In Europe we have no long land frontier with Turkey, as Roumania and Bulgaria lie between us. The only point at which we are in direct touch with her on the mainland is in the Caucasus, and this is the only point where we can engage her by a direct advance across the frontier. But though we are content with our position, we must not forget that Turkey, given a favourable opportunity, might make an effort to regain the territory we have taken from her. To make our position on her frontier safe, we should pacify the Caucasus, improve the conditions of the people and our organization of troops there, and strengthen our command of the Black Sea.
6. _East of Turkey_ we march with Persia for 465 miles in Trans-Caucasia, to the east again for 275 along the Caspian Sea, and further still to the east on land for 593 miles up to Zulfikar on the Heri Rud. Including the Caspian shore, we have a common frontier with Persia of 1,333 miles.[23] Our trade with her has gradually increased in the last ten years from £2,000,000 in 1888 to £3,500,000 in 1897. Of all our land-borne commerce, this is only exceeded by our trade with Germany, Austria, and China. In nine years our exports have risen from £900,000 to £1,600,000, and our imports from £1,100,000 to £1,900,000. Our exports have, however, been artificially stimulated by very heavy rebates on the export tax on sugar and cotton, and the imports diminished by the high taxes on tea brought through Persia (from China and India) and an almost prohibitive tariff on foreign manufactured goods. Her situation on the Indian Ocean, upon the shortest route to India from Europe, combined with the undeveloped state of her resources and her military weakness, makes Persia the natural arena for any struggle between the great Powers for predominance in the Middle East. Hitherto Russia and Great Britain have been the principal competitors, but Germany is now apparently ready to join in the race, for she is making serious efforts to establish her footing in Asia Minor. The fact that we are neighbours over an immense length; our long-standing peaceful relationship;[24] the privileges we enjoy from the Treaty of Gulistan, which give us a word in the internal administration of the country, and permit us to maintain exclusive supremacy on the Caspian, which washes the defenceless shores of Northern Persia; and, finally, our complete military superiority, can be said to confer at present on Russia an effective political predominance in the country. As regards economic predominance, we have in our hands only the trade of the three northern provinces; throughout the rest of the country it does not belong to us. In the southern provinces it is almost entirely in the hands of Great Britain. By seizing points on the coast of the Indian Ocean, by constructing railways[25] and developing her trade with Persia, Great Britain apparently aspires not only to make certain of supremacy in the south, but gradually to capture the trade of the central provinces, and even to compete with us in the north. Germany will also soon be a serious competitor of ours; she already controls the important trade route from Trebizond to Tabriz. The following is the conclusion I recorded in the report I have quoted from above: