IN terms of European politics Ireland is one of the small countries which had to be "reconstructed" after the war. The task was not undertaken by the great and wise at Versailles or Geneva, but by the British Parliament, which could not allow the seven centuries old "Irish Question" to complicate the settlement of its own post-war Imperial problems. This is not the place to criticize the extraordinary form the reconstruction took. It will suffice to say that Ireland, hitherto regarded as one country, was made two, the most unnatural political and fiscal barrier being erected between its six northeastern counties and the other twenty-six. The smaller area contains a million and a quarter out of the four million and a quarter population of the island. The United Kingdom now consists of Great Britain and "Northern Ireland." The latter sends representatives to the Imperial Parliament and has a Parliament of its own.

The quality of these Ulstermen is best seen in the fruits of their labor. Upon a relatively infertile soil they have developed an amazingly productive agriculture. Their holdings being small, coöperation is essential if they are to maintain a fair standing of comfort. But their intense individualism makes it hard to organize coöperation amongst them. In their non-agricultural life they have to their credit their twin world-famed shipbuilding and linen industries. Here, manufacture is cheapened by the employment of whole families. The problem which confronts Northern Ireland is not that of creating new industries, but of safe-guarding linen and shipbuilding from the ravages of post-war reaction. The "luxury liner" in which the great yards of Harland and Wolff and Workman and Clark specialized is no longer in demand. Ulster linen, the staple industry of the province, has been even harder hit. Since the war its raw material, drawn largely from Russia, has been obtainable only at extortionate prices; the depreciated exchanges of the Continent have enabled French and Belgian competitors to under-sell the Irish manufacturer. Formerly the United States took one half of the Belfast supply. The development of the apartment house system, which leads the American housewife to purchase only such stuffs as she can wash at home, and the new fashion for colored goods, have ousted the damask tablecloths, sheets and bed spreads in which Ulster led the world.

As the Boundary Agreement of 1925 relieved the Free State of its liability for a share of the war debt, the political relations between the two areas and the customs barrier are likely to endure for a considerable time. It may be questioned whether the six counties can attain permanent prosperity without free access for their manufactures and imports to the consumers of the twenty-six counties. It is notorious that Belfast industry has always been keenly competitive and somewhat under-capitalized. It has largely availed itself of the deposits of the southern peasantry in the banks. Upon these deposits a very low rate of interest has been paid; and they have been lent at a correspondingly low rate to the farmers, merchants and manufacturers of the North. I am so firmly convinced that the economic future of Ireland cannot be assured until there is active coöperation, and something very like fusion as well, between the Free State and Northern Ireland, that I propose to say very little more about the latter and concentrate upon those issues upon which will depend the answer to the single question: Will the Free State make good?

In the early days of the Irregular revolt Michael Collins is reported to have said he would make rebellion the most unpopular thing that could happen to Ireland. It was a big order in view of seven hundred years of history, but the Free State can claim that for the present generation at least the thing has been done. And the fact that it has been done encourages the hope that we shall get rid of the fallacy, fostered by historical circumstances, that all the economic evils which assail us have their roots in political causes. Even were this true, and it cannot be accepted without drastic qualifications, it by no means follows that the damage caused by politics can be cured by politics. Yet this doctrine had been elevated into a fundamental principle of patriotic faith which it was rank heresy to question. Furthermore, the Free State came into being at a time when agricultural prices were tumbling down, and by a piece of bad luck it had to reckon with a succession of abnormally bad seasons, with an epidemic of fluke among its sheep and cattle, and with restrictions due to the outbreak of foot-and-mouth disease in Great Britain which grievously hampered the transport of livestock across the Irish Channel. Naturally its critics, following time-honored precedents, contended that failure to deliver the economic goods constituted a deadly indictment against the new system of political control. A favorite Republican taunt was to compare Free State ministers with Free State pillar boxes in which the British red had been hurriedly overlaid with a thin coating of Irish green.

