Anglo-Irish Trade War
   HOME

TheInfoList



OR:

The Anglo-Irish Trade War (also called the Economic War) was a retaliatory
trade war A trade war is an economic conflict often resulting from extreme protectionism, in which states raise or implement tariffs or other trade barriers against each other as part of their commercial policies, in response to similar measures imposed ...
between the
Irish Free State The Irish Free State (6 December 192229 December 1937), also known by its Irish-language, Irish name ( , ), was a State (polity), state established in December 1922 under the Anglo-Irish Treaty of December 1921. The treaty ended the three-ye ...
and the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...
from 1932 to 1938. The Irish government refused to continue reimbursing Britain with land annuities from financial loans granted to Irish tenant farmers to enable them to purchase lands under the
Irish Land Acts The Land Acts (officially Land Law (Ireland) Acts) were a series of measures to deal with the question of tenancy contracts and peasant proprietorship of land in Ireland in the nineteenth and twentieth centuries. Five such acts were introduced by ...
in the late nineteenth century, a provision which had been part of the 1921
Anglo-Irish Treaty The 1921 Anglo-Irish Treaty (), commonly known in Ireland as The Treaty and officially the Articles of Agreement for a Treaty Between Great Britain and Ireland, was an agreement between the government of the United Kingdom of Great Britain an ...
. This resulted in the imposition of unilateral trade restrictions by both countries. The "war" had two main aspects: * Disputes surrounding the changing constitutional status of the Irish Free State vis-à-vis Britain; * Irish economic and fiscal policy changes following the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
.


Protective policy

On taking over power and coming into office in 1932, the new
Fianna Fáil Fianna Fáil ( ; ; meaning "Soldiers of Destiny" or "Warriors of Fál"), officially Fianna Fáil â€“ The Republican Party (), is a centre to centre-right political party in Ireland. Founded as a republican party in 1926 by Éamon de ...
government under
Éamon de Valera Éamon de Valera (; ; first registered as George de Valero; changed some time before 1901 to Edward de Valera; 14 October 1882 – 29 August 1975) was an American-born Irish statesman and political leader. He served as the 3rd President of Ire ...
embarked upon a
protectionist Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. ...
policy in economic dealings, and
tariff A tariff or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...
s were introduced for a wide range of imported goods, mainly from Britain, the Free State's largest trading partner by far. This was thought necessary to develop native industry, move away from over-dependence on Britain, and rectify the failure to develop industrially under free market conditions. It was also to compensate for the drastic fall in demand for Irish agricultural products on international markets, due to the Great Depression, which had begun in 1929. Other means also had to be found to help the disastrously undermined trade balance and the mounting national debt. A vigorous campaign was set in motion to make the Free State agriculturally and industrially self-sufficient by the then minister for Industry and Commerce, Seán Lemass. Every effort was taken to add to the measures brought in by the previous government to boost
tillage Tillage is the agriculture, agricultural preparation of soil by mechanical wikt:agitation#Noun, agitation of various types, such as digging, stirring, and overturning. Examples of manual labour, human-powered tilling methods using hand tools inc ...
farming and industry and to encourage the population to avoid British imports and "Buy Irish Goods".


