I have already had two very long conversations with MacDonald on Wednesday and Thursday afternoons (Sept. 15th and 16th)¹.

The discussion ranged over the new Constitution, the External Relations Act, Partition, the Treaty Ports and Defence, Financial dispute and Trade.

In regard to the Constitution, MacDonald put forward the British point of view in regard to these matters, whilst I put forward our point of view. The net results appear to me to be the following:

NEW CONSTITUTION: At the time the Constitution is about to come into effect the British will make some formal protest in regard to Articles 2 and 3. Their point seems to be that they do not want to appear to be acquiescing in our claim put forward in these Articles. I pointed out that we would have to reply fairly stiffly on that matter and there could of course be no question of any change.

PARTITION: I again emphasised that this was the most fundamental and vital question in regard to the relations between the two countries; that no agreements on other matters could bring about the good relations both he and I desired so long as partition lasted. Settlement on the other matters would help to make the solution of partition itself easier perhaps by improving the relations and securing the good-will of Great Britain. MacDonald insisted that they could do nothing about partition which could only be ended by ourselves winning over the North. The British would do nothing to stand in the way. I pressed him on whether they desired partition or not. He said they did not desire it 'for its own sake'. They were committed to the North. I asked if they would publicly state that so far as they were concerned they would desire partition to end. He could not promise that such a settlement² statement would be made. His steadfast view was that the partition solution would have to wait. I said we would therefore have to consider definitely a campaign to inform British and world opinion generally as to the iniquity of that whole position.

THE PORTS: They were ready, he said, to hand over the treaty ports at once if they could be guaranteed an invitation to use them in case of a war when they would need them to protect their essential supplies. He said it was the definite view of the military and naval experts that these ports were necessary to them. I pointed out that public opinion in Ireland would not stand for any such guarantee. Such a guarantee would in effect mean that we were merely holding and maintaining the port defences for their use. MacDonald said he would go into the matter again, that if the military and naval view remained unchanged it was possible that the British Government would prefer to leave things as they are and maintain their rights under the 1921 treaty. I pointed out the danger of that situation from our point of view and their point of view, and we would have to claim the recognition of our complete sovereignty over our ports. I pointed out that our sovereignty over our own territorial waters would not preclude the British vessels from operating immediately outside the territorial limits and questioned the soundness of the military and naval men's views and said that at any rate the wider considerations should be held sufficient to have these views overridden. He admitted that they could override them, but they were bound to take the experts views very seriously into consideration.

GENERAL DEFENCE: On this he said that they appreciated and regarded it as of great value my public statement that our territory would not be allowed to be used by any foreign power as a basis of attack upon them. I said that that principle should be the bedrock on which our defence relations to each other should be built. An independent Ireland would have no² a direct interest in the maintenance of the inviolability of its territory and of its independence. The moment all threats from Britain had ceased and good relations were established an attack on Britain's security would indirectly be an attack upon us. In case of a common attack it would be of incalculable importance to Britain to be able to feel that our part of the general front was safe. It would be our duty to set about putting ourselves in such a position that that would be true. Our resources of course were limited, but we were a people of natural military gifts and I felt that if the burden of the tariffs were removed our people could be induced to bear a fair burden of taxation. To set our defences in order we would need equipment and expert advice. A considerable portion of the equipment would have to be purchased from abroad; the advice would have to come from the experts of some great power. If we had come to a settlement with Britain, naturally so as to provide for the case of our operating side by side it would be advisable to have our equipment or organisation and our defence measures generally the same as those of Britain and part of a common scheme. Towards preparations of this sort the Government could hope to win the support of public opinion generally, although the aim might be misrepresented, but no public opinion could be secured for expenditure or preparation if it was thought that the aim was simply to assist Britain. The aim must clearly be to defend the independence of our own country, but that I repeated would be of incalculable value to Great Britain in a time of stress. The influence of a satisfied Irish opinion at home and in America should not be lost sight of by the British Government. The position of Canada and a number of other considerations made it important that Britain in a time of war should be supported by the active good will of the people of the United States. Irish opinion played an important part in that matter.

