Land Sc Water 
February 7 , 1 9 1 8 
lie in one district, but jn patches, or, at any rate, the usual 
workings lie in patches. None tlie less, we must remark that 
something like three-quarters of all Russian coal is of this 
sort, and that a general calculation of the reserves present 
gives the Donctz basin more than 70 per cent, of all Europe 
in this necessary mineral. 
Iron ore, the next modern essential after coal, is, to speak 
rhetorically, an almost untouched field. No one knows to- 
day what the potent iaUty of iron ore to the east of the Volga 
may not be. Shortly before the war one district after another 
was being discovered ; the northern Swedish field was found 
to extend far eastward into Lapland, and as late as 1913 new 
fields were discovered. As to the Siberian opportunities, 
they may be anything at all — hardly anything is yet known. 
You have a whole continent undiscovered. 
The wealth of what was once Russia in Mangancs? , is 
equally remarkable. Before the war the mass of the export 
was already sent to the German Empire ; indeed, the mines 
were already largely German owned. If the Central Euro- 
pean State of which we speak, remains in existence, the whole 
of this essential will be ultimately under Prussian control. 
The Caucasus, the Urals and the district of Nikipol in South 
Russia, but particularly the first of the three, are the main 
sources of supply. But there are other fields opening up 
further west, notably upon the frontiers of Poland. 
The Oil Industry 
Lastly, of course, there is the oil industry with which every- 
one is familiar. But upon this essential piece of modern supply 
there is no need to elaborate. The point is perfectly simple 
and has become a commonplace with all educated people 
since the development of petrol traffic. All the supply of 
Europe is Galician, Roumanian or Russian, with a trifle 
German. It is either under the direct control of. what has 
now become the Great Central State or, including the 
Caucasus, under what Will indirectly be controlled by 
it if it remains in existence It is notoriously i upossible 
to estimate the future expansion of this particular form 
of production, nothing is more dependent upon chance 
either for its discovery or for its rate of exhaustion. We 
cannot even calculate as well upon this matter as we can upon 
coal, though it is notorious that the calculations ma 'e with 
regard to coal have been upset by experience. ' If Central 
Europe survives, if the German unbeaten continues to enregi- 
ment the Slav, to overshadow the Balkans and Scandinavia, 
and to hold the gates of the inland seas, not only will he con- 
trol the direction of those oil fields, but he will have his hand 
on the doors by which oil can reach other dominions than his 
own. 
On all this first point, the immense undeveloped field lying 
open for whoever shall acquire the political power to exploit 
it, there is no discussion. It is a commonplace of modem 
political economics in which men only differ as to their degree 
of knowledge and upon which ^^"estem politicians only differ 
in the degree of the vividness with which they see the coming 
change. _, 
But on the second point — the point that this vast coming 
economic power will be used adversely to the West and es- 
pecially to Britian — there is considerable debate, and it is the 
doubt upon this probably which will most confuse, delay and 
render impotent what should be our fixed national determina- 
tion, to prevent such a State from arising. 
There are two theories on matters of this kind, the debate 
between which has grown wearisome during the last few 
years. 
There is the fundamental Free Trade theory that your 
neighbour s increase of wealth can always, if you treat it 
properly, be made a source of increase to yourself. There 
is the Protectionist theory that this statement is not univer- 
sally true or even neariy so, but that even under the blind 
action of its change, without political purpose behind it, the 
increasing wealth of one district may mechanically involve 
the decline of another. 
I certainly do not propose to reopen that threadbare debate 
in these columns. It concerns economics as a science rather 
than international, politics, but what I think can be shown, 
what is indeed obvious and only requires reiteration to obtain 
universal assent, is that a competing economic power, if it be 
deUberately used with a political aim— whether we think 
that aim wise or unwise in economics — is an adverse force 
as much as is a hostile army or restrictive conditions of cUmate. 
