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Dáil Éireann debate -
Thursday, 1 Jul 1948

Vol. 111 No. 14

Committee on Finance. - Convention for European Economic Co-operation—Motion of Approval.

I move:

That the Dáil approves of the Convention for European Economic Co-operation signed at Paris on the 16th April, 1948, a copy of which was laid on the Table of the Dáil on the 24th June, 1948.

Subject to your permission, a Chinn Chomhairle, and to the House agreeing to do so, I would ask the House to take this motion together with the motion which has been set down for to-morrow approving of the Economic Co-operation Agreement between this country and the United States. Strictly speaking, I think the latter motion should be taken to-morow, but I think it would be convenient if the two could be discussed together; and, if the House agrees, a vote could be taken on the two of them to-day if the debate finishes. If not, the vote could be taken on the second motion to-morrow. But it would, I think, convenience the House if the two were discussed together.

Mr. de Valera

There is no objection.

The two seem to be related and it might facilitate discussion to take them together.

I think it would. I am in some difficulty in deciding the extent of the detail into which I should enter in moving the ratification of these two agreements before the Dáil. There is a mass of documentation and detail, a good deal of which has been published and a good deal of which has been laid on the Table of the House. I do not propose to go into a tremendous amount of detail but I do think it necessary to give a general idea of the background which has brought about these two agreements. There has been a good deal of uninformed criticism and a good deal of uninformed praise of the Economic Recovery Plan. That criticism and that praise has led, I think, to a good deal of public misconception as to its exact purpose and scope. Generally speaking, the Economic Recovery Plan emerged as a result of a speech made by the United States Secretary of State, General Marshall, in the month of June, 1947.

Following upon the war, as indeed following upon any war, a tremendous amount of economic destruction as well as material destruction had occurred. Possibly in the last war the economic destruction, as well as the material destruction, was greater than in any other war that had occurred in Europe. Apart altogether from the destruction of the industrial potential of Europe there had been vast population movements that disrupted further the economic life of the countries of Europe. Apart from the reduction of the industrial potential, agricultural production was also disrupted, firstly, because of population movements and, secondly, because of the absence of fertilisers and of feeding stuffs during the actual war years and during the period that followed immediately upon the war. Accordingly, Europe, and indeed a portion of Asia, was faced with the problem of seeking to reorganise its economy following upon the war. It was felt—if I may say so, wisely felt— by most statesmen in Europe that, unless it were possible to reorganise the economic life of the different States that compose Europe on a sounder basis than that on which they had been organised before, difficulty would persist in maintaining world peace. Anybody who has considered the position in the abstract will, I think, readily agree that if another war takes place it means the complete and utter destruction of the countries through which that war will pass.

We are not concerned here in the discussion of these two agreements with matters of international politics; but I think it is relevant to the discussion to advert to the political effects of economic recovery. Many wars have their causes in economic conflicts, economic rivalry or economic dominanation between countries or over countries. The economic recovery plan, as I conceive it, is intended to remove, as far as possible, the motive of economic rivalry and economic domination, and to make available the resources of Europe on a basis of mutual help to try to develop a sense of co-operation between the nations of Europe and between Europe and the Western hemisphere.

The initiative, as I indicated, was taken by the United States Secretary of State, General Marshall, in a speech that he made at Harvard University on the 5th June, 1947. With the permission of the House, I propose to read a portion of it as I think it sets the discussion in its proper background. He stated:—

"Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist. Such assistance, I am convinced, must not be on a piecemeal basis as various crises develop. Any assistance that this Government may render in the future should provide a cure rather than a mere palliative. Any Government that is willing to assist in the task of recovery will find full co-operation, I am sure, on the part of the United States Government. Any Government which manoeuvres to block the recovery of other countries cannot expect help from us. Furthermore, Governments, political Parties, or groups which seek to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States.

It is already evident that, before the United States Government can proceed much further in its efforts to alleviate the situation and help start the European world on its way to recovery, there must be some agreement among the countries of Europe as to the requirements of the situation and the part those countries themselves will take in order to give proper effect to whatever action might be undertaken by this Government. I would be neither fitting nor efficacious for this Government to undertake to draw up unilaterally a programme designed to place Europe on its feet economically. This is the business of the Europeans. The initiative, I think, must come from Europe. The rôle of this country should consist of friendly aid in the drafting of a European programme and of later support of such a programme so far as it may be practical for us to do so. The programme should be a joint one, agreed to by a number of, if not all, European nations.

An essential part of any successful action on the part of the United States is an understanding on the part of the people of America of the character of the problem and the remedies to be applied. Political passion and prejudice should have no part. With foresight, and a willingness on the part of our people to face up to the vast responsibility which history has clearly placed upon our country, the difficulties which I have outlined can and will be overcome."

I should like, at the outset of this discussion, to pay a most sincere tribute to the American people for the initiative they took in this matter, for the attempt they made, in the midst of chaos and economic disruption, to provide a framework for economic recovery. It was a statesmanlike and constructive approach to bring about the economic recovery of Europe and thus remove the causes of war, in so far as these economic factors are potential causes of war. I think that insufficient credit and recognition have been given to the United States for their action in this matter.

Briefly, the proposal put forward by the United States can be considered under two headings. First of all, it proposed the setting up of an organisation for economic co-operation, consisting of representatives of the various European countries, the task of that organisation being to secure the maximum co-operation possible, to achieve a system of mutual help and to remove as far as possible the various economic factors and barriers that often had led to friction in the past. Secondly, the United States said: "If you do that, if you prepare to organise yourselves to overcome the economic chaos that exists, we will then afford you the maximum amount of help we can."

It has been estimated, in round figures, that the amount of help in hard cash which will flow from the United States during the four years of the economic recovery plan will reach a total of seventeen thousand million dollars. Even for a country with such vast resources as the United States, this represents a tremendous contribution, a contribution which in the final analysis has to be paid for by the taxpayers of the United States. It is true, of course, that the United States will itself benefit from the recovery of Europe and from a return to normal conditions of trading. But, be that as it may, the countries that will benefit mostly will be the countries of Europe. This recovery programme could not even be contemplated had the American people not been prepared to make their resources available in order to give it a chance of succeeding.

Following upon the speech made by the United States Secretary of State, a meeting was held on the 27th June, 1947, between the Foreign Ministers of France, Soviet Russia and Britain for the purpose of considering what action would be taken on foot of the offer made by the United States. A proposal was made at that meeting for the setting up of a steering committee, consisting of the representatives of these three nations. That proposal, however, did not meet with approval from Soviet Russia. Russia objected to this proposal on two grounds: firstly, on the ground that they claimed the United States did not specify precisely the extent of the aid it was prepared to give, and secondly, because they felt that the steering committee of three, consisting of themselves, France and Britain, might interfere in their internal affairs. As a result of these objections, the Soviet Union withdrew and declined to participate in the plan for economic recovery.

It should be borne in mind at this stage that the offer of assistance made by the United States was an unqualified offer of assistance for the whole of Europe. It was not limited to any particular nations. On the 3rd July Britain and France jointly decided to invite all the European nations to a meeting for the purpose of setting up a temporary organisation to prepare a programme covering the resources and the needs of Europe. The invitation suggested the holding of a meeting on the 12th July for the purpose of formulating a scheme of organisation. The invitation was accepted by Ireland; it was accepted also by Austria, Belgium, Denmark, Greece, Iceland, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland and Turkey. It was originally accepted also by Czechoslovakia. Subsequently, Czechoslovakia withdrew its acceptance, following upon a visit by its Prime Minister and Foreign Minister to Moscow.

I do not think I need trouble the House by reading the invitation in full. It was an invitation pursuant to the speech made by United States Secretary of State Marshall. The invitation was then issued jointly by France and Britain. The first paragraph of the invitation set out that "The two Governments recognise that Europe must take the initiative in the work of reconstruction and for this purpose it is essential to draw up as quickly as possible a programme covering both the resources and the needs of Europe. In the opinion of the two Governments a temporary organisation must be set up to bring together the data on which such a programme will be based."

Acceptance was sent by Ireland on the 9th July and, in the course of the acceptance, the Irish Government's Note stated:

"The Irish Government's acceptance of the invitation conveyed by your Note is based on the conviction that the early restoration of sound, economic conditions in Europe is an essential prerequisite of world economic stability, which in turn is a vital element in the task of preserving peace and, in the method of joint international action, constitutes in present circumstances the best approach involved in the task of European economic reconstruction."

This conference met in Paris from the 12th to the 15th July. Ireland was represented at that conference by Deputy Lemass who made a declaration there and, with the permission of the House, I propose to refer to some portions of that declaration as they explain the attitude which this country and the Government have adopted towards the organisation for economic recovery. Deputy Lemass stated:

"The development of a co-ordinated plan for the restoration of full productivity in Europe generally and the expansion of international trade facilitated by confidence in the stability of political and economic conditions is essential to the prosperity of all European countries including our own. That is why we are glad to participate in the work of this conference which has those objects to achieve."

Then, at a later stage he said:—

"The history of efforts towards international co-operation is in the main a story of blighted hopes. The suggestion made by Mr. Secretary of State Marshall does, however, offer to us the prospect of success in our work which entitles us to begin it with optimism. It appears within our power, not merely to facilitate the work of post-war recovery but also to lay the foundation of a sound European economy which will yield prosperity and security for our peoples in the years ahead when current difficulties of a non-economic character have been overcome. It is our conviction that it is upon such foundation that our hopes of continuing peace can be most confidently based."

The committee set up then, referred to generally as the Committee of European Economic Co-operation, proceeded to an examination of the various economic problems that face Europe. It prepared a very detailed report which is of considerable importance. I think copies of it are in the Library of the Dáil and they are well worth study by anybody interested in the economic problems facing this country and the rest of Europe generally. In the course of its report some of the various tasks and problems facing Europe are set out and summarised. The general purpose of the organisation contemplated at that stage is set out under four general heads—at least the aim of the programme to be carried out is based on four lines of action—firstly, the creation of a strong production effort by each of the participating countries; secondly, the creation of internal financial stability; thirdly, the maximum co-operation between the participating countries, and fourthly, a solution of the problems of the participating countries' trading deficit with the American Continent, particularly by export.

The committee worked, I think, for eight weeks in preparing its report. The report was submitted to the American Secretary of State and was then considered by a number of committees of experts in America. According to the report, it was found that the total deficit with the American Continent for four years running from 1948 to 1951 would run to approximately 22½ billion dollars. Later in September, 1947, the report was considered at a final session of the Paris Conference at which Deputy de Valera attended on behalf of this country. In the course of his address to the conference, Deputy de Valera declared:—

"To seek from another what one could supply by one's own efforts is always unworthy. It is doubly so when the assistance is requested from a friend who has proved himself generous repeatedly. I am happy to sign this report on behalf of Ireland because I believe it to be an honest report. In it self-help is recognised as a primary duty and no more aid is sought than is absolutely necessary if the damage of the war years is to be repaired within a reasonable time and the nations of Western Europe restored to a position in which they can provide for their own needs and preserve their traditional civilisation."

Finally, after some further examination of the proposals made by the Paris Conference, a draft agreement for economic co-operation was put forward and brought up for consideration at a full meeting of the Foreign Minister of the 16 countries involved, which meeting was held in Paris on the 15th March last. I attended that meeting on behalf of Ireland and there made certain declarations which will be found in the White Paper which has been issued by the Department of External Affairs dealing with the European Recovery Programme.

The Convention itself, which is the document before the House to-day, is a fairly long document. I do not propose to go through all its provisions in detail. I propose merely to refer to one or two of the most salient points in it. The preamble sets out the aims which it is sought to achieve. One of these declares:

"Determined to combine their economic strength to these ends, to join together to make the fullest collective use of their individual capacities and potentialities, to increase their production, develop and modernise their industrial and agricultural equipment, expand their commerce, reduce progressively barriers to trade among themselves, promote full employment and restore or maintain the stability of their economies and general confidence in their national currencies;

Resolved to form themselves together into an organisation."

Might I suggest that the Minister would give the pages for reference purposes?

I was reading from page 15 of the printed copy of the Convention.

It facilitates the record.

Article I provides:—

"The Contracting Parties agree to work in close co-operation in their economic relations with one another."

And the last paragraph of the article says:—

"Accordingly the Contracting Parties pledge themselves to carry out, by their efforts of self-help and in a spirit of mutual aid, the following General Obligations, and hereby set up an Organisation for European Economic Co-operation hereinafter referred to as the Organisation."

The next articles provide for the various obligations that the contracting parties undertake. They are in general accordance with the main aims set out in the preamble. Article 7 on page 23 provides that:—

"Each Contracting Party will, having due regard to the need for a high and stable level of trade and employment and for avoiding or countering the dangers of inflation, take such steps as lie within its power to achieve or maintain the stability of its currency and of its internal financial position, sound rates of exchange and, generally, confidence in its monetary system."

Article 8 provides that:

"The contracting parties will make the fullest and most effective use of their available man-power. They will endeavour to provide full employment for their own people and they may have recourse to man-power available in the territory of any other contracting party. In the latter case they will, in mutual agreement, take the necessary measures to facilitate the movement of workers and to ensure their establishment in conditions satisfactory from the economic and social point of view.

Generally, the contracting parties will co-operate in the progressive reduction of obstacles to the free movement of persons."

Part 2 deals with the setting up of the organisation, with the rules applicable to the organisation that is being created by the Convention.

I think I should draw the attention of the House to the provisions of Article 14. Article 14 provides:

"Unless the organisation otherwise agrees for special cases, decisions shall be taken by mutual agreement of all the members. The abstention of any members declaring themselves not to be interested in the subject under discussion shall not invalidate decisions which shall be binding for the other members."

In effect this article, therefore, provides that decisions may be unanimous, except in such cases where one country may indicate that it is not interested in a given issue and abstain from voting.

Now the organisation was set up immediately and proceeded to work. Its function was to collect the relevant data and set up machinery whereby the various programmes of the requirements of Europe could be co-related; so that some idea of the total requirements of the 16 participating countries could be ascertained from quarter to quarter; so that lists of the requirements could be made available to the United States; so that whatever goods were available would be distributed evenly and so as to obtain the best results possible. As in all these international organisations, a tremendous amount of documentation was made available. A great many forms and a great many regulations came into being. These were all necessary, but they all involved a tremendous amount of work, as far as a small country like ours was concerned. I think I would like to pay in this House a tribute to the work of the officials of the Department of External Affairs and the other Departments who have had to carry out this work both here and in Paris on our behalf. They have had to work extremely hard on the question; there were practically no week-ends during which the members of the staff have not had to work; they have had to work overtime at night and stay on until the late hours of the night to comply with all these requirements. So much for the Paris convention.

The convention merely deals, as I explained in the beginning, with the problem of achieving co-operation and with the problem of trying to secure the maximum self-help and mutual help possible between the nations of Europe. But that only skirts the immediate problem that faces Europe. The immediate problem that faces Europe is the question of obtaining the goods that Europe requires from the Western hemisphere. A country, like a family or an ordinary person, must pay for the goods it buys. During the war and during the years that immediately followed the war, gold, which is a medium of exchange, found its way entirely across the Atlantic, because the European countries were not producing and because they were running into debt. Accordingly Europe found itself faced with a position wherein it was unable to purchase from the Western hemisphere the goods that it required. To bring the problem nearer home for illustration purposes, I may take the case of Britain and this country. During the inter-war period, during the period between the two wars, Britain usually imported £400,000,000 worth of goods more than she exported. In other words, she was running an annual adverse trade balance of some £400,000,000. That adverse balance had to be found in hard cash, but at that time Britain had various resources outside its own shores. It had investments in Turkey, in Rumania, in the Argentine and all over the world and the income from these investments made up that £400,000,000 annually.

One of Britain's problems is that she no longer has these investments abroad and is, therefore, no longer able to make up that £400,000,000. But apart from that, the value of commodities has increased considerably and she has now to find a much higher figure, which she can only find by exporting increased quantities of goods. We, likewise, during the inter-war period had an adverse trade balance of £20,000,000 per year. We imported £20,000,000 worth of goods per year more than we exported. We made up the difference through our invisible exports. That was the position that prevailed between the two wars. This problem has greatly increased since.

We find that the adverse balance of payments of Great Britain in 1946 had reached a sum of £380,000,000, whereof £360,000,000 was in reference to the Western hemisphere. But in 1947 the adverse balance of payment was in the region of £680,000,000. So far as Ireland is concerned, the position was that in 1946 our adverse balance of trade with the world at large was £34,000,000. In 1947 it rose to £92,000,000. In the first quarter of this year it has been some £26,500,000. In other words, if the present trend is maintained, our adverse balance of trade this year will run between £110,000,000 and £120,000,000. The problem that faces Great Britain and faces ourselves is to obtain goods from the Western hemisphere for which we have no gold or no dollars to pay. America's contribution to the Economic Recovery Plan has been to make available dollars or goods or credit for the purpose of enabling Western Europe to obtain the goods that it requires for its reconstruction.

