Will Riots Hurt Their U.S. Market?

YEN FOR JAPAN'S GOODS

NOW that Japan's rioting leftists had forced cancellation of President Eisenhower's visit while the more moderate Japanese majority looked on ineffectually, what would the effect be on Americans who in recent years had so taken to things Japanese?

In Miami the Television and Electronics Service Association, representing more than 100 owners, dealers and distributors, voted not to buy, sell or use Japanese products. Miami's East Coast Dry Goods Co. canceled $250,000 worth of orders from Japan; a Miami firm sent back 800 Japanese radios in stock. Ohio's Independent Products Corp. canceled an order for 1,700 Japanese bicycles, and Oklahoma City's Bentley Wholesale Co. for 20,000 yards of Japanese carpet. In Yokohama the rubbermaking firm of Hodogaya laid off 288 of its 420 workers after 13 U.S. firms canceled orders for rubber slippers. Two U.S. associations of ceramic importers shot off angry letters to Japan protesting the treatment of Eisenhower. And Elmer Proctor, director of Metasco, the importing division of big (85 department stores) Allied Stores, asked: "Does Japan want to lose its most important customer and a good friend?"

Japanese businessmen were evidently worried over hostile U.S. reaction. Their great fear is that the riots may spur moves to restrict Japanese exports to the U.S., now totaling more than $1 billion a year, at a time when many U.S. rivals are concerned at the inroads of cheaper Japanese goods. Yokohama Chamber of Commerce President Shogo Tanaka sent a letter of apology to the Chambers of Commerce of 30 U.S. cities for "the mob demonstrations fanned by a leftist minority." Japanese toymakers, who sell $50 million worth of toys to the U.S. each year, wrote directly to President Eisenhower expressing "heartfelt regret and shame" and explaining that 10,000 toymakers had planned to line his airport route to greet him.

For all of the Japanese fears, few big U.S. manufacturers took up the cudgels against them. Ross Siragusa, president of Admiral Corp.--which imports no components from Japan, but competes with firms that do--called for a U.S. boycott of Japanese products "as a counter-demonstration to the cancellation of the Japanese government's invitation to President Eisenhower." He pointed out that Japan sold more than 5,000,000 transistor radios in the U.S. in 1959, charged that jobs have been lost as a result of Japanese imports. Recently, the Japanese government announced plans to limit the export of transistors.

Most U.S. merchants could detect no concerted shunning of Japanese goods by their customers. Big U.S. companies that import from Japan--such as Sears, Roebuck, Woolworth, Montgomery Ward--all insist that they intend to continue importing Japanese goods. Said a top executive of Boston's William Filene's Sons: "From the corporate point of view, to stop selling Japanese goods would be like closing school because a couple of kids had broken some windows."

Only when a nation's differences with the U.S. are sustained over a long period do they seem to affect a customer's buying habits. Japanese goods since the war have gained wide U.S. acceptance for quality at a lower price. Guided by U.S. know-how, Japanese manufacturers have gone far to overcome the reputation for shoddiness formerly attached to the "Made in Japan" label. Says an official of Chadwick-Miller Importers Inc. of Boston: "Since the war, we find Japanese quality is excellent, considering price." Besides, points out Seiki Tozaki, president of C. Itoh & Co., a Japanese import-export firm in Manhattan, "international trade is a two-way street. If you buy from us, we will buy from you." Japan is the second largest consumer of U.S. exports (after Canada), last year took $930 million worth of U.S. goods.

Yet the absence of any serious talk of boycotting Japanese products seems to reflect primarily a sophisticated political response on the part of U.S. businessmen. They think that it is against the best interests of the U.S. Says Frank Wilton, vice president of Detroit's large J. L. Hudson Co.: "It would be the worst possible thing from our point of view. We wouldn't gain anything by playing into the hands of a small group of radicals. We need friends in Japan." The Miami News gave the back of its hand to local boycotters, pointed out that "the very thing the Communists want is loss of the U.S. market to Japan. The logical result would be a Japan allied to the Communist bloc instead of the free world."

The one real threat of adverse U.S. reaction to the Japanese riots is in U.S. private investment in Japan. The Japanese, hoping to attract U.S. investors, have relaxed some restrictions and carefully cultivated Wall Streeters. Japan's own stock market has been fluctuating wildly of late. And though some counselors in the field still think that there are promising long-range investment prospects in Japan, investors everywhere consider a nation's stability a key factor in their decisions.

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