Look for\vard some years and see this new Central State 
at work when German capital and organisation have deve- 
loped the mineral resources of what was once Russia, and 
what is still Poland and the Baltic Coast ; its forestry regu- 
larised ; its hitherto undeveloped mines prospected and 
exploited. You have, it is clear, a great increase in the world's 
wealth, and a market which, if it is open, enriches you if you 
can trade with it. You have people producing new things 
which they can now exchange against your products which 
some years before they had nothing to exchange and there- 
fore could not take your products. In general, there is more 
wealth in the world, and you, in the distant W est, though once 
an enemy in the field, indirectly get your share in this ex- 
pansion. There is apparent conflict between your interests ' 
and those of the new producers when you only consider some 
particular trade in which they have become your com- 
petitors. But take the national wealth as a whole, and if you 
specialise upon what you can produce best, while your former 
enemy similarly specialises upon what he can produce best, 
his increase in wealth is all to your advantage as well as to his 
own. 
A Fundamental Error 
It is clear that this general statement, which would have 
been subscribed to by all or nearly all our politicians of the 
Victorian era, depends, even if you grant its main theory to be 
true (and that is debatable) upon one fundamental con- 
dition, which is that the inciease of production in your new 
country will be guided by the self-interest of individuals or 
groups of individuals ; by the desire of the merchant ; of the 
manufacturer for enrichment, untrammelled by political 
direction of his State. But supposing that political direction 
to exist, supposing, no matter how fooUsh we may think it of 
him to act so, that the foreign statesman dehberately inter- 
feres with this natural operation of exchange and conceives 
that an artificial hindrance to your entry into his markets 
will be of ultimate value to him, certainly in poHtical and 
military strength and possibly in economic strength as well. 
What then ? Supposing the great new resources are used 
during peace with a hostile poll ical intention as weapons 
are used during war ? It is clear that wi h your enemy 
(granting for the moment that he is such in intention) pos- 
sessed of new economic power, that power will be to your 
disadvantage. It can be used to your disadvantage in four 
ways. 
First : By planning to destroy within your boundaries 
some form of production which you can with difficulty replace ; 
on which you have specialised and on which you will remain 
better than he, but on which he will refuse to accept the advan- 
tage you offer him, preferring your ruin. 
Secondly, he can artificially stimulate with the same object 
competition in neu: ral markets. 
Thirdly, he can, perhaps, if his economic circumstances are 
favourable, acquire a monopoly in certain kinds of production 
— the Key industries upon which all the rest depends, and he 
can therefore at any critical moment chosen by himself 
paralyse your economic power without hurting his own. 
Fourthly, he can withheld or supply necessaries such as 
food — which last point may be regarded as only a sub-section 
of the one before. 
The debate really runs, therefore, not upon economic theory 
but upon our judgment with regard to two sets of facts : 
The one demonslrable because it is geographical, the other 
political and dependent on opinion. Would th; new State 
so erected be in a geographical poiition to exercise this pres- 
sure against it ? If it were in such a positioa wo aid it choose 
to exercise that pressure in spite of the sectional harm that 
might be done to portions of its subjects ? 
<Jn thj first of these' judgme nts there can be no doubt. 
The great Central State controlled by Prussia would, so far 
as geographical circumstance alone is ccncerned, be in a 
po;itio;i. to exercise mortal pressure upon ^all the Western 
countries and particularly upon Great Britain. The oil sup- 
plies of Europe and a great part of those of the world ; much 
the most of the coal supplies, a very great portion of the wheat 
supplies and of the supply of wood ; the great ma ses of the 
iron ore of Europe, would be under its control. As against 
this it is pointed out that the command of the tropics and 
therefore of products necessary to modern civilisation, and not 
obtainable in Europe, might remain with those who at present 
have superiority by sea. But with the power of production 
such as a more or less united Central State would have, we 
cannot believe that it would permanently leave the balance 
unredressed. At the expense of another war, to which it could 
come far better armed than we, or more probably, at the 
expense only of a threat, it would secure its own tropical 
supply. 
Meanwhile, we have the capital point upon which so much 
insistence has been laid before now in these columns, the Nev 
State would control the two narrow gates into the Baltic 
and the Black Sea. It could shut or open those gates at will. 
The second conditional judgment is a judgment m political 
motive. Here there is no positive proof available. We are 
not talking of a material condition which can be measured 
and which all when it is presented will admit ; nor of a past 
