Minutes of the first meeting of the conference between the representatives of the Irish Free State and British Governments

PRESENT:
UNITED KINGDOM	IRISH FREE STATE
The Rt. Hon. J.H. Thomas, M.P., Secretary of State for Dominion Affairs	Mr. Eamon de Valera, T.D., President of the Executive Council and Minister for External Affairs.
The Rt. Hon. Neville Chamberlain, M.P., Chancellor of the Exchequer.	Mr. Seán MacEntee, T.D., Minister for Finance.
The Rt. Hon. Viscount Hailsham, Secretary of State for War.	Mr. James Geoghegan, K.C., Minister for Finance.
The Rt. Hon. Sir Thomas Inskip, C.B.E., K.C., M.P., Attorney-General	Mr. Conor A. Maguire, K.C., T.D., Attorney-General.
THE FOLLOWING WERE ALSO PRESENT:
Sir Edward Harding, K.C.M.G., C.B., Permanent Under Secretary of State for Dominion Affairs.	Mr. J.W. Dulanty, High Commissioner in London.
Mr. S.D. Waley, M.C., Principal Assistant Secretary, Treasury.	Mr. J.J. McElligott, Secretary, Department of Finance.
	Mr. Seán Moynihan, Secretary of the Executive Council.
	Mr. J.P. Walshe, Secretary, Department of External Affairs.
Secretaries Mr. R.B. Howorth, C.B., C.M.G. Mr. J.E. Stephenson. Mr. H. Brittain. Mr. W.D. Wilkinson, D.S.O., M.C.

PROCEDURE

MR. THOMAS said that he had received two documents - one yesterday morning and a further document this morning - setting out the views of the Irish Free State representatives. He suggested that it would be a good thing to settle first the line of procedure which should adopted. He wanted to be able to talk plainly and without prejudice. He suggested that they should agree that both sides were speaking as negotiators, each representing their respective Cabinets.

MR. DE VALERA agreed that the negotiations would be without prejudice. He said that any agreement made would be subject to approval by the Cabinet, while any agreement involving any payment of money would require to be brought before Parliament.

MR. THOMAS enquired whether Mr. de Valera would like to elaborate the documents which had been handed in.

LAND PURCHASE ANNUITIES

MR. DE VALERA indicated that as regards Land Annuities, his position was as appeared in his public statements; the main points were set out in the memorandum.¹

MR. THOMAS suggested that the points could be summed up as being

(1) the agreement was not made by accredited representatives.

(2) It was not submitted to Parliament for ratification.

(3) It was provisional.

As regards the question of accredited representatives he suggested that the position in 1923 was precisely the same as that of the present meeting. Mr. Cosgrave, at the time, was the President of the Executive Council of the Irish Free State, elected by the people of the Irish Free State; Mr. de Valera, he suggested, was in the same position today.

As regards the question of ratification by Parliament, he suggested that this was a matter for the Irish Free State, it was not for the British representatives to ask how the Irish Free State representatives proposed to deal with an agreement which they had made; that was their business and not the business of the British representatives.

MR. DE VALERA suggested that it was not a sufficient answer to an enquiry as to his authority for him merely to say that he was President of the Executive Council. He ought to be able to show some Cabinet document giving him authority to deal with the particular business.

As regards the signature of an agreement, it ought to be made clear that those signing were signing as delegates, on behalf of their respective Governments.

MR. THOMAS suggested that it would be a strange proceeding if, after signing a document, it were subsequently to be suggested that the signature was not good, because the signature was not prefaced with certain words.

He also pointed out as regards the question of Parliamentary approval that the agreement was embodied in the Irish Free State Land Act of 1923.

MR. DE VALERA suggested that the fact that the agreement was not signed in proper form bore out its provisional character.

MR. THOMAS quoted Mr. Cosgrave's statement in the Dáil of June 1923 as follows:-

'At the recent negotiations which took place in England, we came to a provisional arrangement which binds us, or in which we accept liability for the payment of a certain sum pending a settlement of the major question'.

