No. 36 NAI DFA P646

Text of financial agreements between the Irish Free State government
and the British government

LONDON, 12 February 1923


(A.)-Completed and Pending Purchase Agreements.
It is agreed that:-
1. The Free State Government undertake to pay at agreed intervals to the appropriate fund the full amount of the annuities accruing due from time to time, making themselves responsible for the actual collection from the tenantpurchaser.

2. The security for such payments shall be primarily a Free State guarantee fund similar to that under existing legislation, and, secondarily, the central fund of the Irish Free State.

3. The British Government shall continue as at present to provide the stock and cash necessary to finance purchase agreements pending at this date. Should any question arise as to whether any case is a pending agreement, the same shall be referred to Mr. Justice Wylie,1 whose decision shall be final.

4. The British Government shall provide out of monies voted by Parliament, the cost of interest and sinking fund on bonus and excess stock as already issued or required for pending purchase agreements, together with the remuneration of the Banks of England and Ireland for management, subject to a contribution by the Irish Free State at the rate of £160,000 per annum.

Provided that such payments on both sides shall be without prejudice to the ultimate financial settlement.

5. The cost of administration of land purchase in the Free State area, except as provided under paragraph 4 above, shall be borne by the Irish Free State.

(B.)-Completion of Land Purchase (new scheme).

1. The terms of any new scheme which the Free State Government may propose to enact after such consultation with landlords and tenants as they may think necessary shall be subject to the concurrence of the British Government in consideration of the guarantee mentioned below.

2. The Free State Government shall finance any such new scheme by the issue of an Irish stock at 4 per cent., the capital and interest of which, subject to agreed provision for redemption, shall be guaranteed by the British Government in the same way as it might guarantee a Colonial or Dominion Government loan.

3. The Free State shall provide security for payment of interest and sinking fund under the new scheme as under (A) 2 above.

(C.) The Free State agrees to continue the Office of Public Trustee without prejudice to the right of any beneficiary to apply to a competent court for the transfer of his trust.


It is agreed that-

1. The division of cost shall be on the basis of existing arrangements (i.e., heads of working arrangements, paragraph 5, and the supplementary instructions to the Compensation (Ireland) Commission).

2. The general principle shall be that of a quarterly refund by the British Government on the following basis:-

(a) The Commission shall report, in respect of the awards made by them in any quarter, in what shares the aggregate amount of these awards is apportionable between the two Governments. On payment being made by the Free State Government on foot of any award made in the said quarter, the Free State Government shall be entitled, by quarterly demands, to recover from the British Government an amount equal to such a percentage of the payment (including any advance adjusted therein) as the aforesaid share of the British Government forms of the combined shares of the two Governments, after deducting from the product of the above percentage a fixed sum of £83,333 6s. 8d.

The said sum of £83,333 6s. 8d. shall be taken into account for this purpose for not more than twelve quarters.

(b) Such demands shall be discharged by the British Government in the course of the settlement from time to time of mutual cash liabilities between the two Governments.

(c) For the purpose of (a) all awards made up to the 31st March, 1923, shall be deemed to have been made in the quarter ending on that date, and the first demand of the Free State shall be in respect of payments made up to that date.

(d) The payments made under this arrangement shall be deemed to be provisional, and subject to final adjustment at the conclusion of the Commission's enquiry.

(e) The British Government waives in favour of the Free State Government any claim to benefit under the Agreements between the two Governments and Lloyd's Underwriters and certain other Insurance Companies.

III.?Payment under the Irish Railways Settlement Act.

The British Government agree not to press for a refund by the Irish Free State of any portion of the above, but reserve the right to claim in the ultimate financial settlement that the whole of the payments made under Section II of the Railways Act, 1921, and under the Irish Railways (Settlement of Claims) Act, 1921, both in Great Britain and Ireland should be treated as public debt for the purpose of Article 5 of the Treaty. The Free State Government take note of this reservation without prejudice to its position in the ultimate financial settlement.

