Extract from the minutes of a Conference held in Taoiseach's Room on 29th September, 1947, 12.30 to 1.45pm
(Secret)

PRESENT

The Taoiseach,
The Tánaiste, Minister for Industry and Commerce,
The Minister for Finance,
The Minister for Agriculture,
The Secretary, Department of Finance,¹
The Secretary, Department of Industry and Commerce,²
The Secretary, Department of Agriculture,³
The Secretary, Department of External Affairs,⁴
The Assistant Secretary to the Government.⁵

The Taoiseach requested the Secretaries of the Departments of Finance, Industry and Commerce and Agriculture (who had just arrived back from London and were returning there tonight) to report on the progress of their discussions to date with the British Authorities and to indicate whether there were any points on which they required further instructions.

Mr. McElligott said that, while they had met with many expressions of a desire on the part of the British Authorities to be helpful, very little real progress had been made. On a number of matters the British had taken the line that some other countries were able to give them, in exchange for the British exports, commodities which were more valuable to them, both from a trading and from a foreign exchange point of view, than what we had to offer. In effect, the British said: 'you are asking us for a lot of things, but what are you going to give us?'. As regards some commodities, the British complained that we were looking for far too great a percentage of their total export surplus; in this connection they cited cotton yarn, where we were asking for twelve million pounds, whereas their total exportable surplus was twenty-five million pounds. The British did, however, hold out hopes of meeting our full requirements in regard to threshing sets, and they were also more oncoming in regard to certain agricultural seeds.

Mr. Leydon said that there was very little prospect of any 'give' at all on the industrial side. Two very important impressions that he carried away from the discussions to date were: first, Mr. Burgess, of the British Board of Trade, left him in no doubt that the British had no desire to see our secondary industries developed; secondly, it seemed to be their attitude that, instead of our exporting, on our own account, any surplus industrial production that we had available, we should do so on a commission basis for the British. They regarded us as their natural market, which they could enter at any time without cultivating it. They had not thought previously of the idea of developing the resources and industrial capacity of the sterling area.

A representative of the British Petroleum Department had suggested to Mr. Leydon that they should have a separate discussion with that Department on the question of our adopting a similar rationing scheme for petrol to that at present in operation in Great Britain. To the suggestion of a conference on this subject, Mr. Leydon said that no useful purpose would be served until we were in a position to have before us a picture of the situation as a whole. The British also suggested that we should impose a cut in our clothing ration, but to this suggestion Mr. Leydon also replied that he was not in a position to discuss it at the moment. In this connection Mr. Leydon mentioned that, although our ration per head of the population as regards clothing was more generous than the British one, our actual consumption of clothing and textiles was lower per head than the consumption in Great Britain. There was a prospect of our being able to get more cotton yarn.

Mr. Leydon said that the discussions in London had confirmed him in the view that it was the British who had spent all the dollars which were available from the American Loan and were now trying to use the present position in which they found themselves to capture foreign markets.

Mr. Ó Broin said that, on his side, he had nothing definite to report yet, but that it was likely that the British would make an offer at an early date of improved prices for cattle and eggs.

[matter omitted]

The Tánaiste expressed the view that it was fundamental that any arrangement with the British Authorities that would involve our curtailing our expenditure on things we need must involve advances on the British side on the questions of supplying us with coal and increased agricultural prices. Concessions on these points would be essential from the point of view of our people here. The Minister for Agriculture was doubtful whether we should take the line advocated by the Tánaiste in so far as coal was concerned. He thought it would be better, from a tactical point of view, if we were to confine ourselves to demands in respect of items on which it was clear that the British could yield without harming themselves. As regards coal, the Tánaiste suggested that we should put it to the British that if they supply us with 50,000 tons of coal a month from now up to March and 100,000 tons extra after March next, then we would agree, that, on our part, we would buy no more American coal. The Tánaiste pointed out that these amounts were infinitesimal compared with total British production, which was about 200,000,000 tons a year.

The Taoiseach, summing up, said that it was evident that both sides were still at the bargaining stage. He thought that we should press for an early conclusion of the negotiations, suggesting, say, the middle of this week. The Tánaiste suggested that we should take the line that the present talks were futile unless the British brought coal into the picture. It was ridiculous for them to say that they could not give us any more coal and for us to leave it at that. The Minister for Finance suggested that the British were afraid of - and were anxious at all costs to avoid - a recurrence of last Winter's fuel crisis, and that we would have a much better chance of getting more coal from them after March than we would have of getting even a small quantity from them between now and March.

Mr. McElligott said that he thought that there were three factors in the situation that we should not lose sight of; first, that we have one customer only for our exportable surplus; secondly, that any concession that the British might make to us might involve them in difficulties with some of their other sources of supply, which would be looking for similar concessions; and thirdly, that we are, in fact, getting a large percentage of British exports of certain commodities (the British had pointed out, for instance, that we were getting 80% of their exports of coke, - 5 hundred tons out of a total of 6 hundred tons.) In this latter connection, Mr. McElligott said that the British Treasury had expressed great alarm at the magnitude of our dollar requirements, saying that we were not doing anything like as well as the other sterling-area countries in the direction of curtailment; it was, of course, appreciated that the British were probably playing off one sterling-area country against another in these negotiations.

The Taoiseach said that if it is found that we are unable to make any progress on the general lines on which the talks are at present proceeding, we must consider adopting the line advocated by the Tánaiste. As regards foreign exchange, it was clear that we could make no progress until the trade and agricultural discussions had reached a more advanced stage. The Taoiseach expressed the view that if there was to be a breakdown in the negotiations as a whole, it would be better if the talks were to be resumed at the ministerial level in London, with the Taoiseach heading the delegation, and that the breakdown should take place there; there was general agreement with this point of view.