To do them justice, the rulers of the Saorstat did not permit themselves to be diverted by this clamor from the path they had marked out. In particular Mr. P. J. Hogan, Minister for Lands and Agriculture, far from prophesying smooth things or attempting by soft answers to turn away wrath, cultivates a gift of plain speaking such as no Chief Secretary in the old days who valued either his post or his peace of mind would have dared to use. Like all students who draw their conclusions from the facts of Irish life and not from abstract theories, he bases his hope for the future of our agriculture upon education and organization. In his speech on the estimates for the Department, delivered last May, Mr. Hogan announced that the Government had decided to establish two new university faculties -- one for General Agriculture in University College, Dublin, and the other for Dairy Science in University College, Cork; and he insists that nothing must be left undone to ensure that these shall rank at least as high as the faculties of medicine, law or engineering. In elementary education it is now recognized that instruction should be given a rural bias, and though the question of technical training after pupils have left the elementary school presents grave difficulties in a country with a scattered population of small farmers, Mr. Hogan believes that in addition to the existing system of itinerant instructors much may be done by improving the publicity work of his Department, and mobilizing its various technical officers to provide material for the agricultural pages of the daily and weekly press.

In the years that immediately preceded the war Irish farming enjoyed the first relatively normal spell it had known for the greater part of a century. The effect of this was seen in a new keenness for the improvement of technical methods and a recognition of the need for organization on scientific lines. Agricultural Coöperative Societies began to make headway at a rate that astonished the world; the number of agricultural students increased; and the new tenant proprietors threw themselves with notable energy into their work. The war years proved profitable to the farmer, but they were disastrous to the new spirit in agriculture, inasmuch as quality ceased to count, and slovens and incompetents could rely on obtaining as high a price for their products as their neighbors who aimed at excellence and good finish. While the rest of the world was setting itself in earnest to repair the effects of this demoralization, the Irish farmer was plunged in a series of worse upheavals as a result of the Anglo-Irish conflict and the armed revolt against the treaty settlement. In the campaign of sabotage waged by anti-treaty bands, farmbuildings and stock were not seriously attacked. But the systematic destruction of railways and of bridges on the main roads, which for a time practically paralyzed communication, and the general chaos and confusion threatened to bleed rural Ireland white. This madness has worked itself out, and the rule of law is now as firmly established throughout Ireland, North and South, as at any time in our history. The fact that the advocates of anarchy enjoyed a brief innings has had one good effect in inducing a healthy disbelief in short cuts, and convincing the farmer that success depends upon his own exertions, directed along lines which have enabled his fellows in other countries to attain prosperity. One of our peculiarities is that wherever the politician can still hope to win support by effective phrases we are slow to accept the reasoning of the economist, however impregnable its logic, and invariably meet it by calling out for a sign. It is almost incredible that in face of the experience of other countries legislation to provide, under penalties, for the grading of butter and eggs should have been opposed. Yet the battle raged loud and long, and less resolute ministers might have quailed before the storm.

The new regulations have been in operation only a few months, and already Irish eggs are at the top of the British market. That the Government are determined to keep them there is shown by the action of the Department of Agriculture, which has recently withdrawn the licenses of some thirty exporters for breaches of the regulations. This drastic procedure has taught a very salutary lesson. At present the Northern Parliament is engaged in amending its legislation in regard to the marketing of eggs, and it is interesting to note that its exporters are pressing strongly for the adoption of the system of grading which prevails in the Free State. Our butter, which had tailed dismally behind that of both Denmark and New Zealand, is also improving its position. When arrangements are completed for bacteriological examinations at the ports, and a national brand is established, there is every reason to believe that we shall regain our old supremacy in British markets. In a speech at the Imperial Conference Mr. Kevin O'Higgins defined the new policy in an admirable phrase. "Its aim," he said, "is to insure that the agricultural exports of the Free State shall be consistently good and not occasionally excellent."

Even in Ireland, when the final word in discussions is often spoken by the Doubting Thomases, this fact has silenced objections, and everything goes to confirm the view that the long delayed work of organizing our farmers for production, marketing and credit is at last to be taken seriously in hand. Ministers are recognizing that unorganized farmers cannot make effective use of the schemes provided by the Government for the benefit of agriculture. In the last Budget a grant of £9,000 a year for four years was made to the Irish Agricultural Organization Society, to promote voluntary coöperation amongst farmers on the ground that what the government can do to improve their technical methods very largely depends upon what they do for themselves to improve their business methods. All that is required, not merely to maintain but to improve his position out of all recognition, is that he should bring to the work he has always done a higher degree of technical competence and efficiency.

