 The National Broadcasting Company and its affiliated stations present the Pacific Story. This is the story of the Pacific and the millions of people who live around this greatest sea. The drama of the people whose destiny is at stake in the Pacific War. This is the background to the war in the Pacific and its meaning to us and to the generations to come. Tonight's Pacific Story, the Japanese Dilemma comes to you as another public service with drama of the past and present and commentary by Dr. Clayton Karris, chairman of the Department of Trade and Transportation at the University of Southern California and co-author of Japan, Its Resources and Industries. The Japanese Dilemma. Aside from the bloody battles which have been fought in the Pacific since Pearl Harbor and aside from the battles that lie ahead, Japan's goal of empire in the Pacific is almost impossible of attainment. So say economic experts. Japan must expand or die. To succeed, Japan must have peace, must have time to exploit our stolen territories, but Japan cannot stop fighting while she develops them. Added to this, there are other complications. By 1930, Japan had a rapidly increasing population. The question is, what are we going to do with our overflow population? We have always had enough fish and rice and vegetables. But how are we going to maintain a civilized standard of living on what we produce ourselves? Look at this report. You'll see agriculture is still Japan's leading industry. We are rapidly becoming an industrial nation. You are a military man. I am an economist. And there on that paper are the facts. Do you mean that in spite of our great increases in population, that we still produce enough food to feed all our millions? We produce 95% of the food we need and we still have enough to export. The time is coming when we cannot do this. There are only two alternatives to that. Either we must expand our industry or we must have more territory. The answer is more territory. Japan is not ready for war. Then we must get ready. We must build industries to use the resources of the new territories we acquire. We must look far beyond our... Actually, Japan was self-sufficient in food. What she needed principally was fertilizer. This had to be imported from the United States and from North Africa. But as she turned her attention to preparations for war, she was not able to import as much fertilizer as she had in former years. In consequence, her crops fell off. Food. We are short of food. We must have food. Food. We must get food from somewhere. Give us rice. We must have enough to eat. Japan's main effort went into preparations for war. The production of food for the time became secondary. By 1931, she was committed to the policy of territorial expansion, the taking of the lands and resources of others. In the fall of 1931, the wires burned with dynamic news. The Japanese have attacked the Chinese at Mukden in Manchuria and are marching on... Mukden has fallen to the Japanese and they are now advancing on strategic centers all from Manchuria. The Japanese have taken over the vast territories of Mukden completely and have already begun to move in. By the time the Japanese had completed their occupation of Manchuria, they were ready to introduce their plans for its development. We will colonize Manchuria with emigrants. That will relieve the pressure on the growing population in Japan. Also, it will provide the people to build a new industry of Manchuria. That was the plan. Emigrants were encouraged to go to Manchuria, but the plan did not work. Our people do not like to go to cold climates like that of Manchuria. The Japanese like warm climates. No, our only hope is to use the Chinese who live there. Railroads were to be built in Manchuria. Mines opened, blast furnaces installed, but already the natural law was working against the Japanese. In conquest, each time an advance is made, another advance must be made to protect the last one. Japan's die was cast. Until the taking of Manchuria, Japan had supported herself mainly by agriculture and light industries. She had enough mineral resources to do this very well. During World War I, she had started to develop heavy industries, but in the depression immediately following World War I, she found it necessary to halt this and export his surplus minerals. After taking Manchuria, all this changed. How is this blast furnace working? It is as good or better than any blast furnace in the world. Excellent. Then we have been able to increase production in iron on the core. Yes, sir. A very substantial increase. Yes, sir. I knew we could do it. We shall make ourselves self-sufficient in heavy industries. We shall make ourselves self-sufficient in the production of iron and ammunition. We can never make ourselves self-sufficient. Why not? First, we have enough mineral resources for right industries, but we do not have enough for heavy industries. You mean that we need more mineral resources? Yes. And something else besides that. To begin with, the development of these heavy industries has cost us more than we can afford. If we are to be self-sufficient, we must pay for it. Who pays for it? The government pays for its subsidies. Actually, we have artificially stimulated production and we have created an artificial profit for the producing companies. But the cost has been paid by our taxpayer. The taxpayer is the one who eventually will gain by it. We can never compete with the heavy industries of other nations. They can produce iron at much lower cost than we ever can. Still, we must have heavy industries. To supply the heavy industries, new mines were opened. Production was stepped up on the old ones. Iron works and steel mills were built. All were operated at a prohibitive cost. And along with all of this, a new crime went up. The Western nations are depriving Japan of resources. We must have mineral resources and the