Back then our politics was still poisoned by civil war bitterness, and members of Fianna Fáil went into the Dáil that day with concealed guns, because they feared the outgoing government might try to stage a coup d’etat.
We have come a long way since then, but our politics remained poisoned for years, with the national interest often being recklessly sacrificed in the pursuit of party considerations. The parallel today would be if Fianna Fáil secretly encouraged our European colleagues not to renegotiate the bailout conditions with the new government, because this would show Fianna Fáil in a bad light.
Some of the parallels with 1932 are striking. The election then was held in the midst of the Great Depression, and one of the main election issues was the country’s foreign debt. Ireland was paying around £3 million a year in land annuities to Britain, arising out of the purchase of land by Irish tenant farmers around the turn of the century.
Éamon de Valera contended that money was not really owed to Britain, and he promised to withhold payments subject to renegotiation.
The Government of Ireland Act (1920), which had partitioned Ireland, had specified that the land annuities would be handed over to the respective governments in Dublin and Belfast. At the time Prime Minister David Lloyd George said the annuities were being given “as a free gift for the purpose of development and improvement of Ireland.”
Article 5 of the Anglo-Irish Treaty of 1921 subsequently acknowledged that the Free State would “assume liability for the service of the public debt of the United Kingdom,” but it specified that “any just claims on the part of Ireland” would be taken into account. The Irish signatories had not admitted a responsibility to pay any money. Michael Collins argued at the time that the British actually owed money to Ireland as a result of over-taxation during the 19th century.
Even if the land debts had been reassumed under Article 5 of the Treaty, they would have been cancelled again under Article 2 of the Boundary Commission agreement of 1925, which released the Free State “from the obligation under Article 5” of the Treaty.
Neville Chamberlain, the British Chancellor of the Exchequer, privately admitted to colleagues in March 1932 that de Valera had “an arguable point,” because the wording of the Boundary Commission agreement absolved the Dublin government “from liability for the service of the Public Debt of the United Kingdom, and that the Irish annuities form part of the Public Debt”.
As a result Chamberlain warned that there was “a certain risk that an arbitrator might hold that Mr de Valera is right from a purely legal and technical point of view, and it would seem most undesirable that we should expose ourselves to such a decision.”
The British contended that the Irish subsequently agreed to pay the annuities in line with Ultimate Financial Settlement of 1926, but this had never been submitted to the Dáil for ratification, with result that it was not worth the paper on which it was written, according to de Valera.
“No minister can assign national property away by his own signature,” he declared. “This has never got statutory sanction, and every sum paid out in virtue of that agreement without collateral statutory sanction is being paid out without the proper authority.”
Convinced that he had a strong case, de Valera was eager to talk with the British, but the Dominions Secretary, JH Thomas, was opposed to making any concession. This was partly in sympathy with Cumann na nGaedheal leaders, who had adopted a treacherous approach from the Irish standpoint.
Senator John McLoughlin, leader of the Seanad, brought JH Thomas a secret message from Cosgrave encouraging the British to adopt an intransigent attitude towards de Valera, and he asked for “a firm and early statement” from the British government. Donal O’Sullivan, the clerk of the Senate, told Thomas that Cosgrave was anxious for the British to outline the actions that they would take against the Dublin government.
If Dublin did not hand over the money due by July 16, 1932 the British announced they would recover the money by implementing a 20% tariff on imports from the Irish Free State. On the eve of the imposition of the new tariff, de Valera went to London in a last ditch effort to persuade the British to agree to international arbitration.
There was little room for understanding between him and Prime Minister Ramsay MacDonald, who was a pacifist who had gone to jail as a conscientious objector during the First World War. He had no empathy for de Valera, the hero of the Easter Rebellion. “So long as de Valera is there,” MacDonald said, “there is no way out.”
de Valera offered to pay the disputed money into a holding account, pending international arbitration, but the British rejected the offer. As the meeting broke up, de Valera stormed down the hall of 10 Downing Street with MacDonald calling after him that he hoped they would meet again. “I don’t think so,” the Long Fellow replied.
Next day, when the Dublin government withheld the annuity payments, the British retaliated by introducing a 20% tax on Irish imports. Dublin, in turn, imposed similar levies on British imports. This was the start of the Economic War.
In December 1932, when France, Belgium, Poland and Hungary defaulted on the war debt payments to the United States, Chamberlain announced Britain would be paying her $95 million on time, even though it meant asking parliament for a supplementary estimate to cover the loss of the Irish annuities and increased unemployment benefits. Next day The New York Times had a front-page headline: “Irish land issue and relief put Britain out £21,420,955.”
The headline was grossly exaggerated. The British exchequer had recouped £3m with the tariffs on Irish imports, and by implication, the Irish Free State was being lumped with the defaulting nations. de Valera stood firm in the face of pressure from abroad and treachery at home.
Of course, his position then was stronger than the government’s position today, because the Dáil had never approved anything to do with the payment of the land annuities.
The Irish people are essentially being blamed for reckless financial dealings of the past decade, and we are even supposedly threatening the economic stability of the European Community. Yah, like we were somehow responsible for the defaulting nations in 1932.
Historically de Valera made disastrous mistakes in 1921 and 1922, while Cumann na nGaedheal made dreadful errors in 1932 and 1933. We should be mindful of those blunders — not to apportion blame, but to ensure that the national interest is not shamefully sacrificed for naked party considerations.