MR. DE VALERA said that these words would convey that there was to be an ultimate financial settlement and that payments made in the meantime were to be without prejudice to that settlement.

MR. THOMAS replied that there was an ultimate financial settlement in 1926; those words appear on the face of the document.

MR. DE VALERA suggested that - for such a matter as a final financial settlement between the two countries - that document was an extraordinary document. It was withheld from the Irish Free State people for eight months; it was merely a collection of odds and ends.

MR. THOMAS enquired whether, if an agreement was reached at the present meeting and a document signed with the heading ?Ultimate Financial Agreement', would the British representatives not have a justifiable grievance if, as a result of action taken or not taken subsequently in Ireland, the validity of the agreement was challenged.

MR. DE VALERA referred to the resolution passed by the Dáil in 1926, some time before the Ultimate Financial Settlement was signed, to the effect that agreements with external Governments were not binding on the Irish Free State without the approval of the Dáil.

MR. THOMAS suggested that if there was any objection to the agreement it was the business of the opposition at the time to raise those objections. Moreover the approval of Mr. Cosgrave's policy at a General Election was an approval of the agreement.

MR. DE VALERA replied that the recent General Election still more clearly endorsed his attitude in the matter. He added that the original agreement of 1923 had never been seen by himself and his colleagues until their attention was called to it by Mr. Thomas's despatch in the early part of this year, and suggested that the British Government had connived at keeping the agreement secret.

MR. THOMAS enquired what would be the object of the British Government keeping the agreement secret. Was not the only possible object that they thought that Mr. Cosgrave had made too good a bargain for the Irish Free State. MR. DE VALERA suggested that it was done with the object of assisting Mr. Cosgrave to carry out his policy in the Irish Free State.

LORD HAILSHAM said that the documents which Mr. de Valera had supplied were not quite what he had expected. At the discussions last week it was suggested that what should be considered was not legal technicalities, but what, in fact, reasonably ought to be done.

On the legal points his clear view was that an agreement made between representatives, as between two countries, is binding, and it would not be fair afterwards to take the view that such an agreement was not properly valid because it had not been ratified. If ratification were necessary it ought to be stated in the document itself. It would be improper for the British representatives to challenge the position of the Irish Free State representatives in signing an agreement; it was for each party to take what measures were necessary to ensure that the agreement was put into proper form.

As regards the question of the provisional character of the agreement, he said that that clearly meant that the agreement was provisional until the ultimate settlement was reached. Such a settlement was reached in 1926.

As regards the argument that the Land Annuities formed part of the Public Debt and were, therefore, covered by the Boundary Agreement of 1925,² the short answer was that the obligations in question did not form part of the Public Debt. The 1925 agreement is evidence of this since it refers only to the Treaty of 1921 and does not refer to the Agreement of 1923. On the general question the position seemed to him to be that the Irish Free State government were acting as agents for the collection of the annuities from the tenants and their payment to the Land Purchase Fund. Except as agents the Irish Free State government had no right to the money.

He felt, however, that there seemed to be no prospect of reaching agreement on legal points. Mr. de Valera had been advised in one sense by his lawyers, his predecessors had been advised in another sense by their lawyers; and the British representatives had been advised by their lawyers that their position was right, and he (Lord Hailsham) although speaking now as a layman, could only say that in his personal view that advice was right.

MR. DE VALERA said that their whole position was that the Land Stock formed part of the Public Debt and the actual liability for the payment to the stockholders had already been assumed by the British Government under the Act of 1920, and at the time of the Treaty was an actual liability of the British Exchequer.

LORD HAILSHAM said what happened in 1920 was not that the British Government agreed to assume liability but that the British Government agreed to give to the Government to be established under the Act, an amount equal to the monies collected from the tenants. But this arrangement never came into effect since it was repealed by the Treaty arrangements. On the general question he suggested that the Irish Free State were claiming, as regards this single question of the Annuities, the benefits of the 1920 Act, but as regards all other matters they were claiming the benefit of the Treaty arrangements of 1921.

