Ireland and the Marshall Plan: E.C.A.'s Manoeuvring to Promote Dollar Tourism

At the end of WW2, the European countries which had taken part in the conflict were economically drained. Their industrial base in tatters, they relied heavily on imports of essential necessities from the United States. But it soon became evident that their exports were not sufficient to cover the increasing cost of their imports. Indeed, by the summer of 1947, the gold and dollar reserves of the sterling area pool had almost dried up, which was likely to severely hamper the reconstruction of Europe. ¹ Seeing the old continent on the brink of economic, social and political disaster, the U.S. was worried that this may leave them open to communist influence. Hence the American decision to set up an economic aid programme (the Marshall Plan or European Recovery Programme) to help sixteen European countries’ economic recovery. ²

Although Ireland had not taken part in the war in the name of the principle of neutrality, it was allowed to benefit from Marshall Aid. ³ There are several reasons behind the American decision. First, Britain was ‘Ireland's banker’. ⁴ The two economies were closely interlinked and ‘the more the United States could meet Ireland's dollar need, the greater the relief to Britain's dollar reserves’. ⁵ Second, American technical support could help make Irish agriculture more productive at a time when food was rationed in Britain. ⁶ Third, the C.I.A. considered that the geographical position of the island of Ireland would be strategic should the U.S. decide to carry out air attacks against the U.S.S.R. ⁷ Fourth, even if the threat seemed remote in the case of Ireland, the American authorities were aware that a deteriorating economic situation and rising inequality could create fertile ground for the spread of communism. ⁸ Finally, as Ireland clearly belonged to the Western Bloc, it seemed logical to include it in the plans Washington had in mind for Europe.

The prospect of benefiting from Marshall Aid so as to boost economic development and to be represented on the international diplomatic scene was welcome by the Irish government even if the promotion of free trade and European integration, which also formed part of the American plans, were not a foreign policy priority or aspiration. ⁹ Although Ireland had not suffered physical destruction during the world conflict, by 1947, its economy was plagued by rising inflation, falling living standards, frequent strikes, unemployment and emigration. ¹⁰ In office since 1932, Fianna Fáil had focused on promoting industrial development. To this end, it had introduced protectionist measures primarily to insulate domestic infant industry from foreign competition and also to make sure private companies would remain under Irish control. But, despite significant progress in the industrial field, Ireland was still mainly an agricultural country which relied on American imports as much as the rest of Europe did. Still, the E.C.A. considered that Ireland's financial position was sound. However, it believed this was ‘not a symptom of wealth but of conservative policy.’ ¹¹ Thus, despite the Irish negotiators’ best endeavours, Washington offered a loan rather than a grant to the Irish authorities. ¹² The latter were left with no other choice but to accept it. ¹³ Although Fianna Fáil won the most seats in the 1948 general election, it fell short of a majority and was replaced by an unlikely coalition led by Fine Gael. Given the respective agendas of the parties that composed it and their ideological ¹⁴ differences, “unlikely” is probably an understatement. ¹⁵ This coalition government dealt with the actual implementation of the European recovery programme (E.R.P.).

Seán MacBride became Minister of External Affairs. Handling the questions related to Marshall Aid fell within the brief of this department, a decision originally made by Éamon de Valera. This decision was not to everybody's liking in the Irish administration. Indeed, in the early days of the Free State, the Finance department held sway in the Cosgrave administration. However, under the Fianna Faíl administration, Industry and Commerce, headed by Séan Lemass, gained a lot of influence while Finance was relegated to second place. ¹⁶ When the Department of External Affairs was assigned the main responsibility for dealing with E.R.P, its range of activities and area of influence extended to economic policy. Understandably, the Department of Finance, which had hoped to regain some lost influence, was dismayed. ¹⁷

In addition, from the beginning it had opposed the Marshall loan. Its high-ranking civil servants, notoriously known for their conservative and thrifty attitude, argued the country would not be in a position to repay it. ¹⁸ Left with no other alternative but to accept a loan, they insisted it should be used to reduce the national debt. Gary Murphy provides evidence that both the departments of External Affairs and the Department of Industry and Commerce, contrary to Finance, were not hostile to the far-reaching objectives of the Marshall Plan and that the latter positively influenced the Irish policies of the end of the 1950s, when Ireland adopted economic planning and the market economy. ¹⁹

In the same vein, the first section of this paper shows to what extent personality clashes within the First Inter-Party Government, departmental power struggles and disagreements over how the government should spend Marshall Aid did indeed hamper the development of dollar tourism. Indeed, tourism was denied state help on economic ground but also for political reasons.

