No. 66 NAI DFA/10/P/226/1

Memorandum for Government by the Department of External Affairs
'Replacement of ECA by Mutual Security Agency'

Dublin, undated, December 1951

  1. The Minister for External Affairs desires to draw the attention of the Government to the provisions of the Mutual Security Act, 1951, recently passed by the United States Congress. This Act, which has been signed by the President and is therefore in force, provides for the abolition of the Economic Co-operation Administration through whose agency Marshall Aid has been distributed to European countries under the European Recovery Programme. The Economic Co-operation Administration is replaced by a new agency to be called the Mutual Security Agency, which will, like the Administration it replaces, have branches in those countries with which it must co-operate under the terms of the new Act. It falls to be considered, therefore, how far the new arrangement will affect this country.
  2. The first question which arises is to what extent Ireland qualifies for continuing assistance under the new Act. Although the Economic Co-operation Act under which Aid was given during the last four years is continued in force, it seems clear that, under the new Act, aid will now be given primarily for the purposes of mutual security. The Act itself says that its purpose is –

    ‘to maintain the security and to promote the foreign policy of the United States by authorizing military, economic, and technical assistance to friendly countries to strengthen the mutual security and individual and collective defences of the free world, to develop their resources in the interest of their security and independence and the national interest of the United States and to facilitate the effective participation of those countries in the United Nations system for collective security’.

    The Act provides for a grant of over $6,000m. for the purposes stated. Out of this over $5,000m. is to be devoted under the Mutual Defence Assistance Act of 1949, to countries which are parties to NATO and certain other countries which the President determines to be of direct importance to the defence of the North Atlantic Area. An allocation of only $1.22m. is provided for economic assistance not based upon mutual defence arrangements with the United States, and even this sum is primarily intended for the countries already mentioned. Provision is, however, made that ‘unexpended balances of appropriations heretofore made for carrying out the purposes of the Economic Co-operation Act of 1948, as amended, are hereby authorized to be continued available through June 30, 1952’. If Ireland is to benefit under this Act, it seems clear that it must be under this provision or not at all, but the possibility of benefiting even under this provision depends on another section of the Act dealing with ‘Eligibility for Assistance’. Here again the section places the emphasis on military assistance, but also provides as follows:-

    ‘(b) No economic or technical assistance shall be supplied to any other nation unless the President finds that the supplying of such assistance will strengthen the security of the United States and promote world peace, and unless the recipient country has agreed to join in promoting international understanding and good will, and in maintaining world peace, and to take such action as may be mutually agreed upon to eliminate causes of international tension.’

  3. Having considered the matter after consulting both the Embassy in Washington and the ECA Mission in Dublin, the Minister for External Affairs is of opinion that although Ireland may continue to benefit under the Mutual Security Act, it would appear that aid given by the American authorities under this Act will be given with a different emphasis, or to use the expression already employed by a Washington official in this connection ‘with a new slant’. It would, therefore, seem that whereas, for example, the technical assistance programme, already approved and in process of being carried out, enjoyed high priority rating in the eyes of the Economic Co-operation Administration, it will have a very low priority in the eyes of the Mutual Security Agency.
  4. At the moment American economic aid to Ireland under the Economic Co-operation Act may be considered under three different heads –
    1. The residue of the original loan still ‘in the pipeline’. This has just been exhausted by drawing the last amount available.
    2. The Grant-Counterpart Fund. This fund is a sterling fund and is created automatically by the operation of Irish purchases on foot of the dollar grant of $18m. made to this country in 1950. The only element of American authority over this fund which still continues is the obligation assumed under the Bilateral Agreement with the United States to seek American approval for expenditure from this fund.
    3. Technical Assistance. A large and varied technical assistance programme has been approved by the Economic Co-operation Administration in Washington and is now being carried out. Authorisations already granted for expenditure under this programme already exceed $1m. It is this programme which stands to suffer if for any reason the United States authorities refuse to continue to grant Economic Aid to this country.
  1. It is a matter for consideration by the Government whether Ireland should continue to accept aid under the Mutual Security Act, assuming that it remains available. The following considerations might be held to suggest a negative response to this question –
    1. The mere existence in Dublin of a mission which would be a branch of and have a similar title to the Mutual Security Agency might be alleged to prejudice Irish neutrality in a future world conflict.
    2. If aid continues to be made available to this country under the Mutual Security Act and if it is accepted, the Minister for External Affairs considers it probable that the United States will seek from this country, if not a new bilateral agreement, at least a written undertaking in the terms of the clause already quoted in paragraph 2 to the effect that Ireland has agreed to join

      ‘in promoting international understanding and goodwill and in maintaining world peace and to take such action as may be mutually agreed upon to eliminate causes of international tension’.

      It might be contended that to agree to co-operate with the United States on these terms would have a similar effect to that stated in the foregoing paragraph.

  1. The Minister for External Affairs has given full consideration to these arguments but is of opinion that they do not outweigh the countervailing advantages of co-operating with the Mutual Security Agency if it proves possible, as the Minister believes, to continue to receive economic aid from the United States by such co-operation. Moreover, the Minister does not consider that these arguments are valid in themselves for the following reasons:
    1. Ireland has a major interest in providing for her own internal security. The fact that Ireland is not a member of NATO should not prejudice the acceptance of an offer of American assistance to increase Ireland’s own internal security, economic or military.
    2. If the Irish Government is called upon to enter into an undertaking such as is referred to in paragraph 5(b) above, the Minister for External Affairs can see no difficulty from the Irish point of view in doing so. Article 29 of the Irish Constitution commits Ireland to the same ideals as are expressed in this proposed undertaking, and in so far as circumstances would permit Ireland has taken her full part in all organisations established for promoting international understanding and goodwill.
  1. The Minister for External Affairs accordingly recommends that if it proves possible to continue to receive economic assistance from the United States, particularly in the form of technical assistance, by co-operation with the Mutual Security Agency or a branch of that agency established in Dublin, the Government of Ireland should be prepared to enter into such co-operation. He would be glad to have the Government’s agreement to this recommendation.1

1 This memorandum should be read in conjunction with No. 67. The resulting Cabinet decision is reproduced in No. 71, and the response to the American Aide-Mémoire of 7 December in No. 72.



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