But the Saorstát was firmly in control. While most people would have preferred to have an Irish Republic free of London domination the realities of everyday life under neo-colonialism compelled them to compromise and make the best of the situation as it was: that or emigrate.
Within the Republican movement a personality cult developed around Éamon de Valera. De Valera himself had already begun to prevaricate on Republican principles, as can be seen from his pre-treaty ‘Document No 2.’ He began within Sinn Féin to shift his ground, taking the position that the only Republican objection to the Saorstát was the oath to the English king, and if it was removed they would enter Leinster House. Of course the fact that the oath was keeping Republicans out of the picture made Cosgrave and his associates even more determined to keep it.
It was not much of a step from there to proposing that Sinn Féin enter Leinster House, taking the oath to do so, in order to be able to abolish the oath once inside.
Unable to get his line accepted, de Valera left Sinn Féin in 1926 with all his admirers and set up Fianna Fáil as a political party reflecting his own views.
Later that year there was an election, in which Fianna Fáil got a considerable number of seats but not a majority. After some theatrical posturing de Valera and his associates went to Leinster House and took the oath to be loyal to His Imperial Majesty King George the Fifth and His Heirs and Successors.
A curious and farcical debacle was to follow. De Valera had secured the support of a small party called the National League, which was actually the still-surviving rump of the old Irish Parliamentary Party, but which had decided that de Valera was the coming man and it would be prudent to be on his side. With it he would be able to form a coalition having a majority of one.
One of the National League deputies was an Alderman John Jinks of Sligo Town. On the day of the crucial vote in Leinster House, Jinks was approached by the head of the British Legion in Sligo, Major Cooper, and warned that if he were to vote for de Valera the Legion would order a boycott of his ironmongery business. Cooper then took Jinks to a nearby bar, where the editor of the Irish Times, Bertie Smyllie, kept him drinking until the vote was over.
Thanks to this intervention a lame-duck Cumann na nGaedheal administration managed to survive until 1932, when de Valera, in alliance with Labour, came to power. In an election the following year, Fianna Fáil gained an absolute majority.
The oath to the king was abolished at once and the British, who had other worries, did not object. The governor-general was disposed of in this way: de Valera named an obscure person to the post and took over the ceremonial aspects of the office himself.
When the last incumbent died he never appointed a replacement.
An important element of the Fianna Fáil platform had been the abolition of the Land Annuities. The new government continued to collect the annuities but stopped paying them over to London. Thus began the Economic War: basically a British blockade, which was to drag on for years and cause much hardship. Eventually it was settled by having the Saorstát paying off the British with a lump sum.
De Valera’s victory caused the collapse of the Cumann na nGaedheal party. Soon, an organisation made up of persons who had fought on the anti-Republican side in the Civil War, the Army Comrades Association, became the main centre of opposition. This body evolved into an openly fascistic group: the Blueshirts. Combating the activities of the Blueshirts largely devolved to Republicans because the Gardaí were more or less sympathetic to them; the leader of the Blueshirts, O’Duffy, being former Garda Commissioner. After a few years the Blueshirts collapsed and the remnants formed a new right-wing political party; Fine Gael.
Asked in Leinster House if the Constitution meant the treaty was repudiated, Dev admitted that the treaty still stood.
Since then, enough hot air has been expended on the subject of the 1937 Constitution to launch a fleet of Zeppelins. Perhaps the best comment came from the writer Seán O Faoláin, who said that it was obviously drawn up by a mathematician because each clause contained a statement followed by a cancelling statement; with the whole adding up to zero.
It was passed in a referendum by a narrow majority. The public was not given an opportunity to vote on a genuine Republican constitution, they were only allowed to choose between what was on offer and what had gone before.
The Constitution was a set of compromises between incompatibles: between monarchy and republicanism, between democracy and theocracy, between elitist and populist. There was provision for a president to take over the functions previously performed by the governor-general. An agreed compromise candidate for this office was found in the aged, non-political, Gaelic scholar Douglas Hyde, who was elected unopposed.
The humorous writer ‘The Pope’ O’Mahoney commented that all that was needed now was a compromise National Anthem. He suggested:
God save our gracious Hyde!
God save our noble Hyde!
God save our Hyde!
When Dev and Cosgrave clash
He will do nothing rash,
God bless his old mustache
God save our Hyde!
