Confidential report from John W. Dulanty to Joseph P. Walshe (Dublin)
(No. 1) (Secret)

1. I took a well informed friend to dinner last night when we had a fairly lengthy conversation. I said that recent events suggested, to put it no higher, that the attitude of the British toward us had undergone a change for the worse. From our recent experience in connection with shipping, petrol, dollar facilities, and navicerts, it would appear that whilst the British were ready to accept our help in a variety of ways they now showed no inclination to reciprocate. Indeed it looked as though they had adopted a policy, if not of active opposition, of indifferentism. I went into some detail quoting incidents under each of the various headings, stressing that of the dollar question, where we were not dependent upon understandings but British Treasury letters in black and white.

2. He said I was absolutely wrong. Taking first the question of shipping, the British were in the position that while the Germans have now 2,000 miles of coast line, and an increasing fleet of submarines with a far longer reach than in 1914-18 they (the British) had, even with the American lendings, a destroyer strength materially below that of 1917-18. The War Cabinet were of opinion that whoever was running the German submarine campaign was very good at his job. On my remarking that their shipping losses within the last few weeks showed a decline he said there were not today so many ships afloat but the really big feature of the problem was that the Admiralty were seizing every vessel on which they could lay hands for transport of troops and supplies – the variety, bulk, and weight of the latter being immense. Obviously if they could wind up their battle with the Italians it would be a most potent factor in the evolution of the war and for that reason the Government had given the Admiralty super-priority in shipping.

3. They were hoping that they would get some help from America. Whilst the shipping pool there was not entirely dried up there were not today many ships available. If an American shipowner sells a ship which involves transfer of flag he has to give an undertaking that he will replace the tonnage which he has sold. Some American shipowners were not ready to give this undertaking but those who were so willing sold their ships at a price which naturally reflected this undertaking. Yet even at soaring prices the British were most anxious to buy and he doubted whether their buyers would let any opportunity slip to get vessels.

4. Their dollar position he described as extremely worrying. They were trying all the time to keep a small reserve but they were very apprehensive about the future. They had requisitioned all dollar securities in this country. They had used their gold reserve and they did not feel that they could go and throw themselves on the mercy of the Americans – though if the situation did not improve they might have to do that.

5. The truth was that they had seriously interfered with the national economy of many countries not in the war at all. The Willingdon¹ Mission to South America was of course meant to maintain their South American trade connections but it was also meant as a point of equal importance to act as a soothing of the South American States for the interference which arose from (a) the deliberate policy of blockade and (b) the facts of the war apart from the blockade. It seemed to him that we, like these far-away countries, had inevitably come into the arena of the war and its unavoidable interference.

6. Whilst no one could foretell the course the war might take he thought that they had not seen the full force of the German submarines but would soon be subjected to an even more intensive campaign. When the weather improved their experts thought there would be aerial bombardment of Britain on a far bigger scale than heretofore. These two war processes would be followed by an attempt at invasion. Napoleon waited for years at Boulogne saying that he could see a hundred ways of getting into England but not one way to get out. He cared for his soldiers. Hitler had no such feeling. His army was now the biggest the world had ever known and the loss of half a million or even more men would not deter him.

7. He knew the Prime Minister's mind and I could tell my Government that the British had never taken any step for the purpose of embarrassing us. Thus as in certain ways 'the fell clutch of circumstance' caught us so it caught them. They were carrying the strain of the biggest war in history and the measures they adopted had one object, and one object only, the defeat of their enemy.

8. I said it was unfortunate to find so many people in this country who still looked upon Ireland in much the same way as diehards of pre-1914 did. If we were not 'lesser breeds without the law' as the old Jingoes declared, many people, including some young lions of Fleet Street, regarded us as though we were their property. My friend said this was partially true. Only a few days ago he had been discussing our position with three Back Benchers who seemed to think that Mr. de Valera ought to bring the Irish people into the war. 'I told them', he said, 'that without going back to Cromwell the history of the relations between the two countries in our own time made it impossible for Mr. de Valera or anyone else who was at the head of the Irish Government to abandon neutrality'.

