AN TAOISEACH

On reaching London by plane on Monday, the 27th December, I immediately got into touch with the High Commissioner and explained to him the extreme necessity of getting immediate information as to the contents of the Note which the British were to hand to us on the 29th (Constitution Day). Although Mr. MacDonald had assured him that there was nothing which would cause us serious difficulty in the Note, nevertheless only we ourselves could be the judges of that, and a preview of the Note might be the means of preventing a breakdown of the negotiations for a conference in January.

The High Commissioner phoned to Mr. Malcolm MacDonald, told him I was in London, and repeated what I had said about the Note. Mr. MacDonald agreed to let us have the Note at 5 o'clock on Tuesday, the 28th, instead of 10 o'clock on the following morning. Mr. MacDonald phoned Sir Edward Harding and instructed him accordingly. Sir Edward Harding invited the High Commissioner and myself to lunch on Tuesday. We had a very long conversation, in the course of which he said that I must remember that there could be no change made in the Note, as it was a Cabinet decision. I suggested that no Cabinet opinion¹ decision could be regarded as final unless Ministers were in the fullest possession of all the facts relating to the matter under consideration at the time the decision was taken, and that if there was something in the Note which in our view would prevent the January meeting I should emphasise in the strongest manner that he should get in touch by phone with all the Ministers concerned so that the necessary modification could be introduced. He then gave me the gist of the Note, and we discussed the main points for some time. I urged strongly on Harding that nothing in the form of the Note should give the slightest impression that the British Government or Parliament had any right whatsoever to interfere with the Constitution. He assured me the form was absolutely correct in this sense, and when a few hours later he brought the actual text to the High Commissioner's Office I could not frankly say that there was any assertion of a right in the British Government or Parliament to do so². As you know, Sir, I telephoned the entire text of the Note and of a statement made by Sir Edward Harding to us on behalf of his Minister, reiterating the latter's desire that the Note - especially the third paragraph - should not be regarded as in any way provocative.

I went to see Sir Edward Harding by appointment on Wednesday afternoon and had some three hours' talk. My main endeavour in this and my subsequent talk with Sir Edward Harding was to obtain from him a frank statement of the British minimum demands. I realised very soon that there is now a genuine desire on the part of the British for a complete understanding with us.

Sir Edward Harding said that the Treaty had indeed become a damnosa hereditas in the relations between the two countries. He went so far as to admit that Mr. Thomas had delayed the settlement of our difficulties and he expressed the belief that, if for the last few years we had had here a British High Commissioner, it would have been of very great help. However, he concurred generally when I told him that a settlement would have been impossible until our State, its Constitution and its laws were exclusively founded on the expressed will of the Irish people without any taint of interference or pressure from the British side. As far as the Twenty-six Counties were concerned, we had now come out of the mountains into the plain, and the way towards a settlement had become much easier. It was of fundamental importance that at the coming conference his Minister should not make any attempt to obtain any amendment of the Constitution - that, in other words, our negotiations as far as politico-constitutional matters are concerned should be based on the irrevocability of the Constitution.

We then turned to the broad lines of the settlement to be reached between us. My first anxiety was to find out what their stand was to be on the Annuities issue. I came back to the point as often as I could without appearing to show unreasonable curiosity. I am quite convinced that the British have made up their minds that it would be impossible for you, owing to your very frequent public utterances, to pay a penny of the Annuities. They are facing up to the difficulties of the conference in a realist mood, and they are ready to make the necessary sacrifices to obtain a settlement, but it was equally clear to me that there will have to be a cash payment on our side in relation to the other outstanding financial matters.

As far as I could gather, the line to be adopted is this. They will ask us to pay the pensions at present being paid in Ireland by them amounting to about £700,000. Further, they will demand a capital sum of some £7,000,000 to cover the local loans. With regard to the sum of approximately £250,000 at present being paid to pensioners who have left Ireland and are resident all over the world, they will propose that we should pay a capital sum of some £3,000,000. It is my impression that we have no chance of forcing the British to forgo the payment by us of the monies payable in this country and of the capital sum of £7,000,000 for the local loans. There will, however, be a sporting chance of getting the British to forgo the capital sum of £3,000,000 in substitution for pensions paid abroad in consideration of (though not as payment for) the modernising works which we should have to undertake immediately in the forts at present manned by the British. The British estimate of the cost of these works is a little under £1,000,000, but I think there is a real basis for argument here.

Sir Edward Harding could not have been stronger on the difficulties which his Government would have to face in Parliament if they were not able to show that the bargain was a reasonably good one for them. Their difficulty in putting over the forgoing of the Annuities payments would be insurmountable if they had not some substantial concessions to show in finance and in defence.