MR. GEOGHEGAN said that he did not think it was necessarily impossible to reach agreement on the legal questions; he, for his part, was quite open to conviction if he received a demonstration that he was wrong on the legal points. His position was that the repeal of the Act of 1920 was after the passage of the Irish Free State Constitution Act, and therefore could not be held to take effect as far as the Irish Free State was concerned.

LORD HAILSHAM enquired whether the claim was that the Act of 1920 was still in force as regards the Irish Free State. If so he thought that the British Government would have a considerable claim for monies under the Act.

As a matter of fact the two Acts, namely the Free State Constitution Act and the Act repealing the Act of 1920 came into force on the same day. As the law does not take account of parts of days in this matter it was not possible to say that one Act was later than the other.

MR. DE VALERA said that his point was that when the Treaty was signed the Act of 1920 was in operation and the gift, as it was called, of the Annuities to ?Southern Ireland' was still operative. Mr. Lloyd George's intention was to divide Ireland. When the offer made by the Act of 1920 was refused he made a further offer in 1921 which went beyond the 1920 offer, but could not be regarded as revoking what had already been given in 1920. Therefore the obligation to meet the various payments of the stock-holders, etc., under the Land Act rested on the United Kingdom as part of the Public Debt, and any obligation on the part of the Irish Free State to contribute thereto was wiped out by the Agreement of 1925.

LORD HAILSHAM said that the intention of the Government of Ireland Act, 1920, was undoubtedly to set up a subordinate legislature in Southern Ireland. One of its provisions was that the proposed government of Southern Ireland should make certain payments to the United Kingdom; another provision was that the Land Purchase Annuities (the property of the National Debt Commissioners) should, from the coming into force of the relevant clause, be received by the Southern Irish Exchequer for their general purposes. That provision must be regarded as scrapped. It was quite impossible to argue that it could remain valid while all the other Southern Irish provisions of the Act had been scrapped. Until quite recently nobody on either side had ever dreamed that the Land Purchase provisions of the 1920 Act were alive. To argue that they were alive was bad law and bad equity.

MR. DE VALERA said that the proposed Southern Irish payments which had been mentioned were in a different category. They had been intended as the payments for certain services which the Government of the United Kingdom was to perform for Southern Ireland: the Free State was now performing those services itself and was paying for them.

LORD HAILSHAM said that it was distinctly provided in the Irish Free State (Consequential Provisions) Act, 1922, Section (1) that the Act of 1920 should cease to apply to any part of Ireland, except Northern Ireland. The Consequential Provisions Act had made no specific reference to the Land Purchase Annuities.

MR. DE VALERA said that the intention of Mr. Lloyd George in 1921 was obviously to make all possible concessions in order to induce Southern Ireland to come to terms. Mr. Lloyd George had certainly said nothing about taking back any concessions already made.

MR. CHAMBERLAIN was clear that it was quite impossible to base a valid argument on hypothetical assumptions about Mr. Lloyd George's intentions of eleven years ago; the only way of conducting a sound argument was to rely upon the terms of the actual legislation.

MR. DE VALERA said that he had been thinking of Mr. Lloyd George's intentions on December 6th, 1921 - the date of the signing of the Treaty.

LORD HAILSHAM said that the Acts of 1922 (namely, the Irish Free State (Agreement) Act of March 1922, the Irish Free State Constitution Act and the Irish Free State (Consequential Provisions) Act of December, 1922) were the legislation which gave effect to that Treaty.

MR. MacENTEE argued that the Irish Free State Constitution Act and the Irish Free State (Consequential Provisions) Act of December 6th, 1922, both passed on the same day, were inconsistent with each other.

LORD HAILSHAM was not prepared to admit the inconsistency. Speaking quite generally, and without reference to the particular argument, the second of two Acts of Parliament prevailed over the first.

