LORD BIRKENHEAD at the outset referred to the counter-claim which had been handed in by the Irish Delegation at the Treaty Conference. The British Government were advised by their experts that the claim was untenable.

If it were assumed that for a period of 10 or 15 years, or any considerable period, the Irish Government would be unable to pay. If as a result the present Irish Government were defeated, it would create a serious situation. At the same time, these conditions might change, and an alternative Irish Government might be possible at a later date. So far as the British Government was concerned, insuperable difficulties presented themselves.

LORD BIRKENHEAD then referred to the economies which the British Government had to make in its endeavour to balance its Budget. If at that moment the British Government were to face the British people with the statement that not only would they allow the Free State a respite in financial difficulties, but that they were wiping out Article 5 altogether, then they would create grave political difficulties for themselves. He had no authority to make any offer to Irish Ministers, but he was anxious to know whether a considerable moratorium, say for x years, would be of assistance. Such an arrangement would leave the rights of the parties to be determined subsequently by arbitration. Would discussion on such lines prove useful to Irish Ministers?

LORD SALISBURY deprecated any actual figures being mentioned. The whole Government, almost without exception, were unanimous that this potential debt could not be wholly wiped out. The reason for this was obvious. They were merely trustees in this regard for the British public, and as such, had no right to sign any agreement by which the British people gave up this claim. He was, however, sympathetic to the suggestion that further time should be given to the Free State under this article, but he thought that as a condition there should be a general clearing up of the many ragged ends which still remained as a result of the Treaty (which he personally had never supported). If the British Government could say that they had laid all these outstanding questions at rest, it might be possible that they would be able to persuade the public that notwithstanding the grave political situation indicated by Lord Birkenhead, it would be well to agree to give further time for the financial settlement between this country and the Free State. The points he had in mind had relation to the Irish adherents of the old regime, double Income Tax, and questions arising out of land purchase.

LORD BIRKENHEAD agreed that the British Government were trustees for this claim, but in view of other recent debt transactions, it might be well for them in the interests of those for whom they were trustees, to strike a bargain with the Free State.

MR. CHURCHILL thought that it [might be] desirable to consider the question not only strictly from the financial point of view. It might be possible in that regard for the British Government to go some distance, but not as far as the Free State desired. Sir James Craig for his part might also be able to do something, but not as much as the Free State wished. A combination of the two lines of solution, namely, amelioration of the lot of the Catholics in Northern Ireland, and easement of Free State finance in relation to Article 5, might be to the interest of the Free State. He was anxious to know what ideas Free State ministers held as to the lines that assistance could take. The Prime Minister had agreed that he should discuss the question further with Sir James Craig, and for his part, he thought that this course might be more fruitful than direct negotiations between Northern Ireland and Free State Ministers.

As regards proportional representation, there were many obvious objections, and it might well be that other more satisfactory means could be devised for protecting the Catholic minority in the North, e.g. (though he had no authority to make such a suggestion) an arrangement might be made whereby additional members were nominated to the Northern Parliament to secure better representations of the minority.

MR. O'HIGGINS said that so far as proportional representation was concerned, strong objections would be raised by representatives, such as Major Bryan Cooper,¹ of Southern Irish minorities if the Free State Government were to propose its abolition. Moreover, these representatives of minorities had had a stabilising effect in the Dáil. Any effort to remove proportional representation, by which alone such representatives could be elected, would be open to strong objection. Free State Ministers considered that proportional representation was required by the peculiar circumstances in the North Eastern area where there was the sharpest conflict of opinion between the majority and the minority. It had been an unreasonable step to repeal that system which had given fair representation to the minority in the six counties. The best evidence of goodwill that Sir James Craig could give towards his minorities would be to restore proportional representation.

MR. CHURCHILL enquired, therefore, whether the restoration of proportional representation would be the first point at which the Free State Ministers would aim.

MR. O'HIGGINS said that perhaps the Catholics in Northern Ireland would not regard it as more important than the disbandment of the special constables.

MR. CHURCHILL said that so far as that force was concerned, he had always understood that it was to be disbanded as soon as the boundary question was disposed of.

MR. O'HIGGINS replied that on that point Sir James Craig had told him on Sunday that he was not in a position to make any immediate contribution except in regard to certain prisoners.

MR. CHURCHILL said that he did not anticipate any great difficulty regarding the disbandment of the special constables, but the re-enactment of proportional representation might be a greater difficulty.

LORD SALISBURY enquired whether there was any actual oppression of Roman Catholics as such in Northern Ireland to-day.

MR. O'HIGGINS replied that it was a question of degree. They were allowed to earn their living if they could, but they had no part in the administrative life of the country. Appointments, for instance, to judgeships and magistracies, were practically closed to them, and the number of Catholics in the R.U.C. was small. This constituted a great contrast in the position of the Free State where the majority of the judges were non-Catholics, as were a large number of the Senators and many of the Deputies in the Dáil.

