In Search of the Promised Land

by Gary Murphy

  What the Marshall Plan did was to initially allow Ireland to re-join the community of Western European states to which External Affairs, in particular, felt the country belonged. It ended the country’s diplomatic isolation after the end of the Second World War by allowing it a discursive place at the initial proceedings and by involving it in an already mapped-out course for the immediate economic future of Western Europe. The Irish Government did, however, concede little ground over intra-European trade liberalisation, and remained extremely apprehensive about US ideas for a multilateral customs union, which would have entailed joining a free trade area with a common external tariff.136Moreover, the Government was obsessed with partition, which to everyone else at the original conference was nothing but a nuisance. Coming at a time when the world was trying to reinvigorate itself after the horrors of the war, Irish complaints about partition were both incoherent and unrealistic.137Nevertheless, the agenda advanced by the Department of External Affairs in this crucial period of Irish foreign policy did set an important precedent for the direction that the Irish state would take – albeit torturously at times – in the following two decades.

  Notes

  1 Patrick Lynch, ‘The Irish economy since the war, 1946–51’ in Kevin B. Nowlan and T. Desmond Williams (eds), Ireland in the War Years and After (Dublin, 1969), p. 185.

  2 Enda Delaney, Demography, State and Society: Irish Migration to Britain, 1921–1971 (Liverpool, 2000), p. 113.

  3 Ibid.

  4 Ibid., p. 125; this includes Northern Ireland.

  5 Ibid., p. 130.

  6 Ibid., p. 122; see also Lynch, ‘Irish economy’, p. 185.

  7 Bryan Fanning, The Quest for Modern Ireland: The Battle for Ideas, 1912–1986 (Dublin, 2008), pp. 194–5.

  8 John Horgan, Seán Lemass: The Enigmatic Patriot (Dublin, 1997), p. 110.

  9 See Journal of Social and Statistical Inquiry Society, 1942–47, volume xvii, sessions 96–100, pp. 438–59.

  10 Ibid., pp. 439–40.

  11 Ibid., p. 442.

  12 Ibid., p. 459.

  13 Arnold Marsh, Full Employment in Ireland (Dublin, 1945), p. vii.

  14 Paul Bew and Henry Patterson, Seán Lemass and the Making of Modern Ireland 1945–66 (Dublin, 1982), pp. 19–20; John Horgan, Lemass, p. 129.

  15 Clair Wills, That Neutral Island: A Cultural History of Ireland During the Second World War (London, 2007), p. 424.

  16 Eunan O’Halpin, Defending Ireland: The Irish State and its Enemies Since 1922 (Oxford, 1999), pp. 254–5.

  17 Lynch, ‘Irish economy’, p. 189.

  18 Ibid., p. 188.

  19 Department of External Affairs, memorandum on emigration, cited in Enda Delaney, ‘Emigration, political cultures and the evolution of post-war Irish society’ in Brian Girvin and Gary Murphy (eds), The Lemass Era: Politics and Society in the Ireland of Seán Lemass (Dublin, 2005), pp. 53–4.

  20 See David McCullagh, A Makeshift Majority: The First Inter-party Government, 1948–51 (Dublin, 1998), p. 142.

  21 J.J. Lee, Ireland 1912–1985: Politics and Society (Cambridge, 1989), p. 289.

  22 Lynch, ‘Irish economy’, p. 186.

  23 UCDA, Costello papers, P190/713 (17), policy suggestions from the AG [nd, c. Sept. 1956].

  24 Dáil Debates, vol. 9, col. 562, 30 Oct. 1924.

  25 Kieran A. Kennedy and Brendan R. Dowling, Economic Growth in Ireland: The Experience Since 1947 (Dublin, 1975), p. 201.

  26 Author’s interview with Domhnall McCullough.

  27 David Jacobson, ‘Theorising Irish industrialisation: The case of the motor industry’, Science and Society, vol. 53, no. 2 (summer 1989), p. 167.

  28 NLI, Brennan papers, MS 26, 359, J.J. McElligott to Minister for Finance, 11 Feb. 1948.

  29 NLI, Brennan papers, MS 26, 383, Dillon to Glenavy, n.d., but by context late Dec. 1949.

  30 Ibid.

  31 Ibid., Glenavy to Dillon, 30 Dec. 1949.

  32 Author’s interview with Patrick Lynch. Lynch credited his appointment to his friendship with Alexis Fitzgerald, son-in-law of Costello, but it is also clear that Costello had a recommendation from McElligott regarding Lynch.

  33 MacBride is quoted in the Sunday Independent, 25 Sept. 1949.

  34 Maurice Moynihan, Currency and Central Banking in Ireland 1922–60 (Dublin, 1975), p. 354. See also Ronan Fanning, The Irish Department of Finance 1922–58 (Dublin, 1978), pp. 442–55 for a vivid description and analysis of the devaluation crisis.