MR. GEOGHEGAN said that the Consequential Provisions Act was a British measure intended purely for British consumption. The Free State could have done without it. The Dáil had done all that was necessary, so far as the Free State was concerned, when it passed its Adaptation of Enactments Act.

LORD HAILSHAM enquired whether that Act included the repeal of the Government of Ireland Act, 1920. If it did not, would Mr. Geoghegan argue that the 1920 Act as a whole was valid in the Irish Free State?

MR. GEOGHEGAN was not prepared to answer without notice. He held strongly, however, that when a valuable concession had been made, like that made to the Free State by the 1920 Act, it could not be withdrawn save by specific words in a statute. The mere general repeal of the 1920 Act by the Parliament of the United Kingdom was not enough.

LORD HAILSHAM said that the Treaty of December, 1921, followed from the fact that the people of Southern Ireland had already rejected the Act of 1920. It could not be supposed that the Treaty intended to leave Southern Ireland the privileges granted to it by the 1920 Act. The Free State was now, in effect, claiming to say that the palatable parts of the 1920 Act were in force and the unpalatable parts repealed.

MR. THOMAS said that, as a layman, he regarded all these points as having been settled ten years ago. The man in the street certainly believed that the Free State had as good legal advice ten years ago as it had now, and that Mr. Cosgrave's Government had been effective in extorting the maximum of concession from this country.

MR. DE VALERA asked whether it was not being forgotten that the whole argument concerned the division of the assets and liabilities of what had been, up to 1921, a common Exchequer. His opinion was that Mr. Cosgrave had been taken at an unfair disadvantage in 1923. He had not at that time had the opportunity of learning what were the Free State's rights.

LORD HAILSHAM pointed out that the Financial Agreement of 1923 had been confirmed by that signed in 1926.

MR. DE VALERA said he wished to emphasize what was the legal position regarding the Land Annuities at the time when the Treaty was signed. At that date (which was the only relevant date) the liability to pay the stock-holders was part of the public debt of the Government of Great Britain and Ireland. It was futile to claim that the National Debt Commissioners were in this respect a private debt collecting agency. They were part of the Governmental machinery of the United Kingdom - the State (or the successor of the State) which had guaranteed the payments.

MR. CHAMBERLAIN disagreed.

MR. MAGUIRE said that it was surely not contended that the 1920 Act was not in force in 1921.

LORD HAILSHAM said that parts of the Act (those for which there were not appointed days) were certainly then in operation; other parts were not. It had been provided that they were not to come into force until certain appointed days; and those days had never been fixed.

MR. MacENTEE enquired how Lord Hailsham interpreted Section 73 of the 1920 Act.

LORD HAILSHAM said that he was familiar with the argument which Mr. MacEntee had in mind. He feared that they would never reach agreement regarding the legality of the Order in Council which had been made under that Section. After all, this was a minor point.

It was the firm view of the United Kingdom Government that the Free State had not, and never had, any right to retain the Land Annuities for its own use.

MR. DE VALERA feared that they were not getting any nearer to agreement.

MR. THOMAS wondered whether there was any possibility of making progress by a direct exchange of views between the lawyers on each side.

MR. GEOGHEGAN said that he would certainly welcome a detailed legal examination, and would enter into it with a mind open to conviction.

SIR THOMAS INSKIP said that he would be glad to meet Mr. Geoghegan.

IT WAS AGREED:

that the meeting between the Law Officers on either side should take place at a later stage in the negotiations.

BONUS AND EXCESS ANNUITIES

IT WAS AGREED:

That the legal arguments regarding the bonus and excess annuities should be examined by the Law Officers on either side at a later stage of the negotiations.