In dealing with our own particular problem here in Ireland, in so far as it affects the economic recovery plan, we have to face up to the position that our financial and currency system has been linked with the sterling area. To a large extent, our savings and our money have been put in the bank round the corner. The bank round the corner is now in some grave difficulties so far as converting its assets into dollars or hard currency is concerned. The gold and dollar reserves of Great Britain were reduced in the year 1946 by some £226,000,000. It is expected that the provisional figures for 1947 will show a reduction by £963,000,000. I am quoting from the Economic Survey for 1948, page 15, where the position is set out as follows:—

"Our reserves at the beginning of 1948 were about £680,000,000, excluding the balance of the Canadian Loan, over and above our agreed drawing to the end of March, but including the whole of the South African gold loan. It will be seen from Table X that during the first half of 1948 they are estimated to be reduced by £222,000,000. This would leave reserves at the middle of the year of, say, £450,000,000. The rate of drain in January was greater than in December and above the average implied in a drain of £222,000,000 in the last half-year. This estimate of our reserves at mid-1948 represents, therefore, the maximum for which we can hope.

If the drain in the second half of 1948 was again of the order of £225,000,000, half of this remaining amount would be gone by the end of the year, and the remainder would be exhausted during 1949.

This clearly could not be contemplated. If it were to become clear that we must act on the assumption that aid under the European recovery programme might not be available to us, we should be obliged to make immediately further heavy cuts in our imports programmes from the Western hemisphere."

That is the position as set out in the Economic Survey published by the British Government. It is a serious position from Great Britain's point of view and it is a serious position from our point of view, because that is the bank in which we have put our savings. It may have been unwise to put all our savings into one bank. It might have been better had we accumulated our savings elsewhere in the last ten or 15 years. There is no use, however, in "crying over split milk." That is the position. We put all our eggs into one basket.

I have no wish in the course of this debate to introduce unnecessarily the question of Partition. I find, however, that it would be impossible to review the economic position of the country and the difficulty in which we find ourselves without adverting to the economic consequences which have resulted from the division of the country. The Six Counties which were cut off from the rest of Ireland contain the industrial potential of the country. A fact that very few people appreciate is that of the various political units that constitute the islands of Great Britain and of Ireland the one solvent economic unit is the area comprised in the Six Counties. Alone of these various political units it has a favourable trade balance. Its exports for the year amounted to £113,250,000, as against imports amounting to £107,000,000. In other words, it had a favourable trade balance, excluding all invisible exports, of more than £6,000,000. Those figures actually include the trade between the Six Counties and ourselves which showed a balance in our favour of £7,250,000 in 1945.

Accordingly, if you were to deduct from these figures the trade between ourselves and the Six Counties the resulting position would show a favourable trade balance for the Six Counties, that is, excluding the trade with ourselves, of some £13,172,000. It is an economic fact that this favourable trade balance, coupled with the fairly substantial exports which the Six Counties have, shows that the Six Counties would be an important economic asset to the economy of Ireland as a whole and that many of the difficulties which now confront us would not exist were it not for the fact that our country has been partitioned against the wishes of the vast majority of the people. Actually, a very large proportion of the exports from the Six Counties go to the hard-currency areas, go to the Western hemisphere. Linen, for instance, which forms one of those items of Britain's trade with the United States, comes largely from the Six Counties. Seventy-five per cent. of the linen produced in the Six Counties is exported and all but 5 per cent. of those exports go to the Western hemisphere and earn hard currency. Therefore, if we find ourselves in economic difficulties, if we find that we have such a heavy adverse balance of trade, if we find that we are unable to earn the hard currency that we require for the economy of the island as a whole, we also find that this is due practically entirely to the unnatural division of our country. I should like our friends both on the other side of the Atlantic and our friends on the other side of the Irish Sea to appreciate fully that if we are a drain on their resources for hard currency it is largely due to the fact that our country has been divided against the wishes of its inhabitants. That is an economic fact, and it is one which should be borne in mind. I am not utilising it for purposes of propaganda but I think it is well that the members of this House should realise the economic factors that are involved.

As I indicated earlier on, one of the purposes of the Economic Recovery Plan is to enable European countries to acquire the goods they require from the Western hemisphere. The American Congress, on the proposition of the Administration of the United States, passed an Act setting up the machinery whereby the Economic Recovery Plan programmes would be financed. The Act makes provisions for a number of different contingencies. It provides inter alia for the conclusion of bilateral treaties between the United States and each of the 16 participating countries and it sets out in some detail the various provisions which are to be contained in these bilateral treaties. It sets up an Administrator who is given Cabinet rank and full powers to administer the help granted by Congress. He has under him an economic staff. He has advising him an economic advisory council. I should like the House to appreciate that when the American Government decided to make this money available to Europe they were laying in store for themselves a great many difficulties. They were laying in store for themselves difficulties with Europe. They were putting a cake on the table. That cake had to be divided. In the cutting up of that cake they were bound to make enemies. Apart from that they were laying difficulties for themselves with their own people.

I told you that the total sum which the American taxpayers will have to provide before this scheme is concluded will be in the neighbourhood of 17,000,000,000 dollars. That, of course, requires taxation. There are very few Governments who would not leave themselves open to criticism by their political opponents for raising such a big sum to expend outside their own shores. There has been a good deal of criticism. I merely mention these things so that the House will appreciate the great many difficulties that confronted the American Administration in putting through this proposal put forward by General Marshall and by the Economic Co-operation Organisation in Paris.

Briefly, the Act passed by Congress provided for the giving of aid in two ways, or possibly, I should say, in three ways. First of all, it provided machinery whereby the participating countries would receive priority in respect of the goods which were in short supply—machinery whereby the goods that Europe required for the reconstruction of Europe would be given priority over ordinary commercial transactions. That was a very necessary and a very important factor from the point of view of Europe. It then provided that aid would be granted either by way of loan or by way of grant outright; that where the aid was given by way of outright grant certain conditions as to the administration of the aid thus granted would have to be observed by the various countries in receipt of the aid; conditions as to how the money would be utilised, because one of the problems that confronted the American economists—and, indeed, the European economists—was that if vast sums of money on this scale were just brought into countries they would create inflation. Therefore, the Economic Recovery Act contains provisions to ensure that any money given by way of grant to a country should be used only for certain specified development purposes.

It also provided for the giving of aid by way of loan. It was left in the sole discretion of the Administrator, acting in consultation with the Economic Advisory Committee, as to whether money would be given by way of loan or grant to any given country. Certain criteria were laid down—laid down is possibly too strong an expression—certain criteria were suggested in the course of the various discussions that occurred in America as to the basis upon which the aid was to be given and as to whether it was to be given to a country by way of loan or by way of grant. The United States Senate Foreign Relations Committee report at page 48 contains the following information as a suggestion of the basis of the criterion which might be used:—

"To the fullest extent practicable within the above test payment should be made or loans used in order to finance imports of capital equipment and raw materials for use in capital development; and grants should be used to finance imports of supplies of food, fuel, fertilisers and raw materials not used for capital development."

In other words, the criterion suggested in that quotation was that in the case of consumer goods aid should be made available by way of grant whereas in the case of capital goods loans should be given. The matter is also dealt with in the White Paper which was issued by the American Government dealing with this question. At page 18 of that White Paper the various considerations applicable are set forth:

"The continuation of the provision and export of food, and even the maintenance of the existing levels of export, will be possible only if there are abnormally heavy imports of fertilisers and feeding stuffs from dollar sources. If dollars are not available imports of these essential items would have to be reduced, resulting almost immediately in a decline of output and exports as well as a lowering of the standard of living."

That was dealing with Ireland. The United States technicians, after evaluating Irish statements of requirements and production programmes in the light of the availability of material and other factors, believed that Ireland will need to import from the Western hemisphere to June 30th, 1949, approximately 190,000,000 dollars if a programme leading to self-support and expanded export is to be initiated. Nearly 60 per cent. of the imports will consist of food, fuel, fertilisers and feeding stuffs. Of the remainder, more than half would be raw materials, machinery and equipment.

At page 48 of the same White Paper the question of the nature of the assistance to be given to different countries is reviewed. It is stated:—

"It is clear that grants should not be made to countries which have the capacity to pay cash or repay loans. It is equally clear that it would be unrealistic to require a participating country to contract dollar debts now if it does not have the capacity to pay without jeopardising the purpose of the programme. However, to the fullest extent practicable within the above test, payments should be made or loans used in order to finance imports of capital equipment and raw materials for use in connection with capital developments; and grants should be used to finance the import of supplies of food, fuel, fertilisers and raw materials not used for capital development."

Generally speaking, from the mass of documentation which emanated from the United States on this particular question, the criterion laid down as to whether a country should receive a loan or a grant seems to have been fairly consistently that, in the case of consumer goods or in the case of goods that are referred to as incentive goods, or goods essential for the viability of a State, the assistance should be made available by way of grant and that, in the case of capital goods, assistance would be made available by way of loan. I merely mention these matters to indicate the background more or less from which this question was approached here.

Since the Act was passed allocations have been made only in respect of the quarter that ends on the 30th June. The allocations which were made ending 30th June provided that Portugal, Switzerland and Sweden would not receive any aid at all either by grant or loan; that in the case of Iceland and Ireland aid would be made available by way of loan only and not by way of grant.

Having regard to the various criteria suggested as to the basis upon which aid would be made available, it may be somewhat difficult to understand why in the case of Ireland aid by way of grant was not forthcoming. I wish to make this quite clear, that we do not complain of it. This is a scheme that is being administered very generously and very ably by the authorities set up under this Act of the American Congress. They are administering the American taxpayers' money. We have no claim on it. It is a matter entirely for them. Having regard to the criteria to which I have referred, it may well be suggested—and it is open to the suggestion—that considerations other than economic ones could apply. I do not know about that and I do not complain. I should like to say this: that whether we receive any aid at all from the United States, or whether such aid is by way of loan or grant, we admire the help that is being given by the United States to Europe whether we benefit by it or not. I think we should give them full credit for their action and, in the course of these discussions, I would like that this matter was not dealt with very much or dealt with in such a way as to detract from the assistance the United States are giving to Europe.

One matter that may have militated possibly against us is the somewhat exaggerated idea that prevails abroad of our standard of living. Both from newspaper reports and also from conversations that I had in America and in Britain I found there was a completely erroneous impression as to the standard of living of our people. I found Ireland had been described as a land flowing with milk and honey, a land in which there were no shortages. In fact, it was described as a country in which the people ate far too much. That impression in many respects has been very damaging to us. The inference has been drawn that while the rest of Europe was on the border of starvation and was undergoing severe shortages, the Irish people were living in the lap of luxury and comfort. In a way, I can well sympathise with the animosity that such an impression would arouse in the minds of people undergoing severe hardship.

On examination, I found that those erroneous impressions were derived from two sources. They were derived from newspaper reports and from the impressions of visitors who at best may be a day or two days in this country. In most cases they were the impressions of people who had stopped maybe for a couple of hours at the Shannon airport, who had obtained a meal and had dined well but possibly not too wisely. I found it necessary to explain that in order to attract visitors and out of a sense of friendliness to those who came to our shores we sought to provide the best conditions possible in our hotels and in our restaurants, and that we always made a point of ensuring that there were more than ample supplies at places like the Shannon airport and at luxury hotels throughout the country. But I must say I found it somewhat unfortunate that our attempts at providing hospitality should be misconstrued as an indication that our country was wealthier, practically, than any other country in Europe.

The second cause for this impression arises possibly through the desire—I was going to say mania—for statistics. Various statistics have been compiled as to the quantity of calories per head of the population consumed in different countries. Some of these statistics seem to indicate that we receive a higher number of calories per head than some other countries. These statistics vary in a great many respects, but it would appear to me, on examination, that the statistics are arrived at on a completely fallacious basis. An estimate of our total production of food is taken. From it is deducted our total exports. To the sum left is added the total imports of food from abroad. That is then divided by the population.

These estimates do not take into account, firstly, close on 1,000,000 tourists and transit visitors that pass through this country every year. It is very difficult to estimate the amount of food that they consume, but I think I may say that in most cases the average visitor consumes anything from two to four times more than the average inhabitant. It is so, in the first place, because he is very often on holidays, and it is so because he very often comes from a country where there are greater shortages; he comes here for the purpose of eating. Secondly these figures do not take into account the very considerable exports of food that occur through food parcels sent out or taken by visitors.

Anybody familiar with the Border area—towns such as Dundalk, Monaghan and Clones—will know that every day of the week these towns are crowded by people who come from the Six Counties in order to purchase supplies and bring them home. In addition to that, practically every tourist or visitor returns with very large food parcels. Thirdly, there is a good deal of unofficial export of food. There is, we all know, a good deal of smuggling of cattle, poultry, eggs, butter and farm produce generally. Only a few weeks ago, I think, as Deputies may have seen in the papers, a consignment of something like 30,000 chickens was found in Belfast which had been smuggled from this side of the Border, so that that traffic is by no means inconsiderable.

I would suggest that these figures are not a reliable index of the standard of living of our people. Possibly a better index of our standard of living would be provided by the relationship between the number of dwellings and the number of people in the country. Taking the countries of Belgium, Britain, Denmark, France, the Netherlands, Sweden and the United States, and comparing their figures with ours, we find that we have fewer dwellings per head of the population than any of these countries. Or, if you like, you can also, to take another comparison, compare the number of motor cars in relation to the population and you find that we have fewer motor cars per head of the population than any of these countries.

Again our consumption of electricity per head of the population is very far below that of any of these countries. Our consumption per head of the population was, in 1947, 200 kilowatt hours, whereas in Belgium it was 800, Britain 860, Denmark 425, France 643, Netherlands 444, Sweden 2,240 and the United States 1,510. Perhaps a better criterion still would be the health tables and the mortality rate of our people. With respect, I would urge on these eminent statisticians to study all these tables, as I think they would provide a much better index of our true economic position than some of the statistics they have evolved. Our mortality rate is higher than that of most European countries—vastly higher than that of the United States, considerably higher than that of Britain and much higher than that of Holland, Belgium, France, Italy, Sweden or Switzerland. Our infant mortality rate is double that of the United States, double that of Holland, double that of Sweden, and 50 per cent. over that of Britain. Those figures might provide the dieticians and economic experts with a truer index of the economic condition of this country.

I have dealt with this at some length —I hope I have not tired the House— because I felt it was necessary as such a false impression existed abroad that this was a wealthy and over-fed country. The medical health tables indicate that the majority of the population of this country bears all the signs —I am not speaking of the upper classes or the middle classes—of undernourishment.

Now, as to the part Ireland can play and as to the help that can be given in assisting Ireland to produce more food, the problem in Ireland is principally an agricultural problem. During the war years the country was starved of fertilisers. It was also short of feeding stuffs and its cattle population diminished, partially by reason of the shortage of feeding stuffs and partially because of the need to increase the production of wheat, which reduced the area available for the production of meat, etc. The extent of the fertiliser starvation of the soil is shown glaringly by the reduced output per acre of various grains. For instance, if you compare the tables of production between 1938 and 1947, you find that in respect of wheat in 1938 the average acre produced 17.2 cwts., whereas in 1947 production had fallen to 10.8 cwts. In the case of barley, a production of 19.6 cwts. in 1938 had fallen to 15.8 cwts. in 1947. In the case of turnips, a production of 17.5 cwts. in 1938 was down to 14.9 cwts. in 1947. In practically every range of root and grain crops, the production has been falling steadily in the last ten years owing to the lack of fertilisers. We believe, therefore, that, given a sufficient quantity of fertilisers and a sufficient quantity of feeding stuffs, the output of food can be increased rapidly so as to enable us to make available to other countries some of the foods in respect of which shortages now exist and are expected to continue.

I do not know whether the House would like me to go through in detail the various provisions of the bilateral economic co-operative agreement signed between the United States and Ireland. By and large, it follows strictly the pattern provided by the Economic Co-operation Act of the American Congress. In many respects it duplicates some of the provisions contained in the Economic Co-operation Convention signed in Paris. Some portions of it are only applicable to countries which are in receipt of aid by way of an outright grant. It provides, in these cases, for a local currency fund and for the administration of the local currency fund; it provides certain conditions that would attach to it, to ensure that it would be safeguarded and that American assets would be safeguarded as far as possible. By and large, I do not think that there was anything unexpected in the bilateral treaty. It conforms, very often word for word, with the Act which renders this treaty essential. Negotiations took place between the 16 countries and the United States relative to the contents of the treaty and the contents in its present form were generally agreed to a few days before it was signed.

I think I have covered in general the main points to which I felt it was necessary to refer, but I would like to say this before concluding: to a large extent, our ability to contribute as usefully as we might will be limited unless we receive aid by way of grant, because it will preclude us from being able to utilise the local currency fund for development purposes, for purposes of injecting the necessary fertilisers and foodstuffs into the agricultural economy of the country. To that extent, I think that we may not be able to obtain as good results as we would if we had received a grant. The question of whether we will receive grants in future is not decided. The matter is decided from quarter to quarter by the Administrator on the advice of the Economic Advisory Council. It was made very clear to us that for the present quarter and the coming quarter the aid given to Ireland would be by way of a loan, but that it was not to be taken as a precedent for future quarters. It was merely a decision reached for the current quarter, but various conditions might affect that in the next and subsequent quarters.