For Ellwood ‘(…) Europeans paid tribute to the supreme role they expected America to play in the postwar world’ at a time when Europe was vulnerable. ‘In return, they were prepared to concede some degree of sovereignty.’ ²⁰ But Denis O’Hearn contends that, in fact, in return for Marshall Aid, recipient countries were compelled to accept trade liberalisation and permit American inward investment. ²¹ Ireland at that time was hanging on to its newly-acquired sovereignty. ²² For Geiger, the Irish reticence to accept a loan was, beyond financial considerations, also the reflection of the wariness of government circles and part of public opinion towards American economic power. ²³

Based on unpublished American archive documents, the second section of this paper reveals that the ECA did indeed exert direct and indirect pressure on the Irish authorities. It uncovers some of the backdoor tactics used by the American agency to convince the Irish government to take action by investing in this sector. But the Finance Department was opposed to it. In reality, contrary to what O’Hearn contends, the First Inter-Party Government would have welcomed some American investment in the hospitality industry if it could have been a substitute for state investment in this sector.

For Ellwood, one of the E.C.A.'s tasks was to ‘channel attitudes, mentalities and expectations in the direction Americans understood, the direction of mass-production for mass-consumption prosperity’. ²⁴ But, according to T. K. Whitaker, ²⁵ the materialistic values Marshall Aid intended to convey were remote from the guiding ideals of the Irish government's policy based on such principles as ‘the democratic way of life, Christian social and economic model, human liberty, the right to national self-determination and family life’. ²⁶

Brian Girvin contends that, in hindsight, most of the potential benefits of Marshall Aid were actually lost on Ireland whose attitude was predominantly isolationist, conservative and economically protectionist. ²⁷ Yet, Whelan argues that in the early fifties Irish society was not immune to external influences. Indeed, despite pervading conservatism and economic protectionism, American influences managed to permeate Irish society. ²⁸

Despite the bleak picture that is usually drawn of the Irish business community of that time, American archive documents evidence that there existed a minority of dynamic hoteliers, open to new ideas, willing to modernise and expand their businesses. The second section of this paper goes on to show that behind the scenes, the E.C.A. established regular contacts with them and helped them coalesce into a small group. The American agency had a dual objective: to put pressure on the Irish government and to send hoteliers to the United States to expose them to the methods used by American hotels.

At the time, the U.S. actually had a keen interest in promoting economic development and the capitalist model in certain countries. Modernization theory was a dominant paradigm in the 1950s and 1960s. ²⁹ It posits that once cultural and institutional endogenous barriers are overcome, ‘traditional societies’ can develop, in a linear way, if they adopt the model of ‘modern societies’. The Marshall Plan was in total conformity with the new zeitgeist. Modernisation theory has since been challenged by the structuralist theories. ³⁰ However, more recently, Douglass North in his work on the causes of uneven economic development asserts that ideas, ideologies and “mental models” influence the choices individuals make. These choices are culturally derived but North contends that they are also “partly non-culturally and non-locally learned”. ³¹ For North, the fundamental source of change is learning by entrepreneurs of organizations. But change is typically incremental: ‘The rate of learning determines the speed of economic change; The kind of learning determines the direction of economic change’. ³²

The E.C.A.'s ruses were useless to get significant immediate action from the First-Inter Party Government. Nevertheless, as the third section contends, the full impact of the Marshall Plan needs to be assessed over a longer term. Indeed, by cherry-picking a small number of ambitious hoteliers and by acquainting them with the “American way”, the ECA was instrumental in the development of several innovations in Irish tourism and the economic sector which attracted the attention of powerful Irish-American businessmen. The latter were subsequently to collaborate closely with the Irish government to attract strategic American investments to the country from the 1960s onwards.

