Dear Secretary,

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I have had luncheon and dinner chats recently with Tufts¹ the new man on the Irish desk in ECA and he has been very frank 'off-the-record'. He also confirmed with regard to our 100% loan what he had learned from other sources. The way he put it was that 'no one in the present U.S. Govt. could maintain that the decision in our case was arrived at on economic grounds'. He added that the atmosphere in this respect was improving and made a passing reference to a token grant. He suggested that if we wanted the NAC to review the ratio in our case it would be desirable to put in a revised statement as soon as possible. He mentioned once more that ECA were proceeding on the basic assumption of convertibility in 1952 (however wrong that assumption might be) mainly because they had no other workable basis to go on. He suggested therefore that any memorandum submitted might emphasise factors other than this. I learned through a pressman who had an 'off the record' talk with Tufts about our case that he described ECA on our loan v grant question as being at the moment like 'a donkey mid-way between two bales of hay - one labelled "politics" and the other labelled "economics￿'.

Tufts mentioned to me that the Minister's action at Paris and his letter to Spaak² were much appreciated by the 'higher-ups' in ECA. Dickinson³ who is Director of Program Co-ordination and probably next in importance to Bissell⁴ (incidentally a college mate of the latter) who mentioned to me how appreciated the Minister's action was. I should mention that Dickinson is a very pleasant and reasonable individual and seems favourably disposed to us. He told me at lunch one day that his grandfather was secretary in some branch of the national movement in Ireland and had a price on his head when he came to the U.S. Tufts confirmed to me that Dickinson would be a sympathetic listener to us.

Tufts himself is also a pleasant and reasonable individual. He shares our view about the excessive detail ECA is asking for. In fact he admits that although he is supposed to be dealing with general policy considerations, he gets so many operational questions that he cannot devote much time to what he should be doing. He tells me too that like Nelson he may be leaving the Irish desk shortly to handle the new appropriation - he was involved in the first one. If this happens I shall have to break-in a third man.

To turn from economics to politics! A young lad named Ramsey has been handling the Irish desk in State up to quite recently while Fales has been busy on a draft Consular treaty with Britain. I have lunched with [him] regularly from time to time and have endeavoured to explain our point of view on partition etc. emphasising the potential fund of goodwill towards Britain etc. In the course of lunch last week I asked him about the proposed repeal of the External Relations Act and he mentioned that he had had occasion to do a memo. on the subject and had given it as his opinion that the removal of this irritant would probably lead to better relations with Britain.

Joe Brennan and myself lunched today with another official in State of whom you are aware and we had a very full 'off-the-record' discussion on this and other related questions. I will give you the gist of the views expressed entirely without comment. You will best be in a position to judge what importance, if any, should be attached to them:-

State does not like the proposed repeal of the External Relations Act. She is not going to take any action however as she knows it would not stop us. Our informant looked into our position in regard to preferences in relation to the Geneva Agreement, the Havana Charter etc. and came to the conclusion that the maintenance of the preferences was adequately covered. State will not take any action to embarrass Britain under MFN treatment or against us in present instance. We can however be adequately 'punished' in other ways. Hickerson is responsible for the decisions in our case and he is not at all sympathetic. Those above him are too busy otherwise to fully inform themselves independently and those below are 'yes' men. George Garrett is stated not to share Hickerson's views on the question. This is borne out somewhat by a conversation I had with him on Monday night at a dinner given in his honour by the Minster and Mrs. Nunan. His comment was that there would not be one vote in Ireland against repeal of the Act and he added 'Why should there be?' I formed the impression however from his manner that he regarded it as a very serious step. Perhaps I should mention here that Sir Oliver Franks⁵ does not seem to be altogether idle on the question. Although he had never met either Mr. & Mrs. Garrett he invited them both to dinner on Tuesday the night after their dinner with the Minister. I also know that Ireland came up in a staff discussion two weeks ago in the British Embassy held by Franks with his economics experts on the relative advantages from an economic point of view of Western European Union or Anglo-American union.

To get back to Hickerson and the story as given to us. He is proceeding on the basis that sooner or later there will be war. The main U.S. concern is to have a reliable leg-hold in Europe. France or Italy cannot be relied [on] therefore the U.S. is backing Britain 100%. State were supposed to have been neutral on the partition question - now they are against the abolition of partition. They are doubtful about our attitude in the event of war. They consider it safer to be sure of the use of the six counties with the probability that our Catholic and moral tradition would bring the rest of the country in in any event rather than play the long shot with the possible risk of the 32 counties being neutral. Our informant remarked that while the present Government might easily run its course of five years its very nature always leaves open the possibility of a re-alignment of forces in the Dáil. There was an unpredictable element in this and in what the attitude might be in the event of war of any government formed including the present opposition.

All the foregoing was as you would well imagine given completely 'off-the-record' with an indication that it would be categorically denied if ever put up to the State Dept. However there it is for what it's worth.

The opinion was expressed that in view of Hickerson's attitude and his influence it would probably be necessary to go higher up to secure any change of attitude. Reference was made to the proposed visit of Mr. Dillon, Minister for Agriculture, for the F.A.O. conference and it was suggested that he might be able to work on Hickerson as the latter thought well of Mr. Dillon.

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