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Anglo-Irish trade war
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Anglo-Irish trade war
The Anglo-Irish Trade War (also called the Economic War) was a retaliatory trade war between the Irish Free State and the United Kingdom 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 in the late nineteenth century, a provision which had been part of the 1921 Anglo-Irish Treaty. This resulted in the imposition of unilateral trade restrictions by both countries.
The "war" had two main aspects:
On taking over power and coming into office in 1932, the new Fianna Fáil government under Éamon de Valera embarked upon a protectionist policy in economic dealings, and tariffs 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 farming and industry and to encourage the population to avoid British imports and "Buy Irish Goods".
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 from the 1880s, which had enabled them to purchase lands from their former landlords, under the Irish Land Acts. 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 suggestion), or from the whole world (the Irish view). In counterclaim, De Valera required the British to:
To recover the annuities, British Prime Minister Ramsay MacDonald 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 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" 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 debate on the outcome of the incident in Cork.
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Anglo-Irish trade war
The Anglo-Irish Trade War (also called the Economic War) was a retaliatory trade war between the Irish Free State and the United Kingdom 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 in the late nineteenth century, a provision which had been part of the 1921 Anglo-Irish Treaty. This resulted in the imposition of unilateral trade restrictions by both countries.
The "war" had two main aspects:
On taking over power and coming into office in 1932, the new Fianna Fáil government under Éamon de Valera embarked upon a protectionist policy in economic dealings, and tariffs 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 farming and industry and to encourage the population to avoid British imports and "Buy Irish Goods".
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 from the 1880s, which had enabled them to purchase lands from their former landlords, under the Irish Land Acts. 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 suggestion), or from the whole world (the Irish view). In counterclaim, De Valera required the British to:
To recover the annuities, British Prime Minister Ramsay MacDonald 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 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" 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 debate on the outcome of the incident in Cork.