It must be admitted that our agricultural economy is woefully lop-sided and by its nature tends to exaggerate the defects which have enabled competitors much less favored than we are to leave us far behind in the race. It was no doubt a sound economic instinct that turned the farmer from tillage to cattle-raising. Whereas the price of the crops grown by the Irish tenant for sale has remained practically unchanged throughout the period, the price of cattle has steadily increased until it now stands at four times the 1840 figure. This plain fact disposes of a vast amount of sentimental and patriotic nonsense. At the same time it cannot be denied that cattle-raising, as ordinarily practiced, has been wasteful to an enormous degree. Not only has it done more to fill emigrant ships than a legion of evicting landlords, but it seems to paralyze effort and lower the level of intelligence by making the rural worker an automaton whose exertions are mainly confined to the opening and shutting of gates. These drawbacks are not part of the inevitable price that must be paid under the economic conditions prevailing in Ireland, nor is the remedy, as some argue, to be found in breaking away from the British market, a course which, were it possible, would be tantamount to cutting one's throat as a cure for anaemia. Our mistake was not that we concentrated upon flocks and herds, but that by reason of slack organization and haphazard methods we did not concentrate upon them sufficiently or exploit their full possibilities.

When we pass from agriculture, which must ever be the dominant factor in Irish -- more particularly in Free State -- economics, there is a consensus of opinion as to the need for a better balance between the chief and the subsidiary industries. How this end is to be attained has yet to be determined. As with the land, the worst obstacle that confronts reformers is the assumption that evils which it is claimed were due to politics in the past can be banished by another brand of politics in the present. The truth is we are beginning to understand that the simple solutions favored by popular opinion will not dispose of the problem. Were it merely a question of breaking down barriers and removing obstacles, as is suggested in certain quarters, state action might provide an adequate remedy. Unfortunately, it is not in the power of governments, however well-intentioned, to create economic initiative where this is lacking, to transform at a moment's notice masses of casual labor into skilled artisans or to make good defects in organization and technical equipment.

It is depressing to record that inside the last few months the last two Free State shipping companies have been absorbed by a British combination. One of these companies was developing a direct trade with the continent which promised good results. In any other country it would be regarded as wholly abnormal that a great industry like the cattle trade should not run its own boats across the Channel, more especially as its leaders are continually protesting against the rates imposed by the British lines and the lack of adequate facilities. There are loud complaints about the failure of the Free State to create a mercantile marine. When, however, organizations like the cattle trade fail to show any initiative, it is difficult to criticize the Government for their reluctance to give a lead or to blame small investors who decline to participate in native shipping enterprises.

In pre-war times Irish industries, which, with a few exceptions, lagged far behind outside competitors in efficiency and capital resources, succeeded in holding their own by their ability to produce special types of goods of superior quality. Irish woollen mills, for instance, did a large export trade in tweeds, and the high class goods turned out by our hosiery manufacturers were in wide demand outside our shores. Nowadays, in the stress of postwar competition, accentuated by depreciated exchanges and increasing costs of production, our manufacturers are struggling desperately to keep their heads above water. Naturally in such a plight they are ready to snatch at any straw; and the obvious demand is for tariffs which would serve to give them control of the home market.

Free State ministers, all of whom accepted the economic program of Sinn Fein, have no bias against protection, and one of their first acts after the conclusion of the civil war was to appoint a Fiscal Inquiry Committee which included the best known Irish economists to investigate the effect of changes in the measures regulating or restricting imports and exports upon the development of industry and agriculture. The Committee reported that "the volume of industry which is anxious to obtain a protective tariff is small compared with that which desires no change in the existing system," and on strictly economic grounds decided against import taxes. When the Free State became a separate customs area in 1922 the imposition of revenue duties on imported tobacco and cigarettes gave a measure of protection to native manufacturers one consequence of which was that the Imperial Tobacco Company began to build factories in Dublin, and additional employment was provided in this industry. Largely as a result of this it was decided in the Budget of 1924 to place protective duties on boots, glass bottles, soap and candles, motor bodies and confectionery, including jam. A year later the list was increased by the addition of furniture, clothing of all kinds, blankets and metal bedsteads. The Minister for Finance described the duties as experimental, and the Government has now adopted what is known as "selective protection," under which instead of the assumption being that Irish industries are entitled to be safeguarded against competition they are required strictly to prove their case before a Tariff Commission whose members act in effect as a research committee to advise the Cabinet.

