Sir John Stephenson began by explaining that the present meeting had been suggested because UK Ministers felt that, prior to a resumption of negotiations on the Ministerial level, it might be useful if some indication of the views of the UK Government could be given in advance to the Éire official representatives. He assured the meeting that it was the clear desire of the UK Government to enter into the closest possible co-operation with Éire in economic matters. Co-operation between the two countries would, however, in the present situation have to be planned against a background of serious dollar and material shortages, shortages which were of the gravest concern to both countries; and both countries would have to be prepared to make substantial contributions towards combatting the present difficulties. He proposed to outline briefly the suggestions which UK Ministers would probably make as to the ways in which the two countries could co-operate to their greatest mutual advantage in the present difficulties.

• Coal. The UK could undertake to continue supplies of inferior coal at the existing rate, (subject to any unavoidable reduction that might be caused by railway transport difficulties), and in addition to supply one million tons of coal of reasonable quality in the year 1948 beginning in April, 1948.
• Cotton yarns. The UK Government could use its influence in Lancashire to ensure that not less than 3 million lbs. of cotton yarn would be supplied to Éire in the next year. The Board of Trade representatives would have more to say about this and Éire's other industrial requirements later in the meeting.
• Fertilisers. Sulphate of ammonia was subject to IEFC allocation and the UK could not go outside that allocation. They could, however, probably offer some 15,000 tons of super phosphates.
• Agricultural prices. The UK would be prepared to offer substantial increases in prices which it was hoped would meet Éire's difficulties and help to dispose of their surplus of older beasts.
• The Dollar Shortage. In the present situation the grave dollar shortage would necessitate substantial contributions towards dollar economy from everyone. UK Ministers would therefore probably wish to suggest that Éire should aim to limit her dollar requirements to a figure of £8 million for the 9 months up to July 1948, over and above her dollar earnings. There were two particular aspects of dollar economy to which UK Ministers would attach especial importance - oil and textiles. Drastic steps had been taken in the UK to limit consumption of these commodities and it was hoped that some comparable reduction might be possible in Éire. He concluded by assuring the Éire representatives that there was on the part of the UK Ministers a very earnest desire to reach agreement and to do everything possible to meet Éire's needs, but this would only be possible if the Éire Government in their turn were prepared to make a substantial contribution to the solution of the difficulties which at present overshadowed both countries.
•   Mr. Rowe-Dutton said that the method by which the Éire Government achieved their dollar economies was of course entirely their own concern, but he hoped that they would not rule out, in advance, economies in oil and textiles. The Treasury appreciated Éire's difficulties, but they hoped that the Éire Government might be prepared to re-examine their requirements of these two items. The Éire Government might also notice that all purchases of US tobacco by the UK had ceased and that there might consequently be a real shortage of tobacco in the UK. On the other hand, stocks of tobacco in Éire were apparently satisfactory, and perhaps the Éire Government might see their way to undertake some reduction. Very harsh measures had been taken in the UK to cut the capital investment programme, the import of foodstuffs, etc., measures that not only made life unpleasant for the consumers, but also presented serious obstacles to people who were trying to do much that was useful and necessary for the country. The UK had played its part to the full in these and many other dollar economies, and UK Ministers were therefore in a position to approach Éire with a clear conscience in urging her to adopt dollar economies that would ultimately be of great assistance to both countries.

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Mr. McElligott expressed some disappointment with the UK proposals though he recognised the serious difficulties confronting the UK in regard to many of the supplies which we were seeking. It had been hoped in Éire that these discussions might lead to closer economic co-operation between the two countries, but it now appeared that these expectations were not likely to be fulfilled. The concessions offered to Éire were on a limited scale, whereas demands had been made for dollar economy on Éire's part that were considerable. In any case, he and his colleagues were precluded from discussing dollar economies, and Éire Ministers had of course had no chance of considering this question in the light of the latest UK suggestions. With regard to coal, the UK offer though generous in the light of prevailing difficulties was much below Éire's pre-war supply. A high proportion of the coal would still be of inferior quality and nothing was being done to ease the fuel situation in Éire during the coming winter. It was disappointing to learn that the most the UK Government could do to improve Éire's yarn supplies was to use their influence in Lancashire, for the supply of 3 million lbs. and that they could not provide any sulphate of ammonia outside the international allocation. With regard to agricultural prices, the conditions offered by the UK fell short of those which the Éire Government had in mind as a minimum requirement. As for the proposed dove-tailing of economies, very little towards that end seemed to have been suggested. The Éire officials could now only report to their Ministers the proposals put forward at this meeting; whether they would prove acceptable to the Éire Government was most doubtful.
Conclusions. The meeting agreed that

• (a) the UK proposals should be circulated immediately in the form of a minute of the discussions; and
• (b) there should be a further meeting at 11 o'clock on Wednesday October the 29th, at which certain details of the UK proposals should be further examined.

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