Faced with possible annihilation by imperialist ventures from the North, islands to the East of Telar accept the Teleri invitation to become part of the Teleri Federation, viewing Teleri protection as favorable to destruction.
Teleri merchants are incensed at the UEK's massacre of its trading partners on he island in Telar's back yard, and largely cease trade activities in the North. Allinazufer is becoming an increasingly important trade interest to Telar, and has grown increasingly wealthy by trading goods such as iron and coal for Teleri goods.
The Teleri Prime Minister (Liberal (Limited Government) Party, Moderate) calls for another set of elections, as he feels that the national defense may be threatened by the UEK entering into this part of the world, and believes that other parties may be more willing to devote funds toward preparation for national defense. His gamble pays off, and the Liberal Party is forced into a coalition government with the Nationalist Party, which has mildly expansionist, protectionist, and statist views. Funding is directed toward the army and navy.
Railroads begin to connect Telar's major cities (where possible), and new industry shows signs of moving into formerly less accessible inland areas. Shipyards remain a major means of transportation, though.
Telegrams being recently brought to a reasonable level of usability by the Technical University, begin to be laid along with rail lines to provide quick and hopefully reliable communication throughout the nation.