Nazis have won WWII and taken over the East Coast of the USA, so naturally we start with the brave resistance fighters there. No, wait—we actually begin in San Francisco with antiques dealer Robert Childan, who runs American Artistic Handcrafts, Inc.
He's waiting to get a package for a customer, but it's not going to arrive on time, which is as exciting as fighting Nazis.
The customer is a Japanese trade official named Tagomi, who needs that package now because it's a gift. Since Childan doesn't have that package (an original Civil War recruiting poster), he agrees to come out to Tagomi's office with some other possibilities.
Before he leaves, a hip Japanese couple come in to browse for authentic Americana for their new apartment. Childan makes an appointment to come visit this couple, the Kasouras. (About now you should realize that we're not going to get Indiana Jones-style anti-Nazi action.)
Meanwhile, secret Jew Frank Frink (original name: Fink) realizes that he probably lost his job after yelling at his boss. His job: making fake historical artifacts (kind of like the ones that Childan sells).
Luckily for us, because Frank lost his job here in San Francisco, he thinks about the rest of the world and about his own past. That's lucky for us because it tells us about this world; for instance, we learn that the Germans have brought back slavery for blacks in the Southeast and are still committed to killing all the Jews they can find.
In fact, Frink makes a joke about how the German colonization of Mars will go: they'll get there and start building concentration camps. It's not a particularly funny joke.
It's extra-specially-not-funny when Frink thinks about how the Germans have killed off nearly the whole black population of Africa.
But here we also get a clue as to when this story takes place: 15 years after the 1947 surrender—1962 (1.47).
Frank may have fought against the Japanese, but he gets along with them now. He even uses the I Ching, the Book of Changes, to get answers about the future. Like right now, he uses it to ask about his old boss, Wyndam-Matson and his ex-wife, Juliana Frink. Geez, this chapter sure gives us a lot of info on Frank's past relationships.