Aide-mémoire to Lord Rugby concerning the Sterling Convertibility Crisis

(With regard to the note accompanying the letter of the 20th August, 1947, received by the Minister for External Affairs from the British Representative).¹

The Irish Government is naturally anxious that confidence in sterling should be maintained and is prepared to co-operate in measures to that end. It is assumed that the measures to be taken will be designed to serve the common interests of the countries in the sterling group as a whole, and will provide to the fullest possible extent for the utilisation and development of the productive resources of this country.

The Irish Government is, accordingly, prepared to examine and discuss the position with the British Government, but must stress the view that the discussion to be fruitful should embrace not merely the problems immediately arising out of the present financial situation but the whole field of trade between the two countries.

The Irish Government has for a considerable time been concerned at the effects on the economy of this country of the policy pursued by the British Government in regard to the trade relations between Ireland and Britain. Broadly, it has been clear for a number of years that the full utilisation of Ireland's productive capacity has been prevented, not merely by the inadequate prices offered by Britain for Irish exports, but by our inability to obtain necessary supplies of agricultural and industrial materials, plant and equipment of which Britain was our normal source of supply.

The consequence has been that the contribution of Ireland, through her export trade, to the economic well-being of Britain and of the sterling countries as a group has been considerably less than it might have been, and that Ireland in addition has been obliged to draw, to a greater extent than would otherwise have been necessary, on the resources of foreign exchange available to the group.