Cloth War

Blunt, hard-headed Walter Runciman. president of Britain's Board of Trade, called in Japan's Ambassador Tsuneo Matsudaira one day last week and gave him a strange ultimatum: Either the Japanese Government agree to divide the world's markets for cotton and silk cloth equably with Britain, or Britain would keep Japanese cloth out of Britain and its colonies by means of import quotas based on what Japan sold during the 1927-31 period. Ambassador Matsudaira passed the ultimatum on to his Government which presently sent back word that Japan wanted to think it over. But Walter Runciman is no man to wait for anybody to think. Four days after the ultimatum, he told the House of Commons that the British Government was asking the colonies to set up quotas effective at once. Said he: "The Government has concluded it would not be justified in longer postponing action in the hope of an agreement."

Nevertheless, Mr. Runciman did not declare unconditional war. He knew that a trade war with Japan will help Lancashire textile men, but hurt other British business with Japan. He invited Japan to compromise, made it clear that his action has nothing whatever to do with Britain's position on Japan's "moral protectorate'' over China (TIME, April 30). To this Japanese newspapers last week retorted: "Great Britain is taking advantage of the unfavorable light in which Japan has recently been placed."

What fear Japanese competition has thrown into the Western World appeared last week in the annual report of the director of the League of Nations' International Labor Office: "Japanese industry has become the most formidable competitor in the world's markets. . . . Though Japanese exports have doubled in two years . . . the principal factor was evidently the depreciation of the currency."

Anyone less polite than a League official would have accused Japan of "dumping.''

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