ROYAL IRISH CONSTABULARY PENSIONS

MR. DE VALERA said that the arguments upon which the Irish Free State relied were summarised in paragraph 4 of the Memorandum. Neither the Treaty nor the Agreement amending the Treaty imposed on the Government of the Irish Free State any liability for the pensions of pre-Treaty pensioners and the allowances to their dependents. The Royal Irish Constabulary did not retire in consequence of the change of Government, nor were they discharged by the Irish Government, but they were disbanded by the British Government under a British Statute, namely the Constabulary (Ireland) Act 1922. The Royal Irish Constabulary was an Imperial Force and not an Irish Police Force, and accordingly it would not be right or equitable to impose a charge for their pensions, etc., on the Irish people.

MR. THOMAS suggested that these particular liabilities were similar to the liabilities of any other continuing service, such, for example, as the Post Office.

MR. DE VALERA said that if the British Government had, without the consent of the Irish Representatives, disbanded the postmen in Ireland before the Treaty, there would have been a strong case for maintaining that pension and compensation payable to the disbanded men should be assumed by the British Government.

MR. THOMAS agreed that this might be so, but what had been done in regard to the Royal Irish Constabulary was done by agreement with the Irish Representatives. The whole matter had been exhaustively argued, and in the end an agreement had been reached and payments had been made under the Agreement for the last 10 years.

MR. DE VALERA said that the Irish Free State Government questioned the validity of the Agreements made in the case of these Royal Irish Constabulary Pensions, just as they questioned them in the other cases. Was it contended that if unauthorised persons made an arrangement which gave away the rights of the Irish people, that arrangement was to be binding on the Irish Free State?

MR. THOMAS repeated that after very prolonged argument an agreement had been reached which had been regarded as a binding agreement for the last 10 years.

MR. GEOGHEGAN maintained that the Royal Irish Constabulary had always been regarded as an Imperial Force, and he quoted a statement made by Sir Robert Peel³ 70 years ago in which Sir Robert referred to the Constabulary as an Imperial Force.

MR. THOMAS enquired whether it was really relevant to bring up quotations of 70 years ago. All considerations of this kind must have been in the minds of those who negotiated the agreement made 10 years ago.

MR. GEOGHEGAN observed that Mr. De Valera had already pointed out that there was evidence that those who negotiated on behalf of the Irish Free State 10 years ago had inadvertently omitted to bring forward certain arguments. It had been suggested that the Royal Irish Constabulary was an Irish Police Force, and he wished to bring before the Meeting statements made by certain eminent persons that the Force was not an Irish Police Force but an Imperial Force. Mr. Geoghegan then read quotations from statements by Mr. Goschen⁴ and Sir A. MacDonnell.⁵

MR. CHAMBERLAIN enquired whether it was argued that the agreement made in 1923 was inequitable and should be re-opened on the ground that the Royal Irish Constabulary was an Imperial Force.

MR. GEOGHEGAN said that the argument was that it was for the Irish Free State to decide what pensions it would pay. The Irish Free State had never taken over the Royal Irish Constabulary but the British Government had disbanded the Force under a British Statute - the Constabulary (Ireland) Act 1922.

LORD HAILSHAM said that when the Treaty of the 6th December 1921 was signed, it was contemplated that both the Royal Irish Constabulary and the Dublin Metropolitan Police should be transferred to the Provisional Government as part of the general transfer of powers and functions to the new Irish Free State. A change of policy then supervened, and at the instance of the Provisional Government it was decided not to transfer the Royal Irish Constabulary to the new Government but to disband it. On the other hand, the Dublin Metropolitan Police was transferred to the Provisional Government. These arrangements were embodied in the document ?Heads of Working Arrangements for implementing the Treaty' dated 24th January, 1922. Discussions then took place with regard to the share which the Irish Free State should bear of the total superannuation, etc. charges in respect of the Royal Irish Constabulary, and ultimately an agreement was reached which was embodied in the Financial Agreement of February 1923.

MR. MacENTEE said that it was important to remember that at that time the Royal Irish Constabulary strongly objected to being taken over by the Provisional Government. The Irish Free State Delegates could not over-emphasise their view that the Force was an Imperial Force and not merely an Irish Police Force.

