CHARLES M. DAVIS

THE TRADE THAT FLOWS ACROSS THE PACIFIC CONSISTS FOR THE MOST
part of exchange between the nations that border on the ocean. The
major part of it is intercontinental in nature, that is, it carries Asiatic
commodities to America and American commodities to Asia. A
smaller part is truly oceanic, in that it carries products that originate
in the oceanic environment, on the islands or the immediate continen-
tal shores. North America and Asia are two of the three most impor-
tant commercial regions of the world; the trade that moves between
them reflects the differences between the nations on either side of the
ocean.

The United States is a nation of high living standards and cor-
respondingly high labor costs; its production, therefore, is very ex-
pensive by world standards. However, American industry is amaz-
ingly efficient so that some types of goods, especially machinery and
automobiles, are made more cheaply here than anywhere else and can
be sold in competition, notwithstanding the wages paid to workmen
in the United States. The country possesses most of the necessary
industrial raw materials but must import some essential commodities
such as tin and rubber. In the western Pacific area only two nations,
Japan and Australia, have efficient and extensive industrial systems.
The industrial system of Japan is based on cheap labor but lacks many
raw materials; that of Australia possesses most of the materials but
lacks the population for a large domestic market for its products.

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