Tourism Development: a Bone of Contention

Ireland received the main bulk of the monies during the first eighteen months of the E.R.P. The funds made available initially helped finance a number of agricultural projects such as the reclamation of land in the West of Ireland, a reforestation program, hospital building and rural electrification development. ³³ However important for the country those projects may have been in the long term, they were of little immediate return. ³⁴ The year 1949 marked a turning point in several regards. First, growing international tensions pushed the Americans to prioritise financial help to countries willing to participate in the formation of the North Atlantic Treaty Organization. Ireland, which wanted to remain neutral, consequently saw its dollar allocation cut by half. ³⁵ Second, the British government took the decision to devalue the pound sterling. Given the parity between the two currencies Dublin had to follow suit. ³⁶ This was not without consequences for the Irish economy. Indeed, counterpart funding had made it easier for the country to import materials and goods from the dollar area. ³⁷ As a result, Ireland's dollar needs had skyrocketed. Furthermore, U.S. entry into the Korean War in September 1950 caused commodity prices to rise, which made things worse. Those factors led to a worsening balance of payments situation, hence the urgency for Ireland to increase its dollar earning capacity. The E.C.A. thus started focusing more on the potential of developing industrial production that could be exported to the dollar area. ³⁸ But, the American team eventually considered that attracting American tourists, whose number could easily double or treble, was the best way for Ireland to earn dollars rapidly. ³⁹ Tourism was a burgeoning industry which had experienced a boom in the immediate post-war period thanks to the stream of tourists from Britain whose holiday resorts could hardly cater for them. ⁴⁰ The Central Statistics Office found that tourists to Ireland had spent £34 million in 1948, a quarter of the total income from abroad. ⁴¹

The Tourist Traffic bill (1939), introduced by Seán Lemass, the then Fianna Faíl minister for Industry and Commerce, provided for the creation of the Irish Tourist Board (I.T.B.) with powers of regulation, registration and control in matters relating to tourist traffic. ⁴² The figures published in April 1945 reveal that 1,192 premises were registered which provided 14,033 hotel rooms and 1,904 guest-house rooms. ⁴³ The grading process (from A to C for each category) began in 1946. ⁴⁴ In 1950, the number of hotels rooms had risen to 16,550 of which 11,300 had running water, an increase of nearly 5,000. However, these figures were still deemed insufficient. The Irish authorities, long aware of the dearth of hotel accommodation, knew the country was not in a position to welcome a large influx of American tourists. ⁴⁵

William H. Taft, special assistant to the E.C.A. chief of mission in Ireland, expressed serious reservations about the state of the accommodation available in Ireland. Indeed, some of the class C rooms he had visited ‘were so dirty and poorly kept that [he could not] see how any human being could occupy them’. ⁴⁶ At the start of June 1949, upon his return from a one-week tour of Irish hotels, Theodore Pozzy's views concurred with Taft's. ⁴⁷ Besides, Pozzy had also gained the impression that Irish hotel owners were quite satisfied with their business and were reluctant to modernise their properties. ⁴⁸

Despite this rude awakening, Pozzy and the E.C.A. did not give up on the idea of promoting dollar tourism. Pozzy cited the example of Vichy, in France, which had gone to some length to attract American tourists, providing a racecourse, a full-sized golf course, a swimming pool and tennis courts. In the casino, facilities for gambling, roulette and card tables which, according to Pozzy, had a special appeal to Americans had been installed. As a result, Vichy had seen its dollar earnings increase considerably in one year. ⁴⁹ Ireland could emulate this example. More controversially, he proposed the opening of night clubs which would serve alcohol up to a late hour at night. Of course, licensing hours would have to be extended in those places as well as in hotels, cafés and public ballrooms. The E.C.A. officials were aware that these suggestions may ‘meet strenuous opposition from more than one quarter’ but it was worthwhile considering implementing them. ⁵⁰ Indeed, Americans were accustomed to such facilities at home and were ‘not likely to come back to a country where they were not available’. ⁵¹ Pozzy also suggested to the Irish government that the duty free allowance be increased for dollar tourists.

