Junior, Drop That Japanese Toy!
A Southerner and a graduate of Yale, DAVID L. COHN scored a solid success in the retail trade of New Orleans beore he became a free-lance writer. His books include Picking America’s Pockets, a volume about our tariff policy’; Where I Was Born and Raised, a study of race relations; a tear diary covering some 10.000 miles with American troops: and two volumes of a lighter nature, The Good Old Days and Love in America.
by DAVID L. COHN
1
I HEAR distant alarms. They emanate from drums beaten by the Toy Manufacturers of the U.S.A., Inc. Even before we had signed the Japanese peace treaty they began to sound their fears that Japan may compete with them abroad, or even have the nerve — especially galling in a late enemy — to invade our domestic market, the world’s richest and most compact market. Upon any effort to do so, says the New York Times, the Toy Guidance Council “probably will revive their campaign of American toys for American homes if Japan proves a serious threat to the American market.”
The Council underrates the patriotism of our children. No American child would play with a foreign toy; certainly not a Japanese toy. No patriotic parent would permit it. We did not win the war in the Pacific only to lose it under the Christmas tree.
Yet there are other considerations that might a fleet parents and children. The Council’s tune is an old one. “Slave labor,” tariff-grabbers have been telling us for decades, will ruin us if we permit the import of foreign merchandise. We alone are free men. We alone live decently or want to live decently. The British, as we know, have long subsisted on roast acorns and mist air of the fens. The French learned to cure Roquefort cheese in caves because they live in caves; no doubt they were animated by the malicious desire to flood us with cheap goods. Scandinavians, like circus seals, are content if you throw them a fish. Italians, of course, rank with Orientals. They exist on leftovers from yesterday’s fried seaweed.
Thus it was that President Hoover, founder of the non sequifur school of economics, said we could not compete with the products of Italian labor. At the same moment Mussolini, quite accurately, said that Italy could not compete with the products of our machines. Both countries thereupon barred each other’s goods through high tariffs. These statesmen, whatever their defects, could turn out as pretty a cul-de-sac as a man might want.
The specter of Japanese competition has long given some of our patriots the shakes. During the depression of the thirties, Congressman Stefan of Nebraska passed through Nagoya, Japan, after a junket to the Philippines. There on the docks he saw cases of goods consigned to us. This alert observer told Congress that Japanese merchandise was causing our unemployment. The unemployed, he said, having little money, buy it because it is low-priced. Since they do so they are unemployed. Actually, however, the goods are high, because their quality is low. Hence consumers cheat themselves out of their jobs and their money at once. It is up to Congress to save ihe people from the consequences of their folly. Enact high tariffs to keep out Japanese goods. Everybody will then buy American goods, and no one will be able to cut his own throat by purchasing the products of slave labor.
This is a pretty piece. What if its reasoning does sound like a parody of the title of a Fielding play: Rape upon Rape, or, Justice Caught in His Own Trap?
If Mr. Stefan had walked down the street to the Tariff Commission, it would have told him the facts of life. When he spoke, one third of Japan’s imports came from us. We were her largest supplier. We exported to her twice as much as we imported from her. Japan therefore had to earn dollars all over the world to pay for the huge balance of trade in our favor. One of our greatest customers, she was especially important to our cotton growers. In 1934, 4.5 million acres were needed to supply the cotton we shipped her. This required the services of thousands of men in the fields, gins, warehouses. It required the services of other thousands working for railroads, trucking companies, steamship companies; of men in steel mills that produced the bands that hold the bales, and jute workers of India who produced the wrappings. They in turn became potential customers for other American goods.
The greater part of our Japanese imports consisted of raw materials necessary or indispensable to American industry and the American standard of living. Half of these imports were raw silk, not a pound of which is produced here. Other important items were tea, furs, bristles, and insect flowers for making insecticides. These were the proportions and this the nature of the trade that was about to ruin the United States in 1934!
2
WHEN it comes to Japanese trade, some of our businessmen are not without a sense of fantasy, and since we are apparently on the eve of its recurrence, I should like to point out not merely the trade aspects of their objections but also their social implications in at least one case.