Non-payment of land annuities

The government sought to go further and end the repayment to Britain of land annuities. These originated from the government loans granted to Irish tenant farmers by the
Land Commission The Irish Land Commission was created by the British crown in 1843 to "inquire into the occupation of the land in Ireland. The office of the commission was in Dublin Castle, and the records were, on its conclusion, deposited in the records tower ...
from the 1880s, which had enabled them to purchase lands from their former landlords, under the
Irish Land Acts The Land Acts (officially Land Law (Ireland) Acts) were a series of measures to deal with the question of tenancy contracts and peasant proprietorship of land in Ireland in the nineteenth and twentieth centuries. Five such acts were introduced by ...
. In 1923, the previous W. T. Cosgrave government had assured Britain that the Free State would honour its debts and hand over the land annuities and other financial liabilities. Under the 1925 ''London Agreement'', the Free State was relieved from its treaty obligation to pay its share towards the public debt of the United Kingdom. The Free State's liability to supervise and pass on land annuities payments led to controversy and debate on whether they were private or public debts. In 1932, de Valera interpreted that the annuities were part of the public debt from which the Free State had been exempted, and decided that the Free State would no longer pay them to Britain. His government passed the Land Act 1933 that allowed the money to be spent on local government projects. After a series of high-level talks in 1932, discussions broke down in October 1932 on whether the liability to pay the land annuities should be adjudicated by a panel chosen from experts from the
British Empire The British Empire comprised the dominions, Crown colony, colonies, protectorates, League of Nations mandate, mandates, and other Dependent territory, territories ruled or administered by the United Kingdom and its predecessor states. It bega ...
(the British suggestion), or from the whole world (the Irish view). In counterclaim, De Valera required the British to: * Pay back the £30 million already paid in Land Commission annuities, and * Pay the Irish Free State £400 million in respect of the British government's supposed overtaxation of Ireland between 1801 and 1922.


Conflict deepens

To recover the annuities, British Prime Minister
Ramsay MacDonald James Ramsay MacDonald (; 12 October 18669 November 1937) was a British statesman and politician who served as Prime Minister of the United Kingdom. The first two of his governments belonged to the Labour Party (UK), Labour Party, where he led ...
retaliated with the imposition of 20% import duty on Free State agricultural products into the UK, which constituted 90% of all Free State exports. UK households were unwilling to pay twenty per cent extra for these food products. The Free State responded in kind by placing a similar duty on British imports and in the case of coal from the UK, with the remarkable slogan (from
Jonathan Swift Jonathan Swift (30 November 1667 – 19 October 1745) was an Anglo-Irish writer, essayist, satirist, and Anglican cleric. In 1713, he became the Dean (Christianity), dean of St Patrick's Cathedral, Dublin, and was given the sobriquet "Dean Swi ...
in the 1720s): "Burn everything English except their coal". While the UK was much less affected by the ensuing Economic War, the Irish economy was badly affected. Internally, the Irish government did not actually end its own collection of annuities that were costing its farmers over £4 million annually. In the background, unemployment was extremely high, the effects of the Great Depression compounded the difficulties, removing the outlet of emigration and reducing remittances from abroad. The government urged people to support the confrontation with Britain as a national hardship to be shared by every citizen. Farmers were urged to turn to tillage to produce enough food for the home market. The hardship of the Economic War, which particularly affected farmers, was enormous and exacerbated class tensions in the rural Free State. In 1935, a "Coal-Cattle Pact" eased the situation somewhat, whereby Britain agreed to increase its import of Irish cattle by a third in return for the Free State importing more of Britain's coal. As the cattle industry remained in dire straits, the government purchased most of the surplus beef for which it paid bounties for each calf slaughtered as they could not be exported. It introduced a 'free beef for the poor' scheme, the hides finding use only in the tanning and leather industries. For many farmers, especially the larger cattle breeders, the agricultural depression had disastrous consequences. Similar to the "
Land War The Land War () was a period of agrarian agitation in rural History of Ireland (1801–1923), Ireland (then wholly part of the United Kingdom of Great Britain and Ireland, United Kingdom) that began in 1879. It may refer specifically to the firs ...
" of the previous century, they refused to pay property rates or pay their land annuities. To recover payments due, the government counteracted by impounding livestock which were quickly auctioned off for less than their value. Farmers campaigned to have these sales boycotted, and blocked roads and railways. Police were called in to protect buyers of the impounded goods and at least one person was killed, for example at the Copley Street riot in Cork, by the so-called " Broy Harriers". The government's senators would not attend a September 1934
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
debate on the outcome of the incident in Cork. With farmers having little money to spend, there was a considerable decline in the demand for manufactured goods, so that industries were also affected. The introduction of new import tariffs helped some Irish industries to expand when Lemass introduced the Control of Manufactures Act, whereby the majority ownership of Free State companies was to be limited to Irish citizens. This caused dozens of larger Irish companies with foreign investors, such as
Guinness Guinness () is a stout that originated in the brewery of Arthur Guinness at Guinness Brewery, St. James's Gate, Dublin, Ireland, in the 18th century. It is now owned by the British-based Multinational corporation, multinational alcoholic bever ...
, to relocate their headquarters abroad and pay their corporate taxes there. Additional
sugar beet A sugar beet is a plant whose root contains a high concentration of sucrose and that is grown commercially for sugar production. In plant breeding, it is known as the Altissima cultivar group of the common beet (''Beta vulgaris''). Together with ...
factories were opened at Mallow,
Tuam Tuam (; , meaning 'mound' or 'burial-place') is a town in Ireland and the second-largest settlement in County Galway. It is west of the midland Region, Ireland, midlands of Ireland, about north of Galway city. The town is in a civil parishe ...
and Thurles. The Economic War did not seriously affect the balance of trade between the two countries because imports from Britain were restricted, but British exporters were very critical of their government due to the loss of business they also suffered in Ireland, by having to pay tariffs on goods they exported there. Both the pressure they exerted on the British government and the discontent of Irish farmers with the Fianna Fáil government helped to encourage both sides to seek settlement of the economic dispute.