Finding the way to provide accommodation meeting American tourists’ standards was probably the trickiest part of the plan. For Taft, the best way to provide luxury accommodation for American tourists was to attract foreign investment, ‘Hotel investors’ interest may be aroused’, he thought, ‘with E.C.A. help by requesting an American prominent in the tourist business to make a survey of Ireland's tourism possibilities’. ⁵² The E.C.A., for its part, could also make arrangements to set up a technical assistance (TA) scheme in the fields of hotel management and training. But Taft was frank: ‘Any real success [would] probably require large outlays of money and imagination. However, [until then] influential Government authority seem [ed] to have been lacking’ while ‘the nature of the difficulties to be overcome demand [ed] the Irish Government's careful attention and effort over many years’. ⁵³ For its part, the E.C.A. was doubtful that the work needed in existing hotels could be achieved in the short term. In reality, behind the scenes, it reckoned the establishment of ‘two to four “centers” in Ireland which Americans could use as bases of operation’ to be the best option. ⁵⁴ ‘Each center would consist of one or more new hotels built to meet American needs and habits.’ ⁵⁵ Clement's ‘off-hand reaction’ was that ‘this kind of approach might be more practical than trying to build wings on existing antiquated hotels’. ⁵⁶ In April 1949, the E.C.A. staff met with Kevin O’Doherty, from the I.T.B., who was ‘most anxious to explore the possibilities of American investment in five of its hotels’. ⁵⁷ According to the latter, the Board was very keen about the idea and its chairman, William F. Quinlan, was quite willing to go to the United States to pursue the question. The E.C.A. proceeded to investigate the conditions that applied to foreign investment both in the industrial and tourism fields. ⁵⁸ In November 1949, the organisation discussed the matter further with the Department of Industry and Commerce which, it seems, cooperated fully. Taft was quite optimistic and hoped that ‘American investors in hotels [would] now step up in line’. ⁵⁹ Meanwhile, Pozzy contacted Hilton Hotels Inc. with a view to arousing their interest in establishing in Dublin a 300–400 bedroom hotel which could cater primarily for American tourists. The company subsequently forwarded a proposal to the Irish administration. ⁶⁰ MacBride, who was consulted along with other ministers, on the desirability of building a luxury hotel of the Hilton type in Dublin, was on the same wave length as the E.C.A. For him, the need for such a hotel was beyond question and the lack of it was a severe handicap for the tourism industry. ⁶¹ Enthusiastic about Europeanisation and Marshall Aid, he proved particularly zealous when it came to supporting and conveying the E.CA.'s views to the government. ⁶² However, Pozzy was soon faced with ‘the lack of the [Irish] Government's determination to go ahead with such a scheme’ and its ‘lackadaisical’ attitude.’ ⁶³ The department of Industry and Commerce was now dragging its feet in promoting tourism matters, which was causing growing irritation on the American side. ⁶⁴ Consequently Carrigan sent a serious warning to MacBride who conveyed it to the government. ⁶⁵ But what the E.C.A. took for nonchalance actually hid an unwillingness to comply on the part of the Finance department.

In contrast to MacBride, Patrick McGilligan, the minister for Finance, expressed his opposition to the project. Most likely influenced by McGilligan's arguments, Daniel Morrissey, the minister for Industry and Commerce, who had initially showed interest in the project, backpedalled. Indeed, the American hotel chain did not intend to contribute any part of the capital necessary to the venture and both ministers were doubtful that the estimated IR£1,000,000 could be secured be it from private sources or from the Industrial Credit Company. ⁶⁶ McGilligan argued that private enterprise had to prevail, consequently the Irish government's policy was to not invest in the hotel business. However, as Lynch highlights, McGilligan had many years earlier undertaken the Shannon hydroelectric scheme, an exemplar in the field of public enterprise. ⁶⁷

Tourism development had already been opposed by Fine Gael in the past when Seán Lemass presented The Tourist Traffic Bill in 1939. Again in April 1946, during the parliamentary debates on the Tourist Traffic (Amendment) Bill, McGilligan argued that an influx of tourists would drive up prices. On the same occasion, some Fine Gael TDs also claimed that it would jeopardise Irish culture and traditions. ⁶⁸ Moreover, it seems that at the time many politicians and commentators shared the view that ‘tourism as an industry was not quite “respectable” and an echoing of earlier fears that it would have the effect of making the Irish people servile and obsequious.’ ⁶⁹

Around the same period, the Irish press virulently attacked the I.T.B. for buying properties to convert them into luxury hotels for American tourists and more generally for the excessive amount of money spent on tourism development. ⁷⁰ However, the venture was short lived as the small size of those hotels made them uneconomic to run on a luxury basis. Furthermore, it seems that the budget allocated by the Irish government was insufficient to maintain the required standard. ⁷¹ By then, tourism had become a political football and was viewed by public opinion and opposition parties as a bottomless financial pit. Once at the helm of the country, the First Inter-Party Government hastened to offer those hotels for sale by auction and to put a stop to the ruinous Air Lingus transatlantic service that had been operating since 1947. ⁷²

