Britons Beaten?

Crisp and businesslike is Baron Kumakichi Nakajima, onetime Tokyo stockbroker, now Minister of Commerce & Industry. Last week he ruffled through a sheaf of amazing figures hot from the Japanese Federation of Cotton Textile Manufacturers. They showed what a spunky little Empire can do in two short years to a big, bumbling Empire--the British.

Scare-heads about the blood Japan has spilled in Manchuria have obscured her quiet, deadly cloth war with Britain, waged with the sharp price-cutting weapon of her depreciated yen. Japan took the yen off gold two years ago (TIME, Dec. 21, 1931), has thus been able to cut her cotton textile prices unbelievably low and to steal British markets throughout the East. Last week the yen was down to 36.7% of its par gold value, while Britain's pound, though also depreciated, stood at 65% of its gold parity.

Months ago Britain, though slow to bestir herself, started to fight Japan's dumping prices by denouncing the 28-year-old Indo-Japanese trade treaty and sharply upping India's tariffs on non-British cotton. British West Africa followed suit. Egypt, whose fat King Fuad is a British puppet, promptly swung into line with higher tariffs. Later even Dutch Queen Wilhelmina's newly named "Netherlands India" (once the Dutch East Indies) joined in building the white man's tariff dike against Japan's cheap textiles.

Fear that the economic struggle might lead to war caused British, Indian and Japanese delegates to meet at Simla in September for a secretive Cotton Conference at which haggling continued last week. Japan, hampered but not hamstrung, has continued to dump. Last week, according to the figures in Minister Nakajima's hands, Japan had outstripped Britain in cotton cloth exports for the first time in history. In the first eight months of this year Japan exported 1,392,000,000 square yards. Britain 1,386,000,000. Since Britain has reigned for a century and more as the world's No. 1 cotton textile exporter, Japanese cotton men were fit to burst with pride.

Neutrals noted that Japan has not. of course, surpassed Britain's peak volume of cotton textile exports. In 1929 Britain exported 3,866,000,000 square yards, Japan 1,418,000,000. What Japan has done is to filch Britain's customary lion's share of what cotton textile orders the East has to give in this lean year.

Japan's sabre-rattlers see an inevitable armed clash with Britain growing out of the trade war. "It is now time," cried Japanese War Minister Sadao Araki not long ago, "for our nation to frustrate the wild dreams of the whites."

"In former times," chimed in Rear Admiral Taneji Kyosa, ''few persons would have dreamed of a war between Britain and Japan. . . . Recent developments, however, show it is Britain that is the most antagonistic to Japan. She is indeed by far the most malicious. A war with Great Britain, it is feared, may be inevitable."

Back from the U. S. with another idea last week came Japan's great Viscount Kikujiro Ishii, her chief delegate to the World Economic Conference. The idea: that Britain would like to egg the U. S. and Japan into war.

"It is possible," purred Viscount Ishii, not mentioning Britain by name, "that certain European countries desire war between Japan and the United States so that they can wrest markets from them." To prevent this, Viscount Ishii urged Japan and the U. S. to sign an immediate "peace-guaranteeing" pact. "Anglo-Japanese relations have worsened," said he cautiously, "but the British have raised tariffs solely because they are suffering from our economic competition. There is no political or sentimental motive behind what they have done."

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