740A.5 MSP/1–452

No. 707
The Embassy in Ireland to the Irish Ministry for External Affairs



The American Ambassador, Mr. Matthews, called today on the Irish Minister for External Affairs, Mr. Aiken, to discuss the possibilities of concluding an agreement through an exchange of notes between the Embassy and the Irish Government to make possible the completion under the existing United States legislation of the program of economic aid to Ireland which had been agreed upon under the Economic Cooperation Agreement between the two countries.2

Referring to the text which he left with the Minister on December 73 and to subsequent conversations on this subject, the Ambassador pointed out that tomorrow, January 8, was the final date for the conclusion of such an agreement and he accordingly wished to make sure that the Irish Government lacked no information on [Page 1548] which to base its decision as to whether it wished to conclude a new agreement. Since the discussion between Mr. Aiken and himself on January 34 and between representatives of the Ministry and the Embassy on January 4,5 the Ambassador stated, the Embassy had received additional clarifications by telephone and telegram, the principal substance of which was conveyed to Mr. Nunan by Mr. Huston by his letter of January 6,6 namely:


Consequences of the non-conclusion of a new agreement to meet the requirements of present Congressional legislation would include:

Immediate termination of economic assistance still in the pipeline;
Immediate cessation of technical assistance; and
Immediate removal from the United States payroll of all personnel in TA projects.

According to the State Department’s calculations, the total loss to the Irish Government with respect to the above items would be in the neighborhood of three and one half million dollars, including pipeline items, letters of credit which would be stopped, etc.

With respect to the grant counterpart of eighteen million dollars, it was stated that these funds may still be disbursed by the Irish Government, but only with United States approval. On termination, however, any unexpended balance can be disbursed under the law only with the approval of the United States Congress; State Department or ECA approval would not suffice, as Congress alone would have the only power of final approval. The procedures to be set up and the likelihood of favorable action of the Congress could not, of course, be foreseen.

The Ambassador then stated that, while naturally it is for the Irish Government to decide whether or not it wished to conclude a new agreement to make possible the completion of aid agreed upon under the ECA, it was his desire to neglect nothing to insure that Mr. Aiken and the Irish Government as a whole had full knowledge of the consequences to the aid program in case of the non-conclusion of a new agreement by January 8, and to make it possible to find mutually agreeable language for the text of such an agreement. [Page 1549] He added that the Embassy’s instructions left sufficient leeway to insure that it would be possible to arrive at a text which would be satisfactory to both governments, provided the Irish Government had not decided that in the circumstances it did not wish to conclude any kind of new agreement.

  1. The existing legislation referred to here is the Economic Cooperation Agreement of 1948 between the United States and Ireland (TIAS 1788), signed at Dublin June 28, 1948, amended by an exchange of notes signed at Dublin Apr. 20 and June 7, 1951 (2 UST 1906).
  2. The terms that formed the basis of this note were sent to the Embassy with accompanying explanation in Airgram A–53, Nov. 22, 1951; for text, see Foreign Relations, 1951, vol. iv, Part 1, p. 534. This note of Dec. 7 presented the amendments that had to be made by Jan. 8, 1952, in all bilateral ECA and MDAP agreements to conform with Section 2 of the Mutual Security Act of 1951 (65 Stat. 373). Section 2 required that the new agreement bind the recipient country to facilitating the purpose of the Act which was, in general terms, to maintain the security and to promote the foreign policy of the United States by authorizing military, economic, and technical assistance to friendly countries in such a way as to facilitate their effective participation in the United Nations system for collective security.
  3. On Jan. 3, Matthews handed Aiken the text of a proposed revision of the 1948 agreement and discussed it with him. The text is in file 740A.5 MSP/1–1052. No separate record of the conversation has been found in Department of State files.
  4. Matthews reported on this discussion in telegram 101 from Dublin, Jan. 4. (740A.5 MSP/1–452)
  5. A copy of this letter to the Secretary of the Ministry of External Affairs and other documents on the subject exchanged between the Embassy and the Foreign Office, together with copies of related memoranda of meetings at the Foreign Office and Embassy telephone communication with the Foreign Office and the Department of State, covering the period from Dec. 7, 1951, to Jan. 10, 1952, were transmitted to Washington in despatch 434 from Dublin, Jan. 10, 1952. (740A.5 MSP/1–1052)