Volume 9 1948~1951


Doc No.
Date
Subject

No. 215 NAI TSCH/2/2/10

Extract from the minutes of a meeting of the Cabinet Schedule: Use of E.C.A. Funds. Loans and Grants
(GC 5/55) (Item 4) (S14106D)1

Dublin, 17 December 1948

Broadly, the policy of the Irish Government will be to use these funds for development purposes to increase the productivity of the nation. The degree and extent to which this can be done will depend largely on whether repayment arrangements have to be made or not. If the funds are available by way of loan, all schemes will necessarily have to be conditioned by the repayment prospects. In either event, four main considerations will govern the policy of the Irish government in utilising those funds to increase productivity:-

  1. the development schemes, insofar as they are financed out of the loan fund, will have to be such as will ensure repayment prospects, either by creating economic conditions that would enable increased revenue to be obtained, or which would, in themselves, produce direct returns to the Exchequer.
  2. the utilisation of this fund will have to be planned carefully so as to avoid inflationary tendencies.
  3. by reason of the fact that [the] Irish economy generally is based on free enterprise, the development schemes will have to be planned in spheres where they do not come into competition with private enterprise.
  4. the development schemes will primarily be directed to the development of the primary natural resources, rather than on secondary industries.

Hereunder are set out some of the main purposes to which it is intended to devote the ECA funds. The first four headings will provide investment of ECA funds, whether by way of loan or grant. The progress and extent, however, of the first four headings will be greatly conditioned by whether they are financed from a loan fund or from a grant. The availability of funds by way of grant instead of loan will enable a much more rapid and determinate progress to be made, calculated to produce in the immediate future substantial additional exports of food to Britain and Europe which otherwise constitute a charge on U.S.A. resources. The last three headings would be more appropriately financed by way of funds made available through grants, as the repayment prospects will be negligible.

1. Land Reclamation and Drainage
This would include the reclamation of land at present totally or partially unproductive by means of arterial drainage, dredging and embankment. Under this heading would also come the improvement of land productivity to provide an exportable surplus of protective foods by means of field drainage, restoration of soil deficiencies, rehabilitation of farm buildings and equipment.

2. Re-afforestation
The policy of the Government as set out in the long-term programme is to step up plantation to 25,000 acres per year, with a view to the ultimate provision of one million acres of forest lands. This programme would be co-ordinated with the general drainage programme. Apart from providing a safe investment, re-afforestation is the only way of utilising mountain lands and of providing employment for the rural population in the poorer districts. It would also have an important effect on drainage and climatic conditions.

3. The Development of the Fishing Industry by the expansion of Personnel and Equipment.

4. Electricity Development
The development of hydro-electrification and turf-burning generators.

5. Agricultural Training and Education
The provision in each county of small agricultural training centres which could be run as model farms, adapted to the particular conditions of the district. The purpose of these would be to improve the farming methods, stem the drift from the country to the cities and revive interest in agriculture. These agricultural centres would, it is hoped, be largely self-supporting.

6. Fertilisers
The provision of fertilisers, free or at a very reduced rate, to rebuild the soil fertility which was depleted during the war years. The average small farmer in Ireland is not able to purchase the required quantities of fertilisers; while, undoubtedly, provision of fertilisers free, or at a very reduced price, would increase the fertility of the soil, it would not enable the recoupment by the Exchequer of the sums involved in the provision of free fertilisers.

7. Harbours
The provision of deep water quays at Cork and Galway to accommodate large ocean-going ships that are at present unable to dock. The lack of these facilities has been a serious handicap both from a trade and a tourist traffic point of view. In many cases, goods and passenger traffic for Ireland is diverted through Britain because of the absence of such facilities.

The capital cost of providing such facilities would, however, be too high for a small and poor country such as Ireland; to a large extent, too, the benefit would accrue to shipping companies.

The foregoing are main headings, and no attempt has been made in this note to elaborate on or to provide statistical data. Detailed plans are being carefully worked out and will be made available, if required, under each of the headings.

1 Sent by MacBride to George Garrett on 18 December 1948.