By the end of the 1940s, although McGilligan had become an advocate of ‘mild Keynesianism adapted to Irish circumstances’ and of state capital investment in the economy, this did not extend to the tourism sector. ⁷³ For him it was mainly up to hoteliers to invest as it was to them that ‘the benefits [would] directly accrue and they [had] ample resources to finance improvements which would serve to maintain the greatly increased prosperity they [had] enjoyed in recent years’. Logically, he dismissed the budget increase of IR£3 million requested by the I.T.B. as ‘extravagant’. Public opinion, he added, was already critical as it was of the financial latitude granted to the Board and would not vouch for such ‘lavish spending’. ⁷⁴

The E.C.A.'s Multi-Pronged Strategy

The E.C.A eventually understood that the ‘present government [had] had a considerable mental hazard to overcome … because of past hostility to the tourist program of the previous government’. ⁷⁵ After having taken stock of the context it operated in, the American agency adopted a camouflaged multi-pronged strategy to circumvent Irish resistance. Washington was aware that: ‘“… overt American propaganda … arouses a degree of suspicion, disbelief, and sometimes animosity, on the part of Europeans” …’. ⁷⁶ Therefore the E.C.A. chose ‘“to push across its message whenever possible by working closely and quietly through indigenous groups” … Using the concept of indirection – that is acting covertly – Marshall Plan personnel developed a plan to influence Europe without their actions being attributed to the United States’. ⁷⁷ Ireland was no exception, ‘it would be ‘re-made’ just like the other ERP countries’. ⁷⁸

The first phase of the E.C.A.'s plan was to rally a small number of ‘enlightened hoteliers’, sympathetic to the arguments of the American agency and eager to increase dollar tourism earnings. ⁷⁹ The majority of them was not “organized”, had little contact with the I.T.B. and had not even heard about the proposal to have the Hilton Corporation come into the hotel business in Ireland. ⁸⁰ The E.C.A. was faced with a dilemma though. It needed to get hoteliers on its side to pressurise the government without its knowing the E.C.A. was the invisible hand behind it. But its position could become extremely awkward. Indeed, behind the scenes, it was pushing for the Hilton project and if ‘the Irish Government were surreptitiously to contract a deal to bring Hilton to build a hotel, the hoteliers would scream their heads off.’ ⁸¹

Be that as it may, Harry Clement and Taft organised a meeting with a small number of hoteliers on 19 April 1950: ‘It was understood that this meeting was informal and off-the-record; and that all remarks concerning the policy of the Irish Government towards tourism and related subjects, would be in confidence.’ ⁸² During this meeting, the E.C.A. representatives said bluntly that, for them, the Irish government had been following ‘an anti-tourism policy’. ⁸³ This policy would have to be overhauled so as to assist the hoteliers who were willing to modernise their premises, be it by the establishment of a low interest investment fund or a revision of the tax system regarding hotel improvements. The E.C.A.'s intention was to ‘establish some kind of committee or commission representing that aggressive “intelligent” minority of hoteliers who would list the terms and conditions under which they would borrow money, expand their facilities and go all-out to push dollar tourism.’ ⁸⁴ In addition, the function of the said commission would be to formulate its own policy which it could take to the government. The commission would keep in close touch with the Tourist Board and the E.C.A., ‘the latter informally of course.’ ⁸⁵ Following this meeting, the Commission of Hoteliers on American Tourism (C.H.A.T.) was set up. ⁸⁶ For Clement, this organisation would allow to counter Morrissey's tactics of ruling by division’. ⁸⁷ Indeed, the Ministry of Industry and Commerce had sought every opportunity to forestall any significant action whether by saying that the Tourist Board had a given problem “under consideration” or that the hoteliers were opposed to it.

