The Cupboard Is Bare

FOREIGN TRADE What are Japan's chances for a resumption of her once great foreign trade? What has happened to the zaibatsu, the handful of mighty industrialists who carried on the bulk of Japan's internal and external business? Last week, on these questions, TIME'S Chief Pacific Correspondent Manfred Gottfried reported from Tokyo:

Any American and British worries about Japs again flooding world markets are premature. In the foreseeable future, the Japs have a desperate problem of meeting their own needs. Right now, Japan is an industrial dust bowl.

Peacetime Japan needed over 5,000,000 tons of shipping to maintain her low standard of living; now only 420,000 tons are left. There are no oil reserves left, only 5,000 tons of cotton, only 40,000 bales of wool and only 180,000 tons of steel. Where will Japan, a great processor nation, get raw materials?

Trade Silk for Food? It seems to have little to give in exchange. So far, the U.S. Army's economic and science section, which will handle reparations, has turned up only 46,000 bales of silk, 2,500 tons of tea and 25,000,000 yen worth of medicine. There may be some other equally small change. But the Jap cupboard is bare.

The only real solution of the desperate food shortage in Japan is to export the silk, etc. in exchange for food. It makes sense for Japan, which needs food, and for us, who want silk. Japan expects to produce 120,000 bales of silk this year, but only 90,000 next year, as a result of government plans to cut the acreage of mulberry trees by 70%.

The resumption of Jap industrial production is still 98% in the talk stage. The question of production is also tied in with the bigger one: what shall be done with the great industrialists, the zaibatsu? Certainly, the trust situation is worse here than even in Germany. Everybody tells tales about the zaibatsu's imperialism, their bludgeoning of competitors, their profiteering. But there is no documentation, probably because, as a French journalist, just released from internment, said: "Really important things were known only to a handful of men, those who did them, and they won't tell."

Trusts Busted. The greatest of the zaibatsu, of course, is the 300-year-old feudal house of Mitsui. The U.S. has found that Mitsui has a financial finger in some 173 companies making everything from paper to airplanes. Mitsui was hard hit by bombs, losing 50% of its flour-milling capacity, 30% of its light-metals capacity, 40% of its chemicals and the bulk of its trading fleet.

The house of Mitsubishi, almost as great, lost 60 to 70% of all of its manufacturing capacity. Of all the zaibatsu, Sumitomo emerged from the war in the best shape, losing only about 30% of its manufacturing capacity.

The zaibatsu expect to lose their markets in China, Formosa, Korea and the South Seas. But the U.S. Army has not decided what shall be done about these great trusts, simply because it does not yet know enough about them.

Investment Opportunity. It is entirely possible that the Japs may suggest that the U.S. Government take shares in the big industries, as a form of reparations, and to give the U.S. an interest in the zaibatsu's survival.

Glossing over the part they had in Japan's imperialism, Jap businessmen base their argument for survival solely on economic grounds. Mitsui's managing director summed up their case: "The old zaibatsu should not be dissolved. Their abilities and their credit are necessary to restore Japan's economy and make possible the execution of the terms of the Potsdam declaration.

This file is automatically generated by a robot program, so reader's discretion is required.