Undoubtedly the imposition of duties has led to brisk trade in the protected industries, and almost 80 new factories, large and small, have been erected in various parts of the Saorstat. While this activity is in marked contrast to the stationary or receding position of trade in other industries, President Cosgrave as recently as July declared in a speech at Limerick, "We have now tariffs on 50 percent of our imports for the past twelve months, and the relative number of people employed bears no proportion whatever to the cost to the country of this experiment." In this connection may be quoted a statesmanlike pronouncement by Mr. Kevin O'Higgins, Minister of Justice, in a tariff debate in the Dail. When the name of Griffith was invoked as if this ended discussion he protested that "the propagandist political writings of any man cannot be accepted simply as the revealed truth requiring no further questioning." According to protectionists the real responsibility for our industrial backwardness rests with ministers who fixed their taxes with an eye to revenue rather than to safeguarding. But it is not disputed that progress in the tariff industries, particularly the boot and shoe and making-up trades, has been seriously retarded by the practical impossibility of securing an adequate supply of skilled operatives.

Together with the difficulty of obtaining long-term credits, either for the extension of existing industries or for new enterprises, this lack of trained workers is perhaps the worst disability under which we suffer. In the past, schemes of technical education have been hampered by financial and administrative difficulties, but the government now realizes more clearly than its predecessors the urgency of the question, and this gives hope that the new Commission set up by the Ministry of Education will be encouraged to go to the root of the problem. Inadequate training is not, unfortunately, a weakness of the rank and file alone. In an angry moment President Cosgrave described Free State business men as "antique furniture," and though this is an exaggeration it was the spice of truth in the phrase that gave it its sting.

Long term credits are as bad a stumbling block in relation to industry as to agriculture. With one or two exceptions Irish industries do not attract Irish investors, and the banking system has not been sufficiently elastic for the financing of new industries. When, following the English precedent, the Saorstat Government guaranteed by means of a Trade Loan Act moneys required for the fixed capital of new enterprises or the extension of old enterprises, the ordinary joint stock banks declined to lend on the government guarantee for a longer period than five years. The difficulty was met by the formation of the Industrial Trust Company Ltd., to which the Minister for Finance in his official capacity is a subscriber. Grants to it have been guaranteed to the amount of £100,000, a sum which it is expected will be doubled in the near future.

Up to the present the Free State Government has not been in a position to exercise any real influence over credit policy. There is a general belief that this will be changed as a result of the investigations of the Banking Credit Commission of which the chairman is Professor Parker Willis, late Secretary of the Washington Federal Reserve Board, who has had much to do with the scheme of farm loan banks in the United States. The Minister for Land and Agriculture has declared that "intermediate-term credits for marketing, etc., as well as long-term credits for building, etc., can only be done by some bank or institution set up for that special purpose," and there is no doubt that the views would be endorsed by the Minister for Industry and Commerce in relation to the financing of industrial undertakings. Therefore it is safe to assume that the Banking Commission is devoting both thought and energy to this issue.

