Arc 66Spain, Soviet Ties, and Dalmatia

East Africa backed Franco’s uprising, expanded its influence through trade and infrastructure, and watched Germany, Britain, and the Soviet Union maneuver for advantage. As the Soviet Union sought cooperation and Dalmatia faced Yugoslav demands, the stretch ended with Karl I prioritizing East African ties while remaining wary of Germany.

  • Ernst prepared East African assistance for Franco’s faction, and Tagian and William negotiated cooperation with Franco in Tenerife.
  • Franco escaped to Morocco, declared himself leader of the rebellion, and arranged German and Italian air support to fly troops past the Republican naval blockade.
  • East Africa won the Berlin Olympics, while Adolf used the Games to promote Aryan superiority and ordered a crackdown on the underground Labor Party.
  • Ernst and Crown Prince Friedrich advanced plans for Gwadar’s water supply and aviation role, while East Africa extended financial, technical, and industrial support in Western Regions Province.
  • Baldwin warned that East African influence threatened British interests and proposed manipulating rivalries among major powers, prompting Ernst to strengthen monitoring and international ties.
  • Yosef and Soviet leaders recognized Germany as their gravest threat and considered cooperation with East Africa and the United States while preparing to move industry eastward.
  • Ernst weighed Soviet overtures and proposed a cheap Central Asia Highway from Gwadar toward the Far East Empire, while cautioning Friedrich against becoming deeply involved in Afghanistan.
  • Karl I chose East African railway standards for Dalmatia and pursued Yugoslav economic cooperation, but after Yugoslavia demanded territory, he made closer East African ties and caution toward Germany his foreign-policy priorities.
Chapters 1632–1656 Vol. 17 Read

Ch. 1632Arms Market

Ernst and Crown Prince Friedrich discussed East Africa’s economic expansion in South America, its plans for the looming Spanish Civil War, and fierce competition in the international arms market. The chapter left them viewing the crowded arms trade as part of a multipolar order that would eventually be reshaped by a new struggle among the strongest powers.

  • Kuyaqi explained that East Africa aimed to bind South American countries to the Empire through economic integration, while Val praised the strategy.
  • Ernst told Crown Prince Friedrich that economic influence offered a more sustainable form of expansion than military force, and they compared East Africa’s approach with Japan’s.
  • Crown Prince Friedrich reported that Spain’s factions were nearly ready for war, and Ernst ordered East Africa to prepare assistance for Franco’s faction through non-sensitive supplies and possible arms sales to Spanish buyers.
  • Crown Prince Friedrich described the competition among East Africa, Germany, the United States, Britain, and France, along with the advantages of other arms-producing countries.
  • Crown Prince Friedrich concluded that the crowded international arms market would require a new division of power, and Ernst anticipated that East Africa, the United States, Germany, or Soviet Union would shape the next order.

Ch. 1633Melilla

In Melilla, Colonel Valdez and Lieutenant Colonel Lara prepared to seize control of the city’s forces if war broke out against Spain’s Republican Government. They traced Italy’s new supply route through Benghazi to East African trade enabled by the North African Railway, while debating how much the railway threatened Spain’s trade.

  • Lieutenant Colonel Lara reported that Melilla’s troops had been re-equipped and that most of the 1st Infantry Regiment had been won over, allowing them to take control if war began.
  • Colonel Valdez and Lieutenant Colonel Lara condemned the Republican Government and expected support from Germany and Italy for a conservative uprising.
  • Valdez asked why Italian supplies had shifted from Italian ports to Benghazi, and Lara explained that the North African Railway had opened earlier that year.
  • Valdez concluded that Italy was buying supplies from East Africa and forwarding them from Benghazi, while Lara noted that East African goods were cheaper and better suited to their needs.
  • Valdez worried that the railway would divert trade from Spain, but Lara argued that its main competition was the Suez Canal route and that sea transport through Gibraltar remained advantageous for western East African goods.

