A further meeting was held at 3 p.m. in the Commonwealth Relations Office under the Chairmanship of Sir John Stephenson. The British Departments were again represented. The Chairman said that the Notes which had been prepared by the Irish Delegation had been considered, though in the short space of time available it had not been possible to do more than form general impressions. He called on the representative of the Ministry of Food to speak on the Department of Agriculture memorandum.
The representative of the Ministry of Food said he accepted the statement in the first two paragraphs of the memorandum sent by the Department of Agriculture. He appreciated the fact that there were long term considerations involved and that, in fact, the Ministry of Food was anxious to have the problem viewed in its long term aspects. They were prepared to discuss the price for fat cattle and he thought that further discussions might prove fruitful so far as prices generally are concerned.
As regards feeding stuffs, they could do nothing about maize which was subject to IEFC control and both countries are in the same position in regard to the Argentine purchases, delivery of which might count against wheat allocations. Reference was made to the policy of growing linseed in Great Britain and the possibility of trying such a crop in Ireland. It was arranged that detailed discussions would take place between the Ministry of Food and the Department of Agriculture starting on the 24th September. The Ministry of Food would also be interested in ware potatoes and in the prospect of receiving supplies of bacon.
The representative of the Ministry of Agriculture said that his Department were sympathetic to the Irish request for fertilisers and would wish to have separate detailed discussions with the Department of Agriculture representatives. He foresaw little difficulty about supplying the indicated quantities of seed wheat and seed oats but as regards the other seeds he would require details of the quantities in each case. Reference was made to exports of cattle to the Continent. It was explained that there had been exports. A control was exercised by export licensing. The exports had been helpful in getting supplies of essential goods and earning foreign exchange. They were not barter arrangements. We would probably have a balance in our favour this year with Switzerland. Arrangements were made for a meeting between the Ministry of Agriculture representatives and representatives of our Department of Agriculture.
In connection with the requirements listed by the Department of Industry & Commerce, Mr. Leydon mentioned that the lists we had provided were not intended to represent our full requirements of goods from Great Britain. They were merely a selection of the most important raw materials about which there were difficulties at present so far as supply from Great Britain is concerned. He also emphasised that the figures of requirements given were not optima but had been pruned. This was confirmed by the Department of Finance representatives. Mr. Leydon mentioned also that he was not in a position to suggest further savings of dollar exchange by curtailment of consumption of goods in Ireland. This was a matter which would have to be settled by Ministers at a later stage in the light of the over-all position.
A representative of the Ministry of Fuel and Power said that so far as coal was concerned, the position was that Great Britain could not provide any additional supplies. There was no likelihood of this position being altered before April next. It would not be possible for them to supply us with the 100 tons of foundry coke a week for which we asked. In this regard he mentioned that the Dublin Gas Company were actually getting 500 tons of foundry coke a week for gas production; and this represented 85% of the total exports of foundry coke from Great Britain, whereas our pre-war share of British exports of foundry coke was less than 1%.
Mr. McElligott said that if this were the case, there seemed to be no escape from dollar expenditure. Mr. Leydon said the matter had been carried as far as officials could bring it and the position would have to be reported back to Ministers. He suggested that the matter was one on which the Treasury ought to talk to the Ministry of Fuel and Power. There was a discussion as to whether coal might not be obtained in Europe through ECO from, say, Poland, but it was thought unlikely that supplies could be obtained from Europe.
Another representative of the Ministry of Fuel and Power, speaking on behalf of the Petroleum Division, referred to the harmonious relations which had existed between the Department of Industry and Commerce and the Petroleum Division, and to a suggestion which had been made in a letter from the Petroleum Division that Ireland should adopt the same measures for saving petrol as were to be adopted in Great Britain. He noted that we estimated that on the present basis of rationing, our consumption for twelve months would be 140,000 tons. He assumed that there would be discussions on the 'outs' we might make and he had no points to raise at this stage beyond remarking that according to the figures furnished the basic allowances for private cars (16% of the total) amounted to two tanker loads. There was a shortage of tanker tonnage at present and any saving would be a great help. Questioned by Mr. Leydon as to whether the shortage of petrol was due to dollars or to tanker tonnage, or to a world shortage of petrol, the representative of the Ministry for Fuel & Power said that all three factors entered into it. As regards fuel oil, he thought our estimated use was high at 250,000 tons a year, having regard to the small amount of oil we used in the first half of 1947, and asked whether the estimate we had sent in some time ago of 180,000 tons for the second half of 1947 was not too high. Mr. Leydon said that he had indicated at the time that owing to difficulties in getting plant the 180,000 tons was to some extent a shot in the dark. It was indicated that this estimate which had been made in June could on the latest information available be revised down to 140,000 tons for the half year. It was suggested by the Ministry of Fuel & Power representative that our requirement of aviation spirit was high by comparison with previous years. Mr. Leydon pointed out that the estimate included requirements of the companies using Shannon Airport and that so far as the user of American companies was concerned, payment was made for it in American dollars.
