It has now transpired that the United States has formally demanded, in a Note presented to Prince Konoye, the Japanese Prime Minister and concurrently Foreign Minister, the cessation of all Japanese discrimination against the trade of the United States with China. The list of complaints against Japan contained in the Note is not so long as it might be, though the manner of their generalization covers more than would at first appear. Reports from the north for months past have dwelt upon the manner in which the Japanese authorities are planning to bring about a condition in which they will have monopolistic control of China's commerce. It is to be expected that, as opportunity offers, the same plans will be extended elsewhere and there are already signs that the process will be followed in Central China, and, it is to be expected, ultimately in the south. By the establishment of exchange control, the creation of monopolies, the prohibition of certain exports, and general discrimination against non-Japanese traders, the Japanese are seeking to wrest some immediate returns from their military adventure, and establish the machinery through which it will eventually be paid for. And it is being done with complete disregard either of the rights of foreign neutrals in this country, or of the promises which Japan has so frequently made through her State officials. One of the principal rights of foreigners in China is that of being able to trade freely with equality of opportunity. The maintenance of the Open Door is something to which Japan is completely committed without any reservation whatsoever, but despite that commitment it is apparent that she is engaged in courses which the history of Manchoukuo during the past seven years has taught the world to expect. The Americán Note asks Japan to implement the assurances which Rave already been given with regard to the maintenance of the Open Door and non-interference with American rights by undertaking certain measures which are detailed.
Those measures if taken by Japan would mean nothing less than a complete stoppage of the present policy and the restoration of former conditions under which all nations trading with China were on the same footing. The Note in effect requires the abandonment by Japan of present policies and a return to practices more in congruity with her prehostilities' undertakings and her more recent promises. Despite the fact that the Note was presented so long ago as October 6, there has been up to the present no announcement of the receipt of the Japanese reply. It is obvious that the rendering of an answer satisfactory to the United States must be a matter of some difficulty. The establishment of monopolies in favour of the big Japanese interests cannot be excused on the ground of military necessity, and if any such attempt is made, it will most certainly be disbelieved. The denial of harbour facilities at Tsingtao to all but Japanese shipping can also be excused for no such reason, and it is clear that this often repeated excuse is being used for the purpose of permitting Japanese traders to establish themselves in such a position that when China is again open to trade it will be possible to permit other foreigners to trade with perfect freedom and equality in goods which have already been cornered by the Japanese. They are in fact not only ensuring control of supplies which they badly need themselves but are establishing themselves in the position of middlemen who alone will be able to sell the surplus abroad. There is another aspect of the whole matter which will undoubtedly appeal to sentiment in the United States. The formation of these monopolies which are subject of complaint places an equal stranglehold upon the Chinese themselves. They will obtain for their produce only what the monopolies care to pay, and the result is that they will suffer from the absence of that competition which alone assures the producer adequate recompense for his labour. The whole scheme is one of downright exploitation on an enormous scale.
The United States Government is not without means of bringing very considerable pressure to bear upon Japan in the event of failure to bring about a satisfactory change in the situation. Retaliation against Japanese trade may very well prove a particularly effective weapon, for any limitation of Japanese trade with the United States would prove a most serious blow to the economic condition of the country. That is a consideration which has not escaped the notice of other countries also suffering from the Japanese commercial policy in China, and it will be as well for Tokyo to remember that though it may secure to itself all the supplies which China produces, inability to process most of it for export abroad means the deprivation of that income so necessary to Japan. Goods which Japan would be unable to dispose of would not be assets, but possibly serious liabilities. Japanese export trade depends to a very great extent upon the goodwill of those countries with which, she does business, and it cannot be believed for one moment that the Japanese are blind to the fact that a continuance of present policies will do anything but destroy it. There should be no doubt about it that discrimination is a dangerous weapon for when employed it invites just that same type of retaliation, and in this instance a retaliation which will be more effective against Japan than it could ever be against the United States. Naturally the Japanese reply will be awaited with great interest, for upon it much may depend. Wisdom would suggest that the best reply would be to fall in with the American demands, though recently stimulated enthusiasms may serve to prevent what would be indeed a pleasurable issue out of the present distressing situation.
Text read from the printed page and cleaned; old type leaves the occasional error.