I agree with the Minister that it is not possible to get a picture of the position in which we will be when these conventions and agreements have been implemented unless we consider both the Convention for European Economic Co-operation and the Bilateral Agreement with the United States together, and, I think also, without having some reference to the financial arrangements which were associated with the trade negotiations in London, the results of which were announced last week. The Convention for European Economic Co-operation has its origin in the Marshall Plan. Whatever case may be made for European economic co-operation and for the establishment of a permanent organisation for co-operation, it is a fact that this convention and the organisation for which it provides resulted from the Marshall Plan. They were not part of the original scheme when the first Paris Conference met last year, the conference which I attended, to which the Minister referred and which followed the speech of General Marshall. There was, if anything, a strong inclination among the representatives of the countries that attended that conference to discourage any proposals for the creation of a permanent organisation. That conference set up only a temporary organisation which had the task of preparing a report of European availabilities and needs and was discharged when the report was presented to the conference and, having been accepted by it, forwarded to the United States Government. The resummoning of the Paris Conference and the submission to it of proposals for the establishment of a permanent organisation for European economic co-operation was the outcome of United States insistence, and I think it is no secret that in many countries in Europe there was not much enthusiasm for the proposal to resummon the conference or for the idea of a permanent organisation. That lack of enthusiasm disappeared; the conference met and the convention emerged from it, the convention which is submitted to us for ratification here.

One does not have to qualify in the least one's admiration for the American proposals or for the determination with which the American Government are endeavouring to bring their proposals into practical effect, if one expresses doubts as to the practicability of maintaining a permanent organisation for European co-operation, or its value in the execution of what was originally the Marshall Plan. The idea of economic co-operation in Europe is one to which we all subscribe. I think we all recognise that the prosperity of any one nation in Europe is bound up inextricably with the prosperity of others, and that it is not possible for any of us to pursue an independent line which might be detrimental to the prosperity of other areas generally without ultimately having to suffer ill-effects from it. Experience seems to show, however, that attempts to promote economic co-operation between the Western European countries, for which this organisation has been set up, are not likely to be successful. It was not successful before. Let us hope that it will be successful in this case. The idea of one customs area embracing all Western Europe, which has been put forward by some people, is, I think, based on the fallacious idea that the economies of the countries of Western Europe are complementary with one another. They are not. In the main they are competitive. The economy of Western Europe could not maintain itself without a substantial influx from abroad of raw materials and essential goods, an influx which before the war was paid for by income earned on foreign investments. These foreign investments were liquidated during the war and do not now exist. The problem of Europe is to make good the lost income, an income very largely equivalent to its need of supplies from the Western hemisphere. However, that is another question.

The ratification of the bilateral agreement with the United States is, we understand, a step we must take if we are to participate in American aid in any form. Aid will be given to us in consequence of that bilateral agreement by the American Government to enable us to fulfil the obligations which we accept with the ratification of this Paris Convention. That is as I understand the position. The American Government, having taken a step which resulted in the meeting of the Paris Conference and the production of this convention, has followed up with this proposal: that each country accepting aid under the Marshall Plan will enter into an agreement which, in effect, binds it to use that aid in accordance with the principles of this convention.

We could no doubt have participated in economic co-operation with other European countries or agreed to establish a permanent organisation for economic co-operation without having sought American aid at all. As I understand it, we could ratify this agreement with the United States and subsequently decline to accept aid from the United States if there was any reason why we thought it was not in our interest to take it. The main point I want to make, however, is that the convention and the agreement are presented to us as necessary instruments to enable us to take our place in a general programme for European recovery and that, in particular, American aid will be made available to us to facilitate the expansion of production and export, to contribute to the revival of prosperity in the Western European area as a whole and to discharge fully all the obligations which we accept under the Paris Convention. It is against that background that I want to have explained to me the significance of the undertaking which the Government entered into in London last week.

On a point of order. I do not want to suggest in any way that the discussion should be curtailed, but I should submit a discussion of the trade agreement in London is beyond the scope of this debate and would entail a very long debate.

I do not propose to refer to the details of the trade agreement in London. I propose to refer to the arrangements which were made in addition to the matters covered by the formal agreement. If they are not relevant to the matter under discussion, I am quite prepared to avoid referring to them. I shall accept the ruling of the Chair. I want to put this to the House, however.

Would it not be better to have the ruling of the Chair on this matter?

The Chair cannot give a ruling until it has heard what I have to say. We have here a convention for the establishment of a permanent organisation for European economic co-operation. We are being asked to ratify that. But, if we ratify it, we accept certain obligations in consequence of its provisions; the obligation to take various steps to expand production, to expand trade with European countries, and to promote the recovery of European prosperity generally. We have associated with that convention an agreement with the United States, an agreement under which the United States says in effect to us: "If you join in this programme for European recovery, then you must make an effective contribution to the programme. We are prepared to give you aid in one form or another subject to the conditions set out in the agreement."

Now, we can consider the relevancy of the extract which I shall read. We have here a convention for European co-operation and for American aid to assist our own recovery and to enable us to take a full part in that general European programme:—

"The Government of Ireland have undertaken to the British Government to use their utmost endeavours to obtain the maximum amount of aid available under the European recovery programme with the object of ensuring as far as practicable that their recourse to the sterling area pool for hard currency will not involve any ultimate drain on that pool."

I think there can be no question of the relevancy of that extract which I have read to the question we are discussing.

On a point of order. I respectfully submit to the Chair that we cannot start discussing the agreement made in London, either in part or in whole, in this discussion. It would widen the scope of the discussion very considerably. That agreement will come up for discussion in due course and that aspect can be discussed then.

It seems to me it must be discussed now. I put it to the Government that we cannot, in matters involving an international agreement to which we will be committed, have resort to sharp practice of any kind, or any course of action which could be conceivably represented as a sharp practice. We are being asked to ratify this Paris Convention. We are being asked to ratify at the same time an agreement with the United States relating to the European recovery programme. We are told that the two stand together, and so they do, because the Paris Convention was the outcome of American insistence and the bilateral agreement is the device adopted by the American Government by which they propose to give us aid to enable us to fulfil the obligations of the Paris Convention. There is no question in this bilateral agreement of the American Government giving aid for any other purpose. They are giving aid to increase our own production and to expand our exports so that we can make our contribution to the recovery of prosperity in Europe generally. I say the Government has already prevented us from doing that and that it is pointless for us to ratify the convention and to enter into an agreement with the United States, having proclaimed in that announcement from London that we are going to seek to the utmost to draw aid under the European recovery programme for an entirely different purpose.

Surely all of the Deputy's arguments would have the utmost relevance when the London Agreement is being discussed by the House.

They will certainly. They are also relevant to the agreement we are now discussing.

In so far as the Deputy has stated it, it has, but going into the whole agreement made in London is not relevant.

I have not suggested that.

The trade agreement will be a matter for another day.

There is another aspect of the agreement which, perhaps, is relevant to the matter under discussion. If we have this situation whereby the Government have undertaken to use their utmost endeavours to obtain the maximum amount of aid available under the European recovery programme, by loan or grant, for the purpose indicated, then we are not really in the position that the Minister represented, that we are considering how we can, with the assistance of American aid, contribute to the recovery of European prosperity and to an expansion of our production and exports. Nor are we in a position that we have any choice as to whether we will accept a loan on the conditions which may be attached to it or not accept it in our own interest. It seems to me that we have undertaken to use our utmost endeavours to get the maximum aid from America by way of loan or grant for the purpose of limiting our recourse to the sterling area dollar pool for hard currency.

I am prepared to admit that we can perhaps combine the two obligations, the obligation which we are asked to enter into here to increase trade with Europe, with the obligation entered into in London to spare the sterling area dollar pool out of European recovery programme funds. We can do that by utilising those funds to expand our production for export to hard currency countries in Europe. Clearly, in that round-about way we can not merely secure increased production and exports, but we can also minimise the extent to which we would have to have recourse to the sterling area pool for hard currency to finance our requirements. But in this trade agreement that is the one thing we have undertaken not to do. There is, as everybody knows——

Are the Deputy's remarks relevant? Is it that matter which is under discussion?

It seems to me that it is relevant to the matter that is before the Dáil at present. It is involved.

With respect, the House has not even got a copy of the agreement. Neither have I. Neither has Deputy Lemass. Neither has any member of this House. How, therefore, can we discuss it?

There was an official communiqué issued. If the Minister will tell me that there is no relevancy in these matters it will relieve the people's mind. I am putting the facts as the people see them. We are now asked to ratify a convention and under it to participate in the elaboration and execution of a joint recovery programme with the object of achieving as soon as possible a satisfactory level of economic activity without extraordinary outside assistance and, to this end, the programme will take special account of the need of the contracting parties to develop their exports to nonparticipating countries to the maximum extent possible. Article 3 of the convention before us says that the contracting parties will, within the framework of the organisation and as often and to such extent as may be necessary, draw up general programmes for the production and exchange of commodities and services. That is the general obligation we are undertaking here as I understand it—an obligation to relate our economic policy to the specific aim of European recovery and to expand our production and our exports to Europe in such a manner as may be agreed within the general framework of this organisation.

European countries could have got together for that purpose without any question of American aid and conceivably they might even have done good work if they had come together. However, when they came together for that purpose the American Government said: "If you do, then to the extent that each one amongst you is prepared to accept that objective and to work towards its realisation we shall give you financial aid"—aid in one form or another through the medium of grants, loans or the giving of priority export facilities to which the Minister referred. It is against that background that I want it explained to me how the Government felt itself free to enter into an understanding with the British Government to do their utmost endeavour to get the maximum amount of aid from America under the European recovery programme by way of loan or by way of grant with the object—and this is an official statement agreed to between the British and Irish Governments—of ensuring so far as is practicable that their recourse to the sterling area pool for hard currencies will not involve any ultimate drain on that pool. I may then be able to see a light by which the Government could reconcile that undertaking to the British with the proposal to the Dáil that we should ratify these agreements.

They may say that it is conceivable that we can draw on American aid and utilise it to increase our production and our exports to European hard currency countries. My answer to that, and I think it is a fair one, is that the only commodity we have to sell that the European countries want in bulk—the only commodity we can hope to sell to Europe in any quantity during the next three, four or five years—is cattle. We could sell substantially increased quantities of cattle in Europe. We restricted exports of cattle to European countries by a quota system. We are proposing to still further restrict them this year and still further next year. How that bilateral arrangement with Great Britain to restrict the exports to Europe——

Surely now, a Chinn Chomhairle, the agreement reached with the British Government as to cattle, I respectfully submit, can have no relevance to the bilateral treaty with the United States or to the Paris Convention. The Deputy's arguments are all splendid arguments which can be used against the London Agreement when it comes up for discussion.

I know that. I want the Minister to tell me that this is——

The Minister has put a point of order to the Chair. The fulfilment of whatever undertakings are understood by this convention may be affected by a trade agreement but the trade agreement as a trade agreement is not under discussion and the Deputy might limit himself to the two points he has raised as briefly as possible so as not to discuss the details of an agreement which is not before the House.

I have no intention of referring further to the details. It is, however, a bilateral trade agreement. In the last month or so a bilateral trade agreement was made with France. It was not of very great consequence, but it was, nevertheless, a bilateral agreement. What does Article 3 of this convention mean?

"The contracting parties will, within the framework of the organisation and as often and to such extent as may be necessary, draw up general programmes for the production and exchange of commodities and services."

I take it to mean that the parties to this convention are undertaking to conduct their trade on a multilateral basis—not upon the basis of a series of bilateral agreements but in accordance with a multilateral agreement to be drawn up within the framework of the organisation. Is that so or not?

Does it not say so?

If that is the correct interpretation of it, how does the Minister reconcile his inviting us to ratify this convention with the fact that he is now, at this present time, negotiating bilateral agreements which appear to have for their object purposes entirely different from those of the proposed organisation to be set up here? One further reference I will make in that regard is that this convention also asks us to undertake to co-operate in relaxing restrictions on trade and on agreements between one another of the members of this organisation. Most of us know that we are always very careful to examine fully the implications of international agreements into which we may enter which put on us obligations to reduce or to relax in any way restrictions on trade.

We know that our economic position is different from that of most European countries. Our economic development was delayed by the fact that we were not a free nation until recently; that we entered what might be described as the industrial race a point away behind other European countries. We know that there was, and is, in Europe a general feeling in favour of leaving the European industrial organisation much as it is thus enabling the countries which had the opportunity of developing particular industrial activities and acquiring the skills which are associated with them to retain them and discouraging other countries from getting into the same lines of activity and we know that any such movement must inevitably be against our interest because of the retarding of our industrial development in the past. I want the Minister to tell me how, in fact, he can reconcile his asking the Dáil to ratify this convention containing that general undertaking to relax restrictions upon trade with the fact that he has undertaken, or is proposing to undertake, to enter into new agreements with the British Government which appear to involve the imposition of new restrictions upon trade to the Continent. I do not want anybody to take from my remarks any impression that we on this side of the House are not as wholeheartedly in favour of participating in any combined effort towards European recovery as anybody else in Europe. Our views upon that matter were expressed in Paris and expressed here on more than one occasion.

I think it is true to say that we would have agreed to participate in such a combined effort even if there had been no prospect of American aid. We might have had much less confidence in its outcome, but nevertheless we could have felt it our duty to have undertaken whatever liabilities we could have undertaken to contribute to European prosperity. What I am criticising here is Government policy and its apparent inconsistency.

The Minister for External Affairs referred to the fact that we have not yet been allocated any American aid by way of grant; that for the current quarter American aid was offered to us by way of loan only. He made some remarks in that connection which puzzle me. He said that apparently the American decision that we in this country did not require grant aid—at any rate during this quarter—was due to a misunderstanding in America of conditions in this country, of our economic conditions generally or the level of food rations which we have been able to maintain. When did that misunderstanding arise? I am anxious to get information as to the stage at which it became apparent to the Government that aid by way of grant was not going to be given to this country in this quarter and, apparently, not likely to be given, judging by recent Press announcements, in the following quarter. Up to the time the previous Government left office there had not been any suggestion that this country would not participate in American aid under the European recovery programme in the same manner and to relatively the same extent as any other of the 16 nations which met in Paris.

Do you stand over that statement?

I certainly do. I am speaking now entirely from recollection.

The statement is not correct.

I am speaking from recollection. I say that there was good reason to believe, as a result of personal contacts by Government officials with American officials in Washington, that the details of the aid that was to be made available to this country by way of grant and the specific commodities that were to be shipped had been informally agreed and that the agreement would be carried into effect as soon as the legal position permitted of it.

That is not correct.

That is my recollection of what the position was when we left office. Clearly, up to the day the Minister went to Paris he could have had no doubt as to the possibility of this country receiving American aid on the same basis as other countries under the recovery programme. There was nothing in his speech, set out in the White Paper here, which conveyed to anybody that there existed in his mind the slightest doubt on that point. It was a surprise to the whole Irish people and a particular surprise to us, who had previous contact with the administration of official business, when the Minister announced prior to his departure to the United States, that grant aid was not to be forthcoming.

Surely the Deputy does not say that seriously.

I say that quite seriously.

Was the Deputy not aware of the communications that passed between this Government and the United States Administration?

I may not have been aware of all of them. I say, however, that up to the day we left office no suggestion had been made that grant aid would not be forthcoming. On the contrary, the reports received following personal contacts in Washington appeared to make it quite clear that grant aid would be forthcoming.

That is entirely wrong. That is entirely contrary to the facts.

I do not think so.

There is evidence, and I shall produce evidence. That is why I have interjected at this stage to prevent the Deputy going on a wrong premise and putting forward an incorrect proposition.

If the Minister wants to keep me from doing anything that may be in any sense damaging to our interests in this matter I am prepared to accept his advice on one condition. His colleague, the Minister for Justice, has spoken on this matter in public. He made a stupid speech in which he attempted in the crudest possible way to put upon the Leader of this Party, Deputy de Valera, responsibility for the fact that grant aid was not forthcoming. If these tactics are going to be resorted to this whole discussion will be conducted on an entirely different plane.

The Minister knows as well as I do that if there was one thing done in this country this year which more than any other would make it less likely that we would get grant aid it was the speech made by the Minister for Justice. If the Minister for External Affairs wants to get over this difficulty and to ensure that in the ensuing periods grant aid will be allocated to this country, not merely must he go after the job vigorously, but he must gag the MacEoins of his Party because further utterances of that kind will create not merely a nasty situation here but a much nastier situation in the United States.

Will the Deputy then gag the Irish Press?

Oh, not at all. I can assure the Minister that the Irish Press will not publish anything which will be at any time or under any circumstances detrimental to this country as distinct from the interests of the Government.

Will the Deputy quote from the Irish Press the comments in relation to E.C.A.?

The Minister should have manners and keep his seat and keep his mouth shut.