Under the new régime all the Free State railroads have been amalgamated into a single company, and a substantial reduction in rates has been effected. Transport charges, it is universally agreed, were so heavy in Ireland as to constitute an unfair burden on industry. But the new system was introduced at a time when the railways were passing through a time of severe stress; and though the situation has been improved by the decision of the workers to accept a cut in wages, it is not yet clear that the unified line has been established upon a sound economic basis. Divided control is carried to even more fantastic lengths in relation to roads than to railways. Thus six miles of suburban highway linking Dublin with Dun Laoghaire (Kingstown) are under the charge of four different local administrative bodies. The Free State authorities are not unaware of the necessity of reconditioning the roads to meet the needs of new developments in motor transport. Already they have expended over five million dollars for this purpose and the current Budget makes provision for an additional grant of ten millions. There is a widespread belief that increased allowances to county councils will not suffice, and that sooner or later trunk roads must be placed under national control. Nevertheless it would be uncandid not to admit that things are steadily improving. Even a couple of years ago Irish roads were a purgatory for the motorist. They resembled the famous Broadway I jolted over in 1879. On a twenty-mile run on one of the main highways from Dublin it was not an uncommon sight to find half a dozen derelict machines which had come to grief in the innumerable potholes. Between 1919 and 1923 the only picks and shovels at work on the roads were those of ambushers digging trenches across them, while high-speed military transport cut the surface to ribbons. This damage has now been repaired, and though heavy traffic has increased enormously, the roads throughout the greater part of the country are better than they have ever been. Within the last few weeks the Government has made it mandatory upon the county councils to set up adequate direction posts and warning signals on all main roads, and the work is already in hand. When it is completed the motorist will find Ireland in line with other European countries.

Experts whose opinion cannot be disregarded contend that the real hope of future progress will be found less in efforts to stimulate enterprises which require artificial aid to withstand outside competition than in the creation of entirely new industries which will be in a position from the first to advance along the most approved modern lines. Thus in the Beet Sugar Factory, which is reaching completion in Carlow, the Belgian concessionaires are installing the very latest type of machinery. This industry has the advantage of an agricultural basis, and it is in the development of manufactures arising out of agriculture that we stand the best chance of remedying the evils of our one-sided economic system. As yet we have made scarcely a beginning with the dead meat industry, in spite of the fact that we possess advantages such as few of our rivals enjoy. Our tanneries are few and not of much importance, and though in woollens and hosiery we have made better headway, the almost complete absence of proper organization is a serious drawback. At present the rule is that practically all mills are turning out a wide range of articles, with the inevitable result that costs of production are abnormally high. With concerted action on the part of manufacturers it would be possible to use separate mills for the production of a special type of goods, and thus avoid the wastage entailed by a disorganized mob of small firms, competing not only against outsiders but against one another.

It used to be assumed that outside the Belfast area large-scale production was not possible, inasmuch as it was held to be repellent to the individualistic Irish temperament. No doubt we do excel in work where personality gets free play, and for this reason undertakings in which quality counts for more than quantity should make a special appeal to us. A good deal depends, however, on the manner in which mass production is attempted. The two most prosperous concerns in the Free State -- the great brewing firm of Messrs. Guinness and the biscuit factory of Messrs. Jacob -- are examples of large-scale-industries with a world-wide reputation for efficiency. What is rarer still, they are establishments in which relations between employers and employed are so harmonious that friction of any kind is almost unknown. The same holds good of Henry Ford's Motor Works, now the back-bone of the industrial structure of Cork, whose citizens in spite of this fact show no signs of losing their individualism.

By the singularly bold stroke of embarking upon the Shannon hydro-electrical scheme the Free State Government cut at the root of the popular idea that Ireland's lack of cheap and abundant coal doomed her industrially to hobble along in the rear of her neighbors. If the plan succeeds, -- and its endorsement by a tribunal of the foremost European experts is the best tribute to its soundness, -- the country stands to recover all that it lost in the age of steam. The proposals put forward by the German firm of Siemens-Schuckert and accepted by the government aim at generating from the Shannon a supply of electricity more than adequate for the needs of the whole of the Free State.

Under the scheme, development is to take place in three stages which correspond with the utilization for the storage of water in the three Shannon lakes, Derg, Ree and Allen. The first or "partial development" stage, only using Lough Derg, will meet early needs. Its estimated cost is 26 million dollars. The whole scheme, to be completed in ten years, will cost 36 millions. In the average year the output will amount to 288 million units. The supply is to be transmitted on high tension lines and will ultimately be distributed through transformers to all Free State cities and towns, but in the first instance to villages which have more than 500 inhabitants. Its authors claim that under the Shannon scheme Dublin will obtain electricity at one-fourth of the price paid in Canada, and opposition from agricultural quarters is countered by the argument that if electricity is ever to come to the farm it must be through a national network such as the Shannon alone can provide.

