This interpretation was set out by W.T. Cosgrave when he refused to give the Army Inquiry Committee a copy of his Attorney General’s legal opinion. “… I must point out that the Executive Council acts collectively, and that its proceedings are necessarily of the most confidential description. When it arrives at a decision to do or abstain from doing any particular act, the decision is the decision of all its members. Previous divergence of views, individual opinions, arguments pro or con, all become merged in the decision which becomes, not the decision of a majority, but the decision of all binding every member of the Council equally whatever may have been his previous attitude …”128
As a former Attorney General, Costello was well aware of the established practice; but as head of a diverse coalition government, he had to recognise a changed reality. In November 1948, he answered questions about remarks made by Dillon and by MacBride, and whether they contravened Government policy. In both cases, he said the ministers were speaking in a “personal capacity”, and therefore the question of Government policy didn’t arise. Lemass derisively asked if the Taoiseach could “arrange to have some signal given, such as the flying of a flag over Government Buildings, whenever a Minister is speaking in a manner in which he is expected to be taken seriously”.129
McGilligan expressed the new approach in the Dáil in 1950, after a public divergence of view between himself and MacBride: “Have we got to the stage when men, just because they join the Government circle, must all … when they go out of the council chambers speak the same language?”130 The answer to that question, according to the theory of collective responsibility, was yes; but a more flexible approach was part of the price of coalition government. The British Ambassador noted in March 1950: “Cabinet responsibility is not marked. Members of the Government criticise in public the policy of their colleagues … ‘Free votes’ on contentious subjects have shown differences of approach between Ministers on which the Opposition has not been slow to seize. But the Government as a whole shows every sign of intending to remain in office for the balance of three years needed to complete its full term; the ranks are closed at once against any real threat to its stability.”131
There was change, too, in relations with the Civil Service. One of the first decisions of the new government was to exclude officials from cabinet meetings—a move described as a “disaster” by Patrick Lynch.132 MacBride objected to the presence of the Secretary to the Government, Maurice Moynihan, as a representative of “the establishment in excelsis”.133 More importantly, Moynihan had worked closely with de Valera for 11 years. The Government’s suspicion of him was not unprecedented—when Fianna Fáil entered government in 1932, the Secretary to the Executive Council, Diarmuid O’Hegarty, was removed. The difference, however, was that O’Hegarty, who was appointed a Commissioner of Public Works, was replaced by someone the new Government trusted.134 Moynihan wasn’t, continuing as Secretary to the Department of the Taoiseach and carrying out his existing duties, with the exception of attending Cabinet meetings. The result was that Liam Cosgrave ended up taking minutes and deciding what should be recorded as decisions.135 If Cosgrave wasn’t there, Costello had to do the job himself.
But while Moynihan was excluded from the Council Chamber, he still fought a battle to ensure proper procedures were followed, and that ministers did not trespass beyond their departmental responsibilities. The main offender was MacBride, who frequently attempted to express his views on matters beyond External Affairs. Moynihan warned Costello that this “would open the way to the creation of chaos in the arrangements for the transaction of Government business”.136 Costello, however, was reluctant to confront MacBride on this issue just a year into the lifetime of the Government. On two occasions in January 1949 he told Moynihan that he agreed with the rule that memoranda should be submitted by the responsible minister, but that MacBride’s contributions should be circulated anyway, due to “unusual circumstances”.137 However, as time went on MacBride’s influence declined and order was restored to Government business.
One of the key battlegrounds in Cabinet was over economic policy. It was not clear at first how much change the Inter-party Government would introduce. The initial emphasis was on cutbacks rather than extra spending. Costello wrote to each minister in March that “the Government is definitely committed to economy and retrenchment in the public service” in order to pay for the lifting of extra taxes imposed by Fianna Fáil in the previous year’s supplementary budget. Savings were “essential … to check inflationary tendencies resulting from excessive State expenditure and to lessen the impact of taxation on the cost of living … It is not too much to say that the fate of our government depends on the success or failure of the economy drive by individual Ministers …”138 The following month, the new Taoiseach told the Federation of Irish Manufacturers that a change of government “hardly causes a momentary interruption in the economic life of the people”. However, he went on to suggest that it was impossible to have decent industries “if we bolster up inefficiency at the expense of the consumer”. In what was a clear criticism of tariffs, he called for an emphasis on positive encouragement of “Irish initiative, skill and craftsmanship rather than on negative steps to discourage fair and reasonable competition”.139