IV.?Refund of Cost of Munitions.

The British Government agree that the cost of munitions of war supplied to the Irish Government up to the present date shall constitute a debt to be funded for the purpose of adjustment at the ultimate financial settlement (the exact amount due to be settled by agreement) on the understanding that the Irish Free State agree to pay cash for future supplies.

V.?Royal Irish Constabulary.

The Free State Government, without prejudice to their position at the ultimate financial settlement, agree to repay to the British Government 75 per cent. of the pensions and compensation allowances payable to ex-members of the Royal Irish Constabulary under the Constabulary Acts, subject to the exception mentioned in Article 10 of the Treaty.

The British Government agree to waive their claim for any contribution in respect of extra statutory non-recurrent payments made in connection with the disbandment of the Force.

VI.?Haulbowline Dockyard.

1. It is agreed that lands and buildings shall be transferred to the I.F.S. subject to the understanding that such lands and buildings shall be treated generally in the same way as military establishments under the 'Heads of Working Arrangements.'

2. (a) As regards fixtures, unerected plant and floating craft, the I.F.S. claim under the Treaty and Constitution, and on the analogy of military establishments, whatever is needed for carrying on the yard in working order.

(b) The British Government, while holding that there is a broad distinction in principle under the Treaty between naval and military services, and that the claims of the I.F.S. under paragraph 2 (c) above are therefore inadmissible on legal grounds, are nevertheless prepared without prejudice to agree in the procedure proposed in paragraph 3 below as a practical working arrangement.

3. If the Admiralty desires to remove for its own purposes any of the fixtures, unerected plant or floating craft, the I.F.S. will agree to the removal of so much as will not prejudice the working of the yard subject to the I.F.S. being given credit in the ultimate financial settlement for such part of the property removed, as is not surplus to normal requirements (on the analogy of military movables under the 'Heads of Working Arrangements').

4. (a) The I.F.S. contends that 'normal requirements' mean the requirements of the yard when carried on as a dockyard, whatever be the use to which it is put hereafter by the I.F.S.

(b) The British Government contends that normal requirements mean actual requirements.

Decision on this point to be reserved for the ultimate financial settlement.

5. It is agreed that a cash payment shall be made on account of the British claim for a refund of the cost of maintenance of the yard on the principle agreed under Head IX of this Agreement.

VII.?Local Loans.

1. It is agreed that the Free State Government shall make payments to the Local Loans Fund on account of outstanding arrears at the fixed rate of £25,000 a quarter as from the 1st April, 1923, until such time as the amount of irrecoverable debt on this account can be ascertained and agreed between the two Governments.

2. As regards future collection, the principle laid down in Article 4 (iii) of the Order in Council of the 1st April, 1922, shall continue to be applied between the British Government and the Free State Government pending further consideration.

VIII.?Annuities under the Irish Railways Acts, &c.

The Free State Government agree, without prejudice to the ultimate financial settlement, to pay to the Treasury the amounts due for payments of annuities arising from expenditure in the Free State under the Railways (Ireland) Act, 1896, the Public Offices Site (Dublin) Act, 1903, the Telegraph Acts and the Military Works Acts.

IX.?Recoverable Charges.

It is agreed that in future not less than 80 per cent. of these charges shall be paid by the Free State on account immediately on presentation of the claim, a reasonable period being allowed for discussion of any question which may be raised as regards the balance.

X.?Property Losses in Irish Rebellion, 1916.

The British Government agree to meet payments remaining to be made in respect of property awards already made, and the Free State Government to accept liability as from the 1st April, 1923, in respect of awards for personal injuries outstanding.

XI.?Claims against Local Authorities for Extra Police.

The British Government agree to withdraw this claim.

XII.?Arrears of Taxes as on April 1, 1922.

The British Government agree that all such arrears are collectable by the Irish Government for the benefit of their Exchequer.


1William Evelyn Wylie (1881-1964), later a High Court judge of the Irish Free State.

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