  35 Sunday Independent, 6 Mar. 1950.

  36 NLI, Brennan papers, MS 26 428, memorandum for the Government, financial policy, 16 Oct. 1951.

  37 Ibid.

  38 Author’s interview with Seán Cromien.

  39 Kennedy and Dowling, Economic Growth in Ireland, p. 202.

  40 See Denis O’Hearn, ‘The road from import-substituting to export-led industrialisation in Ireland’, Politics and Society, vol. 18, no. 1 (1990), pp. 14–15; also Lars Mjoset, The Irish Economy in a Comparative Institutional Perspective (Dublin, 1992), p. 268.

  41 Even in the dark days of 1957, Gerard Sweetman, Minister for Finance in the second Inter-Party Government, echoed the predominant economic view when telling the Fine Gael ard fheis: ‘it is quite useless to talk of a long-term economic plan in a free private-enterprise economy’: NAI, DT, S.16066A, speech by Sweetman at Fine Gael ard fheis, 6 Feb. 1957.

  42 Richard Dunphy, The Making of Fianna Fáil Power in Ireland 1923–1948 (Oxford, 1995), pp. 249–50.

  43 NAI, DT, S.13814A, Industry and Commerce memorandum on the control of prices and promotion of industrial efficiency, 26 Feb. 1946.

  44 Ibid. See also O’Hearn, ‘Road from import-substituting’, p. 14.

  45 Author’s interview with Tadhg Ó Cearbhaill.

  46 NAI, DT, S.13814B, Department of Finance memorandum: comments on proposed legislation to establish an Industrial Efficiency Bureau, 4 Mar. 1946.

  47 Quoted in O’Hearn, ‘Road from import-substituting’, p. 14.

  48 Author’s interview with Colm Barnes.

  49 Emmet O’Connor, A Labour History of Ireland, 1824–1960 (Dublin, 1992), p. 132.

  50 See Niamh Puirséil, The Irish Labour Party, 1922–73 (Dublin, 2007), pp. 102–3.

  51 Stefan Berger and Hugh Compston, Policy Concertation and Social Partnership in Western Europe (Oxford, 2002) p. 158.

  52 O’Connor, Labour History, p. 160.

  53 Ibid., p. 161.

  54 Puirséil, Irish Labour Party, p. 119.

  55 Ibid., pp. 130–1; Niamh Puirséil, ‘Political and party competition in post-war Ireland’ in Girvin and Murphy, Lemass Era, p. 14.

  56 O’Brien had retired from the ITGWU, although he retained his well-remunerated position as a director of the Central Bank. Larkin died in January 1947.

  57 O’Connor, Labour History, p. 155.

  58 Plunkett is quoted in John L. Pratschke, ‘Business and labour in Irish society, 1945–70’ in J.J. Lee (ed.), Ireland 1945–70 (Dublin, 1979), p. 39.

  59 Author’s interview with Donal Nevin.

  60 Brian Girvin, ‘Trade Unions and Economic Development ’ in Donal Nevin (ed.), Trade Union Century (Cork & Dublin, 1994), p. 123.

  61 An account of Lemass’ success in originally defeating MacEntee in responding to Labour, the unions and the working class can be found in UCDA, MacEntee papers, P67/362–66.

  62 Brian Farrell, Seán Lemass (Dublin, 1983), p. 82.

  63 Bew and Patterson, Seán Lemass, p. 12.

  64 Ó Cearbhaill interview.

  65 NAI, DT, S.11752A, interim report of the Industrial Development Authority regarding industrial exports, 27 Sept. 1949.

  66 UCDA, McGilligan papers, P35B/55, note for Minister for Finance, 18 Oct. 1949.

  67 Ibid., P35B/69, Finance memorandum on proposed Industrial Development Board, 1949.

  68 Ibid., P35B/47, memorandum on proposed Industrial Development Board, n.d., c. 1949.

  69 Barnes interview. McGilligan’s comment can be found in UCDA, M
cGilligan papers, P35B/47.

  70 O’Hearn, ‘Road from import substituting’, p. 16.

  71 Irish Independent, 21 Feb. 1949.

  72 See Brian Girvin, Between Two Worlds: Politics and Economy in Independent Ireland (Dublin, 1989), pp. 173–4.

  73 Lynch interview. Lynch was a member of the Dollar Export Advisory Committee and the Foreign Trade Committee at this time.

