The danger of that, to my mind inevitable development,  
lies in the uneconomic breaking up of the world into little compartments   
with inadequate resources and markets wholly unsuitable to the development   
of industry on the modern scale. The natural answer to that in my mind is   
that nations will come together, for a combination of political and   
economic reasons, to combine in groups for common defence and mutual   
economic development. The natural tendency of such groups will be to   
reduce their trade barriers within themselves, while as a result of   
internal development within the group, they will also be able to afford to   
be less extreme in their protectionism against, the outside world. Europe   
would never have been driven to the extravagances of exaggerated protection,  
 quotas and exchange restrictions during the years between the two great   
wars , if the European nations had been allowed to develep something in   
the nature of a mutually cooperative economic system among themselves,   
and had not been prevented by the operation of the Most Favoured Nation   
Clause, which has undoubtedly, in recent years, been the most serious   
obstacle to the lowering of tariffs there and elsewhere. As I think I   
said to you in my last letter, the best hope of European recovery after   
the war ~ ~ lies in ~ome form of European economic &nd political   
commonwealth based on free cooperation. The idea of such a European "New  
Order" makes a tremendous appeal, even when accompanied by German   
domination and exploitation, and will certainly renewsits appeal once that   
                fear of domination is gone.                 
 
                                                            
 
 
I am afraid all this has been a rather long-winded excursus rather than a   
clear answer to your question. Perhaps I might sum it up by saying that   
mixed up with all the scum and evil of the Nazi revolution, and with its   
fantastic exaggeration of Prussian militarism, there are also elements of   
a general worldwide revolution in political and economic thinking, which   
will remain, not only in Germany and other countries directly affected by   
the revolution, but also influence our own political and economic thinking   
in Anglo-Saxon countries- as indeed did the French Revolution. In   
planning for the future we shall therefore be wise, while maintaining the   
essentials of what we are fighting fer, also to keep in view the general   
trend of the world and adapt cur plans to that trend, instead of thinking   
that we can go back to the world of an earlier stage of~ development. We   
do not want to abandon any of the vital things which that earlier stage  
 won for us, but we have also to realise its limitations and the need for   
       further constructive thinking and orxganising.       
 
                                                            
 
 
I enclose copies of the two books which you very kindly said you would   
pass on to the President. Sir G. Schuster's book gives, I think, as good   
an analytic and constructive picture of the