In 1934 a vice-president of the Pro-phy-lac-tic Brush Company wrote to Representative Treadway of Massachusetts, He said that in 1933 approximately 50 million toothbrushes were sold here. Of these, approximately 13 million were imported brushes, 95 per cent of which were made in Japan. Of the American brushes, three fourths of them, said the writer, were made by his company and the remainder by the Du Pont Viscoloid Company. Japanese brushes with bamboo handles, landed here at 1½ cents each, sold retail at three for a dime. “There ought to be a law,” concluded the Company’s man.
Let us look at this. The condition was that 130 million people bought 50 million brushes. Many individuals, however, bought six or more brushes annually. If, however, only 50 million were sold to the whole population, it follows that millions of Americans did not own a toothbrush. It was then estimated that 60 to 70 per cent of the people did not brush their teeth.
Many people did not brush their teeth because they could not afford 50-cent American brushes, or 35-cent brushes. Others gratefully turned to the three-for-a-dime Japanese article.
If, then, the majority of Americans did not brush their teeth, if brushing teeth is hygienicallv useful, and more people would do so if they could afford brushes, it follows that the public interest — if not the interest of American brushmakers — is served whether cheap brushes come from Japan or Greenland. But according to high-tariff advocates, we must use high-priced American brushes or go without.
Additionally we may note that, according to the Company’s man, two firms made 75 per cent of our brushes. While 75 per cent of a market represents a substantial monopoly, it does not have the symmetrical beauty of a complete monopoly, and one therefore can hardly blame the Company for aspiring to a higher beauty.
What of Japanese competition with us in foreign markets before the Second World War? Here let the Tariff Commission speak (as of 1934): —
“For the most part,” it said, “our export commodities are different from those of Japan, and our principal foreign markets are not important markets for Japan. . . . The expansion of Japan’s export trade has not been a major factor affecting . . . the total trade of the United States in third countries.”
From 60 to 65 per cent of our total exports at that time went to Canada and Europe, “It is in these two great markets,” wrote the Tariff Commission, “that much the larger part of the total loss in American export trade has been sustained, and Japanese exports to these areas have had little to do with this loss.”
In 1935 I wrote: “The facts do not reveal that Japan is an economic menace to the United States in competition with either our domestic or foreign markets. Whatever difficulties may arise between the two countries in the future will be based upon Japan’s aspirations in the Pacific, her possible attempts to exclude us from Chinese and other Asiatic markets, and her ambitions to assume hegemony over most of Asia. These are primarily politico-economic questions. They cannot be settled satisfactorily by putting higher tariffs on Japanese toothbrushes or tinned fish. They await more statesmanlike efforts.”
The “new” Japan is a stupendous and necessarily dubious experiment. How she goes may decisively affect the future of all Asia and therefore our future. Yet, this being so, while we arm against the possibility of penultimate disaster, and Japan is a great American military base under the terms of our treaty with her, we are strongly tempted to repeat our pre-war mistakes. Let us note some of the facts of Japanese life.
In 1945, when the war ended, there were 80 million Japanese. Now there are 83 million. They live 3000 persons to the square mile of arable land, the total of which is about equal to the arable land of New York State. Allied occupation health techniques lowered Japan’s death rate from 29 to 11 a thousand — a decline of three fifths. It took us twenty years to halve the death rate in Puerto Rico. But Japan’s birth rate is 34 a thousand. Every day she has 5000 new mouths to feed, and if nothing stops her population progression she will have over 100 million people twenty years hence.
Stripped of her overseas possessions, she has neither raw materials for her industry nor food for her people. Cut off American food today, and tomorrow millions of Japanese would begin to starve. Yet we have told Japan we do not intend to keep her on a dole indefinitely. At best it will be enormously difficult for her to develop enough foreign trade to keep herself going. But if we should shut her out of our markets to which she must turn for food and indispensable raw materials such as cotton, how will she live at all? And if she finds that she cannot live, will she quietly die to please American toymakers and canners of tuna fish? Or will she turn to the vast next-door markets of Red China, make common cause with Red elements in Asia, become their supplier of goods and weapons in return for food and materials? Or shall we, to please some of our businessmen, subsidize Japan indefinitely at a cost of a billion dollars, or more, annually; if, that is, this able, ambitious, dynamic, populationexplosive country should be willing to remain our ward upon these terms? Japan, I take it, is proJapanese. She, as any other country, will consult her own interests. Whether she will then become pro-American or pro-Russian must depend in large degree upon whether or not we attempt to choke her as she tries to earn a living.