Western nations are blocking all our efforts to get one. But experts studying Japan's economy saw through this. The reason Japan is short of minerals is that she's preparing for war. Until she put in heavy industries, she not only had enough, but she had a surplus to export. If she respected herself to light industries and textiles in which she excels, she would feel no shortage of minerals. Japan can live without heavy industries and actually would be better off without them. But she's trying to make herself self-sufficient to wage war on her neighbors. And that is why she is short of minerals. For years, Japan's greatest output had been in textiles. For years, she had worked to develop the textile industry. Just before the Japanese attacked China in 1937, there were a million workers in the Japanese textile mills. Their greatest product was cotton cloth. We bring in the cotton from abroad and make the cloth and then export it. This is a Japanese textile manufacturer. What we really do is export the labor of our workers. We add the labor of our workers to the raw cotton. Our labor cost is about 1.27 of 1 cent per yard. So, with a product so cheap, we are more than able to meet competition in the world market. We can sell cotton cloth when no other nation can sell it. This was possible because the Japanese had made great advances in the making of textiles by machinery and because of their skill in management. But to feed this industry, they had to have cotton. To get cotton for their textile mills, they started their economic penetration of North China. No, I will never work for Japan. You have taken my land, but I will not work for Japan. This was the attitude of many Chinese whom the Japanese had conscripted for work in the fields. No, I will not grow cotton. I will grow rice and vegetables. So at least we will have something to eat. Japan had taken the cotton fields, but the cotton crops fell below the old levels. Japan was cotton hungry. We must get cotton from China if we ought to be independent of the United States and the India. We can never get cotton out of China without the cooperation of the Chinese peasants. They will not work for us. No, because they know they can get nothing but their enslavement out of it. Within Japan, there were still some who clearly saw where their nation was heading. But gradually their council was being drowned in the clamour for the coming conflict. To the dominant element, the solution for Japan's problem was to take more territory and to exploit it for Japan's benefit. You see, last year we imported 53 million pounds of cotton from China. But this year, now that we have moved into China, we have imported 191 million pounds from China. You are not correctly interpreting the facts. We have brought 191 million pounds of cotton into Japan from China this year. Have we not? Not from the fields of China. You have taken all of the stocks out of the warehouses. But we have the cotton. The test will be the amount of cotton you get next year. The next year, Japan got only 8,500,000 pounds. Instead of getting more cotton out of their invasion of China, the Japanese got less. The situation became increasingly worse. And almost before the echo of the guns had died out in Japan's drive to the south, cotton experts moved in to start cotton cultivation. The fields of indoor China are already wiped with cotton. The growing of cotton in this region is another evidence of the superiority of the Japanese agricultural technique. We have introduced cotton in this strange land where cotton has never grown before. By this achievement... Radio Tokyo told of this as a glowing achievement. The cultivation of cotton was pushed with all possible zeal. But it was not enough. Japan was growing hungrier for cotton by the hour. In occupied China, a great event was impending. There is no need to be concerned about the Japanese. Of course not. We are cooperating with them. These were Chinese businessmen, big businessmen in occupied China. The Japanese realize our value to them. They have vision. Of course, we must be realistic about this new currency. It has the backing of the Japanese Empire? Of course, of course. There could be such a thing as it not having the same value at some future time as it has today. Actually, it has already depreciated. Of course, I don't think this is any cause for alarm. None would happen, none would ever. I've been looking for you. Hello, Wang. I have just learned that you two, both of you, have invested your money in cotton stocks. Well, what's the matter? Isn't that correct? Well, I... Yes, yes, yes, I put some money in cotton stocks. And what about you, Chen? Yes. Yes, I've... I've put some in cotton stocks, too. Didn't either of you know that the other have invested in cotton stocks? Well, uh... No, no, I didn't know that Chen had put his money into cotton. No, I didn't know that he had put his money into cotton. Well, uh, did you put much money into it? I, uh, I invested quite heavily. Yes, I did, too. Well, you two must think highly of cotton, or you're a little uncertain about the new Japanese-backed currency. Oh, there's a new currency that is backed by the Japanese's sound, I am sure. Of course, of course, the Japanese are our friends. But actually you think it's safer to have your money in cotton. It's just a matter of being realistic. These are uncertain times. Yes, and cotton will... Cotton is stable, money is not. Besides, Japan is a ready market for cotton. You must be right, because nearly all of the big businessmen have put your money into cotton. Well, we are living in unusual times. It is necessary to do unusual things in order to be protected. Of course, you see, we are... Mr. Chen, Mr. Chen. Yes? Excuse me, Mr. Chen, but this has just come to the office. Oh, uh, notice from the bank, eh? This is impossible. What does it say? I can't believe it. Is there anything I can