvm GOPfiHD 050 « oosoasm u manomxm ofipmoson « eanomsH Hosanna A ooqsasm “ son“ opponeH asnosoon c» nanogum dresses « Anneaaoo no consensus ea sesaepg “ “newluc sequences a“ oesaepv u use» noonomapoom oooopm causes " ooosoosaoam ooonosos m a nosoom copes: on» one sense go cause Hanoo.q«m - .H oases 41. After falling by 53 per cent from their 1929 leve1,exports to the United States began to rise in 1932 following the depreciation of the yen. A.lma11 fall in the quantity and a drastic fall in the price of raw silk exports in 1934 far outweighed the 14 per cent increase in the value of other commodities, with the result the lowest figure of the eleven years, 399,000,000 yen.l The United States statistics present a decline in imports trom.Japan.1asting through 1934. That the country was still on gold before 1933 eXplains the apparent contradiction of the Japanese figures. The available measures of quantity indicate that Japan's exports to all countries did not fall off greatly in volume during the depression years and rose to record amounts after 1932 or 1933.2 Although the volume of exports of all other commodities than raw silk to the United States rose very much after 1931 the volume of raw silk exports declined. It is not certain what was the trend in the net volume of exports to the United States. Imports from the United States increased startlingly after 1931, reach- ing 810,000,000 yen in 1935, not far below the 1920 record of 873,000,000 rent The United States statistics do not show as large an increase, since monetary devaluation did not go as far'as in Japan, nor do they reveal the increase as beginning until 1933, when the devaluation occurred in this country. ' Because_the prices of Japanese imports rose more rapidly (in yen) than the prices of exports, the high import.values following 1932 do not reflect a corresponding increase in the physical volume of trade. Raw cotton, constituting over half of the imports by value, actually decreased in value through 1934, however, although not as rapidly after 1932 as other commod- ities.3 In the recovery period the barter terms of trade were unfavorable to Japan.' She exported large quantities to the United States at low prices and 1 67 #105, p. 35. 2 71, p. 529; 9; 10, p. 185, 186; 67 #105, p. 14; 44, 1933, p. 123, a 1934, P0 106, 107e 3 67 #105. Po 36s 42. imported relatively smaller quantities at high prices. The total value of imports was much greater than that of exports. The things that Japan sent to this country were in relatively small demand, especially raw silk, the bulk of her principal exports. 0n the other hand, her dependence for raw materials compelled her to buy extensively of raw cotton and other things from this country. Prices were determined in world markets and since she couldn't do without the goods she had to pay them. The Bilateral Trade Balance In 1932 United States-Japanese merchandise trade showed an export balance for the United States for the first time in 10 years. In 1934 I in, 91-, hldficf) this amounted to $91,000,000, as compared with $173,006,60041n 1929. The principal causes for this reversal were the fall in the value of raw silk imports and the rise in the value of raw cotton exports. Both the quantity and the price of raw silk declined; the quantity of raw cotton has declined since 1932 (but is still well above the pro-depression average) and the ; price has risen. In 1934 our exports of raw cotton exceeded in value our imports of raw silk. Exports of’all other commodities than raw cotton exceeded in value imports of all other commodities than raw silk. since 1932 these exports increased more rapidly in both quantity and value than the corresponding imports. Our exports to Japan increased largely because she was compelled to buy raw materials and semimanufactures that could be purchased here advantageously; our imports from her did not increase as greatly, even exclusive of raw silk, since the expansion of her exports was in low-priced, low-quality goods for the most part not readily saleable in this country of relatively high purchasing power, effective producers in many lines, and high tariff walls.1 l 67 #105, p. 33-8. 43. The Relationship to the Total Trade of the T 9 Countries Japan's Part in United States Trade From Table II, page 44, it appears that Japan has become a more important market for United States products during this period. During the first phase over five per cent of our total exports went to Japan. In 1934 the proportion had reached 9.8 per cent. Raw cotton played the most important role here as above. To a certain extent this shift is an outgrowth of the depression since the lowered purchasing power of world markets has made price more important to consumers. It was on a price basis largely that Japan's phenomenal export expansion grew. As a result of this expansion she has increased her imports from the united States more rapidly than other countries. In the future she may have to furnish higher quality goods, but she will be in a better position to do so.1 At the beginning of this eleven-year period Canada, the United Kingdom, Germany, and France ranked ahead of Japan as markets for United States goods. For a time Japan alternated with France for 4th place, but by 1932 she had climbed into 3rd place, ahead of Germany, where she remained. Japan's proportion of our total imports moved upward haltingly to reach 10 per cent in 1932. Imports of silk in 1931 and 1932 nearly up to the 1929 level in quantity helped offset the decline in prices. The decline in the quantity and value of silk imports in the next two years overbalanced the increase in other commodities so that total imports from Japan were still falling when those from other countries were rising.2 not until 1935 did imports from Japan begin to rise. As a consequence the proportion of our imports from that source dr0pped to 7.2 per cent in 1934. She was second only to Canada as a source of imports in every year 1 40.2. 2 67 #105, p. 34, 35. Ill ._ quip m. . ,4. «as: .«n ._. he... ar» .50 .00 .0 .00 .00 .00 .aoaoe “00 .He .oooopm sooHo: “sons omoHsaam .00 one .00 0000 .H oHpoa sous soosasoo .moHomeopm moooom assess .000H M00 .moHpmHospm 60008000 .000H alen0H-000Hv He .0 .mOHa 00 “sous somaosoosom H 0.H0 H 0.00 n 0.5 n 0.0 000H 0 0.0H H 0.0m m 0.0 0 . 0.0 000H H 0.00 H 0.0s 0 0.0 n 0.0 n00H H 0.H0 H 0.00 0 H.oH n 0.0 mn0H H H.0n H p.00 0 0.0 a 0.0 H00H H 0.00 H 0.00 . 0 H.0 n 0.0 on0H H 0.00 H 0.00 0 0.0 n 0.0 000H H 0.He H 0.00 m 0.0 a 0.0 000H H 0.H0 H 0.00 0 0.0 a 0.0 000H H H.00 H 0.00 m 0.0 0 0.0 000H H 0.0e H 0.00 0 H.0 a 0.0 000H venue: « eonoenm m. . . . nanomww es 0 ewesuneh Hence a no . . enemsnsh House as ”nopspm oops D.Hupoa” es unopspm ooawso.aspoe seem a no osoo sod « room u do some nos seem a do «:00 arm a seem a so psoo nos HUGH oases oooooaou oH page .ooooow oooHsp one cease 000000 sooHss sH anon o.sosoh ee ee, ee ee ee ee 0 «onperspe anaconda“ “ Auouvaaepe seesaw uopquql . « eeannsoo enema no scene Hence an» op sOHpsHom sH scuba onesenohIeopsam oopHsD I .HHeaeea 45. but 1925 and 1935 when the United Kingdom surpassed her. The Part of the United States $2_Japan's Trade Throughout this eleven-year period the United States has been Japan's xnost important supplier. In the recovery period her share of Japan's total imports stood at a new level of about one-third. As exports of cotton goods led Japan's recovery imports of raw cotton increased. More- over, the United States supplied a larger proportion of Japan's total imports of cotton. Decreases in quantity have been more than compensated by highsprices. This is not the sole factor, however, for after 1932 imports of other commodities from the United States rose faster than those of raw cotton.1 Over two-fifths of Japan's exports went to the United States from 1925 to 1929. In the following years the pr0portion fell until it reached 18% per cent in 1934, due to the decline in silk prices and to the rapid expansion of exports to other markets than the United States, as explained . before.2 Almost since the beginning of trade with Japan the United States has been her largest customer. This position was lost in 1934 to Manchuria and Kwantung, considered together, but it was regained in 1935. Had those countries been separated the United States would have been first in 1934, but since a large portion of the shipments to Kwantung eventually reaches manchuria they should be joined.3 The United States is far more important in the trade of Japan than Japan ismthat of the United States. This is not at all surprising in view of the size and wealth of this country. The remarkable thing is that a country as small and devoid of resources as Japan should bulk so large in our'trade. The dominant position held by the United States in the l 67 #105, p. 36, 37. 2 67 #105, p. 35. 3 85' p. 94. 970 I .IU. . 46. foreign trade of Japan has joined with other factors to tie the two countries closely together in business matters. As the United states Commercial Attach; in.Tokyo, Frank S. Williams, has said, Japan's whole industrial structure is essentially American, having been developed largely with our engineersland machinery. The close proximity of the two countries, the personal contact maintained through the steady flow of travellers in both directions, and the intense interest shown in every financial, economic, and social development in the United States are indicative of the extremely close relationship between Japanese business conditions and conditions in the United States. The countries are fortunate in that trade is largely Inpplementary. Given careful consideration of such.min0r trade disputes as are bound to arise occasionally, trade should continue to grow to the mutual advantage of both countries.1 l 35’ p. 102’ 1030 '...__ 47. CHAPTER VI TARIFFS IN RELATION TO UNITED STATES- .nrmsz TRADE, 1925-1935 Japan In 1924 Japan hmposed a luxury tariff of 100 per cent on designated articles, hoping to reduce the import balance of trade, to curb extrava- gant spending, and to raise revenue. In 1925 the list of commodities affected was amended by removing articles imported for industrial use, materials for reexport, and certain others from the luxury class. The revision of 1926, a general increase, was declared to embody the following principles: (a) Free entry for raw materials not domestically produced (or produced in insufficient amounts); (b) protection for staple industries with bright prospects; (c) the same or lower import duties if home products are able to compete; (d) lower duties on necessities of life; (6) high duties on other than necessities, to discourage consumption; and (f) a greater preportion of Specific duties. .A law passed on June 16, 1932, provided for the assessment of specific duties on a basis of 135 per cent of the existing rate for the time being, with certain exceptions.1 In 2 Japan's leading imports from the 1933 the rates were again raised. United States in 1929 were raw'cotton, wood, petroleum products, agricul- tural products (wheat, rice, and tobacco), automobiles and parts, minerals (iron, lead, and aluminum), machinery, hide and leather, and fertilizers. Although.materia1s to be used in further production predominate, only raw cotton, old iron, hides, and certain fertilizers were admitted free or dUtYe 3 1 1, p. 422, 423, 1296. 3 71, p. 220. 2 71' p0 214F180 48. Duties upon imports of foodstuffs and agricultural products have been increased during this period. They tend to weaken the ability of Japanese industrialists to compete in foreign markets, but are a political benefit and may be the result of recognition of the dangers of relying upon export markets as a means of paying for food imports in the face of increasing duties levied by foreign countries. Japan's on policy has thus tended to restrict her exports, reducing the purchasing power of other countries for her goods by opposing imports from them, and increasing the costs of her manufacturers (eventually, if not already) by giving protection to agricultural products and to the domestic production of semimanufactures and raw materials. In view of her abundant labor supply it would seem wise to facilitate the imports 01‘ such raw materials and semimanufactures as might be processed into f1111 shed goods. Those industries in which the value added in manufacture 1‘ great should be encouraged, even if this means doing without s.;;me of the others.2 Such a program will probably not be adopted, for Japan is giving great attention to the develOpment of self-sufficiency for military reggae and necessarily excluding the above project. The United States During this period two tariffs have been in effect in the United States. The Fordney-McCumber tariff of 1922. was known as a highly protective measure; the Shoot-Hewley tariff of 1930 was far more so. ReEndless of speeches to the) contrary, Congress followed no definite p°11cy in formulating either of these measures, unless, of course, Be“firing reelection mew be termed a tariff policy. Tariff measures haVO been chiefly the result of trying to please conflicting pressure \ 2 71. p. 4670 12' p. 477-9. 2,- . a.) 4.1.1 _ fume; 49. groups. Those that were thoughtto control the most votes were served. One result of this was increased protection to agriculture. Another was the pyramiding of rates by giving protection to the raw material producer and then raising the rate with successive stages in the fabrication of that raw material to compensate for the higher costs of raw materials in each stage of manufacture as well as for any disadvantage the domestic producer*may be successfully claim.1 In addition to these general tariffs certain changes under the flexible provisions of the laws and added fees or quotas applied under the NIRA have affected individual commodities and will be mention in that connection. Japanese-United States trade was also affected by the increasing ad , valorem equivalents of specific duties when prices were falling. United States imports from.Japan in 1929 paid an equivalent ad valorem duty of 4.5 per cent; in 1931 they paid 6.9 per cent. Computed merely upon dutiable imports these percentages were 37.1 and 44.5, respectively. These may be compared with 13.3 per cent upon both free and dutiable imports from all countries in 1929 and 17.7 per cent in 1931 and 40.1 per cent upon dutiable imports in 1929 and 53.2 per cent in 1931. Japan appears to be at less of a disadvantage than most countries, especially when the rates upon all imports are considered, since the large raw silk imports free of duty. send that rate to a very low point.2 .L compilation of the United States Tariff Commission, using general imports until 1934 and imports for consumption in that and the following year, shows that duty-free imports from Japan constituted 88.3 per cent of the total in 1928 and amounted to $339,000,000. This proportion declined‘to 1934, when it was 71.2 per cent and duty-free imports were valued at s84,300,000. The first nine months of 1935 showed an increase 2 71, p. 9, 10. -aaaranuillalfifiaxq ,. 50. in value over the same period in 1934, but they were a smaller proportion of the whole, since dutiable imports were increasing more rapidly. The principal reason for this decline was the greater fall in raw silk prices than in the average for dutiable goods. Dutiable imports have risen in both quantity- and value since 1932. In terms of quantity dutiable imports probably were maternally larger in 1934 than in 1931, although not much greater in value.1 Most of Japan's exports to the United States are not directly competitive.3 Hewever, relatively few enter free of duty, the principal ones being raw silk, tea, undressed furs, and pyrethrum. From the narrow scope of the free list and the high rates upon the manufactured products in which Japan has such an advantage as to enable her to sell them here in fair quantities it would appear that our tariff was formed upon a basis of "comparative disadvantage"--that only when this country was exceptionally unfitted to produce a commodity was its import unre- stricted and not always than:5 I Free imports of crude materials alone (principally raw silk) made up 85 per'cent of all imports in 1928 and 65% per cent in 1934. .The 1930 tariff act had no effect upon this. Finished manufactures imported free of duty rose relatively from-k of l per cent in 1928 to 1.3 per cent in 1934 while dutiable imports climbed in prOportion to the total from 8.0 per cent in 1928 to 20% per cent in 1934. This reflected Japan's increasing industrialization and the great decline in raw silk imports. semimanufactures likewise increased relatively, the dutiable from.1.1 per cent in 1928 to 3.0 per cent in 1934 and the free from .8 per cent in 1928 to 2.8 per cent in 1934. Free imports gained on the dutiable in this class, perhaps a result of higher rates on the dutiable 1 67 #105, p. 38-40. 2 12. pe 474e . 3 71, P0 210, 2190 . ii» wart“... 51. items under the act of 1930. Free imports of crude foodstuffs rose preportionately from 1.6 per cent in 1928 to 2.6 per in 1934, while dutiable imports, after increasingfilmportance from .5 of 1 per cent in 1928 to .9 of 1 per cent in 1930 accounted for an average of only .2 of 1 per cent from 1932 to 1934. An increase in the tariff on dried beans from 1&4 to 3d per pound in the act of 1930, in conjunction with low bean prices, was the principal cause of this relative (and absolute) decline.l A decrease in the proportion of the total accounted for by duty-free manufactured foodstuffs from .3 of l per cent in 1928 to .006 of 1 per cent in 1934 may also have been.due to a reduced free list in the tariff act of 1930. In the same period the proportion of dutiable manufactured foodstuffs rose from 1.8 per cent in l928 to 4.3 per cent in 1934. 1 67 #105. p. 1340 52. PART TWO THE IMPORTS OF THE UNITED STATES FROM'IAPAN CHAPTER I IMPORTS FROM JAPAN BY ECONOKIC CLASSES Over four-fifths of our imports from Japan before 1933, according to Table III, page 53, were raw materials, principally raw silk, but also including pyrethrum, crude camphor, vegetable wax, and undressed furs.1 The decline in raw silk imports was largely responsible for the smaller proportions of crude materials in later years. Imports of crude materials from all countries also declined during this eleven- year period. They were less than half as important as in our trade with Japan. Finished manufactures made up the bulk of the remainder of our imports from Japan, showing a marked upward trend to 22 per cent in 1934. Refined camphor, cotton and silk manufactures, clay products, toys, brushes, and electric lamps were important items.2 Finished manufactures composed an increasing part of our imports from all countries until 1931, but moved downward relatively thereafter. By 1934 Japan supplied as large a preportion of finished manufactures as the hypotheticalnaverage" country. Foodstuffs from.Japan, about half crude and half manufactured in 1928, also expanded relativelyciuring the period, the proportion of manufactured foodstuffs doubling while crude foodstuffs showed no definite trend. Fish, tea, and dried beans and peas were the principal 1 41, 1933, p. 316, Sl7e 2 41. 1933, p. s16, 31?. .MJhuflcMmuflEnauHI—uué .. . e 2.; 55. .mmuSpmuoom eoaepowmsmss mm coahflmmsao some can seem munch Hagan ow edema .mmsao puma on» a“ use Has ones seepnana haasaoommm moaofipnds «nod mH .nmoa one enoa ma moapmesmooo you apnoan any .mcosmoonp a“ nobfim ma madame on» Bonn conseaoo one: smash gosh momoaaoonog one .Amnmav mm «Aemmaummoav fie «moousom 0.0a nsnau H.om unuuu o.ma unnuu m.ma unnnu o.mm nuns: mama ¢.Hm >.am m.ma m.n H.0H n.e n.ma o.m «.mN «.mo enoa m.mm o.ea H.0N m.e m.ea m.¢ o.ea 0.x o.mm «.me mama m.mm H.0a e.ma H.m a.ma o.» o.aa o.m H.bm s.mm «mod n.mm m.HH m.bH m.m c.0H o.m o.ea o.m e.on ¢.Hm Hmoa s.em m.m o.md m.n 0.9 e.m H.na b.m s.mn o.Hm onoa o.mm m.m H.0m H.N 0.0 o.N n.ma H.m $.mn o.mw omod «.mm m.m w.mH m.H 0.0 H.m ¢.ma H.m a.mn m.mm mNoH o.am uuuuu o.sa uuuus m.oa unuun H.ma uuunu «.mn nu:uu puma m.oa nunun «.ma nuunu ¢.o cucuu m.mH nuuuu e.oe :uu-u omen m.mH uncut 0.5H null: n.0H nus-u p.aa nun»: n.a¢ nuns: mmaa mofinpmsoo HA4 « smash mofinansoo Add.“ semen "moaspssoo add “ semen moasaqdoo Add.“ munch uoanvssoo Add.“ munch “ a u naeflnopufi eesno meow nonsposunnss eomuauah monspoeoseeaaeom «mmmspmuoom eonspeensmmzu amusemeooh evoke manganese aa<.aonn ems manna song $.3nom5 H838 mousse eoflap oo soapsflfiflo S3323 .. .HHH capes . 4.415“ 54. items.1 Foodstuff imports from all countries were about five times as important at the beginning of the period. They also increased, but not quite as rapidly. Samimanufactures, such as silk waste, vegetable oils, and hat materials,2 rivalled one or the other of the classes of foodstuffs for the cellar position until the expansion relative to the total in 1933 and 1934. In the total trade of the United States,imports of semimanufactures bulked much larger, but no definite trend was evident. The general upward trends of the four smaller classes in United States imports from Japan, particularly rapid in 1933 and 1934, were in large measure the results of the great decline in the importance of crude materials. That this was not the entire cause, in later years, at least, is evidenced by the actual value increases after 1932 in all of the four except crude foodstuffs, and that increased in 1934. Meaanile, the values of crude materials and of the total imports from Japan were declining. The sub- stantial rise in the total of imports from.Japen in 1935 could hardly have taken place without an increase in crude materials, however. The United States statistics of raw silk imports from Japan in 1935 are not yet available, but Japanese exports to this country were over 35 per cent higher in value than in 1934 and the average yen-dollar exchange rate was only one cent lower. Evidently, under existing conditions of demand, tariffs, and compara- tive advantage, Japan has an advantage over most countries as a supplier of raw materials to the United States. In all other classes save finished manufactures (and that only in 1934) other countries as a whole excelled 55. Japan as suppliers of our markets. Table IV. - Percentage Distribution of Japanese Export Trade (excluding minor miscellaneous items and coin and bullion) : Food, Drink, : Raw : Articles Wholly: Manufactures : : and Tobacco : . materials : Manufactured :for Further Use : Year : : : :in Manufacturing: 1926 7.1 6.7 41.0 42.4 1927 6.7 6.3 38.4 39.4 1928 7.9 4.5 41.2 41.7 1929 7.6 4.2 44.6 42.0 1930 8.7 4.3 47.1 35.8 1931 8.9 3.9 46.5 36.9 1932 7.4 3.6 49.7 34.5 1933 e (a) 4% (a) 553 (a) 29 (a) 1934 7.9 4.4 61.9 23.0 1935 7.9 4.4 58.1 26.9 Sources: 1926 to 1929, 42; 1930, 31; 1931-1932, 33; 1933 as in footnote; 1934-1935, 39. (a) 1933 data obtained from text of 35. They are approximate. From Table IV, it appears that wholly manufactured articles have increased their proportion of Japan's export trade during this period and are now the leading class. .A smaller preportion of semimanufactures (in which ”raw” silk is includedfwit is the product of a reeling process essentially manufacturing and mostly carried on in filatures built for the purposel) is now exported, due to declining silk values and greater use of her materials herself. Foodstuffs exports are somewhat more important than at the beginning of the period; raw materials somewhat less. 1 12.5, Po 204. D 0 xi 6 O D U 1 I ( O u I I I .4436 when? .- A 56. CHAPTER II AGRICULTURAL PRODUCTS The Foreign Agricultural Service DiviSion of the Bureau of Agri- cultural Economics has compiled the values of agricultural imports from Japan in 1929 and 1935, using general imports in the first instance and imports for consumption in the second. The data for other years are not yet available, but these will give a fair sample of the significance of agricultural commodities in the trade. In 1929, 87 per cent of our imports frmm Japan were agricultural products, valued at $374,000,000 and amounting to 17 per cent of our total agricultural imports. In 1935 only 71 per cent of our imports from Japan.were agricultural; their value was $107,000,000; and they amounted to but 10 per cent of all our agri- cultural imports.‘ Japan was declining in importance as a supplier of agricultural products, but still remained well above the 54 per cent ' average for all countries.1 The declines in raw silk, tea, beans and peas were the principal losses. Raw silk bulks so large that almost alone it controls the movements of the total. Vegetable oils are classified as agricultural products in the Yearbookggégriculture2 and are so classified in this discussion, but it happens that Japan's production of perilla oil is largely from seed imported from China. It is not an agricultural process as far as she is concerned although the product is agricultural by nature and is so classified in this country. 1 58. 2 22.5. 114 .4 . . ... ,rthHw was 57. ea Raw Silk Raw silk, imported free of duty, accounted for about 83 per cent of the total value of United States imports from Japan before 1929, but had dropped to only 60 per cent by 1934.1 Until 1931 about 96 per cent of Japan's silk exports went to the United States, but by 19322had declined to 83% per cent, rising again to 93 per cent in 1935.2 The principal reason for this latter decline was the greater depreciation of the yen after 1932 in terms of the currencies of important EurOpean.markets than in terms of dollars, as prices in European currencies were lower giving greater encouragement to the demand. Approximately 40 per cent of the farm population of Japan is depend- ent upon a combination of sericulture and rice-growingz, each of which has fallen upon evil days during this period. The production of silk in Japan climaxed some years of expansion with an output of 96,000,000 pounds in 1931. not until 1934 did the output drop significantly, to 78,000,000 pounds.‘ The low production of that year may have had some part in the rise in price in 1935. Exports of raw silk averaged 80 per cent of the production during the years from 1925 through 1929, but declined relatively to 66% per cent in 1934. mach of this may be accounted for the growing export business in silk manufactures.5 The value of Japanese exports of raw silk to the United States fell from.¥849,500,000 in 1935 to ¥244,400,000 in 1935. Lower values through 1929 were due to lower yen prices, which fell about one-third from 1925 to 1988 while quantities were increasing. The quantities fell after 1929, but remained above the 1925 level. For a few months in 1932 yen prices were 71, p. 211; 41; 42. 39. 21, p. 50 26, p. 447, 448; 17, p. 105. 26, p. 447, 448. C'd>Cfltbl‘ 3. 1.5.13»...