The progress so far achieved in discussion with the British was reviewed at a meeting of the Irish Delegation at 10 a.m. on the 24th as a preliminary to a meeting which the Department of Finance representatives were to have with the Treasury at 11.30.¹ Mr. McElligott expressed the feeling that the atmosphere was good but his view was not shared by Mr. Leydon who referred to the fact that we had got a blank refusal in regard to coal, what was tantamount to a blank refusal in regard to cotton, and nothing but the most general expression of hopes as to future supplies of cotton piece goods and rayon yarns and piece goods. He admitted that as regards food and agriculture, the atmosphere appeared to be more favourable. Mr. Leydon referred particularly to the fact that the representative of the Board of Trade had let it slip out that they were mainly concerned with developing Britain's own trade with South America and other countries. Mr. Ó Broin was generally of the same view as Mr. Leydon. Mr. Leydon referred to the headaches which the Department of Finance would have if agricultural prices were increased. The immediate result would be to raise the cost of living in Ireland; and the only way of combating this would be the introduction of subsidies. Mr. McElligott said one remedy for this might be an export tax but Mr. Ó Broin said that this would neutralise any advantages to the farming community that might ensue from the discussions. Mr. Ó Broin mentioned that, in any event, the Government were aware of these difficulties and that his Minister had instructed him to get the highest prices possible and leave the repercussions to be dealt with afterwards. Mr. Leydon said that there seemed to be no escape, so far as the Irish consumer was concerned, from paying the higher price whether it were provided in the form of subsidies or prices. He said also that he thought the Treasury had handled the situation very badly; they seemed to be letting their own Departments get away with it, and did not seem to be concerned with the achievement of dollar savings so far as our supplies are concerned by any other means than getting us to curtail our consumption. He emphasised that this was the very direction in which it was important for us to make certain the discussions were not turned; and he urged that, at the talk with the Treasury, Mr. McElligott should make it very clear that we were disappointed with the manner in which our representations had been received; and that unless there was a change of attitude we would get nowhere with these discussions. We could not possibly agree with the notion that austerity should be imposed on the Irish people in order to save dollars for Britain which had herself created the present difficulties by what he described as a spendthrift attitude in regard to dollars, or to assist Britain in capturing permanent markets for her exports. Mr. McElligott thought this was an over-statement of the position. While he agreed that Britain's expenditure of dollars had been heavy proportionately, he thought that in general they could not be said to have spent dollars on luxury or non-essential goods, and that it could not be argued that their present standard of living had been made higher than ours by dollar expenditure. He pointed out that Ireland also has an interest in the long-term future of sterling. Mr. Leydon agreed that he had perhaps overstated the position but said it was helpful to have the general picture painted. He agreed that we have an interest in the future of sterling, but maintained that it is not to be compared with the British interest.

Mr. McElligott suggested that there was no use in recriminations. Whatever the British had done about dollars, the fact was that there was only a limited amount available now and unless all in the sterling area co-operated, there would be no dollar currency available for any country. Even though we did not like it, it behoved us in our own interests to try to get to grips with the problem of saving dollars.

Mr. Leydon suggested that Mr. McElligott should put it to the Treasury at the meeting that the British Departments were not getting to grips with the problem insofar as the elimination of dollar spending by us on goods which could be got from Britain was concerned.

Mr. McElligott mentioned that Mr. Rowe-Dutton of the Treasury was anxious to get figures relating to the Balance of Payments position. Mr. McElligott did not feel that we could give figures of that kind to the Treasury until agreement had been reached on the overall position as a result of discussions between the Departments of Agriculture and Industry and Commerce and the appropriate British Departments. He appreciated that the delay was not in any way attributable to the Irish Departments; in fact, the Board of Trade, which was so vitally concerned with our raw material position, had at first suggested that the meeting with them should be put back as far as Tuesday next and had, in the end, not been able to fix it for earlier than 4 p.m. on Thursday.

Mr. McElligott informed the meeting that he had received word from his Minister that the Note of Directives to the Delegation had been approved subject to one amendment requested by the Tánaiste. In accordance with the Directives, he would be able to supply the Treasury with the Estimated Requirements of Foreign Exchange, including Dollars, for the period of nine months beginning 1st October, 1947, but no question of reducing these figures could be entertained until the British side had met their obligations in the field of supplies and prices now under discussion.