Changes to the Irish constitution and politics

In 1933 De Valera removed the
Oath of Allegiance An oath of allegiance is an oath whereby a subject or citizen acknowledges a duty of allegiance and swears loyalty to a monarch or a country. In modern republics, oaths are sworn to the country in general, or to the country's constitution. For ...
(to the Constitution of the Free State and statement of fidelity to George V as "King in Ireland") as required by the 1922 Constitution. In late 1936 he took advantage of the Edward VIII abdication crisis to enact the Executive Authority (External Relations) Act 1936 and the Executive Powers (Consequential Provisions) Act 1937. This had the effect of ending the role of the
Governor-General of the Irish Free State The governor-general of the Irish Free State () was the official representative of the sovereign of the Irish Free State from 1922 to 1936. By convention, the office was largely ceremonial. Nonetheless, it was controversial, as many Irish Nat ...
in Irish internal affairs, and replacing him with the government of the day. In 1934-36 the government was concerned at legislative delays caused by the Senate (In Irish: Seanad Éireann), by passing the Constitution (Amendment No. 24) Act 1936. The modern
Seanad Éireann Seanad Éireann ( ; ; "Senate of Ireland") is the senate of the Oireachtas (the Irish legislature), which also comprises the President of Ireland and Dáil Éireann (defined as the house of representatives). It is commonly called the Seanad or ...
was created by the 1937 Constitution, and first sat in January 1939. Remarkably, despite the general economic hardship, the government vote held up in 1932–1938. Firstly de Valera had called the 1933 election within a year of taking office, before the worst effects had been felt. The July 1937 election saw a drop in support for him, but also for his main rival, the
Fine Gael Fine Gael ( ; ; ) is a centre-right, liberal-conservative, Christian democratic political party in Ireland. Fine Gael is currently the third-largest party in the Republic of Ireland in terms of members of Dáil Éireann. The party had a member ...
party, and he continued in office with the tacit support of the Labour Party. The number of Dáil seats contested in 1937 had been reduced from 153 to 138 seats, leaving less chance for smaller parties to win seats. On the same day as the 1937 election the
Constitution of Ireland The Constitution of Ireland (, ) is the constitution, fundamental law of Republic of Ireland, Ireland. It asserts the national sovereignty of the Irish people. It guarantees certain fundamental rights, along with a popularly elected non-executi ...
was adopted by a plebiscite, moving the state further away from the constitutional position envisaged by the 1921
Anglo-Irish Treaty The 1921 Anglo-Irish Treaty (), commonly known in Ireland as The Treaty and officially the Articles of Agreement for a Treaty Between Great Britain and Ireland, was an agreement between the government of the United Kingdom of Great Britain an ...
. The new Constitution was approved by 56.5% of voters who, because of the high numbers abstaining or spoiling votes, comprised just 38.6% of the whole electorate. Nohlen, D & Stöver, P (2010) ''Elections in Europe: A data handbook'', pp1009-1017


