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3

Financial Quagmires and

Legal Limits: Irish Free State

Diplomacy, 1922–1938

Many of the founders of Dáil Éireann adopted the mindset that the Irish Free State’s foreign policy should not be determined primarily by Irish membership of the British Commonwealth. Instead, it should be an expression of the Free State’s own written constitution, which stated in Article Two that ‘all powers of government and all authority, legislative, executive and judicial, are derived from the people of Ireland’.1 Half of the eighteen constitutions that were studied as templates when drafting the constitution of the Irish Free State were those of republics.2 Reflecting this, the Irish correspondent of Foreign Affairs during 1922 judged that ‘the Free Staters, being republicans, are not prepared to destroy republicanism’.3 America’s ambassador to the United Kingdom also felt that the Irish Free State cabinet should be considered to be republican revolutionaries in their background.4 Irrespective of the existence of a written Irish constitution, however, there was actually a very significant difference between the operations of an independent republic and membership of the British Commonwealth. Ignoring Arthur Griffith’s protests to the contrary, Lloyd George explained in June 1922 that the Irish were not entitled to have ‘their own ideals of political, economic and social welfare’ because, according to British imperial logic, the dominions’ rights in such matters were ‘not based on theory but on experience’: namely, the degree to which the king, or Whitehall, had first judged that it was in everyone’s best political and economic interests that they begin to exercise such powers.5 From this legal perspective, only London could represent the Irish Free State to the rest of the world by means of a proxy.

In his understanding of Irish statehood, Joseph Walshe, the secretary and practical creator of the new Irish department of external affairs, essentially subscribed to a belief in the reality of Irish sovereignty.6 Griffith had believed that the Irish Free State constitution entitled Ireland to stand ‘on equal terms with England’ within the commonwealth,7 but British Commonwealth policy regarding Ireland, upheld by the Dominions Office and the British Imperial Treasury, was always based on a hierarchy of interests that was determined by London’s own foreign trade policy. Adopting this reasoning, Ireland was not regarded by London as a co-equal with Canada and Australia, let alone England, but instead as a fiscal identity comparable to New Zealand as a food supplier nation.8 Against this backdrop, during the 1920s both leading officials and diplomats of the Irish Free State essentially learnt by a process of trial and error of various potential limits to the Irish state’s legal, diplomatic and fiscal authority. This created a preoccupation with counteracting these limitations. This was partly why the Irish government became very inclined to concentrate on the League of Nations as an alternative forum to the British Commonwealth. Former American diplomat Edward House, who would be discredited under the Republican administrations of US presidents Warren Harding and Calvin Coolidge for having supposedly been led by the nose by Britain,9 suggested during 1922 that the Irish and German cases were linked by their mutual desire to join the League of Nations and to see the United States also become a member. In any event, House predicted that membership of the League of Nations could serve as ‘a God-sent haven for such states as Ireland’ because if its ongoing dispute with Britain could not be solved bilaterally, ‘Ireland has sought the only forum open to her where it can be done.’10

The importance that the Irish government attributed to the League of Nations was reflected by its decision to appoint most of its cabinet as members of its annual delegations to the league as soon as Ireland was admitted in September 1923.11 By this time, the Dáil cabinet had also established a ‘North Eastern Boundary Bureau’ to seek a resolution of Ireland’s partition dispute. This consisted of the legal personnel that had drafted the Free State’s written constitution,12 but it also included prominent Irish economists and, in the person of Kevin O’Shiel, a northern Irish nationalist and barrister who had formerly managed the Dáil’s land courts. From his northern contacts, O’Shiel knew that many unionist businessmen were arguing privately that ‘they would be better off under Dublin than Westminster’, with only the budgetary logic of the British imperial treasury serving to dictate otherwise.13 Acting on such advice, from April 1923 to January 1924, Cosgrave’s cabinet considered that if a constructive customs policy was initiated, this could encourage northern businessmen to view Dublin rather than London as their natural ally and, in the process, facilitate the goal of a united Ireland. O’Shiel himself believed that Ireland’s case regarding the economic and, in turn, political injustices of partition should be presented to the League of Nations itself.14 Bruno Waller, the president of the still-extant Irish League of Nations Society, argued strongly against adopting such a stance, however, and instead advised Cosgrave’s cabinet to focus simply on getting the Anglo-Irish agreement, or ‘treaty’, registered with the League of Nations as an internationally recognised legal agreement.15

The American government had some interest in establishing diplomatic and trade relations with the Irish Free State quickly. It would not do so, however, because of a combination of political disturbances in Ireland and America’s felt need to defer to Britain’s hesitancy in allowing a Free State government to operate freely.16 While an Irish American contributor to Foreign Affairs recommended George Russell’s Irish Statesman journal to Americans as the best guide how to ‘properly envision the revolutionised Ireland of today’,17 Irish civil disturbances during 1922–3 led to the suspension of municipal government in Ireland for several years. Therefore, neither Russell’s nor anyone else’s ideas of economic development were likely to be implemented any time soon.18 Russell himself would later write for Foreign Affairs that Ireland was the only country in Europe ‘where there is neither fear nor envy, but only gratitude’ for America’s growing influence in international affairs. He also argued that the claim in Foreign Affairs by unionist propagandist Stephen Gwynn that there were two, mutually hostile, Irelands (north and south) was incorrect, and that the eclipse of partition, by means of a new federal political arrangement,19 was likely in the near future.20 This belief of Russell’s (a native of Ulster) that the partition of Ireland could not last reflected the fact that the existence of Northern Ireland had no legal, political and cultural antecedents in history before Westminster’s unilateral passing of its Government of Ireland Act in December 1920. The official title of the United Kingdom itself would not change to include Northern Ireland until 1927.21 Its existence could not be ignored, however, while it was also clear to critics and supporters of partition alike that ‘the “Ulster” problem’ was ‘the crux of the whole situation’ in determining whether or not the fledgling Irish Free State could possess sufficient financial solvency to survive.22