841D.51/148
The Secretary of State to Messrs. Frank P. Walsh and John T. Ryan, New York
Sirs: The Department has received your letters of February 20 and 29, 1928, with enclosures,9 regarding the obligation of the Irish Free State to the American holders of bond certificates issued by the so-called Irish Republic in connection with loans floated in the United States.
In the printed communication enclosed with your letter of February 20 you state that it seemed clear to you from the discussion at the Department on February 8 that the Department had reached two decisions: First, that the Irish Free State is not legally liable to American citizens or holders of “Republic of Ireland bond certificates” and, Second, that the Department would not present diplomatically the claims of said citizens to the Irish Free State, for the reason that Great Britain might find grounds to complain that this Government was patronizing a contribution by American citizens to funds of her enemies for war purposes. In the letter with which the printed communication was enclosed you state, in commenting upon your understanding that because of its friendly interest in the welfare of the bondholders the Department would present unofficially to the Irish Free State a request that, as a moral obligation, the American citizens should be reimbursed in the amount of the proceeds of the bonds sent to Ireland, that you have not the legal right to agree to or acquiesce in such a course for the reasons set forth in your printed letter of February 20.
While it is recalled that there was some discussion of views expressed by certain officials of the Irish Free State to the effect that, on the basis of the decision of the court in New York in the action brought by the Free State to obtain possession of the funds held in New York, the Free State is under no legal obligation to the socalled bondholders, it is not recalled that either the Solicitor or I undertook to express an opinion on the question of the legal liability of [Page 93] the Irish Free State in the premises. The view was expressed, however, that the Free State was under an obligation to return to the certificate holders that part of the money received by it.
Concerning the matter of presenting a diplomatic claim on behalf of the American citizens, an effort was made to explain why the Department did not consider that it would be justified in making formal representations to the Irish Free State. It was pointed out that, in the first place, the Department has consistently taken the position that it cannot undertake to act as a collection agency in the enforcement of foreign obligations purchased by American citizens and, in the second place, the situation in the present case is made more difficult by reason of the fact that the money was advanced for the purpose of promoting a revolution in Ireland against the parent State with which this Government was and is on friendly terms. It was added that while the Department did not consider that it could, for the reasons stated, make the claim of the certificate holders the basis of formal diplomatic representations to the Free State, it was felt that the Free State should return to the American subscribers the money which went to Ireland and which it is understood was used by or for the benefit of the Free State, and that the Department had used and was prepared to continue to use its informal good offices to bring this about.
The Department would be pleased to be informed whether the statement in your letter of February 20 that you “have not the legal right to agree to, or acquiesce in, such a course” is to be understood as meaning that you do not desire the Department to proceed further with the matter through the use of its informal good offices. The Department will take no further action in the matter pending the receipt of your reply.
I am [etc.]
Assistant Secretary
- None printed.↩