Ch. 1634Lieutenant Colonel Lara's Resentment

Lieutenant Colonel Lara and Colonel Valdez discussed Spain’s need to overthrow the Republican Government and build a strong, unified state, while lamenting its decline relative to Italy and other powers. Lara remained resentful toward Britain and the United States for helping Spain lose its colonies, and the chapter ended with Spain’s prospects for reclaiming leadership of the Spanish-speaking world still uncertain.

  • Lieutenant Colonel Lara argued that the North African Railway would not significantly affect Spain’s trade and said Spain needed immediate East African support against the Republican Government.
  • Lieutenant Colonel Lara praised East African goods over Italian products as the conversation contrasted Italy’s weak industrial reputation with East Africa’s and Germany’s stronger brands.
  • Colonel Valdez blamed Spain’s liberals, the Labor Party, and republicans for Italy’s rise and called for a strong government to unite Spain and reduce internal division.
  • Colonel Valdez said Spain’s limited population, arid land, and lost colonies made economic competition difficult, but argued that its resources and industrial base could help it regain influence among Spanish-speaking countries.
  • Lieutenant Colonel Lara dismissed Argentina and Mexico as potential leaders of the Spanish-speaking world and resented the Americans and British for contributing to Spain’s loss of its American colonies.

Ch. 1635Contact

East African envoy Tagian met with Franco in the Canary Islands to offer cooperation ahead of Spain’s expected war. Franco verified Tagian’s credentials and learned that East Africa believed he could lead the Nationalists and eventually rule Spain.

  • Tagian and William arrived in Tenerife aboard the East African merchant ship Cortileir to contact Franco, whom Spain had exiled to the Canary Islands.
  • Tagian and William met Franco at his residence, where Franco recognized that they were not ordinary merchants and demanded to know their purpose.
  • Tagian revealed that he represented the East African government and had been sent by Crown Prince Friedrich to negotiate with Franco.
  • Franco examined Tagian’s identification documents and Friedrich’s letter, then burned the letter as instructed.
  • Tagian explained that East Africa wanted to invest in Franco because it trusted the Nationalists and believed Franco’s military influence gave him a strong chance of winning the coming war and leading Spain.
  • Franco realized East Africa valued his military talent and influence within the Nationalist faction.

Ch. 1636Taking Control of the Army

Franco secured East Africa's support for the Nationalist cause and flew from the Canary Islands to Tétouan to take command of the Army of Africa. After the officers accepted his authority, he claimed leadership of the wider rebellion against the Madrid government.

  • Franco agreed to East Africa's terms for cooperation, including protecting its interests in Spain and coordinating on regional security.
  • After Solot was kidnapped and killed, the Spanish conflict escalated, and on July 11 the rebels received the signal to begin their uprising.
  • Franco left the Canary Islands by plane with trusted companions, choosing the risky night flight to avoid interference from Madrid.
  • After a difficult journey, Bebby landed safely in Tétouan, where Army of Africa officers and administrators awaited Franco.
  • Franco denounced the Madrid government and declared himself the overall leader of the effort to overthrow it.

Ch. 1637German Air Force Joins the Fray

As the Spanish rebellion stalled, political turmoil in the Republican Government led to the rapid replacement of three prime ministers. In Morocco, Franco consolidated the Army of Africa and arranged German and Italian air support to transport his troops across the Strait of Gibraltar.

  • Franco unified the rebel forces in Spanish Morocco, while the mainland conflict bogged down without either side securing a decisive advantage.
  • Quiroga resigned as prime minister, and after Barrio briefly took office and resigned, Hilar became prime minister and armed workers to fight the rebels.
  • Franco learned that his forces had abundant supplies in Morocco but could not cross the Republican naval blockade by sea.
  • Franco proposed flying the Army of Africa to Spain and sought transport aircraft from Adolf and Benito.
  • Adolf and Benito agreed to deploy their air forces, and Germany sent more than twenty Ju52 transport aircraft to Morocco.

Ch. 1638Enemy in East Africa

Adolf inspected Berlin’s Olympic Stadium and discussed Germany’s plans for the Olympics, Spain, and eventual expansion across Europe. He identified East Africa as Germany’s most serious long-term rival, warning that conflict between them would become unavoidable after Germany unified Europe.