Ireland eventually managed to obtain a small grant which was, at least on paper, likely to increase the American agency's leverage on the Irish government. By July 1950, the total grant aid received by Ireland amounted to $3 million in respect of which the Irish currency counterpart was lodged in a special account. ⁸⁸ The use of this part of American aid was subject to Washington's approval before the monies could be withdrawn and this, according to Carrigan, would ‘have important psychological advantages in catalyzing the adoption of a new program by the Government’. ⁸⁹ In this instance too, the E.C.A. was at the helm away from the public eye. Indeed, in March 1950, MacBride wrote to Carrigan requesting ‘suggestions and ideas’ for the use of the grant counterpart fund. ⁹⁰ The E.C.A. mission had already a clear vision of how it wanted to see the grant counterpart funds spent judiciously: ‘In the past, the government as a whole has leaned toward investment in undertakings that would create jobs. They are influenced in this by the desire to stop emigration. Tourism and agricultural education are not likely to create a large number of jobs; thus, their development may call for help from ECA.’ ⁹¹ In July, Carrigan was happy to report that the Irish government's list of proposals was ‘almost word for word’ the same as the one he had suggested to MacBride. ⁹²

Using Marshall Aid TA programmes also formed part of the E.C.A.'s plan to get its way. Indeed, on 15 April 1950, at a meeting at the department of Industry and Commerce, Clement recalled that the department had considered applying for a TA survey which would be conducted by experts sent to Ireland under the aegis of the E.C.A. so as to assess the hotel needs in Dublin and throughout the country. ⁹³ The American agency was hoping such a TA tourism survey would have an impact on the Irish government which would then step up its efforts to promote tourism. Clement thought he could conveniently ‘arrange to have the Hilton organisation represented among the experts.’ ⁹⁴ Later on that month, Taft and he met with members of C.H.A.T. who agreed that Peter Jury ⁹⁵ and Robert Kidney, ⁹⁶ acting as this organisation's spokespersons, would promptly meet with Morrissey to let him know of the group's willingness to increase dollar tourism. It would also bring to the minister's attention its desire to assist the TA tourism survey as envisaged by the E.C.A.. C.H.A.T. was willing to confer with U.S. technicians in charge of it and to have first-hand access to the recommendations put forward by the survey team. But Clement hoped that ‘if such recommendations offer[ed] some hope of sound financial investment, CHAT [would] then be disposed to form a new corporation, which, with the proper kind of Government assistance and encouragement [“this group could then hire Hilton if it seems desirable to so” (handwritten addendum)] would undertake the building of the necessary hotels and other installations.’ ⁹⁷ Clement was actually planning that C.H.A.T. would align its recommendations with those of the TA tourism team before presenting them to the Irish government. ⁹⁸

On 21 April 1950, Morrissey agreed with the principle of a TA survey on tourism and assured the American representative that should it recommend it, the government ‘would be prepared to spend a lot of money on developing key centers’. ⁹⁹ He also said that the government wanted to put an American, with a ‘lifetime of experience’ in the tourist industry, in charge of the I.T.B. Unimpressed, Clement drove the point home at a meeting with the Taoiseach the following day. He expressed the E.C.A.'s (in Washington) ‘outright concern and dismay at Ireland's inactivity’ in earning dollars and laid emphasis upon the fact that American aid would stop in 1952. ¹⁰⁰

At the end of July 1950, Clement, who wanted to make sure he would get his way, briefed the TA tourism team led by Robert K. Christenberry ¹⁰¹ both on the ‘difficulties, political, financial, and personality-wise’ that awaited them and on what he wanted to see achieved. ¹⁰²

Predictably, most of the American team's recommendations reflected what the E.C.A. considered necessary for the prompt development of dollar tourism. ¹⁰³ First, the I.T.B. had to be totally reorganized and it was suggested that TA be obtained through the E.C.A. for a period from 6 months to a year to set up the new organisation: ‘This might comprise two people who would be the best obtainable in the United States. In addition, until such time as the Irish can carry on as Departments Heads, other technical assistants should be sought through E.C.A. to train these individuals in their functions and guide Board activities until they are self-sustaining and efficient.’ ¹⁰⁴ This would, of course, allow the new tourist board to benefit from American expertise. But above all, the E.C.A. could make sure that the recommendations set out in the report were implemented. Clement, however, was aware that ‘the country as a whole would probably resent having 100% of these advisors be Americans’. ¹⁰⁵

The American plan aimed to attract 40, 000 tourists to Ireland in 1951, nearly double the number for 1949, and 70, 000 by 1953. For that purpose, a minimum of $200,000, to start with, had to be allocated to promotional activities in the United States.

