Memorandum for Government by the Department of External Affairs
'The Irish claim for compensation for bomb damage against Germany'

1. On the 9th June, 1941, the Government of the German Reich, in an Aide-Mémoire addressed to the Irish Legation in Berlin, accepted unconditional liability to pay compensation for the loss of life, damage and consequential injuries suffered as a result of bombs dropped by German aircraft at the North Strand, Dublin, and at Arklow on the nights of the 31st May and the 1st June, 1941.¹ By an agreement signed in Berlin on the 1st February, 1945, by the Irish Chargé d’Affaires in Berlin and the Head of the German Foreign Office, the two Governments agreed amongst other things as to a method by which portion of this liability might be discharged. The method adopted was that the Irish Government should collect debts due to German residents by firms and individuals in Ireland. Among the purposes to which sums collected under this agreement by the Irish Government might be applied, the German Government agreed to compensation being retained in respect of damage done by German bombs at –

   a)	Campile, Co. Wexford	£12,000
   b)	to the S.S. Kerry Head	552
   c)	the bombing incidents at the North Strand and at Arklow estimated, at that time, at approximately	450,000

   In anticipation of the agreement of the Reich Government to this arrangement, the Irish Government had made Emergency Powers (No. 335) Order, 1944, whereby all Irish debtors of German firms and individuals were required to pay their debts to the Minister for Finance who gave appropriate receipts. Over £106,000 was collected in this way from the time that the Order was made in 1944 until 1947 when an amending Order restricted any further operations under the original Order to debts outstanding at the date of the Amending Order. Of the sum collected approximately £42,000 was paid in accordance with the Agreement of 1945 towards the expenses of the German Legation in Dublin and the expenses and pay of the German Internees. £12,552 was paid into the Exchequer in respect of the Campile and ‘Kerry Head’ incidents. The remainder – £51,600 – was held by the Minister for Finance, for credit of the Exchequer, as a set-off to the claim for bomb damage at the North Strand and Arklow.

2. When a German delegation came to Dublin in July 1951 to discuss the terms of an Irish-German Trade Agreement, the delegation inquired regarding the collection of debts under the Berlin Agreement of 1945, of which the Federal Republic had no copy. Dr. van Scherpenberg, Leader of the German Delegation, who held a full power from his Government to negotiate on this and other matters, indicated to the leader of the Irish delegation and to other Irish officials duly authorised in that behalf that
   1. his Government were anxious to honour the Agreement of 1945;
   2. that his Government attached great political importance to the recognition of the Federal Republic of Germany as the legal successor (at least in respect of the territory it governs) of the Reich; and
   3. desired to know whether the Irish Government would be prepared to recognise the legal succession of the Federal Republic to the Reich and to re-apply, as between the two countries, the Treaty of Commerce and Navigation between the Irish Free State and Germany done at Dublin on the 12 May, 1930.

   In reply to this enquiry, with the consent of the Minister for External Affairs, the Irish delegation informed Dr. van Scherpenberg that the Irish Government were prepared to recognise the legal succession of the Federal Republic to the Government of the Reich, at least in respect of the territory over which it exercised jurisdiction; and, accordingly, subject to the modifications required by the change in circumstances and status of the High Contracting Parties, the Irish Government was prepared to consider the Treaty of 1930 as applicable between the two countries on the understanding that if the Federal Republic took the advantages she should also take the burden of her legal succession and should accordingly assume liability for the contractual debt assumed by the Reich under the Berlin Agreement of 1945. Dr. van Scherpenberg expressed his satisfaction at the reply given on behalf of the Irish Government and gave an assurance that the Government of the Federal Republic would almost certainly accept liability for the compensation set out in the Berlin Agreement once the facts were placed before them. In subsequent conversations had with the German Legation at Dublin this assurance was confirmed and the acceptance of the Berlin Agreement as a binding obligation on the Federal Republic was stated in unconditional terms.