FINANCIAL DISPUTE: MacDonald adverted to the fact that I had committed myself definitely to not paying a single penny of the land annuities. They regarded these monies as due to them on the basis of the Cosgrave agreements. To them Cosgrave was the head of a responsible government capable of entering into binding contracts. They should not be penalised because there was some domestic procedure which he did not follow. I replied that neither should we be penalised because an agreement was signed which had no proper authority behind it. In our opinion the money was not due. I referred to the 1920 Act and asked MacDonald if he had made himself acquainted with the details of our case. He made it clear that he had not. I suggested he should try to understand that case. So far as we were concerned I was so satisfied that the monies were not due that under no circumstances would I, as a private individual, agree to pay away monies to which I had such an obvious right. MacDonald said he felt that the British Government would be unable to face their Parliament and people with the proposition that these payments should be entirely remitted.

Discussing the other withheld payments I agreed that there was a possibility of compromise in regard to them. I had not examined the merits of the British claim in regard to these, because I was satisfied generally that the annuity payments which had been wrongfully made would more than cover any claim which the British could advance in their regard. MacDonald said he understood that my suggestion in our talks in London had been that the increased cost of our defence forces incurred by the taking over of the ports and the modernising of their equipment should be regarded as meeting the British financial claim. He had made enquiries he said and was informed that about half a million pounds would be the total cost of modernising defences of the defence of the treaty ports. I told him that it was not the first capital cost that mattered but the continuing charge. Our present army would have to be considerably increased, both the standing army and our volunteer forces. We would need some coast patrol vessels, and also a number of aeroplanes. The annual cost of maintenance of these could hardly be less than a million pounds, and our taxation was already an extremely heavy burden, particularly because of partition, the general depression and the result of British tariffs. It would be extremely difficult to increase it to any appreciable extent. The exact amount of the cost could only be discovered when we went into detail.

Ex-Service Pensions.³

TRADE: I pointed out that a trade agreement would be necessary in relation to any settlement of the financial dispute. I thought the trade settlement would present no difficulty. I pointed out that of course we could not forego the right of protecting our own industries, but that we would have need of considerable capital, equipment and goods which it would be quite uneconomic for ourselves to produce. In any case we would have either directly or indirectly to purchase in order to secure payment for what we want sell. The ideal for our country [was] not to have all its eggs in one basket, but to have a balancing trade with two or three large countries, but if the countries we would like to purchase from us were unable to do so, well we could not buy from them.

The conversations ended with a full realisation by MacDonald that we desired to be on friendly terms with England, were animated with no ill-will towards them, but that our desire was to clear away the ground and prepare a foundation on which cordial relations and friendly co-operation would be possible. I agreed to have lunch with himself and Eden at the Bois on Saturday next, the 18th inst., so that Mr. Eden might give an account of the international situation. MacDonald repeated what he had said at the beginning that the conversations in London had been of great value to him, that these conversations he hoped would be of similar value, that he would report to the Prime Minister when he got back, might possibly then have a discussion with the Cabinet Sub-Committee and then if they could find a basis, put forward proposals to us. I thought that discussions by civil servants would be of no use as the questions were essentially ones which would have to be decided by principals. I thought a delegation of British Ministers could meet ourselves² ours either in Dublin or in London to hammer out a settlement finally, but that any such meeting would be worse than useless unless there was a reasonable prospect that a settlement could be made.

Notes:

At the outset of our discussion Mr. MacDonald said that he was very glad to have the opportunity of further discussion, that his last talk in London had been extremely helpful and made it possible for him to explain clearly to his colleagues the purpose aimed in the new Constitution.

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DEFENCE Note

The British would in their own defence be compelled, if we did not do it, to make provision for the defence of our area if we were not strong enough ourselves to resist an attack on our territory by another power. We would naturally be only too glad to invite them to assist. The need of the unity of Ireland in any satisfactory defence. At present no general strategic plan possible. The development of food possibilities of Great Britain and then of our country as a defensive measure.