Realism in the Far East

A new clarity in U.S.-Japanese relations was apparent last week. In Washington the tension seemed to ease; in Tokyo the tension seemed to increase. Actually both the U.S. and Japan were acting directly along the lines of their dominant policies. The week was one of realism on both sides.

In his speech to the nation, President Roosevelt pointedly avoided any reference to Japan. He upheld China's hand, yet did not deliberately worsen U.S.Japan relations. Secretary of State Cordell Hull pointedly denied that there had been any change in relations with Japan because of the Japanese seizure in French Indo-China of $10,000,000 worth of U.S. goods.

Meanwhile the State Department announced that during April the benign old Secretary had realistically approved licenses to export $57,000,000 worth of war materials to the Dutch East Indies--an amount second only to the arms exports bound for Britain.

Day after the President's speech, in a slick little four-way play, a rigid export control was slapped down on Philippine trade. The President signed an act curbing Japanese access to Philippine raw materials. By prearrangement President Manuel Quezon immediately signed a proclamation implementing the new license system. Then High Commissioner Francis Bowes Sayre, almost in the same breath, announced that the act was in effect at once under his supervision.

The controls having been clamped on, all parties at once took great pains to make it politely clear that export control did not mean embargo. Full stoppage of trade, tsk-tsk'd Mr. Sayre unctuously, was not intended. He wanted "a minimum of dislocation" of normal business. The Japanese, no fools, had anticipated plenty of "dislocation"; in April and May they had bought everything in the Philippines that wasn't nailed down, including $353,600 worth of iron ore. They knew that licensing meant slow strangulation: the application of licensing to U.S.-Japanese trade had brought exports to Japan down from $62,900,000 in the first quarter of 1940 to $32,800,000 in the first quarter of 1941.

In the meantime the President had moved his attention and many a U.S. ship into the Atlantic. Neither the U.S. nor Japan wants a U.S.-Japanese war. Therefore the U.S. would go on aiding China against Japan, and the Japanese would carry on their aggression against China and southeast Asia--both policies based on national realism.

At week's end reports seeped out of the President's pre-speech conference with Congressional leaders. One conferee asked Mr. Roosevelt why there was no reference in the speech to Japan. The President calmly replied that there are two factions in Japan--the belligerent Army and the peace-loving businessmen. He said that harsh words might give the belligerent faction the excuse it needed to launch an anti-U.S. drive.

The game went on. War in the Pacific now would mean that someone had bungled, badly. U.S. and Japanese citizens watched and hoped that no one would bungle.

In a historic statement of U.S. policy, Franklin Roosevelt last week told the world that the U.S. will defend not only Britain, not only the U.S., but China too. "Hitler's plan of world domination would be near its accomplishment today, were it not for two factors: one is the epic resistance of Britain. . . . The other is the magnificent defense of China. . . ." In effect, the President signed and sealed a new alliance. To the totalitarian Axis of Rome, Berlin and Tokyo, he opposed a rival, democratic Axis, reaching from London across the Atlantic to Washington, across the Pacific to Chungking.

While Mr. Roosevelt sat in the East Room of the White House, a slight, brown-eyed man of 52 with crinkly, greying hair sat in a plane over the Pacific. His name was Abraham Manuel Fox, and he was on his way to Hong Kong to help restore China's ailing economy.

A Philadelphia Republican, Manuel Fox joined the U.S. Tariff Commission in 1923. Closer to the New Deal than many a good Democrat, he became vice chairman of the Committee for Reciprocity Information (which is a wailing wall for U.S. industrialists who want to keep their tariff protection) in 1938, next year headed an economic mission to Venezuela. But his China assignment last week was his toughest to date.

In China, Manuel Fox will be a member of the United States Dollar-Chinese Yuan Stabilization Board. Already there, or on the way, are his fellow-members, modest, capable Chairman K. P. Chen and Britain's Cyril Rogers. The board will study all phases of Chinese economy--taxes, earning power, transportation, etc. But its big job will be to manage China's $90,000,000 Stabilization Fund, try to stop inflation in unoccupied China (where $1.70 in Chinese money buys only one pound of rice).

To swing this large-scale currency-stabilization plan, the U.S. pledged $50,000,000, the United Kingdom $20,000,000, China $20,000,000. In the U.S. $90,000,000 sometimes looks like chicken feed.

But in China an American dollar goes a long, long way. If the Fund succeeds in making the yuan respectable, Manuel Fox expects a quick lift in China's trade. As late as last year, Japan--for a smuggler's price--sold China most of her imported cloth goods. Smuggling had been choked off to a trickle last week. But with money to give it strength, it would revive again.

Shoes, Coal, Bandages. In 214 U.S. cities a more direct kind of much needed aid was under way: the United China Relief drive for $5,000,000, to help China's 50,000,000 war refugees.

This campaign for China's relief goes into five separate funds, buys food and clothing for refugees (one U.S. dollar provides necessities for a homeless civilian for three weeks), medical supplies (two U.S. dollars pay for enough chloroform for 80 operations), helps support orphanages, schools to train Chinese leaders, industrial cooperatives.

Especially important to China are these cooperatives. Started with a scant $500,000 capital, they now include almost 3,000 small, mobile workshops back of the lines, support some 500,000 refugees, supply consumer goods (shoes, nails, bandages, coal, cigarets, books, cloth) worth around $6,000,000 a year. Their share of the United China Relief fund, about 10%, will help establish 30,000 new workshops that China needs.

In a cable of thanks to relief officials last week, Mme. Chiang Kai-shek said Chinese morale had been notably boosted by "the unprecedented scale of the present American . . . assistance to China." The American Friends Service Committee said it was sending an ambulance corps of 50 U.S., British and Canadian citizens, ten ambulances to China for duty on the Burma Road.

These concrete expressions of good will, along with Secretary of State Cordell Hull's promise to move for relinquishment of U.S. extraterritorial rights in China when the war is over, amounted to the clearest kind of proof that Franklin Roosevelt's words were not just words--that the U.S. now looks on China as a full-fledged partner in the fight for freedom.

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