I move that Dáil Eireann approves the Agreement between Ireland and the United States of America governing disposition of the balance in the Counterpart Special Account signed at Dublin on the 17th June, 1954, a copy of which was laid on the Table of the Dáil on 4th December, 1954.
The Economic Co-operation Agreement which was signed in 1948 between this country and the United States of America was the basic agreement under which Ireland availed of aid under what came to be known as the Marshall Plan or the European Recovery Programme. That agreement provided amongst other things that where we received aid on a grant, as distinct from a loan basis, the Government should deposit into a special account opened in its own name in the Central Bank an amount in Irish pounds equivalent to the dollar cost to the United States Government of commodities, services and technical information made available to Ireland by that Government during the currency of the Marshall Plan.
Most of the aid which Ireland received was by way of loans, and as Deputies will be aware, we undertook to repay these loans with the interest thereon over a specified number of years. An initial grant, however, of $3,000,000 was made to Ireland in respect of the year ending 30th June, 1950, and a special account was accordingly opened in the Central Bank for the reception of the counterpart of this grant aid. Subsequent allocations raised the total amount of grant aid received by us to $18,000,000, and a corresponding amount of counterpart was lodged in the special account in the Central Bank. Five per cent. of each deposit made to the special, account was reserved for the use of the United States Government for its expenditures in Ireland in accordance with the provisions of the 1948 Agreement. The total amount now available in the counterpart special account is approximately £6,142,000.
The 1948 Agreement provided that the Irish Government could draw from the balance in the special account for such purposes as might be agreed on from time to time with the United States Government. In May, 1950 agreement was reached for the use of £50,000 from the special account to meet local currency expenditure by the Irish Government on technical assistance projects. During the years 1950 and 1951 other proposals for the utilisation of the Counterpart Funds were put before the American authorities, but no agreement had been reached regarding these proposals before the suspension of American economic assistance to Ireland early in 1952, and the final termination of such assistance later in that year.
The 1948 Agreement provided that where an unexpended balance remained in the special account at the time of termination of economic assistance, it would be necessary before that balance could be used to obtain the approval either by act or joint resolution of the Congress of the United States of America. Between June, 1952 and March, 1953, a total of twelve projects, together with a reserve fund were put before the American authorities designed to utilise in full the unexpended balance of £6,142,000.
It was decided accordingly to conclude a bilateral agreement between the two Governments regarding the disposition of the balance in the special account, and to present that agreement for approval to the U.S. Congress. A draft agreement for this purpose was accordingly negotiated and initialled in Dublin in August, 1953. Subsequently, however, certain modifications of the proposals were agreed upon in Order to meet the views expressed on the American side, particularly in the American Senate Foreign Relations Committee. Five projects were dropped from the original list, and one new one (that for an educational exchange programme) was added. In consequence of the foregoing changes in the list of projects, it became necessary to revise the draft agreement of August, 1953, and a new agreement based on the proposals as they now stand, was signed in Dublin on the 17th June, 1954. Ratification of this agreement on the American side was effected by the inclusion of a special provision in the Mutual Security Act of 1954, which was passed by both Houses of Congress and signed by President Eisenhower in August last. In accordance with Article V, this agreement becomes effective on the date of the exchange of ratifications by the two Governments. Before effecting this exchange, the approval of Dáil Eireann is being sought for the agreement.
The agreement expresses the mutual desire of the two Governments that the counterpart money should be used for the benefit of the Irish economy, and Article I thereof indicates in a general way the measures upon which the money may be spent. They are:—
"(a) Scholarship exchange between the United States and Ireland;
(b) Other programmes and projects (including the establishment of an agricultural institute) to improve and develop the agricultural production and marketing potential of Ireland and to increase the production and efficiency of Irish industry, and
(c) development programmes and projects in aid of the foregoing objectives."
All of these projects and programmes are to be drawn up with a view to their making a continuing contribution to our economy.
The purposes for which counterpart Funds may be used are, of course, couched in general terms only in the agreement, and Deputies will observe that Article III provides that specific sub-agreements must be negotiated between the two Governments in relation to each project which will set forth among other things a detailed specification of the nature of the projects, including a detailed budget and a plan of expenditure. These sub-agreements are at present in course of negotiation. There are in all eight projects, and they are expected to absorb about £5.8 million of the Counterpart Funds. The balance of approximately £340,000 will be held in a reserve fund in accordance with Section 4 of Article III of the agreement to meet either unforeseen increases in the costs of agreed projects, or for other programmes or projects which may be agreed upon. We have agreed to make annual reports to the United States Government on the status of the projects and programmes covered by this agreement.
I have already informed the Dáil in reply to a question by Deputy Collins on the 23rd June last, the nature of the eight projects which have been agreed upon. The scheme most likely to come into operation first is that providing for the subsidisation of the delivery cost of ground limestone. As Deputies will be aware, since March, 1951, the Government have operated a scheme of this nature, and up to 31st March last, the expenditure thereon was approximately £1,150,000. A sum of £600,000 was provided for in the Budget for the current year for this scheme, and this money provided by the Exchequer will continue to be used for the subsidy up to the date on which the sub-agreement comes into operation. Deputies will appreciate that it is essential for higher productivity to increase the application of ground limestone, so that annual losses are made good, and to replenish to some extent the lime reserve of our soil. It is the aim of the Government to integrate liming into the farming system as a practice essential to good farming, and to the building up of soil fertility. To this end it is proposed to spend over the next three years a sum of £1,750,000 of Counterpart Funds on the subsidisation of the delivery cost of limestone, so as to encourage its extensive use among our farmers.
Another scheme which it is hoped will come into operation without undue delay is that for the eradication of bovine tuberculosis. Already since the 1st September last the Government have introduced a scheme for the eradication of bovine tuberculosis in County Sligo and in an area surrounding the parish of Bansha. The moneys for these two schemes have been provided and will continue to be provided from funds made available by the Exchequer. Counterpart Funds will be used on intensive eradication work in County Clare, and in the rest of the country except County Sligo and Bansha. The total sum of money which has been earmarked for use under this project is £700,000.
The third project is intimately linked with the previous one, and is for the provision of grants towards the purchase by creameries and cream separating stations of equipment for the pasteurisation of separated milk, and the sterilisation of milk containers. A sum of £500,000 will be utilised for these purposes.
A fourth programme is intended to provide for the making of grants to assist Muintir na Tire, Macra na Feirme and the Irish Countrywoman's Association. A sum of £30,000 of counterpart money will be made available to this end. A sum of £1,840,000 is being provided for the purpose of setting up an agricultural institute, and a sum of £500,000 for the establishment of an education exchange programme with the United States of America. £350,000 will be provided for defraying in whole or in part the cost of technical assistance projects, and finally, a sum of £130,000 will be provided to make available additional laboratories and equipment for the Institute for Industrial Research and Standards. The details of these schemes are at present being worked out in collaboration with the American authorities, and it is hoped that we shall be in a position to complete the details during the course of the next few months.
The importance of these projects for the development of our economy during the next few years will be evident to Deputies, and there is no need for me to elaborate upon that aspect of the matter at this stage. Before concluding, however, I would like to thank especially the American Ambassador, Mr. Taft, for the unfailing interest which he has shown in these projects, and for the assistance which he has so readily given at all stages in the rather prolonged work of preparation and negotiation which has taken place.