— 58. were nearlythe above are "Foods in tin and bottle" and Fish and shellfish" (Table XIII). The first, at least, includes many canned foods other ‘then fish, but canned crabs and tuna are the largest items in trade with 13113 country. An increasing trend appears igagalue of exports of this é§roup. The drop apparent both here and in the United States statistics 111 1934 was at least partially due to decreased exports of canned tuna and (rnab meat to the United States. This loss seems to have been nearly Ifiecouped in 1935. The proportion of Japan’s total exports sent to this c"Juntry declined decidedly. The proportion by quantity is definitely E“Udaller, indicating that we take the higher quality goods. "Fish and Shellfish" is a classification not sufficiently important in former years to warrant entry in the foreign Commerce Yearbook before the 1935 edition. The United States takes a rather small proportion of Japan‘s tOtal exports. An increasing part of exports to the Unites States was composed of foods in tin and bottle. ‘ l 41. Table XIII. o'United States-Japanese Trade in Edible Fish and Fish Products Footnotes on bottom of next page. Commodity : United States Imports : Japanese Exports : Commodity : : : Per Cent :Rank :: : Per Cent : Year : Pounds :Dollars :from Japan: by :: Yen : to U. S. : Year : (900) : (000) :(by value):Va1ue:: (000) :(by value): Crab Crabs in Mbat(a) Tins(b) 1925 9,035 3,051 98.0 -- ----- ---- 1925 1926 7,916 3,679 97.6 -- ----- ---- 1926 1927 8,700 3,703 97.9 -- ----- ---- 1927 1928 12,744 5,030 99.8 -- 10,448 56.3 1928 1929 10,681 5,001 97.8 -- 9,821 58.8 1929 1930 9,491 4,188 82.8 -- ----- ---- 1930 1931 9,361 3,748 84.6 -— 6,760 55.6 1931 1932 6,358 2,276 73.2 -- ----- ---— 1932 1933 6,943 2,057 71.1 -- 7,385 39.7 1933 1934 5,232 1,747 78.0 -- 5,757 37.3 1934 1935 5,654(c) 1,962(c) 86.9(c) -- ----- ---- 1935 Tuna Fish Fish and in 011 Shellfish 1931 649(d) 127(6) 76.9(d) -- 2,678 9.9 1931 1932 5,071 653 91.4 -- 1,697 6.2 1932 1933 14,219 1,950 99.0 -- 1,748 3.4 1933 1934 3,315 502 98.7 -- ---- --- ---- 1934(6) 4,253(e) 702(6) 96.4(e) -- 2,197 3.8 1934 1935 5,284(c) 845(6) 96.2(c) -- ----- ---- 1935 Tuna Fish, Foods in Fresh or Tin and Frozen Bottle(f) 1925 831 40 8.1 -- 7,856 ---- 1925 1926 None None None -- 8,551 53.7 1926 1927 108 10 .6 -- 8,825 45.2 1927 1928 3,545 472 25.5 - 11,286 49.0 1928 1929 6,243 686 26.1 -- 11,384 44.3 1929 1930 6,449 571 20.4 -- 9,265 42.6 1930 1931 6,812 530 91.6 -- 7,811 41.2 1931 1932 4,295 271 90.9 - 8,053 35.4 1932 1933 4,497 179 76.7 -- 17,838 ---- 1933 1934 5,733 396 95.9 -- 11,182 22.2 1934 1935 1,981(c) 128(c) 90.2(c) -- 16,813 29.4 1935 Total Edi- ble Fish & Fish Pro- ducts(g) 1925 13,617 3,864 12.8 6 1926 12,699 4,610 13.4 -- 1927 13,941 4,606 13.0 -- 1928 21,958 6,456 16.8 -- 1929 26,543 7,159 18.0 3 1930 24,419 5,880 16.6 -- 1931 24,457 5,010 17.7 -- 1932 27,802 3,679 17.2 2 1933 41,675 5,190 23.4 -- .1934 35,206 4,388 18.9 2 . It,“ 9' n.‘ E.» Ill-I In I. 76. In 1925 they accounted for only .8 of the total, but in 1934 and 1935 amounted to 3 per cent.1 Before the depression it was estimated that over 1,400,000 were actively engaged in fishing in Japan and about 720,000 peOple lived from canning or otherwise preparing fish for'market. Nest of the catch was consumed at home, but exports were growing.2 Crab Meat Crab meat, canned, was the largest item. Imports from Japan declined in both quantity and value after 1928, and more rapidly than imports from all countries so that by 1933 Japan supplied only 71 per cent of the total. Since that year she has regained some of her former importance. Japan supplies a higher-priced, higher quality product than do other countries. Her exports to this country declined relative to her total exports, and the United States, which had been the largest market until 1933, was second to Great Britain in 1934.:5 .The Japanese product is quite different from the domestic and only partially competitive. To begin with, only five to ten per cent of the domestic production is canned, and that chiefly in Alaska.4 The princi- pal domestic production is on the Chesapeake Bay and the distribution of the product is limited by its perishability.5 About E of the imports from Japan are fancy meat of the deep-sea king crab. The leg meat of (a) Beginning in 1930, "Crab meat, crab sauce, and crab paste”. (b) Includes ”Crabs in bottles" in 1928, 1929, and 1931. (0) 8 months. (d) For 1931, only reports from collectors of customs at Boston, New York, San Francisco, Los.Angeles, and Sedzle. (e) Duty rate changed from 30 to 45 per cent by Presidential proclamation, effective Jan. 13, 1934. (f) Crabs in tins is included in this larger classification. (2) Includes canned clams, swordfish, and miscellaneous fish and shellfish as well as the above. 42; 390 59 #642, p. 5. 67 #105, p. 78; 36, December, 1933, p. 24. 67 #105, p. 130, 131. 59 #779, p. 1; 67 #105, p. 130, 131. OHS-UNI" 77. this crab has a reddish cast and is partially interchangeable with imported canned lobster meat. There are also some imports of meat prepared in Chosen from the "Korean crab." For the most part the Japanese crab meat brings higher prices than the domestic. The prices of the latter fell rapidly with the coming of the depression, due chiefly to increased production and the physical difficulties of wide distribution,1 but the previous amalga- mation of Japanese canneries and production control2 apparently were successful in at least one direction, for the prices in this country of imported crabs remained almost stationary until well into 1932.3 Although the unit values of imports declined from 3.449 per pound (1929) to 8.306 per pound (1933), this was considerably less than the decline for imports from all countries. Had prices fallen more freely Japan's share of the United States imports might not have declined as much. The duty in this country was not changed during the period, remaining at 15 per cent.4 Tuna Imports from Japan of tuna fish free of duty (fresh, frozen, or packed in ice) were not important before 1928, when Japan supplied one-fourth of the total. After 1930, when imports from other countries (principally Nbxico) nearly disappeared, Japan sent over 90 per cent of the total in most years. Japan sends practically all frozen albacore which is canned in this country as "white meat" tuna, the highest grade. That species of tuna has practically disappeared from American waters since 1925.5 Imports of tuna fish in oil were insignificant before 1931. Nearly all of the supply comes from Japan and the bulk of this is albacore, packed in cottonseed oil, “domestic style."6 Our dunestic production is about one-half yellowfin, one-fourth striped tuna, and oneisixth albacore, 59 #779, p. 2,,4, 6, 7. 42, 1929, p. 396. 59 #779, P. 1, 2. 90 67 #105, p. 150, 151. 67 #105, p. 188, 189. 67 #71,“ p. 2; 67 #69, p. 114. 0"”ah Gisak- | . .. dealing? . . . . F ....p Fr 78. the latter mostly from imported frozen fish from Japan. When Japan developed her own canning industries this supply of fish was somewhat checked and the California pack of white meat tuna decreased. Total imports of canned tuna in oil supplied 18 per cent, 31 per cent, and 15 per cent, respectively, of an increasing domestic consumption from 1932 to 1934. .As the result of'a Tariff Commission report the duty was raised from 30 per cent, as it had been under both tariff acts in effect in this period, to 45 per cent on January 13, 1934.1 Nearly half of the 1934 imports entered before that date and the imports for the year were decidedly below those of 1933. ' The effects upon Japan were also pronounced. The tariff increase plus a small catch led to a pack less than half as great as in 1933. many canneries that formerly packed tuna specialized on canned mandarin oranges for the British trade. Great Britain superseded the United States as the largest ' buyer of Japan's canned goods, taking more than twice the value of the previous year.2 The law "for the Control of the Export of marine Products" was enforced for the first time by the Japanese government in September, 1934, when.the domestic production of canned boiled tuna not packed in oil was pro- hibited in order to prevent any possible agitation in the United States for higher duties upon this product, which has become popular since the higher duties on tuna in oil were put into effect.3 The United States took 85 per cent of Japan's exports, by quantity, in 10 months of 1934, but only 69 per cent in the same period of 1935, though the absolute amount was larger.4 3.233.512.1222 and Fish Meal 1 Fish scrap and meal were not of sufficient importance to be separately entered in the United States statistics before 1931, nor was Japan an impor- 67 #71, p. 2, 3, 8; 67 #105, p. 128, 129. 35, Pa 45. 460 ' 36, August, 1954, p. 21. 40.3. IPO'INH 79. 1 tant supplier until shortly prior to that year. Since that year exports to this country have grown rapidly, but not quite as fast as her exports to all cauntrdes.2 The commodity enters this country free of duty and is enthusi- astically received for use as a fertilizer and increasingly as stock feed. Table XIV. - United States-Japanese Trade in Fish Scrap and Meal : z : United States Imports : Japanese Erports(a) : 3 .: Per Cent : Rank: . Per Cent : Year : Tons:Dollars :from Japan: by : Yen : to U. S. : :(000): (000) {Lby value):Value: (000) : (by value): 1928 -- --- ---- -- 7 26.9 1929 —- --- --- -- Negligible Negligible 1930 -- --- ---- --- ----- ---- 1931 27 940 69.5 -- 1,656 63.5 1932 13 288 54.3 16 ----- ---- 1933 24 611 88.6 -- 2,965 58.6 1934 34 931 93.5 14 6,095 50.3 1935 21(b) 553(b) 97.2(b) -- ----— ---- (a) values for l928--33 are for "Other manures". In 1934 fish meal equaled 98 per cent of "Fish meal"and "Other manures". (b) 8 months. Most of the product was sold on the Pacific coast until 1934. Trans- portation costs are an important element in the price. Not much is sold in the middle west on account of the large production there of animal tankage. In 1934, when California relaxed its restrictions on the use of pilchards for fish scrap and meal, the United States production reached its maximum and exports expanded by ten times, 80 per cent of them from the Pacific coast. The imported product was diverted to the Atlantic coast in that year, the production of menhaden meal being low there due 3 to low prices and a poor run of fish. Despite the restrictions imposed in this country, Japan has been able 1 59 #779, p. s. 2 67 #105, p. 78. 3 67 #69, p. 254; 67 #105, p. 192, 193. . . a a. -_ assault? . 80. to offset to some extent the drastic shrinkage in our silk purchases by larger sales of these marine products. She has always had abundant resources in this line; her people have had long experience as fishermen; and the development of the export industry has preceded Space. Furs Despite the density of her population Japan is a rather important source for certain wild animal furs, since nmue than half of the area of Japan proper is forested.l EXports to the United States increased from 61 per cent of the total sent to all countries in 1928 to 92 per cent in 1933. Table XV. - United States-Japanese Trade in Furs : United States Imports : Japanese Exports Year : Mink Furs,_Undressed : All Undressed Furs : of All Furs 3 : : Per Cent: : Per Cent: Rank : : Per Cent :Number : Dollars: from : Dollars: from. : by : ‘Yen : to U. S. t (000) x (000) : Japan by: (000) : Japan by: value: (000) :(by value) x : : value : : value : : : 1925 434 781 32.2 2,550 2.5 8 ----- ---- 1926 545 1,251 37.3 2,874 2.7 -- ----- ---- 1927 657 1,806 55.9 4.610 307 -" ----- n--- 1928 526 1,442 42.1 3,550 3.3 -- 1,844 61.0 1929 752 2,104 53.6 4,217 3.9 6 2,352 64.3 1931 697 663 38.2 1,447 3.0 -- 1,403 85.9 1933 849 614 29.3 1,306 3.9 -- 2,820 91,8 1934 882 955 37.5 1,855 4.9 9 2,759 91.3 1935 883(a) 867(a) 46.5(a) ----- --- -- ----- ---- (a) 8 months. The United States statistics shown in Table XV include only undressed furs, entering free of duty. Imports of dressed furs from Japan are small. The values fell sevendy in the depression years, not rising until 1934, 1 59 #642. p. 30 panel, 410 .L If 81. although the quantities were frequently larger than those of 1929 before the end of the period. Trappers during the depression probably had no alternative to selling their furs for what they might bring. Lack of other opportunities might even tend to increase the production, while the demand was very low due to the lack of purchasing power. From one-third to one-half of the imports from Japan have been mink. The skins are of a different texture and lighter color than the much higher— priced domestic and Canadian skins. They supplement the domestic supply. Japan has been the principal source by quantity and, beginning in 1927, by value. Over 80 per cent of the skins came from there from 1929 through 1955.1 Coney and rabbit furs were imported from Japan in sizable amounts, but accounted for a little less than 5 per cent of the imports from all countries from.l931 to 1835. Squirrel furs, kolinski furs,-and fox furs other than silver or black were also fairly prominent.2 Natural Camphor Crude camphor, distilled by the collectors from chips from an ever- green tree found principally in Formosa3 forms the basis of Japan's monopoly of natural camphor. Refined camphor is not strictly a forest product, but will be discussed herealso. Less than half of the value of United States imports of natural camphor is accounted for Int the refined product. Synthetic camphor imports, principally from.Germany, were less than imports of natural camphor in 19264; in 1930 they were slightly greater in terms of quantity5 and slightly less in terms of value; in 1934 they were again much less 67 #105, p. 182, 183. 67 #105, p. 182-5. 7. . 60 #78, p. 77. 41. QIFCRNH 82. than of natural refined camphor. Since refined natural camphor was chiefly used in.medicine, for which synthetic camphor was not permitted until June 1, 1936, the Gernan.competition was felt chiefly by crude camphor. This Table XVI. - United States-Japanese Trade in Camphor 3 : United States Imports of Natural Camphor : Japanese EXports Year : Crude : Refined : Rank: 3 : :Per Cent: : :Per Cent: of :—' :Per Cent : : : from : : : from : Both: : to :Pounds:Dollars:Japan by:Pounds:D011ars:Japan by: by : , Yen :U. S. by : (0001: (0001 : Value : (000): (000) : value :Value: (000) : Value 1925 2,090 1,165 89.5 1,514 918 96.3 10 3,175 ---- 1926 1,886 1,092 94.3 1,165 760 99.6 -- 2,241 ---- 1927 1,621 779 96.2 1,480 823 100.0 -- 2,274 40.3 1928 4,365 1,649 100.0 1,176 593 100.0 -- 2,413 44.3 1929 4,204 1,580 100.0 1,386 769 97.0 9 3,060 49.4 1930 1,058 ' 419 100.0 1,031 557 100.0 1- 1,168 37.6 1931 1,964 700 98.1 1,191 573 100.0 -- 1,348 45.8 1932 1,799 513 100.0 1,045 371 99,8 11 1,216 34.4 1933 1,989 411 100.0 1,599 479 100.0 -- 1,568 35.2 -1934 2,663 646 100.0 ”1,425 570 .100.0 11 1,716 37.3 1935 964(8) 263(a) 100.0(a) 884(a) 348(a) 100.0(a) -- ----- ---- (a) 8 months. is perhaps best revealed by the figures of quantity presented in Table XVI.‘ Refined camphor imports maintained a fairly steady level, but crude natural camphor fluctuated quite severely in certain.years. The Japanese government was several times forced to lower the price to meet the competition, evidence of which is apparent in the relatively small increase in the value of crude camphor imports in 1928 and 1929 when the quantity was more than doubled. The principal use of crude camphor, except for the production of refined natural camphor, which is kept a Japanese monopoly by the prohibition of exports for refining purposes, is in the manufacture of pyroxylin plastics. Here it has suffered from the wider use of other plasticizers than camphor and the trend toward plastics not requiring camphor, as well as from the .- finals} Q . e I I i I I. p O 9 I O . . . . . s: . l o alumna—1111152; 83.. use of German synthetic camphor (and domestic, since 1933).1 These tendencies are perhaps reflected in the smaller proportion of Japanese camphor exports coming to this country in recent years, although we were still her principal market in 1934.2 There was a cent a pound specific duty on imports of crude natural camphor, and refined camphor was dutiable at 6¢ per pound under the act of 1922 and at 5;! per pound under the 1930 3 act. The medical demand for the refined product tended to keep the imports of this from falling as far as the other. 1 7; 42, 1926, Vol. II, p. 340; 67 #105, p. 108, 109. 2 67 #105, p. 79. 3 71’ P. 2130 521.3. 4.. . 84. CHAPTER IV 1.31M} F 1".C’IURJSD ' ‘EKT ILES Total Cotton manufactures Until recently Japan was only a minor supplier of cotton manufactures, to this country, but her prOportion by value of our total imports gradually rose from its 4.1 per cent level in 1925, advancing rapidly in 1933 and 1934 to reach 10.7 per cent. Imports in the latter year amounted to $3,400,000,slight1y exceeding those of the prior record years of the period, 1925 and 1929. Cotton manufactures ranked 7th among our imports from Japan in 1925, 1929, and 1932, but had moved up to 4th place in 1934, when they accounted for 2; per cent of the value, in contrast to .7 of 1 per cent in 1926. Improvements in technology and in management, somewhat lower wages since 1928, collective buying and selling and price and production control, the ability to use a larger pronortion of the cheaper Indian and Chinese cottons than can most mills,and the depreciated yen.put Japanese producers in a favorable position for competition on world markets that, because of the depression,gave more attention to price and less to quality than usual.1 Meanwhile, due to the crop reduction program, the drought, the cotton loans, ‘ the processing tax (although a fee was levied on the cotton.content of imports to equalize this), the dollar devaluation, and the NRA, the costs of our producers of’all<:otton manufactures rose.2 "Other" Cotton Rugs Imports from.Japan of "Floor coverings of cotton other than 'hit-and- miss' rag rugs, chenille rUgs, imitation oriental rugs, and grass and rice- 2 61, p. 55, 54. 85. straw rugs" doubled in quantity from 1929 to 1934 as Japan's share of our total imports, by quantity, rose from.75 per cent (1929) to 99 per cent (1955). Japan special ized in the lower-priced types, principally plain Table XVII. - United States Imports of Rag Rugs from.Japan wCommodity : : : Per Cent 8c : Square Yards : Dollars : from Japan Year : 4(000) : __(0001§ : ,(by;va1ue) Rag Rugs Cotton Chenille 1929 ----- --- --- 1931 317 119 88.7 1932 463 97 87.6 1955 1,072 254 97.7 1954 1,182 579 98.4 1935 570(a) 157(8) 98.7(8) "Hit-and-Mlss" 1929 2,020 1,140(b) 100.0 1951 5,585 455 100.0 1952 4,264 278 100.0 1955 5,989 259 100.0 1954 5,750 275 100.0 1955 3,410(a) 250(a) 100.0(a) 0ther(c) 1929 2,179 556 36.9 1951 1,850 565 61.6 1952 2,065 245 65.2 1955 5,995 556 90.1 1934 4,756(d) 626(d) 92.9(d) 1955 1,960(a) 550(a) 95.0(a) (a) 8 months. valued at the United States selling price. Imports of "Other carpets, carpeting, mats, and rugs" from Belgium, France, and Italy were assumed to be oriental rugs and were not included in the total in figuring percentages. From.Jan. 1, to June 4, inclusive, rugs of grass or rice straw were included. For the remainder of the year these rugs amounted to 890,000 square yeards and $68,000. None were from other countries. Although these rugs were in chief value of cotton they were included in "other" cotton rugs only from Jan. 1, to June 4, of 1934. .' --—— and plaid rag rugs and rugs of Sanshu-yarn (reclaimed from.old rags). Imports expanded rapidly in quantity after the fall of the yen under the 99......le u Ewan... 86. 55 perTcent tariff, but were much lower in 1955 (8 months) after the hmposition under the NIRA of a fee of 20 per cent ad valorem.but not less than.f1ve cents per square yard, effective June 5, 1954, and the negotiation of a quota agreement, effective June 1, 1934, limiting Japan's exports to 4,070,000 square yards annually. The fee was abolished on June 15, 1935 after the demise of the NIRA, but the quota remained, after having been lowered to 3,250,000 square yards in May, 1935. The domestic production of competing rugs has been declining, with a substantial proportion carried on outside the mills.1 Cotton Chenille Rugs Over half of the quantity of cotton rugs produced in this country in recent years were chenille. The Japanese production, mainly for the United States market, has been smaller than curs,quite the Opposite of the situ- ation with regard to "hit-and-miss" and "other" rugs, but has increased steadily. Our domestic production averaged over 2,000,000 square yards from 1.929 to 1935, was probably about half this in 1934, and increased about 25 per cent during the-first half of 1935. The apparent consumption was increasing, so the share supplied domestically declined from 88 per cent in 1951 to 64 per cent in 1933, and less in 1954. Low-priced imports, despite inferior quality,tended to restrict domestic production even before the NRA. With that episode it was felt necessary to impose a fee of 15¢ per square yard in addition to the 40 per cent ad valorem duty under the act of 1930 (itself an increase over the 1922 rate of 35 per cent), effective June 5, 1934, and abolished June 15, 1955. There was also an agreement restricting entries to 650,00 square yards per year, which was revised in may, 1935,to 750,000 square yards. .As a result imports were much lower.2 _— 1 67 #105, p. 146, 147; 67 #95, p. 8, 9, 11, 56. 2 67 #95, p. 3, 4, 11, 17; 67 #105, p. 144, 145. "Hit—and-Miss" Rag Rugs Rag rug imports from Japan amounted to 5810,000 in 1925 and $1,100,000 in 1926 according to the Tariff Commission. The duty of 35 per cent was shifted to the United States selling price of similar rugs in 1928 after a cost investigation by the Commission. Japanese rag rugs, an increasing prOportion of which were made in household shops under contract to middle- men who furnished hand looms and materials, constituted more than 70 per cent of our imports of cotton floor coverings at the beginning of the period. The tariff increase was followed by a reduction of nearly one- third in the quantity of hit-and-miss rag rugs imported.l The change to 75 per cent of the Japanese value in the 1930 act was a virtual reduction of the tariff by about half, so much lower were they than domestic values. .As a result of this and the broadened.nar%et under depression conditions as consumers sought cheaper goods the quantities imported advanced until 1932 and their values until 1931. There has been no increase since 1932 such as occurred with most other cotton manufactures. Our domestic output has been declining for nearly a decade; in 1932, when the consumption reached its peak, imports supplied 90 per cent of the whole.‘ Our production is now largely in homes or institutions, whereas the Japanese industry, chiefly interested in our market, has become concentrated in small factories using hand looms.2 As a result of higher coats for our producers underthe recovery program our government made a quota agreement with Japan whereby she was to limit eXports to 5,250,000 square yards annually, effective June 1, 1934. In May, 1935, the quota was increased to 3,550,000 square yards.5 1 65, p. 2-57; 67 #95, p. 26, 27. 2 67 #95, p. 5, 25; 67 #105, p. 144, 145. 5 67 #95, p. 6, 56; 67 j105, p. 144, 145. '88. Cotton Rags The United States has been Japin's principal market for Japan's exports <3f cotton rags, although its pr0portion has declined, perhaps the result of Table XVIII. - United States-Japanese Trade-in Certain Cotton manufactures Commodity United States Imports lamenese_§xports & ' : Per Cent : Per Cent Year Yen : to U. S. O. O. .0 O. .0 O. .0 O. .0 .0 Pounds : Dollars :from Japan (000) : (000) :(by value) (000) :(by value) Cotton Rags (except for paper making) - 1928 ------ ------ ---- 7,22 85.7 1929 ------ - ----- ---- 8,508 84.6 1951 15,185 669 94.4 5,755 75.6 1952 10,182 280 98.1 ---- ---- 1955 15,599 459 99.7 5,525 55.7 1954 17,161 712 98.2 4,858 55.5 1935 16,046(a) 683(a) 98.4(8) ----- ---- Cotton Cloth(b) Square Yards (000) 1925 5,051 744 7.9 ..... . ---- 1926 1,865 278 3.5 ..... --_- 1927 1,401 219 2.6 ..... ---- 1928 1,476 229 2.6 ..... -_-- 1929 1,058 171 1.9 ..... --_- 1930 . 967 114 2.0 ----- ---- 1931 770 106 1.5 64 ----- 1952 789 57 1.5 254 ---- 1955 1,116 79 1.5 1,299 ---- 1954 7,287 565 5.6 2,765 .6 1955 24,962(a) 1,213(a) 26.8(a) 8,184 1.6 Cotton Waste(c) Pounds (000) 1925 7,291 669 18.0 ..... ---- 1926 6,075 489 22.8 ----- ---- 1927 6,148 412 25.4 ----- ' ---- 1928 5,522 382 12.7 808 17.0 1929 5,070 277 11.2 657 12.5 1950 ' 4,760 252 17.8 ----- ---- 1951 5,559 141 25.7 245 15.4 1932 976 18 10.1 ----- ---- 1955 5,129 69 8.5 595 9.6 1954 1,449 55 2.5 1,265 19.2 1935 15,439(a) 729(6) 28.6(a) ----- ---- (a) 8 months. (b) ‘U. S. : 1925-30, only "colored, dyed, printed, etc., or woven- figured", general imports. 1931-35, imports for consumption of all "Countable cotton cloth? For 1929 the latter classification showed 1,217,000 square yards, $189,000, and 1.3 per cent. (c) Japanese classification, "Waste cotton and waste cotton yarn." 69. an increase in the tariff from 20 per cent in the 1922 act to 3¢ per pound in 1930 (about 70 per cent at 1931 prices).1 The effect was intensified at depression prices, but better times were accompanied by increasing imports, which are principally wiping rags-~01d clothing usually processed by washing or bleaching and then torn or cut into rags. Domestic production in this country in 1931 was valued at $5,400,000; we exported 20,000,000 pounds in 1934, valued at $931,000, largely rags suited to remanufacture into shoddy.2 Cotton Fabrics The statistics secured were of doubtful comparability, but there can be no questioning the rising trend since 1931. Japanese exports rose much more rapidly in quantity than in value, indicating lower yen prices. 3 Imports from Japan declined before 1929; she was evidently unable to meet both our quality and price requirements. "Countable cotton cloth? includes bleached and unbleached cotton cloth as well as the colored, etc., cloth, figures for~which were given through 1930 in Table XVIII. Imports of the other two classes from Japan were small before 1931, but due to the use of imports for all countries as a base fer the percentage computation, Japan's prOportion of the total will be relatively lower. With these reservations the table may serve to indicate trends. In 1933 and 1934 Japan's share of the total reached record heights. ' Japan became our leading supplier in point of quantity in December, 1935, although the United Kingdom remained first by value.4 Japan sold us principally medium-fine staples, especially white shirtings, lighter weight than domestic bleached print cloths, but competing with them for use in.underwear, nightgowns, and handkerchiefs, selling about i to 1 1 41. 2 67 #105, p. 146, 147. 5 67 5105, p. 85. 4 67 #112, p0 no 90. cent per yard below the domestic product. The ad valorem equivalent of the duty in 1934 was 27 per cent, generally below that upon imports from from other countries because they were of finer quality or more largely composed of cloths that were printed, dyed, etc. Rates under the 1930 act were above those of 1922. It will be noted that the bleached cloths formerly of little importance have beccme the chief component. The quality also is better than in former years.1 As a consequence of a Tariff Commission investigation a 42.6 per cent increase in the duty was effected by Presidential proclamation on may 21, 1936. Furthermore, an agreement was reached with the Japanese government during 1935 by which exports of cotton piece goods to the United States and the Philippines were to be voluntarily limited. The threatened Japanese competition was probably less serious than some thought, however, for there was an increase in the stock in bonded Warehouses from.495,000 square yards in December, 1934, to 9,518,000 square yards in December, 1935 (preliminary figures), indicating that the demand was less than had been expected by importers.2 Cotton Waste This is another commodity whose imports from Japan declined in quantity, in value, and in relation to total imports even before 1929. .L remarkable reversal in 1935, however, sent all these figures to their highest levels of this eleven-year period. Imports, principally thread Waste used ftm'nachine wipings and for manufacture into low-grade yarn, enter free of duty. In recent years the total imports have been equiv~ alent to about 6 per cent of the domestic production for sale. They Were exceeded by exports. The remarkable increase in the proportion °t the total that is from Japan is associated with the rapid growth \__ 1 67 #105, p. 158, 159; 67 #112, p. 155. 