In Lithuania the Sauliu Sajunga (Rifle Association), a kind of semi-official reservists organisation, developed fascistic tendencies and got out of control. It was disbanded in 1938 and some of the leaders were convicted of treason and shot.
In Latvia the Aizsergi (Insurrection) society had a roughly similar history. In Estonia the Vabadussojalaste Liit (League of Fighters for Freedom) had to be disbanded in March 1934 when it attempted to organise a march on the capital to overthrow the government.
In Finland there were similar developments, leading to the emergence of Mannheim as national political leader.
Most of the lower-grade civil servants were Irish, drawn mainly from the ‘Castle Catholic’ element in the population. Going up in the ranks, however, a larger and larger proportion of them tended to be English. It was natural enough that the English would look after their own, and membership of a Masonic lodge was also rumoured to be necessary if one sought rapid promotion.
There had been in Dublin Castle a ‘Treasury Branch’ which looked after the finances of the administration and which, as might have been expected, operated on the principle that as little money as possible should be wasted on the lazy and ungrateful Irish. The civil servants employed there took over the new Department of Finance when it was set up.
The head of the department from its establishment until he retired in 1944 was Arthur Codling, an Englishmen who had worked in Dublin Castle since 1900. The bulk of his senior staff were also natives of England: TSC Dagg, CS Almond, JL Lynd and CJ Gregg. The only Irishman to occupy a senior post was Joseph Brennan: Brennan had also worked in the Castle, had opted for a pension and had then got himself the plumb job of Comptroller-General, while retaining his pension.
Birds of a feather flock together. The men who ran the Department of Finance of course gave preference to those subordinates whose views were closest to their own, and to some extent the golf course replaced the Masonic coven as the place where preferments were negotiated.
So there was created a powerful. non-accountable, self-perpetuating bureaucracy that rolled on and on doing what it did: the inherited British obsession with secrecy made sure that very few people knew what in fact it was doing. (Even the price of a bun in the staff canteen was a state secret.)
Looking at the history of the early years of the Department, or as much of it as is in the public domain, at first glance one might be forgiven for concluding that the leaders of it regarded the economic sabotaging of the Saorstát as a kind of patriotic duty.
Closer inspection reveals a more complex situation. While they could barely conceal their contempt for the Saorstát and those who ran it, to them it was still better than the alternative. Rather, their behaviour is consistent with a determination to do the best they could to ensure that England’s interests were not jeopardised. They were more like London civil servants sent to run the finances of some remote British county council: they would try to make a good job of it but their prime concern was to protect the interests of the British Empire as a whole.
Apart from that, such ideas about trade and economics and banking and financial matters in general as they had were always about fifty years out of date.
Apart from laziness and nostalgia, there were two practical reasons why a break with sterling was opposed. Firstly, if a new Irish currency had been introduced then all the sterling in circulation would have been withdrawn and Britain asked to honour it in bullion: treasury notes being in theory IOUs issued by the British government against gold held by the Bank of England. Of course the Bank of England did not wish to part with any gold.
A second reason was that the Saorstát, unique in the sterling area, had a significant portion of its native-born population living in the United States and these emigrants regularly sent home money to relatives in Ireland and often eventually retired to Ireland with their savings and pensions. This actually brought a very significant sum of money into the sterling area (about twenty million dollars a year) and this money eventually found its way to the Bank of England and made a useful contribution to England’s balance of payments: the more so because it was in effect ‘free money’: nothing had to be exported in exchange. Also a very unfavourable exchange rate was in operation: five dollars to the pound sterling.
Sterling was a grossly overvalued unit of currency. This was done partly for prestige purposes but also because England was a major international creditor. Third World debt is nothing new: many South American countries were massively in debt to England at high interest rates. Some European counties also owed huge sums, notably Greece and Portugal. Germany was paying large war damages.
Even within the British Empire heavy payments in sterling were going to London, notably from India. The Saorstát too was handing over large amounts of money each year to the London government under various pretexts, while about as much again was going as private payments for such things as ground rents. It made sense to keep the exchange rate high.
The use of the artificially high sterling currency was one of the main factors inhibiting the economy of the Saorstát. It meant that the price of Irish goods on world markets were prohibitively high. Only Britain could afford Irish exports, and on the British market they had to compete with similar goods from countries outside the sterling area.