  • Adolf praised Albert Spee’s completed Olympic Stadium and promised him the task of remaking Berlin after the Games.
  • Adolf received a report that German aircraft had helped transport part of Franco’s forces from Morocco to southern Spain, and ordered Göring to reward the airmen and prepare further support.
  • Adolf said Germany would avoid intervening in Spain during the Olympics but might later send its air force or troops to help Franco defeat the Republican government.
  • Adolf outlined plans to defeat France and then the Soviet Union, while relying on the Olympics to improve Germany’s image and distract other European countries.
  • Adolf warned that East Africa’s economic reach, military strength, and influence across trade routes made it Germany’s greatest future threat, and predicted the two powers would clash after Germany consolidated Europe.

Ch. 1639Medal Table Leaders

Adolf ordered German athletes to defeat East Africa at the Berlin Olympics, while Director Watt urged East African competitors to answer Germany’s racial insults with victories. After a tense opening ceremony and fierce competition, East Africa finished first in the medal table, ahead of Germany and the United States.

  • Adolf told German athletes to show East Africa no mercy at the Berlin Olympics and prove Aryan superiority.
  • Director Watt rallied East African athletes to defeat Germany and warned them that Germany and the United States were formidable rivals.
  • The Berlin Olympic competitions began on July 31, with East African, American, and German athletes battling in the men’s decathlon.
  • At the opening ceremony, German-aligned delegations received cheers for saluting the stands, while East Africa and other delegations faced a cold reception.
  • East Africa won the Games with 102 medals and 31 golds, while Germany placed second and the United States third.

Ch. 1640Post-Olympics Turmoil

The 1936 Berlin Olympics provoked European dismay and embarrassed Germany as East Africa and the United States excelled, while underground Labor Party newspapers mocked Adolf’s racial ideology. Heinrich persuaded Adolf to reinterpret the results as proof of Aryan superiority, and Adolf ordered propaganda to promote that explanation and a renewed crackdown on the Labor Party.

  • European newspapers highlighted the strong results of East Africa and the United States and Britain’s declining Olympic performance.
  • An underground Labor Party newspaper used Owens’s victories to ridicule Adolf’s racial theories, despite the danger of circulating banned materials in Germany.
  • Adolf angrily condemned the underground press and Germany’s athletes, especially Owens, before Heinrich defended the Empire’s Olympic results.
  • Heinrich argued that East Africa’s population and supposedly mixed ancestry explained its medal count, and Adolf accepted the argument and extended it to other countries and territories.
  • Heinrich pointed to events Germany had won that East Africa and the United States had not entered, while noting East Africa had won the football championship.
  • Adolf ordered the propaganda department to present the Olympics as proof of Aryan superiority and told Heinrich to crush the Labor Party; Heinrich promised a crackdown.

Ch. 1641Territory Exchange

Ernst and Crown Prince Friedrich reviewed East Africa’s gains from the Berlin Olympics before discussing how to supply water to Gwadar Port. Friedrich proposed exchanging territory with the Kalat Khanate to secure the mountain water sources Gwadar needed.

  • Ernst explained that East Africa had used Germany’s Olympic propaganda stage to boost its international image with an unexpected sporting success.
  • Friedrich reported that Gwadar’s scarce rainfall and groundwater threatened the port’s redevelopment and ability to support stationed personnel.
  • Friedrich outlined a plan to build reservoirs in the Makran Mountains and divert seasonal rivers, but said several water sources lay within the Kalat Khanate.
  • Ernst favored negotiating with the Kalat Khanate first and said Gwadar’s strategic importance mattered more than expanding its population or city.
  • Friedrich proposed exchanging territory with the Kalat Khanate to obtain the areas containing the water sources Gwadar needed.

Ch. 1642Reservoir Site Selection

Ernst and Crown Prince Friedrich agreed to seek northern mountain land from the Kalat Khanate in exchange for parts of Gwadar’s coast, while planning Gwadar Port as a military and aviation hub for aid to the Far East Empire. In Gwadar, Watson surveyed reservoir sites and concluded that Reservoir Area No. 2 could meet local needs, while Sivag pointed out the port’s potential role in transporting urgently needed supplies.