LORD HAILSHAM observed that the Royal Irish Constabulary carried out the ordinary police duties throughout most of Ireland.

MR. CHAMBERLAIN, after referring to the provisions contained in Article 10 of the Treaty relating to compensation, pointed out that it had subsequently been agreed with the Provisional Government that the Royal Irish Constabulary should be disbanded and that this had been effected by the Constabulary (Ireland) Act, 1922. The Irish Free State Delegates had spoken as though that Act had been passed in opposition to the real wishes of the Irish people. There was no doubt, however, that in 1922 both sides recognised that the Royal Irish Constabulary could not be continued, that the force must be disbanded as part of the political settlement, and that suitable provision must be made in the Act dealing with disbandment for the super-annuation and compensation liabilities which disbandment must entail. Very exhaustive discussions took place in regard to these superannuation and compensation arrangements which eventually led up to the Agreement of February, 1923. With regard to the annual compensation allowances granted under the Disbandment Act of 1922, the Irish Free State Ministers had argued that when the Treaty liability was undertaken they had not contemplated such extensive superannuation as was the necessary consequence of the disbandment of the Force, but in the end they recognised the strength of the reply that disbandment was the policy of the Provisional Government as much as of the British Government. In the end the Irish Free State representatives accepted liability for 75 percent of the annual superannuation and compensation charges. In these circumstances, he (Mr. Chamberlain) again enquired whether it was represented in this respect that the Agreement of 1923 was inequitable because the Royal Irish Constabulary was an Imperial and not a local Force.

MR. GEOGHEGAN argued that the Agreement of February, 1923 was a provisional agreement, did not constitute a final and binding settlement, and was open to reconsideration like the other financial questions at the present time.

MR. DE VALERA objected to the suggestion that the disbandment of the Royal Irish Constabulary had been carried out at the instance of the Provisional Government, and read to the meeting extracts from an Irish inter-Departmental minute of 21st December 1922, signed by Mr. O'Higgins⁶ in support of his view.

MR. THOMAS suggested that the explanation which had been given by Mr. Chamberlain was the true one; both sides recognised in 1922 that the disappearance of the Royal Irish Constabulary was an essential preliminary to a political settlement.

MR. MAGUIRE enquired which were the binding Agreements, the Treaty or the Agreements subsequent to the Treaty?

LORD HAILSHAM saw no inconsistency in the provisions of the Treaty and those of the Agreements. After repeating the reasons why it had been decided to disband the Royal Irish Constabulary, he pointed out that after disbandment was effected by the United Kingdom in 1922, there still remained for settlement the question of how any compensation was to be determined and who was to pay it. As the policing of the Irish Free State was handed over to the Irish Free State Government it was not unnatural that the Government of the Irish Free State should assume liability for police superannuation and compensation charges. After prolonged discussions it was eventually agreed that the United Kingdom Exchequer should pay the pensions and compensation in the case of the Royal Irish Constabulary, and that the Irish Free State Government should make a contribution to this expenditure. He could not see any inconsistency, as between the Treaty and the Agreements, in the arrangements which had been made.

MR. DE VALERA observed that he was not sure that he could agree that no use could have been made by the Irish Free State Government of the personnel of the Royal Irish Constabulary, and MR. GEOGHEGAN mentioned that many ex-members of the Force were actually now in the service of the Irish Free State as Civic Guards.

MR. MacENTEE thought that the position was that the Provisional Government did not want the Royal Irish Constabulary to be transferred, and the Constabulary could not be taken for service outside Ireland. The United Kingdom, therefore, had an Imperial force in Ireland which it could not use, and the problem of the disposal of that Force was essentially a United Kingdom problem. Even if the Provisional Government had been willing to take over the Force in 1922, the personnel would undoubtedly have declined to be transferred.

LORD HAILSHAM observed that this sounded to him as if the Constabulary fell under Article 10 of the Treaty as persons ?who retired in consequence of the change of Government effected in pursuance hereof'.