2 67 51112, p. 4-6, 14, 166, 167; 38, p. 5. 91. Of her cotton textile industry. It was not, however, based on a price advantage for the unit value of imports from all countries was below that of imports from Japan.1 The 1934 exports from Japan to this country set a new mark both in value and in the share of her total exports sent here. Nevertheless, true United States remained the third sextet, surpassed by Great Britain and Germany.2 Silk Manufactures Imports of silk manufactures from Japan amounted to pl2,000,000 in value and 29% per cent of our total imports of this class in 1926, but were declining absolutely and relative to imports from other countries before 1929. A small recovery brought their values to $2,700,000 in 1934. Japan's proportion of our total imports of silk manufactures advanced from 1930 to reach 40 per cent in 1934. In rank this class was second among our imports in 1925 and 1929, fourth in 1952, and fifth in 1954.5 This country has declined in importance as a market for Japanese silk tissues, even in recent years. Japan's general expansion of exports Inet stiffer domestic competition in this country as well as a demand for, Sparticularly, the higher quality goods in which She was less well equipped to canpete. The above trends are clear but anydetailed comparison of ‘:he Japanese statistics of the different years in Table XIX should be \lndertaken with caution, for in some years at least rayon and artificial silk were included.4 Broad Silks Cloth for export was woven mainly on power looms in Japan, but the inferiority of equipment, skill, technique, and management confined the production to rather simple low-grade goods at the beginning of this 41; 67 #105, p. 182, 185. 67 #105, p. 79. 41. 49 F 0:19,. l ‘u'IJII 11 V . léxflri .7 1 ..-l M.- l a s 92. Table XIX. - United States—Japanese Trade in Silk Tissues ‘ : : United States Imports of Broad Silk :Japanese Exports Year : : : ' : In the Gray(a) :Bleached,flPrinted, or Dyed(b): : z : Per Cent : : : Per Cent : : Per Cent :Pounds:Dollars:from.Japan: Pounds : Dollars:from Japan: Yen : to U. S. : (OOO):4(OOO) :(hy value): (900) : (000)_;(by_va1ue);(000):(by value) 1925 1,179 5,693 87.0 410 1,747 25.4 21,038 18.0 1926 1,916 8,467 85.3 228 1,184 16.8 26,263 19.7 1927 1,798 6,990 86.7 125 669 8.0 18,190 13.0 1928 1,808 5,893 ' 86.5 213 775 8.9 15,406 11.5 1929 2,073 5,647 85.9 274 999 12.0 14,703 9.8 1930(c) 767 1,853 84.3 94 308 12.1 6,528 9.9 1930(d) 206 404 (d) 206 404 (d) ------ ---- 1931 1,223 2,069 75.4 443 924 30.4 4,673 10.7 1932 1,008 1,064 90.6 177 249 30.7 4,244 8.4 1933 1,106 965 88.5 207 329 28.2 6,127 9.7 1934 1,024 944 88.8 331 621 38.6 5,532 7.2 1935 706(8) 632(e) 89.7(8) 393(e) 732(8) 56.7(8) ---—-- ---- (a) 1925-30(0): general imports; broad (except pile); all silk, in the gray. 1930(d): general imports; except pile; over 30 inches wide; not Jacquard- figured. 1931-5: imports for consumption; except pile; over 30 inches in width; not Jacquard-figured; in the gray; all silk. 1930(d) includes both colored and gray. (b) 1925-30(c): general imports; broad; dyed, colored, or advanced. 1930(d): general imports; except pile; over 30 inches wide; not Jacquard-figured. 1931-5: imports for consumption; except pile; over 30 inches in width; not Jvauard-figured; bleached, dyed, or printed; all silk. 1930(d) includes both colored and gray. (c) Ending June 17. (d) Beginning June 18. The percentage is omitted as the change in the classification makes it incomparable. (e) 8 months. period. The lack of modern dyeing and throwing facilities ("throwing" is a process that imparts more twist to the raw-silk threads) also restricted production to goods of unthrown silk in the gray or bleached, such as the two leading exports, pongee and habutae. Oriental pongee is a cheap, plain- woven, undyed cloth made of unthrown tussah (wild) silk.l Genuine pongee has been produced only sporadically in this country; most of the output is a l 64, p. 8, 9, 17, 65. 95. cheaper imitation.l Habutae, as imported, is a lustrous white silk suitable for linings, underwear, negligees, dresses, shirts, upholstery,etc. About half of the imports were used without dyeing or printing when this report was made by the Tariff Commission in 1926. It was a lower-priced cloth than any all-silk cloth produced in this country; rigid government inspection was practiced to insure against adulteration. Table XIXLshows a great decline in the value of imports of broad silks in the gray from Japan since 1926. The percentage of our imports sent us by Japan has been on a higher level beginning with 1932 than before and during the depression, however.3 About three-fourths of the imports under this classification now are genuine pongee. Habutae is second in importance. Chiefly the lighter and medium weights are imported, competing only indirectly with domestic fabrics of a different nature, such as silk mixtures and rayon.4 Under the influence of increasing prosperity until 1929, these cheaper silks were apparently in less demand in this country; although the quantities imported expanded after 1927, they were valued at less. With the depression, of course, the demand for all silks collapsed quite suddenly. According to Japanese statistics the United States took a smaller share of her exports of pongees (from 78 per cent in 1929 to 45 per cent in 1934) following the depression and a slightly larger share of her eXports of habutae (from.10 per cent in 1928 to 12 per cent in 1934). The United States was her first market for'pongee and her third for habutae in 1934.5 The other important group of broad silks according to the United States classification was "bleached, printed, piece-dyed, or yarn-dyed" all-silk fabrics, chiefly printed and piece-dyed pongees and Fuji cloth (imitation pongee). Apparently the lack of dyeing facilities at the beginning of this 1 67 #105, p. 150, 151. 64, p. 9, 15, 229. Q 67 32105, p. 150, 151. 67 54105, p. 79. album 94. period has been remedied, at least in part, for in the first 8 months of 1935 these fabrics exceeded in value the imports of broad silks in the gray. In 1926, 2% per cent of our imports from Japan were silk fabrics. The ratio had fallen to 1.2 per cent by 1933.1 The tariff remained at 55 per cent upon both classes of broad silks throughout the period. Eats The quantities of hats exported to this country by Japan were greater after 1930, as were the yen values, although the latter did not reach the 1929 level. The peak year in the dollar value of our imports and in the quantity of Japan's exports was 1931, but due to the lower exchange value of the yen in 1929, that year was first in Japanese statistics, though second in ours. There must have been an unusual domestic demand for cheap summer.hats in that year. There is practically no domestic production of the principal sorts imported from.Japan, but there is quite an industry employed in finishing the hat bodies.3 Japan supplies now over one-fifth of our imports of hats of straw or other fiber. Before 1930 imports from Japan paid a duty of 35 per cent; beginning in 1927 over half the value was composed of blocked or trimmed hats. After the 1930 act the duty on‘blocked or trimmed hats was 29 1/6 cents each plus 50 per cent; hats of these sorts not blocked and trimmed entered at 2 1/12 cents each plus 25 per cent if bleached, dyed, or colored.(appar- ently higher than the former rate in most cases, under the ruling prices), and at 25 per cent if not bleached, dyed, or colored.4 This change resulted in the practical elimination of imports of blocked and trimmed hats. 7]., p. 211. 67 #105, p. 150, 151. 67 #105, p. 160, 161. 41, 1950. *‘(fltvt‘ 95. Bleached, dyed, and colored hats are our largest imports despite the duty disadvantage. Most of the imports were paper imitation Panama hats, almost none of which come from other countries. In the other items such as palm leaf and straw hats Japan was generally an unimpor- tant supplier.l Table XX. - United States-Japanese Trade in Hats and Materials Commodity United States_1mports : Japanese Exports a 3' : Per Cent : Rank : : : Per Cent Year : Dollars:from Japan: by : Dozens : Yen : to U. S. : (000) :(by value): Value : ,1900) :,L000)_ :(by value) Hats (a) 1925 721 9.1 16 ----- 2091 ---- 1926 1,939 18.9 -- ----- 4310 ---- 1927 1,674 18.5 -- ----- 2352 27.1 1928 432 5.6 -- 141 1799 14.8 1929 2,807 19.6 8 572 7200 39.7 1930 1,860 16.0 -- 466 3689 39.4 1931 2,950 23.1 -- 1,098 6201 58.3 1932 1,143 24.5 9 637 3035 39.3 1933 896 21.8 -- 886 4136 29.7 1934 1,204 19.9 12 836 4513 25.3 Iflat Mete- Bundles rials (b) 5000) 1925 1,530 40.3 11 7,947 3,638 ---- 1926 1,927 39.4 -- 9,488 3,761 ~--- 1927 1,823 34.8 -- 7,819 2,879 ---— 1928 563 18.4 -- 2,526 1,161 24.9 1929 728 16.5 18 3,073 1,356 26.2 1930 544 13.6 -— 2,102 875 ---- 1931 341 13.2 -- 1,799 623 34.6 1932 152 10.8 17 1,741 633 ---- 1933 748 53.9 -- 8,859 3,303 42.3 1934 1,200 81.1 13 13,622 4,941 61.6 (a) U. S. : Hats of straw or other fiber. Japan: Hats, caps, and bonnets. (13) 'U. S. : Hat materials of straw or other fiber. Japan: Plaits ‘ l. 67 #105, p. 160, 161; for hat-making. The percentages are computed from the data for "Plaits of straw and hemp" giVen in 67 $105, p. 79, which correspond very closely to the values given here. 67 #97, p. 9. 95. Hat Materials In 1928 there was a tremendous fall in the value of our imports of hat materials from Japan, accompanied by a decline of 2/3 in quantity and a fall in the per cent of our total imports of this class coming from Japan by nearly 50 per cent. The drop in our imports of hat matertals from all countries was probably due to changing styles, although unit values of imports rose from $.0042 to 3.0048 per yard. There was little change in the relationships between Japanese and other prices, 1 but the development of braids in part of synthetic textile, such as pedaline (a hemp core, usually, wrapped spirally with a narrow strip of cellophane), and neora (a ramie band laminated between two cellophane strips) may explain the decline in Japan's relative impor- tance. When Switzerland supplied nearly all the pedaline braid before 1931, it was used only for high priced millinery. Japan entered the market in that year with lower prices, but comparable quality, but not until 1933 did braids in part, but not chief value,of synthetic textiles exceed in value the balance of imports of hat materials from her. Over 2/3 of the 1934 imports were of pedaline braid.2 Unbleached braids of straw and hemp were the items of next impor- tance. Imports of these from Japan were an increasing proportion of imports from all countries, beginning with 1929, so evidently the declining ratio of Japanese hat materials to the total until 1932 was due to a shift in demand away from these straw and hemp braids in which long experience and the availability of raw materials had given her a natural advantage.3 Straw and manila hemp braids, not bleached, dyed, colored, or l 41. z 67 #57, p. 2, 5, 6; 67 #105, p. 158, 159. 97. stained, paid a 15 per cent duty throughout the period. Pedaline braid, 87% per cent of which came from Japan in 1934, was dutiable at 15 or 20 per cent before the act of 1930 and at 45 per cent thereafter, but the increase of imports was not halted. 1 There is no domestic production of these types of braids. Certain braids of synthetic textile are produced in this country, but producers have suffered from (1) a general lowering of millinery prices so that cheaper materials were required, (2) style trends in higher priced millinery away from braids, especially the rough braids made here, and (3) the increasing competition of imported materials,which consumers have preferred. The United States value of our imports probably exceeds the value of domestic braid production.2 1 67 #105, p. 158, 159. 2 67 #97. pa 1. 2, 9’ 100 98. CHAPTLR V OTHER MARI} FACTURL‘D Pit ODUCTS Pottery and Glassware Pottery One of the more important exports of Japan to this country has been pottery, accounting for around 12: per cent of the total value until recent years. Its proportion reached 3:33- per cent in 1934, well ahead of any prior year of the period. Long eXperience, an abundance of raw material , and Organization as a household industry with low wages and low capital costsa fit Japan for international competition. Imports of earthenware, much the Smaller class, expanded through 1930 while those of china and porcelain declined from 1926, but the depression brought no important shift in the I‘elative positions of the two. China and porcelain ports remain about twice as large in value and Japan continues to supply a considerably larger part of our total imports of those articles than of earthenware. Production in this country is almost entirely earthenware. Despite high duties, imports of household table and kitchen pottery have supplied a much larger part of our total consumption than in the case of most manufactured commodities from Japan. The large amounts of skilled hand labor required are prejudicial to the success of United States PrOducers, especially in the more highly decorated articles. Japan supplies large quantities of these, as do the European countries; Japan sends Principally, however, articles of intermediate and low price,4 which compete to a larger extent with domestic producers. In the cheap lines of both eaJ-‘thenware and china this competition is severe, although concentrated \ i 59 #642, p. 7. 3 35' p. 96. 4 67 #105, p. 112, 113. 67 #102, p. 3. 99. principally in decorated cups and saucers not parts of sets, of which she supplied nearly 40 per cent of the domestic consumption (in quantity) in 1933 and about 25 per cent in the first half of 1934. Imports of medium- priced goods are principally china, competing only indirectly. A sub- Table XXI. - United States- Japanese Trade in Pottery and Glassware Commodity : United States Imports : Japanese Exports & z : Per Cent : Rank : : Per Cent Year : Dollarszfrem Japan: by : Yen : to U. S. : L0001_;(by value): Value : (000) : jby valuel_ Pottery 1925 3,950 23.1 5 12,022 34.1 1926 5,762 29.9 -- 13,947 42.0 1927 4,731 23.4 -- 12,244 40.2 1928 4,662 26.0 -- 13,792 39.8 1929 5,335 28.4 4 14,500 39.2 1930 4,632 32.9 -- 10,820 39.8 1931 2,760 35.2 -- 6,634 34.4 1932 1,513 34.6 5 6,441 28.1 1933 2,456 44.4 - 10,180 28.6 1934 4,164 57.9 3 14,314 34.2 Glass and Products 1925 82 .5 l9 ------ ---- 1926 115 .6 -- ---—-- ---- 1927 106 .6 -- ------ ---- 1928 101 .7 -- ------ ---- 1929 178 1.3 19 - ----- ---- 1930 117 1.3 -- ----- --- 1931 92 1.3 -- 100 1.5 1932 106 2.9 18 492 5.3 1933 134 3.8 . -- 803 5.2 1934 390 9.2 18 1816 9.3 1935 --- --- -- 2309 9.9 stantial amount of the imports are excellent quality dinnerware, well above the price range of ordinary domestic earthenware. Some, less expensively decorated, are more or less competitive in price with the domestic article. Imports from Japan accounted for about 10 per cent (of the number of pieces) of the complete earthenware or china dinner sets (domestic and Japanese) sold in this country in 1933, and about 100. 15 per cent in the first half of 1934. The increase, and the imports, were largely'sets with a large number of pieces, whereas the domestic industry specializes in the snaller sets.l As to kitchenware, the share of Japan in the United States consumption declined from 88 per cent in the first half of 1933 to 36 per cent in the first half of 1934 as the domestic production expanded greatly.2 Japan has partially supplanted Germany, France, and Czechoslovakia in our markets, sending mostly goods of lower quality for which depres- sion conditions widened the market, but also having a price advantage on similar goods, particularly after her currency depreciation. Before the depression her cheaper goods probably found readier markets in poorer countries; the United States was taking a declining preportion of her exports at that time. Under the recovery codes costs of domestic producers rose considerably. Japanese price competition did not increase in schrity, however, due to the advance in yen exchange and to the practise of the Federation of Japanese Pottery Exporters' Associations, formed in 1933, of advancing the prices of the major classes of pottery exported to the United States. For'about 3 months late in 1934 importers brought in abnormally large quantities of pottery in anticipation of an advance in the price in Japan. This partially accounts for the large imports of that year while tending to reduce them in 1935.3 The duties under the act of 1922 applicable to the principal imports from Japan were 70 per cent on decorated china and porcelain and 50 per cent on.deconated earthenware. The act of 1930 imposed an additional 10 cents specific duty upon imports of decorated earthenware and of decorated household table and kitchen were of china and porcelain. 1 67 #105, p. 114, 115; 67j102, p. a. a 67 #105, p. 114, 115. 5 67 #105, p. a, 9, 11, 12. 101. .mnpnoe m Aug .nmmeh Sony menomaa mo peso Hog 0H poops mane copspfipmnoo define use easemenpnwo cepwuooocsb Any .HmoflEono use .Hmownpomao .nanopfix .oapwp dens nmnpo .nwwaoonom one means new “huepfinem use eqonopfix one maps» caonmmson menu Henna .mnskqupm can onssnonpnse mom Amy lovm.mm nonmam onmmm loam.sm magmas novmom.a mama -- --- mama s.mm mom mms H.me neo.a som.m mama -- --- mama 0.0m can mmm e.sn mas soo.m mama -- --- mama s.me cam mom o.em Non HmH.H mama -- --- mama s.me mam mow H.em mam mmo.a Hams -- --- anma -- -- --- -- --- --- onma s.mm sHe.H cams n.mm mam one o.mH oom mom.a mmmH m.ma smm.a mama -- -- --- --- --- --- mama n.nH Ham mama -- -- --- -- --- --- sums H.m mos smma -- -- --- -- --- --- omma e.mH smm mama -- -- --- -- --- --- mama m.m mmm mama aemnmnaxoom pmmoHov any copsnoooa .ons: _Emnmnfixoom a nosSoo IonOpw a onweuonpnsm pmeouo .ousrncnpawm nova.as lovmmn levees.» love.mm hovmoa.a lovmmm.m mama -- --- mama o.ms owe mom.m n.mm moo.m emm.e mama -- --- mama m.me mom mmm.a m.mn mam.a nan.e mama -- --- mama .mn mmH mmm.a n.mm mom om¢.n mama -- --- mama n.mn Hem sen.a H.me mae.a mmm.m Hams -- --- Hams -- -- -- -- --- --- onma m.mn oao.» coma m.nm Hem sme m.ae sme.n mmm.m mama m.on mnm.n mama -- -- -- -- --- --- mama s.en mos.n mama -- -- -- -- --- --- sums m.mn Hmo.e smma -- -- -- -- --- --- omma o.oe «mm.m mama. -- -- -- -- --- --- mama m.an mon.n mama any oceanooon .sasaoonom can define easaooeom can define loans» spam. «moon «Ammo. «loads» spa“ A0301 « looms “ use» “«lmsss> has“ looms ” gems quash Bony“ unsaaoo «season uqsmsh_sonnu musaaon " season" ”“nwmch Beau“ nnmaaoa u pqoo Hem « u u pnoo Hem u u u thcQEBoo «u psoo Hem « u mascoaaoo " nonopHM can manna caonemsomu “on compo semen acne snoppom no upcomeH mopmcm smegma - .HHNN canes D. - 1n 102. The specific duty assumed particular significance with regard to low-priced imports from Japan. One rather unusual result of its application was that the ad valorem equivalent of the duty upon undecorated articles became considerably higher than that upon the decorated articles of higher value, placing a sort of premium upon the export of this latter class.1 Class and Glassware In 1935 the Commerce Yearbook first included glass and glassware among the principal commodities exported from Japan to the United States, giving data for the years back to 1931.Thisitem has shown a remarkable increase, but experts to other markets are of much more importance to Japan. Our imports from.Japan have never fallen back as far as the 1925 level in value and in 1934 set a mark over twice as great as the previous maxi- mum. Before 1930 articles for chemical, scientific, and experimental purposes comprised the largest class, although they were never ever one- fifth of the total. second in value was cut or decorated glassware. The classifications have been changed since that year, but it appears that scientific articles lost their preeminence in 1932. Blown glassware of various kinds new forms the bulk of the imports. Animal figures and glass novelties, bowls and vases, table and kitchen ware, and decorative jars and bottles are included. Most of the Japanese products are man- blown, whereas a large part of theciomestic articles are blown by machine. There is very little dcnestic production of decorative glassware except bowls and vases. In this field, as in others Japan has taken advantage of her low- priced skilled labor and the adaptability of her small-scale industry 1 67 #105, p0 112-17; 67 #102, p. l, 20 2 67 #105, p. 116, 117. 103. to the production of novelties for sale at low prices in foreign markets. Despite higher tariffs under the act of 1930, her products have met marked Continued recovery may mean a shift to higher quality goods, where success. her advantage over other foreign countries is less. 2913 Toys are becoming of more importance in Japan's exports to the United States. Their prOportion grew steadily from .4 of one per cent in 1927 , the first year for which data were obtained, to 2.4 per cent 1934.1 At the beginning of this period toy manufacture in Japan was virtually a household industry save for the production of celluloid and rubber toys, which were largely by-products of factories specializing in other manu- factures of these materials. This condition,conducive to low prices, has probably not been substantially altered. Japan produces chiefly for the export trade, forrwhich the United States is the principal market.g Japan's exports of toys to all markets increased except in the depres- saion years; exports to this country remained a fairly constant proportion. In value the 1929 level has been passed and Japan has become our principal Supplier although at the beginning of the period she was rather unimportant. Japan has largely replaced, Germany in our toy markets.3 ADolls and parts have been important throughout. Bisque dolls designed ‘tca retail at not more than 10 cents each, dolls of cellulose compounds, with Eirni without movable parts, and stuffed dolls of textile or thin leather are ‘tlle principal types imported from Japan. Japan is almost the only external ‘BCIurce of most of these; celluloid dolls without movable parts are the only kind made extensively in this country with which the Japanese dolls compete. The duties were 60 and 70 per cent in the 19:32 act. The 70 per cent on .__‘___ : <12. 3 59 #445, p. 6’ 10’ ll. 41; 37.5. .*‘Ill‘ ..... r 104. dolls of bisque, china, etc. has been retained, but the imposition of compound duties on the other types has resulted in ad valorem equivalents well over 100 per cent. Hand labor, a variety of styles, and long experi- ence in the manufacture and use of cellulose and clay products give Japan an advantage not offset by the tariff.1 Table.XKIII. - United States- Japanese Trade in Toys 3 United States Imports Japanese Exports 3 : Per Cent : Rank : Per Cent, Year :Dollars :from Japan: by Yen : to U. S. : LOCO) :(by value):Value :(000) :(by value) .0 .0 O. .0 1925 248 6.1 18 ----- ----- 1926 383 8.7 -. ---—- ----- 1927 343 7.5 -- 3,417 32.5 1928 403 9.5 -- 3,666 33.3 1929 1,321 25.8 14 4,631 33.4 1930 1,332 31.4 -— 3,470 29.7 1931 1,149 30.9 -- 2,928 30.0 1932 788 31.7 12 4,987 33.0 1933 857 45.5 -- 6,976 26.5 1934 1,560 76.6 10 9,604 31.6 1935 ----- -—-- -- 11,494 34.0 Rubber toys (animals, fish, balloons, and water pistols) surpassed dolls in value in 1933 only. In that year they supplied about 6 per cent of our domestic consumption, more than at any time since. Celluloid ani- mals and birds, rattles, and other toys, bisque or porcelain tea sets or figures, and miscellaneous toys of various sorts are also important. In almost every case the last few years have seen rapid increases in the Value and the pr0portion from Japan. Germany has lost her former priority. many of these articles are not produced in this country, often because of the necessity for hand labor. In other parts of the trade variety and new ideas that catch the fancy are important factors.2 1 67 #105, p. 164, 165. 2 67 #105, p. 164-7. Electric lanfi It may seem surprising that Japan supplied 21 per cent of our total imports of electrical machinery and apparatus in 1925 and that this pro- portion has increased, ranging from 39 to 71% per cent from 1929 through 1954 and averaging over 50 per cent in 1955 and 1934. This group ranked only 17th among our imports from Japan in 1925, 16th in 1929, 10th in 1932, and 15th in 1934. However, electrical equipmentis a field in which the preeminence of the United States is such that it need import very little. Electric lamps were the bulk of the imports and of these Japan has been sending an increasing portion, largely low-quality bulbs at low prices. No great technical advancement is required and the low wages and small overhead costs of the household industry that produces them give her a great advantage.1 The bulk of the imports before 1930 were carbon filament incandescent lamps. The expiration of domestic tungsten filament patents in 1929 permitted Japan to enter this field and carbon filament lamp exports have fallen off even more rapidly than they grew. The duty was raised from 20 per cent to 30 per cent in 1930, but they would have declined anyway.2 Imports of metal filament lamps rose steadily through 1933 in quantity, but were reduced nearly one-fourth in 1934 by trade restric- tive measures applied in this country.3 Japan‘has come to supply 99 per cent of our total import trade in these. The largest part,by quantity though not by value, has been miniature Christmas-tree, toy, and flashlight lamps, inferior in quality, and lower in price than the bulk of the domestic product. Imports of Christmas—tree and toy lamps have probably equaled or exceeded domestic production in some recent 1 35, p. 96. 2 41, 1930. 3 37.5. ‘ thlmlliiwflt bl 106. years. The large increase in imports since 1929 resulted to a consider- able extent from the expiration of domestic tungsten filament patents. . , tha? . Domestlc production of lamps othernm niature (metal filament) was valued at about $41,000,000 and exports in 1934 were more than twice imports.1 Table XXIV. - United States-Japanese Trade in Electric Lamps United States Imports of Incandescent Lamps : Japanese Exports .. O. O. O. .0 O. O. 'Year metal Filament(a) : Carbon Filanent :of Lamps and Parts : : Per Cent : : : Per Cent : : Per Cent NUmber:Dollars:from Japan:NUmber:Dollars:frem Japan: Yen : to U. S. #1900): (000) :(py value): 1000): (000) :(by Value)3(000) :(by value) 1925 1,121 26 7.1 19,501 478 42.7 ---- ---- 1926 1,464 52 12.7 16,599 513 40.7 —--- ---- 1927 2,334 72 36.5 17,665 629 59.7 1765 25.7 1928 2,367 61 44.2 30,339 886 82.2 2616 31.2 1929 4,285 125 89.3 37,502 1092 88.3 3113 32.8 1930 28,798 747 95.9 13,201 459 93.5 2786 34.2 1931 67,552 1,335 97.4 1,597 54 99.4 3040 38.7 1932 113,269 1,138 97.9 155 2.8 71.6 4667 33.5 1933 120,423 789 99.0 169 2.2 90.0 3273 ---- 1934 92,721 832 99.2 70 .86 61.2 3155 20.1 1935 - ------ ---- ---- ------------ ---- 2631 15.7 (a) In some years very small amounts of "other" lamps were included with the metal filament group. The United States increased in importance as a market for Japan until 1931. By 1934 our pronortion was only 16 per cent. The market for low- priced lamps would naturally be reduced in this country as the effects of the depression wore off.' While our imports decreased other countries continued to buy more from Japan. Brushes Under the Fordney-McCumber Tariff brushes imported from Japan were dutiable at 45 per cent for the most part, but the 1930 act increased the rate in most cases to 50 per cent plus one or two cents.2 The effects of this change would appear to be a drastic reduction of imports if the high 1 67 #103, p. 118, 119. 