3. Subsequent to these assurances there took place the London Conference on German External Debts which commenced in March, 1952, and concluded in February, 1953, with the signature of the London Agreement on German External Debts on the 26 February, 1953. Ireland was represented by an observer at this conference and in its decision of the 23 January, 1953, the Government decided to authorise the Minister for External Affairs to sign the Agreement on behalf of this country. In paragraphs 10, 11 and 12 of the memorandum submitted by the Minister for External Affairs dated 17 January, 1953, for the purposes of that decision, reference was made to the possible effects of the London Agreement on the Irish claim for bomb damage against Germany. At that time and during the negotiation of the London Agreement the Irish Authorities relied upon repeated assurances given by the German Legation on behalf of their Government to the effect that the London Agreement would not interfere with the settlement of the bomb damage claim by Germany and that negotiations for the settlement of that claim would take place after the signing of the London Agreement.
4. Negotiations for this purpose have taken place in Dublin between a German and an Irish delegation, from the 12th to the 15th June, 1953, and again from the 23rd to the 25th July, 1953. As a result of these negotiations the German delegation and the Government of the Federal Republic were induced to accept the arguments put before them by the Irish delegation to the effect that the conversations referred to in paragraph 2 above constitute in international law a valid and binding agreement on the German Government, although the mutual undertakings were not reduced to writing and although, as the German delegation insisted, Dr. van Scherpenberg may have acted in excess of his constitutional authority under German law. The German Government therefore accepted the point of view of the Irish Authorities that there existed between the two Governments a valid agreement respecting the settlement of the Irish bomb damage claim which would enable it to be dealt with by the Government of the Federal Republic outside and independently of the London Agreement of the 26 February, 1953. Under Article 26 of that Agreement nothing therein is to affect the validity of any agreement concerning debts entered into by the German Government before the coming into force of the London Agreement. The London Agreement comes into force when it is ratified by the Four Major Powers concerned, that is to say, the United States, Britain, France and Germany. The last of these necessary ratifications is that of the Federal Republic of Germany and the German ratification will, it is understood, be carried out in the first week of August, 1953.
5. While accepting liability in law for the payment of the Irish bomb damage claim, the delegation of the Federal Republic of Germany made it clear that this was subject to three conditions:-
   1. As the representatives of the German Government acted in excess of their constitutional authority under the Occupation Statute, it was necessary for them, even at this stage, to obtain the consent of the Allied High Commission to the verbal agreement concluded as a result of the discussions in July, 1951, (see paragraph 2 above);
   2. in order to make a settlement with the Irish Government of the bomb damage claim acceptable to the Allied High Commission, it must necessarily comply with certain terms and conditions established during the course of the London negotiations on German External Debts. Such terms and conditions were accepted, notably by Switzerland, for the settlement of similar bomb damage claims;
   3. the terms and conditions upon which the Irish claim could be accepted were that –
      1. the claim must be reduced by a percentage which recognised the reduced capacity of the German Government to pay its debts as a result of the partition of Germany. This percentage was on the average about 40%.
      2. The final sum arrived at would be payable by instalments over a period of not less than twenty years.

6. The Irish delegation in reply to these suggestions pointed out that the Irish claim viz. £482,000 in respect of North Strand and Arklow incidents, was for a trifling amount in comparison with the enormous claims which other countries had lodged against Germany; that the claim had been formulated on an exceptionally moderate basis as long ago as 1944, and that, if no interest was to be payable, the reduction on account of the partition of Germany should be much less than 40%; and that to make it payable by annual instalments over twenty years greatly lessened the value to the Irish Government of the Federal Republic’s acceptance of the liability for the damage. In consequence of these representations the German delegation ultimately obtained approval from their Government for a settlement which involved a percentage reduction of the gross Irish claim by approximately 22% and also undertook to consider, as soon as her economic conditions made it possible, the payment of the Irish claim, either in one lump sum or by two or three substantial instalments.
7. As a result of the negotiations, an agreement was signed between the Minister for External Affairs and the Leader of the German Delegation, (who was on this occasion also Dr. van Scherpenberg) on the 25th July, 1953, whereby the Irish Government undertook to accept the sum of £325,000 in lieu of all claims for loss of life, damage to property and consequential injuries suffered in connection with the bombing incidents referred to in paragraph 1 above. This sum is equivalent to the full Irish claim of approximately £482,000 reduced by about 22% and also by the £51,600 remaining available from the collection of German debts as an offset to the present claim. It is considered that in all the circumstances this is a reasonable and acceptable settlement and the Minister for External Affairs recommends it to the Government accordingly. The figure of £325,000 plus the amount of £51,600 already referred to is almost exactly equal to the actual amount, viz. £344,000 approximately of the payments made by the Irish Government to Irish citizens for loss of life, injury and damage incurred at the North Strand and Arklow, together with the sum of £34,500 included in the Irish claim for administrative expenses incurred by the Irish Government in connection with these incidents and the payment of compensation. Although the agreement provides for payment of the sum of £325,000 in twenty annual instalments, an exchange of notes, simultaneously with the signing of this agreement, provides for the anticipation of the instalments as soon as the German Government is in a position to do so. Clear indication has been given to the Minister for External Affairs that the Federal Republic will anticipate payments of this claim, so far as the international situation will allow, in two or three years. The exchange of notes also preserves the right of the Irish Government to present at the time of the signing of a Peace Treaty with Germany and in accordance with the relevant provisions of the London Agreement on German External Debts, the claim of the Irish Government for over £100,000 for other bombing incidents not formally recognised by the Government of the Reich and therefore not covered by the Berlin Agreement of 1945.
8. Copies of the Agreement signed on the 25th July, 1953, and of the exchange of notes done on the same day are attached hereto as Annex A and Annex B respectively for the information of the Government. It will be observed that the Agreement is, by Article V thereof, subject to ratification. The Minister for External Affairs was unable to consult the Government formally in advance of his signature of this agreement and exchange of notes. The visit of the German Delegation was announced only after the Government Meeting on Tuesday, 21st July, and the Minister was unaware before the German Delegation arrived whether the negotiations to be undertaken with them would lead to the conclusion of an agreement; or what the terms of such an agreement might be. Having regard to the time element already mentioned, that is to say, the coming into force of the London Agreement on German External Debts in the early part of August, 1953, the Minister for External Affairs had no alternative but to act on behalf of the Government in anticipation of their approval. He therefore signed the Agreement and the exchange of notes in exercise of the plenipotentiary powers which are recognised by international law to belong to his office and after consultation with the Taoiseach, the Minister for Finance and such other members of the Government as were available.
9. The Minister for External Affairs desires to emphasise that the Agreement and exchange of notes which he signed on the 25 July, 1953, and the verbal agreement of July, 1951, upon which they are based, will remain of no effect unless the Allied High Commission are prepared to approve of them; since without such approval the German Government would be unable to carry out its obligations under these agreements. He considers, nevertheless, that the fact that the German Federal Government was prepared to enter into the formal Agreement of the 25 July, 1953, is a step of significant importance and one which would no doubt operate to influence the decision of the German Government, if and when, it recovers its full international sovereignty.
10. The Minister for External Affairs now seeks the approval of the Government for –
    1. ratification by him of his signature of the Agreement with the German Government signed on the 25th July, 1953, and
    2. of his signature of the exchange of notes effected on the same day.