  • Crown Prince Friedrich proposed trading Gwadar’s less useful coastal land for mountain territory from the Kalat Khanate, and Ernst agreed.
  • Ernst described plans for Gwadar Port to serve as an aerial logistics hub for military aid to the Far East Empire.
  • Watson reported that Reservoir Area No. 2 could collect seasonal rainfall and provide minimum drinking water for twenty thousand people, and Sivag asked him to prepare a construction plan.
  • Watson said Reservoir Area No. 3 had better conditions but lay in Kalat Khanate territory, while Sivag suggested joint development with Turbat.
  • Watson argued that Gwadar did not need to become a major aviation hub, but Sivag reminded him that the Far East Empire urgently needed medicine and weapons, changing his view of the port’s potential.

Ch. 1643Development of the Western Regions

East Africa expanded trade and military cooperation with the Far East Empire’s Western Regions as Japanese aggression disrupted older trade routes. The chapter ended with East Africa declining large-scale military aid but offering economic support to stabilize the province and limit Soviet influence.

  • Sivag explained that Japanese smuggling and military pressure had crippled East Africa’s former trade with the Far East Empire and made the Northwest Air Route and Western Regions trading ports more important.
  • East Africa helped the Western Regions Provincial Government secure Shule, establish an airport and trading port, and equip motorized infantry units with East African weapons.
  • Talshi urged Battalion Commander Zhang to eliminate hidden hostile forces in Shule before they could reconnect with foreign backers, while Zhang warned that his province could not afford another costly campaign.
  • Battalion Commander Zhang telegraphed Dihua with Talshi’s proposal, but the Western Regions Provincial Government declined a new operation because of financial constraints.
  • Consul General Blaney rejected a request for large-scale military aid and offered economic, financial, and technical cooperation instead.

Ch. 1644Industrial and Agricultural Support

Consul General Blaney proposed East African economic and agricultural support for Western Regions Province, focusing on industrializing textiles, food processing, and metalworking around Dihua and Shule. Representative Wang agreed to report the proposals to the provincial government, and East African investment later expanded across the region.

  • Blaney explained that East Africa could not provide substantial military support or practical overland trade links, but could offer financial, technical, and personnel assistance.
  • Blaney proposed modernizing textile production in Dihua and Shule with supervised low-interest loans, technical support, and East African managers and specialists.
  • Blaney urged Representative Wang to develop cotton cultivation, repair waterworks, and build coal-fired power plants to supply electricity for textile and other industries.
  • Blaney recommended adding metalworking and flour milling to create jobs, process local resources, and meet demand in Western Regions Province and nearby markets.
  • Blaney and Representative Wang agreed that extremist nationalist and religious groups threatened regional stability, though Wang said the province could not easily control its vast, remote territory.
  • East African investment and personnel later spread through the Western Regions, while the completion of Gwadar Airport helped East African trade and goods gain ground.

Ch. 1645"Shit-Stirrer" in Action

The chapter describes the limits of East Africa’s development efforts in Western Regions Province, then follows a British cabinet meeting on the threat East Africa posed to Britain’s global interests. Britain concluded it could not contain East Africa directly and planned to stir conflicts among rival powers to protect its empire and avoid war.

  • East Africa’s investments brought short-lived prosperity to Western Regions Province but left industries dependent on East African technology and personnel.
  • Prime Minister Stanley Baldwin convened the cabinet on October 21, 1936, and warned that East Africa’s expanding presence threatened British interests across Europe, Africa, and Asia.
  • William Ormsby-Gore and the Marquess of Zetland described East Africa’s growth and its strategic encirclement of India, while cabinet members conceded Britain could not readily oppose it.
  • Chamberlain urged Britain to avoid war and use diplomacy to divert threats, and Baldwin proposed provoking rivalries among East Africa, Germany, the Soviet Union, Japan, and the United States.
  • Baldwin prioritized turning Germany and the Soviet Union against each other while keeping Japan from joining Germany against the Soviet Union, so Britain could preserve its position in Europe and overseas.