2 71, p. 213. v I O a» ' e r . c a\ I a - a a . o . e . . e Q G . p\ f . l\ . I . v u e . n o I e O a . . a o O o . n a t . 1 . A I t ll! . . . ."‘.II' 5., II :1" I1! 1 U 107. marks of 1929 ($2,000,000) and 1926 ($1,300,000) be compared with sub? sequent values falling to $450,000 in 1933. On the other hand, the effects of the tariff increase cannot be separated from those of the depression. moreover, comparison of the years before 1929, exclusive Table XXV. - United States-Japanese Trade in Brushes : : Japanese : United States Imports : Exports Year : : Per Cent : Rank : : Dollars : from.Japan : by : Yen : (000) : (by_va1ue) : Value : A#(OOO) 1925 850 57.6 15 3097 1926 1,304 62.7 -- 4595 1927 730 48.6 -- 3261 1928 864 53.2 -- 2984 1929 2,024 72.1 11 4022 1930 830 61.4 -- 1328 1931 720 62.6 -- 1134 1932 468 61.9 15 256 1933 450 63.8 -- 1679 1934 ' 638 66.5 17 1808 1935 ----- ---- -- 1663 of 1926, when the value averaged a little 0Ver $800,000, with values of $800,000 and $700,000 in round numbers for 1930 and 1931 would indicate that the tariff had little effect. The statistics will, of course, not reveal whether imports might not have been greater had the tariff not been increased. The failure of imports of brushes to respond.more rapidly after the depression may be due to this increase; certainly, Japan has the advantages of low wages and experience. Her camphor supplies gave her an early start in the manufacture of cellulose compounds. Other materials are imported but are not bulky in relation to value.1 As far as Japan was concerned, exports fell more suddenly and more severely than was the ease with moat commodities. Some re- covery was made, but predepression levels were not approached. Never- 1 l3,p. 1450 108. theless, brushes approximated their predepression ratio to the total exports to the United States in 1933, 1934, and 1935,1 so that any definite results of the tariff increase may not be seen in the presence of the many other :factors. In 1934 and 1935 the United States took about one-third of Japan's ‘brush exports. The largest single group in our imports from Japan was toothbrushes, but not until 1929 and 1930 did they make up more than half of the imports in this classification. About one-fifth of the domestic consumption of toothbrushes with handles of cellulose compounds is imported,over 95 per cent from Japan, which has a price advantage over other countries. The change in the duty sent the ad valorem equivalent to 178 per cent in 1933 in contrast to 45 or 60 per cent under the former act.2 Our other toothbrush imports were chiefly low-priced toothbrushes with bamboo handles,not produced in this country since 1934, which are sold princi- pally to prisons, asy1ums, and similar institutions. The duty, formerly 45 per cent, reached an ad valorem equivalent of 125 per cent in 1933. Contrary to the usual trend, Japan is a somewhat less important supplier now, with.about 80 per cent, than she was in 1929, with 85 per cent.3 1 41. 2 67 #105, p. 160, 151. 3 67 #105, p. 162,163. 109. CHAPTER VI SUMMARY as: items Many of the items which later became of considerable importance in the trade of Japan and the United States were not of sufficient significance early in this period to warrant their inclusion in lists purporting to pre- sent the "principal items." Among those not appearing in the Commerce Yearbook list for the years before 1927 are: lamps and parts, ranked 15th according to United States statistics in 1934; toys, ranked 10th in1934; beans and peas‘, that slipped into last place in 1932 and menot listed again after that year; ani vegetable oils, ranked 8th in 1934., Another group, for which the 1931 figures were the first given, included insect flouers, ranked 7th in 1934, cotton fabrics (total cotton manufactures ranked 4th in 1934), fish and shellfish, glass and glassware, ranked 18th in 1934, and knit goods. Generally, though small in value, these increased rapidly. First appearing in Jamn's lowest year of the depression, they would naturally appear to grow more rapidly than others whose former {status was available for comparison.1 There were also certain commodities not always sufficiently important to secure separate listing in the official statistics. Cotton floor cover- ings were not separately listed in our statistics before 1929; perilla oil not before 1928; mgs, except paper stock, not before June 18, 1930; and fish scrap and fish meal not before 1931.2 In the Japanese statistics, also, such commodities as fish meal and tuna fish in tins were not separately classified till 1934.3 Conversely, beans and peas and silk waste and floss declined in 142. 241. 3 67 #105, p. 78-80. .53 .1, 4.334“. ml! w. . . 110. :hnportance and were dropped from the Commerce Yearbook after 1932.1 Variations from the ggneral Average The general movements of trade during this periOd, in brief, were the follows: in terms of yen, 1925 was the peak year, with 1929 second, in.exports from Japan to the United States. Except during 1929 there 'was a steady decline until 1931, after which recovery set in. Although the total exports to the United States dropped severely in 1933, this Inay be disregarded for our purposes since it was almost entirely due to the slump in raw silk values, other commodity exports continuing to expand. In dollars, 1925 was the year of the lowest predepression value and 1929 that of the highest. Total imports from.Japan.did not begin to rise until 1935, but 11‘ raw silk be excluded, the imports of all other commodities are seen to have turned upward after 1932.2 Therefore we may say that the usual trend, according to the number of commodities following it, was upward after 1931 in yen.and after 1932 in dollars. The cases in which such an uptuin.reached predepression Levels were sufficiently out of the ordinary however, to deserve especial mention. In.most cases Japan's share of our total imports of the commodity increased during the period. Not nearly as general was the tendency fer the United States to take a larger part of Japan's exports of these principal commod- ities. A.brief discussion of the variations from these general trends may add to our understanding of the forces in action. . Failure to Recover Outstanding in this group is raw silk, a luxury product suffering from Lack of demand in the United States due principally to poor business conditions and the competition of rayon. most of the decline in values was due to falling prices, for the quantities imported have remained 1 42. . 2 67 $105, p. 8. 111. above those of 1925 and 192 . Its value in 1934 was below that of 1951 or 1932 in either dollars or yen; other markets have become more signi- ficant for silk, tea, and vegetable wax as a result of the pressure of low prices and a small demand here. Tea has failed to recoup its losses in value, measured in terms of yen, in the face of a secular decline in the demand. Japan's former preeminence in our markets seems definitely gone. ‘Vegetable wax also failed to participate in the general recovery. Japan's exports of fish and shellfish were less in 1934 than in 1931; crab meat imports from her declined continually until 1934 in Value and in proportion to imports from all countries partially because of the Japanese price-maintenance policy in all probability. Other markets for crab meat have proved more receptive than ours, also. "Hit-and-miss" rag rugs seem less in denind in this country and have been restricted by quota agreements; and the demand for dyed, colored, etc. silk fabrics (broad) is still low. Japan's exports of hats, caps, and bonnets have not reached their 1931 level. The United States is a less important market for silk tissues and hat, caps, and bonnets than formerly. This is not a sign of lagg rd recovery in the latter case, for 1931 was nearly the peak year. The case of electric lamp bulb imports is similar. The expansion was not checked until after 1931. Only two manufactured products, of moderate importance, have actually failed to recover from the low point of the depression: "hit- and-miss" rag rugs and broad. silk fabrics, dyed, colored, printed, etc. In such important agricultural products as raw silk, tea, and vegetable wax Japan has been unable to maintain the volume of her trade with this country. It is possible, however, that greater prosperity will mean a continued reduction of the markets for her hat bodies and lamp bulbs, each of which is a substitute for something better. 112. Commodities That Have Regained Former Levels The trade in pyrethrum had attained predepression Levels by 1934, measured either in man or in dollars. Vegetable oils did even better, leaving far behind the previous high year of 1927, in terms of yen. The principal cause of this was the unprecedented expansion of the trade in perilla 011, although rapeseed oil also reached predepression levels in value. Edible fish and fish products, despite the decline in crab meat, returned to the levels of 1925 to 1927, gains in canned tuna fish going a long way toward making up for the loss. The Japanese classifi- cation, "Foods in tin and bottle", showed an average value of exports to the United States for 1933 to 1935 almost one-fourth above the previous high.annual value {1929), despite heightened tariff barriers. Fish meal, not included in the above. fish and fish products, since it is not an edible product,is a comparatively new field for Jaxan, but one with great possibilities,as she has already discovered. Exports in 1928 and 1929 were so small as to make comparison with the present futile. In the last two cases, however, other’narkets for Japan have expanded more rapidly than ours. The Japanese data for the Values of fur ex;orts also indicate that 1929 has been surpassed. The United States statistics show that not even the 1931.1evel has been reached; the two classifications are not compar- able. Unitedstates imports of mink from Japan were in advance of the 1925 imports, but not near any other predepression year. Japan seems to be supplying a smaller part of our imports than previously, but accidental variations in the size of catch and quality of fur may account for this. Cotton manufactures reached their'high point in 1934. "Other" cotton rugsaha, countable cotton cloth. reached predepression levels. Cotton waste touched a new high in yen in 1934. Exports of hats, caps, and bonnets from Japan were above most pre- depression.years in 1933 and 1934; in dollars, the imports of hats of straw or other fiber were above 1925 and 1928. As to hat materials, dollar values show a return to the former status, while the yen value was a new high for the period. In such comparisons as these the effects of the low foreign value of the yen and the rising export prices in yen are seen repeatedly. Pottery had reached its former level; earthenware slightly exceeded the 1929 peak in terms of dollars. Exports to other countries had advanced even more rapidly, making our prOportion smaller. Glassware set a new record for the period in 1934. Toys, in yen and in dollars, set a new'record in 1934. Menthol could make no claim.to pre- depression status except in terms of'yen. With electric lamps as with hate, the 1925 value was easily exceeded in 1934. Here, however, practi- cally all our imports are new metal filament lamps; in 1925 they were practically all of carbon. Our preportion of Japan's exports declined in late years as other countries found the cheap lamps more to their liking than we did. or these commodities it will be noticed that cotton manufactures, toys, glassware, perilla oil, canned tuna fish, and fish meal were relatively unimportant at the beginning of this period. The first three are not new products but the extremely successful attempts to meet the needs of our.market in these lines represent a new degree of skill in foreign.marketing and in production for such markets. The last three are new products whose possibilities were neglected before . .As early as the first half of 1934 it was apparent that miscellaneous items were gaining on the major commodity exports of Japan.1 This is not surprising for these markets have been less fully exploited and producers in the 1 36, May, 1934, p. 32; 39.5, p. 1. A filial 9.. 114. countries entered by the Japanese goods are less powerful. or the two principal classes of obstacles met by Japan in our markets, one was composed of trade restrictions in the nature of high tariffs, quotas, fees, and trade agreements. The frequent use of specific or compound duties resulted in higher barriers, in effect, as the prices of goods fell. Japan, supplying generally low-priced goods,was particularly affected. The barriers raised in other countries seem to have been more serious. The other general category was inclusive of all the factors affecting our demand for her products. In very many cases Japan was unable to supply goods of high enough quality to meet any general demand in this country. During the de- pression years the cheaper gpods were often more in demand. As time wears on Japan will find our demands more exacting; she already has found the great possibilities of the markets of backward countries as outlets for her industries. Price is more important and quality less important in those countries and Japan is better fitted to fill their needs. With most commodities in the period just past, the yen depreciation and Japan's intense efforts to produce cheaply goods for export markets have increased her preportion of our total imports. 115. PART may '73 Ta; spacers or has U‘m'rn scams TO J [Lipid-J CIL‘LPYEU I LSXI’ORTS TO JAPJJ BY nCOI‘C-ULIIC (31418355 By far the largest class is crude materials, which has advanced to new levels since 1930 with the greater importance of raw cotton. although exports were above those of 1925 to 1931, declining cotton shipments since 1932 account for the falling percentage shown in Table JCWI. Of the other commodities included, hides and skins, crude petroleum, and phosphate rock have shown marked advances since the depression years; tobacco leaf, logs and hewn timber, and umnanufactured wood have not advanced as rapidly largely because of barriers raised against imports in attempts to gain self-suffici- ency and a favorable balance of trade. Finished manufactures was the second class until 1933, accounting for OIlenquarter of our exports to Japan before the depression, but much less now that Japanese industry supplies so much of its home market, leaving principally new, cornplex, and high-quality articles for foreign producers. The demand for these is less, of course, but may be expected to increase as Japan grows more prosperous. Advanced iron and steel and petroleum Products, machine ry and vehicles, and photOgraphic and projection goods are the principal components.2 Exports of semimanufactures declined relative to the total until 1952 but have since advanced into second place with twenty-three per cent in \— 1 41. 2 41. 116. 11323500 ausflgumofinpngo .34 ea cobfim me madam» on» some cop5e800 one: smash 0p pace mmmmpsmopme one .Ammmav mm "Aeneammmmmwomw «moonsom n.¢e cunt w.mH III: o.b lull mom III: n.0n nun: mama m.H¢ o.na m.oa 0.0m o.m w. m.m N.H H.Hm «.00 mama «.5n m.na moda m.ba eoo a. a.m n. m.mn u.bo mama 0.0m «.ma .ma e.ma 0.9 n.H, s.m m. e.mn s.0s mama H.b¢ o.mN «.0H e.¢a ¢.OH n.m n.m b. w.nm n.mn Hmoa m.om n.mm o.wa m.sH 0.0 ¢.N b.¢ H.¢ m.dm H.5d onoa H.m¢ poem H.¢H H.ma $.m o.N N.m ¢.n N.mN N.m¢ QNQH m.w¢ m.wm m.¢a H.0N n.m m.H m.m m.m b.0m 0.0m mmod o.ae lulu >.¢H 31:: b.@ III: m.m nun: H.mm Inn: puma m.a¢ lulu m.nH III: b.0H IIII H.e nut: m.om Inll wNmH m.mn Inna m.na .IIII m.aa Inna 0.0 But! 0.0m IIII mama 5&3. moHHpSSO .34 sash .39 M mflash “meanpqdoo 4? s33” 333560 .34 O. O. O O O . megaposusasa commaaahu « sesame suseafieom “namepmooom cmuSpowhdnmau « « meespneoos segue meanness: cease 32.2500 :4 3 one sash on 3.83%. oapmmeoa $9.wa @325 .3 sofipsfinpm 3 owepnoo Hem .. .HBQ 3an 117. 1934, followimg the movement of exports to all countries, but changing more rapidly. Sawed timber, wood pulp, leather, and certain petroleum.and metal products compose this group. Many items have declined in the face of the Japanese development of her own industries; the gains in commodities required for processing outweighed these, however, as Japanese recovery progressed.l Foodstuffs exports were small and suffered disprOportionately from higher tariffs and a policy of self-sufficiency after 1931. Rice and condensed milk particularly were affected. Although Japan became self- sufficient with regard to domestic consumption of wheat, imports continued as the basis of her eXport trade in flour. The United States sent very little in 1932 and 19oz, but increased its shipments in 1934, accounting for the rise in crude foodstuffs.2 Japan takes about twice as large a proportion of the United States eXports of crude materials as all countries, a much smaller preportion of finished manufactures (now well under one-half), a somewhat larger share of semimanufactures, and a much smaller part of foodstuffs. The advances in crude materials and semimanufactures and the decline in finished goods are expected accompaniments of the industrialization of the country. Decreases in foodstuffs are contrary to rule, but have followed upon governmental policies of self-sufficiency and agricultural relief and larger imports from Chosen, manchukuo, and nustralia. It must be remembered, too, that Japan is still predominantly agricultural . Japan’s imports from all countries are predominantly and increasingly raw materials. manufactures for further use in manufacturing have in- creased, displacing wholly manufactured goods, declining in recent years. Foodstuffs imports,the smallest class, have declined fer reasons given above. ~ l 41. 241. 118. Table XXVII. - Percentage Distribution of Japanese Import Trade (excluding minor miscel- laneous items and coin and bullion) : Food, : : : Lhnuflactures Year : Drink,: Raw : Articles : for Further : and :Materials: Wholly : Use in :Tobacco: :Manufactured:Manufacturing 1926 14.7 56.4 15.2 15.0 1927 12.9 47.9 11.6 13.9 1928 13.6 53.0 15.1 17.4 1929 12.2 55.2 16.0 16.0 1930 13.2 53.5 16.6 15.7 1931 12.8 55.4 16.0 14.7 1932 11.2 58.6 15.5 14.1 1953 9 (a) 61% (a) 14 17 1954 7.6 61.9 11.5 18.5 1935 7.9 61.0 11.6 19.0 Sources: 1926 to 1929, 42; 1930, 31; 1931-2, 35; 1933 as in footnote; 1934-5, 39. (a) 1933 data obtained from text of 35. mate. They are approxi- A C e O C l I 4 I 115324“) I! CHAPTER II 119. AGRICUIEURAL AND FOREST PRODUCTS égricultural Agricultural products make up more than half our eXports to Japan. Cotton shipments caused the percentage to rise in 1952, but they have fallen off since. skins being the only one to increase greatly. the best predepression years in 1954. The other items are for less important, hides and It, however, exceeded Table XXVIII. - United States Agricultural Exports to Japan Agricultural Exports to Japan :As Percent of : : As Percent : Total Year :Total Ezports.: Value : of Total :Agricultural : to : :Agri cultural : Exports : Japan : : _Egports : Mullion Million Dollars Dollars 1925 59 135 6 2,280 1926 49 127 7 1,892 1927 55 141 7 1,908 1928 52 149 8 1,815 1929 51 132 7 1,847 1930 49 80 5 1,496 1931 57 89 9 1,038 1932 67 90 12 752 1933 64 91 15 590 1934 57 120 15 787 1935 52 105 16 669 Source: Foreign Agricultural Service Division. Compiled from.official records of the Bureau of Foreign and Domestic Commerce. more striking is the great increase in the proportion of our tO'tal agricultural exports that went to Japan. In 1935 she was our Second market for agricultural products, far behind Great Britain. {p118 need for imports, chiefly cotton, to supply her industries caused her trade with us to advance much more rapidly than that of other 120. countries.1 Our total agricultural exports, in fact, have been declining since the beginning of the period, although they have shown some recovery from the low level of 1935. Raw Cotton Raw cotton,our principal export to Japan, accounted for nearly 50 ‘per cent of the total value of our exports to that country from 1925 to 1927. In 1929 and 1950 it amounted to about 40 per cent, but in 1952 and 1933 had passed the 60 per cent mark , falling to 53 per cent in 1934.2 Since 1951, Japan has been our principal market, in quantity and in value, supplanting the United Kingdom.and Germany.3 The Progress and success of the Japanese cotton textile industry determines the demand for foreign cotton (there are practically no domestic supplies). The export trade has been particularly significant since 1931, and in that year it was estimated that one-fourth of the imported raw cotton was reexported as cotton yarn or fabric.4 The proportion supplied by the United states had been increasing before the depression, but it has been on a new level in recent years. The ad- vancing quality of Japanese fabrics, reflecting higher domestic stand- ards of living, the entrance into a higher class of export markets, and severe competition from Chinese mills in the coarser fabrics required more of the United States cotton.5 The shorter staple Indian cotton usually sells for about 80 per cent of the price of our product,6 but its uses are more limited,not much of it being suitable for cloths of yarn counts above 303. An 7 unusually narrow price margin in 1927 sent our share of Japan's 1 25, p. 386, 587. 2 67 #105, p. 36. 3 67 #105, p. 98. 4 21,p. 12. 5 12.5, p. 115, 119. 6 69, p. 547. 7 67 #112, p. 1480 121. Table XXIX. - United States-Japanese Trade in Raw Cotton United States ExportsA(a) : Jgpanese Imports : : : Per Cent : Rank: : Per Cent Year : Bales : Dollars : to Japan : by : Yen :from.U. S. : (000)» : “(900) :(by value):Value: (000) ~:(by value) 1925 1,003 120,887 11.5 1 360,168 39.0 1926 1,251 107,859 ---- -- 317,428 ---- 1927 1,437 122,922 ---- -- 343,563 ---- 1928 1,225 129,272 ---- -- «£0,930 ---- 1929 1,101 109,399 14.3 1 276,358 48.3 1930 889 65,910 ---- -- 176,801 --—- 1931 1,744 79,740 24.6 -- 155,306 51.9 1932 2,249 85,921 ---- 1 320,731 -—-- 1933 1,814 86,699 21.9 -- 381,087 63.1 1934 1,737 112,178 30.6 1 400,242 54.9 1935 ------------ ---- -- 371,952 52. "Total raw cotton, except linters? In this and the following tables in Part Three the United States statistics were compiled from.Foreign Commerce and Navigation and Tariff Commission Report No. 105, second Series, p. 86-99. The Japanese statistics were obtained from the Commerce Yearbook, Foreign Trade of Japan-«1934 and 1935 ,Tariff Commission Report No. 105, Second series, p. ~50-53 and 72-77,the,Annua1 Economic Report of Japan-- 1933, p. 103,104, and P. G. Wright, Trade and Trade Barriers in the Pacific, p. 214-18. In the latteryvalues were given .only to tenths of millions of yen. In some of the tables these values in round numbers have been used to fill in the gaps that would otherwise have been left. The data from.the Commerce Yearbook had to be reconverted' into yen.as explained in the source note to Table V, p. 58. In order to save time percentage figures have only been included for 1925, 1929, 1931, 1933-5, and upon occasion, certain other significant years. (a) Sources: imports to 63 per cent.1 In that year and since 1929 this country has been Japan's leading supplier in terms of value,2 In terms of quantity the United States was first in 1927 and from.1931 to 1935.3 'United States cotton growers have benefited from the expansion of Japanese cotton textile exports to markets of low purchasing power whose demand 4 otherwise might not have been tapped. In 1931 and early in 1932 there 42. 67 #105, p. 50; 67 #112, P0 1490 61, p. 109. 42. *GNP w.‘ 11.3%.... 1.1.5!!! A. . ‘1. F were large Japanese imports in.anticipation of the fall in yen exchange.1 The value of our exports of cotton to Japan began to rise in 1931, two years before the upturn in our total exports to her. Concurrent with the general deflation after the stock market crash our cotton prices fell as low as five cents in June of 1932.2 The price differential between United States and Indian cotton was again exceptionally small in 1931 and 1932; India suffered a crop shortage;3and Japanese cotton buyers boycotted India in retaliation against her'neasures restricting imports of Japanese cotton goods.4 As a result, imports of United States cotton set a record in quantity in 1932. They have declined since then as United States prices have risen, but more slowly. The devaluation of the dollar, reduced supplies because of the drought and the crop reduction program, and cotton loans at values above the market price have contributed to this rise.5 For'a time in late 1934 and early 1935 Indian cotton sold at only about 70 per cent as much as United states cotton, but this abnormal differential has since disappeared.6 The conclusion of the Indian trade agreement re- moved the objection to imports from India. Japanese imports of our cotton were, however, 350,000 bales lower in 1935 than in 1934. Stocks were very low at the end of the year and imports were expected to be larger in 1936.7 Japanese mills had postponed purchases pending the announcement of this country's cotton loan program.8 The continued importance of United States cotton has been due principally to the need for its quality in.making the higher grade yarns. some mixing with fibers from India and Chosen is done,9 38, p. 3, 10. 37, November 25, 1935, p. 15. l 32, p. 7; 33. p. 12, 130 2 61, p. 64, 65. 3 67 #112, P0 1480 4 27, p. 6, 7. 5 61, p. 64, 65; 24, p. 29. 6 69, P. 5470 7 8 9 123. and is especially suitable for exports that must compete on a price basis in backward countries.1 Gemany am the United Kingdom have drastically reduced their imports of cotton from this country.2 Our exports to Japan will suffer if barriers such as we have raised in the Philippines and in our domestic markets limit 3 Another obstacle appears in the form of her exports of cotton products. Japan's drive for self-sufficiency ani the problem of her trade balance. There has been talk of importing cotton from Brazil and other countries in order to balance trade bilaterally and secure freer entry for her own exports;4 cotton cultivation is being encouraged in Korea; and staple fiber, manufactured by nany rayon companies, is becoming popular as a substitute for cotton and wool.5 Wheat Through 1930, althogh declining in importance, wheat imports did not fall below 2.3 per cent of Japan's'imports from the United States, but in the mxt three years tley almost disappeared.6 Roughly, the quantity and nlue of wheat exports from this country to Japan, as well as our preportion of Japan's total wheat imports, followed the same movement. The United States has not been the leading supplier of Japan during this period, either Australia or Canada holding that position. Price relationships have been largely (determinative of the distribution of Japan's importsfl Tm United States was giving way to these newer countries to whom wheat production for export was far more important than to us in accordance with the~ general decline in the importance of wheat exports to our economy. A declining acreage following the World War and a growing 27, p. 6, 7e 67 #105, p. 98. 38, P0 30 37, may 24, 1935, p. 15. 39.5, p. 20 71, p. 215. 