A chara,

I have gone carefully through the President's notes on the Northern situation, a copy of which you gave me. I think, from what you said, that the notes were made before I furnished the President with our Memorandum on the 'Possible Basis of Union',² which contains material which I hope may be of use on the subjects he refers to.

The President reviews the situation with ultimate political union as the goal in view, while, at the same time, he says that this is, for the moment, out of the region of practical politics. In other words, his view is that while the goal of national union may be still a long way off, everything which is done now should be done with the idea of assisting the evolution of National union.

From reading the notes in the light of this idea, certain questions occurred to me which I would like to suggest for consideration.

The President suggests that Sir James Craig will urge that union might be made by retaining the two Parliaments and having a Council of Ireland formed from the two Cabinets. Could this be done without taking away from the power of the Dáil, or would it be possible to form a Council of Ireland from the Cabinets? There seems to be a constitutional difficulty in this, as the Council of Ireland has legislative powers, and would probably tend to develop under such a scheme into something in the nature of a Federal Parliament. If such a scheme was put into operation would not certain important powers have to be handed over to the Council by the Dáil?

There seem to me to be four possible arrangements, some of which would be very undesirable.

(1) The Northern Parliament could remain, as it is at present, subordinate to Westminster.

(2) It could become subordinate to the Oireachtas instead of to Westminster.

(3) It could become, jointly with the Dáil, subordinate to a third body for all Ireland.

(4) It could acquire control of Reserved Services and so become a Dominion Parliament.

Is not this last alternative very dangerous? Would it not enable the North to join the League of Nations and act in every way with the same independence as the Free State? Is it not moreover contrary to the Treaty?

The President raises the question of the representation of the North in Westminster. Is not this inseparably connected with the arrangement for the North to make an Imperial Contribution? Under any but a Tory Government will this not become a very serious financial embarrassment? If this is so does not the reason already exist for the abandonment of representation in Westminster by the North? While fiscal union is, of course, possible without political union, is any political union possible so long as representation at Westminster continues? It would seem to be dangerous to our status.

The President refers to the Customs barrier as something which we must retain. I am not quite certain whether his note referred to the whole Customs barrier of the Free State or the land portion of the barrier between us and the North. Could not this be moved to the sea if the North agreed to accept our fiscal system? Could not such an arrangement be made without prejudice to the Boundary Commission or to our political position generally, with universal popular support all over Ireland? I always think this side of the question requires first attention, because if the fiscal systems, in force in the North and in the Free State, once diverge, and new vested interests spring up, political union will become daily more difficult. I am certain that the wisdom of the Government in their attitude towards fiscal matters has impressed the North, even more perhaps than the success of the Loan, which must itself be partly attributed to the feeling of security created by their attitude towards these matters.

All the questions raised by the President's notes are very complicated and very interdependent. I am passing you on these which occur to me off-hand, as I think you said the President was circulating his notes with a view to getting general suggestions.