9. I referred, as I had done in a previous conversation with him, to Mr. Churchill's reference to the ports. He again said that he thought that statement in Parliament was unfortunate. In passing I may mention that I put the same point to Mr. W.P. Crozier, the Editor of the 'Manchester Guardian', who took exactly the same view as my friend adding that the same opinion had been expressed to him by several people here in London. I could not obviously very well ask him who the people were but as I know he is in personal touch with people of political importance here it is reasonable to assume that it was people of that type who expressed the opinion.

10. My friend having said that there were frequent differences of opinion between the British and the Dominions I thought it well to talk to the High Commissioners for South Africa, New Zealand and Australia.

11. Mr. Waterson² told me that the 30,000 tons of shipping for their fruit trade which had been agreed upon between the British and his Government at the beginning of the war was reduced not long ago to 10,000 tons of shipping. On his making representations he secured an increase from 10 to 20,000 tons. Within a week of that arrangement being made and without any reference to him Lord Woolton made an announcement which meant they were refused the 20,000 tons. In consequence of this the South African Government had to take over all the fruit and with heavy subsidies were now having it canned for export when ships might be available. Their dollar position was not unsatisfactory. They had always had a big transatlantic trade and they had an ample gold reserve. Their petrol, which came from Persia, did not present any serious difficulty.

12. The British Government, Mr. Jordan³ informed me, had entered into a formal contract with New Zealand to take 140,000 tons of meat each year. They had taken about one-third of this purchase but were unable to move the remainder owing to shortage of ships. The New Zealand Government had taken the line that this was unquestionably a breach of contract and were pressing to be allowed some advance on the meat purchased but not removed from New Zealand. Thus far they have not succeeded in obtaining any such advance. Notwithstanding the fact that they had requisitioned all their dollar credits they were short of dollars for some time now. They had been unable to buy anything from America, notably Virginia tobacco. They had fortunately laid in big stores of petrol and fertilising materials but their petrol ration was below the standard obtaining in Britain.

13. He, in common with other High Commissioners, complained about the lack of information from the British. At their daily meetings with Lord Cranborne they were given information which invariably was in the newspapers the following day. He had however stressed for some information about the publication of war aims. A Cabinet Committee representing all the political parties had sat for some weeks and had produced a somewhat idealistic picture of a brave new world. The theme of social justice including the abolition of unemployment, and the unqualified recognition of the principle that the employee was to be every bit as important as the employer, loomed largely in this new picture. Mr. Jordan with his strong Labour sympathies enquired whether preparatory steps were now being taken to enable effect to be given to this report when the time came. He gathered that no such steps were being taken and when he asked if he might refer to it in a public speech he had to make at Durham a few days ago he was told that no reference of any kind should be made to the report at present.

14. Mr. Bruce⁴ had had the same story to tell. He said they also had a contract with the British Government, theirs being for a quarter of a million tons of meat per year. Here again the British had taken part of their purchase but had said they were unable to remove the rest and admitted a breach of contract. Fifteen ships normally under service between Australia and Great Britain had been withdrawn, with the result that their canned food and their wine industries had been 'completely torpedoed'. This blow had fallen on a Government in Australia which had really no working majority and had caused a state of mind which it was no exaggeration to describe as hysterical. He had made appeals to the British Ministers concerned and had seen the Prime Minister. All he got was regrets but no ships. Their wheat position was no better. A large part of their crop they used to sell in the North Pacific. Here again the necessary ships were to seek. He had himself chartered three Greek vessels but had been told by the British that he could not have them. They were very badly off for dollars. They were ready and willing to buy aeroplanes from America but they had no dollars nor could they get help from the British. Like New Zealand they had put in a big reserve of petrol but they were now on a very low ration and were worried about their future.

15.⁵ The breaches of food contracts should be put in juxtaposition with the widening acute shortage of food supplies in this country – the present meat ration, even when it is obtainable, being clearly inadequate.

16. The office staff having gone I have just time to get this note away for the train. On Monday I will send a further note.