BLAME THE BUYER!

Evening Post, Volume CXVI, Issue 85, 7 October 1933, Page 10

BLAME THE BUYER!

JAPANESE ATTITUDE

NEW VIEW* OF TRADE STRUGGLE

THE SHRINKING MARKET

A Japanese view of competition in industry was put by Mr. K. Shimada, 0110 of the Japanese representatives to the recent International Cotton Congross, a report of which has been liberated in the bulletin of the International Federation of Cotton Spinners, says the "Financial Times." . Mr. Shimada made it clear that the Japanese Spinners' Association was always ready to examine in a co-opera-tive spirit and on an equitable ' basis any international scheme which they could develop at that meeting or at any otheT time with a view to alleviating the world's economic evils. On one of the salient factors of the present depression, as it appeared to Japanese eyes, the most vitai cause was to be found in the disparity of the pricelevel between primary commodities and manufactured goods. The world economy in large measure consisted of the exchange between these two sets of commodities, and this was particularly true in the ease of the cotton industry. Overseas markets for cotton goods were mainly found in agricultural countries, and even in manufacturing countries the bulk of the home' demand for cotton goods came from the farming communities. FINDING MARKETS. The most important primary commodities, such as grain, cotton, rubber, and so forth, had lost nearly two-thirds of their value during the past five years, while most manufactured goods had not responded to this downward movement half as much, and under-con-sum'ption of manufactured goods was clearly borne out by the fact that there is today over 30,000,000 unemployed in Europe, Great Britain, and the United States. Yet one was faced ail the time with the ever-increasing difficulty of finding markets for .the goods the production' of which had been drastically cut down. But the, price was not sufficiently lowered to stimulate consumptipn. . . ■ If p,t this stage further attempts were made to curtail production sufficiently to raise the value of . manufactured goods, the evil of under-consumption must persist until they found themselves once again caught in a grayer difficulty as the result of ever-shrinking markets. The total value of the world's trado, he reminded the conference, had'been steadily decreasing for five years, until, for the first quarter of 1929, it was not. more than 35 per cent, of what it was five years previous. He felt compelled to draw attention to the danger of relying too much on restrictive, measures of production, holding that such attempts which had been applied in the past years in a number of affiliated cottim associations, not: excepting Japan, had proved, quite inadequate, if not injurious to the fundamental recovery of tne industry.. • .• •. . ' TOO EXPENSIVE. They must not, continued Mr. Shimada, shut their eyes .to. the unpleasant fact that cotton goods with other manufactured'goods are altogether too expensive to enable the majority of consumers to buy what they, are normally entitled to consume. To make cotton goods available for the reduced purse of the farmer, it was vitally necessary not only to reduce the cost of production, but make every" endeavour to remove artificial barriers of trade, such as boycotts, high tariffs, quotas, preferential duties, exchange restrictions,, and so forth, : since all these palliatives contributed to make the price of manufactured goods .unbearably expensive. If the discrepancy! of price-level was removed there was no reason why the normal.and free flow of interchange of commodities ,-should not tako place, thereby restoring the cotton industry to its former prosperity. Applying himself to the international trade of his country, Mr. Shimada asked those who might possibly regard the Japanese as tho enfant terrible of international trad© to remember that Japan buys in the world's markets more than she sells, and by buying in foreign markets as much as they did ho felt they were entitled to sell • as much as they were selling at present. As to the complaint made against Japan, particularly the cotton industry, of selling cheaply, the blame ought really to bo put on tho buyers. •No sellers, even cotton spinners, would prefer to sell at a lower price than they were positively compelled to accept. THE ROLE Or COSTS. If they went a step further into the question they would bo at once confronted with the undeniable £act that the economic development of tue Western nations had been achieved mainly through reductions in the cost of production by the application of mechanical and chemical knowledge as against the old methods of manual or antiquated appliances. In conclusion, Mr. Shimada declared there could bo no wrong, morally or economically, in supplying mankind with the necessities of life at low prices. ■ . ■ ' . The United States Department of Commerce states that Japan's exports of cotton cloth for March amounted to 183,000,000 yards, showing an increase over the exports in February,' which amounted to 157,000,000 yards, and over the exports in March,. 1932, which totalled 148,000,000 yards. The law controlling export trade in Japan became effective in May. Details regarding this law are not available, but it is generally known that the Government intends to exert some control over exports of certain commodities, as .the competition among domestic manufacturers last year and the large exports of some products resulted in unfavourable action by some foreign countries with reference, to imports of Japanese goods.