SOUTH AFRICAN PLAN.

Manawatu Standard, Volume LVII, Issue 219, 16 August 1937, Page 8

SOUTH AFRICAN PLAN.

PLAY AUSTRALIA AND BRITAIN AGAINST JAPAN. Convinced that she is 1 sitting pretty” in any case, South Africa is not perturbed by Japan’s threat to discontinue her wool purchases unless South Africa buys more from Japan. South Africa realises that Japan possibly hopes to play off Australia against South Africa, but she does not propose to co-operate with. Australia, because she feels that her unique position as the world’s greatest gold producer enables her more profitably to play a lone hand, says a Capetown message of July 8. . The Union Government is aware that Japan is using the same tactics as she recently adopted towards Australia. It is confident that Japan must buy from one or the other. If she abandons South Africa, she must then return to Australia. British and Continental buyers must then get their requirements from South Africa. . “It is no use blustering. Wo won t be hurried. We can afford to wait and see. We won’t enter into any agreement with Japan until we are satisfied that she intends to continue buying our wool.” That is the attitude of South Africa. They remember that Japan had the trade balance all her own way until a policy of expediency drove her to South Africa. Imports from Japan in 1935 were valued at £2,656,000, and Japan’s imports from South Africa at £486,000. AVhen Japan entered the woo] market in 1936; her purchases from South Africa rose to £2,397,000. Japan’s wool purchases alone from the Union in 1937 will amount to £5,000,000. Nevertheless, before committing herself, South Africa will require « guarantee that this business will continue. She feels that she is able to wait because of her strong position with Britain, from whom in 1936 her purchases amounted to £37.000,000. Britain buying only £13,000,000 worth of goods from her. As any increase in South Africa’s purchases from Japan would he mainly texiles. they would he made at Britain’s expense. This gives South Africa a strong bargaining power in both countries. The indications are that she is determined to profit from the position. If Britain is not prepared to grant concessions calculated to even up the balance of trade, South Africa can divert her texile purchases to Japan.

South Africa is most satisfied with her exchange arrangement with Germany, who is taking large quantities of many’, who is taking large quantities of her wool. She wishes that Australia would follow suit. Germany would then get more wool and would not have the same incentive to manufacture synthetic materials, which are a menace to all wool producers.