Dear Mr. Foster,
I am taking the liberty of sending you directly a copy of a letter² which I have sent to Paul Miller, the Head of the ECA Mission in Ireland, in relation to a fairly large Technical Assistance Programme on which I have been very keen. I am sure that Paul Miller will communicate with you in relation to it; I think that his approach and that of the ECA Mission in Ireland would be sympathetic. In order to save time, I am also communicating with Ambassador Katz³ in Paris.

For the reasons which I have explained in my letter to Paul Miller, Ireland really never had an opportunity of developing her economy on sound and well thought-out lines. Technical Assistance on the lines suggested would, I believe, make a fundamental difference and be a lasting monument to the work of ECA in Ireland.

If the proposals in the enclosed letter are, in general outline, acceptable to you, my hope would be that ECA could earmark the necessary funds from the T.A. Funds at its disposal. We could then proceed to submit in the usual way the specific requests for T.A.

The proposals for Technical Assistance in the enclosed letter have been under consideration and active discussion here for some weeks past. Since dictating the draft of the enclosed letter to Paul Miller I have just learned from the ECA Mission here that the possibility of discontinuing Aid completely to Ireland is under active consideration by ECA. I therefore thought that I should take this opportunity of mentioning, very briefly, some considerations that would be relevant to this issue:-

1. By reason of Ireland's anomalous relationship with the sterling area, any sudden ending of Marshall Aid would cause grave difficulties. Complete dependency upon the good will of the U.K. for dollars would probably result in difficulties for the Irish economy and leave us very much at the mercy of our good neighbour.
2. For the reasons which are outlined in the second paragraph of my letter to Paul Miller, our problems are somewhat different and more difficult than those of most other European countries. We have a lot of lee-way to make up in order to develop our productive and exporting capabilities.
3. Our national income is, I think, among the lowest of the nations participating in the Recovery Programme.
4. Any sudden curtailment of the import of dollar goods, particularly wheat, maize, feeding stuffs, machinery and oil, without an interim period for readjustment, would adversely affect our agricultural output and, as a direct consequence, our exports of foodstuffs would decline to the disadvantage of Britain and other European countries. The curtailment of tobacco supplies would have a serious effect on our Exchequer finances.
5. A further and sudden complication in relation to our dollar needs has arisen as a result of the present fuel crisis. Although Britain is bound by the Trade Treaty of 1948 to supply us with a fixed quantity of coal she has just notified us that she proposes to cut this amount by more than half. While this matter is under active negotiation with London at the moment, we have been forced to purchase dollar coal in substantial quantities to avert an immediate crisis in our industries. The sudden coal shortage has created a very special problem for us because our own fuel - turf - production fell very much below expectation last year owing to bad weather conditions.
6. (Apart from the fact that we have no particular desire to trade with Eastern European countries, we would encounter special difficulties there, as we have no diplomatic relations with any of the communist dominated states - and they have no special liking for us, e.g., our admission to UNO is blocked by Russia.
7. Our planning has been based on the expectation that Aid would be available, although on a diminishing scale, until 1952. Its sudden suspension now would cause serious dislocation.
8. The total amount of Aid involved for Ireland is relatively insignificant in the over-all picture, but is all-important from the point of view of ensuring both short-term and long-term objectives in Ireland, especially as regards production.

These considerations are by no means comprehensive, but I thought I should mention them immediately in case the matter was under consideration. I should willingly elaborate on these, or go to Washington for further discussions if you considered this desirable. In any event, I think that it would be of the utmost importance that we should have as long notice as possible of any intention to cut off Aid completely, so that we may undertake the necessary negotiations with London in relation to the sterling pool and our relationship with the EPU, and so that we may be able to plan for alternative sources of supplies without causing undue dislocation to our economy. This would take time and would involve many complex economic and political issues which would require careful handling.

Apart from these considerations, it is questionable whether full value from the Technical Assistance Programme visualised in the enclosed letter to Paul Miller could be obtained if Aid were to [be] stopped off suddenly. Time would be needed to provide answers and make-shift remedies to the many problems that would be involved in a sudden shut-down of Aid. However small, comparatively speaking in terms of ECA financing Ireland's proportion of Aid had been, it is nevertheless the basis of an important development programme which would have to be stringently reviewed if Aid were to stop suddenly. The continuance of Aid, even though on a limited scale, coupled with the implementation of Technical Assistance Projects on the lines suggested, would enable Ireland to solve many of her pressing problems while at the same time making a contribution to the OEEC nations (e.g. increased production and utilisation of native fuel, production of animal feeding stuffs, increased agricultural production, increased mineral and industrial production).

I should be grateful if you would convey to Mrs. Foster and accept for yourself my very best wishes for the coming year. Let us hope and pray that it will be an era of greater peace and stability for all our peoples than the year which is just drawing to a close.