In most areas, the reports stated, upgrading existing accommodation as well as bringing into the supply suitable private homes or ‘other existing structures of charm and attractiveness’ would be sufficient. The latter were deemed a great asset for the tourism industry. ¹⁰⁶

Having said this, the report also stated that there was no other alternative than to build a new 150-bedroom hotel in Dublin and 100-bedroom hotels in Cork, Killarney and the Limerick-Ennis region as these were bottleneck areas particularly in July and August. By stressing that these hotels were needed to foster economic development as a whole, the American consultants tried skilfully to lessen the Irish authorities’ reluctance to promote tourism and diffuse any latent suspicion of ‘Americanisation’ in the population, a population that would have to be ‘educated’ to the value of tourism through a vast information and promotion campaign, ‘as a result, the tourist [would be] a welcome guest, not merely a tolerated stranger’. ¹⁰⁷

The Christenberry report also advised that the government provide financial assistance for capital expenditure and improvements as well as remission of a portion of the rates applicable to the expenditures made under the improvement programme for a period of seven years. Indeed, the consultants felt that ‘the burden of this expansion [could not] be placed entirely on the shoulders of private enterprise solely on the patriotic appeal based on the need for dollars.’ ¹⁰⁸

Joseph Carrigan, who left his post at the E.C.A. in Dublin in July 1950, was succeeded by Paul Miller. For a while, the latter thought he had found the right method to press the Irish government to act: ‘I have the feeling they do not resent a reasonable amount of constructive criticism. It seems necessary if we are to get some things done, and there are some hopeful aspects of the situation. The tourist organization has really been worked over, and we now have a completely new Tourist Board. It appears that the recommendations of the survey team are to be taken seriously.’ ¹⁰⁹

He couldn't have been further from the truth since the Irish government vetoed the publication of the Christenberry report and the reports of the hoteliers who had been to the U.S. as part of the E.C.A.'s study trips. Indeed, Liam Cosgrave, parliamentary secretary to Morrissey, went as far as forbidding them to discuss publicly, and even within their own associations, what they had found out and what they recommended. ¹¹⁰ By February 1951, Harry Clement came to the following conclusion: ‘The Christenberry report has been suppressed and so much time has passed that it is now more or less useless’. ¹¹¹ The Irish Government eventually released a synthesis of the various reports handed in during the tourism TA programme including the Christenberry Report. ¹¹² Naturally, negative criticisms concerning the general state of hotels, sanitation and the lack of hygiene in hotels, restaurants and guest houses were expunged from the document.

In February 1951, as none of the E.C.A.'s tactics had worked Harry Clement threatened to give up entirely on the idea of technical assistance. ¹¹³ His message was conveyed to Seán MacBride who once again put pressure on the government to get action. ¹¹⁴ The situation got critical as Washington required that TA should now only be provided in connection with activities which were essential to the defence effort. Unexpectedly maybe, Clement defended vigorously TA programmes for tourism in Ireland arguing it was part of the backbone of the Irish economy. ¹¹⁵ Eventually, on February 9 1951, the government authorized Morrissey to amend the 1946 Tourist Traffic Act. But the passing of the legislation was delayed because of the change of government in June 1951. ¹¹⁶ Fianna Faíl was now back in power.

The far-Reaching Impact of the E.C.A.'s Study Trips to the United States

Even if its experience in Ireland left the E.CA. team with a sense of disappointment, as the following excerpt of the organisation's final assessment of the programme epitomizes, it retained the hope that its efforts may bear fruit in the long run: ‘It is doubtful whether the immediate results of Ireland's participation in this general program have been worth the expense and effort involved […]. It is possible, however, that the long-term effects may more than justify the program’. ¹¹⁷ The E.C.A.'s ruses did not really work but the E.R.P. by facilitating the exposure of some forward-looking hoteliers to the ‘American way’ helped set a dynamic in motion. The tourism study trips to the U.S. had indeed a far-reaching, albeit belated, impact on the tourism sector and beyond.