do, Mr. Chen? No, no, you go back to the office. Yes, sir. Can I see it? Yes. Your office must have received the same message. Who's it from? It is from the Central Reserve Bank of China. The government is going to buy up all the stocks of cotton with the new Japanese-backed currency. What? The government is buying up every pound of raw cotton and cotton yarn and every yard of cotton-piece goods. And they said they were going to cooperate with us. They can't give us that Japanese-backed currency for our cotton. It's worthless. They're robbing us. I don't understand. You speculators pretend to be cooperating with the Japanese, but instead you put your money into cotton to protect it against them. Then they confiscate all the cotton and give you instead their Japanese-backed currency. So really, you have exchanged your goal for the worthless Japanese money, and they get the cotton and the bargain. I don't understand. With this coup, the Japanese cleaned the Shanghai market out of cotton, and still Japan was cotton hungry. Everywhere, she sought to get cotton, and nowhere could she get enough. Her greatest industry, her most promising industry, was crippled. For now, she was at war, and she could not fight and exploit her great stolen empire at the same time. As Japan's cotton textile industry was crippled, so also were many of her other industries. In 1938, Japanese fishermen caught more fish than fishermen of any other nation on earth. Six billion, six hundred million pounds. But they caught a good deal of this in Soviet waters, and even more distant waters. They exported much of this fish. Now, the Japanese fishermen have been swept from a good part of the Pacific. Not only is there a catch last, but they have no market for it. So spoke experts. Is it the war alone that has kept Japan from becoming a great industrial pond? Observers studied the changing scene. Well, there are other reasons. Japan has tried to manufacture too many different things. Before the war, she was producing 26,000 different kinds of goods. In some of these, she could excel as in textiles, in silk, in fish, and in shipping. But in many others, she could not succeed, as in the heavy industries. She does not have what it takes to compete with the heavy industries of the United States. Then the implication is that she would have been better off to make fewer different things. Exactly. Instead of trying to compete with the world in many things, she would have been better off to specialize in the things in which she had the natural advantage. From the view of the Japanese in power, this meant that Japan would have to remain within her own islands. It meant that she would have to adjust her economy to what she had, to make the things she was best qualified to make, and to depend upon the rest of the world for the other things she needed. Japan will never do this. We will make Japan self-sufficient. This was the Japanese attitude that led to her vast industrial expansion program after she attacked China in 1937. Until this time, she had been a third-class industrial nation. She set out to make herself a first-class industrial nation. So this is going to be an automotive plant, is it? Yes, sir. It will be in operation in a matter of months now. Uh-huh. Going to build your own automobiles, are you? Not only our own automobiles, but engines for many other purposes as well. Yeah. Certainly going to be a big plant. It is just one of the plants we are building. Are you referring to your steel mills? Yes, sir. And our new chemical plants. Uh-huh. Oh, what are you going to do about supplies? Supply? Yes. What do you mean? Well, you've got to have coal and iron and oil, things like that. We have plenty of coal. Yes, but you'll need such things as, well, copper and rubber and tin and bauxite. Yeah? How are you going to get those things? We will get them. Japan knew where she would get her raw materials. She knew where they were and how she would take them. Within three months after Pearl Harbor, she had conquered the territories that had all the raw materials she needed. Iron, oil, copper, cotton, rice, rubber, tin, bauxite, hemp, quinine, and a hundred other valued materials. And back home in Japan proper, her new factories were already in gear to use these materials. The problem was to get them out of the far-flung lands and to bring them back by ship. But shipping was her mortal weakness. On the day Japan went to war with the United States, she had about six million tons of merchant shipping. Of this, she needed about one million tons just to carry on transportation around the islands of Japan proper. She needed another two and a half million tons for her normal trade between Japan and the lands immediately around her, Korea, China, Manchuria, and Soviet Asia. So that left her with something more than two million tons to keep her far-flung army supplied and to bring back the raw materials of her newly acquired lands. It was not enough. United States submarines immediately went to work on Japanese shipping. United States bombers blasted Japanese shipping wherever it was found. United States warships struck Japanese shipping devastating blows. We are seeking Japanese shipping more than two million tons and we are seeking Japanese shipping more than twice as fast as they can produce it. So spoke our military men. At the outbreak of the war, Japan had a building capacity of some 400,000 or 500,000 tons of shipping a year. She expanded this to about one million tons a year. But we have been seeking her shipping at the rate of two million tons a year. That means that as of now, she probably has less than half the shipping that she had the day she attacked Pearl Harbor. Within Japan, emergency steps were taken. We will build a small wooden ship ranging from 100 to 300 tons. We will put these into service around the islands of Japan. And the ships that have been in this intercostal and