Anglo-Irish trade war

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.

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.

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".

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,[3] the Free State was relieved from its treaty obligation to pay its share towards the public debt of the United Kingdom.

[4] 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 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.

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.

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".

This caused dozens of larger Irish companies with foreign investors, such as Guinness, to relocate their headquarters abroad and pay their corporate taxes there.

The resolution of the crisis came after a series of talks in London between the British Prime Minister Neville Chamberlain and de Valera, who was accompanied by Lemass and James Ryan.

Although the period of the Economic War resulted in severe social suffering and heavy financial loss for Ireland, its outcome was publicised as favourable.

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.

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".