Lord Rugby telephoned this morning and referred to his interview with you about a week ago and to the memorandum which he had handed to you. He had now received instructions from London to tell us that it would be essential to have negotiations initiated as soon as possible. They cannot send any of their people over here at the moment as they are now under exceptional pressure and they hoped that, as a first step, Mr. McElligott would go to London for talks with Mr. Rowe-Dutton, at latest sometime next week. Lord Rugby implied that his instructions did not state precisely the subject matter of the proposed talks but he believed that it would be the scale of dollar expenditure that can now be contemplated and Ireland's share therein.

On your instructions I later telephoned to Lord Rugby and told him that I had conveyed to you the substance of his telephone call and that you would like him to come to see you on Wednesday or Thursday of next week for a serious talk and that you would then give him the Irish Government's views on the general economic situation which would have been examined by that time by the various Ministers concerned. He asked me whether Mr. McElligott would go to London as suggested and I replied that you preferred to initiate matters by the proposed talk with him.

Later Lord Rugby telephoned saying that he had conveyed this information to London and had been instructed to say that it was of vital importance that Mr. McElligott should go over as otherwise everything would be held up. Time was a vital factor and they wanted to make a technical exposé to Mr. McElligott. I understood Lord Rugby to say that this was in accordance with paragraph 5 of the memorandum which he had handed to you. There would be a hold-up in the programme if Mr. McElligott did not go over. Mr. McElligott's visit need not interfere with the proposed talk which you wished to have with him.

On your instructions I later telephoned Lord Rugby's office and in his absence asked Mr. Dutton to let him know that Mr. McElligott would get in touch with Mr. Rowe-Dutton to-morrow morning by telephone and would try to get across to London by Wednesday or Thursday of next week. This would not interfere with the talk which you wished to have with Lord Rugby.