20, p. 360, 375; 67 #105, p. 50. €001.me 124. Table.XXX. - United States-Japanese Trade in Wheat and Tobacco (a) United States: "bright flue cured.” Commodity : United States Exports _ . Japanese Imports & : : : Per Cent : Rank : : Per Cent Year : Bushels : Dollars : to Japan : by : Yen : from U. S. : (000) : (000) :(by'value);Value : (000) :(by value) Wheat 1925 3,673 5,441 3.7 7 25,580 36.3 1926 8,006 11,040 ---- -- 25,293 ---- 1927 4,105 5,339 ---- -- 18,365 —--- 1928 5,600 7,023 ---- -- 15,904 ---- 1929 7.003 8,515 7.6 6 15,046 21.2 1930 6,403 6,483 ---- -- 17,951 ---- 1931 1,820 904 1.8 - 2,523 7.7 1932 218 117 ---- 27 751 ---- 1933 664 353 7.4 .- 238 .5 1934 4,401 2,352 22.9 8 9,854 24.2 Leaf Pounds Tobacco(a) (000) 1925 7,741' 3,278 3.0 -- 4,600 --_- 1926 7,188 2,369 ---- -- 5,400 -_-- 1927 9,991 4,289 --- -— 7,700 ..-- 1928 15,241 5,521 ---- -- 6,790 ---- 1929 13,969 4,875 4.2 -- 8,047 81.7 1930 5,899 2,221 ---- -- 5,000 ---- 1931 11,053 3,056 3.4 -- 5,546 68.1 1932 2,940 788 ---- -- '1,700 ---- 1933 6,191 1,126 1.7 -- 3,962 63.5 1934 9,405 1,878 1.7 -- 4,782 56.9 Total Tobacco & manufactures 1925 ------ 3,372 2.0 9 1926 ----- 2,469 ---- -- 1927 ----- 4,350 ---- -- 1928 ---—-- 5,624 ---- -- 1929 ------ 4,953 3.0 10 1930 ------ 2,311 --9- -- 1931 ----- 3,216 2.7 -- 1932 ----- - 924 ---- 10 1933 ,-_--- 1,248 1.4 - 1934 ----—- 1,975 1.5 11 125. domestic consumption that left only the less desirable grades and types for 1 foreign sales was already evident at the beginning of this period. Our exports held up exceptionally well in 1930; forty-three per cent of the value of Japan's wheat imports were from this country,2 but the bottom drOpped out in the next three years. Australia's program of export encouragement increased her share in 1931;3 in 1932 the price advantage to Japan of buying in depreciated sterling markets caused a further shift to Australia and Canada;4 in 1933, as a result of the drought and the AAA much of the advantage that might have arisen from our own depreciation was lost. Our total wheat exports in 1933 were walued at less than $5,000,000.5 Our exports of flour to Japan suffered even more severely, .meeting increasing competition from her local millers as well as these other unfavorable factors. They amounted to $1,700,000 in 1929, fell to $4,100 in 1933 and rose only to $12,000 in 1934. Japan took only 2 per cent of our total flour exports in 1929 and has taken less than 1 per cent since then.6 Except for 1931 and 1932 the proportion of our wheat exports that was sent to Japan showed an upward trend. .A short crop in Australia in 1934 enabled us to regain a portion of the former trade,7and Japan's retaliatory duty of 50 per cent ad valorem.additional imposed upon Canadian wheat, beginning July 20, 1935,8 probably further increased our share of the trade. ,Another benefichal factor in the 1933-1934 season was the operation of the North Pacific Emergency Export Association, which bought wheat at 17, p. 247, 248. 43. 32, p. 13, 14. 33, p. 140 41. 67 #105, p. 87. 35, p. 102. 4, p. 84. (D-acwcnuscnesfid llo‘ ‘ final I.ail4 r.— 126. the domestic price and sold it abroad at competitive prices, the difference being made up by funds raised by the processing tax. For the twelve months ending June 30, 1934, about 87 per cent of our net wheat and flour exports were made through this organization at a cost of about 23 cents per bushel. Operations ceased after June 30, as it became evident that the 1934 cr0p would not meet our domestic needs.1 .Ln increase in the Japanese tariff, effective June 16, 1932, from lfi to zé-yen per picul was followed by lowered quantities 0f imports in the next three years, a longer consecutive period, but at no lower levels than were frequent in previous years. There is a drawback on the duty when the wheat is milled into flour for export2 and so effective was the government's program of encouragement of wheat production that Japan had become self-suffnzient by 1935,3the production in Japan proper rising from 31,000,000 bushels in 1932 to 48,000,000 bushels in 1934..4 Groes imports have varied from.year to year since the develOpment of the export flour business, dependent upon the domestic cr0p and demand and the . success of the.millers in meeting foreign, especially Australian,competi- tion. Even if Japan can continue self-sufficient with an increasing population there will be large imports for milling flour for exports plus some strong wheat to mix with the domestic soft wheat.5 Tobacco and Manufactures Despite a Japanese import duty of 355 per cent throughout the period imports of leaf tobacco from the United States averaged nearly 1 per cent of Japan's total imports from this country.6 Through 1930 the next largest iten.in our*total.exports of tobacco and manufactures was cigarettes;' stems, trimmings, and scrap supplanted them in 1931. Neither item.was 26.5. 4, p. 840 4, p. 56. 43. 4, p. 56, 90. 71, P0 8160' 0101¢>Citold 127. ever'very large. The Japanese government has a monopoly of the tobacco industry in that country. The failure of imports to respond to the general.recovery'movement after the depression is perhaps due to govern- ment discouragement. The product is not a necessity; contributes to Japan's unfavorable trade balance; and the government is promoting more and better production within the country.1 The_United States is the principal supplier,sending a higher grade product than its principal competitors, China and the Philippines. They have been gaining ground during the depression and recovery periods, however. Hides and Skins The intensity of cultivation of the limited amount of land in Japan has not lent itself to stock raising. Few livestock are reared and but a small proportion of these are slaughtered annually, partially at least 'due to religious objections. Such domestic hides as are produced are usually of low quality, for the livestock are poor and the take-off and curing careless. According to the Japanese data, China was the Leading source of imports until 1934 when the United States moved up from.second ‘place.2 many partly tanned hides are also imported from British India and halaya, but these are included in the statistics of leather imports.§ The heavier weights of mediumpquality rawhides, principally cattlehides, are most popular, with a trend toward the usensemitanned hides, which the tanners have found more advantageous than the purchase of the raw product.4 Cow and buffalo hides enter Japan duty-free.5 Because the United States itself uses so much leather only a rather small proportion of the large production or hides and skins inciient to meat production is exported and alarge quantities are imported. Japan is one of our*1arger customers6 and ‘ 58! P0 20 60 #50, p. 3, 164; 59 #755, p. 5-7; 67 p105, p. 52. 59 #632, p. 34. 59 #755, p. 7. 71, p. 216. so 450, p. s, 43, 44. alflimsbldihi 128. her preportion has increased during this period, our experts to all countries continuing to decline until 1933 while exports to Japan turned upward in 1931, supplying her growing leather industry.l Although values dropped Table.XXKI. - United States-Japanese Trade in Hides and Skins and Leather Commodity : United states Exports : Japanese Imports a : : Per Cent : Rank : : Per Cent Year : Dollars : to Japan : by : Yen : from U. S. ' : (000) :(by value): Value : (000) : Lby value) Hides and Skins 1925 1,090 9.1 16 (a) (a) 1926 1,474 ---- -- (a) (a) 1927 1,281 --—- —- 3,132 32.5 1928 1,269 ---- -- 3,185 ---- 1929 1,375 20.2 19 3,729 29.1 1930 876 ---- -- 2,472 ---- 1931 807 26.3 -- 2,242 30.6 1932 885 ---- 12 3,397 ---- 1933 901 44.0 -- 4,315 31.9 1934 1,579 36.7 13 6,270 38.5 1935 ~---- ---- -- 6,696 31.4 Leather 1925 2,025 3.9 14 3,779 ---- 1926 2,357 ---- -- 4,200 ---- 1927 2,110 --- -- 3,084 40.2 1928 2,002 ---- -- 3,392 ---- 1929 1,512 3.5 17 3,093 42.4 1930 789 ---- -- 1,616 ---- 1931 680 2.7 -- 1,469 33.8 1932 245 --- 23 982 ---- 1933 227 1.6 -- 767 19.5 1934 238 1.5 23 749 15.5 (a) Not listed in 42 for the years before 1927. ‘ Considerably under tln influence of depression conditions, the quantities 8ant Japan showed a general upward trend reaching new high marks in 1934. cattlehides comprised the bulk of our exports throughout the period. Calf and kip skins showed a remarkably steady growth in the face of poor busi- nGas conditions in general and accounted for over one-third of the total in 1934. x 1- 41; see also p. 129 below. t . u r . . l I ’ I I I . U ( I Q 1 1 I O Y n I la. Its a p A . . . s o I . e h s I . 129.‘ The customary movements toward greater self-sufficiency are under way in Japan as she attempts to promote sheep-raising in Manchukuo and in Chosen. Should such projects he successfu1,imports of wool and of hides Table XXXII. - United States-Japanese Trade in Certain Hides and Skins : : Japanese Imports of : United States Exports : Cow and Buffalo Hides : z : and Skins Year :Calf and Kip Skins (a) : Cattle Hides : : : :Per Cent: : :Per Cent: : Per Cent :Pounds:Dollars: to :PoundszDollars: to : ‘ Yen :from U. S. : (000): (000) :Japan by: (000): (000) :Japan by: (000) :(by value) x : :Vahm : : :Vahn : : 1925 311 67 2.2 6,576 1,011 14.4 2,600 ---- 1926 628 111 ---- 9,342 1,317 ---- 4,200 ---- 1927 688 134 ---- 6,823 1,108 ---- 2,900 ---- 1928 1,065 296 ---- 4,488 936 --- 2,600 ---- 1929 1,311 322 20.9 6,800 986 28.1 3,370 31.8 1930 711 142 ---- 4,926 685 ---- 2,300 ---- 1931 1,843 213 34.8 6,210 497 29.5 1,949 34.1 1932 4,470 315 ---- 9,581 488 ---- 3,100 ---- 1933 2,971 294 58.1 8,897 584 56.8 4,175 35.6 1934 5,307 582 48.4 12,739 946 38.0 6,015 41.9 (8) 1925-1930, calfskins only. could be reduced, but it will not be for some time in any event.1 leather Japan's use of leather has been increasing;during this period although the depression was a setback, causing an even greater tendency to buy the cheaper varieties than was customary in a country whose populace has such low purchasing power and sometimes sending consumers back to the articles formerly used or to cheap substitutes. The demand for foreign style shoes has been gradually increasing, however. School regulations require them; 2 they are used in the army; and business men prefer them. The domestic tanning industry has expanded its output, extended its range, and improved the quality. The tariff was increased in 1926 and 1 39.5. p. 2; 40e4e 2 56; 59 #755, p. l; 60 #157, p. 7. t o s p. p s s V |\ 1 I . . I ' k I I a o I o_ . I !\ . f. P - . e O O s v. . n o s O D e. la I.» a a . . ( 130. in 1933. $018 leather was dutiable at 21 yen.(l926) and 36.58 yen.(1933) per*100 kin; the more valuable dyed or*colored leather paid 145 yen from 1926 to 1932 and 195.75 yen in 1933 and following years, per 100 kin.l Table XXXIII. - United States Exports of Certain Leathers to Japan : Goat and Kid : Sole Leather, : Calf and Kip 7 : (Glazed Kid), Black : Backs,_Bends,;& Sides : (Other than Black) : : :Per Cent: : :Per Cent: : :Per Cent Year :Square:Dollars: to :Square:Dollars: to :PoundszDollars: to : Feet : :Japan by: Feet : :Japan by: : :Japan by : (000): (000),: Value : (000): 1000) : Value : 1000)1_L999) : Value 1925 1.116(8) 340(a) 2.7(a) 1,869 747 28.4 1,584(b) 564(b) 5.7(b) 1926 a 559 200 ---- 1,744 703 ---- 1,619 569 6.8 1927 592 195 ---- 1,634 757 ---- 1,876 555 -—-- 1928 608 219 ---- 1,095 512 3256 1,085 407 ---- 1929 633 29 4.3 778 3.51 28.3 559 209 3.6 1930 665 228 ---- 498 220 ---- 301 100 ---— 1931 734 192 4.8 709 216 35.6 309 82 4.7 1932 496 98 ---- 105 26 ---- 127 21 ---- 1933 643 122 5.7 27 14 11.9 35 6 .8 1934 479 122 5.2 38 18 8.8 49 10 ' .8 (a) Total goat and kid. (b) Total calf and kip. Early in the period domestic uppers were inferior in finish.and elasticity, while domestic sole leather absorbed water quickly.2 Even in 1930 most of the leather producing establishments were household shops with only 1 or 2 employees; less than twenty were fully equipped with modern machinery. The greater part of the consumption of the medium qualities and practically all 3 By 1934 more of the smaller pro- of the best grades hnd to be imported. ducers had been forced out of business and there were 50 important plants fitted with modern machinery. Practically all types of leather were pro- duced and the foreign producers were bein; displaced. Although the competition was more severe and losses had been sustained the United States in 1934 remained Japan's leading supplier of finished 71’ Do 2160 59 #546, p. 54, 55. 59 #755, p. 4, 5. 60 #157, p. 209. #>Cfltold 131. leather am of each of the three sub-classes presented in Table 305C111. The Japanese statistics include imports of partly tanned hides and skins from British India, sufficient to give.it the bulk of the trade as reported in Table lOCXII.1 The outstanding feature of the tables is the continuing declim in exports to Jamn and in Japan's status among our customers. Greater domestic production caused larger imports of hides and skins but "reduced imports of leather. Sole leather, backs, bends, and sides, and calf and kip other than black declined much more rapidly than goat and kid, black, leaving the latter first in importance. Japan increased in importance as a customer for black goat and kid leather. Her domestic prediction was small before 1925, grew sufficiently to cover about 45 per cent of her requirements in 1930, but did not increase much thereafter, while the consumption fell off less than that of other leathers.2 The Jamnese output of solo leather now compares favorably with our grade .2, but a large part satisfies the important demand for the cheaper qualities. 3 Leather produced Imports are chiefly from our Pacific coast producers. in Japan virtually dominated the domestic market for black uppers in 1929, and the manufacture of medium qualities and of colors has grown since then. Tie shift to cheaper types has reduced the demand so that'the domestic production of calf and kip now predominates.4 Condensed Milk The lack of development of the dairy industry in Japan means that a large part of the demand must be met by imports. The native Japanese have not generally come to desire milk in their diet, but there was a demand onthe part of resident foreigners5 and certain of the Japanese. 1 60 #157, p. 212’ 214; 60 £103, Pe-224‘ 59 #401, P0 23; 60 #157, p. 2100 2 59 #755, p. 16; 60 #105, p. 225, 224; 60 #157, p. 212. 5 59 $401, p. 25; 59 #571, p. 58; 60 #157, p. 209. 4 59 #632, p. 52; 60 #105, p. 225; 59 #755, p. 15-15, 19; 60 #157, p. 210, 211. 5 10.5, p. 50 132. With the advance in the duty from 11 to 20 yen per 100 kin in that year and to 25 yen per 100 kin in 1933, imports declined markedly. The United States was the principal supplier, sending usually about two-thirds of the total, but by 1933 its preportion had fallen below half.l Meanwhile, Japan Table x1217. - United States Exports of Condensed Milk to Japan : : : Per Cent: Rank Year : Pounds : Dollars : to Japan: by : (000)__: (000) :(by value): value 1925 5,242 966 14.6 18 1926 3,642 670 ---- -- 1927 4,947 925 ---- -- 1928 5,652 1,068 ---- -- 1929 5,186 984 15.2 22 1930 4,219 800 -—.- -- 1931 3,732 721 21.8 -- 1932 2,224 421 ' ---- 18 1933 .1 .02 .003 -- 1934 91 13 1.3 28 had practically lost her significance as a market for our exports of con- densed milk. Rice Between 1880 and 1928 Japan's rice production increased 88 per cent, three-fourths due to a higher yield and one-fourth due to an increase in the area under cultivation. It did not seem possible in 1929 that either by an increase in the cultivated acreage or by larger yields Japan could significantly increase her production.2 From 1928 to 1932 , 85 per cent of the annual consumption was domestically produced and 13 per cent imported from Chosen and Taiwan. Despite the efforts of the government to support the price by loans for storage, and‘by buying and selling at fixed prices during this period the crops brought low prices.3 On October 12, 1933, was issued an imperial ordinance prohibiting the importation of 1 71, p. 198, 217. 2 13, p. 31. 3 708. 133. rice without a license. 1 In that year also the duty was advanced from.1 yen per 100 kin to 1.35 yen.per 100 kin.2 Table XXXV ShOWS the effects upon our trade. Table XXXV. - United States-Japanese Trade in Broken Rice United States Exports ja) ' Japanese Imports : : Per Cent : Rank : : Per Cent : to Japan : by : Year Pounds : Dollars Yen :from'U. S. (000), : (000) :(by value):Value :gLOCO) :(by value) 1925 21,157 810 89.2 20 ---- ---- 1926 26,589 1,055 ---- --- ---- ---- 1927 35,116 1,293 ---- -—. ---- ---- 1928 48,635 1,504 ---- --- 2,457 ---- 1929 47,645 1,471 74.5 18 5,225 18.1 1950 55,259 1,005 ---- --- ---- ---- 1951 23,978 356 40.8 --- 1,271 19.5 1952 50,962 551 --—- 20 ---- ---- 1933 9,165 85 78.6 --- 581 5.5 1934 None None None None None None (8) "Rice flour, meal, and broken rice." Aglarge part of Japan's total rice imports consisted of broken rice. We sent little of any other classification to her’except in 1927, follow- ing Japan's short rice cr0p of 1926,3 when.exports of "Rice” totalled $2,600,000. From 70 to 90 per cent of our broken rice exports went to her'in most years. The size of her'domestic crop has been the principal determinant of the volume of imports. Should she have a very short crop some year the government would probably relax its restrictions to pre- vent excessive prices. The United States has always been a rather un- important source of supply, still less important with regard to total rice and paddy imports than with regard to imports of broken rice alone.4 35, p. 1100 71, P0 2180 42' 1928. v01. II, p0 3890 67 #105, P. 72' 75; 71’ P0 1970 e-oahar» we». - 154. Forest Products Wood Pulp Our exports of paper base stocks to Japan have expanded remarkably since the early part of the period, when Canada, Sweden, Norway, and Germany supplied larger proportions of the value of Japan's inports than did we.1 This has come about with the growth of exports of sulphite wood Table XXXVI. - Lnited States-Japanese Trade in Paper Base Stocks Japanese Imports United States Exports .0 O. .0 .0 .0 O. .0 .0 x 3 Year :Total Paper Base Stocks: Sulphite Wood Pulp» Pulp for Papermaking : ‘7Per Cent: Rank : : :Per Cent :Per Cent :Dollars: to : by : Tons :Dollars: to Yen :from U. S. x (000) :Japan byzvalue : z (000) :Japan by (000) :(by walue) 8 :‘Value : : z : value : 1925 175 3.0 24 None None None ------ ---- 1926 97 ---- - 165 20 ---- ------ ---- 1927 191 ---- -- 303 17 ,---- ----- - ---- 1928 470 ---- -- 2,627 177 ---- 1,289 ---- 1929 576 11.3 25 8,463 451 21.3 2,317 17.2 1930 324 --— -- 3,595 188 --- ------ -—-- 1931 1,224 32.9 -- 21,662 1,152 51.2 2,418 20.4 1932 1,086 --- 9 21,162 1,065 --4- 3,952 --- 1933 1,994 51.6 -— 45,017 1,959 64.3 7,802 28.8 1934 5,207 63.9 6 91,426 5,154 75.6 16,321 36.9 1935 ‘ ----- ---- -- ----- - ----- ---- 22,812 41.4 pulp, comprising nearly all of the paper base stocks sent Japan since 1931. Our exports to all countries of all paper base stocks declined until 1933, but exports of sulphite wood pulp rose in value after 1928.2 The rapid deve10pment of Japan's foreign style paper, rayon, and other cellulose products industries has been particularly marked since the de- pression. Although she produces about 80 per cent of the paper pulp needed,3 the high grade sulphite wood pulp needed for the manufacture of rayon, 1 59 #672, P0580 2 41. . 3 38, D0 70 3.1.1.1."! ,. _ . .1 135. staple fiber, cellophane, and other cellulose products must be imported.1 It was largely due to the demand for this quality and type of product that the United States had become Japan's principal supplier in 1934. A temporary factor of minor importance was the added 50 per cent retaliatory duty upon wood pulp imports from Canada, practically none entering in the last four months of 1935. This was to be removed on January 1, 1936, according to press reports.2 The Japanese data presented in Table XXXVI do not differentiate between rayon and paper pulp. Imports of the latter still form a some- what larger part of the total quantity? but there seems to be more room for the growth of imports of rayon pulp. In 1933 our government's representative in Tokyo stated, "We believe that Japan already accounts for>about 15 per cent of world rayon production, being exceeded only by the United States and Italy. There is reason to believe that in a very short time production will equal that of the United States and that in 1934 Japan will be the world's largest producer."4 .As usual, however, Japan is trying to develop her own production. Among other things it is reported that the Taiwan Paper Company is building;a factory for the {manufacture of paper pulp from Xiphagrastis, an Asiatic grass somewhat similar to sugar cans in appearance.5 Wood Japan has been forced to import large amounts of lumber to supple- ment her domestic supply. The need was particularly great in the years following the earthquake of 1923 when.reconstruction was going on. Housing and the construction needs that accompanied her industrial expansion6 before 1929 maintained imports at a high level. Construction declined in 1929 as many new projects were postponed and imports began a 35, p. 46; 36, December, 1933, p. 26. 38, P0 30 36, March, 1935, p. 18; 37, May 24, 1935, p. 21; 37, July 24, 1935, p. 19. 36, July, 1933, p. 7. 36, January, 1935, p. 16. .mpumt—o 136. .ommn pHmu uo omuufipuoo mmpoupoom -- --- emm.mm mama NH m.on eem.a a.mm new mmm.em a.ma «an ome.me a.mm moa.om onm.om «emu - a.ma mme.a a.mm 6mm mua.en a.mm see mmm.nm e.am eom.mm mee.nm mama a -- nom.u -- one som.nm -- one 6am.on -- --- mmm.om mead - e.em one.» a.mm eeo.m mae.naa o.mm mam Hmm.ae m.em mma.mm om¢.m~ Hams - -- ems.n -- mnn.m Hmo.uuu “so neo new -- --- omo.mn ones a m.ee mmm.m m.em ans.n amo.oea A81 181 new H.em 026.86 aam.se ammo - m.me mnm.a -- mam.m mao.mmm new 18V Rev -- mem.em mmm.em mean - -- man.m -- eem.n mee.ema Aeo new law -- --- mmm.as amen II IIII oon.¢ IIII Nmn.n #ma.¢ma Avv Adv Adv IIII IIIIII moe.em omaa oa a.mm mum.m a.mm mam.m smm.moa “so new 181 --4-q.-nw-- nm¢.oe need 0 .Hfih .mmm .muE .nmomo woos mun-fl seems ecoasmm «made» an." -moooo " Romeo " amvoooz pmpefia usmm cum mmoq .m .D.Eonuu do» « um» » omuupomfiuumeub Hopes pumo nmm “ um- “ u manomaH mmmu oh u m m.e muu.m .mm mm mem.u o.me and omn.m a.m ems eom.ma a.mm emm.a emu.mma seas - 5.6 ama.m a.mm em mma.m m.as mNH ems.ou «.n oem msm.mm a.mo smo.a HmH.eeH mama a -- mea.m -- mm ee¢.m -- Hem man.ma -- men mem.me -- m¢m.a snm.esa mama - a.ma mom.e m.ee mad «Hm.e e.mm mas aam.me o.HH mom moo.eo H.oo Hmn.m mmo.eom Hams - -- smm.m -- see mmm.e -- mam mam.ae -- 0mm esm.mm -- emm.m mes.oba ones m a.m mmo.oa H.5m non muo.ua m.sm mmm.u mam.em e.aa mem.m seo.mma e.ne one.e esm.e¢m mead - -- mem.ma -- mmm obs.om -- mam.n mma.mma -- can.» ome.mma -- nae.e mom.mmn mama - -- oaa.nu m.em mmm mmm.9a -- new.» om¢.mea -- omm.n enm.maa -- nom.m ems.mmm seas - -- mnw.oa Ago “no Ago -- sea.» mma.meu -- oee.n mas.msa -- mmo.s Hme.een same a dum.mu mme.ma 151 Ago 15o H.He mma.m aso.mou a.mm nes.m nau.mea «.05 mmwne noo.som mama w muoDUOHnH Havoc MoOHEOm UQmQOHQ Nah H2832 H32. a. 218-8m was mama-sou sewage £22; 8228 Ammuaauumom cum .mxumam .monmom measen meaa> m H means H mwmeo H mass» M ”mooo H muae> H ”mooo m muae> . “Mooo H as .ee amuse. noooo .an amuse. noooo . oooo.sp sauna. Amoco . 0001.25 amuse. Aoooo . oooo.ap amuse“ noooo . oooo. xumm " on unnmaaoau o» “mamaaoau poem“ on “mamaaomu poem“ 0» «namaaomu poem“ 0» "mamaaomu pooh" Hum» Sumo 9mm" Sumo 9mm" « “pumo mom“ 2 Sumo .Hmmu « “pumo nmm. « u mpuouwm mopspm empuuo 8663 an Queue sameness-mopapm amass: - .HstNN_.Hnse 137. decline from which the recovery has been but slight. The United States, with large supplies of timber very similar to that which grows in Japan and to which they have become accustomed, growing in the Pacific States and readily shipped by water to Japanese ports, is her principal supplier. Although the value of our exports of sawmill products to Japan is greater than the value of our exports of unmanufactured wood, the latter class has become relatively more important during this period. The Japanese much prefer to import large sizesland rough lumber, sawing them in their own mills or on the Job itself. Their mills cut for quality, finishing their products very smoothly and accurately. Purchasers willingly pay a higher price for this type of material. Most of the sewn sizes of Douglas fir and hemlock imported are remanufactured in Japan with as much upgrading as possible. There iamextremely little waste, almost all fragments being used in some way.2 Douglas fir, mostly sawed timber, but including large amounts of boards, planks, and scantlings, nearly all rough sawn, is the varhaty most in demand. The large sizes in which it may be obtained plus its inherent qualities make it more or less indispensable. Cedar is imported to supplement the decreas- ing supply of Japanese red.and white cedar, no other substitute being available. Imports are principally as logs and hewn timber. Hemlock is particularly suitable by virtue of its size and freedom.from resin for construction requiring a clear lumber without pitch.3 There were but small evidences of recovery in this trade as late as 1934. Sawmill products continued their-decline; those groups that rose did so in small degree. A shift to unmanufactured timber might have been ex- pected as Japan pursued her policy of self-sufficiency and continued her industrialization,especially in view of the above-mentioned practice of 1 60 #59, p. 5. 2 60 #59, p. 5, 7, 8, 15. 5 6o #59, p. 7, 9, 15-21, 59. (a) Inclusive also of other softwoods and of hardwoods. (b) Not separately classified before 1927. (c) "Cedar, other than for pencils, pine and fir boards, planks, logs, and cents.” (d1 Nnt nennmta'lv (Fla-unified before 1931- 138. resawing most imported lumber. Nor would imports be expected to reach former levels now that the reconstruction work and government building program.have been largely completed.l But the United States, particularly since 1029, has been suflying a smaller proportion of Japan's imports of wood, while Canada's share of cedar, pine, and fir imports climbed from 6% per cent in 1929 to 31 per cent in 1954.2 Canada's departure from gold aided her exports of lumber in 1932, but this factor is in no way a complete eXplanation, for we were losing Japanese markets to her quite rapidly before that.‘ The NRA enabled many lumber companies to raise prices domestically in 1933; if they quoted equivalent prices for export the advantages of our depreciation were largely nullified. Labor troubles in Pacific ports in 1934 kept down exports to Japan in that year and enabled Canada to capture more of the market, partic- ularly as Canadian prices were reduced during the latter part of the year. Imports of foreign lumber in general were favorably affected by the higher prices and policy of control put into effect by the Saghalien government to conserve the pulp supply.3 Japan's imports from this country rose consider- ably in 1935, accounting for nearly all of the increase in her total imports.4 A logger‘s strike in the Pacific Nerthwest, the 50 per cent retaliatory duty imposed on Canadian lumber in the last part of the year, and rumors of an impending shipping strike in our own Pacific ports contributed to this.5 Japan's general tariff increase upon imports of wood affected all countries equally, but helps to explain the marked decline in the proportion of our exports of most of these products that went to Japan. according to P. G. Wright the representative tariff rate was 1.8 yen per cubic meter until 1932 when it was increased to 3 yen. In 1953 it again was raised, this time to 4.45 yen per cubic meter.6 36, December, 1933, p. 26, 27. 67 #105, p. 50. . 36, AngUst, 1934, D0 17, 18; 35, P0 90, 910 39. 37, September 26, 1935, p. 22; 38, p. 3. 