The recognition of the Elvish kingdom of Yelen, existing entirely within Christotan boundaries, is nowadays hailed as an act of supreme magnanimity and tolerance; an early manifestation of the great spirit inspiring the Confederacy. It proves, people claim, that Christotans are so at ease with themselves that they can coexist not with only foreign cultures but with other races, providing those races are no threat to humanity. This interpretation is false. There's no doubt that relations between Yelen and Christoté have been strong for centuries and that a policy of mutual co-operation has clearly benefited both parties. And other arrangements - the later establishment of the gnomish and halfling enclaves for example - were made in a genuine spirit of tolerance. But Christoté has respected Yelen's independence for the same reason that Erenland and the kingdom of Elsey had earlier recognised it. The Elves didn't give them any alternative.
In the late 900's, still swaggering over their expulsion of the Erish Empire and the foundation of the Confederacy, humans turned their eyes to the Yelen forest. A non-aggression pact had been signed by the Barons but had yet to become sacrosanct. Elsey, which encircles the forest, had already intervened successfully in Flauge's civil wars and was even less restrained than others. It claimed that an oddity like Yelen undermined its territorial stability, though its true reasons were economic. The timber of the moulin tree, which only grew in Yelen, was already much-desired, being durable, easy to work and also an attractive dark green colour. Both builders and furniture makers used it when they could but only at the luxury end of the market. The Elves rarely sold it, at reasonable rates when they did but then human merchants bumped the price up extortionately. The forest was also rumoured to contain great numbers of rare herbs and minerals. The Baron of Elsey began to harass the Elves, cutting off supplies and burning down trees on the fringes of the forest. Unfortunately the Elves refused carry retaliation to the aggression beyond their boundaries. They contended themselves with waiting and shooting anyone who ventured too far in. Finally, in 1001, the Baron got Huwdone House approval to launch a full-scale invasion. A force of some twenty thousand men was raised and marched into the forest. For two weeks, nothing was heard from them. No messengers came out; any envoys sent in didn't reappear. Then several hundred bewildered and terrified Elsan troops staggered out of Yelen. They brought tales of endless ambushes, traps, strange magics and a resistance both fanatical and cunning. The rest of the army had been either killed or captured, including the regimental commander. It was by no means Christoté's only 'secret war' which somehow doesn't make it onto official proclamations, but it was easily the most disastrous.
Huwdone House realised it had to intervene to rescue something from the debacle. The Baron of Elsey banned all Christotans from going within five miles of the forest. Meanwhile, a team led by Marcas Welverton, then a lieutenant to the ailing Tars Tukas, began negotiations with the Elves. In the summer of 12002 he led a diplomatic mission into Yelen to speak to the Elvish king. Exactly what happened during there three-week stay, no-one is quite sure. But the diplomats eventually emerged on horseback, wearing garlands of flowers around their necks and, particularly in Welverton's case, fixed smiles on their faces. In their train came the five hundred or so troops who had been captured by the Elves. Welverton's brief had been to try and persuade Yelen to become a semi-autonomous protectorate of Christoté. He announced that the treaty he'd signed recognised Yelen's full rights of independence, and seemed to believe this was a great triumph for Christoté. There has subsequently been much debate whether this was merely the first manifestation of the great incompetence which later marked Welverton's time as Chancellor, or whether his ineptitude was actually caused by spells or potions given to him by the Elves.
To be fair, after lying down for a few days Welverton was able to explain other parts of the treaty. An almost-satisfactory deal had been brokered over Elvish wood. A fixed amount - not enormous but greater than previously - would be sold to humans each year and the prices would remain low. The Elves also gave seeds so that plantations could be started in Christoté. The timber was of a lower quality - not for any mysterious reason, humans just couldn't tend trees as well as Elves - but was better than nothing. Both the luxury and mass market producers did well out of the treaty. Welverton's somewhat idiosyncratic decision therefore satisfied the basic aim of Christotan foreign policy - to benefit its economy - and should probably be applauded. However, it is clear that any magnanimity in the affair was exercised by the Elves. They had Christoté over a barrel - able to resist both economic and military threats - and had no reason to make any concessions. That they chose to do so is fortunately something which hasn't been forgotten by the humans, only a little distorted.