The issue of protection, and specifically the restrictions on foreign investment imposed by the Control of Manufactures Acts, became a major source of disagreement between External Affairs and Industry and Commerce. The disagreement was brought to a head during the negotiation of a Treaty of Friendship, Commerce and Navigation with the United States. MacBride was keen to reach agreement with the Americans, but the negotiations dragged on well into 1949 because Industry and Commerce opposed change. Costello revealed his views on the subject to Vinton Chapin of the American legation in October 1948, describing the Act as “outmoded and outdated and … as much humbug as the External Relations Act”. He added, from his experience at the Bar, that the restrictions were easily circumvented.140 Costello knew what he was talking about—one of the main architects of ways to get round the Acts was his old friend Arthur Cox, who “drove a coach and four through the legislation”.141
However, while Costello may have thought the Act “humbug”, he had to take political realities into account. The American Minister in Dublin, George Garrett, reported in December 1948 that the Government would be reluctant to repeal the Acts because of strident opposition from Lemass and from the Federation of Irish Manufacturers.142 In a speech in New York the following month, Dan Morrissey repeated the Industry and Commerce view—industrial policy was based on the maintenance of protective tariffs and retention of control by Irish nationals in new industrial undertakings.143
Garrett tackled both Costello and MacBride on these remarks, suggesting that they must be taken on their face value as an indication that the Government was not going to change the rules. However, “both Costello and MacBride were inclined to deprecate the importance of Morrissey’s statements, suggesting that they had largely been made for political effect”.144 Norton, meanwhile, delivered a speech suggesting the establishment of an Industrial Development Commission which would foster new industries and examine tariffs (an idea which bore fruit in the Industrial Development Authority). The Irish Times in an editorial suggested Norton had helped “to correct any misguided impression that might have been left by … Mr Morrissey … Mr Norton has introduced the necessary safeguards. The government … will not follow blindly the policy of its predecessor.”145 The Treaty was eventually finalised in 1950, giving the Americans some but far from all of what they had been seeking. It is an indication of the strength of protectionist feeling in Industry and Commerce that the Department was able to hold out against the Taoiseach and the Minister for External Affairs so successfully.
Disagreements over free trade were also reflected in the Irish delegation to the Anglo-Irish trade talks in London in June 1948. As head of the delegation, Costello had to conciliate a range of departmental interests. Industry and
Commerce wanted the power to protect more industries; Agriculture wanted to secure better prices for farmers’ products on the British market; Finance wanted to ensure Ireland could still draw dollars from the sterling area pool. This last point was complicated by the forthcoming Marshall Aid allocations. MacBride and External Affairs were determined to refuse any offer of a loan, on the basis that Ireland should hold out for an outright grant. But Finance felt dollars should be accepted, even if they had to be repaid, to help ease the pressure on sterling.
Costello initially backed MacBride, telling the Dublin Chamber of Commerce in May that “we are not prepared to take American aid at any cost. We are as proud of our economic independence as we are of our political independence and we are determined that we will not incur foreign liabilities and commitments which are not within our power to meet …”146 But the matter was made much more urgent at the talks on 18 June, when the British Chancellor, Sir Stafford Cripps, announced that Ireland would no longer be able to draw dollars from the sterling area pool from the end of the month. Costello accurately described this announcement as “a bombshell”—it would severely restrict Ireland’s ability to import vital goods. A late-night negotiating session with Cripps two days later in Costello’s suite in the Piccadilly Hotel finally reached a compromise—Ireland could continue to draw down dollars pending the receipt of Marshall Aid, on the understanding that she would do her best to get the maximum aid. It was a “vindication of Finance’s belief in the pre-eminence of the sterling crisis in Anglo-Irish economic relations”.147
The Anglo-Irish talks were also the scene for one of James Dillon’s more colourful phrases, his promise to drown the English with eggs. In a memoir quoted by his biographer, Maurice Manning, Dillon revealed that he had come up with this phrase at a press conference after the “hot-tempered” Costello “found some question which was addressed to him peculiarly provocative and proceeded to reply to the Press man with considerable emphasis. I thought that was an excellent moment to relieve the situation …”148 His comments grabbed the headlines and diverted attention from Costello’s belligerence.
But if the Taoiseach was rescued by his Minister for Agriculture on this occasion, it was more often the other way round. After his retirement from politics, Costello recounted an incident from the early days of the Government, when Dillon sought, and received, his agreement to a scheme of land reclamation. He took the Taoiseach’s approval as sufficient sanction (or pretended he did), and announced the scheme in a speech in Mullingar. James McElligott, Secretary of the Department of Finance, first read of the plan in his newspapers, when he was heard to say (according to Costello), “It can’t be true! It can’t be true!”149 While somewhat embellished for an after-dinner audience, the anecdote was essentially accurate; Dillon had gone on a solo-run which caused “a state of upheaval” in Finance. The incident “showed that his observance of cabinet procedure could be cavalier, if not completely out of order”.150 It also rather neatly illustrates the problems Finance faced with this new government.
