2. Settlement of present difficulties other than G.G.

On the first day Harding put up the most preposterous proposals which are summarized in Doc. A attached.¹ I told him and Batterbee that the utmost I could reasonably ask you to consider was an agreement on the lines of Doc. B attached,² and I ruled out any specific return of the Oath issue as the best possible way to drive us out of the Commonwealth. (Doc. C attached.)³ They have partially accepted my par.[agraph] 1 but they want a reference to the King.

If the reference operates so as to 'severalize' the King it would be to our Constitutional advantage and I got them to put that condition in such a way as to refer to the King in relation to 'each member' of the Commonwealth, not to the Commonwealth as a whole (Doc D. attached).⁴

On the Oath question I got them to the point of asking an assurance from you in private to British Ministers that you would not go in with the Bill without consulting with them with a view to discovering how best to reconcile the desired modifications of the Treaty with the position of the I.F.S. as a coequal member of the Commonwealth and with the relationship existing between each member and the King. The fact that such an assurance would be private makes it more important for them to put a reference to the King in to Art. 1 of the Agreement.

They are afraid that the reference to Ireland's special position might have constitutional consequences in Canada and S. Africa but they are ready to put the general idea in another form either in a preamble or in our article.

I left them in no doubt that three millions would be the minimum reduction acceptable and I think, ceteris paribus, we can get that. The period of years and possible spread of the reduced amount would have to be discussed in detail.

Conclusion

When you have had time to examine these points I think you will agree that there is a serious possibility of making progress. Anyhow, armed with your further instructions I hope you will let me continue to bring them nearer to your point of view. The purely personal and unofficial and responsible character of the negotiations has been absolutely maintained.