The power-station cannot be in working order before 1930 at the earliest, in spite of the excellent progress which is being made with the preliminary operations. But it is an interesting fact that continental groups are already making approaches with the object of organizing the rural industries which they calculate will come into existence once a supply of cheap electricity is available. Even at this stage plans are being drafted for a chain of electro-chemical industries in connection with the Shannon. Low-priced power is the essential basis of these undertakings; and foreign industrialists, who find that under post-war conditions scope for the investment not only of money but of technical knowledge is becoming rather restricted, are for the first time giving serious attention to Irish possibilities. Italy's success in applying electric power to the manufacture of artificial silk yarn has not passed unnoticed in the Free State. Though it is recognized that great caution is necessary in entering this field, the Shannon developments, together with the knowledge that there is available a large number of workers trained to deal with fine textiles, have encouraged industrialists to frame plans for the establishment of a factory. In this work, as in most of our new experiments, technical direction must be in the hands of outsiders till a generation of Irishmen have been trained on scientific lines.

The money necessary to finance the Shannon scheme is to be raised by loan. Unlike most European peoples, the Free State has escaped a back-breaking load of national liabilities. Its total debt works out at less than one year's revenue, though the figure will be increased now that the Minister for Finance has announced that non-recurrent expenditure is to be funded. This means a new loan, but it is of good omen that whereas the last was issued at 95 it now stands at 99. While there is agreement that taxation to the tune of 122 million dollars is too high an annual burden, so far no political party has definitely advocated cuts sufficiently drastic in national services to reduce appreciably the Budget demands.

Disturbed labor conditions are often taken by outsiders to be the rule rather than the exception in Ireland. The organized workers supplied not a little of its driving force to the revolutionary movement, and naturally their exertions were directed towards maintaining the standard of living which had been established during the Great War. While wages advanced as steeply, if not as quickly, in Ireland as in Great Britain between 1914 and 1918, since that period, except in rural areas, the Irish worker has been more successful in maintaining his advantage. It is claimed that this higher wage acts as a handicap upon native industries, but the Fiscal Committee reported that the evidence submitted to it was insufficient to enable its members to determine the true weight of this handicap. Experts, who cannot be accused of a bias in favor of labor, hold the view that with an improvement in technical methods and organization, and the provision of adequate capital resources, the present or even higher wage rates could be paid without detriment to production, if not with positive gain, in virtue of the increased efficiency secured.

The worst troubles of recent years have arisen through domestic differences between various sections of workers, which have now fortunately ended in a complete triumph for the Irish Transport and General Workers Union. Leaders of this organization are anxious to aid in fostering new industries, and have given practical proof of their good-will by consenting in certain cases where evidence of necessity was forthcoming to modify or even waive existing trade union regulations. A well-known authority who has had wide experience in conducting negotiations between employers and employed in the Free State recently stated that "firms which are contemplating industrial enterprise in this country will find labor conditions, with very few exceptions, reasonable as anywhere in the world." A new precedent was recently established by the visit of the leaders of the Labor Party to the Carlow Beet Sugar Factory prior to its formal opening. In the course of their speeches on that occasion, the Labor representatives declared they felt a moral responsibility for the success of a great national enterprise. Given coöperation on the part of the management, they would leave nothing undone to ensure that Irish workers should fulfil their obligations. If we can establish a working agreement between Capital and Labor in the Free State -- and the omens are decidedly favorable -- we shall do more to increase our prestige in the eyes of the world than by all our political battles.

No account of the Free State's beginnings -- no forecast of its ultimate achievement -- can be just or approximately accurate without making full allowance for the circumstances in which it came to be. Three wars -- the World War, the Anglo-Irish conflict and the civil war -- might well have paralyzed effort and banished hope. Every student of Irish life knew that the first fruits of self-government must be disillusion. When the dream of centuries was realized, it was accompanied by the partition of the country against the wishes of the vast majority of the Irish people. If these things be duly weighed, I do not think it is rash to prohesy that the Irish Free State will make good. If it does a new Ireland will be born.

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  • SIR HORACE PLUNKETT, founder of the Irish Agricultural Organization Society; Chairman of the Irish Convention, 1917-18; author of several political and economic works on Ireland
  • More By Horace Plunkett