Ch. 1646Manipulating Public Opinion

Britain stirred international hostility through news manipulation, commercial competition, and agents in other countries to keep the great powers divided. In Rhine City, Ernst and Crown Prince Friedrich suspected British interference and ordered measures to protect East African interests while monitoring foreign-influenced media.

  • Britain encouraged hostile news coverage and trade disputes between countries, while opening markets to rival powers to provoke conflict.
  • Crown Prince Friedrich told Ernst that suspicious public-opinion shifts and British activity overseas suggested Britain was targeting East Africa.
  • Ernst warned that a British-American alliance would threaten East Africa most, and ordered closer monitoring of South America and the Nanyang region and stronger ties with southern countries.
  • Ernst advised using public anger to support national-defense construction while tracing foreign-influenced media and recording its operators.

Ch. 1647The Soviet Union's Attitude Toward Germany

In 1937, Yosef and Soviet officials assessed Germany as a growing military and strategic threat that the Soviet Union could not match alone. They resolved to accelerate preparations for war and seek support from the United States and East Africa, even by offering concessions in Asia.

  • Yosef told Soviet officials that Germany and its nationalist bloc had become the Soviet Union’s most lethal external threat, making international friends essential.
  • Yosef and Marshal Voroshilov compared the countries’ forces, populations, railways, and mobilization capacity, concluding that Germany held major advantages.
  • Yosef warned that the Soviet Union might lose on the front lines and called for faster eastward relocation of defense industry and population during the Third Five-Year Plan.
  • Yosef said German and Italian intervention had weakened Spain’s Republican government and that Britain and France could not be trusted to oppose Germany.
  • Yosef concluded that Germany had strategically encircled the Soviet Union and proposed seeking American and East African support, even if the Soviet Union had to yield interests in Asia.

Ch. 1648Soviet "Ally with America Against the East" Strategy!

Yosef and Soviet leaders discussed how to cooperate with the United States and East Africa against Germany. Litvinov argued that Germany threatened the maritime powers more than Soviet Union did and proposed exploiting American concern about East Africa to build a lasting alliance.

  • Yosef argued that East Africa and the United States would oppose a Germany that controlled Eurasia and threatened their interests.
  • Soviet leaders questioned whether capitalist powers would cooperate with Soviet Union despite their history of hostility.
  • Yosef asked Litvinov whether cooperation with East Africa and the United States was possible.
  • Litvinov argued that Germany endangered world security and that Soviet Union shared common interests with East Africa and the United States.
  • Litvinov said cooperation with East Africa and the United States would be easier than with Britain and France, which distrusted Soviet Union and Slavs.
  • Litvinov proposed an “Ally with America against the East” strategy that would use American concern about East Africa to secure cooperation beyond Germany’s defeat.

Ch. 1649A Complete Diplomatic Shift

Yosef and Soviet officials assessed the danger posed by Germany and concluded that Soviet Union could not protect its western industrial centers through military force alone. Yosef ordered a diplomatic turn toward East Africa and United States, leaving Soviet Union poised to pursue closer relations with both countries.

  • Litvinov warned that war with Germany would deepen Soviet Union's industrial and military disadvantages, while Mezhlaurk asked whether the military could defend the western industrial zones.
  • Marshal Tukhachevsky said the Soviet military could not reliably shield Leningrad, Moscow, and East Ukraine, and proposed delaying Germany's advance while moving industry and military resources eastward.
  • Tukhachevsky urged Soviet Union to protect its Caspian oil production and use energy diplomacy to restrict Germany's supplies.
  • Yosef declared that Soviet Union would prioritize national security, set aside exporting ideology, and unite with countries opposed to Germany.
  • Yosef directed officials to use the Second Five-Year Plan celebration to engage representatives from East Africa and United States, and said he might visit both countries.