Part of McElligott’s problem was his own minister. McGilligan had started out in the approved manner, severely pruning the estimates left behind by Fianna Fáil (the most spectacular victim of this pruning was the proposed transatlantic air service, cancelled just a month before it was due to start). And he frequently sent memoranda to colleagues appealing for reductions in spending, arguing in December 1948, for instance, that unless spending was cut, there would have to be “crippling increases in taxation”, adding that while “some redistribution of incomes is necessary in the interests of social justice … the redistribution of incomes has already proceeded so far that Ireland is probably one of the most egalitarian countries in the world”.151
But McGilligan, and Costello, were reluctant to impose the sort of Cabinet discipline found in single-party governments. In February 1949, McElligott complained about public announcements by ministers of expensive schemes “without any prior consultation with the Department or, as far as we know, with the Minister for Finance”.152 The implication of the phrase “as far as we know” was extraordinary—McElligott was suggesting that his political superior might be keeping things from him. Later in the same year, he warned that Finance “has lost its power to control the situation … the Minister for Agriculture … cherishes ambitious schemes … the Minister for Health is equally ambitious … We have also confronting us the issue of a White Paper on Social Security, the cost of which, if implemented, would run into staggering figures …”153
As well as extravagance in the spending departments, he also had to contend with McGilligan’s equally strong desire to cut taxes. In the run-up to the Budget of 1949, the Secretary advanced an ingenious argument against a 6d in the pound tax cut, which would cost £1 million to implement. He said it “will not please Labour. There is nothing, it will be said, in the Budget for the working man—nothing off beer and ’baccy …”154 Given that McElligott’s concern for the working man had not been particularly evident before, his argument was presumably a sign of desperation in his dealings with his minister.
If Finance resented the other departments, that resentment was more than returned. Dillon complained to Costello that Finance had become an “intolerable octopus”, observing that officials in other departments spent their time “carefully composing lies for submission to the Department of Finance on the principle that if you want X the only hope of getting it is to ask for 10X + 3Y …”155 Costello, displaying his customary sympathy for a colleague, described McGilligan in March 1949 as “immersed in the preparation of the Estimates and … vigorously pushing aside the gloom of his officials”.156 McGilligan’s efforts in that regard had evidently failed by the end of the year, when Costello complained that a memorandum he had submitted to Government “creates an unnecessary atmosphere of gloom, which is scarcely justified by the facts stated … we are both very acutely aware of the far-reaching decisions which must soon be taken by the Government on matters of public finance and budgetary policy … A negative or unduly pessimistic presentation of the facts will not provide the kind of atmosphere in which I propose to have these Cabinet discussions take place.”157
Finance also found itself under siege over the devaluation of sterling (or “the sterling” as MacBride always referred to it) in September 1949. As early as June of that year, having been tipped off by the French Foreign and Finance Ministers,158 MacBride submitted a memorandum to Government on the possibility of devaluation, arguing that it was “essential to consider the steps which can be taken at this stage to minimise the disastrous consequences” devaluation would have for the Irish economy. Specifically, he wanted Government action to repatriate assets invested in Britain and their use for “national development projects” in Ireland.159 The Department of the Taoiseach noted that this memorandum appeared to be out of order, as it should have been submitted by Finance rather than External Affairs, but that Finance was not objecting to its circulation.160 But while the memorandum was circulated, it wasn’t actually discussed—the subject was postponed at no fewer than 14 Cabinet meetings, until MacBride’s prescient warning was overtaken by events.161
On Saturday 17 September, Costello received a message from Attlee confirming the British were about to devalue. In his memoirs, MacBride recalled that the resulting Cabinet meeting was held in Iveagh House, headquarters of the Department of External Affairs. This was the only time the Government met there, and MacBride implied that the meeting was held on his turf in recognition of his interest in the issue.162 In fact ministers met for two hours in Government Buildings before resuming in Iveagh House from 11 p.m. to 4.45 a.m.163 Iveagh House was chosen because most ministers were due there anyway for an official reception in honour of Archbishop Cushing of Boston. MacBride, supported by Browne, argued against devaluation; McGilligan and Dillon opposed them. Finance official T.K. Whitaker later described “MacBride sitting astraddle on a chair in the middle of the room (with other members of the Government sitting around the
sides) and relentlessly cross-examining his senior Finance colleagues”.164
Not for the last time, Norton’s attitude proved crucial; once he sided with Finance the decision was made.165 The Government agreed to follow the British example, with a statement declaring that devaluation was “the course of least disadvantage”. However, MacBride refused to let the issue go, insisting on further discussion of the implications of devaluation and recommending a drive to increase dollar earnings, particularly through encouraging tourism and moving away from reliance on the British market. “The Minister for External Affairs strongly urges that in this situation the trade policy of the government should be to purchase our imports in the cheapest markets and to sell our exports where we will get the best prices possible.”166
The Government agreed to set up a special committee including outside experts to consider the various points raised by MacBride. It was to meet when memoranda had been received from various interested Departments. However, in February 1950, Moynihan noted that Finance and Agriculture had still not submitted their observations. After discussing this with Costello, he noted “there is no need to remind the Ministers for Finance and Agriculture further in this matter”.167 This strongly suggests that while Costello was prepared to humour MacBride, he was happy to let the matter drop as soon as he decently could—an interesting insight into his management style. MacBride—correctly—dismissed the committee as “a mere sop” in a conversation with Costello’s assistant, Patrick Lynch. In the same conversation, on 8 October 1949, MacBride complained that only Browne, Dillon and himself were getting results, and that he would have to leave Government within two months “unless there was a material improvement and the atmosphere ceased to be clouded by what he called Fine Gael conservatism”.168
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