Minute from John V. Fahy to Count Gerald O'Kelly de Gallagh (Paris) enclosing a memorandum on Anglo-Irish trade
(15/64)

I am directed by the Minister to forward herewith for record and information copy of a recent statement issued to the press by the High Commissioner London, relating to the position of Anglo-Irish Trade in 1931.¹

Position of Anglo-Irish Trade in 1931

The returns of external trade published for the first six months of 1931 indicate the prevailing depression and the heavy fall in export prices.

Irish Free State purchases from Great Britain were valued at £17,936,831; while British purchases from the Irish Free State were £14,165,483; leaving an adverse trade balance of £3,771,348 to the Irish Free State on the half year's trading.

Although both exports and imports have decreased from last year, Irish purchases of British manufactured goods have increased in many directions despite the weaker purchasing capacity of the Irish Free State, due to the smaller purchases by Great Britain of Irish agricultural produce.

The following statement indicates how unbalanced Anglo-Irish trade has become and how essential it is in English interests to concentrate on the purchase of Irish goods in preference to foreign.

Irish purchases of English

		Jan-June 1930		Jan-June 1931
Motor Cars, tyres and parts		£991,650		£1,012,907
Printing and paper etc.		£616,006		£636,137
Clothing, cotton goods etc.		£3,380,849		£3,132,446
Coal		£1,571,681		£1,523,006

English purchases of Irish

Bacons and hams		£904,157		£486,970
Creamery butter		£814,531		£442,070
Fat and Store Cattle		£5,321,140		£4,405,248
Fresh eggs		£1,641,659		£1,494,749

There has been a decrease of nearly 50 per cent in the value of the sales of bacon and ham, while the consumption of these commodities has increased in Great Britain. The Board of Trade Returns show that imports of bacon into Great Britain increased from 4,093,670 cwts. in 1929 to 5,401,820 cwts. in 1931. Imports from Denmark increased from 2,365,046 cwts. to 3,537, 018 cwts; and imports from Sweden and the Netherlands also increased; while imports from the Irish Free State decreased from 221,034 cwts. in 1929 to 148,143 cwts. in 1930 and to 103,633 cwts. in 1931.

In spite of the general depression of trade all over the world, Irish purchases of British manufactured goods in the first half of 1931 showed substantial increases in many directions over 1930 figures. The British industries which benefited, besides those mentioned above, were cutlery, wireless sets and parts, artificial silk yarn and its manufactures, leather manufactures, chemicals and drugs, linoleum, cement, bottles and jars, slates. The Irish exports which show increases are horses, calves, fresh pork, salmon, cream and potatoes. These commodities were purchased in slightly greater quantities in 1931, but the aggregate increase is insignificant compared with the drop in the purchases of bacon and hams, butter, eggs and poultry.

The Irish Free State is the only Dominion supplying cream to Great Britain. This year's exports to June, 1931, amounted to 25,657 cwts. as compared with 22,890 cwts. in the corresponding period of 1930. Denmark exported 28,311 cwts. in 1931 against 26,045 cwts. in 1930. The only other considerable supplier is the Netherlands which exported 11,458 cwts. in 1931 against 8,252 cwts. in 1930.

The export of potatoes from the Irish Free State to Great Britain has recently been brought into line with the export of other foodstuffs and all exporters must be licensed by the State, while their premises and those of potato packers, are open to continual government inspection. The powers given to the Government by the Agricultural Produce (Potatoes) Act, 1931, passed in July, 1931, are very extensive, including the inspection of crops of potatoes. During the six months to June, 1931, the value of the potato exports was £103,837 as against £6,992 in the corresponding six months of 1930. Irish trade with Canada and Australia is becoming even more unbalanced than Anglo-Irish trade. The figures for the first six months of 1931 were:-

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I.F.S. exports

I.F.S. imports

Balance in favour of  overseas Dominions

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		£		£		£
Canada		15,830		280,999		265,169
Australia		5,594		343,749		338,155

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It is difficult to see how the Irish Free State can continue to maintain its comparatively large purchases if the British market becomes still weaker for Irish commodities. Now that the prices of all raw materials are down to the pre-war level and in some cases lower, it becomes necessary for the Irish Free State, if its purchases from Great Britain are not to collapse, to sell ever increasing quantities of bacon, butter, eggs, poultry, salmon and pork. Irish tweeds are now appearing on the English market in competition with foreign imports but the popular demand for the less durable Continental material is a barrier to trade, difficult to surmount.

It can only be regarded as unfortunate for the British manufacturers' and workers' interests that trade with the Irish Free State is becoming so lopsided and that British purchases of Irish produce have declined so heavily. The full effect of the January-June low purchases must eventually and soon be reflected in reduced Irish purchases of British manufactured goods.