(a) The danger of German attacks on shipping must not be underrated. So far as ships sailing to and from this country are concerned, the activity of the last three days has already belied the British attitude that the German declaration was merely a bluff and that it would make no difference in the situation existing before it was made. The new total blockade may be intended merely as a temporary diversion but, as long as it lasts, it is likely to make itself felt.

(b) Assuming the danger to shipping and passengers to be a real one, the immediate question is what action should be taken to safeguard or protect Irish citizens and ships against the risks, and to prevent serious trouble arising between this country and Germany. The German suggestion, made in the official statement declaring the blockade, is that we should prohibit our citizens and ships from entering the war zone. We would say that that would be unneutral and would be tantamount to doing the work of Germany's blockade for her. The Germans would reply that, in taking such action, we would be doing no more than countries like the United States and the Argentine have already done, at great economic loss to themselves, in the interests of their neutrality. A serious point for us, however, is that the British would almost certainly resent this or any other similar action on our part implying recognition of the effectiveness or legitimacy of the German blockade.

(c) Assuming that Irish citizens and ships are to continue free to enter the blockade zone, there remains the question of what other official action might be taken to minimise the risk of loss of life and property and to guard against the charge of timidity in the assertion of our neutral rights. Over 75% of the passenger traffic between Britain and Ireland is carried by the L.M.S.² boats which are of British registry. Only about 10% of traffic is carried in Irish ships. So far as the question of the safety of our citizens is concerned, there would probably be no serious difficulty, even from the British side, about the issue of an official statement to the effect that 'Owing to the present risks, Irish citizens are strongly advised to avoid travelling by sea if they can do so without serious disadvantage or inconvenience.' If necessary, an exit permit system restricting travel could be instituted. But that would involve increased expenditure to the Exchequer and additional inconvenience to travellers.

(d) There remains the question of Irish ships. Here the position turns very largely on the question of the legality of the German blockade. On account of the novelty of blockade by air and for other reasons, a positive statement with regard to the legality or otherwise of the German measures is hardly practicable; but so far as the precedents go, there is a good deal more to be said in favour of the legality of the blockade than against it. If the German blockade is not illegal, any action by the Government in the direction of arming Irish vessels to enable them to force the blockade, or to combat the blockade measures, could be regarded as an act of war by Germany. The position would be the same if Irish ships were to be escorted by Irish naval units with instructions to resist the blockade measures. Whatever the legal position may be, however, politically an official attitude of defiance and resistance to the German blockade measures, would be liable to maximise the political repercussions of such incidents as did occur and to lead to a severe strain on our relations with Germany. There does not seem to be any ideal course. It might help if the Department of Industry and Commerce were to discuss the matter with the strictly Irish companies on the basis that measures of armed protection are not practicable in the case of neutral ships. In somewhat similar circumstances, other neutral governments kept their ships in port. Serious as the loss would be, if the proportion of sinkings became very high, our shipping companies might want to take similar action on their own initiative.

(e) There remains only the question whether, and if so in what form, we should make a formal protest to the German Government with regard to the application of the blockade measures to Irish citizens and ships. Our reply to the German Note would, of course, draw attention to the vital importance of trade with Britain to our national economy, and to the resentment likely to be felt by Irish people all over the world if Irish citizens and trade are seen to suffer the consequences of a conflict in which this country is not involved. But it is not easy to see on what we could base a formal diplomatic protest in the ordinary sense. As has been said above, there is more to be said in favour of the legality of the German measure than against it. We could also urge the German authorities in verbal representations to exercise discretion and forbearance in the case of ships of Irish registry. But here we would be likely to be met with the argument that the legality of the German blockade depends on its universality, and the German Government could not discriminate in our favour without leaving themselves open to challenge by other States.

a) On prestige and other grounds, the British reaction to any such agreement between us and Germany at this stage would, of course, be very bad – and, of course, we are dependent on the British for shipping, foreign exchange, supplies and so on. The British reaction would be particularly bad at the moment because they are about to approach us with a proposal that we should facilitate them by doing the very thing against which the Germans ask for a guarantee, i.e., by allowing British cargoes to be trans-shipped in our ports. It is barely possible that, in certain circumstances, the British might be brought to see certain material advantages for themselves in an arrangement of the kind proposed between ourselves and Germany. That might be the case, for example, if the arrangement guaranteed our imports of feeding stuffs and enabled us to increase the proportion of finished live stock which we send to Britain. The likelihood is, however, that the Germans would take care to define the term 'vitally essential supplies' in such a way as to make anything like this impossible.

b) On the other hand, we must allow for the possibility of the war continuing for a considerable time and the German blockade proving effective. The consequences for us might be wholesale industrial unemployment and serious reduction of our live stock population and agricultural production. It was precisely consequences of this type which, both in the last and in the present war, forced States like Holland, Switzerland, Denmark, etc., to make agreements with Britain of the kind which Germany is now proposing to us. We have, of course, useful stocks on which we could rely. But, in the situation in which we are now placed, such stocks as we have are a vital guarantee of our independence vis-à-vis Britain. According as our stocks were depleted, we would become more dependent on her, and, if she is at the same time feeling the effects of the blockade herself, she will not be able to give us much and what she has available to give will be more likely to be accompanied by political conditions. Furthermore, if, owing to the German blockade, internal conditions here become bad, firms are closed down and unemployment increases, public opinion will find it increasingly hard to understand why advantage is not taken of the German offer. Therefore, although there are strong reasons against making any formal agreement with Germany now, there are almost equally strong reasons for trying to keep open the possibility of making an arrangement on the lines suggested at a later stage if it should become really necessary to do so.

c) We could put our disinclination to enter into any agreement on the ground that it could be held not to be strictly neutral. We could support this by pointing to the German attitude to the War Trade Agreements concluded by Britain with Holland, Denmark, Belgium, etc., both in the last and in the present war. The Germans would, no doubt, counter this by saying that, what they objected to in the British War Trade Agreements with the Border neutrals was that the Border neutrals concerned were the normal channel for the passage of essential overseas supplies to Germany which the Agreements were intended to cut off. The British could not challenge the proposed arrangement between Ireland and Germany on the same ground.

d) The legality of German measures against cargoes coming to this country from overseas is much more doubtful than the legality of their action against trade between this country and Britain. Once again, however, the Germans would be able to point to lengthy and inconclusive diplomatic correspondence during the last war in which they would be able to find a colour of legal justification for their action. The trouble is that the sinking of cargoes coming to Ireland in Irish ships from countries other than Britain will be capable of being quoted in the British Press as instances of German violation of our neutrality. We shall have to take every such case up with the German Government to avoid the charge of allowing our neutrality to become a dead letter.

e) Our attitude to the German offer to grant immunity to cargoes coming to this country might be based on the following principles:-