So, almost all exports went to Britain. For the most part this consisted of food, and especially of cattle on the hoof. In Britain itself the government was subsidising food production as a means of holding down the cost of living, depressing wages and thus subsidising exports. This too was to the disadvantage of the Irish producers.
A new coinage was introduced in 1925. Copper and silver coins were minted at the Royal Mint in London and were struck from the same blanks as the equivalent English coins. They had the motif of various familiar animals; as did the coins of the other ‘Dominions’. From about 1942 the British began to withdraw the silver coins, using the Irish banks, and replace them with ones made of cupro-nickel: the silver being needed for other purposes.
In 1927 currency notes began to be issued. Probably due to pressure from the British, for each note issued an equivalent amount in sterling was lodged with the Bank of England, so as to guarantee the sterling equivalence of the notes.
It also guaranteed that sterling withdrawn from circulation would be returned to the originator, the Bank of England, and not encashed. This so-called ‘Note Fund’, which eventually exceeded a billion pounds, actually constituted a colossal loan from one of the poorest countries in the world to one of the richest and was basically a gigantic swindle.
The Saorstát, like most governments of the time, kept what were called ‘external assets’. These assets consisted of amounts of ready money held in various world centres of banking to enable rapid settlement of international payments. Most countries kept their external assets in gold. The Saorstál;t was unique in that it kept all its external assets in Bank of England notes. The experts of the Department of Finance insisted that the value of gold might fall, but that sterling was, well, as safe as the Bank of England and would never, never be devalued. They were mistaken.
For many years Saorstát Éireann had the highest per capita external assets in the world.
A report was submitted in 1938 which more or less said, well, it’s not very nice but there’s nothing to be done so carry on as before. The only change they suggested was greater restriction on investment in semi-state bodies like the ESB.
However two members submitted a dissenting minority report. They were Professor Alfred O’Rahilly and Seán Campbell, president of the Irish Congress of Trades Unions.
This report recommended a break with sterling, the repatriation of the Note Fund, greater availability of credit and more government intervention in and regulation of the state’s finances. To this minority report the Department of Finance, without the permission or even knowledge of the signatories, appended a 136-page addendum, worded in the most insulting and intemperate language, dismissing the minority report as utter and complete nonsense.
De Valera and his associates accepted the majority report and things went on under Fianna Fáil much as they had under Cumann na nGaedheal.
At the beginning of the ninteenth century the territory of Ireland was divided up among landlords who rented land to tenant farmers. In the towns too landlords owned the land underneath the buildings and the residents had to pay ‘ground rent’ to them. Rural agitation throughout the late 1800s had forced the government to restrict the power of the landlords and eventually to bring in a scheme under which tenant farmers could purchase their holdings on a state-managed installment scheme. However the process was a slow and expensive one and there remained great inequalities in the ownership of land.
The Land Bank was given £200,000 starting capital and was intended to facilitate the purchase of land from members of the Ascendancy; who now often saw no future for themselves and were anxious to sell up and get out while they still could. The Land Bank would advance money to any co-op having at least seven members, none of whom was to be an employer of paid labour, to buy land coming on the market. Prior to the Civil War £365,000 was loaned to rural co-ops for this purpose.
The Bank was an independent institution headed by a respected academic, Professor Arthur Cleary. After the Civil War the Leinster House government took it over, closed it down and sold its assets for a nominal sum to the Bank of Ireland.
Suppose one were to have a map of, for example, County Roscommon in 1932: ten years after the Saorstát was established, and on that map had a dot for every resident. Looking at it one would assume that the west and south of the county were relatively arable and prosperous while the north and east were poor and unable to support a large population.
In fact the exact opposite was true. West and south Roscommon, where the bulk of the population lived, contained mostly relatively inferior land: stony and bleak with much bog and scrub and with people scratching a living off tiny holdings of a few hectares each.
The north and east had much better land, but it consisted of very large holdings, usually hundreds of hectares in extent. However the owners did not consider themselves farmers or ranchers but squires. They had no interest in the land they owned except that it should provide the funds to pay for their usually prodigal lifestyle. Estate management would be left largely in the hands of backward labourers whose notions about agriculture did not extend much beyond letting bullocks eat the grass. This was the world described by David Thompson in his famous account Woodbrook.
These estates functioned by buying young cattle produced on the small farms of the west and south of the county and fattening them for export. This grotesque set-up had evolved over time because the landlords had expelled the population from the best land to create ranches while leaving tenants with the poorer land and squeezing them for rent. [In Scotland the landlords went a stage further, they evicted the inhabitants of the poorer lands too, to make way for sheep.]