71’ p0 2140 Gone-(stew 139. Rosin The United States furnishes the bulk of Japan's imports of rosin,which have held remarkably steady. In 1929 we supplied rosin valued at ¥3,500,000. Quantities rose during the depression, but the value drOpped to ¥2,000,000 in 1931, rising to ¥2,900,000 in 1934. As a necessary raw.material, imports are not dutiable.l Cur statistics showed that while the value of our exports to Japan fell from s1,4oo,000 (1951) to p680,ooo (1955), she took a larger part of our total exports, by 1934, 10 per cent, in contrast to 7 per cent in 1929.2 1 71, p. 217; 67 #105, p. 74. 2 67 p105, p. 87. 140. CHAPTER III LE‘I‘ALS AND IAANUFAC’FURES , EXCEPT MACHINERY AND VEHICLES Dependent as she is for most minerals and metals due to the volcanic formation of the islands,lyet needing large quantities of them for the furtherance of her program.of industrialization, Japan has been a rather important market for our exports of metals and manufactures. Her pro- portion of the total declined from.7% per cent in 1926 to 5 per cent in 1931 under the influence of a general slowing up of Japan's expansion, but with her recovery boom.flar in advance of other countries it reached 15% per cent in 1934. values fell from p34,500,000 in 1926 to $6,000,000 in 1932 and rose to $29,600,000 in 1934, above their 1929 level. Exports of most of the items that are discussed here followed this general course before the depression, but there was more varhince in their response to that influence. The remarkable expansion of exports to Japan during the recovery period was concentrated almost entirely in iron and steel semi- manufactures, cepper, and aluminum. These outweighed all others. Iron and Steel By far the largest metal imports of Japan were of iron and steel, basic to any sort of industrial program. The first year of our-period, 1925, is hardly representative, for Japan's purchases were below their normal Levels, largely due to the excessive stocks on hand as a result of large imports in 1924 following the earthquake of September, 1923.2 Our exports of semimanufactures and advanced manufactures reached their predepression peak during this eleven-year period in 1928; exports of 1 59 $505, p. 5, 4. 2 59 #612, p. 55. 141. steel mill products to Japan were at their highest in 1926. Government regulations requiring the replacement of all temporary structures erected in the business district after the earthquake by buildings of concrete and steel before 19281 added their force to the general industrial growth of Table xxxv111. - United States-Japanese Trade in Iron and Steel United States Exports : Per Cent : Hank : : Per Cent : Rank : Year Dollars : to Japan : by :Dollars : to Japan : by : (00 ) :(by Value): value : (000) :(by value): value 3 Semimanufactures Advanced_hanufactures 1925 8,796 12.5 5 2,910 3.8 2 1926 14,450 ---- -- 3,201 -—-- -- 1927 14,082 16.2 -- 2,584 ---- -- 1928 15,403 ---- -- 3,874 ---- -- 1929 14,828 14.2 4 3,511 4.0 13 1930 9,643 ---- -- 2,558 --- -- 1931 3,375 10.5 -- 2,547 6.9 - 1932 2,407 ---- 5 749 ~--- 15 1933 7,265 28.2 - 414 2.1 -- 1934 17,352 30.5 3 620 2.2 17 Japanese Imports of Iron and Steel Steel Hill Products : Per Cent Yen :from U. S. (000) :(by value ) 1925 2,657 3.6 13 (a) (a). 1926 5,569 6-8 -- 33,697 25.0 1927 3,967 ---- - 36,745 --~- 1928 3,429 ---- -- 39,237 --~- 1929 3,719 3.9 12 39,931 25.0 1930 2,027 ---- -- 29,067 31.1 1931 980 3.2 -- 8,635 17.8 1932 552 ---- 16 11,683 ~--- 1933 580 2.9 -- 22,190 16.3 1934 530 1.7 18 67,797 39.6 1935 88,991 43.0 (a) Not comparable before 1926. ‘__ Japan, necessitating imports of iron and steel and their products. Under the influence of the world depression imports from the United 53hates fell to less than one-fourth their 1929 value, and the United States ilame to supply less than 18 per cent of the total imports. Before 1933 ‘ l 42. 1925’ p. 673. 51‘ 142. .the share of the United States was greater by value than by quantity; we were sending products of higher quality and value than other countries. It was perhaps for this reason that imports from this country declined so much more rapidly than the total imports of Japan. Certainly, in 1933 and following years, probably due in harge part to the much greater importance of old and scrap iron and steel, the unit value of imports from this country was lower than that of imports from.all other countries,land in 1934 and 1935 imports from the United States reached new heights, both in absolute value and relative to the total. Japan, in 1934 ranked sixth among the world's steel producers, was our leading customer for iron and steel products in 1933 2 and 1934.‘ The Imperial Geological Survey has estimated the iron ore reserves of Japan Proper to be 80,000,000 tone which would supply the blast furnaces of the United States for little more than a year. Not over half of this ore is utilizable at present. There are extensive deposits of iron sands, but these cannot be economically worked with existing methods.3 Iron ore is imported principally from the malay Peninsula and China;4 pig iron is imported in large amounts from India, Chosen, Manchuria, and China; the other iron and steel products imported come principally from Germany, the United States, and Great Britain.5 The United states, in 1929, produced 37 per cent of the world's iron ore, 47 per cent of its pig iron, and 48 per cent of the steel ingots.6 Although our exports of tonnage products are but a small part of our total production, their persistence indicates that we have a comparative advantage in general in world competition in this field, growing out of our rich natural resources _— 42. 1 . A 2, p. (911, 012, 3420 15, p. 277-9. 21, p. 140 59 #615, p. 1. 45, p. 20 030109me 143. and our industrial effectiveness. The advantageaso mmhoaa .mpeogm sesameepen was opmaoefie doeH 8H0 mm.epmmn sesamefiewwefieeaoeH .mmpom passe " AoooS . 303-u msflee « gooey " sense “.Nooon “ muqdomuhn .m .9» new "an emmwhumpwaaoau meoB .mpmomm Heme was conH " passe " looov " loooq,u "he unashamemaaomu muqdomnhp .m .3 am mvp 3pm HHOenH odam> “ Aooov " new "we camphumemaaoa " on u u . Seem « . op « “ Seem « . oe . " meow "peso mom" " “peso pom“ “peso pom" “ammo Hem“ "ammo mom" 1 u mupomxa mopepm ocean: “manomaH omoasmwh“ appomxm seesaw empacb “menomaH omoemmwh“ manomem mopspm copaealw monepoeueeosaemm Hoopm use ooeH flamenco :H ovens omoqemshnmopopm uopfiop I .NHNMN canes 145. use and for export.1 Domestic and colonial pig iron.producers cannot compete successfully without extensive tariff aid and subsidization. The problem of an ore supply is the nearest to solution of any. Lack of good coking coals, out-moded equipment, and general inefficiency send Japanese costs far above those of Indian producers.2 Since the United States has in nearly all years been the leading supplier of scrap iron3 the growth of Japan's total consumption is represented by her imports from this country. Some imported scrap is used for other purposes than smelt- ing. Tin-plate and black-sheet scrap is in good demand for handicraft work, as toy manufacture. 01d gas pipe and steel boiler tubes are redrawn and used for making bicycles.4 These factors alone could not have caused the growth from .1 of l per cent of Japan's total imports from the United States in 1925 to 2.7 per cent in 1933,5however, had it not been for the enormous expansion of Japanese industrial activity, government aid in the search for self-sufficiency, and the greatly increased demand for iron and steel products for military purposes in recent years. Our departure from the gold standard in 1933 gave us an advantage over competing suppliers in scrap as in other steel products,6but higher prices in the United States in 1934 tended to cause a shift toward other countries for scrap iron supplies and toward a wider use of pig iron in general. The Belgian devaluation in 1935 also was adverse to our exports.7 Other Semimanufactures Tinpflate and terneplate constituted our largest single iron and steel export to Japan before the depression, but now ranks behind iron and steel 38, p. 5. 59 #612, p. 6, 9, 16, 18. 59 #615, p. 11, 12; 42. 59 #615, p. 200 71’ p. 2150 36, June, 1933, p. 2. 36, Febrwary,l934, p. 14; 56, April, 1954, p. 11; 57, May 24, 1955, p. 19. <103CfiH>CflZUIJ 146. scrap. From 1925 through 1933 it averaged 1.7 per cent of Japan's total imports from us.1 We were usually Japan's principal supplier by a wide margin. This position was lost to Great Britain in 1933,-but was regained in 1935. Japanese firms are not able to furnish tastin plate needed by her petroleum and canning industry.2 The rapid growth since 1931 of canning for export that was noticed in Part Two abovejjthe very slow in- creaSe of domestic production, and the slight price advantage held by United States producers in 1934 over their British, French, and Italian competitors4 point to continued exports on an important scale for some time, although if the new governmenttdrlplate factory proves successful we may eventually lose the market. Wire rod exports to Japan also showed a substantial recovery from the 1932 low point. Except for the period from.1929 through 1931 Japan has taken an ever-growing share of our exports and is now far and away the principal customer. At the same time the percentage of her imports supplied by this country has risen, the United States since 1931 ranking as her most important source, ahead of Germany and Great Britain.(5 This is another commodity with which Japanese firms have not yet been able to supply their compatriots. 7 Imports of wire itself are comparatively smallf3 Black steel sheets and iron and steel galvanized sheets differ from the class of semimanufactures as a whole,_failing to recover much of their predepression status. The former was second only to tin plate and terne- plate through 1928, but has been hard hit by the expansion of Japanese capacity. Japan was formerly a very important market for black sheets, 71, p0 2150 36, February, 1933, p. 9; 59 $612, p. 46. 43. P. 30 36, April, 1934, p. 11. 36, February, 1934, p. 14. 59 $615, p. 11, 12; 67 }105, p. 510 36, February, 1933, p. 9. 59 £615. P0 16. a)<10301$-0303FJ 147. preferring'United States Open-hearth steel sheets for galvanizing because 1although Great Britain ranked first as a supplier 2 of their superior quality, in most years, probably competing on a price basis. We were Japan's principal supplier of galvanized sheets from 1925 to 19273 and probably continued so until 1930, although the data are not available. The domestic production has come to dominate this field, in which imports were never very large during our period. Other Iron and Steel Japan took an increasing share of air exports of advanced manufactures until 1931, but her prOportion was on.a much lower-level from 1932 to 1934. From five to six per cent of our exports of tools of all sorts went to Japan before 1932; her proportion of our smaller exports of woodscrews rose to 51 per cent in 1931. The depreciation of the yen raised a barrier against imports in the fbrm of higher prices. In the case of most of the commodities that have been discussed this was of little avail,for Japanese industry had to have them in order to carry on. Here, however, was a finished product, not a raw material; furthermore, Japanese producers had become able to Isupply most of the market. These markets are probably lost to United States producers, except for those manufactures beyond the technical scope of Japa- nese industrY. ' The situation is essentially the same with regard to steel mill products, except that Japan has been losing significance as a market for our exports since 1926. Tubular products and fittings were the principal imports of this grouprmostly welded black pipe (nearly all steel) before 1931. As early as 1927 domestic producers supplied 47 per cent of the consumption of pipes and tubes. United States products sold principally upon a quality basis.4 59 #515, Pa 240 59 ”615, p. 11, 12; 67 p105, p. 51; 36, February, 1955, p. 10. 59 #615, p. 11, 120 59 #615, p. 16, 17. m-oaaare 148. The percentages of our exports of structural iron and steel and of iron and steel rails sent to Japan fluctuated widely during this period, but have been on a much lower’level in recent years, due to the depreciated Table XL. - United States Exports to Japan of Certain Steel mill Products and Advanced Manufactures (a) : : : Per Cent : : Per Cent : : Per Cent Year :Pounds:Dollars: to Japan :Dollars: to Japan.:Dollars; to Japan :giQUO); (000)_;jby value); L900)_;pr value): (000) :(by_va1ue) All Tubula£_Products Structural Welded Black Pipe and Fittingstb)_ .1333 g Steel 1925 23,877 977 14.7 1,364 4.6 383 3.2 1926 50,545 1,712 22.2 2,278 6.7 972 6.3 1927 43,225 1,412 ---- 1,866 ---- 339 ---9 1928 34,720 1,265 ---- 1,680 ---- 297 ---- 1929 45,244 1,531 16.5 1,998 5.5 529 2.3 1930 16,331 569 ---- 1,004 ---- 472 ---- 1931 9,662 306 10.9 612 5.3 58 .8 1932 4,271 139 --- 289 ---- 79 --- 1933 956 25 2.5 379 4.7 48 2.2 1934 .3,324 80 4.9 374 2.8 21 .4 Wood Screws Tools Iron §_c_ Steel Rails Gross " $000) 1925 2,988 327 35.9 841 4.1 426 6.9 1926 3,753 427 ---- 1,147 ---- 1,452 19.0 1927 3,513 394 ---- 893 ---- 1,106 ---- 1928 4,550 430 ---- 1,208 ---- 566 ---- 1929 3,456 348 44.9 1,083 5.3 516 9.7 1930 3,216 294 ---- 871 ---- 182 ---- 1931 2,260 250 51.3 500 6.2 120 9.3 1932 337 46 --v- 155 ---- 73 17.1 1933 58 6 8.4 169 3.3 39 3.2 1934 30 3 6.1 325 4.3 12 .6 (a) (M "Wood screws" and "Tools" are the only advanced manufactures presented here. The most important item besides welded black pipe is casing and oil-line pipe, exports of which have averaged over $200,000 annually since 1929, every'year being above predepression levels. Never did Japan yen.and to Japan's rapid extension of her own production. import much fabricated structural material, for the low labor costs make it cheaper to fabricate the material in her own shops, although rigid inspection is required.1 Germany was the principal source of rail imports for Japan, 1 59 #615, p. 18, 19. 149. with the United States second. Domestic production was supplying an increasing amount of the total consumption before the depression.:L Although Japan is still largely dependent upon outside sources for the materials required for her iron and steel industry she has achieved a degree of self-sufficiency in fabricated steel products. Jamn proper now produces finished steel products in excess of the domestic demand, although the Empire is still on a deficit basis.2 Rising prices of iron and steel products in 1934 led the Jalnn Iron Manufacturing Company, a government-sponsored project, to import foreign finished steel products to sell with its own.‘5 Cepoer The United States, although importing large quantities of cepper, mostly for refining, was on a net export basis from 1881 to 1932. From 1925 to 1929 our domestic consumption was from 100 to 150 per cent greater tlnn before the war; that of the rest of the world only about 40 per cent more. Able to make reasonable profits by means of improved methods, nevertheless, domestic producers did not wish to exploit the less profitable ores and thus lost some of their foreign market to the low-cost producers in South America, the Belgian Congo, and Canada. Many of these mines, particularly in Chile and Peru, were owned by United States interests who chose to expand them because of higher profits than at home. The effective price-fixing action of COpper ExPorters, Inc., with the aid of a strong'demand and production quotas, raised the price from less than 123 cents per pound in June, 1927, to nearly 18 cents in February, 1929. DeSpite rising stocks. it was main- tained at about this level for a year and perhaps encouraged the foreign 1 59 #615, P. 20, 210 2 55, p. 55, 54. 5 36, August, 1954, p. 11. 150. .aama msoama memos as» sea as ea emamaa aoz .330 .953 £39 5: “.m .D has new omnod Hovhd : t : Nfl : c : ADV .eama maoaoa asses map you me ea emamaa aoz any - a.mm oam.aa - -- --- ---- -- --- - -- --- aama aa m.mm maa.aa a m.oa aaa.a mas.aaa a.ma aaa.a am s.e moa eama - -- maa.e -- e.m maa.a maa.am a.aa mam - o.aa ama aama mm -- ama am -- ea was -- ama ea a.ma ama mama - a.ea ea - mac. ma ama a.a mea - o.a aa aama - o.me ama - -- aaa ema.a -- --- - -- ma oama a a.ma aaa.a aa a.a ama.a eam.s a.m aaa mm a.a mom mama - -- aas.a - -- aaa.e ama.aa -- aam.m - a.aa aoa.a mama - -- mae.a - -- ama.a .ase.em e.sa maa.a - -- ama.a emma - a.mm ooa.m - ¢.e mea.a sea.ea -- aaa.a - -- sae.a aama -- mm was -. lav aa a. ama.ar-ema.m a.m.-aoo.a am a. om aama mans.» anaam as apoemH mas-Hora Romeo .8 2526 um madam hp .23 .mpownH mm. 685% .apomda 23M manpowmgfla one scam Manx Hoodoo -- --- --- e.aa aaa.e - -- --- --- -- --- - -- --- --- mama e.ea aaa aam.a m.ea aam.a ea a.ma aaa mom.m how any ea s.em aaa.a mam.s eama m.aa ama mma.e e.aa aao.e - o.am map. aea.ae aav om - s.am aaa aaa.a aama -- oea aae.a -- aea.a aa -- aam mae.o¢ -- asa am -- mam mm¢.a aama a.a mom aoa.a a.oa aaa.a - m.ms aem aoa.¢a a.e ama - a.as am sma.a aama -- ama aas.a -- aaa.e - -- ama.a aoa.aa -- aam.a - -- ma aaa mama a.aa «aa maa.a a.ma wee.e aa e.aa ema.a moa.aa a.¢a meo.a mm a.aa aa ama mama -- ama.a aae.oa a.as boa.a - -- eam.a mae.ae -- aoa.a - -- maa ama mama -- aea aaa.a -- aaa.a - -- baa.a aas.aa o.aa ooa.a - -- aa aea eama a.ma aaa aeo.a -- a,c.a - -- aam.a aao.ma “av Adv - -- ma ma amma so. a. a a.m oaa.a a a.a ama ama.a Ass lav mm mm. a. a amma asasas _Nmmmm mm .398 .30me male . whom .m-flm-Mmm manom a a .9258 a 3.3 E33534 amass u|aooov “looms " asap» ”Aooovuasaasu msaa> « aooov “gooey ” means “Aoooaadsaa>u asap» ” Nomad ”Aoooq “ .3 nanuhunpmaaoquaosdom"? .m .5“ so» n he :3 nfiahuauaaaonumensomgn .m .9 so» a an 23 camshumswaaonunesdom“ on a . u a Bonk « 323m u on u u a 80h.“ « 33am « 09 u u u HG®W paoo pom" « “peso Mom" « “ammo Mom» « “ammo Hem» » «pnoo mom“ a « apnommam ampmpm copanp « apnoea « mung-Mm 3»st defies “ 3393” “ 3.38am mmpwpm c325 a a cm on. mach u a on omega». u . , . manpowunqwfi use magma .8ng a3 cum-am. mmosfimh Imopupm 603:5 .- .Hdn 0.33. 151. development that made such inroads on our foreign markets.1 This price policy was perhaps directly responsible for our smaller share of the Japanese market in 1930 and prior years, although we remained the princi- pal exporter of cOpper to her. Japan was not an important customer for United States copper exporters before 1934. Nearly 90 per cent of our exports of unmanufactured cOpper went to Burcpe, principally France, the United Kingdom, and Germany.2 although she is the fifth copper producing country of the world, Japan has been generally on an import basis since the war, despite her wide- spread deposits of good quality.3 Accumulated stocks within the country and the sharp fall of world COpper prices, especially acute in November, 1931, forced producers to sell at a loss so that for a time since 1930 Japan has been on an export basis. The government,aided by a c0pper cartel, has tried to check imports and encourage eXports by raising the' tariff or providing a drawback, but without permanent success.4 There is a much greater demand for copper than formerly, for buildings, 5am, predominating in electrical equipment, chenical apparatus, alloys, recent years, for munitions. The 1934 demand, arising from munitions manufacture, was thought to be abnormal, so it was not thought worth while to go to the expense of further exploiting the producers' own 6 mines. These shifts, to an export basis during the depression, and back to a heavy import basis,explain the sudden fall of our eXports to Japan and the sudden loss of her position in our eXport trade followed by a recovery 16, p. 429, 430, 434-5. 67 #29. P. 620 21, p. 6; 13, p. 272; 59 5505, p. 3, 4. 21, p. 6. 67 $29, Po 20 2, P0 1490 030'! $01M!“ , 152. exceeding all prior years of the period. It is interesting also to observe that a much larger part of our exports of old and scrap copper is sent to Japan than of refined copper. Her refining industries are strong enough to make it more profitable to refine her own copper than it would be for most countries importing c0pper from us.1 Aluminum Aluminum, besides its rapidly growing use industrially, is essential for the munitions industry. Japan proper has no bauxite ores economically workable and is entirely dependent upon foreign sources for the metal which she manufactures into finished products. Her imports come from the United States, Canada, Switzerland, Germany, and Great Britain.2 The United States improved its position in the Japanese market before 1929, but its share fell in later years as scrap aluminum was imported from Germany and Great Britain.3 Despite the much smaller proportion of Japan’s demand supplied by this country her position in our market continued to strengthen until by 1934 she took 98 per cent of our exports of ingots, scrapy and alloy,which had supplanted fabricated aluminum.products as the principal class of our total aluminum exports.4 Japan had also swung back by a very narrow.margin to the United States as her principal source of supply in 1934, purchasing ¥4,l46,000 of "ingots, slabs, grains, and other", 33 per cent of her total imports. The "other," representing largely scrap, was not included in the figures presented in Table XLI.5 The duty upon ingots, slabs, and grains, raised from 3.20 to 4.32 yen per 100 kin in 1933 probably pLaces a premium upon scrap imports.6 Strenuous efforts for'scme years past to attain self-sufficiency in this * 2, p. 149. 21, P0 17. 32, p. 12. 2, p. 18, 19. 67 #105, p. 75; 62, 1955, p. 454. 71, p. 2180 Gallium!“ 153. metal appear to be hearing fruit,for the Nippon Electric Industry Company has been producing aluminum since 1334 and six other companies are pre- paring to begin production. A rich clay discovered in Nanchuria, Korean raw’material, and bauxite imported from the Dutch East Indies are to be used, depending upon the location of the plant. 1 Lead NOrmally a net importer of lead despite the possession of the world's principal producing deposits of lead ore, the United States had developed an export trade in refined lead, or manufactured products made therefrom, emelted and refined in bond from imported ore and base bullion. This trade has declined since 1927,2 exports to Japan forming a rapidly rising pro- portion of the whole. In 1928 Japan ranked third as a market for our refined pig lead exports in point of quantity, following the United Kingdom and Germany; in 1929 she was second only to the United Kingdom; since then 3 This relative advance came while exports to Japan she has been first. were declining; the other markets were lost more rapidly. Although she is almost entirely dependent upon foreign sources,4 Japan was the world's fifth consumer of lead in 1934, taking about 8 per cent of the total consumption. Her total imports broke all previous records in that year and according to her statistics the prOportion from the United States was also nearly at its highest point. They seem to in error, however, probably reporting large shipments of Mexican lead as from the States. The former large shipments of Mexican lead to the United States for refining have nearly disappeared as refining capacity has been extended in Mexico.5 This sharp decline accounts for the fall in rank among our exports to Japan from 13th in 1929 to 24th in 1934. The United States had been 2, p. 25, 26. 45, P. 3; 62, 1935, P0 89, 910 62, 1932-33, p. 62; 62, 1935, p. 92. 60 #76, p. 4, 5. 62, 1935, p. 94, 97. 0190310!“ 154. increasing in importance relative to Japan's principal supplier, Canada,1 but should Mexican.1ead prove satisfactory, and this seems probable, its importance will be considerably less in the future. An increase in the 2 Japanese tariff from ¥.4O per 100 kin to ¥.54 per 100 kin in 1933 has had no apparent effect as yet. Zinc The zinc exports of the United States to all countries declined from 1925 to 1933, as our total exports of lead did from 1925 to 1934.:5 The situation is quite similar: Although one of the major world sources of zinc is the Lississippi Valley the United States' export trade, normally, is largely in slab zinc produced from foreign ore. From 1925 to 1927 considerable domestic ore was also exported.4 Japan is a much less impor- tant market than she was for our lead exports and her importance has been declining since 1928, rather than growing. Save for the years 1929 to 1931, when Japan took an unusually small part of our exports, cast zinc in slabs, blocks, or pigs formed the bulk of the trade.5 Canada and Australia furnish the bulk of Japan's imports, the United States running a very poor third.6 Japan, largely dependent for the zinc supplies that will be needed in her expanding industrial system,will furnish a fine market for Canada and Australia, but it does not seem that the United States, with its enormous dcmestic consumption and record of declining exports for 9 years before 1933 will supplant these other countries. The ore supplies in Japan are said by some to be adequate for her domestic needs, but the domestic pro- duction of predepression years will need to be more than tripled if this is to come to pass.7 67 #105, p. 52. 60 #76, p. 4, 5, 1010 l 67 #105, P0 520 2 71, p. 217. 3 410 4 62, 1955, p. 114; 45, p. 5. 5 41. 6 7 .l --‘O IL! I"..9 . .1 t . ¢'..m-V.r.»l. 155. CHAPTER IV OTHER INDUSFRIAL PRODUCTS Petroleum and Products Prior to 1929 the United States produced about 70 per cent of the world's total output of petroleum. EXports as a group ranked second among the major classifications save for the years 1929 to 1931 when machinery occupied second place. Raw cotton, of course, was always first.l Petroleum products also ranked second among our exports to Japan, whose deposits are neither large nor susceptible of economical exploitation. She has been forced to import the largest part of her raphily growing consumption.2 As a consequence, her importance as a market of the United States has been steadily increasing. Imports of crude and heavy mineral oil advanced almost without pause as the United States supplied an increasing part of Japan's growing total import busi- ness. Both the quantity and the proportion of other mineral oils imported from this country declined during the latter part of our period. The tariff increase of 1933 from 2.75 to.3.7l yen per 100 gallons on crude and heavy oil merely meanthigher domestic prices, for the imports were essential; with regard to other mineral oils the change from 7.50 to 9.10 yen per 100 gallons probably aided the shift to domestic refineries.3 Crude and Heavy The largest item in our exports to Japan is crude petroleum. Its exceptional advance marks the development of domestic refining facilities :35 well as the growing demand for petroleum for industrial and military 14568. Second in value was the class, gas and fuel oil, with another _ .1. 60 #80, p. l; 60 $99, p. v; 42; f3. . 2 59 #505, p. :5, 4; 21, p. 17, is; 12.5, p. 121. :3 71, p. 215. 