~ National Loan 1920~

ref. J. Considene paper UCC arch.

http://web.me.com/billmartin7/Correspondence/NATIONAL_LOAN_1919_20.html

Within days of being appointed Minister for Finance in 1919 Collins set about raising the funds necessary if Dail Eireann was to fulfil its stated ambition of providing an alternative government to the British one that was operating from Dublin Castle.

The immediate needs were those associated with establishing independence - the military resources of the Irish Volunteers and IRB plus the diplomatic resources of the Irish delegation to the Paris peace conference. These areas of expenditure were to remain the largest during Collins's time in Finance. In 1921, Defence expenditure was £137,483 and Foreign Affairs expenditure was £30,000. Annual expenditure on other areas such as Agriculture, Education and local government averaged around £4,000 each (Carroll 2002:11). During the early months of 1919 the Dail survived on private donations. For example, Anna O'Rahilly provided £2,000, Sinn Fein gave £1,300 by way of a loan, and the American organisation called the Friends of Irish Freedom started sending money beginning in June 1919 with $100,000 (Carroll 2002:4). However these funds would not prove sufficient and on April 10th De Valera stated that Collins who had become Minister for Finance replacing Eoin McNeill would be shortly announcing a loan issue on behalf of the Dail. Initially £250,000 was to be sought in Ireland and an equal amount abroad. Collins took responsibility for raising the domestic part of the loan, while De Valera and Harry Boland took responsibility for the American fund raising efforts.

(During his period in Stafford jail before transfer to Frongach, Collins was located in a cell next to J.J McElligott a Cambridge Graduate who together with Joseph Brennan (financial advisor to Collins during the Treaty negotiations) were to dominate Irish fiscal and monetary administration in the Dept of Finance for the next 30 years).

The domestic bonds were sold in units of £1, £5, £10, £20, £50 and £100. Twenty five percent was to be paid up front/ 25% on 1st August 1919 and the remainder on 1st November 1919. Interest payments were to be made twice yearly once the Republic had received international recognition (Carroll 2002:6). The American bond certificates were sold in denominations of $10, $25, $50, $100 and $10,000. The purchaser would receive a certificate that could be exchanged at par for a gold bond paying 5% interest one month after the Republic had received international recognition (Carroll 2002:17). The monies collected were made payable to the three Trustees of Dail Eireann - Eamon DeValera, James O'Mara and Bishop Michael Fogarty of Killaloe. While the conditionality of the promises to repay did not deter subscriptions, the establishment and recognition of the Republic combined with the position of the Trustees was to have serious legal consequences for the ownership of the monies. After the Treaty split a variety of organisations sought control over the monies both in Ireland and in the America.

Collins set about the logistical task of organising the loan in circumstances that were far from conducive to success. Even the idea of a band of revolutionaries as distinct from a sovereign government, seeking loans from the general public with a promise of repayment once the Republic was established seems difficult to imagine. As the year progressed the British authorities took greater steps to suppress nationalist activities.

They stopped many newspaper advertisements of the loan. Raids were made on the locations where the provisional government were thought to be operating. The terms bond, certficate and bonds-certificate are used interchangeably throughout this paper. The reason for the range of terms is that the issue of whether the issuer was sovereign is doubtful in international law. In fact, the term bond-certificate was used in America to circumvent this problem. Officially the Republic was not established until 1949. However, it could be argued that what was meant was the establishment of a 32-county Republic rather than the 26 County Republic that ultimately was recognised.

Announcements of public meetings to promote or sell the bonds resulted in the arrest of the organisers. People were arrested for possession of the bonds or the prospectus. To compound the problems Collins faced the Dail was declared an illegal organisation on September 12th 1919. Frank O'Connor captures Collins's application "It is characteristic of Collins that from the beginning he does not seem to have thought at all of the impossibilities latent in the scheme; to him it meant exactly what it said, and he tolerated none of the slackness which could, and did so easily arise from its inherent fantasticalness. He was a born improvisator, and from the moment he was appointed Finance Minister the department of Finance began to function; within a few weeks his mighty Loan was under way, and even to-day, when we have forgotten or can no longer imagine the preposterous conditions under which the department worked - censorship, imprisonment, confiscation, murder - one is filled with respect for the variety and thoroughness of the work performed" (O'Connor 1937 page86).
Amazingly, "everyone got their receipts" (Coogan 1991 Chapter 12).

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