  74 Interviews with Dr Aodogan O’Rahilly, Joseph McCullough, Domhnall McCullough and Colm Barnes.

  75 Dáil Debates, vol. 119, col. 1585, 9 Mar. 1950.

  76 Lemass to Dwyer, quoted in Michael O’Sullivan, Seán Lemass: A Biography (Dublin, 1994), p. 118.

  77 Joseph McCullough interview.

  78 Girvin, Between Two Worlds, p. 176. See also Mary E. Daly, Social and Economic History of Ireland Since 1800 (Dublin, 1981), pp. 164–5.

  79 Ó Cearbhaill interview.

  80 NAI, DT, S.11987, establishment of Industry: Underdeveloped Areas (Amendment Act), 1957.

  81 NLI, Brennan papers, MS 26 248, memorandum for the Government, financial policy, 16 Oct. 1951.

  82 For a useful account of the different historiographical interpretations of Irish involvement in the Marshall Plan, see Till Geiger, ‘The enthusiastic response of a reluctant supporter: Ireland and the Committee for European Economic Co-operation in the summer of 1947’ in Michael Kennedy and Joseph Morrison Skelly (eds), Irish Foreign Policy 1919–1966: From Independence to Internationalism (Dublin, 2000), pp. 222–3, 244–6.

  83 Whitaker is quoted in Ronan Fanning, Department of Finance, p. 406.

  84 In a number of interviews with the author, Whitaker insisted that Marshall Aid was in no way a development programme of any kind, but simply a mechanism by which the US gave funds to the Irish Government.

  85 Author’s interview with Charles Murray.

  86 Murray and Boland are quoted in Bernadette Whelan, ‘Ireland and the Marshall Plan’, Irish Economic and Social History, no. xix (1992), p. 54.

  87 For a comprehensive account of the background to the original conference, see Bernadette Whelan, ‘Integration or isolation? Ireland and the invitation to join the Marshall Plan’ in Kennedy and Skelly, Irish Foreign Policy 1919–1966, pp. 203–21. See also her thorough study, Ireland and the Marshall Plan, 1947–57 (Dublin 2000), for a further elucidation of this theme.

  88 This comment is in a source entitled ‘Reminiscence of an Irish diplomat: Frederick H. Boland, ambassador to London, permanent representative at the United Nations and president of the General Assembly 1960’. It was compiled by Boland’s daughter, Mella Boland (Crowley), and is based on a series of extended conversations between the two during the latter stages of his life. Copy in possession of the author.

  89 Michael Kennedy and Eunan O’Halpin, Ireland and the Council of Europe (Strasbourg, 2000), pp. 23–32.

  90 NAI, DFA, 305/57/I, European Economic Co-operation Conference, EECC/9, speech by Lemass, 14 July 1947.

  91 Ibid.

  92 NAI, DFA, 305/57/I, report from Boland to Taoiseach, 30 Aug. 1947.

  93 De Valera is quoted in D.J. Maher, The Tortuous Path: The Course of Ireland’s Entry into the EEC 1948–1973 (Dublin, 1986), pp. 23–4.

  94 NAI, DFA, 305/57/1A, Boland to Ó Broin, Leydon and McElligott, 8 Mar. 1948.

  95 UCDA, P176, Fianna Fáil parliamentary-party minutes, 441/A, 30 June 1948.

  96 NAI, DFA, 305/57/III, Ireland’s relation to ERP, 29 June 1948.

  97 Ibid.

  98 NAI, DFA, 305/57I, general considerations on Ireland’s position in relation to ERP, n.d., but by context mid-1948. This document – although untitled and undated – was probably written by Whitaker, and contains much of the same arguments as the document ‘Ireland’s Relation to ERP’. The arguments, however, are stated in much bolder and more forceful terms.

  99 NAI, DT, S.16877X/62, statement to ministers of the Government of the member states of the European Economic Community, revised 1 Jan. 1962. This document – though written some eighteen years later – also bears Whitaker’s imprint. He was the official most involved with the EEC application.

  100 NAI, DFA, 305/57I, general considerations on Ireland’s position in relation to ERP.

  101 Ibid.

  102 Ibid.

  103 McCullagh, Makeshift Majority, p. 153.

  104 NAI, DFA, 305/57/1A, Nunan to Boland, 28 Apr. 1948.

  105 NLI, Brennan papers, MS 26 414, Boland to McElligott, n.d., but by context early Mar. 1948.

  106 NAI, DFA, 305/57/3, speech of Frank Coffey to Jersey City Lions club, 16 Mar. 1948.

  107 Ibid.

  108 Ibid., External Affairs to Washington, 18 Mar. 1948.

  109 Ibid., Washington to External Affairs, 18 Mar. 1948.

  110 Ibid., 305/57/3, Washington to secretary, 1 Apr. 1948.

  111 Ibid., 305/57/3, speech of Frank Coffey.

  112 Ibid., External Affairs to Washington.

  113 The full text of this speech is in NAI, DT, S.17246A/62, 5 Feb. 1962, and came in the context of Ireland’s application to join the European Economic Community in 1961.