156. remarkable increase. It is in these two classes, and gasoline, naphtha, etc., that Japan has taken an increasing share of our exportSnduring this period. Although refined products still account for the bulk of our experts to all countries they have declined in relation to the total.i Our rising exports Table XLII. - United States-Japanese Trade in Petroleum and Products :Uhited States Exports of_i Japanese Imports : : Total Petroleum Products: Crude and : Mineral Oil, : Year : , ‘_} fiegvy_011 : Other : : : Per Cent :Rank : : Per Cent : : Per Cent : :Dollars: to Japan : by : Yen :from U. S. : 'Yen :from U. S. : : (oOO) :(by value) :Value: 1000) :(by_value) : (000) :(by value) : 1925 16,329 3.5 2 6,700 ---- ----- ---- 1926 25,757 ---- -- 8,600 ---- ----- ---- 1927 20,862 4.3 -- 10,900 ---- ----- ---- 1928 24,004 -—- --- 20,548 --;- 22,294 --- 1929 22,860 4.1 2 26,091 56.0 24,423 52.7 1930 19,292 ---- -- 25,400 ~--- ' -—--- ---- 1931 16,878 6.2 -- 24,972 56.7 24,104 57.8 1932 15,524 ---- 2 32,100 -—-- —---- ~--- 1933 14,440 7.2 -- 39,784 58.2 19,526 48.2 1934 21,052 9.3 2 54,475 66.0 17,215 41.4 1935 ------ ---- -- 81,336 76.1 ----- --- to Japan in these two classes have contributed to a general advance in the significance of our eXports of the heavier products. Gas and fuel oil is partially used as a raw material for cracking, partially made into furnace oil, and partially used for Diesel engine fuel.3 Diesel engines have been widely adapted in ships; the fishing fleets have been widely motorized, increasing the market for light fuel oils; and the Japanese navy imports large quantities of petroleum, probably mostly fuel oil, although governmental imports are not included in the Japanese statistics. The extensive hydroelectric development and plentiful coal supply has kept the demand for heavy fuel oil at a rather low level.3 1 41. 2 .5. ‘5 21, p. 17, 18; so #29, p. 157. 157. Japan is now our principal market for gas and fuel oil and ranks with France, behind Canada, as one of the three important markets for our crude oil.1 Other Petroleum Products With the lighter, more refined products, the trends have been quite different. The declines in the values of these commodities sent to Japan sometimes began as early as 1926 and usually lasted until 1933. In most cases exports to Japan fell more rapidly in the latter part of our period than exports to all countries. It was the decline in these products that drew downward the values of our total petroleum exports to Japan. Since they were generally of declining significance in our total export trade they did not prevent the rise of Japan relative to other markets, however. Gasoline, naphtha, and other finished light products was the largest item in 1934. The demand for motor fuels increased enormously as auto- mobiles became more widely used, although the per capita consumption is still very small. Aircraft, particularly military planes, account for a much larger proportion of the demand than in this country. There will undoubtedly be a great expansion of this demand in the future, but domestic refineries may be expected to supply a larger part of the market, probably using imported crude.2 Moreover, Netherland India is a strong competitor in many of these refined products and preceded the United States in 1934 as a supplier of "other ” mineral 011.:5 She and the United states together just about split 95 per cent of Japan's total gasoline imports in 1934.4 The severe decline in exports of illuminating oil (kerosene) was probably the largest single factor explanatory of the decline in all petrolewm products. Electric lighting is very widely used in Japan, as electric power is quite cheap and quite readily available, so the consump- 62, 1932-33, p. 459-495; 62, 1935, p. 748, 758. 21, p. 17, 18; 12.5, p. 121, 122. 67 #105, p. 73. 35. P. 550 #OJI‘OH 158. tion tended to fall. At the same time domestic producers were eXpanding their output. In lubricating oils, also,90 per cent of which came from this country in 1934, domestic competition was felt.1 RMch of the former comparative advantage of our refineries in all lines has disappeared in the face of government aid and protection and rapid industrial growth. Should the duty on imported crude be lowered the Japanese refinery branch, best fitted to compete anyway, would probably develop even more rapidly, although the difficulty of disposing of by-products is an obstacle.2 The duty will probably be retained, however, as Japan makes strenuous efforts to develop her own supplies, though without much success. Shale oil distillation is already beingcione on a small scale in M'anchuria.3 In an effort to secure an artificial self-sufficiency the military forces procured the passage of the Oil Control Bill in 1934, providing that all refiners must have a stated minimum capacity and that importers and re- finers of gasoline, heavy oil or crude oil must maintain stocks equal to half of their annual imports. The foreign companies, already operating at a loss due to low gasoline prices objected to the added cost in the absence of assurance for the future. October 1, 1935, was originally set for the enforcement of the act but it was postponed to June 30, 1936. If the foreign companies continue to decline to comply as they have done, the government will be forced to aid domestic concerns and expand refineries 4 in order to supply the market, or else modify its requirements. hhchinegy and Vehicles Only about 3 per cent of our exports of this class (next to petroleum and products in our total export trade except from 1929 to 1931, when it was ahead of themS) went to Japan until 1931, but her prOportion rose 60 380, p. 137; 36, December, 1933, p. 35; 35, p. 55. 70. 60 j76, p. 255; 21, p. 22. 36, Ray, 1934, p. 25; 35, p. 19; 70. 42; £3. ' UIO'PCRNH 159. .emma mnomon uofimfimmmao haopmammom poz “5V m.m an n e.n mom man m.m sHo.m ama awed 0.5 mm m s.m Ham new n.m omn.a mea mama u--- we OH n--- mma.a was c--- aem.a ama mama o.ma as m H.e use.a can o.e mem.m Ham amen -au- sea as ---- emm.n eeo.a u--- ooe.m ama owed m.ne 0mm an 5.5 mee.m «on.a «.5 mem.n mmm emea s.-- sow ea ---- Hao.m msm.m u--- eke.m mam mama a.mm mam ea u--- nHo.m moo.a -uu- mam.m oem some new lav any a--- cme.nH Hee.m ---- man. How ewes lav hen Ase m.m nmm.s mmn.a e.m nan.m mma mead maflo Aooomoaomv Hmcfio.wwmdhrm .IHIOI mnwvwfldmflH. HHO WQHPMSHSHHH HHO §#wowhnfid H. e we m.m ome.m mso.a a.mm . smm.e eao.s o.eH eam.a nee.o emea m. on mpa.a s.n ma.m use m.em one.e HmH.m m.sa mom.m nnm.m mama ---- pa mne.a u--- pme.m spa ---- mam.e eme.¢ w.sH mnm.e asm.e mama n.H was sea.n .n ema.a enm.a m.ma man.e sme.m m.ea mam.n eoe.n awed ---- .mm mno.m ---- mao.e eeo.a -uuu smm.e emo.n u--- nnm.n eme.m owed 5.5 ama mao.o a.H 550.5 nae m.aa mam.e maa.n a.a Hae.m es¢.m emoa u--- mes ema.aa u--- oma.e ma ---- emm.e aaa.m u--- enm.m eeo.m mama ---u Hen mos.o n--- mme.m 5mm ---- mno.e mae.a s--- nom.a mme.a awed m.m mno.a noa.5a m.m mom.o nae u--- eam.m aea.m u--- enm.a man.a omen o.m can mmo.e H.H nea.m saw m.e omm.m mmm.a a.e mma.a enm mmaa messeosm manna eeamacae nonpo com .mmpgmrz .oofiaowmw wee anaeenem HHo|HWsm ens mes aspaoepmm oeeno loans» ann_ looov " looov "lessee ape" loose " looov .losasp any“ 19001 " nooou "Assess ape" loco. “ “coon gamma 0» .mnmaaomu moodom " edema 0p "mamaaomumaonpom . momma o» “mnmaaonnmaopnwm " awash on umpmaaoaumaonnmm " Meow peso mom " " peso mom " u peso Mom « u “ peso mom a " oposeopm was esoaonpom we gamma 0» mpnoaam mmpwpm eopficb I .HHHHM manna 160. in the following years to 4.7 per cent in 1934. Exports of this class followed quite closely the movements of our total exports to Japan, the values rising to $34,700,000 in 1929, falling to 98,700,000 in 1932, and rising to $20,300,000 in 1934, still below predepression levels. Auto- mobiles and parts and industrial machinery, the principal components, moved in the same directions, but electrical equipment and office equip- ment declined in value from early in the period. Automotive Products The United States supplies practically all of Japan's growing market save for the small amount of domestic production. The advance of this class from eleventh in 1925 to third among our exports to Japan in 1929 is rather significant. Trucks and busses, though the smallest group, showed the greatest advance. The Japanese data for all autos and parts do not agree with the separate statistics presented, but it seems that most of the imports are in the form of parts, probably for assembly. The United States statistics show parts to be the largest class, but not to that extent. Probably many parts exported for assembly are reported as automobiles by the shippers. 0f the parts reported, the largest portion since 1927 has been "for assembly."1 At the beginning of 1925 Japan possessed only about 20,000 auto- mobiles; at the end of 1934 the total was estimated to be 120,000, of which 55,000 were passenger cars, 40,000 trucks, and 25,000 busses.2 Extremely high taxes in the principal cities and the lack of good roads limited the growth, especially as regards pleasure cars. The government inaugurated a road building program in the fiscal year 1930-31 that was to last for twenty years. Repairs and overhaul costs are much lower 1 41. 2 55, p. 129. 161. Table XLIV. - United States-Japanese Trade in Automobiles and Parts : : Japanese : United States : Japanese : United States Expgrts : Imports : Exports : Imports : : :Per Cent: :Per Cent: :Per Cent: :Per Cent Year : : : to : : from : : to : : from :Number:Dollars:Japan by: Yen :U. S. by:Dollars:Japan by: Yen :U. S. by : : (000) : Value : (000): Value : (000) : Value :_L000): Value gassenger Cars §_Chassis Total Auto- Parts, except Parts, other mobiles Tires g Engines than Chassis & ' and Accessories Tires '- 1925 1,095 1,144 .6 ~---- —--- 1,840 2. ----- ---- 1926 1,642 1,600 ---- ----- —--- 2,874 ---- ----- ---- 1927 2,685 2,316 ---- ----- ---- 5,905 ---- --—-- ---- 1928 8,419 5,997 ---- 12,987 ~--- 9,792 --- 10,826 ---— 1929 5,408 3,892 1.7 8,921 95.5 12,837 7.0 16,313 99.2 1930 4,600 2,719 ---- ----- --—- 5,381 ---- ..... -_-- 1931 5,432 2,592 5.4 5,093 91.6 4,108 5.9 9,675 99.4 1932 2,778 1,518 ---- ----- ---- 2,143 ---— ----- ---- 1933 3,517 1,564 4.9 1,532 84.8 2,619 7.1 10,706 98.4 1934 .9,645 4,638 5.9 3,075 91.6 5,474 8.3 27,534 99.1 Trucks, Busses, §;Chassis, Total Automobiles, Autos and except glectric Parts, 5 Accesso- Parts—E ries.L3L Rank by Value 1925 ----- 109 .3 11 0,103 1.0 9,22 78.9 1926 167 292 ---- -~ 5,599 ---- 13,105 ---- 1927 38 555 ---- -- 9,042 1----- 16,024 ---- 1928 2,024 1,729 ---- -- 17,556 ---- 23,554 ---- '1929 3,448 2,226 2.0 3 19,016 3.5 31,048 92.4 1930 2,304 1,476 ---- - 8,243 ---— 19,868 ---- 1931 4,286 1,661 6.6 -- 8,509 5.8 15,817 96.9 1932 2,961 950 ---- 3 4,673 ---- 13,838 ---- 1933 8,903 1,23 6.2 -- 5,454 6.0 13,288 (c) 1934 9,841 5,139 7.1 4 13,544 7.0 31,553 (0) 1935 ---------- ---- -- ------ ---- 31,255 95.9 (a) Includes minor items in addition to the groups given here. (b) Not the total of the other columns for Japan. (c) The classification for all countries was not comparable,so the percentages were not computed. than henabecause of the low wages paid, so cars last much longer despite poor roads and the lack of ready service facilities.1 Fully 95 per cent of the Most of the passenger cars Operate as vehicles serve commercial purposes. taxis or vehicles for hire; truck transportation up to 100 miles has been 1 59 5492, p. 12; 55, p. 128; so #108, p. as. highly developed; and there is a complete system of bus lines, mostly Serving as feeders to the railways and tramways. The taxes on commercial vehicles are much lower than on pleasure cars, but excessive competition among themselves and with other fonns of transport have forced rates to seriously low levels.1 Low earnings and the low external value of the yen in 1932 cut down imports, affecting particularly the United States. After our devaluation the exchange preference for European goods was wiped out and by 1934 much deferred replacement buying was being done.2 Automobile accessories are in less demand than might be expected because of the almost exclusive commercial use of the cars and the low earnings. Since practically all the cars are United States makes we get nearly all the replacement business, but the domestic parts industry has been growing rapidly. Where hand labor can be used Japanese producers can often compete effectively on a price basis, of especial importance in such a market. [More liberal credit terms and more rapid delivery by the 3 Under the influence of the rapidly manufacturer appeal to the dealers. depreciating yen, United States parts and accessories rose in price so far above the domestic products that sales practically closed until our devaluation in 1933 brought prices down to a point where the difference in quality would justify them. By this time, however, the quality and appear— ance of the domestic product had been improved and it appeared that a large 4 Imported part of this business was permanently lost to the United States. parts paid a duty of about 30 per cent in 1925, 25 per cent from 1926 to 1932, 35 per cent in that year and 42 per cent in following years. This,. too, was a strong stimulus toldomestic production.5 The duty on automobiles was 50 per cent in 1925, 35 per cent from 35, p. 129; 60 #108, p. 68. 36, March, 1933, p. 11; 37, June 25, 1935, p. 22. 60 #128, p. 97, 99, 100. 36, May, 1933, p. 8; 36, August, 1933, p. 6, 7. 0190116?“ 163. 1926 to 1933, and 50 per cent in that and following years,lsufficiently higher, levied upon the higher values of finished cars, to make it profit- able to establish assembly branches of United States finns there. In addi- tion to the tariff,domestic production is encouraged by subsidies and by government purchase of Japanese cars.3 Further development was sought through the bill for the control of the auto industry passed May 23, 1936.3 Principally, it imposes a license system upon manufacturers of parts and assemblers of automobiles, licenses to be issued only to finns organized under Japanese law over half of whose capital stock is owned by Japanese subjects, except for established companies, to the extent of their eguip- ment and productive capacity on August 9, 1935. All further increases are subject to governmental control under the law.4 If policy so dictates, the effects upon our exports may be severe. Industrial hmchinery Industrial machinery exports have retained their relative position among our more important exports to Japan during this period, but there have been significant changes in their composition. Since 1931 Japan has increased her proportion of our exports beyond predepression levels, al- though of the groups presented heresewing machines; the least important in former years,is the only one to evidence the same tendency. Several classes of little importance before the depression have set new records in recent years, g;g., gear-cutting machines, turret lathes, and milling machines. Industrial development in Japan has extended her market rapidly, but l 71. Po 2160 2 35, p. 48, 4:90 3 8.5. 4 37, September 26, 1935, p. 26. .omoSauaH swam peeEQflSwm Heownpoeam memos one ofloem .msmpa poaoeoaefi mama sass ooo .xeoma sea .onoa .mooa as ooo.onme ooo .ooo.oome .ooo.mommv masseuse moeaaae .Ameame oasm map as ooo.oome sea ooo.ooaev mosses pongee .Aaao>aoooomos .eooa one woos on ooo.oome sea 000.0HHe genomes awash 0p gofime mo mpaomxev meewgode 0......) oscuaomm emae mmmmHoeH .mewmeao snow wefiomomaa on» mmmammm loo flog om an m.H Hon o.H Hoo oH o. e o.m oo o.m m «mod 11 1- .o one w.H mom 1. o.H as o. m o.w so woos om om 1111 son 1111 oss ea 1.11 on 1111 as 1111 ms mood 11 11 m.n ama o.H moo.a 11 n.m as e.H os o.e oom Hmoa 11 11. 11-1 owe 1111 oeo.m 11 1111 me 1111 mom 1111 was onoa on em o.e mes. m.n osm.e Ha m.e osm m.om Hum e.e oao omoa 11 -1 1111 ooa 111- nmo.e 11 1-11 ama 1111 ama 1111 new mmoa 11 1- 1111 me 1111 mmo.o 11 1111 was 1111 oeH.H 1111 Hom.a smoa 11 11 1111 a. 1111 oaa.oa 11 11-1 Hmm.a 11-1 aom.a 1-11 oeo.H oooa 1111 mm on m. m s.na HHH.oH a H.oa ooo o.oo san.m o.sm onfl.m omoa esam> he xemm Mawm mooeawamma mofimommmoos JJquimmm meson munem mopshmmmq MGWmmo Hopes .m.mppom .pmoeonfid coampea.m*wwmefinosfi nomad mwfipnebsoo was snowmameoo eoflpammmwmwm Heofiapooam H.309 we. weaspomwewne . w. aoflmmfiemeepe e.H one a m.o ooa.o o.m no so e.m was e.m moa H.e Hoe eooa o.H nod 11 e.o Hso.m H.H o2 on o. oo s.H ms n.o osa oooa 1111 «as o 1111 noo.m 1111 we ona 11.. mo 11.. on 1111 was mood m.H own 11 e.m Hee.n a.» mo Noe H.m Hod n.m oom o.m New Hooa 1111 Hoe 11 111- oom.o 1111 oom oeo 1111 was 1111 moo 1111 ooH oooa o.a moo e o.o oea.o H.o eon ono o.e «mo o.m ooo H.m ooo omoa 11-- moo 11 -111 emo.s 11-1 owe moo 1111 «on 1111 omo -11- new omofl o.H ooe 11 1111 ooo.s 1111 men moo 1111 man 1111 Hon m.e ooo smoa 1-1- moo 11 1111 mos.a 1111 one poo 1111 oeo o.o one 1111 owe omoa o.H men o o.e mum.o o.o Hon Hoe o.m mom n.n own s.a ooa omoa meoeefiamm4 ama. omfinosz spasm onijam hemeflgomfijmwfi manem.mmm 82.8 5.2. 92335 .38 mwommoeosoo .34 152mm 2392. 122mm m mosses 1183088532 osHo>.m1~ooov "seams" cease ”1dooov " ooaa> «1moooo " 1 ooHs> “ xoooo " osas> “ floooo “ spam» 1 xooov “ .11 .3 1288228309“ he :3 dashumusaaoehn afishumnoflomfionfiozuhp ammohumnsdfiomnhn nomshuonsaaonuhp nflshumnezoeusow on a u Mnom“ on u u 3 u u n o» n a 3 n u on u « peso Ham" “ .peoo hem“ "ammo Ham“ 2 “ammo mom» "ammo Hem" “peso mom» “ Canon: one 58332 53qu no momma on 3.33% nopopm 8325 1 .BH canoe 165. government aid, tariff protection, greater upon the simpler types of machin- ery and generally increased in recent years, and the need for less trans- portation of bulky and easily damaged machinery have aided the domestic industry.1 Wages are very low, but the value of the output per man is far below that in the United States.23 The United States has developed a quality trade, especially in the larger and more complicated machinery, and new devices. do have been Japan's largest foreign supplier in general, but Germany, selling much cheaper goods, has made remarkable gains, displacing r1 the United Kingdom and threatening our supremacy.o Germany took over our leading position as a shipper of metal working machinery in 1931.4 The general revival of business in Japan since 1931 has benefited domestic producers far more than foreigners. Nevertheless, the establish- ment of new manufacturing enterprises, the purchases of military authorities for the modernization of munitions plants, and the orders of government railways fer rolling stock have redounded to our benefit as it is still necessary to import precision machinery, heavy internal combustion engines, and many special jobs.5 The very growth of the domestic industry itself creates a demand for certain products such as those imported for the use of the machine tool and automatic industry.6 Electrical Apparatus The noteworthy feature of this trade is its steady decline in value and in significance to the United States. at the beginning of the period Japan followed Canada as a purchaser of our electrical apparatus and we were her most important supplier; in 1934 she took only about 1 per cent of our electrical goods exports and we were second to Germany in her l 46, p. 161; 71, p. 214; 12.5, p. 120, 121; 13, p. 144. 2 60 ”111, P. 16, 300 3 47, p. 109; 59 5825, p. 66; 36, Kay, 1934, p. 18; 40.5; 60 5111, p. 42, 54; 12.5, p. 121. 4 46, p. 162; 67 $105, p. 530 5 59 5825, p. 66, 57, 6 36, December. 1933. p. 19. 166. 1 Electrical equipment drOpped from fourth to sixteenth among our markets. exports to Japan. The early develOpment of exports of this class rested upon the wide- spread government development of water power in Japan by granting concessions to private companies, making electricity about as readily available as in any country for industrial uses. Power is widely used, although the abundance of 1abor*and the practical necessity of retaining all of a firm's workers restrained the use of automatic machinery. Railway electrification has been undertaken on.a wide scale also. a large part of the homes are wired but little use is made of electricity except for lighting and some power companies have not encouraged any other use.2 A market for'United States goods would probably develop in this field if they could be supplied at prices within the purchasing power of the people or if their purchasing power should rise sufficiently. Broadcasting is government-controlled and supported by license fees. Radios are required to conform to government regulations; the topography and climate make reception only fair; and the programs are quite serious in nature. Registrations of sets increased from 250,000 at the beginning of 1926 to 1,900,000 at the end of November, 1934, with United States exports supplying a rather small part, as Japanese manufacturers possessed most of the market. Formerly they imported the parts, but these have been locally produced in.recent years.3 As with radio, so with other electrical goods. Tariff protection and domestic production under license agreements with foreign manufacturers have greatly reduced imports. The Japanese goods must be sold on a price rather than a quality basis, but price is far more important there than 1 59 #505, p. 11; 35, p. 40. 2 59 #505, p. 7-9, 11, 14, 16. 3 59 j505, p. 19; 59 $433, p. 75; 60 #136, p. 102; 35. a? u .I‘ r .- ufl’s.’ IV...‘ w‘. I .5: P 167. in this country.1 The composition of each of the sub-classes in our exports to Japan has changed quite rapidly during this pariod,2 illustrative of the rapni entrance of Japanese producers when a new market is opened and indicating the dependence of our trade upon technical advances and new developments. Office Appliances No unusual features are presented here. Japan takes but a small part of our total exports, yet we dominate her market in.auch items as cash registers calculating machines, and typewriters. Domestic production and 3 The necessity for imports are both increasing as recovery advances. precision and high quality should make Japanese competition less threaten- ing in.the near futuie than in many other lines of machinery. Aircraft Exports of aircraft, parts, and accessories to Japan from 1931 to 1934 were above all years before 1929. Here the military demand for planes conflicts with the desire for self-sufficiency. Many ships are produced in Japan's own factories, but imports of planes and of parts are also necessary.' Commercial aviation also creates a demand. Our exports to other countries advanced rapidly after 1931, so the pro- portion sent to Japan declined. Chemicals and Fertilizers Fertilizers The intensive agriculture necessarily practiced by Japan upon her old soils requires the extensive use of fertilizers, considerable amounts of which must be imported. Japan.has some phosphate deposits but is partially dependent upon foreign sources, and has almost no workable 1 12.5, p. 120, 121. 2 41. 3 40.6. r .9.-. ‘n . .\ .v I ‘ ‘i‘r. .34.»? . .0 lfll‘.f1r .o " Iii; .ooqmowmflswwm haspooEop no HHmEm no mEopfl peeve moodaonm Amy .qom oom neg» mmoq on .mmma mHomon emfimflmmmao haopsymaom pom ADV .wmma anomop made» one now me ea oopmfia #03 Rev on a.ma mes.a new osewfiamoa no“ : z z awed - n.ea see.a mes woos oeoz once oeoz msoz mama HH -- one can -- one -- ma a mama - a.ma . pam.m sew a.a sew H.0 and m Hams - -- nee.n men -- mao.n -- nae mm omma m m.sm mmo.e as» a.ma ene.e a.oe nmm.m om mama - -- eee.n Hem -- use.» -- «so.a em mesa - a.ma one.n oma -- Hma.m m.Hm see.a a amen - -- Hnm.n ama -- ees.m -- omm.n so emmfl m 0.0m mom.e mes o.sm mee.m o.ee mea.m mm mama mdflwb he flew maswnopm§.noNHHHpeom opsmmwsm Edwnoeew seem ems spousanpnme Hapoe n.sm mam.e -- --- -- mama a.ms nee.m m.Hm mes om o.em ome.n m.om Hem eam ewes m.nm Hme.m m.ee ooe as p.5H was.m m.ea ewe and mesa -- oom -- ow a -- eem.m -- own was mesa m.es mne.m e.m. eeo.H mm m.ae ems.m 5.x new 0mm amen -- ooe.H -- ewe Ha -- men.e -- mmo.a ama owed m.ss msm.m a.me new 0H m.am anm.e m.eH ems ama mama -- mme.a new any any -- new.» -- see ama mama new new lav -- one.n -- awe and same any Ana new a.mm men.m -- new we ewes new new any new new n.m Hem ms mama awesom.wm seapoaao seeps Henpmpwa amuuflm»pme assesses smegma ease .soom opeamwoem . "Ronawb may“ 4000“ “Aosawb hnv" Aooov- “ AQOQQ Hannah» hay" nooov "Rosamb any" Hooov " Aooov ”.m .3.Eouou new smash 0» u mosaaom u mnoe u. .D.809mu new smash Op « mamaaoa " mooe u ammo mom u peso pom “ u u peso hog « peso arm n " meow apnomwm mopwpm uopfinp manomeH awesomdh oppomwm mopopm nopfinb O. O. O. C. O. O. 0. O. .9 mphomeH omonwmwh u mnoNHHHpnoh ea enema omoosmwhtmouopm oceans u .H>HN vague 169. deposits of nitrates and potash.l Although exports of other fertilizers in fairly Large amounts have occurred sporadically, phosphate rock, potassic materials (chiefly chloride of potash» and ammonium sulphate havebeen our 2 All enter Japan duty-free.‘5 Fertilizers principal exports to Japan. suffered greatly in 1952 from the extremely low purchasing power of Japanese farmers. Somewhat better prices and governna nt credit have expanded imports since that year, with the exception of ammonium sulphate. In each case, however, the United States now supplies less of Japan's import trade:4 Japan has been one of the three leading purchasers of phosphate rock in the form.of land pebble from this country:5 In 1953 and l934 Egypt 5 replaced the United States as Japan's primary supplier.6 we remain her principal source of chloride of potashmv With ammonium sulphate the case has been quite different. Our exports and our place in Japan's market have diSappeared. Two influences have caused this, primarily. The chemical industry in Japan has undergone a tremendous expansion. Ammonium sulphate preparation by nitrogen-fixation from the air has been develOped until Japan is very nearly independent although as yet the consumption has outrun her domestic production.8 The other influence is the loss of the Japanese market to German and British producers, principally German. Consequent upon Japan's advance as a producer came an invitation to the Japan Sulphate of Ammonia hhnufacturer's Association to join the European Sulphate of Ammonia Syndicate. Agreements were drawn up in 1934 and 1955 whereby the European nitrOgen syndicate was to supply a limited amount during the first half of the year and Japan was to be permitted to export, in limited amounts, to markets not considered the syndicate's exclusive sales territory.9 l 60 #76, P0 4, 5o 6 2, P0 452; 67 #105, p. 510 2 41. 7 67 #105, p. 52. 3 '71, p. 217, 218. V \ s 59 ,.{£825, p. 14; :56, March, 19:54, 4 39’7f818,p0 15; 59,182.”), p. .LJ. p. 190 5 62,1934, p. 960; 62 ,1955, p. 1057, 9 59 #825, p. 20; 56, December, 1954, p. 15; 37, December 25, 1935, p. 23. 170. Dyes Coal-tar colors are in great and increasing demand in Japan as her cloth.export industry grows, especially as she attempts to develop the I Experts from production of the more valuable dyed and printed cloths. Table XLVII. - United States-Jauanese Trade in Certain Other Chemicals : United States Exports : Japanese Imports Commodity: : : Per Cent : Hank : : Ier Cent : & :Pounds :Dollars: to Japan : by : Yen : from.U.S.: Year : (030) : (000) :(by»value):value :(900) :(by value): Synthetic Dyes (a) 1925 ----- 1,063 15.9 17 (b) (b) 1926 ---- 1,351 ---- -- (b) (b) 1927 ----- 1,303 23.7 -- (b; (b) 1928 --- 1,299 ---— - (b) (b) 1929 ----- 1,055 14.5 21 (b) (b) 1930 ----~ 777 ---- -- (b) (b) 1931 ---—- 797 16.8 -- 1,025 14.1 1932 -—--- 528 ---- 17 1,157 ---- 1933 ----- 315 6.8 -- 882 10.9 1934 ----- 393 7.0 19 1,115 12.2 Sodium Hydroxide (Caustic Soda)(c) 1925 22,205 574 19.3 2 (d) (d) 1926 33,804 937 ---- -- 2,663 33.4 1927 28,812 764 ---- -- 2,086 17.0 1928‘ 44,441 1,192 ---- -- 3,631 —-~- 1929 45,315 1,162 33.0 20 4,531 40.0 1930 31,363 882 ---- -- 2,841 ---- 1931 38,230 974 28.1 -- 2,915 35.4 1932 22,630 337 ---- 21 1,014 ---- 1933 3,552 65 2.5 -- 1,038 (e) 1934 2,848 56 1.9 26 473 (e) Soda Ash(c) 1925 158 3 .3 27 1926 3,591 65 ---- -- 1927 5,083 71 ---- -- 1928 16,676 238 ---- ~- 1929 35,038 549 40.9 26 1930 24,460 333 ~--- -- 1931 23,450 274 31.9 -- 1932 432 7 --- 29 1933 8,615 64 8.5 ~- 1934 6,945 52 5.4 27 (a U. S. classification: "Coal-tar colors, dyes, stains, and color lakes." (5) No so listed in 42 for the years before 1931. (c) Japanese classification: "Caustic soda and soda ash." (d) Not listed in 42 for the years before 1926. (e) " " ” 42 for all countries after 1932. 