MR. DE VALERA said that the Treaty was a document which had been thoroughly discussed throughout the Irish Free State and the provisions of which could, in his view, only be varied by a document equally authoritative and the contents of which had been equally brought to the notice of Irish public opinion. The Irish Free State Delegates claimed that the Royal Irish Constabulary was an Imperial force and on grounds of equity they maintained that the United Kingdom should discharge all the superannuation and compensation liabilities.

MR. THOMAS said that the United Kingdom Delegates equally maintained that on grounds of equity the arrangements come to in 1923 should not be varied. All the considerations which had been advanced on the present occasion had been the subject of discussion when the Agreement was made.

MR. DE VALERA said that it appeared to him that this was another case in which neither side was going to convince the other. He wished to add that in no conceivable circumstances could the Irish Free State agree to accept liability for the pensions of ex-members of the Royal Irish Constabulary who retired in the ordinary course prior to disbandment and were pensioned under previous Constabulary (Ireland) Acts.

LORD HAILSHAM urged, with regard to this last point, that these pensioners were in exactly the same position as ex-postmen and other pre-Treaty pensioners.

MR. THOMAS pointed out that under the Treaty the Irish Free State Government took over the assets and liabilities of the transferred services as a going concern. He noticed that there was never any reference made by the Irish Free State Delegates to the assets which they had acquired under these arrangements.

MR. DE VALERA said that this raised the question of the share of the Irish Free State in the Colonies and Imperial equipment.

MR. THOMAS said that this point arose under the second Irish Free State memorandum.⁷ The United Kingdom Delegates were bound to bear in mind the assets side of the balance-sheet.

CIVIL AND JUDICIAL PENSIONS

MR. THOMAS inquired whether Mr. de Valera wished to add anything on the next item, that relating to judges' and civil pensions.

MR. DE VALERA said that the argument was set forth briefly in the Memorandum. As regards judges who retired before the Treaty no liability was imposed on the Irish Free State under the Treaty and it was not seen how liability could accrue. In so far as there was any liability on the Irish Free State under Article 10 of the Treaty, discharge of that liability should be made by a direct payment and not indirectly.

LORD HAILSHAM referred to Article 80 of the Irish Free State Constitution which expressly provided that as respects ?Departmental property, assets, rights, and liabilities, the Government of the Irish Free State shall be regarded as the successors of the Provisional Government ...'. He thought that judges' and other pensions were clearly a departmental liability within the meaning of that Article and that the Irish Free State had thereby accepted responsibility for them.

MR. MacENTEE suggested that Article 80 was in conflict with the Treaty and was therefore void and inoperative to the extent of its repugnancy to the Treaty. There was nothing in the Treaty which imposed liability for pensions prior to the time of the Treaty.

LORD HAILSHAM replied that there is nothing in the Treaty to prohibit the acceptance of such liabilities.

MR. GEOGHEGAN suggested that a distinction should be drawn between the pension of a judge and of a civil servant, and that it was not proper to regard a judge's pension as a departmental liability.

MR. MacENTEE added that judges were not members of a department; their pensions formed a general charge on the Consolidated Fund.

LORD HAILSHAM suggested that it was possible to interpret ?departmental' in a special sense under which it would be possible to say that there was no such thing as departmental property, assets, and rights as well. Strictly speaking, all assets, etc. belonged to the State for the Department concerned, and not to the Department as such.

MR. GEOGHEGAN maintained that there was a distinction as the pensions of judges were charged on the Consolidated Fund and not on annual votes. He suggested further that, in so far as they were charged on the Consolidated Fund, it might be held that they formed part of the public debt and so were released by the Agreement of 1925.

MR. THOMAS said that we ought to look at the circumstances at the time. The question, no doubt, then discussed was whether it was proper that the Irish Free State should be responsible for the payment of pensions of former servants, the reply to which was that if they took over the buildings they ought to take over the liability for the pensions also.

