In Persia we are playing a rapidly losing game. Commercially, as I have already said, we have lost Northern Persia, and Russian influence is fast advancing in Southern Persia. This is surely the time to pull up and change our tactics, or we shall go to the wall altogether.

As Mr. Joseph Walton, M.P., very ably put it before the House of Commons on January 22nd, 1902, in the case of Russia we have at present to contend with abnormal conditions of competition. It would therefore be wise for the British Government to reconsider its policy in order to maintain, at least, our commercial interests in Southern Persia. The Government of India, too, should take its share in upholding British interests—being directly concerned in affairs that regard the welfare of Persia. Russia has gone to great expense to construct two excellent roads from the north into Persia to facilitate Russian commerce, and it would be advisable if we were to do the same from the south. (One of the roads, the Piri Bazaar—Kasvin Road, is said to have cost, including purchase of the Kasvin Teheran section, something like half a million sterling). It is indeed idle, as Mr. Walton said, to adhere to methods of the past when foreign Governments are adopting modern methods in order to achieve the commercial conquest of new regions.

The matter of establishing Consulates, too, is of the greatest importance. We find even large trading cities like Kermanshah, Yezd, Shiraz and Birjand devoid of British Consuls. Undoubtedly we should wish a priority of right to construct roads and railways in Southern Persia—in the event of the Persians failing to construct these themselves—to be recognised, and it seems quite sensible and fair to let Persia give a similar advantage to Russia in Northern Persia. Nothing but a friendly understanding between England and Russia, which should clearly define the respective spheres of influence, will save the integrity of Persia. That country should remain an independent buffer state between Russia and India. But to bring about this result it is more than necessary that we should support Persia on our side, as much as Russia does on hers, or the balance is bound to go in the latter's favour.

The understanding with Russia should also—and I firmly believe Russia would be only too anxious to acquiesce in this—provide a protection against German commercial invasion and enterprise in the region of the Persian Gulf. Germany—not Russia—is England's bitterest enemy—all the more to be dreaded because she is a "friendly enemy." It is no use to try and keep out Russia merely to let Germany reap any commercial advantages that may be got—and that is the policy England is following at the present moment. The question whether or no we have a secret agreement with Germany, in connection with the Euphrates Valley Railway, is a serious one, because, although one cannot but admire German enterprise in that quarter, it would be well to support it only in places where it is not likely to be disastrous to our own trade and interests generally.

Little or no importance should be attached to the opinion of the Russian Press in their attacks upon England. The influential men of Russia, as well as the Emperor himself, are certainly anxious to come to a satisfactory understanding with England regarding affairs not only in Persia but in Asia generally. An understanding between the two greatest nations in the world would, as long as it lasted, certainly maintain the peace of the world, and would have enormous control over the smaller nations; whereas petty combinations can be of little practical solid assistance or use to us.

As I have pointed out before on several occasions,[3] Russia is not to-day what she was half a century ago. She has developed enough to know her strength and power, and her soldiers are probably the finest in Europe—because the most practical and physically enduring. Her steady, firm policy of bold advance, in spite of our namby-pamby, ridiculous remonstrances, can but command the admiration of any fair-minded person, although we may feel sad, very sad, that we have no men capable of standing up against it, not with mere empty, pompous words, but with actual deeds which might delay or stop her progress. As matters are proceeding now, we are only forwarding Russia's dream of possessing a port in the Persian Gulf. She wants it and she will no doubt get it. In Chapters XXXIII and XXXIV the question of the point upon which her aims are directed is gone into more fully. The undoubted fact remains that, notwithstanding our constant howling and barking, she invariably gets what she wants, and even more, which would lead one to believe that, at any rate, her fear of us is not very great.

We are told that our aggressive—by which is meant retrogressive—policy towards Russia is due to our inability to effect an entire reversal of our policy towards that country, but this is not the case at all. At any rate, as times and circumstances have changed, our policy need not be altogether reversed, but it must necessarily be subjected to modifications in order to meet changed conditions. If we stand still while Russia is going fast ahead, we are perforce left behind. The policy of drift, which we seem to favour, is bound to lead us to disaster, and when we couple with it inefficacious resistance and bigoted obstruction we cannot be surprised if, in the end, it only yields us bitter disappointment, extensive losses, enmity and derision.

The policy of drift is merely caused by our absolute ignorance of foreign countries. We drift simply because we do not know what else to do. We hear noble lords in the Government say that the reason we did not lend Persia the paltry two and a half millions sterling was because "men of business do not lend money except on proper security, and that before embarking on any such policy the Government must be anxious to see whether the security is both sufficient and suitable." Yes, certainly, but why did the Government not see? Had the Government seen they certainly would have effected the loan. Surely, well-known facts, already mentioned in previous pages, have proved very luminously our folly in taking the advice of incompetent men who judge of matters with which, to say the least, they are not familiar. But the real question appears to be, not how to make a safe and profitable financial investment, which is no part of the functions of the British or any other Government, but rather whether it is not better to lay out a certain sum for a valuable political object than to allow a formidable competitor to do so to our prejudice.

Hence the disadvantageous position in which we find ourselves at present, all over Asia, but particularly in Persia. It would no doubt be the perfection of an agreement if an amicable understanding could be arrived at with Russia, not only regarding Persia but including China, Manchuria, and Corea as well. A frank and fair adjustment of Russian and British interests in these countries could be effected without serious difficulty, mutual concessions could advantageously be granted, and mutual advice and friendly support would lead to remarkably prosperous results for both countries.

Russia, notwithstanding all we hear of her, would only be too glad to make sacrifices and concessions in order to have the friendship and support of England, and Russia's friendship to England would, I think, be of very great assistance to British manufacturers. It must be remembered that Russia is an enormous country, and that her markets both for exports and imports are not to be despised. In machinery alone huge profits could be made, as well as in cloths, piece goods, fire-arms, Manchester goods, worked iron, steel, etc.