Extract from a letter from Seán Nunan to John J. Hearne (Washington DC)
(Confidential) (Copy)

1. With reference to your minute (115/1) of the 10th June 1952,¹ and your cable No. 138² regarding the Mutual Security Act of 1952, we note the personal opinion expressed to you by the Chief of the SA Division of the MSA that it is unlikely that the Administration would grant this country aid under the Act. This opinion occasions us some surprise as, on the face of it this country appears to be in the precise category which the special fund provisions (Section 7(i) of the Act) are designed to meet. Did he enlarge on the reason for this opinion? Is it clear that his opinion related to this special fund provision or perhaps to the general aid provided under the Act? We have had in mind in this connection the assurances contained in your telegrams 111³ and 113⁴ that the provision in question would apply to Ireland.
2. For our own part we have been examining with interest the possibilities opened up by this provision, with a view to placing the Government in a position to decide whether, and if so in what manner, an initiative might be taken by us towards securing some of this $100,000,000. Our conclusions might be summarised as follows:
3. It seems to us that having regard to the emphasis on military security and defence in the 1952 Act generally and the specific qualification ‘when the President determines that such use is important to the security of the United States’ in the clause in question, a request from the Irish Government to benefit under the clause would be most likely to meet with a sympathetic response if the purpose for which the assistance was required was the purchase of military equipment for strengthening Ireland’s defences. As you will be aware, we informed the United States Ambassador early this year, during the discussions concerning the conditions which we would have had to accept in order to continue to receive aid under last year’s Mutual Security Act, that the Irish Government did not ask the Government of the United States for free military assistance or for further free economic assistance but that they would be grateful if the Government of the United States would facilitate their efforts to strengthen Ireland’s defence forces by arranging for the sale to the Department of Defence of modern arms and equipment. In reply, the American Embassy stated in a Note of the 8th February that ‘the Embassy reaffirms the willingness of the United States Government to consider Irish arms requirements as circumstances and other United States defence commitments permit upon receipt of a communication from the Irish Government addressed to this question’. Efforts to purchase arms and other military equipment in the United States have proved unavailing. We have been able to obtain a certain amount of material from European countries but the total result has fallen far short of our full requirements.
4. In these circumstances we feel that it would be good policy to avail ourselves of the special fund provision of the 1952 Mutual Security Act to obtain arms and military equipment either directly from the United States or by purchase from European countries. I may say that this represents also the personal feeling of our own Minister.
5. Proceeding from this, it appears to us that in view of the fact that the United States Government are apparently experiencing great difficulty in meeting their commitments for the supply of arms and equipment to their NATO allies and the very guarded offer from the American Embassy quoted earlier, it would be highly improbable that the American authorities would be prepared to let us have any substantial quantity of American warlike material within a reasonable period. Delivery dates in Europe for the type of material which we most urgently require seem to be better and moreover European prices are, in general, lower than American. Our object would therefore be if the President was willing to make Ireland an allocation from the special fund to get the Americans to make the dollars in question available to us for purchases in Europe. The ability to pay in dollars would unquestionably be of assistance in obtaining quick delivery of supplies from Europe and from the American standpoint the fact that dollars granted to us from the special fund would, through being used for offshore purchases in Europe, constitute a contribution to the solution of the European dollar balance of payments problem, should commend itself as a cogent reason for the US authorities giving favourable consideration to the idea of assisting Ireland from the special fund and in this manner.
6. It may reasonably be taken therefore that should the Minister decide to put a recommendation to the Government that we should seek (directly or through indirect methods) assistance from the special fund, his recommendation would, in principle, be that the approach should be made on the basis that the funds would be used for military purposes. This need not necessarily exclude entirely the possibility that some proportion of the moneys might be used for economic projects, particularly of a type which might be susceptible of being classed as ‘defence support’ projects.

[matter omitted]