The Quarter-Open Door

A Perry in reverse, General Douglas MacArthur last week opened the door for the resumption of foreign trade with Japan. But it would not be like the old days, when Japan did the world's fourth-largest export business (3,533 million yen, about $1 billion, in 1936), used its credits to build up vast stockpiles of war materials.

SCAP (Supreme Commander of the Allied powers in the Pacific) announced that Japanese trade would be on a noncompetitive barter basis. Maximum volume during 1946 is fixed at only about 25% of prewar levels, roughly $800,000,000 in imports and exports. The Potsdam standards which apply to Germany would apply also to Japan. Thus exports will be permitted only to get foreign exchange to buy essential imports to: 1) prevent disease and unrest; 2) carry out the objectives of occupation; 3) establish a minimum Japanese economy.

Under this SCAPitalism, U.S. markets are in no danger of being flooded with cheap Japanese toys, Christmas-tree lights, pottery, etc. Japan's initial exports will be largely from stocks accumulated during the war--80,000 bales of raw silk, 75,000,000 yards of mixed fabric, 1,500 tons of tea, nearly 1,000,000 grams of cultured pearls. Small amounts of silk, tea and such lesser items as agar-agar (a gelatinous substance extracted from seaweed) may reach the U.S. this year. But most Japanese goods now available for export are suitable only for nearby Asiatic and Pacific markets. In these markets, they will be exchanged for urgently needed food.

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