The Minister has got to the stage when he confuses the interests of his Party with the interests of the country. I want information from the Government. I think the House is entitled to have the information. We have been given a White Paper published by the Government containing a great deal of information concerning our import requirements from the Western Hemisphere and from the United States during the current year. As I read that Paper, our import requirements from the Western Hemissphere for which we must pay in dollars during this fiscal year, 1948/49, will total approximately 152.6 million dollars. Putting against that big bill, which represents the cost of the goods we need from those areas, what we may ourselves earn in dollars through export trade or otherwise, there will be a deficit of 121.5 million dollars. That figure of 152.6 million dollars covers, as I understand it, the whole of our import requirements. But if we take only the goods which are essential to maintain our present standards of consumption, the goods which it may not be practicable to replace entirely from other sources, our requirements from these western hemisphere countries total 101.9 million dollars. I think it is time that the House and the country got some clear statement on the position from the Government. What, in fact, do they conceive our import requirements from the western hemisphere countries to be? We have a list of goods set out in this White Paper. We know that that list can be revised. We see in it such commodities as coal. We know that in this year we can dispense with the importation of coal from the United States. To that extent our requirements are reduced.

For the information of the Deputy that list has been revised long ago.

So I am assuming. I want now the revised list published to this House and published to the country or, at any rate, I want such general information given to the people of this country as will enable them to understand clearly the picture and what the shape of our trade with the western hemisphere is going to be for the next half of this year and the first half of next year. We have at the moment that list of requirements. We see the total. We know that some of the items can be deleted from it. We know, on the other hand, that so far as wheat is concerned our import requirements are based upon assumptions of our own production which are not now likely to be realised.

There is a figure given here for the home production of grain in 1948 and it is 337,000 metric tons. That figure, I take it, represents grain delivered to flour mills. It is not the total production of wheat, but the actual quantity which will be delivered to the millers for conversion into flour and bread. The Minister for Finance gave us a figure for the yield from the native harvest this year which must be wrong. I want to be assured it is wrong. He said he was basing his estimate of wheat imports on the assumption that we would produce this year 100,000 tons of wheat. Will somebody tell me that figure is wrong? It is almost inconceivable, despite the obvious discouragement of the Minister for Agriculture, that our wheat production this year could have fallen so low. If it has fallen to 100,000 tons, and if we are not going to get 337,000 metric tons which the American experts assume we are going to get from our own harvest, then our import requirements will have to be enlarged; we will want more wheat than they assume.

The Minister may have information on these matters, but I think it is desirable that that information should be given to the public. These are not things which should be kept secret, particularly if we have to face this year, according to the Taoiseach's statement yesterday, very substantial reductions in the supply of goods which heretofore came from the dollar areas. The public should be told, and they should be given a clear exposition of the measures which the Government propose to take in order to minimise the resulting hardship. The Taoiseach told us yesterday, "It is not yet possible to state how far it will be necessary to eliminate or curtail imports of commodities in respect of which hard currency facilities have been granted in the past, but it is clear that unless our future resources of foreign exchange increase materially beyond those at present foreseen, the necessity for applying available currencies to objects vital to the national economy will involve substantial restrictions on less essential items."

If that will be the position we should be told so, and we should also be informed what the exact dimensions of our difficulties are, what quantities of goods we hope to be able to procure in the western hemisphere area in the next half of this year or in the following 12 months' period, what these goods will cost, to what extent purchases will have to be confined to essential items, how the total cost of the import programme will be met, where the dollars will come from, how we are to get them and subject to what conditions. Are we in this position, that we can draw from the sterling area pool a sufficient quantity of dollars to cover the essential goods in that import programme, or are we to be in the position that we will have to borrow from the United States, under the European recovery programme, money for goods for immediate consumption which are of no significance in the development of our own future productive capacity and which could not, under any conceivable circumstances, be classified as capital?

We are told the Government have agreed to limit drawing on the sterling area pool to the amount drawn in the first half of this year. I was astonished when the Taoiseach yesterday was unable to give me any figure to represent our dollar or other hard currency expenditure in that period. I know the Government did not enter on this matter without having some figure in their minds by which they understood the restrictions that they are accepting. I think the House should be informed fully on these matters. When, last year, we had to make arrangements in relation to drawing from the dollar pool, there was no question of withholding all the information available from the House. The House was informed of the total of the dollars available to us and it was within that limit we had to regulate our dollar purchases.

For some reason there is being built around this matter a cloak of secrecy or an atmosphere of mystery which I am anxious to penetrate. If these figures published by the Government in the White Paper are no longer applicable to the situation, if that list of imports in this fiscal year from the United States has been revised, then we are just as much entitled to get the revised list. The publication of this list by the Government is obviously misleading.

That list was prepared by the Deputy while he was in office and it includes vast quantities of American coal which this country does not need.

Was this list published to inform or mislead us?

It was published to inform the public of what had been done up to a certain stage. If the Deputy will look at the date he will see when it was published.

It does not make any difference.

Of course it makes a difference.

This list is the only information the public has.

That is the Deputy's own list and it is quite erroneous because it contains things that the country does not require.

With the possible exception of coal, and some items of transport equipment which are referred to, there is nothing in the list that the country does not require. But if there is a revised list why was it not published? Is there any reason why Deputies who are here in the legislative Assembly, who are the representatives of the people and who are asked to ratify this agreement, should not be told how much we need from these dollar countries? If what we get is less than what we need, what shall we have to do without? What is the total availability of dollars to finance our trade? To what extent have we to borrow under the European recovery programme in order to finance the essential goods indicated in the list?

We should also get from the Government some general statement indicating their view of events in the future. To what extent will we be able, as this American agreement contemplates, to develop a healthy economy independent of extraordinary outside assistance? The American agreement says that the Americans are prepared to help us, through this European recovery programme, to develop a healthy economy which can be maintained without extraordinary outside assistance. When is it hoped to get to that position if we are in this position now, that even the essential goods which we must obtain from the United States or else endure extraordinary hardships here must be paid for by moneys borrowed from the United States?

Ninety per cent. of the goods from the United States are essential goods that have been paid for and that we will continue to pay for.

How are all these things to be financed? Will we be continually in debt to America and will there come a time when America will say: "We will lend you no more; you will have to do without those things", or is there in contemplation an arrangement with Britain and America which will enable us to escape from that position and repay our debts because clearly it is not possible for us to borrow money from the United States on the understanding that the moneys will be repaid unless we have simultaneously some arrangement with Britain relating to the repayment terms which will ensure that the sterling we get from British trade will be converted by England into dollars with which to effect repayment? Whatever agreement is made with America as to the conditions of repayment of loans must clearly be a subject matter of discussion with the British, because unless the British agree we cannot repay so long as our general trade situation is as it is at present.

The Minister refers to the fact that all our savings are in the bank over the way, that all our eggs are in the one basket. I am sorry the Minister for Agriculture has gone, because, so far as eggs are concerned, I think all the members of the Government over there have what psychiatrists call a fixation idea. If all the eggs are in the one basket how many are left?

They are not all in good condition.

Why are they not in good condition?

Because you put them in the basket and left them there too long.

I shall not argue about that, but there are two things I should like to say in order to get the facts understood. I preface my observations by saying that if the Minister can devise means and ways by which we can escape out of that position, I will be the first to praise him.

It is too late now.

So far as the past is concerned I have no doubt whatever that any other system of financing before the war would have meant much greater hardships for us during the war than the present system caused. There was at no stage during the war any difficulty in financing the purchase of any goods we could get and could ship to this country. That was the result of an arrangement made with the British Treasury before the war, an arrangement that would have been impossible if we had attempted to convert our Central Bank funds into gold or in any other way endeavoured to secure a position of independence, even though we might, on other grounds, have preferred that situation. Secondly, I want to say this, that the additions to the sterling assets of our people during the war were because there was no alternative to making these additions. We did not want to make them, but sterling funds accumulated because of exports of food from this country and because imports were not practicable.

We are not going to accept the position now, and I hope the Government has not accepted the position, that the utilisation of these funds in Britain or in the sterling area is to be subject to the supervision or the veto of the British Government. Let me say also that, if there has been a depletion of the number of eggs in the basket, it was not our doing. Our drawings of sterling from the pool were never excessive and, if there has been a serious change in the situation created in this area over and above what was anticipated this year, it was not because of any excess purchases made by this country from the dollar area or in any of the hard currency areas, whereas we take occasion to note that Britain's deficit on external trade is running at £150,000,000 in excess of the estimate in that White Paper which the Minister quoted. The extent to which we are going to endure hardships, to cut down imports from the United States, to do without goods we need, to finance current consumption by loans made available under the European recovery plan programme is a matter which must be seriously considered. We want to be quite clear that we are not going to get the thick end of the stick and that there is at least something approaching equality of hardships borne by those who are mainly responsible for the position in which we now find ourselves.

There is another matter which I should like to mention. Article 6 of the convention is as follows:—

"The contracting parties will cooperate with one another and with other like-minded countries in reducing tariff and other barriers to the expansion of trade, with a view to achieving a sound and balanced multilateral trading system such as will accord with the principles of the Havana Charter."

Does that Article commit us to accept the principles of the Havana Charter? Remember this Charter has not been before the Dáil. Deputies have not seen it, much less discussed it. An attempt by Parliamentary question to extract information as to the attitude of the Government led to the reply that the Government had not determined its attitude, that the provisions of the charter were under examination in the various Government Departments and that no decisions had been made. If Article 6 of this convention appears to commit us to the principles of an international agreement which we have not seen, which we have not discussed, should there not be some qualification attached to our ratification or at least some statement made by the Minister which would make it quite clear that we are not, by the provisions of Article 6, depriving ourselves of the opportunity of exercising an independent judgment upon the Havana Charter when we see it? I personally have seen it. I got a copy of the charter as published by the British Stationery Office. It is a most complicated document. If one took note of the principles which appear at the head of the various chapters, and regarded the Charter as expressing these principles only, one would have considerable difficulty in recommending its ratification to the House but when one considers all the provisos and qualifications and the various measures adopted at the Havana Conference to avoid creating practical difficulties for the countries which signed it, one takes a different attitude to the document on the whole.

It is clearly a document of great importance, a document to which the American Government particularly attaches a very considerable importance and we should not by this side-wind commit ourselves to it in advance of debating it here.

Did the Minister reprobate Mr. de Valera when he signed the Paris report? It contains identical provisions and it was signed by Deputy de Valera in Paris.

I do not know what point the Minister tries to make. Deputy de Valera signed the Paris report in September, 1947.

And the Havana Charter was drafted in March, 1948.

The Paris report signed by Deputy de Valera contains the following provisions:—

"If the increased production resulting from these programmes is to make its full contribution to the restoration of the European economy and the reduction of abnormal demands on the rest of the world, it must be accompanied by a freer movement of goods and services within Europe itself. This movement is now hampered by quantitative restrictions on imports and exports, by measures which countries have been forced to take to balance their trade with each other bilaterally and by restriction on the movement of men and women. To achieve the freer movement of goods, the participating countries are resolved:—

(i) to abolish as soon as possible the abnormal restrictions which at present hamper their mutual trade;

(ii) to aim, as between themselves and the rest of the world, at a sound and balanced multilateral trading system based on the principles which have guided the framers of the draft charter for an international trade organisation."

That is the Havana Charter.

I am in agreement with that. For 16 years——

You based your criticism on that.

——we guided our international trade arrangements in general on the basis of preferring multilateral arrangements to bilateral pacts.

Last year the British Government were urging upon us the desirability of departing from that principle and of endeavouring to open up trade by means of bilateral agreements. As far as the Havana convention is concerned there is a specific document—not a mere expression of principles but proposals to establish an organisation all the members of which commit themselves to conduct international trade in accordance with the rules set up. I do not know if Deputies opposite think that we should accept this charter without having seen it, because that is what the House is being asked to do. If they do not think that the House should accept it without having seen it, much less having a debate on it, do they not think that some qualifications should be attached to our ratification of this convention? I do not want it by means of amendment to the ratification motion. I would be satisfied if some member of the Government stood up and put on record that, even though the convention contains Article 6, we are not necessarily committed to the ratification of the Havana Charter and will not be committed to it until we have seen it. I do not know when we will have the opportunity of considering it. I think it is unlikely that it will be considered by the American Senate before June of next year. That seems to be the forecast of American newspaper commentators at any rate. Few of the nations that signed the Havana convention will want to have the proposals submitted for ratification to their Parliaments until the Americans have ratified it, because the adherence of the United States to the charter is the one thing that can give it significance.

There is another article in the convention which is, in fact, ambiguous, as is the position in which it places us, and I think the Minister should explain it more fully to the House or at least refer to it at the conclusion of this debate. The Minister did refer to Article 8 and read it out, but he then passed to other articles without commenting on it. I think that we should have some explanation of the commitments on which we are entering:—

"The contracting parties will make the fullest and most effective use of their available manpower. They will endeavour to provide full employment for their own people and they may have recourse to manpower available in the territory of any other contracting party. In the latter case they will, in mutual agreement, take the necessary measures to facilitate the movement of workers and to ensure their establishment in conditions satisfactory from the economic and social point of view. Generally the contracting parties will co-operate in the progressive reduction of obstacles to the free movements of persons."

Now I know that one of the parties in the Paris conference was Italy, and that Italy was most anxious that any plan of European recovery would involve arrangements by which Italian workmen would be allowed into other countries to take up employment there. To a large extent the problem referred to in Article 8 is an Italian problem and the provisions of Article 8 are framed to solve it. But we are entering into some commitment and if there is to be any limitation or qualification of our ratification of it it is now that it should be expressed.

I thought we were going to get an intimation from the Minister of the general position of this State in relation to giving to other countries a right to recruit manpower here or facilitating the movement of manpower to employment elsewhere, because we have been for many years in the position of having a declining population due to emigration and part of our national policy, upon which there is no difference of opinion as far as I know among political Parties, is to check emigration and, if it is necessary to that end, to impose whatever restrictions we think are socially justifiable and necessary to achieve the results we all desire as speedily as possible. Is there at any time the possibility that that article can be quoted against us? Is this a commitment which would prevent us from taking such measures as the prohibition of advertisements in the newspapers of offers of employment in other countries? We have not the legal powers, nor perhaps the Constitutional powers, to prohibit such advertisements at the present time, but conceivably circumstances might arise under which the Dáil might consider it desirable to place a restriction on offers to Irish workers of employment abroad or on the establishment of recruiting or employment agencies here to employ such workers. Does this mean that we would be impeded from taking measures of that kind by the fact that Article 8 can be quoted against us as an international agreement into which we entered?

The Deputy's concern about these matters is of recent growth.

I was concerned with these matters when Deputy Lehane had an interest in very little—but however I am not going to be lectured by Deputy Lehane as to my sincerity. Whatever I have done for the workers is on record and I am prepared to take the judgment of the workers of Dublin South Central constituency which Deputy Lehane and I both represent.

I was proceeding to this discussion in an orderly way but I was provoked by these tactics. The attitude of the Government on these agreements is unsatisfactory. We got from the Minister a long review of the history of the convention, a number of general statements and a not unsatisfactory description of our national position on some matters of importance. But we got very little of practical importance which would enable a Deputy to make up his mind in regard to two points: what we are committing ourselves to by it, and what is available out of it. We must know what the facts are under both those heads.

We have had apparently conflicting Government policies, and a certain amount of confusion has been aroused by the presentation of these agreements for ratification to the Dáil this week, following the announcement of the terms of the agreement in London last week which appear to be diametrically opposed to them. We have had a continuous refusal to give any information which the public should have, or the evasion of the obligation to give it which the Taoiseach attempted yesterday in reply to Parliamentary questions and which the Minister continued today. The Government cannot possibly hope to bring this country through a period of hardship such as we appear to be facing—if I am reading correctly the reply given by the Taoiseach yesterday—unless they are frank with the public; unless they tell them exactly how the position has arisen; what they are going to do about it, and what is involved in it. It is not the slightest use to keep the hardships at the backdoor while telling the people from the front window that there are no hardships such as will cause unnecessary trouble. The proposed ratification of these two agreements gives the Government an ample opportunity, a very suitable opportunity, to make a statement on these matters.

I have listened with attention to the views which Deputy Lemass has set out in the course of this debate. I am in the difficulty that I do not know whether Deputy Lemass is or is not recommending to the House the ratification of the Paris Convention and of the agreement which was signed last week. We support these motions for the ratification of the Convention for European Economic Co-operation and of the agreement between Ireland and America which was signed for the purpose of enabling us to take advantage of the proposed legislation under the terms of the United States Economic Co-operation Act. I do not propose to refer to this agreement in anything other than general terms, but, if I may be permitted, I should like to make some observations on aspects of the situation which I think this agreement underlines. It is hoped that the proposed aid from the United States, either by way of grant or of loan, will, in the words of the original author of this idea—

"help to direct our own individual and concerted efforts to become independent of abnormal outside assistance and bring about normal economic conditions and stable international relationships with other countries."