inter-island service will be put into service carrying surprise to our troops and returning with raw material. The small vessel program was a failure and the ships that trafficked between Japan and her new outposts met the same fate as those that had gone before. The officials were called to the royal palace in connection with the shipping emergency. After a complete report was made on the situation, they promised the emperor that the supreme effort would be made to ease his majesty's august mind. This is Radio Tokyo. But in spite of all the efforts of the Japanese, thinkings continued. Japan began to feel the shortages of minerals, iron for her heavy industries, of oil, gasoline for her tanks and trucks and planes, of food, rice from Indochina and Burma. Effective at once, no more rice will be imported into Japan. The ships that have been used to bring rice in from Indochina and Burma will henceforth be used for military purposes. All effort will be put into growing of food on the islands of Japan and in foremost of Manchuria and Burma. By the middle of 1944, Japan had left only some 3 million tons of shipping. She needed at least 6 million. By the end of 1944, with the landings in the Philippines, the United States Navy was in a position to throw a blockade across the South China Sea between the Philippines and the mainland of Asia. Japan lay in danger of being cut off from her island empire to the south. The question is, if Japan could have exploited the land she conquered, could she have become a first-class industrial power? No. In some of her industries, she could never compete with the leading industries of the world. And if she is deprived of all of her stolen lands, would the Japanese people be able to support themselves on the islands of Japan proper? Yes, but to do this, Japan must return to being nothing more than a third-class power. While a steel jaws of military force close in upon Japan, she is falling victim to her own economic mistakes. To interpret this, the National Broadcasting Company presents Dr. Clayton Karris, chairman of the Department of Trade and Transportation at the University of Southern California, and co-author of Japan, Its Resources and Industries. Dr. Karris. The dramatic presentation we have just heard suggests three profound factors which are always at work in Japanese economy. The first one is that Japan did not and cannot secure as much raw material by aggressive means as were available to her under conditions of peace. The second factor is that the real costs of what she did get were greater than they had ever been under peaceful conditions of trade. The third factor is that even had Japan been successful in extending her sovereignty over all of Asia permanently, she would actually enjoy no advantage not already hers under pre-war conditions. In 1939, Japan secured her 60,000-ton requirement of crude rubber at a price of 13 cents per pound, a total of $17 million. Her costs of conquest in 1942 in the Melee Peninsula alone are alleged to have been more than $400 million. However, the 13 cents per pound price of crude rubber included a minimum production cost of 9 cents per pound. No matter what country governed Melee. Thus, the gross profit per pound did not exceed 4 cents. Even if Japanese authority could exploit that rubber in such fashion as to eliminate the 4-cent margin, it could not eliminate the 9-cent production expense. Therefore, the maximum savings per year to the Japanese economy would be 4 cents per pound, time 60,000 metric tons or a little over $5 million per year. It would therefore require 84 years to repay its costs of acquisition. Even more unfavorable conditions attached to the minerals of the Philippines, the petroleum of the Netherlands Indies and Burma, the tin of Malaya or the antimony and tungsten of China. In conclusion then, it was not economic strangulation. It was not population pressure. It was not foodstuff deficiency that forced Japan into aggression. It was the ill-fated commitment to national prestige that determined final policy. Within the framework of prestige, I mean to include the ambition which nearly all governments have, to extend sovereignty over new territories, to increase the subject population, to achieve higher rank among the powers, to secure remote naval and military bases, and to achieve her own type of manifest destiny. Not one of these prestige factors is economic. Not one of them actually relieves resource deficiencies at home. Not one of them actually provides, either historically or presently, living space for excess Japanese which was not available already. Economic strangulation was a concept created to justify aggression, created for credulous foreigners and unenlightened Japanese. Japanese are not the only people who have been sold a gold brick. This does not oversimplify the problem. There are six countries in Europe whose raw material and food deficiencies are worse than Japan's in peacetime, but they enjoy a superior level of living through peaceful international trade. Japan must improve its national welfare by the same method. Thank you, Dr. Clayton Karris. You have been listening to the Pacific Story, presented by the National Broadcasting Company and its affiliated independent stations as a public service to clarify events in the Pacific and to make understandable the crosscurrents of life in the Pacific Basin. For a reprint of this Pacific Story program, send 10 cents in stamps or coin to University of California Press, Berkeley, California. To repeat, for a reprint of this Pacific Story program, send 10 cents in stamps or coin to University of California Press, Berkeley, California. The Pacific Story is written and directed by Arnold Marquess. The original musical score was composed and conducted by Thomas Paluso. Your narrator, Gain Whitman. This program came to you from Hollywood. This is the National Broadcasting Company.