Ch. 1650Moscow's Transformation

Yosef and Soviet leaders discussed seeking support from East Africa and the United States to counter Germany, while considering how to appeal to each country's interests. In Moscow, East African ambassador Lawrence praised the Soviet Union's rapid industrial and urban development as Soviet officials began adjusting their approach to East Africa.

  • Yosef proposed that, if circumstances demanded, he might travel abroad to secure support from East Africa and the United States, and the Soviet leaders discussed first testing their willingness to cooperate.
  • Molotov argued that East Africa had no incentive to help Germany defeat the Soviet Union and would benefit from keeping Germany in check.
  • Yosef directed officials to appeal to American concerns about Germany and East Africa, while warning East Africa of the danger Germany posed.
  • Lawrence praised Moscow's prosperity during a car ride with Markov, who challenged East Africa's shift away from a planned economy.
  • Lawrence compared Soviet development with Germany's unsustainable growth, prompting Markov to abandon the argument and adopt a more conciliatory tone.
  • Lawrence cited the Moscow Canal, Metro, improved roads, factories, and public utilities as evidence of Moscow's transformation into a modern industrial city.

Ch. 1651Plotting the Central Asia Highway

Crown Prince Friedrich assessed the Soviet Union’s new diplomatic openness and considered using improved relations to negotiate an overland highway from Gwadar Port through Afghanistan to Shule. The chapter left the proposal as a possible means of supporting East Africa’s Far East strategy, while Friedrich ordered continued monitoring of the Soviets.

  • Lawrence and Markov compared Moscow and Rhine City, and Markov argued that the Soviet Union would catch up with the industrial powers in another ten or twenty years.
  • Talaya told Crown Prince Friedrich that Soviet diplomats were making more contact abroad and Cheka activity in East Africa had decreased, but the National Security Bureau could not confirm the reasons from inside the Soviet Union.
  • Crown Prince Friedrich and Talaya discussed the Soviet Union’s setback in Spain, the rebels’ growing advantage, and the threat posed by the strengthening German camp to Britain, France, and the Soviet Union.
  • Crown Prince Friedrich told Talaya to keep watching the Soviet Union and said improved relations might let East Africa gain access to Central Asia.
  • Crown Prince Friedrich considered seeking Soviet approval for a highway from Gwadar Port through Afghanistan to Shule, which could support East Africa’s military cooperation with the Far East Empire if sea routes were cut off.

Ch. 1652Consolidating Strategic Advantages Around the Indian Ocean

Ernst and Rudolf discussed the Habsburg states in West Africa and how they could exploit a future war between Germany and France, while avoiding any visible ties to Germany. Crown Prince Friedrich then reported signs of a Soviet foreign-policy shift and proposed preparing negotiations that could secure trade and an overland route from Gwadar to the Far East Empire, leaving Ernst ready to advance East Africa’s Indian Ocean strategy.

  • Ernst and Rudolf discussed the growth of the Habsburg Monarchy and New Austria in West Africa, which depended on East African support.
  • Ernst warned Rudolf that the Habsburg states could take advantage of a Germany-France war to expand into French West Africa, but must not appear aligned with Germany.
  • Crown Prince Friedrich told Ernst that Soviet diplomatic and Cheka activity suggested the Soviet Union might be seeking to ease relations with East Africa.
  • Ernst agreed to wait for the Soviet Union to make its intentions explicit while preparing to preserve trade and gain advantages in negotiations.
  • Crown Prince Friedrich proposed seeking Soviet cooperation for an overland route from Gwadar Port to the Far East Empire, and Ernst saw an opportunity to strengthen East Africa’s Indian Ocean position.

Ch. 1653Save Where Possible

Ernst argued that East Africa should accommodate Soviet influence in the Middle East and Central Asia while focusing on economic interests and secularization. He told Friedrich to avoid deep involvement in Afghanistan and build the Central Asia Highway as cheaply as possible, leaving its scope and quality minimal.