I accept, a Chinn Chomhairle, the statement of United States Secretary Marshall that the policy which it is sought to implement by the Economic Co-operation Act is directed, again to use the Secretary's own words—

"against the removal of hunger, poverty, desperation and chaos and that its purpose should be to revive our working economy in the world so as to promote the emergence of world conditions in which free institutions can exist."

The position in this part of Ireland at the moment is, due to our failure to take control of our own currency, that the normal sterling value of our imports exceeds, as the Minister told us, our exports by £92,000,000.

Prior to the recent war the excess was an annual excess of some £20,000,000 sterling. In the days before the recent war our income from investments outside this country helped to finance that adverse trade balance, but with the debit, the adverse trade balance, of £92,000,000 per annum it is impossible for us to finance that adverse balance out of income. The effect of our progress for the past two years has been that we are rapidly consuming our capital assets and that our income from foreign investments is inevitably falling. I believe that the proposed agreement will give us an opportunity of readjusting this unhealthy position. But, in our view, this would be no more than a temporary palliative unless the nation were to take three positive steps: (1) to cut down our imports of all unessential consumable goods and to develop our own industrial arm; (2) to increase our export surplus and accelerate the tempo of our existing agricultural and industrial production; (3) even at this late stage, to examine forthwith the feasibility of cutting ourselves free from sterling.

I do not think that arises out of this agreement.

With great respect, in the Minister's statement and in the speech of Deputy Lemass the matter was referred to on several occasions.

I heard it referred to once about eggs in a basket and on no other occasion, and that was an interruption.

I bow to your ruling and will pass from that if you will permit me to say that, if we are to get the maximum benefit that the breathing space which this agreement allows us, we should consider the feasibility of examining our position in regard to liquid sterling.

The Deputy bowed to the Chair's ruling, but he did not bow very deep.

Possibly I misapprehend the point to which you, Sir, took exception.

It is not the opportune time for discussing our link with sterling.

I thought I had related it to the agreement.

A very tenuous connection.

We believe that this agreement gives us an opportunity for breathing space. We wish to make it plain that we believe in the capacity of this nation, given time, freedom and opportunity, not alone to rebuild itself, but to make a real contribution towards the rebuilding of the rest of Europe. To one other aspect of the machinery envisaged by the convention, I feel that I am entitled to refer. The United States Secretary of State, author of the Marshall Plan, declared its purpose to be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist. I feel that it would be dishonest on our part were we, while expressing our appreciation of the generous attitude of the American Government, not to point out that the granting of aid or assistance as envisaged by the American Government and in the Economic Co-operation Act of 1948 to the so-called United Kingdom means, in effect, that financial assistance by the people of the United States is, in part, being used to subsidise the continuance of the unnatural division of Ireland by the Border, and, further, that the British occupation of portion of our national territory is, in part, being financed by the wealth and power of the citizens of the United States.

The aid which the United States Government is giving and proposes to give to Britain is, therefore, being used in part to bolster up and to continue in power the undemocratic junta who obstruct in portion of our country the emergence of those political and social conditions in which free institutions can exist and to which United States Secretary Marshall referred. It is our duty on an occasion like this to let the people of the United States know that their generosity is being availed of for the purpose of perpetuating the crime of partition and the tyrannical occupation of six of our counties by a foreign power.

I want to say a few words in connection with these matters because I find that I have a viewpoint somewhat different from my colleagues. I look on this agreement as a very serious matter and I feel that other people are not looking at it in the same serious way which I approach it. I think that is exemplified here this evening to some extent by the very small attendance of Deputies while the matter is under discussion. I feel that this agreement contains a surrender of certain of our national rights and that that surrender is contained in that agreement without any apparent reason and, as far as I can see, without any justification whatsoever. We are not a beggar nation nor are we a mendicant nation.

Listening to the Minister reciting objections to the American viewpoint that we are a well-fed nation was to me a somewhat doleful experience. Undoubtedly, the general impression is abroad that our standard of living is high and for certain sections of our people there is no doubt whatsoever that the standard of living is high and very high. In the view of certain people and in the experience of certain people this is probably a land flowing with milk and honey and many people in this country are living in the lap of luxury. If the Americans have got that viewpoint in so far as a certain section of our people is concerned, they have got a correct viewpoint. If there has not been a more equitable and fairer distribution of the food and of the wealth of the country that is our own fault and nobody else's. From reading the documents that were available to me I gained the same impression that Deputy Lemass had—that the original viewpoint in this was that certain nations would come together, ad hoc, if you like, in a temporary fashion for the purpose of agreeing on a form of co-operation and that the European nations would do their best to endeavour to help one another and to build up European recovery. I gathered from Deputy Lemass that this proposed permanent—if we can call it permanent—organisation is a viewpoint of the American Government; that it was accepted without enthusiasm by other nations and that it was probably accepted because they were in the position that they wanted such assistance as they could get. Therefore, right up to the stage of this Economic Co-operation Agreement which we are entering into with the United States of America, it seemed to be a reasonable arrangement whereby this nation, in common with other European nations, would get together and endeavour to help one another.

I take the very same objections to articles in the Paris Convention that Deputy Lemass takes. I raise the same query and I make the same criticisms. Next we come to the American Act which has been referred to here as the European Co-operation Act. In America it appears to be referred to as the Foreign Assistance Act of 1948. We can examine the problem from our own point of view but let us examine it from the American point of view. What was the American objective? What had it in mind? I agree with what has been said by the Minister, by Deputy Lemass and by Deputy C. Lehane that the American Government are to be admired for their generosity to Europe. I do not want to be taken as detracting in any way from that. However, the Title of this Act that was passed in the United States describes itself as an Act to promote world peace and the general welfare, national interest and foreign policy of the United States. There is no doubt whatsoever that as far as America is concerned—while they are anxious to be generous, and we thank them for their generosity—and as far as this Act of theirs is concerned it was an Act to promote the foreign policy of the United States and it says so.

Lest there should be any misunderstanding I will read the title: "To promote world peace and the general welfare, national interest and foreign policy of the United States through economic, financial and other measures necessary for the maintenance of conditions abroad in which free institutions may survive and consistent with the maintenance of the strength and stability of the United States." Now, that is a very far distance from the raising up of European countries. There is no doubt that is covered but, as far as America is concerned, it is to promote the foreign policy of the United States and it has as its object the maintenance, strength and stability of the United States.

Section 102 (a) of that says:—

"Mindful of the advantages which the United States has enjoyed through the existence of a large domestic market with no internal trade barriers and believing that similar advantages can accrue to the countries of Europe, it is declared to be the policy of the people of the United States to encourage these countries through joint organisation to exert sustained common efforts as set forth in the report of the Committee for Economic Co-operation signed at Paris which will speedily achieve that economic co-operation in Europe which is essential for lasting peace and prosperity."

There are other matters into which I do not propose to go at this stage. But, that being so, we enter into this agreement with the United States. The preamble to that agreement sets out a number of matters which are, in fact, covered in the American Foreign Assistance Act of 1948. In Article 1 I find it is provided that—

"the Government of the United States of America undertakes to assist Ireland, by making available to the Government of Ireland or to any person, agency or organisation designated by the latter Government such assistance as may be requested by it and approved by the Government of the United States of America. The Government of the United States of America will furnish this assistance under the provisions, and subject to all the terms, conditions and termination provisions, of the Economic Co-operation Act of 1948, acts amendatory and supplementary thereto and appropriation acts thereunder."

That is my first objection. We bind ourselves to something that the American administration may pass into law amending this in the future. We bind ourselves not only to what we know at the moment but also to something that may happen in the future.

In Article 2 there are quite a number of general undertakings and this country, Ireland, agrees with America—

"to adopt or maintain the measures necessary to ensure efficient and practical use of all the resources available to it, including...to promote the development of industrial and agricultural production on a sound economic basis."

Is that the sort of clause into which this sovereign State should enter with the United States of America? We agree with the United States of America to promote the development of industrial and agricultural production on a sound, economic basis. What right have we to enter into any such agreement with the United States of America or with any other nation? Since we obtained a measure of freedom for ourselves, of which this Parliament is the symbol, has not our main objective been to promote the development of our industrial and agricultural production on a sound economic basis? I object to this Government entering into any such agreement in which we write it down that we will endeavour to promote the development of industrial and agricultural production on a sound economic basis.

The next clause is that we agree—

"to stabilise our currency, establish or maintain a valid rate of exchange, balance its governmental budget, create or maintain internal financial stability, and generally restore or maintain confidence in its monetary system."

I look upon an agreement containing such a clause as that as an insult to this country. This is Dublin, not Khandahar of 50 years ago when, after a successful march by Lord Roberts, an agreement in that form could be presented to the Afrikaanders. One of the things on which my Party, Clann na Poblachta, laid stress in its election policy was our currency. We want absolute control of our own monetary system. Here, we find ourselves entering into an agreement with the United States of America to stabilise our currency, establish or maintain a valid rate of exchange, and balance our budget. Has it not been the policy of both the Governments in this country in the last 26 years to balance our budget? Is not that what we all try to do? Now we enter into an agreement with the United States of America that we shall balance our budget in the future. I say that is an insulting agreement into which to enter with any other country.

(d) "to co-operate with other participating countries in facilitating and stimulating an increasing interchange of goods and services among the participating countries and with other countries and in reducing public and private barriers to trade among themselves and with other countries."

In other words, this country, in which there has been an active tariff policy over a number of years, in which that was felt to be necessary by two Governments prior to this one and is felt to be necessary, I understand, by the present Government, is entering into an engagement with the American Government, by which we will reduce public and private barriers to trade among European nations, the nations mentioned there as being parties to this agreement—Austria, Belgium, Denmark, France, Greece, Iceland, Italy, Luxembourg, Norway, the Netherlands, Portugal, the United Kingdom, Sweden, Switzerland, Turkey and the commanders-in-chief of certain areas in Germany.

I look upon these particular matters as the surrender of our sovereignty in certain respects, and certainly the surrender of our rights. Deputy Lemass referred to this, in so far as it was referred to in Article 8 of the Paris Convention. But it is here in this clause that we agree with the American Government:—

"2. Taking into account Article 8 of the Convention for European Economic Co-operation, looking toward the full and effective use of manpower available in the various participating countries, the Government of Ireland will accord sympathetic consideration to proposals made in conjunction with the International Refugee Organisation directed to the largest practicable utilisation of manpower available in any of the participating countries in furtherance of the accomplishment of the purposes of this agreement.

3. The Government of Ireland will take the measures which it deems appropriate, and will co-operate with other participating countries to prevent, on the part of private or public commercial enterprises, business practices, or business arrangements affecting international trade which restrain competition, limit access to markets or foster monopolistic control whenever such practices or arrangements have the effect of interfering with the achievement of the joint programme of European recovery."

By Article 3 we are compelled, if we agree, upon the request of the American Government, to consult with the American Government respecting projects in Ireland proposed by nationals of the United States of America and with regard to which the Government of the United States of America may appropriately make guarantees of currency transfer under a section of the Economic Co-operation Act of 1948.

Article 5 is an extraordinary article. It provides that the Government of Ireland will facilitate the transfer to the United States of America, for stockpiling or other purposes, of materials originating in Ireland which are required by the United States of America as a result of deficiencies or potential deficiencies in its own resources. Does that article mean what it says in words—that the United States of America may require certain materials originating in this country? They may require us to provide those for them and, if we do not provide them, where are we under this agreement?

Will the Deputy finish reading the article?

Here it is:—

"The Government of Ireland will facilitate the transfer to the United States of America, for stockpiling or other purposes, of materials originating in Ireland which are required by the United States of America as a result of deficiencies or potential deficiencies in its own resources, upon such reasonable terms of sale, exchange, barter or otherwise, and in such quantities and for such period of time, as may be agreed to between the Governments of the United States of America and Ireland, after due regard for the reasonable requirements of Ireland for domestic use and commercial export of such materials. The Government of Ireland will take such specific measures as may be necessary to carry out the provisions of this paragraph, including the promotion of the increased production of such materials within Ireland, and the removal of any hindrance to the transfer of such materials to the United States of America."

That Agreement provides specifically that the United States of America may require this country to provide materials. What those materials may be I do not know. What can one conceive them to be? If there is that difficulty, why is that clause put into that agreement at all? What materials will the Americans require us to give them? What materials do they require for stockpiling that they may want us to give? If they know at the moment what these materials are, why is it not provided? That provision leaves it absolutely open, in my view, to the United States at some time to require us to provide some materials that we might not be anxious to give them.

It will be only after due regard to our own requirements—is that not accurate?

After due regard for the reasonable requirements of Ireland. When it is a matter of interpreting what are the reasonable requirements of Ireland, will it be the big or the little nation that will decide?

For domestic use and commercial export.

Could the Minister give an idea what that material is?

In the case of Ireland, I can conceive what it could be. It is in respect of a material of which there is a surplus, and after your home needs and your export needs have been fulfilled. It could well be coffee instead of burning it; it could well be potatoes instead of letting them rot.

I know the many things that it could be, but what I am anxious to know is, when the representatives of our Government and the representatives of the American Government decided to insert that clause in the agreement, what was contemplated by it? Why should that clause be inserted in an agreement of this nature? It is a clause that may mean anything or may mean nothing. I look on that as an Article that could be dangerous, that could be a source of difference between this country and the United States. It could possibly lead to different interpretations between this country and the United States. It could lead to the bigger nation considering that we had broken this agreement. It could lead to an international tribunal, which is provided for in the agreement, deciding that we have broken the agreement, and could lead then to an occupation of this country because we had broken the agreement. That is what I am concerned with.

The agreement does not provide for the occupation of this country.

I have not said there was anything in the agreement which provides for the occupation of this country but I do say that where you have an agreement which is broken, history has shown on many occasions, the breaking of such an international agreement has led to military action. I sincerely hope that this House will never land us into the position of entering into an agreement that we shall be obliged to break and that may lead to an invasion of this country in consequence.

Article 6 says:—

"The Government of Ireland will co-operate with the Government of the United States of America in facilitating and encouraging the promotion and development of travel by citizens of the United States of America to and within participating countries."

If this was not a one-sided agreement, as I say it is, why is there not a provision for our citizens to travel to the United States? Is this a one-sided agreement under which the United States gets everything and we get nothing? We may get a loan.

We are told now that we may get nothing. It is in my opinion a one-sided agreement or, as I said at the beginning, a surrender of rights without reason or justification.

"The Government of Ireland will, when so desired by the Government of the United States of America, enter into negotiations for agreements (including the provision of duty-free treatment under appropriate safeguards) to facilitate the entry into Ireland of supplies of relief goods donated to or purchased by United States voluntary nonprofit relief agencies and of relief packages originating in the United States of America and consigned to individuals residing in Ireland."

I sincerely hope that we are not in the position at the moment that we want to facilitate America in sending relief goods donated to or purchased by nonprofit relief agencies in America. If we are not in that position that clause should not be in the agreement at all.

Article 7 is again a one-sided agreement:—

"The Government of Ireland will communicate to the Government of the United States of America in a form and at intervals to be indicated by the latter after consultation with the Government of Ireland, certain information."

In other words, we bind ourselves to communicate to the Government of the United States of America, in a form and at intervals to be indicated by America, certain detailed information. Article 9 states:—

"The Government of Ireland agrees to receive a special mission for economic co-operation which will discharge the responsibilities of the Government of the United States of America in Ireland under this agreement.

(2) The Government of Ireland will, upon appropriate notification from the Minister of the United States of America in Ireland, consider the special mission and its personnel, and the United States special representative in Europe, as part of the legation of the United States of America in Ireland for the purpose of enjoying the privileges and immunities accorded to that legation, and its personnel of comparable rank."

No one has any idea as to what size this special mission dealing with economic co-operation is going to be, or whether it is to have a representative in every town or village or in the cities but, whatever special mission America may send over, we are to consider its members as having the status of diplomatic representatives and enjoying all the privileges and immunities accorded to diplomatic representatives.

"The Government of Ireland will further accord appropriate courtesies to the members and staff of the Joint Committee on Foreign Economic Co-operation of the Congress of the United States of America, and grant them the facilities and assistance necessary to the effective performance of their responsibilities.

The Government of Ireland... will extend full co-operation to the special mission, to the United States Special Representative in Europe and his Staff, and to the members and staff of the joint committee."

Article 10 provides that we may agree to submit to the decision of the international court of justice any claim espoused by either Government on behalf of one of its nationals against the other Government.

I do not know whether there is anything further in the agreement to which I should refer. If the main purpose has been, as apparently was the intention last year, that we should co-operate with the other nations of Europe in trying to establish better economic conditions and to improve conditions generally, if the United States of America in their generosity were prepared to provide aid for those countries as they indicated and if their administration in charge of this aid are of opinion that we do not require a grant to carry on, if what we are to get from the United States of America is a loan, something to be repaid in whatever way we repay it, then I say that that matter could have been dealt with under a very simple trade agreement with the United States and that there was no necessity to enter into this one-sided agreement which gives rights to America that America should not have in this country. There should be no necessity to enter into an agreement of that kind.

