Letter from William P. Fay to Maurice Moynihan (Dublin)
(Confidential)

Yesterday afternoon, the 11th instant, Dr. Nolan¹ conveyed the following message to Mr. Nunan on behalf of the Taoiseach –

‘A meeting of the ERP Committee should be held as soon as possible to consider and prepare a report for the Government on the implications of the Note of the 10th instant from the US Embassy and on the matters requiring decision by the Government on the situation created by that Note.’

In accordance with the Taoiseach’s request I arranged a meeting of the ERP Committee for yesterday afternoon. All Departments who are entitled to send representatives to the Committee were represented at the meeting, including your own Department by Mr. C.H. Murray.² It was decided that, having regard to the highly confidential nature of the discussions and of the subject matter thereof, it was desirable that no formal record of the meeting should be drawn up. Instead, the decision of the Committee was that I, as Chairman, should write to you setting out the results of our deliberations.

Copies of the United States Embassy Note of the 10th instant were circulated to the Committee. The Members of the Committee gave special consideration to the following sentence in the Note, which conveys the decision of the United States Government –

‘I accordingly have to inform Your Excellency that my Government regrets that in view of the failure of the Irish Government to accept the principles and purposes of the legislation under which assistance is furnished, it has no alternative under this legislation but to suspend the assistance being received by the Irish Government under the Economic Co-operation Agreement referred to in paragraph 1 above.’

The Committee were of opinion that, on the ordinary construction of this language, it was not to be assumed that the American Government intended to denounce or impugn in any way the continuing validity of the Economic Co-operation Agreement of 1948. In the Committee’s opinion, the language is itself specially phrased to show this when it says that the United States Government ‘suspends’ assistance ‘being received by the Irish Government’ under the Agreement. Apart from this general consideration, however, the Committee felt it impossible to arrive at any definite opinion as to the implications of the Note and, therefore, as to the matters requiring decision by the Government in the situation created thereby, in the absence of a clear indication from the American authorities of their own intentions. I have been myself in communication with Mr. Dexter,³ the head of the former ECA Mission in Dublin (now known as the MSA Mission for Economic Co-operation in Ireland). Mr. Dexter informed me that he had not yet received instructions from Washington but expected to very shortly, setting out precisely what the United States authorities intended to do in regard to outstanding commitments for economic assistance to this country. The Committee decided, therefore, to await the receipt of these instructions and their communication to us.

It was felt, however, that it would be desirable to formulate a series of questions to be put to the American authorities when they were in a position to reply to them. These questions the Committee formulated as follows.

In the first place it was considered that the American authorities should be made aware of our assumption that the Economic Co-operation Agreement of 1948 continued in full force and validity. On the basis of that assumption, they should be told that the Irish authorities assume also:-

1. that the United States Government Authority which under paragraph 6 of Article IV of the Economic Co-operation Agreement of 1948, is charged with scrutinising the purposes to which the Grant Counterpart Fund will be applied, would now be the Mutual Security Agency as legal successor to the Economic Co-operation Administration,
2. that the amount of dollars outstanding now (estimated at approximately $150,000) under Procurement Authorisations issued by ECA for goods which have been contracted for with American suppliers under the authority of these PAs will be reimbursed in due course on presentation to Washington of the documents prescribed by ECA regulations, and
3. 1. that all contracts already signed before the 8th January, 1952, in respect of any project of technical assistance will be honoured in full until completed in so far as it falls to the American authorities to pay the dollar cost of such contracts,
   2. and that the Mutual Security Agency will authorise the release of sufficient sums from [the] Grant Counterpart Fund to enable the Irish currency cost of such contracts to be met.

In addition to these queries which would be put to the American authorities as assumptions, it was further agreed that a definite question should be submitted to them for the purpose of ascertaining their precise intentions in respect of technical assistance projects which they had already approved in principle but in respect of which no contract had been signed before the 8th January, 1952.

The Committee finally agreed that the Departments principally concerned, namely, the Departments of Industry and Commerce and Agriculture, should survey and examine their programmes of technical assistance projects with a view to their being classified on the basis suggested by the foregoing questions, viz. whether the relevant contracts had been signed before the 8th January, 1952, or whether approval had been given before that date though no contract had been signed or whether neither of these things had been done.

The Committee agreed to meet again immediately a communication was received from Mr. Dexter indicating that he had received instructions on the subject from the Authorities in Washington. The Department of External Affairs representative promised to keep in constant touch with Mr. Dexter and to arrange with him that they should be informed immediately such instructions arrived.