  114 Diarmaid Ferriter, The Transformation of Ireland, 1900–2000 (London, 2005), p. 467.

  115 NAI, DFA, 305/57/1A, memorandum of meeting in McElligott’s room, 1 June 1948.

  116 Irish Press, 2 June 1948.

  117 NAI, DFA, 305/57/1A, comment by Department of External Affairs.

  118 McCullagh, Makeshift Majority, p. 153.

  119 NAI, DFA, 305/57/1A, Brennan to Boland, 15 June 1948.

  120 Alan Milward, The Reconstruction of Western Europe 1945–51 (London, 1992), pp. 183–4.

  121 Dáil Debates, vol. 110, cols. 332–3, 10 Mar. 1948. Both Brennan and MacBride are quoted in NAI, DFA, 305/57/1A.

  122 NLI, Brennan papers, MS 26 413, Department of External Affairs, submission to Government concerning interdepartmental and staff organisation for administration for the European Recovery Programme, 28 Apr. 1948.

  123 Ibid.

  124 McElligott is quoted in Fanning, Department of Finance, p. 411.

  125 NLI, Brennan papers, MS 26 413, McElligott to Boland, 30 Apr. 1948.

  126 Lynch interview.

  127 Cromien interview.

  128 Ibid.

  129 Boland, Reminiscences.

  130 UCDA, P35C/2, McElligott to McGilligan, 17 Dec. 1948.

  131 UCDA, P35C/47, Department of Finance memorandum, financial policy, 26 Nov. 1949.

  132 Whitaker interview.

  133 NLI, Brennan papers, MS 26 428, George Duncan, ‘The budget of 1950’ to Dublin Chamber of Commerce, 24 May 1950.

  134 Brian Girvin, ‘Did Ireland benefit from the Marshall Plan? Choice, strategy and the national interest in a comparative perspective’ in Till Geiger and Michael Kennedy, Ireland, Europe and the Marshall Plan (Dublin, 2004), p. 207.

  135 Donal Ó Drisceoil, Peadar O’Donnell (Cork, 2001), p. 113; The Bell, vol. 16, no. 6 (Mar. 1951).

  136 Geiger, ‘The enthusiastic response of a reluctant supporter’, p. 244.

  137 Girvin, ‘Did Ireland benefit from the Marshall Plan?’, p. 207.

  2. This Dark and Dismal Land

  Patrick McGilligan introduced Ireland’s first capital budget in May 1950, declaring:

  One of the primary responsibilities of a Government is to promote, by an enlightened budgetary and investment policy, the continuous and efficient use of national resources in men and materials.1

  Described by Patrick Lynch as the first explicit expression of Keynes in an Irish budget, and drafted by Lynch in association with Alexis Fitzgerald, the budget sought to allocate a certain part of the nation’s finances to public purposes, and to ensure that the nation’s resources were utilised to advance the interests of the community as a whole. Lynch – very much influenced by the Swedish and Norwegian systems – saw the capital budget purely as a matter of capital investment. He argued that the only way in which the repatriation of sterling assets could be achieved would be by a deficit in the curr
ent Government budget; the proceeds would go into productive investment.

  McGilligan had undergone what could be described as a Pauline conversion from his very conservative, ‘reactionary even’ days of the late 1920s, from which the ‘Irish people might have to starve’ comment continued to hang albatross-like around his neck.2Lynch put this conversion down to the fact that McGilligan was a man of wide reading; he had read Keynes and was influenced by him. Keynes’ comments during the Finlay Lecture (at University College, Dublin) of 1933 – during which he argued that if he was an Irishman, he would see very great merit in the policy being pursued by the Fianna Fáil Government that had just taken office – ‘undoubtedly influenced a thinking man like McGilligan’. Thus, by the time he became Minister for Finance in 1948, McGilligan was very receptive to Lynch’s advice – much more so than anybody in Finance with the exception of T.K. Whitaker and one or two other young officials.3Whitaker had taken the traditional Finance line on social spending, but was an official with a remarkably adept mind and someone not willing to simply sit still. While he continued to display conservative sympathies at this stage, he was looking to other countries to see how they pursued economic development. He studied in detail the 1942 Beveridge Report in Britain, and closely analysed the performance of the Tennessee Valley Authority during Franklin Roosevelt’s New Deal of the 1930s. He was also influenced by the Monet Plan in France and the Vanoni Plan in Italy after the Second World War. Thus, Whitaker was no dogmatic or doctrinaire economist rigidly adhering to a particular theory, but, rather, one who was receptive to advice and willing to look to other jurisdictions to procure economic security and advance for the Irish state.