The Government of Ireland and the Government of the Federal Republic of Germany considering that

Have negotiated and agreed as follows:-

Article I.

The Government of the Federal Republic of Germany agree to pay to the Government of Ireland a sum of three hundred and twenty-five thousand Irish pounds (£325,000) for compensation in respect of Irish claims concerning loss of life, personal injury, destruction of or damage to property and all expenses incidental thereto caused by German aircraft on the 31st May and 1st June, 1941.

Article II.

1. The Government of the Federal Republic of Germany shall pay to the Government of Ireland the said £325,000 in twenty yearly instalments of £16,250. The instalments shall be payable on the 1st April in each year and the first instalment shall be paid on the 1st April, 1954.
2. No interest shall be charged provided the payments are made in the agreed manner but otherwise interest at the rate of 5 per centum per annum shall be paid on any arrears.
3. The Government of the Federal Republic of Germany may make advance payments only after consultation with the Governments of the United States, France, and the United Kingdom. All advance payments shall be deducted from outstanding instalments in equal proportions.

Article III.

Payments under this Agreement shall be made in accordance with the payments arrangements for the time being in force between Germany and the Sterling Area. Should there be no such arrangements in force at any time, the two Governments shall agree upon other arrangements for payment.

Article IV.

The Government of Ireland will furnish such information as the Government of the Federal Republic of Germany may request regarding the debts collected pursuant to the Agreement of the 1st February, 1945.

Article V.

This Agreement shall be ratified by the Governments of Ireland and the Federal Republic of Germany.

Done at Dublin this 25th day of July 1953 in the English and German languages, both texts being equally authentic.

25 July, 1953

Dear Dr. van Scherpenberg,

I acknowledge the receipt of your letter of today’s date reading as follows:-

‘With regard to paragraph 3 of Article II of the Agreement between our two Governments concerning compensation for bomb damage which we have signed today, I am able to assure you that the Government of the Federal Republic of Germany shall endeavour to the best of its ability to make advance payments with a view to reducing the time required for the complete discharge of their liabilities under the Agreement.

I also confirm that the Government of the Federal Republic of Germany have taken note that the Government of Ireland have presented outstanding claims, not covered by the present Agreement, for compensation for damage occasioned by German aircraft on other occasions during the war, in a total sum of £101,113 and that the Government of Ireland reserve their right to pursue these claims in such manner as may be open to them.’

I confirm that the foregoing represents a correct statement of the understandings reached.