In so far as that agreement does restrict our national rights. I say that it should not be ratified this evening or to-morrow. This country has been engaged in a struggle for freedom for many centuries, and that struggle has not yet ended. For the greater portion of the country we have achieved a substantial measure of freedom, and I say that it is unwise and that it is wrong in the present state of the world that we should enter into an agreement with another nation by which they can flood this country out with a mission with all diplomatic privileges; that they can require us to give information that they want; that they can compel us to look into the matter of the balancing of our Budget, the stabilisation of our currency, the reduction of trade barriers. That form of agreement, entered into without any necessity with another country, is a surrender of a certain amount of our national rights. I repeat what I have said, that this is a one-sided agreement and that it is buying, as far as we are concerned, a pig in a poke. I think it is a dangerous agreement, that it should not be entered into and, it having been entered into, I certainly say as an advocate in this House that it should not be ratified.

Deputy Cowan has delivered a very remarkable speech and I think a deliberately mischievous speech. He has talked about the things that the country has to give up and is called upon to give up in this agreement with the United States, but he has not alluded, either directly or indirectly, to the alternative. He talks about the United States "flooding this country with a mission," about their having certain rights as to how we balance our budget or conduct our affairs here, but he did not tell us what would happen if the enemies of the United States were to take control of the country and of all western Europe.

On a point of order, the agreement that is before this House is the agreement that has been presented by the Minister for External Affairs. I dealt with that agreement in so far as it was the agreement which came before this House. Deputy Cogan has now introduced another element, however, of what would happen if this agreement were not ratified.

That is an argument, not a point of order.

To introduce the question of the invasion of the countries of western Europe by Russia in answer to my argument is not in order, I respectfully submit.

I am not a lawyer. I have not the glib mind of the members of the legal profession. There are many ways of facing a question of this kind, many ways of advancing arguments in favour of proposals without saying definitely, clearly and in a forthright way what you mean, but we all know what Deputy Cowan wants. He wants to spike this agreement, and if other nations were to follow the line which Deputy Cowan suggests this nation should follow we know what would happen. There is not much that this small nation can contribute to the strength of the western European nations. There is not a vast amount of military or economic resources that we can throw into any such organisation, either potentially or at the moment. But at least we can do our share as a free and democratic nation of western Europe to co-operate with the other free and democratic nations of western Europe. I congratulate the Minister for External Affairs for having entered into this agreement with the United States. It will make for the strengthening and for the advancement of our country. It clearly will put our country in a position to uphold its freedom as all western European nations are trying to do. What are the dangers involved in the articles of this agreement to which Deputy Cowan refers? What likelihood is there that the United States are going to tyrannise this country with regard to our internal affairs? No co-operation has ever been achieved in the world between nations without giving up some little portion of their absolute and complete independence.

The League of Nations involved some little surrender on the part of the nations concerned. The United Nations Organisation also demanded a certain giving up of certain rights. You cannot have co-operation either between free people or between free nations without a certain yielding of some portions of their sovereignty. When we consider the issues involved, however, the living threat, the real threat that exists to the liberty of western Europe, I think that we will have no hesitation in saying that it is right and proper that our nation should co-operate with the other free nations of the world. We are not thinking of going as mendicants to the United States; what we are going to receive from them will be little compared with what they will be called upon probably to give to other European nations. We realise that we can also give something to them; we can give them co-operation and we can give them the assurance of strength, which comes from the realisation that this free nation will co-operate and that we will extend and expand our industrial and agricultural production and put ourselves in a strong agricultural position, thus deflecting forces that seek to place our people and the people of western Europe in slavery and tyranny.

I do not think that this agreement in any way curtails our real power either to protect our industries, to expand our agriculture or to stabilise our currency, as is suggested. I think it more or less strengthens our position in these respects. These are all things which we desire to do, and there is no reason why we should not be prepared to accept the co-operation of a great nation in seeking to achieve these things.

As the Minister for External Affairs pointed out, I believe that there is in the world a false opinion as to the standard of living which exists in this country. To a certain extent, I think that opinion was deliberately created by the predecessors of the present Government. They thought, perhaps, they were doing a fine thing in seeking to prove to the world how prosperous our country was. They thought they were more or less raising the prestige of the country and, indirectly, raising their own prestige by pretending that this country was much more prosperous than it is. We are not well off in this country, neither are we completely destitute. Under the exceptional difficulties of the emergency period we have been able to make a very reasonable attempt at survival and have survived. In spite of whatever conditions may be imposed on us by external events, we will always, I think, be able to survive as well as any nation with similar resources. We do not go hat in hand to the United States begging for alms. We seek, more or less, the co-operation of that great nation in doing the thing which the American nation thinks ought to be done, that is to increase our output and thereby put ourselves in a position to help other nations by our exports, and thus contribute to the general well-being and prosperity of the other nations who are linked up directly in this agreement.

I think it is a pity that Deputy Cowan should have introduced a jarring note into this discussion. This nation has had the strongest ties of friendship with the people of the United States. The United States have contributed in a very large measure to helping this country in her struggle for independence, just as people of our race have helped the struggle for independence in the United States and in building up that great and free nation. With these considerations in view, there is no reason why there should not be a close and formal agreement between the two nations to work together for the mutual benefit of both countries. It may happen that, at the moment, there is not much that the United States can give to our country. It may happen that it may only amount for the moment to a loan. But if this nation is menaced as other free nations have been menaced during the past six or seven years, if this nation is actually attacked, we can always count on the United States giving 100 per cent. of its support and the support of its armed manhood in defending our freedom, and that is a great deal to expect from the United States.

If one were to follow Deputy Cowan's example and go through the agreement lawyer-like and ask the House to consider the extent of the obligations of each article of the agreement signed by the Minister for External Affairs and the United States Minister in Dublin, one might be taken aback if one allowed one's imagination to run away with one. I think, however, that we have to have regard in the first place to the fact that, so far as I know, it is the same agreement as has been made between the United States and all the European states that are participating in the European Economic Co-operation Committee. I take it, therefore, that it is quite possible that some of these clauses do not refer specifically to us. It was very doubtful I should think when the agreement was being drawn up whether the United States had particularly in mind our circumstances. One would imagine that they had regard more particularly to the large European States that would be depending on them for very considerable help running into millions of dollars and, perhaps, hundreds of millions of dollars.

Take the one referring to stockpiling. I do not think that it would be easy to conceive what particular materials, let us say, of military value the United States could consider would be obtainable from this country. There may be such materials. With the progress of modern science it is impossible to know whether there might not be something of extreme value, such as the mineral which the Portuguese dug up in their back gardens which was found very useful in connection with the manufacture of steel and which fetched a very high price during the last war and did a great deal to help Portugal in achieving wartime prosperity.

One would be inclined to think that this particular article has reference to the ingredients, let us say, of the atomic bomb, which, I imagine, are to a large extent in Africa and under the control of some of the European Governments who would be benefiting from this agreement. At the same time, if the Minister for External Affairs, as he was reminded last night, were on this side of the House, I am quite sure that he would follow, generally speaking, the lines that his colleague, Deputy Cowan, has pursued, and that he would have emphasised to the House and the country the very serious nature of the obligations we are undertaking in this agreement. I do not think I am wronging the Minister when I suggest that it is not beyond the bounds of possibility that in these circumstances he might have even questioned the advisability of accepting the agreement, as Deputy Cowan seems to do.

There are certain items in the agreement about which doubt has been expressed in other countries. So far as one can read about this matter, it appears that the amendments to the final part of it dealing with the interpretations were largely inserted as a result of efforts by the British authorities to have the terms of the agreement modified.

If the British considered it necessary to have even verbal amendments inserted here and there, as in the clauses dealing with currency which they felt might be unduly onerous upon them, and if they made amendments of that kind and got the Americans to accept them, it seems likely that the view that they have is that this agreement must be taken literally, and for countries that are expecting to obtain a very large amount of aid under its provisions it would be wrong, and it would be deceiving the United States, to accept the terms of the agreement, take the money, and not spend it in the way laid down and later on to find themselves in the position that, perhaps, they still had to call on the United States for assistance. That would seem to be the British attitude. They have postponed the consideration of the agreement until next week although it involves them in a considerable loss. Apparently, if they were to take the agreement this week, before the 3rd July, they would be able to get aid during the present week to the extent of some £10,000,000 under the existing arrangements which will now have to be deferred until the agreement is ratified by the British Parliament. As I understand it, that is the position.

An objection was made about the currency question. If the Americans ask us to see that we balance our Budget and keep our national finances in proper order, I think it would be on the same line as asking us to do something that is really for our own benefit, even though it is not very palatable to have somebody else coming along and telling you like a doctor what is the best thing to do to keep the economic system of your country in a healthy condition. One would prefer to be allowed to determine for oneself. Unfortunately, if you are going to accept financial aid of one kind or another from the doctor upon which you have to depend, it seems only natural that the doctor, in allocating that aid, should lay down certain remedies, certain treatment for the patient who, on the Continent of Europe at any rate, requires a good deal of curative treatment to bring him back to health. It is only natural that certain criteria should be laid down as to what is necessary in the American viewpoint in order to maintain a healthy economy which will finally enable the countries concerned to get on their feet and to carry on without any external assistance after the four-year period over which the Marshall aid plan is to run. It is quite true, as Deputy Cowan says, that some of the clauses would arouse a certain amount of anxiety in one's mind if one felt that they were going to be pushed to extremes.

Under Article 4, the local currency article, the Government of Ireland will establish a special account in the Central Bank of Ireland in the name of the Government of Ireland (hereinafter called the special account) and will make deposits in Irish pounds, and so forth, to the extent to which dollars are obtainable from the United States of America. Pounds will have to be paid into this special account by the Irish Government. After paying the administrative costs and certain other charges out of this special account the Government of Ireland may draw upon any remaining balance in the special account for such purposes as may be agreed from time to time with the Government of the United States of America. In considering proposals put forward by the Government of Ireland for drawings from the special account, the Government of the United States of America will take into account the need for promoting or maintaining internal monetary and financial stabilisation in Ireland and for stimulating productive activity and international trade and the exploration for and development of new sources of wealth within Ireland.

With regard to the proposal about trade, the United States Government, as we know, attaches a great deal of importance to reducing or to abolishing completely the barriers to the development of international trade, as they are called, in the second article of the agreement, general undertakings, paragraph 1 (d). We bind ourselves to co-operate with other participating countries in facilitating and stimulating an increasing interchange of goods and services among the participating countries and with other countries and in reducing public and private barriers to trade among themselves and with other countries. I do not know whether the Minister is in a position to give the House any indication of the extent or the nature of the co-operation which is likely to be sought in that matter, and what the general policy of the United States Government is likely to be. In paragraph 3 we find that we are binding ourselves to take the measures which we deem appropriate and will co-operate, with other participating countries, to prevent, on the part of private or public commercial enterprises, business practices or business arrangements affecting international trade which restrain competition, and so on. In the interpretation inserted at the closing part of the agreement these provisions are explained—the explanation naturally takes the view that the clause is going to be operated and seeks to set out what is and what is not in question.

It seems quite clear that it involves some measure of restraint of trading facilities and restraint of the restrictions which operate when agreements are made between countries. In fact, the whole question—as Deputy Lemass touched upon it—of the extent to which the agreement would seem to constrain us in any way in connection with our trade agreements with either our neighbours or our friends on the Continent is a matter in regard to which we would like to have more information from the Minister. I would assume also, looking at the matter from a detached point of view, that the special mission which is spoken of enables the United States to test for itself the extent of the effort which the country seeking aid is making out of its own resources; the extent of the initiative and enterprise it is showing to co-operate with the United States; and whether it is doing the utmost possible and contributing to the maximum extent from its own resources and from its own population. I would imagine that the United States would be justified in having regard to what the individual nation would contribute in that respect. But, of course, if a mission had not special knowledge of European circumstances; if it had not regard to the different attitudes of different countries and to the fact that, as Deputy Lemass pointed out, they are largely engaged in competition with one another, that they are, in the main, manufacturing countries depending for a large part of their food and raw materials upon the United States itself— if the mission were not well grounded not alone in European economics but in European politics as well—there would be danger that they might expect results that those who are more familiar with the European scene would say are very unlikely to obtain. If the idea behind the agreements is, as Deputy Lemass said, that at some time or other there may arise a European customs union—and we know that a certain amount of progress has been made in that direction already—we would, nevertheless, be deceiving ourselves if we were to assume that in the course of time the western European States, having regard to the present aim of economic co-operation and reconstruction on the Continent, are going to give up their individual sovereignty and rights to the extent of combining in a general customs union. That idea seems to be beyond practical politics. On the other hand, if the circumstances in Europe generally make it clear to these nations that there is no other way out, and that the situation which will confront them in the future is such that there is no other alternative except to closer union—economically first and later politically— although none of us can foresee that happening, it may very well come about. Whether it would be more likely to arise if the nations were left to themselves voluntarily to work out an agreement, or whether it is more likely to come to pass under the direction and advice of the United States missions and the schemes that the United States will bring into operation in these countries, is a question we have to bear in mind in connection with this matter.

The United States of America had a very sad experience of Europe after the First Great War. They lent very large sums of money for the rehabilitation of Germany and Austria. They lost those moneys and, being far removed from European politics and not perhaps understanding the position, they were apt to blame Europe for their losses. It may be that in the interval they have learned more about European affairs. But I suggest that we have to be careful in dealing with them or in taking aid from them to show that we fully understand the obligations to which we are committing ourselves, and that if at any point we are asked to show what we are doing under particular clauses of this agreement in regard to increasing our production for example, in regard to the policy we are following in developing our resources, in regard to our policy of promoting trade with other countries, in regard to all these other matters, if we desire to secure financial aid from the United States, we will have to be prepared to answer the questions that they can legitimately ask arising out of the expenditure of these moneys.

I am not quite clear—and this is an important matter upon which the Minister might give an authoritative answer—as to whether, if we do not accept any aid under this agreement, we will be bound by the provisions to which I have referred. Will we be bound to furnish information as to what we are doing to the mission and to the United States Government? Or is it the position that it will only be to the extent to which we seek assistance that we shall be asked to undertake these obligations and answer for the expenditure and render an account of it in the way laid down?

The Minister in introducing this agreement and in proposing the agreement to the House suggested that there was a view outside this country that our standard of living was very much higher than it really is. The Minister was at some pains to quote figures regarding mortality and so on to combat the idea that, in fact, we are better off than they are elsewhere. It would be rather amusing now if one were to compare the Minister's speech in proposing this agreement with some of the speeches he has given in the past. No matter what the Minister may say the fact is that we are an agricultural country to a large extent. With our small population it would be an extraordinary thing if we had not a surplus of food One of the questions most likely to arise, if we receive aid under this measure, is as to what steps we are taking to increase our production and our trade with other countries and as to what exactly we are doing economically towards the rehabilitation and recovery of the European States. It is more than likely that any inquiries in that direction will be for the purpose of ascertaining what we are doing in the way of increasing our agricultural output. I suppose if one were to look at the output of our agriculture from the American point of view and if one were to equate it in terms of American conditions our output might appear to be rather small. But the Minister very righly mentioned that all through the war period we were deprived of fertilisers for our land. Artificial fertilisers were unobtainable. The yield from our most important crops has gone down, as he pointed out, very considerably. If that position were to continue it would take a very long period of years before we could recover the fertility of our land. Every month that passes without remedial measures being applied in order to restore our land to its former fertility holds up indirectly the recovery of Europe to whatever extent we would be able to participate in that recovery by increasing our own production.

The Minister was asked to give more definite information as to the nature and extent of the aid which he foresees we are likely to get. Since so much emphasis has been laid upon agricultural production, I think it is only right that we should know. Everybody would like to see adequate measures taken to increase our production. It is only fair that we should know what exactly this agreement holds in the way of assistance towards bringing about an increasing agricultural output and achieving higher and bigger targets all round. Fertilisers are an item of the greatest possible importance to the country. They are extremely difficult to obtain. The prices that have been quoted for fertilisers are very high indeed. If the agreement does not bring about an increase in the supply of fertilisers it will be very disappointing indeed.

The same is true of feeding stuffs. If produce is going to be turned out in increased quantities, if we are going to have that very large increase in agricultural production that we would like, feeding stuffs will be necessary. If we are to depend upon the sterling pool, the pool of dollars which the sterling countries as a whole have at their disposal and which has been very greatly depleted during the past few years, it is difficult to see how we can obtain these very important materials. We are entitled to get more information than the Minister has given us with regard to these very important matters. If we are not able to secure materials for agricultural production, for the feeding of our stock and for giving our soil back its fertility, then I fail to see how the agreement will bring about what we all so much desire, and that is that Ireland should contribute to the utmost possible extent in doing its share in its own particular way to increase food supplies for other countries.

I do not think I have anything further to add beyond pressing for information on these points: is the position this, that it is only to the extent of the assistance that we obtain under the Marshall aid programme, that we will be bound by the obligations in this agreement with the United States? Is the position this, that if we do not obtain or do not seek any aid, there will be no obligation? Secondly, what are the items and the amount of the material in each particular case—the more important material such as machinery for the equipment of our industries and, in particular, for our agricultural development, such as fertilisers and foodstuffs? What are the quantities the Minister thinks it likely that we shall obtain?

