Irish Economy 1922-1939 6 th Year History. The Economic and Social Policies of Cumann na nGaedheal, 1922-32 Ernest Blythe was the Minister for Finance.

Irish Economy 1922-1939

6th Year History

The Economic and Social Policies of Cumann na nGaedheal, 1922-32

Ernest Blythe was the Minister for Finance.

Neither he nor his colleagues had any experiences so they relied on Civil Servants.

Joseph Brennan and JJ McElligott were the most influential

Both believed in Free trade and cautious spending.

Both believed in concentrating on agriculture to boost exports

Challenges

Only industrialised part of Ireland was gone.

Only 6000 people were rich enough to pay income tax.

Emigration and unemployment left a large group of dependents.

No economic independence (banking and currency and over 90% of trade)

Agriculture

Problems: Irish farms too small Farmers too old. Irish food had got a

bad reputation in WW1

Attempts to Improve

Patrick Hogan was Minister and tried to improve things by: Setting standards for

production and presentation

Appointed advisers. Set up the ACC Land commission bought

land and divided it among small farmers.

Up to the great depression, exports improved.

Industry

Big companies like Guinness, Jacobs and Ford lobbied for free trade (feared retaliation).

Blythe agreed, but did introduce some tariffs to protect shoes, clothes, soap and furniture.

The Shannon Scheme completed in 1929 by Siemens was a success.

However the Shannon Scheme was an exception as the civil servants were against using foreign investment for big projects.

They believed the state should not be involved. The ESB was set up to distribute electricity and became the model

for future SSBs.

Social Policy

The British had introduced OAPs and social welfare but they could afford it.

Blythe cut the OAP by 1 shilling and made the means test more difficult.

They did little to replace the city slums.

When the Depression hit, they cut the pay of public servants.

The Depression stopped emigration and unemployment increased.

Assessment

C na G prudent (balanced the books) but politically naive.

Had done little to help the poor while protecting their richer supporters.

Wide open to attack from FF.

The Economic and Social Policies of Fianna Fail

FF’s economic policy was based on: A belief in protectionism

(popular after the depression) A desire to be less dependent

on GB for nationalistic reasons.

Dismantling the Treaty, which meant not paying the land annuities.

Sean MacEntee was Minister for Finance 1932-39 and he introduced many tariffs

Economic War

Tariffs, no land annuities and the removal of the oath maddened the British.

They put a tax, equal to the land annuities on Irish cattle. FF introduced more tariffs. This ‘economic war’ and the Depression reduced Irish exports by

70%. The Irish government tried to get farmers to switch to wheat and

sugar beet by using subsidies but this favoured bigger farmers. Higher taxes were introduced to pay for the subsidies. Tariffs made imported goods more expensive. In 1935 both governments agreed the Coal-Cattle Pact but free

trade did not resume until 1938

Other Agricultural Policy

James Ryan was the Minister and he believed in self-sufficiency by getting farmers to grow wheat and sugar beet.

Irish Sugar Very successful

Wheat not a good idea.

Industry

Sean Lemass was the Minister for Industry and Commerce until 1948

Under protection new industries grew. They stayed small and never intended to export.

1933 Lemass set up the ICC to give loans to industry. He set up semi-state bodies like the Irish Sugar Company, Aer

Lingus, Bord Na Mona and Irish Life). He allowed monopolies believing that the businesses would not be

set up otherwise. In spite of the Depression jobs in industry increased by one third but

it was not enough. Emigration stopped for a little while but this was because there

were no jobs in GB because of the Depression.

Social Policy

Unemployment Assistance introduced. OAPs increased. Pensions for widows and orphans

introduced. They built 12,000 local authority houses a

year compared with C na G’s 2000.