small power could only be taken if all the major powers agreed, in the process leaving unchanged the ‘balance of power’ diplomatic practices that had led to the First World War in the first place.35 Typifying this as England’s attempt to ‘trick America’, Sinn Féin argued that ‘today Ireland is doing more than all the remainder of Europe to prevent that trick succeeding’ and that this reality was elevating the question of Ireland into a ‘world question’.36
Noting that ‘the domestic problems of Europe are of no consequence to the United States of America’, Sinn Féin expected as early as the summer of 1918 that America would not be enthusiastic about the League of Nations idea. Reflecting this, Ireland’s primary concern was simply to concentrate on the fact that ‘our fellow countrymen in the states will know how to take advantage of the Irish pronouncement for independence’ to ensure that ‘America will understand the voice of Ireland and America will respond.’37 The first pronouncement of US Republican Party senators on Ireland was to declare that they believed that the Dáil’s representatives should have been admitted to the peace conference, but they did this only after the Versailles conference had ceased.38 In the autumn of 1919, the Friends of Irish Freedom in America celebrated when US Republican senators rejected the idea of America joining the League of Nations. This was viewed as having undermined the possibility of an Anglo-American alliance and increased the likelihood of persuading the Republican Party to take up the cause of Irish independence as part of its election manifesto for the next US presidential election.39 It was widely expected that the Republicans would win such an election on an isolationist foreign policy ticket. This was because Americans tended to view new institutions such as the League of Nations and the associated ‘International Labour Organisation’ as mere fronts for (British) imperial intrigue, as well as a means to lead America, against its own wishes, into European political entanglements. Sinn Féin was essentially correct that the United States would welcome if direct trade with Ireland could be boosted. However, America had no interest in involving itself directly in others’ affairs, preferring instead to stick dogmatically to a foreign policy of ‘[commercial] involvement without [diplomatic] commitment’.40 This was the Achilles heel of the Friends of Irish Freedom’s campaign.
The attitude of Wilson’s Democratic Party in the United States was disappointing for Ireland. A cross-party Irish delegation had attempted, in vain, to meet Wilson in Paris to offer him the freedom of Dublin. On this occasion, intimations were received from Edward House and Herbert Hoover, then the head of the American Relief Administration in Paris, that Wilson could not ‘officially’ take up Ireland’s case. Sinn Féin read this comment mistakenly as a hint of encouragement. Wilson was actually very unhappy that the Friends of Irish Freedom had unilaterally appointed a political delegation of three prominent Democratic Party members to visit Ireland and Paris in support of the Dáil. Frank P. Walsh, a Kansas City lawyer who was formerly chairman of American Commission on Industrial Relations, led this delegation.41 In the recent past, the Friends’ treasurer Thomas Hughes Kelly, who was chairman of the New York Emigrant Savings Bank, was prevented from even landing in Ireland by the British government. According to Lord Midleton, the only reason why the British government did not issue a warrant for the arrest of Walsh was that it had decided instead to present the British government’s case regarding Ireland to the American government purely as part of its negotiations for the holding of future joint Anglo-American naval conferences.42 From Britain’s point of view, the question of the freedom of the seas with regards to Ireland meant utilising the western coast of Ireland for the defence of British mercantile and military shipping alone. As acting president of the Dáil, Arthur Griffith believed that Britain’s massive wartime debt to the United States should work to Ireland’s advantage in presenting a different case.43 Ireland’s lack of financial clout, however, meant that it was poorly equipped to convince the Americans not to accept the Royal Navy’s ‘western approaches’ stratagem. An additional factor that did not help the Irish case was that Wilson had been very influenced by Casement’s misleading propaganda that had presented Irish nationalists as having been pro-German during the war.44
Dáil Éireann’s economic policy was based on a desire to change banking practices in Ireland by adopting a more American-style policy of allowing extensive loans to even small businesses. This was considered as an essential first step to allow Ireland to capitalise upon various international factors. This included the capacity of many ‘pre-war pastoral countries’ to capitalise upon the trend of American investment in Europe to transform themselves into ‘a manufacturing exporter’; the existence of ‘a permanent market’ on the European continent for Irish agricultural produce; and the potential, once Ireland was able to ‘burst through the trade wall’ of Britain, to revive various historical trade routes as well as to create entirely new ones.45 Dáil personnel worked with the IDA and American consular services to promote direct trade between Dublin and New York, and they also worked with French consular services to initiate new direct shipping lines with Le Havre and Bordeaux.46 These initiatives, however, involved American and French shipping lines exclusively because there was insufficient Irish risk capital to establish an Irish mercantile marine. The British government, which had already imprisoned many Sinn Féin TDs, formally outlawed Dáil Éireann in September 1919 after it began legislating on banking. Hitherto, almost half of the assets of the Irish joint stock banks and Post Office Savings Bank were held jointly as securities in London banks, and were legally tied into the operations of both the Irish Land Commission and the British government’s own ‘war loan fund’ that had financed the First World War.47 The Dáil issued a direct challenge to this situation in August 1919 when it launched its own National Land Bank in Dublin under the management of a former professor of economics in Toronto.48 This bank sought to cultivate links with cooperative banks in both America and Germany and to scrap the Irish Land Commission, but the British government considered this to be an illegal initiative.
Sinn Féin’s expected victory in all local government elections was intended to bring about a complete revolution in banking practices in Ireland. This was because of the willingness of all local government bodies, which swore an oath of loyalty to the Dáil as the national parliament and intended setting up their own courts, to invest their funds in the Dáil’s bank to effectively transform it into a new Irish national bank. This was the essential basis of Sinn Féin’s counter-state programme: enabling Irish nationalists to take administrative control of all the apparatus of government nationwide.49 The outlawing of the Dáil, however, not only made this policy impractical but also left the Irish republican administration without a secure outlet for investing its capital other than in Dublin Corporation stock. Therefore, the administration of the Irish government outside of Dublin city became an essentially ad hoc process that operated without the security of having a working relationship with any bank.50 This trend was enhanced by the fact that as soon as Sinn Féin took control of the national administration of local government during the summer of 1920, Britain sent army auxiliaries to Ireland to suppress this administration, causing fatalities in Ireland to peak thereafter.51 This situation naturally irked Sinn Féin supporters greatly. On Griffith’s insistence,