MR. DE VALERA said that, in so far as the United Kingdom case was founded on agreements, it was founded on agreements which he could not accept. The only argument which had been brought forward this morning on the legal points which had appeared to him as a new argument was that with relation to Article 80 of the Constitution, and on that, he gathered, that his legal advisers were not prepared to accept the view of the British representatives. All the other arguments used had already even previous to the Conference been brought forward and met, so far as he was concerned.

LOCAL LOANS ETC

MR. THOMAS inquired whether there was any further argument to be brought forward in regard to the other two matters remaining in the Memorandum, namely, Local Loans Annuities and the various Works Annuities. The United Kingdom point of view was that in neither case would these be regarded as part of the public debt.

MR. CHAMBERLAIN explained the view to be, as regards the Local Loans Fund, that there was only a contingent liability on the Exchequer; the loans were made from the Fund and the interest on the stock was met out of payments made into the Fund. In the circumstances, he did not think that it could properly be regarded as public debt.

MR. DE VALERA said that, in his view, public debt in Article 5 of the Treaty was used to cover State indebtedness in the widest sense and would include such items as Local Loans Stock which is a State obligation.

MR. THOMAS inquired whether the same argument was employed in regard to the Military Works etc. Annuities.

MR. DE VALERA replied that the position was that the Irish Free State representatives did not accept the agreements on which the claim was based. The payments were regarded as public debt payments and so wiped out by the Agreement of 1925.

MR. THOMAS said that each particular item had been dealt with but that there had been no discussion yet of the broad general issue of financial relations. The subjects under discussion had been the items which are the immediate cause of the difference between the United Kingdom and the Irish Free State and the position which had been reached could be summed up as follows:- The United Kingdom representatives had been told nothing either in documents or orally which would alter their view of the equity and justice of their case. He understood from Mr. de Valera that the Irish Free State representatives took the same view as regards their case.

OTHER CLAIMS OF THE IRISH FREE STATE

He mentioned that he and his colleagues had only seen, at the beginning of the meeting, the further document which had been handed in on the previous night,⁸ and asked what course it was suggested should now be followed.

MR. DE VALERA said that it was only now that the two Governments were really negotiating the ultimate financial settlement contemplated in the Treaty. If there was to be such a settlement as would obviate further meetings like the present, account would have to be taken of all the items mentioned in the second Free State Memorandum.⁹ That was merely a preliminary Memorandum indicating the heads of the various claims. Some of them had already been the subject of correspondence between the two Governments in the past.

In reply to MR. THOMAS who referred to the fifth head of the Memorandum (Currency), and enquired whether it was not for the convenience of the Irish Free State that British currency notes were circulated there. MR. MacENTEE said that while neither Government had put forward a definite request for such an arrangement it was clear that as a matter of equity the Irish Free State should have a share of the profits derived from the circulation of the British notes.

LORD HAILSHAM pointed out that none of the Irish Free State claims gave any figures of the amount claimed, to which MR. DE VALERA replied that they could go into the figures if necessary, although some of them would be rather troublesome to determine.

MR. THOMAS said that nevertheless it would be convenient if, for example, the Irish Free State Government could indicate what sort of compensation they had in mind under Head 2 (Abandonment of the Gold Standard).

MR. MacENTEE said that Irish people had deposited in their Banks sums amounting to £75 millions which the Banks had invested in British Government securities. As Great Britain did not consult the Irish Free State before abandoning the gold standard he thought some compensation was due to the holders of these securities and that they were entitled to be paid in sterling of the same gold value as when the money was first invested.

LORD HAILSHAM asked why the Irish Free State should expect such compensation when no other country had received it, to which MR. DE VALERA replied that if other countries had an opportunity of making such a financial settlement as was now being discussed they would no doubt put in a claim to compensation. He asked whether if the Irish Free State had similarly abandoned their currency standard with a similar loss to British nationals no protest would have been made by Great Britain against such action. Had Britain not made such a protest to France?

The Meeting then adjourned until 3 p.m.