County Roscommon has been selected as a random example: the story was exactly the same for the rest of the country, the worst land was cultivated and the best given over to grazing.
The ranches contributed little to the economy. The small farmers could have fattened the cattle they produced themselves if they had more land. Also the ranches were mostly over-grazed and neglected. But the Saorstát was reluctant to bring in any large-scale reform. These squireens had influence: they showed up at the Dublin Horse Show and hob-nobbed with visiting notables and cheered the British team. Also, in the wisdom of the time: Big was Beautiful.
Landlords had always bitterly opposed the selling of land to tenants, who in any case usually barely had enough money to pay their rent let alone buy their holdings. A bankrupt landlord who had to dispose of his assets was expected to sell to another landlord; thus confining the ownership of land within the Ascendency class. Failing that, they preferred to sell to foreigners.
In 1891 the British established the Congested Districts Board with a view to reducing the number of very small uneconomic holdings especially on the western seaboard. This was to be done partly by encouraging emigration, partly by consolidation of holdings and partly by the encouragement of alternative means of livelihood such as fishing and cottage industries. The work of the board was concentrated in County Mayo where agrarian unrest was greatest. The work of the CDB was on the whole enlightened and beneficial. Among other things they did buy out bankrupt landlords and redistribute their estates. The whole of Clare Island was bought from the landlord and given to his tenants.
Later the Land Commission was established with the purpose of buying up land and selling it on long-term hire-purchase to suitable farmers. It was set up as a sop to the Irish Party but was run by a committee of landlords, the class it was supposed to eliminate, and it made very slow progress.
At the beginning of the present century the Wyndham Acts enabled tenants farmers to buy out their landlords. The value of the land would be assessed by a judge, a person who could be expected to have strong class identity with the landlord, and the landlord would be given British government bonds to that amount.
The farmer would then pay the Land Commission an annual sum rather like interest on a loan. The farmer received deeds to the land and in theory owned it, though all that had really happened was that he had had a change of landlords.
The landlords continued to own the residue of their estates: woods, bogs, waste land, lakes and rivers. For example people had, and usually still have, to pay a fee to be allowed to cut turf.
On the other hand there was no attempt to limit the maximum size of holdings, the cornerstone of land policy in each of the Baltic states, and no changes to the essentially feudal property laws. The Land Commission itself had little interest in breaking up large estates: the Dublin-based civil servants who ran it were concerned first and foremost with their own careers and pensions and were reluctant to make extra work for themselves and took action only when political pressure made it impossible to avoid doing so. The politicians, despite occasional outbursts of rhetoric, were content to let things slide. Nevertheless, the number of civil servants employed in the Land Commission rose steadily year after year, a fine example of the Parkinson effect.
When de Valera came to power there was a short burst of land redistribution: not unconnected with the patronage and rewards system, but the advent of the Economic War put agriculture up in such a heap that few people were interested in taking up farming anyway. The Rath Cairn experiment, where farmers from Connamara were resettled on ranchland in County Meath, remains an example of what could and should have been done all over the country, but it was to be only a half-hearted pilot project that was not expanded on.
However, all was not as it seems: the Saorstát also spent about half that sum on the importation of cattlefeed: the overvaluation of sterling made feed cheaper to import than to grow at home. Curiously, export and import of pork were about the same at £2M each: export of live pigs to Britain was balanced by importation of cheap ‘shop’ bacon produced in England from pigs fed on swill.
During the Second World War there was another submarine blockade but this time the British had their act together. Realising that the Saorstát was cut off from external markets by lack of ships, they imposed fixed, very low, prices on Irish food exports to Britain. In the Saorstát itself the cutting off of cheap third-party sources of food compelled the government to introduce compulsory tilling of the land. It should be noted that cultivation of wheat and sugar beet, mostly on large farms, was subsidised while growing of oats and potatoes, mostly on small farms, was not.
After the war the London government continued the wartime policy of pegging the price paid for Irish food at an uneconomic level, compelling the Saorstát to introduce export subsidies. This situation continued until the advent of the Common Market, under which agriculture has been pushed in a different - though equally misguided - direction.
In the next issue there will be a description, for comparison purposes, of the land reform programme in Lithuania in the years of independence.