Sterling Area Conference
Résumé of a statement by James J. McElligott at a meeting held in the Chancellor of the Exchequer's Room, Treasury, at 11.00am on Friday, 19th September 1947

Having thanked the Chancellor for his statement, Mr. McElligott stated that as the Chancellor was already aware, the Irish Government were extremely anxious that confidence in sterling as an international currency should be preserved and were willing to co-operate in measures to that end. Ireland considered that she was in a special position because of her close economic links with the United Kingdom and of her long interest from historic and economic causes in sterling extending far back before the war.

Ireland was specially concerned that the measures taken should be directed towards an improvement in the productive capacity of the sterling area as a whole including our country. The position in Ireland was that labour and machinery were idle which, given certain conditions, could be devoted to increasing the output of the sterling area. Britain was the traditional source of supply for various essential goods, including coal, coke, chemicals, and various raw materials of industry. On account of the reduction of British coal exports to Ireland to vanishing point, Ireland had to import essential coal supplies from the United States. The same position obtained in regard to many classes of finished and semi-finished goods. Because wool tops, cotton yarn, and other raw materials were not available from Britain, these materials had to be sought outside the sterling area but the supplies available were not sufficient to keep our plant working to full capacity.

In the realm of agriculture, Ireland could make a substantial contribution to the saving of British foreign exchange on food if supplies of fertilisers and agricultural machinery were made available to increase production and there were a proper policy on the part of Britain in regard to prices for our agricultural produce.

Both in the industrial and agricultural spheres, therefore, Ireland was in a position, given the necessary facilities, to cut down scarce currency imports for her own requirements and also by increasing exports to reduce Britain's imports of goods from scarce currency sources.

Mr. McElligott said that he wished to reinforce the statements made by the Australian and New Zealand representatives on the importance of directing exports to the sterling area, especially exports of industrial machinery and equipment and raw materials to build up the productive capacity of the sterling area. Sir Stafford Cripps's speech on export policy had caused him some apprehension lest there might be an intention to divert such exports to hard currency countries. He wished to emphasise the importance of increasing exports to the sterling area which would have the effect of building up the productive capacity of the area.

Unlike some of the other representatives present, he was not in a position to announce measures of foreign exchange economy decided upon by his Government. He would like to point out, however, at this stage that because of the diversity of economy and social circumstances from country to country, the same kind or degree of austerity might not be practicable for all. As an illustration he referred to petrol consumption by private motorists, a reduction of which in Britain merely sent mechanics, garage hands, etc. to other jobs, but in Ireland would cause unemployment because of the absence of alternative occupations. An increase in unemployment would lead to further emigration or to higher expenditure on unemployment relief.

In conclusion Mr. McElligott said that the Irish Government appreciated the difficulties of the situation and were willing to co-operate to the maximum extent possible in measures to overcome these difficulties.