Dear Con,
In the course of informal conversations yesterday with Mr. Jim Nelson¹ and Mr. Harry Clement² of the Irish Desk in ECA both of them made remarks which confirmed our existing view that the State Department has been responsible for our receiving less favourable treatment than we otherwise might have expected. Both conversations were entirely informal and in fact both officials indicated that what they were doing was 'irregular'. It appeared to have been generated by the pre-Christmas spirit of goodwill (not that both officials have not always been quite friendly and helpful).

Jim Nelson, who went into the matter in more detail than Harry Clement, brought up the subject by saying that he had received the clear impression that the tone in State Department was very much against us. He said that while there was nothing in the air at the moment in which this hostility could damage us he wondered whether we could not do anything to improve relations as State Department opposition was bound to injure us again at some stage in the future. He mentioned how dissatisfied he was with the recent allotment of ECA grant to us and he had hoped for a far higher proportion of grant. The direct implication from his remarks was that the State Department were responsible for the unfavourable decision. In fact he implied that the State Department were opposed to our receiving any grant.

With a view to developing the discussion a little further I mentioned that I was aware that there seemed to be a certain coldness towards us in the State Department but that I was at a loss to find a reasonable basis for this attitude. To this Mr. Nelson replied that he had heard five or six matters mentioned by the State Department in which they felt that we were not being co-operative. He instanced the air negotiations and the difficulty which had arisen about American investment in Ireland in connection with the proposed treaty of Friendship, Commerce and Navigation. He went on to say that he, personally, thought some of the matters to which State Department took exception seemed to be rather trivial and in most cases appeared to have two sides to them. While not purporting to understand the situation fully he thought that perhaps as ECA was a new organisation without any carry-over of old prejudices they looked at us more objectively than the State Department who not unlikely still carried some of the war-time prejudices. He also mentioned the traditional rivalry that exists between the executive and legislative arm in this country and suggested that perhaps the very outspoken remarks made on our behalf by favourably disposed Congressmen may not be calculated to promote our relations with the State Department.

I asked Mr. Nelson what he thought we could do to improve the situation. He was not able to make any direct suggestions except perhaps that the Mission here might give more attention to wooing the State Department both at the top and lower levels. In this connection he mentioned that we seemed to have partially won around at least one official to date. (I think he meant Garner Ranney with whom I have been in very close social contact over the past year and a half.) I gathered that one of the more hostile officials in the State Department is Mr. Wayne Jackson who is only a recent arrival on the Irish Desk. Joe Brennan and myself are doing what we can to promote goodwill with Mr. Jackson. Mr. Nelson concluded this aspect of our conversation with the suggestion that every effort should be made to find mutually acceptable solutions to any matters we have outstanding with the State Department.

I should appreciate it if you could keep us informed of the progress of any negotiations in Dublin on matters involving State Department here so that we will be forewarned in any of our conversations with officials of that Department. In connection with the U.S. Legation in Dublin, Mr. Nelson made the comment that the present Minister³ there was not the best from our point of view in so far as he was not skilful in his handling of situations. Whenever he got worked up on our behalf he launched a broadside or a direct blast at the State Department which, if anything, engendered further hostility in that Department. A shrewder man might promote our cause more skilfully.