The position with regard to defence is slightly more complicated. Sir Edward Harding at first adopted the attitude that their forces should have the right to come into our ports in a grave emergency. That for them was the really important point. I explained to him that here we were dealing with a matter that concerned in the most vital fashion our national sovereignty. No Government in this country could give the right in such an unqualified manner to the British forces. But could not our mutual difficulties be solved in another way? We must assume that a major European crisis meant the coming to a head of the struggle for world power between Germany and Great Britain, and that in the course of such a struggle the danger to our country, owing to its geographical position and to the fact that it was a source of food supply for the British, was as real as it was to Great Britain herself. That being the case, it would be our duty to defend our shores by every means against an invader, whether as you, Sir, have frequently said, an attack was made directly on us for the purpose of seizing part of this island or on us for the purpose of using this island as a stepping-stone in an attack on Great Britain. But we quite recognised that the pressure of an invading force or of attacking planes might very soon become overwhelming for the forces which would be at our disposal. British aid would then have to be called in. What was supremely important was to recognise from the beginning that the forts and all our territory were exclusively ours, and that arrangements made to defend them in time of war would have to depend on our goodwill and complete and formal consent. I do not fear that we shall have any serious difficulty in finding a formula which will give us the completest sovereignty over every inch of our territory and which will, at the same time, satisfy the British that we shall co-operate with them when the two islands are being subjected to a common menace. I shall endeavour, in the light of my conversations with Harding, to draw up such a formula in the course of the next day or two.

I understand from certain remarks of Sir Edward Harding that one of the things which has made the British military people most suspicious of us is the fact that we have from time to time made public statements that we intended to declare our neutrality when a major crisis occurred. I remember only vaguely such statements, but I think some members of the Labour Party have made statements of the sort in recent times. Indeed, I may say at this point that I came away from my first week's conversations with the Permanent Head of the Dominions Office more convinced than ever that all statements in relation to external affairs should be made exclusively by you, Sir, and that casual remarks made by prominent public men on the Government side could easily give rise to suspicions which render our relations with our principal 'external affair' more difficult. Sir Edward Harding was quite frank in telling me what the obvious consequences would be of a declaration of neutrality on our part at a moment when the British people were in the very gravest danger from a powerful European enemy or group of enemies. They would be obliged in their own vital interests (and no doubt they would say it was also in our vital interest) to come in and occupy this country and carry out functions which we as their 'most natural ally' (no irony was intended, and I did not take him up on the expression) should carry out. The British at the conference would generally argue that our defence was a matter for ourselves, and that we could not claim financial concessions from them because we were doing what any normal State considered it its duty to do. They are not, for instance, subsidising directly or indirectly Australia, South Africa or Canada in defence matters. However, Sir Edward Harding admitted that our defence interested them in an entirely different manner, and he thought that as far as the material of the port defences was concerned our expenditure could be taken into account.

On the trade side I think they will ask us to withdraw or reduce some of the duties which hit them most heavily, or to increase our trade with them. Sir Edward Harding was inclined at one moment to think that some of the penal duties might have to be left in operation by them in order to satisfy Parliament that they were getting some fraction of the Annuity payments. I told him that a threat of that kind could only have one result, namely, to put an end to the negotiations at once. A war of whatever nature must end as a whole. There could be no half-measures. Obviously we should be ready to drop our penal duties and to make a reasonable trade agreement with them. Of course we expected to get a free market for agricultural produce in Great Britain, and I believed the Minister for Industry and Commerce could find the means, with their help, of diverting some of our external trade to the advantage of British merchants. I did not think that, once the broad principles had been determined with fairness to both sides, there would be any serious difficulty when we reached the stage of detailed discussion between the Ministers concerned.

On the issue of the unity of Ireland, Sir Edward Harding adopted the now stereotyped attitude of the British that it is very largely, if not exclusively, a matter between ourselves and the Six Counties. I disagreed very strongly with him on that point. They, at any rate, have no intention of making any suggestion about unity at this conference, but I think that apart from the restatement of the principle which you, Sir, will have to make, something might be gained by definitely suggesting a common purpose in pursuance of which there could be a meeting between the two Governments once or twice a year. The British would, I believe, be prepared to help us in bringing about that first step towards unity if they were asked to do so. No doubt their Right Wing political affiliations make it very difficult for them to make a suggestion themselves.

To conclude this very summarised note, I should like to repeat my opinion that the British seem to seriously desire a settlement and that they are ready to meet us in a friendly spirit with the intention of coming as far as possible along our path. I also wish to suggest that I should go back to London to continue my talks with Harding at the beginning of next week. I think, having discussed all these matters with you and having reached a more definite view as to what we can and what we cannot accept, it might be possible through Sir Edward Harding to bring the British closer to our view, or at least to ensure that there will be no real hitches in the early days of the conference through want of a proper understanding of each other's position.