I think we are entitled also to know what the reactions of the agreement to which reference has already been made in this debate, the reactions of the contemplated agreement with Great Britain, are likely to be on this agreement. Is the position to be that this agreement will bind us to the extent its terms seem to indicate, to contribute directly to the rehabilitation of the economy of the countries on the European Continent? If that is the position, then there would seem to be a contradiction between the objective in that case and the objective set out by the agreement with Britain.

These are points on which the House is entitled to information. I do not know whether the Minister feels that there is a particular hurry or urgency in securing the approval of the House for the agreement. In his opening statement he outlined the events leading up to the Marshall aid plan and the programme that has arisen out of it, and he made reference to partition which we all endorse. Undoubtedly, if this country were operating as a single State with a single Government, it would be able to contribute more effectively because it would be more economical and efficient as a single unit than it can be at the present time when we have the position, as the Minister stressed, that in one part of the country the industrial potential is very much greater than it is in the other part. We have concentrated all that industrial potential in one particular state and in the rest of the country our potential is very largely agricultural.

We are also losing, as was pointed out, because, if we should borrow dollars from the United States and be asked to repay them later on, and if we look around to see what exports we are likely to be able to send to the United States, they are very limited indeed—whiskey, tweeds and horses. The big item is in the northern area, the big item of linen. It is a great advantage to the British Government at the present time and it is a tremendous loss to us that this very large dollar earning industry, which should rightly belong to the people of this country, is being used in a way that is not of the slightest advantage to us from the point of view of earning American currency.

I feel that Deputy Cogan was possibly unfair to Deputy Cowan in describing the speech Deputy Cowan made as a mischievous one. It may be that Deputy Cowan's conception of this agreement is different from mine—and it is—but I feel that, what ever his interpretation of the agreement is, it is sincere.

In dealing with this agreement we have got to take its background into consideration. We must approach it from the angle of whether or not we subscribe to the principles out of which the whole agreement in its ultimate form has come. The Minister for External Affairs presents this agreement for ratification. In a broad way he defined for the House the purpose of European recovery and also the purpose for which the United States proposes to make available to Europe an immense sum to help recovery. Both of these things embody a spirit of Christianity that is fundamentally Irish.

I feel we should approach this agreement in an honest, earnest way. Deputy Cowan is suspicious of it. He has gone through it in great detail and dealt with articles which to him, as a lawyer, are full of danger. I feel it is an omnibus agreement, a general agreement, and that when it comes to the point of actual operation there most probably will be found a lot of truth in Deputy Derrig's suggestions that many of the sections will not in fact apply to this country at all. I do not believe Deputy Derrig was serious in seeking information as to whether or not the terms of the agreement would bind this country in the event of no aid being given. Surely, even to a person with the most elementary intelligence, the giving of aid would strike one as being a condition precedent to the agreement?

What is behind this agreement? It purports to give to Ireland, by way of loan, certain facilities in rehabilitating herself so that she in turn may contribute what she can in a fair way to the rehabilitation of Europe. I could not conceive a more worthy object. I am glad that it is by way of loan rather than grant that assistance will come to this country. I feel this country will honour whatever obligations she may undertake and any money that may be given by way of loan will be repaid in an honest way. To that extent there is an element of fair bargaining. It may be, as Deputy Cowan said, that the agreement sounds one-sided, but when we analyse its purpose we realise that America is prepared to give us certain financial aid.

In ordinary business, never mind in international affairs, surely a person who is going to advance a loan is entitled to certain reasonable security? There is nothing to my mind unreasonable in what they seek. First of all they are anxious to define the objects for which the money is to be given. They want to make sure that any money that may be advanced by way of loan is to be used for the purpose of the rehabilitation of this country in a specific way. I do not think there is anything unfair in that and I feel that this House will be unanimous in the feeling that there are priorities to which that money should go. The first priority is rightly, as Deputy Derrig has suggested, the recapitalisation of our land so that its productivity may be increased because people, rave whatever way they may about the industrial potential of this country, must recognise that the fundamental industry is agriculture and back to that base must go the first impact of any loan or any dollar credits we may have made available to us in this country.

It is true to say that we have to accede to certain inquiries that America will make. Start off with the proposition that America is the giver and we are the receivers, is there anything unreasonable in the Americans having a deliberate type of investigation, which I conceive this special mission will have, to know what is exactly happening in this country in regard to the money so advanced? I think there is a good deal of absurdity, if not sheer nonsense, in the suggestion that we may be flooded with emissaries who might be located in every town and in every village. I feel that whatever the mission may be, it will take the normal diplomatic form and not, as conceived by Deputy Cowan, the form of hordes of certain types of inspectors going round the country.

One thing I should like to make perfectly clear and that is that if I believed, as Deputy Cowan apparently does, that we are in any way surrendering a national principle or national liberty in the agreement, I would have no hesitation about being an ardent advocate of repudiation of the agreement and of refusal of its ratification. I feel that this is a business transaction between two countries where there is a basis of friendship, a basis of understanding by virtue of the very build-up of the United States in relation to Éire. There is a certain amount of deep blood ties between the two countries. There is a consistent history of friendship between them and I feel that in this business deal this agreement does not ask us, or I do not think America would have the impertinence to ask us, to sacrifice any of our national sovereignty just because we find that, in a difficult situation in the western world, we are forced to look for a loan of dollars from America to help us to rehabilitate our country.

I accept this agreement and support the Minister in this agreement in the feeling that this country goes to America, not to beg but to ask her to help this country to rehabilitate itself in essential capital equipment, to rehabilitate the land of this country, because we know that through that rehabilitation we shall be able to honour our side of the bargain. We know that through that assistance we can put our country in a position not only to increase its production but to repay all the loan given and afford us at the same time an opportunity, as a Christian and mainly Catholic nation, to contribute our maximum effort to the rehabilitation of Europe generally. I feel that we talk in this House of this agreement without really analysing the philosophy that is behind it. It is a philosophy of honest, Christian principles—that we ought to do our best so that we may help others to recover. We never, I feel, think seriously enough about what the real plight of Europe is, because if we did, we might not be arguing about the finesse of a legal document, but we might put our back to the principle of getting our country to work in a way that would enable us as Christians to help others to recover.

I would say finally in regard to the agreement that I welcome it because I can see in it a hope for the proper recapitalisation of our land, putting our land back into a position of heart and fertility of which administrative stupidity deprived it. I see in it the possibility of giving our industries again proper capital equipment and I see in it the possibility of again reaffirming and more deeply cementing the friendship between two nations that I think no bickering in this House should tend to break.

Mr. de Valera

An international agreement is a very serious matter. I think it is highly desirable that every clause and every sentence of it should be examined carefully. I was about to ask whether it was desired that we should ratify it in a moment of hurry or why this discussion should be ended this evening. It seems to me that this agreement appears to be objectionable to a number of Deputies here from the fact that it is in a general form. I take it that this agreement is in common form. It is an agreement which is to be signed by a number of nations whose conditions and circumstances differ very much one from another. I do not think it is right to say, as one Deputy has just said, that this agreement will bind us only in case we accept aid. I think the agreement is of a general character which binds us irrespective of whether we get aid or not, and I would like if the Minister would confirm that view.

Some portions are only applicable to countries that receive aid.

Mr. de Valera

We propose to ratify an agreement which will in certain respects bind us whether we expect to get aid or not. The agreement is intended, I think, to serve two purposes from our point of view: first of all to enable us by co-operation to do something to aid the other countries of Europe to recover and to establish themselves on a sound economic basis and it is also intended to help ourselves. With regard to the first it is in my opinion our duty to do what we can as a nation to contribute to the restoration of Europe, that we should do everything that is possible for us—when I say that I mean, of course, that we are restricted by what is right for us to do as a nation—everything within our power in that sense to help Europe back to normal conditions. The alternative is a frightful one. Europe apparently without help from outside is going to be in a chaotic condition and it would be very foolish even from a narrow and selfish point of view to think that from a Europe in that condition there would not be reactions here. We would suffer, apart from any question of brotherly regard for other peoples, very severely from such a condition so I think it is our duty as a nation to do everything in our power to contribute to the restoration of Europe.

With regard to ourselves we have a very serious situation here, too. Capital development is required and we have not the means of getting the capital equipment necessary from the sources in which it is available. We want to get it if we possibly can and the only way apparently is by the provision of dollars from the United States of America, provision either by way of loan or a grant. The trouble is, when you consider the position from the point of view of a loan, what prospects we have of being able to repay the loan. If we come actually to the point of asking for a loan I think it would be very unwise for us to ask for any loan unless we were able to see clearly our ability to repay it. There is no doubt that we have certain assets but how far they would be available for loan repayment in dollars is another question. We are not, unfortunately, completely and absolutely in a position to control the use of these assets. They can be controlled from outside. We hope that we will be able to have an arrangement in such a way that these assets will be made available. It is a matter for very serious consideration that—if the accommodation must be by way of loan—before we ask for it we should clearly see our way to repayment. As to the conditions that should be imposed if we got a loan I think that they should be of a very different type from the conditions that would be imposed in the case of a grant.

It is quite clear if the United States makes a grant, a gift, that the United States has the right to see that that gift is used precisely for the purpose for which the grant was raised. Some of the clauses in this agreement which were regarded as objectionable were intended to provide that if the United States makes a grant to any country that grant will be used for the purposes which she intended, that is, for the restoration of that particular country to a sound economic position. It is quite clear that the grant could be used in a way which would lead to different results and consequently, while one would prefer to be a free agent as to the manner in which the money in the Central Bank would be used, it does not seem to me to be unreasonable that the United States in giving a grant to any nation should see that that grant is not used in a manner that would be detrimental to the general purposes which they had in mind in making the grant. I do not see how any country which accepts a grant could reasonably object to the provisions in this agreement. Undoubtedly some of the provisions could possibly be abused, but that is a question for each particular nation to consider when seeking a grant. They would have to consider whether the obligations they enter into would be consistent with their general interests. If we were a nation that absolutely needed a grant and that it was vital for us to get it, then I would say that we would have to balance which was better for us, not to look for the grant nor to accept it, or to accept it with the obligations that are attached. I do not think we can have it both ways.

There is an old Irish proverb which says that drinking is very pleasant but that paying for it is bitter and, in the same way here, not to be able to use a grant in precisely the way you desire to use it and to have to consult other people about it may be somewhat distasteful, but the alternative for each nation is not to take this money or these goods at all. I would prefer myself if we had more time to study the agreement. For my part, I have not studied it in full detail. I would like to have had more time, and I appreciate that Deputies in dealing with international documents require time to consider personally all the implications. From the study I have made, however, I feel that I would have to vote for the ratification of this instrument, to vote for it, because I feel it is necessary for the other nations in Europe. I think, however, before the final step is taken of looking for a grant or for a loan we should look more closely into the parts of the agreement that would then apply. I think, on the whole, that the United States has a right if it gives money to see that the gift is used precisely for the purpose for which it is intended. The Minister, in starting, pointed out what a very serious burden is going to be put on the taxpayers of the United States of America and therefore that the Administration of the United States in seeking the agreement of the representatives of the people to put this burden upon their people would need to be satisfied that the money would be used precisely as they want it.

For our own part, I think that before we ask for either a gift or a loan, with this agreement in front of us, we ought to ask ourselves how we are going to be able to repay the loan and to pay the interest, and, if it is a grant, whether the obligations which we enter into are of such a character that we can enter into them with the necessary degree of confidence. As I have said, I would rather if this matter could be left over for further consideration, but on the consideration which I have given it I feel I shall have to support the ratification.

I should like to say that, for my part, I welcome the speech which Deputy de Valera made on this matter. I think that his speech of commendation is a very welcome one. It is true that if this agreement is ratified during the currency of the agreement important decisions will have to be taken as to the manner in which the agreement will be worked in this country. I think all of us welcome the gesture which the agreement contains and the means it offers this country to rehabilitate its own economy and share in its own way in the recovery of Europe. I was interested in what Deputy de Valera said concerning the question of a loan. I would remind the House that this matter of a loan from America as opposed to a grant is one which has created a difficulty to which the present Minister has been alive for some time back.

Naturally this country and this House would not permit a situation to arise whereby we enter into commitments that we could not fulfil. It may be that this loan, in the opinion of the Government, can be repaid through the chance for better production which the agreement gives to the country. From my own point of view, I am certain that this entire matter will get the very careful consideration of the Government. The agreement gives a chance to this country to share in what I believe is going to be a period of prosperity for Europe in coming years. It would be very unwise for us to turn away this gesture. It would be very unwise for this country not to play its part, as Deputy Collins said, as a Christian country, first of all, and secondly as a country in Europe, in what might well be a co-operative movement to place the European Continent on a better economic basis.

I join in the welcome expressed by other Deputies to this agreement, realising not only the benefit it gives the country, but also the responsibility it entails. Like any other agreement, it puts an obligation on us to fulfil its terms. While it gives our people a chance of working harder to get better production, it also gives them a chance of getting the aid necessary for that production. For that reason, I welcome the agreement.

There is the old saying that those who go a-borrowing go a-sorrowing. After listening to the terms of the agreement one could not help feeling that one must submit to what really may be termed an infringement of our rights in order to secure dollars to rehabilitate industry here. Any of us who have had to approach a bank for an overdraft know that the usual procedure is that you are asked to what purpose you are going to put the loan, and that, having agreed to give the loan for a specific purpose, the bank will impose all sorts of conditions, such as security for repayment and a mortgage on your property. In that way one finds that the borrowing of money under any conditions is really a very hard business.

I am sure the Minister and the Government recognise that a very essential matter for this nation is that the necessary provision should be made for the repayment of any money borrowed. It would be good business for the Government to do that. It has not the same effect for an individual as for a nation if there should be default in repayment. I believe the money is necessary to get our industry going by providing the requisite machinery. I do not think it is possible to keep our machines going without assistance from America in the form of materials in some cases, or of dollars to buy them. In order to keep our foundation industry of agriculture going it is absolutely essential that we should be able to provide the requisite manures for our soil and feeding stuffs for our live stock. Agricultural products are really the only exportable products which we can look forward to finding an easy market for in Europe.

As to the question of getting free grants from America or money on loan, I must say that I do not like the idea of appealing for free grants. I do not see why America should make free grants available to us. This country has facilities available in the way of raw materials and of getting raw materials in return for its goods, whether manufactured or agricultural, and I think our workers are capable of providing for our own needs. There may be other countries in Europe in a less favourable position. We did not participate in the war and, therefore, did not suffer the destruction which other countries suffered. Although not actively engaged in the war, we did suffer substantial losses. These losses are best estimated by the fact that for six or seven years we were compelled to engage in tillage in a very extensive way. As a result of that our soil has been robbed of its fertility which was built up by many years of effort and good husbandry on the part of our farmers. One thing which is obvious is that if we are to regain a position of security in world conditions so dangerous that one might regard the future with a great degree of uncertainty, that condition of affairs will have to be remedied.

These conditions were forced upon us during the emergency and the result is that our soil is in a highly-impoverished condition. I would urge, therefore, that whatever else may happen the Government will ensure that the requisite fertilisers are made available at the earliest opportunity and in the greatest possible quantity. In that way, we shall restore the productivity of our soil at least to the level at which it was prior to the emergency. We will thus safeguard our people's food supply in the event of any future world conditions making it impossible to get supplies from outside. I am very sorry that in discussing this agreement it was not possible to have included, as mentioned by Deputy Lemass, the other agreements we entered into. On the whole, I am satisfied that we must be patient with the restrictions that are attached to any agreements we may enter into now because of the prevailing world conditions. If we desire the right to live in harmony with other countries and to claim ourselves as a civilised nation we must be prepared to play our part. While it is regrettable and hurtful that we should seem in any way to mortgage our rights, we must, nevertheless, in the interests of our people and of Christianity in Europe be prepared to make a sacrifice. We must depend upon the good guidance of our Government—in the belief that they are not trying to sell something across the floor of the House and thus to the nation—to ensure that the agreement is the best they can procure. In the interests of the community we must accept their advice and hope that the contracts the Government enters into will have good results. For that reason, I consider that the agreement should be recommended to the House and should be accepted.

I agree with the regret expressed by Deputy de Valera that more time was not available to enable a fuller consideration of these two agreements, though, by and large, the objectives of these agreements really have been available for quite a long time. As far as the convention of economic co-operation is concerned, the terms have been known and publicised since last April. As far as the bilateral agreement with the United States is concerned, while its terms have only been known publicly within the last few days, the terms embodied in it are, in fact, the terms that are set out in the Economic Co-operation Act which was passed by the American Congress. Therefore, very few of the provisions really come as a surprise. I agree with Deputy de Valera that it might have been more satisfactory if more time had been available. The difficulty as to the question of time is that, under the Act passed by the American Congress, these bilateral agreements were provided for and, after the first three months after the passing of the Act, the administrator of the Economic recovery programme was debarred from making supplies available unless these bilateral agreements had been concluded. The delay in producing the final drafts is not really the fault of the American State Department as much as it is the fault of the 16 European countries involved. They all discussed the terms of this agreement for some considerable time.