3
LET us turn now to another sphere and see how the “honest, noble, independent farmer,” as they called him in the 1820s, is behaving just as stupidly and just as greedily as some of our businessmen. Once the businessman made a fool of him by making him pay excessively for the high costs of industrialization through high tariffs. Today, somewhat of a city slicker himself and support of the powerful dairy lobby, the farmer is out for a share of the tariff swag and means to get it by methods once used against him.
Dairy interests recently put an enactment through Congress that will reduce our importation of foreign cheese by 40 per cent. Dollar earnings, important to the countries involved, will be lost to these friends and allies of ours: Canada, Italy, Denmark, the Netherlands, New Zealand, Switzerland, France, The enactment hurts our consumers. Blue cheese, for example, will go up 7 to 11 cents a pound. It does great harm to our pretensions of world leadership, and benefits no one but the dairy interests.
Exporters of cheese are to be deprived of a large part of their dollar earnings here even though imports of cheese amount only to 5 per cent of our consumption. For this piddling business we destroy the confidence of the free world in our big words that the world must have a revival of trade; we cast doubts even upon our own sanity, make a mockery of the Marshall Plan, violate our commitments in the General Agreement on Tariffs and Trade. Nor is this all. Hell-bent upon keeping Western Europe from trading here, we are not slow to berate her lor trading with Eastern Europe.
Dairy interests, as you know, are opposed to domestic trade as well as foreign trade. For fifty years they saw to it that oleomargarine was federally taxed at 10 cents a pound. It did not matter that this hurt consumers everywhere and producers of vegetable oils in the South and elsewhere. In 1936 the Wisconsin Commissioner of Agriculture told Congress that rats fed on butter grow fat. But rats fed on margarine die. Margarine, therefore, is rat poison, not man’s food.
Signs multiply that in a desperate, dollar-hungry world, we yearn again to go economically isolationist. For more than a hundred and fifty years the United Stales tariff—a law affecting the national interest —has been written and applied on nearly every basis except the national interest. It has been the plaything of politics, the instrument of privilege, the weapon of monopoly. Its misuse is a prime exemplar of the insane nationalism that plagues the world. Irrationally, greedily used by us now, it may undo our huge labors in organizing the free world for freedom, and bring us to the brink of destruction. Our trade position in the world is so commanding that the free world must trade with us, be subsidized by us, die, or trade with the Communist world.
The case becomes the more urgent when it is seen how every day science makes us more and more selfsufficient so that, as our needs to buy abroad decrease, other countries have fewer dollars with which to buy here. Thus, synthetic fabrics have all but destroyed Japan’s once great silk trade. Synthetic quinine makes us less dependent upon quinine-exporting Indonesia. Synthetic rubber makes inroads upon our imports of raw rubber from southeast Asia. And only recently the Reynolds Metals Company announced the “tinless” tin can. Made of aluminum, coated with plastic and feather-light, it may be remelted after use and fashioned into a new can. This invention must eventually grievously affect tin-exporting Malaya, Siam, Bolivia. In agriculture, we are successfully growing Turkishtype tobacco in North Carolina, foreshadowing a decrease of tobacco imports from Turkey and Greece, while in Florida we have begun a large-scale experiment in growing kenaf. It is a plant substitute for jute that may in the future destroy India’s important jute trade in our market.
Already possessing the world’s greatest industrial and agricultural plants, and daily increasing our self-sufficiency through science, are we to deny a hungry world even a few crumbs from our table; crumbs such as 5 per cent of our total consumption of cheese? Is this harmonious with our leadership in the United Nations, the Marshall Plan, the North Atlantic Treaty Organization? Or is it merely a recrudescence of that greed which has so blighted our relations with foreigners in the past?
Shall we never understand, even poised as we are on a narrow ledge above the abyss of disaster, that it is impossible to be politically internationalist and economically isolationist; and that it is insane to attempt to be both at once?