Coal-Cattle Pact and resolution

In 1935 tensions began to ease between Britain and Ireland. With the 20% tax duties on imports, coal and cattle were becoming increasingly harder to buy because of the prices. There was such a surplus of cattle in Ireland that farmers had to begin to slaughter their cattle, because they could not be sold to the British. Britain and Ireland then signed the Coal-Cattle Pact which meant that buying these commodities would be cheaper and easier to get. The Coal-Cattle Pact indicated a willingness to end the Economic War. The resolution of the crisis came after a series of talks in London between the British Prime Minister
Neville Chamberlain Arthur Neville Chamberlain (; 18 March 18699 November 1940) was a British politician who served as Prime Minister of the United Kingdom from May 1937 to May 1940 and Leader of the Conservative Party (UK), Leader of the Conservative Party from ...
and de Valera, who was accompanied by Lemass and James Ryan. An agreement to reach an acceptable settlement was drawn up in 1938, enacted in Britain as the Eire (Confirmation of Agreements) Act. Under the terms of the three-year Anglo-Irish Trade Agreement, all duties imposed during the previous five years were lifted. Although the period of the Economic War resulted in severe social suffering and heavy financial loss for Ireland, its outcome was publicised as favourable. Ireland was still entitled to impose tariffs on British imports to protect new Irish industries. The treaty also settled the potential £3 million-per-annum land annuities liability by a one-off payment to Britain of £10 million, and a waiver by both sides of all similar claims and counter-claims. As it was known in the 1930s that the Land Annuities payments in Northern Ireland of some £650,000 p.a. were being retained by its government, and not passed on to London, it remains unclear why the Irish government did not mention this in the course of negotiations. It also included the return to Ireland of the
Treaty Ports Treaty ports (; ) were the port cities in China and Japan that were opened to foreign trade mainly by the unequal treaties forced upon them by Western powers, as well as cities in Korea opened up similarly by the Qing dynasty of China (before th ...
which had been retained by Britain under a provision of the 1921 Treaty. With the outbreak of
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
in 1939 the return of the ports allowed Ireland to remain neutral.


Long-term effects

Protectionism remained a key element of Irish economic policy into the 1950s, stifling trade and prolonging emigration. Its architect, Seán Lemass, is now best remembered for dismantling and reversing the policy from 1960, advised by T. K. Whitaker's 1958 report "''First Programme for Economic Expansion''". This then became an important part of Ireland's application for entry into the
European Economic Community The European Economic Community (EEC) was a regional organisation created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lisbo ...
in 1961 and eventual accession in 1973. The Republic's population rose in the late 1960s for the first time since the Free State's formation in 1922.


References


Further reading

* Canning, Paul M. "The impact of Éamon de Valera: domestic causes of the Anglo-Irish economic war." ''Albion'' 15.3 (1983): 179–205. * O'Rourke, Kevin. "Burn everything British but their coal: the Anglo-Irish economic war of the 1930s." ''Journal of Economic History'' 51.2 (1991): 357–366. {{Economy of Ireland Wars involving Ireland Wars involving the United Kingdom Economic history of the Republic of Ireland Ireland and the Commonwealth of Nations Ireland–United Kingdom relations Economic history of Ireland Land reform in Ireland 1930s in Ireland 1930s in the United Kingdom 1930s in economic history Trade wars