171. this country have declined in value and in proportion to our total exports of coal-tar colors, however. German competition has been severe. Seeking to regain their former position in world dye markets, German producers formed a super trust in 1925 which has since extended its activities by agreements with producers of other countries, cut manufacturing costs by centralization and coordination, reduced selling expenses by unification of sales agencies, and widened its range of chemical products.1 German dyes were practically excluded from Japan in 1925 in order to protect the domestic industry,2 but an agreement was reached in 1926 whereby Germany was to send only those dyes not produced in Japan.:5 Governmental aid in the form.of higher import duties in 1926 (specific duties whose force increased as prices fe11§)and the extension of liberal subsidies to companies producing certain special varieties was extended as a national defense measure.5 30 successful was this that Japan ranked fourth among the world's dye producers in 1933, along with Russia.6 She is now selJ-sufficient in most types of synthetic dyes, leaving only the more exgensive ones to be imported.7 The United States, which exports principally the cheaper dyes, will not receive much of this trade.8 Caustic Soda and.Soda Ash A growing export business that had become a very large part of our total eXports in these commodities failed to survive the depression. Japan not only developed domestic production nearly to the point of self-sufficiency, but took a smaller preportion of her imports from us.9 The demand for caustic soda has grown tremendously with the expansion of the textile, paper, soap, 10 . and cellulose products industriee, but the domestic production has grown eVen 66 #34: p0 83 65 5589 P. 142' 10 59 +518 0. 12' 59 $825 U lg 66 #54, p. 186. ' ' ‘ ' J ' ‘° V. 66 #35, p. 165. 66 #57, p. 165. 66 #54, p, 8, 126; 66 [35, p. 164. 59 $823, p. 12. 59 I'818, p. 60 67 "I619, p. 50 71. p. 197, 217; 42; 59 2818, p. e, 7. COCOS) 0:01.56:ch 172. more rapidly under the protection of a tariff duty raised from .70 yen per 10 kin in 1925 to 1.50 yen per 100 kin in 1926 and from there to 2.02 pen per 100 kin in 1952. Soda ash production subsidized, has also grown. Japan's imports from all countries are probably chiefly natural soda which is made into soda ash, much of which is converted in turn into caustic soda or used 1 in glass manufacture. Table XLVIII. - United States EXports to Japan of Photographic and Projection Goods : : : Per Cent . Rank : : Year : Dollars : to Japan. : by : : : LQOngi :_Lby value) : value : 1925 895 4.7 19 1926 1,210 --- -- 1927 1,588 --- ~- 1928 1,716 --- -- 1929 1,790 5.7 ‘ 14 1930 1,430 --- -- 1931 1,281 6.4 -- 1952 1,090 --- 8 1933 1,047 8.5 -- 1934 1,017 6.6 15 1935 ----- III-- -- Photographic and Projection Goods Japan, though still a minor'narket for photographic and projection equipment, takes a larger part of our total exports than at the beginning of the period, but she will not for long unless exports to her advance 2 The depression's immediate soon as thoSe to other countries are doing. effects were less severe than with many other commodities, but the values have continued to decline slowly since 1952. The classification includes a great many items, the most important of which are unexposed sensitized films (over 4/5 other than motion-picture films), photographic paper, and dry plate. Japan has taken nearly half our total exports of the latter 2 41. 173. and probably more than twenty per cent of our exports of photographic paper in recent years.1 No other country approachs the United States as 2 a supplier of the principal item, sensitized moving-picture films, and the trade will probably continue until the domestic chemical industry takes it over. No doubt much of the failure to recover has been due to the expansion of domestic production in the lesser and simpler components of the class. 1 67 #105, p. 930 2 67 #105, p. 55. 174. CHAPTER V SUI;- 31'3th General Trends ig_United States Export Trade with Japan Our total eXport trade with Japan moved upward haltingly until l928, dropped something more than fifty per cent, in value, by 1952, and then advanced again, not, however, reaching predepression levels. When measured in yen the predepression peak of 1926 was exceeded by 1954 and 1935 imports and the low point occurred in 1951. This trade bears less uniformity than our import trade with Japan. Two general tendencies are evident. The depreciation of the yen tended to reduce imports from all countries. Our retention of the gold standard after the British Empire and other countries had left tended to cause Japanese importers to shift their purchases to countries with depreciated currencies. Later, when we depreciated, our_own prices rose coincident with the beginning of recovery, the NBA, and the AAA' sufficiently to nullify the advantage in many cases. Furthermore,the severe fall of Japan's exports to this country caused a reversal of the balance of trade and the government is inclined to discourage purchases from this country in favorcfl?purchases from others whose bilateral balance is active for Japan. Definite action has been taken in relatively few cases, but the tendency is there. Frequently, too, our exports to Japan have been of quality goods that were less in demand during the depression. Customers became more price-conscious and shifted to Japanese goods, particularly as the domestic production increased in quantity and improved in quality. All these factors, growing domestic production being of greatest and most lasting importance, tended to discourage imports from this country. 175. In contravention to them was the demand for raw materials which Japanese industry could convert into goods for the growing domestic and export trade. Her deficiency in resources can hardly be remedied, although she may adapt her industrial structure to it and perhaps shift her sources of supply to. points within the Empire. The latter appear inferior, but the pressure of the military demand for self-sufficiency, rising barriers against her export trade, the desire for world recognition, and the lack of a feeling of polit- ical security drive her on. New Export Items Several items appeared in the Commerce Yearbook's list of the principal eXports from this country to Japan during only a part of the period. Syn- thetic dyes, first appearing for the year 1951, wenaonly of ordinary impor— tance; hides and skins, first appearing for 1927, and phosphate rock, for 1926, added their bit to the recovery of our exports to Japan; but copper, data for which first appeared for the year 1926, ranked fifth among our exports to Japan in 1354. Caustic soda and soda ash appeared for 1926 and dropped out after 1952; aluminum ingots, slabs and grains appeared in 1927, but lasted no longer (had scrap been included the situation would have been otherwise). The United States statistics added two new classifications of wood durin“ the period, cedar boards, etc, in 1927 and hemlock logs and hewn timber in 1981, and separately classified potassic fertilizer materials for the first time in 1939. Items Showing Marked Recovery Hides and skins, wood pulp, iron and steel semimanufactures (principally scrap), refined c0pper, crude oil, gas and fuel oil, and phosphate rock and potassic fertilizers, are the essential raw materials so important that recovery, an expanding export trade, and enormous military expenditures 176. necessitated imports in excess of the highest predepression years. Hides and skins, iron and steel scrap, and crude and heavy oil. imports have re- placed many former imports of more advanced manufactures as Japanese finns have taken over the processing. In most cases Japan has taken a larger proportion of our exports of these commodities and in the leading ones, wood pulp, iron and steel, and crude and heavy oil, the United States has enlarged its share of Japan's imports. Less remarkable advances were made by raw cotton (a phenomenal increase in 1932 has been followed by a decline), aluminum, automobiles, and aircraft. These equaled predepression levels or exceeded them in the last year or two of the period. The first two are essential materials for industry and munitions; the last two are finished products in great demand for commercial and industrial use which cannot yet be successfully produced in Japan. Items Failing to Recover Among the principal articles of trade in which the first group of influences predominated were two food products, condensed milk and rice, imports of which continued to decline as tariff barriers were raised to protect agriculture, promote self-sufficiency, and improve the balance of trade. Sawmill products, steel mill products and advanced iron and steel manufactures, the lighter and more advanced petroleum products, dyes, electrical equipnent, ammonium sulphate, photographic and projection apparatus, leather, and caustic soda have continued to decline in the face of domestic competition. Our exports of gasoline, naphtha, and other finished light products and of photographic goods to Japan improved their position relative to our total exports of those classes, while the other groups lost relative to the total. In most of these groups, also,the United States lost a portion of its former share in Japan's import trade in the face of adverse exchanges and foreign competition, chiefly on a price basis. 177. Two commodities, lead and zinc, declined as a part of a secular downward trend in United States exports to all countries. Japan took an increasing proportion of our total exports in the first case, but our domestic needs are so great that our eXport business has been built on the refining of foreign ores which has been declining for years. 178. CONCLUSION Japan, driven by a desire for power and standing among Western nations and a rapidly growing population in a small, poor country has been rapidly becoming industrialized. The exigencies of the depression led to the de- preciation of the yen and the intensification of the efforts of the govern- ment and business men to expand her exports. 30 successful were they that the world was startled and some were frightened by the "economic invasion." Most new materials had to be imported. Since their prices were determined on world markets in currencies of greater value than that of Japan, their prices rose more rapidly in terms of yen than did those of exports_(deter- .mined in relation to the price levels of Japan, which rose more slowly), although the quantity of imports increased much less than did that of exports. In addition to the above factor, imports from the United States, largely needed raw materials, rose while exports to this country decreased. The predominance of silk, a luxury product meeting increasing competition from rayon, largely accounted for the decrease, as "all other" commodities increased in value. Tariff barriers were high and were raised in several instances after 1930 when certain commodities began to enter in large amounts. Quota agreements were made and fees temporarily imposed. Barriers of this sort were probably less common than in other markets, but Japan's export growth was chiefly in commodities not well adapted to our markets. During the depression more attention.was given to price and Japanese competition, aided by the lower external value of the yen, by government subsidies, regulation of quality, and general encouragement, was more severe. However, she had difficulty in meeting our demands as to quality in some lines, while in others our tariff was too high, and the balance of 179. trade turned passive for Japan in 1932 for the first time in years, and she declined in importance as a supplier of our wants. The United States likewise took a smaller share of her total exports as other, principally backward, countries took more. Our experts to Japan had to overcome the disadvantages of a depreciated currency, heightened tariff barriers, a governmental pregram of self-suffi- ciency, governmental attempts to balance trade, and the rapid develOpment of domestic industry. hany of them declined. The more important, however, were crude materials and semimanufactures and these generally advanced as Japan, lacking raw materials, was forced to import cotton for her domestic and export trade, iron and steel scrap for her iron and steel producers, whose demand was heightened by military activities and armament programs, crude petroleum for her refineries, etc. The United States came to supply a larger preportion of Japan's needs than formerly and found her taking a greater part of our total exgorts as her recovery preceded that of other countries. Japan has made a remarkable recovery and the government deserves most of the credit. Its policies have been contradictory at times as it has tried to satisfy all producers. The country would advance more rapidly in industxda1.matters if agriculture and the primary industries were not protected. Japan is best fitted for the production of finished goods requiring large amounts of labor and little capital. Political and military necessities have forced compromises with the economic, as usual. The re- covery has been conducted under stimulants; the patient may have difficulty learning to live without them. The budget is badly unbalanced. The bal- ance of trade has not been successfully controlled. horeover,the benefits have gone to a small part of the nation. Agricultural and industrial 180. workers have received only the remnants. There is more employment, but wages are lower. The advantages of depreciation have worn off. Continued attempts to balance trade bilaterally will probably'nean.higher raw material costs in the future. It seems that the benefits of the government's pregram have yet to be paid for. 181. AP. ENDIX Table XLIX. - Prices and Exchange Rates 9 a Year ; Wholesale Price Indices Yen-Dollar : Conversion : : United : Exchange :Factors (a) : Japan : states : Rates : 1925 212.2 103.5 41.04 .4104 1926 188.2 100.0 47.12 .4712 1927 178.6 95.4 47.41 .4741 1928 179.8 96.7 46.41 .4641 1929 174.8 95.3 46.10 .4610 1930 143.9 86.4 49.39 .4939 1931 121.7 73.0 48.85 .4885 1932 28.1 64.8 28.11 .2811 1933 142.7 65.9 25.65 .2014 1934 141.3 74.9 29.72 .1775 1935 ----- 80.0 28.81 .1705 (a) Used in converting "old gold" Values given in 42 into yen. Sources: Price indices: For Japan, the Bank of Japan index, based on July, 1914, cited in 67 $105, p. 14; for the United States,1926-1935, the Bureau of Labor Statistics index, based on 1926, 63.5, p. 9; 1925, Ibid., 63. Exchange rates: 1925-1934, Federal Reserve Bulletin, cited in 67 #105, p. 14; 1935, 39. o u a o O O I I c I C o o a u o . O 6. 6.5 6.8 7. 7.5 l BIBLICGRAPHY The EncyclOpedia Americana. Americana Corporation, Pew York and Chicago, 1932. 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Stanford University. Timperley, H. F. Japan in Lanchukuo. Foreign Affairs, Vol. XII, Lo. 2, January, 1934, p. 295-305. Tokyo Institute of Political and Loonomic Research. Supply of Raw Laterials in Japan. Japanese Council, Institute of Pacific Relations, Tokyo, 1935. ’ ii + 25p. Treat, Payson J. Japan and the United States, 1853-1921.' Houghton Mifflin Company, Boston and New York, 1921. vi + 283p. United States.1 Department of Agriculture. Yearbook of Agriculture. 1935. iv + 762p. Plant Industry Bureau. Commercial Possibilities of Japanese Lint in the United States as a Source of Natural Lenthol, by 1. F. Sievers and M. S. Lomrn. August, 1933. 35p. Technical Bulletin No. 378. United States government publications are published at the Government Printing Office in Washington. The repetition of this has been avoided. 185. United States. Department of Agriculture. Sureau of Agricultural Economics. 24. The Agricultural Outlook for 1936, November, 1935. 144p. Miscellaneous Publication No. 235. 25. Geographic Distribution of United States Agricultural Exports. Foreign Crops and Markets, Vol. XXXII, No. 13, March 30, 1936, p. 386-393. 26. The Position of Silk in United States-Japanese Trade, prepared by O. L. Dawson and W. Ladejinsky. Foreign CrOps and markets, Vol. IXXII, No. 15, April 13, 1936, p0 447“457 0 Agricultural Adjustment Administration. 26.5 Agricultural adjustment. hay, 1933, to February, 1934, p. 62-5. February 15, 1934, to December 31, 1934, p. 77. Agricultural Adjustment Administration. Division of Immmati on. 27. World Cotton markets. 1935. 8p. -G-43, issued September, 1935. Agricultural'adjustment.Administration. 28. Cotton Production Adjustment, 1934-1935. No. 25, December, 1935. United States. Department of Commerce. Bureau of Fisheries. 29. Fishery Industries of the United States: 1934, by R. H. Fiedler. 1935. ii + 75—330p. _ Appendix II to Report of Commissioner of Fisheries for the Fiscal Year 1935. 30. _Studies in Crab Canning, by Kokichi Oshima. 1931. ii ‘0' 8p. Investigational Report No. 8, Vol. I. Bureau of Foreign and Domestic Commerce. 31.-37.0 Consular Reports. 31. Annual Review of Commerce and Industry of Japan for 1930, by Vice Consul Hiram.Bingham, Jr. American Consulate General, Tokyo, 1931. 114p. 32. Review of Commerce and Industries of Japan--l93l, from Leo D. Sturgeon, American Consul. American Consulate - Senoral, Tokyo, 1932. H J. 75271. 33. 34. 37. 38. 39. 186. United States. Department of Commerce. Bureau of Foreign and Domestic Commerce. Review of Commerce and Industries of Japan--1932, prepared by Leo D. Sturgeon, American Consul. American Consulate General, Tokyo, 1933. 11 + 33p. Annual Economic Report—~Japan--l933, submitted by Frank S. Williams, Commercial Attache. Tokyo, 1934. ii 4' 112p. Annual Trade and Economic Report: Japan--l934, by Frank S. Williams, Commercial Attache. American Embassy, Tokyo., 1935. vi + 140p. Japan Trade and Economic Letter, Office of Commercial Attache, American ambassy, Tokyo. ‘ January, 1933-- Larch, 1935. September and November, 1933, were not obtained. Japan Menthllerade Report. _ May 24, 1935--December 23, 1935. The august number, covering the month of July, was not obtained. Division of Regional Information. Trends in United States-Japanese Trade, by V. P. Copping. 1935. 81). Special Circular No. 333. (Far Eastern Series No. 149.) Economic Developments in Japan during 1935 and Outlook for 1936. February 15, 1936. 10p. Special Circular No. 355. (Far Eastern Series No. 155.) Foreign Trade of Jajanrla34 and 1935. February 29, 1936. 6p. Supplement to Special Circular No. 355. (Far Eastern Series No. 155.) Far Eastern Supplement No. 38, July 28, 1936. Excerpt from Whaley-Baton Service. 2p. Press Memoranda. JUne IS, 193 . July 24, 1934. December 30, 1935. November 2, 1935. January 17, 1936. December 27, 1935. 187. United States. Department of Commerce. 43. 45 47. 49. 50. 51. Bureau of Foreign and Lonestic Commerce. Foreign Commerce and Navigation of the United States. Various paging. 1925 to 1335 editions. Foreign Commerce Yearbook. various paging. 1925-1935. (Before 1953, Commerce Yearbook.) Statistical Abstract of the United States. 1953 and 1935. world Economic Review. Various paging. 1953 and 1934. Charts of Vorld Production, Import:,and Exports of major Minerals of Industry, 1929. 1933. ii + 13p. Articles from Commerce Reports. The Industrial Development of Japan, based on report from Trade Commissioner J. H. Ehlers, Tokyo. Commerce Reports, No. 16, April 18, 1927, p. 161-165. The Industrial Machinery Market of Japan, based on report from Trade Commissioner J. H. Ehlers, Tokyo. Commerce Reports, No. l5, april ll, 1927, p. 109-110. ' Japan's Imports Larger in Karch, based on cable from acting Commercial Attache H. A. Butts, Tokyo. Commerce Reports, Leading Larkets for United States Lumber Exports in 1925. Commerce Reports, No. 30, July 26, 1926, p. 218-230. Lhrketing Flash Lights and Batteries in Eastern Asia. Commerce Reports, No. 45, November 5, 1928, p. 666-368. Unsettled Conditions Mark Close of Year in Japan, based on cabled and other reports from Commercial Attache C. E. Herring, Tokyo. Commerce Reports, No. 7, February 14, 192 , p. 440-442 0 United States. Department of Commerce. Bureau of Foreign and Domestic Commerce. 52. Baldwin, C. F. Kotor-Vehicle World Census, January 1, 1951. Commerce Reports, No. 27, July 6, 1951, p. 3-7. 53. hallowe, Alice. Douglas-fir prorts in 1326. Commerce Reports, No. 16, April 18, 1927, p. 166-167. 54. mayton, Joseph Gregory. Adjustment of Earthquake Bills Sought by Japanese Government. Commerce Reports, No. 16, April 18, 1927, p. 175. 55. Peirce, Francis Lamont. Commercial DeveIOpments in the Pacific Area. Commerce Reports, No. 28, July 15, 1935, p. 75-78. 56. SChnitzer, J. (compiler). The karket for Leather in Japan. Commerce Reports, No. 12, karch 22, 1926, p. 724. 57o Steintorf, Paul P. Japan's Industrial PrOgress. Commerce Reports, No. 28, July 15, 1925, p. 79-80. 58. monthly Summary of Foreign Commerce of the United States, December, 1955. 1956. 59. ‘ Trade Information Bulletins. $401 Sole Leather: World Production and International Trade, J. Schnitzer. 1926. 11 + 25p. #435 World Radio markets in 1926, compiled by Lawrence D. Batson. 1926. ii + 85p. 3429 Outlook for Increased Leather Exports, by J. Schnitzer. 1926. ii + 39p. 3445 International Trade in Toys. 1926. 11 4' 37130 #465 ‘ MotorAVehicle Taxation and Regulations in Foreign Countries, by C. E. Haynes. 1927. 11 4' 58130 3481 unrkets for motor Boats, marine Engines and Accessories, Compiled by E. Flehro 1927. 11 + 46p. #492 #571 #573 #600 #612 #615 #652 #642 $672 g734 United States. 189. Department of Commerce. Bureau of Foreign and Domestic Commerce. Trade Information Bulletins. Used-Car markets of Foreign Countries, compiled by Jo Ho Shannon. 1927. 11 + 1490 Eflectrical Development and Guide to marketing of Eflectrical Equipment in Japan. 1927. 11 + 25p. The Fish Meal Industry, prepared by J. A. LeClerc. 1928. ii + 17p. American Leather in Foreign Markets, by J. Schnitzer and Davni E. Longanecker. 1928. 11 * 78p. International Sole Leather Trade and Production in 1927. 1928. 11 + 64p. Raw Materials Entering into the Japanese Iron and Steel Industry, by I. H. Ehlers. 1928. ii + 21;. Radio Markets of the World: Lawrence D. Batson. 1929. ii + 84p. 1928-1929, compiled by The Production of Iron and EhlerSo 1929. ii + 46p. Steel in Japan, by J. H. Japanese Trade in Iron and Steel Products, by J. H. EhlerSo 19290 11 + 30p. Million-dollar Markets for American Leather, by J. Schnitzer. ii * 52p. Trends in Japan's Trade and Industries, by Halleck A. BUttBO 1929. ii + 26p. PaPer Trade and Industry of Japan, by B. K. Frost. 1930. ' ii + 25p. Markets for Motor Boats, marine Engines, and Equipment in Canada, Latin America, Oceania, and Asia. 1950. 11 + 46p. 59. 60. #755 f779 #818 #823 #825 550 #80 #87 #39 $103 .190. United States. Department of Commerce. Bureau of Foreign and Domestic Commerce. Trade Information Bulletins. Leather Industry and Trade of Japan, by J. Schnitger. 1931. ii + 20p. International Trade in Fish hbal, compiled by George J. Carr. 1931. ii ? 18p. Motor Fuels in Foreign Countries. 1932. 11 ‘T 35130 World Chemical Development in 1933 and Early 1954. 1934. 11 + 84p. World Chemical Developments in 1934. 1935. 11 ¢ 13290 Industrial Machinery in Principal Foreign Countries. 1955. iv § 71p. Trade Promotion Series. Hides and Skins: World Production and International Trade, by Jo SChnitzer. 19270 vi + 210p. American Lumber in Japan, by E. A. Selfridge. 1928. iv + 49p. Mineral Raw materials, by J. N. Furness and L. M. Jones, assisted by F. H. Blumenthal. 1929. V111 + 27890 The American Chemical Industry: Production and Foreign Trade in First Quarter of Twentieth Century, by A. H. SWift. 1929. vi + 114p. International Trade in Petroleum and Its Products. 1929. iv + 153p. American Douglas Fir and Its Uses, prepared under direction Of Axel Ho OXhOlIno 1929. iv + 60p. Internation Trade in Petroleum and Its Products: 1929. 1930. vi + 175p. International Trade in Leather, by J. Schnitzer. 1930. iv + 266p. 60. §108 5111 3128 #136 #157 60.5 61. 62. 63.5 United States. United States. United States. United States. United States. 191. Department of Commerce. Bureau of Foreign and Domestic Commerce. Trade Promotion Series. Motor Vehicle Regulations and Taxation in Foregin Countries. 1950. V1 + 93p. Indu stria l 2.;achine ry: iv + 62p. 1930, by W. E. RastaIL 1931. Foreign harkets for Automotive Replacement Parts, saccessories, and Service Station Aquipment, compiled by P. R. Eliattix. 1952.. vi + 428p. International marketing of Surplus Wheat,'by George J. Carr. 1932. iv + 28p. Radio markets of the World, 1932, by Lawrence D. Batson. 1932. ‘ vi + 112p. Leather: World Production and International Trade, by J. G. Schnitzer. 1935. ' viii + 258p. 74th Congress. Revenue Act of 1986. p. loo-106. (Public Act No. 740.) 74th Congress. Senate. Cotton Textile Industry. 1955. xi + 154p. Senate Document No. 126, 74th Congress, lst Session. Department of the Interior. Bureau of Mines. Minerals Yearbook. Various paging. 1932-1933, 1934, and 1935. Department of Labor. Bureau of Labor Statistics. kbnthly Labor Review, Vol. XXV, No. 6, DecemBEr, 1927, p{~198. Wholesale Prices, February, 1936. ii + 12p. Serial NO. R0 370. 192. United States. Tariff Commission. 64. Broad-silk Manufacture and the Tariff. 1326. xvi + 461p. 65. R38 Rugs. 1928. iv + 37p. 66. Tariff Information Series (£34, 55, 37, 38, and 39). Census of Dyes and Other Synthetic Crganic Chemicals. Various paging. 1925, 1926, 1927, 1928, and 1929. 67. Reports, Second Series. jlg Census of Dyes and of Other Synthetic Organic Chemicals: 1930. 1931. V111 + 112p. $29 Production Costs of Copper. 1932. vi + 82p. Senate Document No. 28, 72nd Congress, lst Session. .541 Production and Transportation Costs of Certain Oils. 1952. xviii + 240p. Senate Document No. 72, 72nd Congress, lst session. £57 Crab Heat. 1933. iv + 13p. jdl Dried Beans and Black-eye COWpeas. 1956. iv + 65p. ' $53 Rubber-soled and Rubber Footwear. 1933. iv + 22p. 1.3369 Fishery Produ: ts. 19:53. V1 + 351p. #71 Fish Packed in Oil. 1934 #84 Canned Clams. 1934. vi + 30p. $95 Cotton Rugs. 1935. Vi + 569. #96 Red Cedar Shingles. 1955. iv + 55p. #97 Hat Braids and Hat Bodies Containing Synthetic Textile. 1935. iv + 12p. 5100 Crude Phosphates and Superphosphate. 1965. iv § lon 67. #101 #102 5103 5105 flO? $108 ¢112 68. 69. 70. 70.5 70.7 71. United States. Tariff Commission. Reports, Second Series. Dyes and Other Synthetic Organic Chemicals in the United States: 1934. 1956. vi + 80p. POtterYQ 1936. iv + 114p. Sun Glasses or Sun GOggles. 1935. iv + Zip. Recent DevelOpments in the Foreign Trade of Japan; Particularly in Relation to the Trade of the United States. 1936. vi + 207p. Frozen Swordfish. 1936. iv + 26p. Wool Knit Gloves and Mittens. 1936. viii + 43p. Cotton Cloth. 1956. viii+ 168p. Vinacke, Harold M. International Organization. F. S. Crofts and Co., New York, 1954. I + 483p. Wallace, Henry A. The World Cotton Drama. Foreign Affairs, Vol. XIII, No. 4, July, 1935, p. 543-556. Wertheim, Barbara. . The Oil War in Japan. The Christian Science Honitor, Weekly Ragazine Section, Vol. XXVIII, No. 3, November 27, 1935, p. 4. Whittlesey, C. R. Exchange Control, American Economic Review, Vol. XXII, No. 4, December, 1932, p. 585-604. Windel, Dudley. Economic Consequences of an Industrialized Japan, Economic Forum, Spring, 1934, Sec. 1, p. 182-192. Wright, Philip G. Trade and Trade Barriers in the Pacific, with an introduction by W. L. Holland. Stanford University Press, Stanford University, California, 1936. xvi + 530p. owl! "' 'I' " I ‘='=‘: " .l ”I— Jun 10 .5, ,1 ‘r. w a». M age" _I‘Angr \ _I. _B'A" . " "' '1 1L 0 ‘ ‘f‘ ‘ ‘a; ugly) zvczdi hr. " L‘I-mv 5.1:! mun-t "7'1 Willi Willi“