As regards kerosene, the Ministry of Fuel & Power representative inquired whether the estimate of consumption visualised the abolition of rationing. He was informed that it was calculated to enable the domestic rationing arrangements to be terminated but to retain control over distribution to traders. The rationing arrangements Mr. Leydon explained entailed hardship for householders in the rural areas, and the scheme was costly in administration. The Ministry of Fuel & Power representative indicated that kerosene was in difficult supply.
It was agreed that a discussion should take place between representatives of the Department of Industry & Commerce and of the Ministry of Fuel & Power regarding petroleum products at a suitable opportunity. After the meeting Mr. Leydon indicated to Mr. Mitchell (Petroleum Department) that he was not in a position to discuss 'cuts' until the over-all position had been clarified.
A Board of Trade representative said that he appreciated our difficulties in regard to cotton yarn supplies but it was extremely unlikely that we would secure anything like our requirements of twelve million lbs. as the total export target had been fixed at twenty million lbs. for the year. The recent placing of cotton yarn exports on an 'open basis' should improve the prospect of Irish manufacturers who had considerable influence with the British spinners. It was, however, pointed out that on the contrary there had been no improvement in the position since the specified quota system had been terminated, and reports from trade interests indicated that the position had deteriorated.
It was suggested by the Board of Trade representative that the balance of advantage might lie in our buying dollar yarns. The export of yarns by Britain to dollar countries was not merely a short term means of securing dollars, but was also important from the long term aspect as the dollar shortage was likely to continue for some years and now was the time to establish a foot-hold in the dollar countries for the purpose of developing a permanent trade and keeping also a pre-war trade with America in finer yarns. Ireland was a natural market for the British cotton industry owing to its proximity and there would not be the same difficulty in holding this market as in the case of the American market; from the trade point of view, this was an additional reason for sending yarns to America. Mr. Leydon pointed out that this was tantamount to saying that as the British cotton industry were assured of this market, they could in times of difficulty as at present divert supplies from the Irish cotton mills with the knowledge that when the sellers market would have disappeared, they could fall back on the Irish market. This appeared to conflict with the terms of the agreements entered into in 1939 and 1940 regarding cotton yarn and piece goods and to be illogical and contrary to the interests of the sterling group as a whole because if we could not get all our yarn requirements we would have to pay in dollars for the labour content of piece goods while idle plant and labour was available in this country.
Mr. Leydon asked why Irish mills had to pay a higher price for British yarns than the British mills. A Board of Trade representative stated that the price difference arose from the fact that while domestic yarn prices were controlled, export prices were free. There was no official regulation of the price for export yarn and if Irish manufacturers were being charged too much they should get after their suppliers.
The position in regard to cotton piece goods was somewhat better than that in regard to yarn, but was far from easy. As regards rayon the export targets fixed were well above the pre-war level and Irish manufacturers should receive substantial deliveries of rayon yarns and piece goods.
It was agreed that there should be a separate discussion between representatives of the Board of Trade and the Department of Industry & Commerce regarding textile supplies, and that each side should, at this discussion, be in a position to give full information regarding the rationing arrangements, level of supplies, etc., in their own countries. Those present on behalf of the Board of Trade were unable to discuss tops and woollen supplies but would have experts at the special meeting which was fixed for Thursday afternoon.
It was also agreed that the other items mentioned in the Note submitted to the Commonwealth Relations Office might be discussed at this meeting.
