Anglo-Irish Trade War - Protective Policy

Protective Policy

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. This was thought necessary 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 had also to be found to help the disastrously undermined balance of trade and the mounting national debt. A vigorous campaign was set in motion to make Ireland agriculturally and industrially self-sufficient by the then Minister for Industry and Commerce, Sean 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, which had enabled them purchase lands from their former landlords, under the Irish Land Acts. In 1923, the previous W. T. Cosgrave administration 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 all other contributions to the public debt of the United Kingdom on payment of £150,000 down and £250,000 p.a. for sixty years. The question of land annuities was still outstanding . 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 State would no longer pay them to Britain. His government passed the Land Act of 1933 that allowed the money to be spent on local government projects.