  • Ernst described the Soviet Union as East Africa's main rival in the Middle East and Central Asia, while Friedrich and Rudolf noted Germany's growing role and predicted future competition there.
  • Ernst argued that Soviet ideology would weaken over time but that Arab religion posed a longer-lasting challenge, and proposed letting the Soviet Union take greater responsibility for the Middle East while East Africa promoted secularization.
  • Ernst warned Friedrich that Afghanistan was a costly, intractable trap and said East Africa should allow the Soviet Union to get entangled there rather than intervene deeply.
  • Ernst explained that the Central Asia Highway should serve mainly to move supplies to the Far East Empire, since sea routes were cheaper and the overland route offered little economic value.
  • Ernst directed that the highway be built as cheaply as possible, allowing existing roads, one-way sections, and basic sand-and-gravel surfaces; Friedrich was startled by how frugal the plan was.

Ch. 1654The Kingdom of Dalmatia's Dilemma

King Karl I and the Dalmatian cabinet debated how to improve the kingdom’s struggling economy and transport network. Facing Yugoslavia’s military threat, Karl chose the East African railway standard for a planned north-south line and decided an East African company should build it.

  • Finance Minister Davis described Dalmatia’s fiscal problems, weak transport links, and need for new economic development.
  • Davis proposed a north-south railway from Fiume Port or Zadar to Dubrovnik, supported by east-west roads.
  • Transport Minister Wang Lü outlined the trade and defense advantages of European and East African railway standards, prompting a divided cabinet debate.
  • Prime Minister Yulitean asked Karl I to decide which railway standard the kingdom should use.
  • Karl I chose the East African standard and proposed hiring an East African railway company, citing the threat from Yugoslavia and the low cost of changing standards later.

Ch. 1655First-Mover Advantage

King Karl I and his cabinet discussed how the Kingdom of Dalmatia could industrialize and defend itself amid threats from Yugoslavia, Italy, and Germany. They planned to develop military production, aluminum processing, and reliable electricity while seeking trade and economic cooperation, especially with Yugoslavia.

  • Prime Minister Yulitean urged stronger army defenses along Dalmatia’s borders with Yugoslavia and emphasized hydropower and thermal power to support industry.
  • King Karl I argued that Dalmatia needed domestic military production and aluminum processing to reduce dependence on foreign suppliers and build industrial capacity.
  • Davis proposed seeking foreign assistance, establishing food-processing and textile industries, using Balkan resources, and turning Dalmatia into a maritime trade hub.
  • Davis argued that Dalmatia should pursue economic cooperation with Yugoslavia because it needed Dalmatian ports and could provide markets and raw materials.
  • King Karl I decided to approach the Yugoslav government about cooperation and, if negotiations failed, to focus Dalmatian trade on other Adriatic countries and overseas partners.

Ch. 1656Balancing Relations Between East Africa and Germany

The Kingdom of Dalmatia faced Yugoslavia’s rejection of economic cooperation and territorial demands, prompting Karl I and Prime Minister Yulitean to weigh defense and diplomatic options. They planned to deepen ties with East Africa, remain wary of Yugoslavia, and manage Germany carefully, while recognizing that balancing the two powers would remain difficult.

  • Dalmatia’s envoys approached Yugoslavia in February, but Yugoslavia rejected cooperation unless disputed regions were returned and demanded additional territory, including Fiume Port.
  • Prime Minister Yulitean advised Karl I to avoid an arms race with Yugoslavia, rely on the Dinaric Alps for passive defense, and make Yugoslavia believe Germany and East Africa supported Dalmatia.
  • Yulitean warned that Germany might exploit a Dalmatian-Yugoslav war to intervene and restore former Austro-Hungarian territories, and Karl I agreed that Dalmatia could neither exclude nor fully trust Germany.
  • Yulitean urged Karl I to make East African defense cooperation the core of Dalmatian diplomacy while limiting cooperation with Germany mainly to economics.
  • Karl I set three priorities for foreign affairs: deepen the alliance with East Africa, stay militarily vigilant toward Yugoslavia, and handle Germany carefully.
  • Yulitean proposed limiting East African troops in Dalmatia and giving Germany a stake in Dalmatian trade, but Karl I doubted Germany would abandon its territorial ambitions.
Arc 66 of 70