MR. COSGRAVE said that so far as appointments in the Free State were concerned, individual merit was the only consideration to which regard was paid. The question of religion was not allowed to arise in that connection. In his view, the re-distribution of electoral areas in Northern Ireland was of even greater importance than the re-enactment of proportional representation. Under the scheme brought in by the Northern Government, larger numbers of Catholics had secured smaller representation, while relatively smaller numbers of Protestants had secured larger representation.

The Irish signatories of the Treaty had never contemplated the possibility of such a situation. At that time, proportional representation was in operation both in the North and in the South, under the Act of 1920. When the Irish signatories agreed to Article 5 they did so in the perspective of Articles 12 - 15. Without those latter articles, the other Article would not have been accepted. Article 12 proved to be unworkable, and he believed there was no possible method of solving that particular problem. The aim he had in view was by surrendering some immediate advantage to obtain something of far greater value in, say, 20 years, and that was a better feeling between the North and South, by eliminating the disputes and distrusts that existed to-day. In this way, he hoped for the possibility in the future of their becoming one country with the same political outlook.

MR. CHURCHILL said that this was his hope, and it had, he believed, been that of all those who had signed the Treaty. From that point of view, the maintenance of the existing boundary was in every way preferable to the marking out of a new boundary by the Imperial Commissioners. Such an arrangement would only stereotype existing differences.

MR. COSGRAVE said that the old boundary was more satisfactory from the point of view of Sir James Craig.

MR. CHURCHILL enquired whether the Free State Ministers were not afraid of the position with which they would be faced in the event of the award being made public. Would they not be confronted with serious criticisms from their own supporters when it became apparent that they had refused to accept an arrangement which had added increased acres and larger population to the Free State. It would, he believed, be very difficult, to keep the terms of the award secret. Indeed, the Commissioners might desire that it should be made public in view of the criticisms to which they had been subject.

MR. COSGRAVE said that if the terms of the award were published, both the Northern and the Free State Governments would be faced with the utmost pressure from persons who under the award would be transferred to the areas to which they wanted to go. The question of immediate relief would over-ride the question of the ultimate good of the community as a whole. Speaking as an Irishman, and not as a Minister, he admitted that he viewed with distrust and disfavour an arrangement whereby the Catholic minority in the North would be still further weakened. That minority had to-day only a small voice with which to support its interests, and under such a scheme it would be still further weakened.

MR. CHURCHILL thought that Irish Ministers would run a grave risk if they were to assume that the report of the Commission would not become known. The Commission had been much attacked on account of their anticipated award; he did not know their views but he thought it possible that they would wish to publish their finding. Indeed, he thought it a strong probability.

MR. O'BYRNE took the view that publication of an unauthorised award differed materially from an official statement by the Commission. Surely the Commission would hold its hand if a joint request were made by the British and Irish Governments?

MR. CHURCHILL thought that this might be so, but it was not safe to assume it. The Commissioners were, he knew, pressing to see the Prime Minister, and while publication would not be the same as an actual promulgation by the Commission, its possible effects must be considered. Would the publication of the award affect the views at present held by the Irish Ministers?

MR. COSGRAVE replied that it would not, but he would much prefer that there should be no publication.

MR. CHURCHILL said that Sir James Craig was seeing him at 5.0 p.m. and he suggested a resumption of the present meeting at 6.0 or 6.30. Were there any other points that Irish Ministers would like to put to him before he saw Sir James Craig?

MR. COSGRAVE briefly reviewed the position from the point of view of Irish Ministers. At the time of the Treaty, the revenue of Ireland was £50 millions per annum, but in the year following it had dropped to less than half. In the month that the Treaty had been signed, the price of cattle had fallen from 112/- to 56/-: they had considered it a passing phase, but the price had never since risen above 60/- to 65/-. The system of Government which they found in operation was a system suited to the needs of a country of much greater financial resources. Education services amounted to £5 millions per annum: Old Age Pensions, £3 millions, and pensions under Article 10 amounted to £2 millions. These three services reached therefore a total of £10 millions per annum. From the point of view of Ireland, a postponement of financial settlement from the present bankrupt to a future solvent period would mean that Ireland would thus surrender factors which at present would be of value in determining that settlement.

MR. CHURCHILL pointed to the tremendous payments that this country was called upon to make to America. These payments would increase in 1933. If, however, the attitude of the United States were to become less rigid, the atmosphere would be easier for this country, and it would thus place us in a position to deal more generously.

In reply to a question by LORD BIRKENHEAD, MR. COSGRAVE said that if he were to accept a moratorium on the lines proposed, his action would be riddled with criticisms. He would much prefer to secure improved conditions for the Roman Catholics in Northern Ireland, but failing this he looked for more than a moratorium of the provisions of Article 5.

MR. O'HIGGINS said that in order to ride the political storm, it was essential to have regard to the feeling of the electorate in the 26 counties. The Government could only survive if one or other of the two conditions to which he had referred were secured, either the improvement of the position of the Northern Catholics, or the elimination of Article 5. He believed that the Government could maintain their position if they were to stand on the territorial status quo, were to secure the release of the prisoners to which Sir James Craig had agreed, and if Article 5 were to disappear.

The Meeting then adjourned till 6 p.m.