There was some delay in reaching agreement amongst themselves as to what the terms would be. Having discussed them, they appointed four representatives in Washington—a representative of Sweden, Denmark, Britain and France—to discuss some of the terms of the American authority. That meant more time. After they had discussed them they had to report back to the organisation or the 16 countries who, in turn, had to get into touch with their respective Governments and all that entailed a good deal of delay. Therefore, most of the delay was really caused by the 16 participating countries —not deliberately, but it just happened that way. As far as the American administration is concerned they had little or no latitude in the matter. An Act had been passed by their Congress setting out the terms upon which they could make 5 billion dollars available this year. The American Congress—a House like ourselves here—said: "Well, if we are spending 5 billion dollars we want to ensure that it is not going to be wasted; we want to ensure that it will be used for proper purposes and not some improper purposes." They, therefore, set out in their Act all the various conditions that they thought should be embodied in these bilateral agreements. Undoubtedly the bilateral agreements are not in the form in which a treaty would normally be set up because the American State Department was bound by the Act under which it was acting. It had to draw up a bilateral agreement that fitted within the four walls of the Act which was passed by the American Congress or it could not act.

There has been a good deal of criticism as to the terms of the bilateral agreement and as to the terms of the Convention for Economic Co-operation. I regret and deprecate many of the remarks that have been made. I think that many of them largely ignore or misinterpret the actual facts and the actual terms of the agreement. Deputy Cowan, for instance, in his criticism of the agreement article by article, in dealing with Article 1 sought to convey to the House—and to alarm the House —that the whole agreement was subject to the terms of the Economic Co-operation Act of 1948 or of any amendment that might subsequently be passed by the American Congress. The suggestion made to the House was that the House was adopting an agreement that was not final and that could be altered by the unilateral action of the Legislature of the United States. Of course there is not the slightest foundation for that. Anybody reading the agreement would see that. The article in question provides—

"the Government of the United States of America will furnish this assistance under the provision, and subject to all of the terms, conditions and termination provisions of the Economic Co-operation Act of 1948, acts amendatory and supplementary thereto and appropriation acts thereunder, and will make available to the Government of Ireland only such commodities, services and other assistance as are authorised to be made available by such acts."

In other words, the article merely provides that in so far as the American Government itself makes money available it will do so only in accordance with the law which enables it to do so; but it in no way ties this country to any acts of the American Congress, or in no way makes this agreement subject to any amendments that may be passed by the legislature of the United States at some future date.

A good deal of the other criticism that has been addressed towards this agreement is likewise based upon a complete misconception or misinterpretation of the terms of the agreement. Article 2 provides a number of conditions. It provides general conditions, but all and each one of them are subject to the first clause of the article, which sets out—

"in order to achieve the maximum recovery through the employment of assistance received from the Government of the United States of America, the Government of Ireland will take all possible steps,"

and then a number of things are set out. In order to achieve the maximum recovery through the employment of assistance we agree to take all possible steps. Those are directive clauses. Those are clauses which say, in effect, in so far as you avail of the assistance we give you we want you to comply with certain things; we want you to take all possible steps to balance your budget; we want you to take all possible steps not to run into debt, and so on and so forth.

Those are extremely reasonable provisions. I wonder what terms Deputy Cowan, or any other lawyer in this House, would embody in a loan agreement for £100,000,000 to £150,000,000. What guarantees would they demand for its repayment? What conditions would be attached to it? I would suggest to the members of this House that the conditions that would be attached to any ordinary loan transaction of that magnitude would be ten times more stringent than the provisions contained in this agreement. It is from that point of view that we have to examine these provisions. Under this agreement this country will, in effect, over a period of four years, receive a sum ranging from £100,000,000 to £150,000,000.

This country?

This country.

In other words, we are going to borrow £150,000,000—because we are not going to get a grant —for four years.

I am sorry that the Deputy must not have listened to my opening statement. The allocation of the grants and loans is to be made from quarter to quarter. I stated specifically that the administrator appointed by the American Government had stated categorically that the allocations would vary; and that the allocation made for the present quarter was not to be taken as a precedent for future quarters. I do not know in what shape aid will be given to this country for the next four years. Nor does Deputy Cowan. I do know that if this country is to subsist on even a curtailed economy for the next four years it will require at the very minimum £100,000,000 to £120,000,000 worth of goods from the western hemisphere. I know that we have to find that £120,000,000 worth of currency or gold from some source.

Will Deputy Cowan, or any Deputy in this House, get up and tell the country that we are to cut out our imports from the western hemisphere; that we are not to import any wheat; that we are not to import any coarse grains; that we are not to import any fertilisers? Because, in effect, that is what our position under this agreement means. It is all very well to oppose and criticise an agreement or to oppose and criticise a measure; but you must look at the consequences. If this agreement were not put through, if help were not forthcoming from the United States by way of purchasing facilities and by way of currency facilities, this country would not be able to import the goods that are essential to its economy. Last year we bought close on £30,000,000 worth of goods from hard currency areas in the western hemisphere. We exported £200,000 worth of goods. In other words we had a deficit of £29,750,000. Will any Deputy in this House tell me where to get £29,750,000 worth of dollars? Those are the facts that we have to face. If any Deputy is opposing this measure I think it is unfortunate that he did not tell the House where the hard currency, the dollar and the gold required to buy the wheat from which our bread is made, and the coarse grains and the fertilisers, will be obtained.

I would also like any Deputy who is opposing this measure to examine the provisions it contains in comparison with the provisions contained in most loan agreements, either in ordinary commercial life or between countries, and to compare them with the provisions of this agreement. Deputy Cowan criticised at length the provisions dealing with the power of the administrator to establish missions abroad. He said that there might be missions established in every village in the country. Is that a reasonable construction of the agreement?

I have examined this agreement with some care and I am satisfied that it in no way infringes our sovereignty. There are other countries in Europe also anxious to safeguard their sovereignties. No countries are more anxious to safeguard their sovereignties than the Scandinavian countries and this agreement was largely negotiated by the Scandinavian countries.

Deputy de Valera has made a point which, I think, he was quite justified in making. It was a point, indeed, which gave me some considerable worry and embarrassment, as to our ability to repay a loan in dollars or to service the repayment of such a loan. Frankly, my view was that unless we could see some possibility of servicing a loan in dollars, I would rather do without taking the loan. I said so publicly; I said so in America. Many of the American officials take the view that repayment depends on convertibility being achieved, that the whole Marshall plan depends on the achievement of convertibility in the period of four years, that the American people have staked their money on convertibility being achieved within that period. I do not know whether convertibility will be achieved within that period or not, and, therefore, I was in some considerable doubt as to whether this country should undertake an obligation which it saw no possibility of being able to meet. We have, however, since then been able to obtain an assurance that this country would be able to draw from the sterling area reserves such quantities of dollars as would be necessary to service any loan which we found necessary or desirable to take under the European recovery programme and which otherwise could not be paid by our exports.

Is that over and above what is required to finance our current needs?

Our current requirements. There is quite a popular misconception as to the function of the European recovery programme. The European recovery programme is there to enable us to get our current requirements; not to get things we do not need or things over and above our current requirements. People often talk of capital equipment through the European recovery programme. That may apply in the case of an industrial country where a factory has been bombed out of existence. Then possibly America may make money available by way of loan for the purpose of reconstructing the factory, but by and large you can say that 90 to 95 per cent. of our imports from the western hemisphere are not capital goods. They are just our ordinary requirements. They are consumer goods—tobacco, oil, petrol, wheat. Those are the things that absorb most of the hard currency we require from the western hemisphere. In the present state of world economy, the only things we can obtain are essential requirements.

There has been some discussion between members of the House as to whether it would be better to get a loan or a grant. I appreciate the arguments that have been put forward by members of the House on that matter. A grant would have this advantage, that it would enable the creation of what is known as a local currency fund which could in turn be utilised for development purposes. Where a grant is given the equivalent money in the local currency—in our case the equivalent money in sterling—has to be lodged in a separate fund. That money accumulates very rapidly. In our case, inasmuch as our imports amount to some £20,000,000 to £30,000,000 a year, it would mean that your local currency fund would amass, say, £20,000,000 to £30,000,000 a year. That local currency fund can then be used for development purposes with the consent of the American administrator.

I feel that if such a local currency fund had been available—or if it becomes available in the future, as I hope it will—it would have enabled works of reconstruction in the country, it would have enabled the injection into the soil of the country of large quantities of fertilisers. I think it would have enabled us to regain our productivity at a much faster rate. I think it would have been of more use to the rest of Europe because we would be able to increase our production of food more rapidly.

These are some of the considerations which make me feel that a grant would have served a more useful purpose from the point of view of the architects of the European recovery programme. On the other hand, in support of those who have expressed the view—I think Deputy Maguire was one—that a loan is more satisfactory, there is this to be said, that a loan is not subject to many of the stringent conditions contained in the agreement which are applicable to grants. Therefore, you have greater freedom in the utilisation of the currency you obtain by way of a loan than you have in the case of a grant. Our problem here is not shortage of money. We have money; we have sterling—up to £400,000,000 worth of sterling stacked up in England. That is the egg basket to which references were made here to-day. The whole problem arises because that sterling is not convertible into gold or dollars, is not capable of purchasing the goods that we normally require from the western hemisphere. The whole purpose of that portion of the European recovery programme relating to the bilateral agreement is to overcome the difficulty of obtaining goods required from the western hemisphere. The Americans have made available to Europe these vast sums of their own currency in order to enable Europe to purchase these goods.

I think that it was Deputy Maguire who said that this country had not received any direct damage from the war but that its agriculture had suffered considerably as a result of the war. I quite agree and I think Deputy Maguire somewhat understated the damage done to agriculture in this country during the war. Put it this way. If a mine is hit by a bomb in war time, the mine remains unimpaired, the buildings may be actually destroyed, but you can rebuild the buildings. If a factory is destroyed, you can rebuild that factory in a comparatively short space of time. Our country consists of some 350,000 factories, 350,000 small holdings of land, small holdings that have been run without the fertilisers that we require to keep the soil in fertility. Gradually they have been wearing themselves out as machinery wears itself out without oil. It will be much harder to rebuild the fertility of the soil than it would be to rebuild a concrete building or a concrete site.

I do not know whether or not to get cross with Deputy Lemass, but I do wish that in matters relating to external affairs, he would display a somewhat greater sense of responsibility. The burden of his suggestions to-day, the burden of the suggestions repeatedly put forward in his newspaper over a period of time, was that Ireland was always to get this European recovery programme money by way of grant. "That was the position when we left office, but Ireland is not going to get it by way of grant because this Government has put us in an undesirable position." Repeatedly to-day in the course of his speech and repeatedly in his newspaper he has stated categorically and stated indirectly as well: "There was not the slightest indication before we left office that Ireland was not to benefit by way of grant." I am quite willing to give Deputy Lemass credit for not having known the facts, but I do think that when his attention is drawn by a responsible Minister on the other side of the House to the fact that he is making a mistake as to his facts, he should stop and that, when he is proved wrong, he should apologise and admit that he has made a mistake.

The position is that on January 12th the matter came up before the United States Foreign Relations Committee and a statement was made by Mr. Willard Thorpe concerning Ireland's position. He said:—

"Ireland, in our calculations, might have some assistance, but it would be in the form of loan and not in the form of grant."

That was on the 12th January, 1948. Later on—I need not trouble the House with this—Ireland was placed in the category of nations that might get no aid at all, either by way of grant or loan. Following upon that, my predecessor in office, Deputy de Valera, who was then Minister for External Affairs, sent a memorandum to the American authorities in reference to this very statement. In view of that, I think that Deputy Lemass should admit that he has made a mistake and not put me into the position of having to attack him in regard to this matter. I think it would create a better feeling. I think that in matters relating to external affairs this House should present a united front.

Could the Minister again state the name of the person who made the statement to which he refers?

Mr. Willard Thorpe.

And his position?

He is Assistant Secretary in the State Department. I have the Memorandum sent by the Department of External Affairs if the Deputy wants to see it. Will the Deputy admit he was wrong?

There is other knowledge which is available to me, and I am sure it is available to the Minister, which will justify what I said.

I have no other knowledge. Will the Deputy admit he was wrong? I appeal to Deputy de Valera whose Department at that time made representations to Washington in relation to the matter to suggest that Deputy Lemass might be generous enough to admit he was wrong.

The Minister must deal with the Deputy who made the statement.

I shall deal with the Deputy who made the statement. Here and now I charge Deputy Lemass with having repeatedly published in his newspaper false statements relating to that position. While I was in Washington Deputy Lemass caused to be published in his newspaper dated May 25th this statement. The statement was on the front page and had a big double-column heading:—

"Speculation continues in Dublin over Mr. MacBride's statement before his departure for Washington that Ireland might not benefit under the Marshall plan, writes the Irish Press political correspondent. It had never been previously suggested by any source, Irish or American, as far as is known, that this country would not share in United States aid in the same way and relatively to the same extent as the other 15 participating countries of Western Europe.”

Now I have drawn Deputy Lemass's attention to the fact that that was an untrue statement. He has repeated that several times in statements in this House and in several other portions of his newspaper on different dates, and, apparently, he has not got the courage or the honesty now to admit that he was wrong. I suggest that he is being unfair to himself.

Will the Minister explain to me why, on a date subsequent to the date which he quoted, there appeared in the newspapers from American sources lists of the commodities to be supplied under the European recovery programme to this country?

I am not aware that any statements were published from any American sources that this country was to receive anything by way of grant from the United States. I am aware that untrue statements, which I gave credit to the Deputy for having made in a mistaken view of the facts, appeared in his newspaper. I have now drawn the Deputy's attention to the facts and I think, in fairness to himself, if not in fairness to me and my Department, he should admit that he made a mistake.

Will the Minister explain, is it on the basis of a statement made by a minor American official——?

A Deputy

Sit down.

I am willing to sit down and listen provided that the same applies to both sides of the House. The Minister interrupted me.

I did not interrupt the Deputy once.

The Minister for Defence——

Several times I referred to the Minister for Defence in my speech, and I will refer to him again if I like.

The Deputy has made in this House to-day statements that were untrue.

I made statements which were true as far as I know.

In fact they were untrue, as you know.

I do not know.

Mr. de Valera

I can say I saw on the papers lists of the supposed things that were to come.

I am not talking about lists of the proposed things. I am talking about statements made in this House that aid would be given to this country by way of a grant, statements repeated in the Deputy's paper, that it was never in doubt until I took over office and until I bungled it. The statements made were untrue, and I call upon the Deputy to withdraw them.

When he will be——

The Minister is in possession and must not be interrupted.

Why did the Minister for Justice state last week that we would have got a grant except for the intervention of Deputy de Valera?

I suggest that you made in this House repeatedly to-day statements that were untrue in fact, and you made in your newspaper repeatedly untrue statements.

They were not untrue.

They were and they are untrue. I have read a report of the United States Foreign Relations Committee and I have here the memorandum which was sent as a result of these talks to Mr. de Valera's Department in Washington. In view of that, do you still deny that these statements are untrue?

I suggest that the Minister should use the third person.

I will let the House judge the weight they can place on statements made by Deputy Lemass in future from those he has made this evening.

I know the weight I will place on the Minister's statement, because he has the information I have.

I challenge Deputy Lemass to produce any authoritative statement proving that this country was to get aid by way of a grant and not by way of a loan.

There was no suggestion to the contrary up to the time that we left office.

I have evidence——

Of a minor American official.

He was not a minor official, but the official who appeared before the American Congress. He was not a minor official and he was not looked upon as a minor official by Mr. de Valera at the time, because his Department thought it essential to send a special memorandum to Washington which was handed to the American Minister here in Dublin in relation to it. The same applies to your remarks about the Havana Charter contained in Article 6 of the Economic Co-operation Convention. The self-same provisions are contained in the report of the Paris Committee signed by Mr. de Valera.

That was before the Havana Charter was drafted. Now that it is drafted, let us discuss it.

It was drafted then.

It was not.

The Minister is entitled to speak, and should be allowed to speak.

A Deputy

He challenged the Deputy.

The framers of the draft charter for an international trade organisation that is signed——

That is a draft; it is not the actual document.

Is that the quibble you are on now?

Will the Minister say whether he intends, by the ratification of the Economic Co-operation Convention, to commit us to the ratification of the Havana Charter?

It does not commit this Parliament to ratify the Havana Charter. If the Deputy had taken the trouble to read Article 6 of the convention properly he would see that it does not involve any commitment of that kind and that is one of the reasons why it is so drafted. I hope that the House will, in a matter of this kind, act with a sense of responsibility and will ratify these two agreements unanimously and thus show that it is their desire to take a part in the plans for economic co-operation for the mutual and self-help of Europe.

Question put and agreed to.
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