Arising out of Mr. Jones' conversation with Mr. Griffith, the latter indicated to me last night that Mr. Lloyd George desired to see me. This conversation took place subsequent to the official conference held at 10, Downing Street on Sunday evening at 5 p.m. I did not attend this conference for the reason that I had in my own estimation argued fully all points. This morning Mr Griffith came to me again and suggested in his official capacity as Chairman of the Delegation that I should have the meeting with Mr. Lloyd George as so much depended on the Delegation at this vital time. Mr. Jones had suggested the interview for 9.15, but as I had not made up my mind until after speaking to Mr. Griffith this morning I did not see Mr. Lloyd George until 9.30 as stated above.

Acting on the general résumé of points of difference as sketched by me at the Cabinet Meeting on Saturday, 3rd. instant, I had my points set out as follows:-
(1) The essential unity of Ireland. Suggestion that we should press for a letter from Craig indicating either:
(a) Acceptance of Conditions and naming those Conditions.
(b) Rejection.
(2) Oath of Allegiance. Clause 4 of British Document.
(3) Defence. Clause 6 and Annex A. of British Document (29a) - date 1st December.
(4) Trade. Clauses 9 and 10 of ditto.

Mr. Lloyd George opened the conversation indicating that he was having a meeting of his Cabinet at 12 o'clock and was putting it to them that the Conference had broken as a result of the interview last night. I said I understood that. He went on to say that the break was therefore definitely on the question of 'within or without' the Empire (at this stage he did not refer to allegiance except to say that he would be willing to consider any form of Oath in order to meet or attempt to meet our wishes). I said I wished to express what my view was on the document. I said that I was perfectly dissatisfied with the position as regards the North East, and I put it to him definitely under headings (a) and (b) of paragraph 1 above. He remarked that I myself pointed out on a previous occasion that the North would be forced economically to come in. I assented but I said the position was so serious owing to certain recent actions that for my part I was anxious to secure a definite reply from Craig and his colleagues, and that I was as agreeable to a reply rejecting as accepting. In view of the former we would save Tyrone and Fermanagh, parts of Derry, Armagh and Down by a boundary Commission, and thus avoid such things as the raid on the Tyrone County Council and the ejection of the staff. Another such incident would, in my view, inevitably lead to a conflict, and this conflict in the nature of things (assuming for instance that some of the Anglo-Northern police were killed or wounded) would inevitably rapidly spread throughout Ireland. Mr. Lloyd George expressed a view that this might be put to Craig, and if so the safeguards would be a matter for working out between ourselves and Craig afterwards.

The question of the Oath was then referred to again, Mr. Lloyd George insisting that paragraphs 1 and 2 of their document were the substance, that a definite understanding had to be arrived at on those, then we could discuss the form of Oath.

I then passed on to Defence. I objected to Clause 6 on the ground that the word 'exclusively' implied that we were not to take measures for raising coastal defence forces. Mr. Lloyd George said that if I had the idea of building submarines they could not allow that. I said my objection was on the principle that we could build nothing. If I were met on this part of the clause I thought we could find agreement, and as for the second part of the Clause I thought we could find agreement on the basis of an understanding that the Review Conference at the end of ten years definitely meant the transfer to the Government of the Irish Free State of the responsibility for Coastal Defence.

I passed on to paragraphs 9 and 10 and pointed out that it was the fetters I objected to in these Clauses. Mr. Lloyd George suggested that if there were complete freedom on one side, there should also be complete freedom on the other. This I said would meet my view, as also would paragraph 8 on page 2 of our document of the 22nd. November. (copy of paragraph 8 attached).

Mr. Lloyd George made notes of all objections as expressed above, and suggested that if we thought fit he would meet us at 2 o'clock to-day. I left the appointment stand tentatively.

Finally the conversation developed into a statement by Mr. Lloyd George to the fact that were Clauses 1 and 2 accepted he would be in a position to hold up any action until we had, if we desired to do so, submitted the matter to DAIL EIREANN. I left it at that saying that unless I sent word to the contrary some members of the Delegation would meet him at 2 o'clock.

Note on Annex 'A'.
In dealing with this matter I asked for a definition of the term 'Admiralty property and rights' mentioned in paragraph 1, sub-heading (a); also that Mr. Churchill should define what he meant by 'care and maintenance parties.'