From January to March 1950, a first delegation from Ireland, sponsored by the European Travel Commission under the aegis of the Marshall Plan, went to the United States to study American hotels’ methods and generally assess the scope for the development of American traffic to Ireland. In March 1950, a group from the Irish Hotel Commissions also went to the U.S. as part of a scheme organised jointly by the E.C.A. and the O.E.E.C. ¹¹⁸

Finally, a third party composed of fourteen hoteliers and caterers as well as members of C.H.A.T. toured the U.S. for two months. Granted, prior to this party's departure for the U.S., Timothy J. O'Sullivan, director of the Gresham Hotel (Dublin) and chairman of the delegation, made it clear that their intention was not to ‘Americanise’ Irish hotels: “We are anxious to study the smaller type of hotel which would be more suited to our economy … We cannot hope to imitate, nor would it be desirable to do so, the mammoth hotel organisations in America … We have no intention of destroying the characters of our Irish hotels nor would the American wish us to do so.” ¹¹⁹

But Brendan O’Regan, who was then the catering comptroller at Shannon Airport, was also among those who took part in one of the ECA's familiarisation tours of the hotel and leisure industry in the United States ¹²⁰ during which he met Conrad Hilton. ¹²¹ From then on ‘he became a great follower of everything American for most of the rest of his life, admiring the drive, organisation and enterprise he saw there … A lot of his thinking was influenced by his experiences in the States’. ¹²² Indeed, he came back with a clear vision of what the Irish tourism sector needed to attract American visitors, and what it should aim at. This vision was set out in a very detailed report, co-signed by Patrick F. Dornan, which was handed to the Irish government on April 29^th 1950. ¹²³ Instead of waiting for the latter to take action, O’Regan decided to take the matter into his own hands. His biography relates with great detail how this man contributed actively to the transformation of Irish tourism through various innovations among which the opening of the Shannon College of Hotel Management, the first of its kind in Ireland, and of the first duty-free airport store in the world. ¹²⁴

In 1957, Seán Lemass appointed O’Regan chairman of Bord Fáilte Éireann, a position he held for 16 years. In 1961, the latter also successfully spearheaded the establishment of Ireland's only regional development agency, Shannon Free Airport Development Company and developed the Shannon Free Zone, the first of its kind in the world. ¹²⁵ Over the years, O’Regan, who was John Leydon's ¹²⁶ protégé, became a very influential man who ‘had the ear and the trust of the most powerful figures in government … Top government officials would acknowledge in later years that when proposals or new projects came up the line from Shannon, resistance or reservations were pointless. Anything that emanated from O’Regan was going to get the go-ahead.’ ¹²⁷ Brian O’Connell and Cian O’Carroll, O’Regan's biographers, even contend that the success of the Shannon model may well have eased Lemass's acceptance of export-led growth as set out in Ken Whitaker's report, Economic Development. ¹²⁸ O’Connell and Cian O’Carroll's assertion is an interesting one but regrettably they do not provide hard evidence to substantiate it. It is however undeniable that, by the early sixties, Lemass and O’Regan were both on the same wavelength. Not only were they convinced of the need to attract tourists ¹²⁹ and investment through the Irish-American connection, but they also worked actively towards it. O’Regan contributed to attracting some Irish-American millionaire businessmen, some of whom invested successfully in the Irish hospitality sector and/or in the industrial sector in the west of the Ireland. Bernard P McDonough was one of the Irish-American tycoons that O’Regan convinced to invest in the hotel industry in Ireland in the early sixties. McDonough first bought Dromoland Castle which he converted into a luxury hotel. As it was conveniently located in the vicinity of Shannon, it accommodated foreign businessmen visiting Shannon Development. McDonough also set up the International Hotel. Located within the precinct of Shannon Airport, it was designed to accommodate passengers overnight and house the Shannon College of Hotel Management that O’Regan had set up in 1951. McDonough also built the Clare Inn that opened in 1968 and the Limerick Inn.

As O’Regan also headed Shannon Development, he aimed at attracting industrial investors. Howard Thomas Hallowell, chairman of Standard Pressed Steel Company of Pennsylvania, was one of the first businessmen that O’Regan convinced to establish a plant at Shannon.

McDonough and Hallowell are two of the millionaires that were to become members of the powerful network of Irish-American businessmen, Ireland-United States Council for Industry and Commerce Incorporated, which was set up by the Lemass administration to help the Irish authorities attract foreign investment. As this author has shown elsewhere, Lemass also had Irish-American connections in high-powered business circles in the U.S., like the Links Club, which were to have a pivotal role from 1958 onwards. ¹³⁰ This network kept on collaborating with the Irish authorities long after Lemass left office. It was composed of Irish-Americans industry chieftains, bankers, publishers, owners of retail chains. In 1975, Michael J. Killeen, managing director and Chairman of the IDA Executive Board, stated that the members of this council had invested £100 million and created 20, 000 jobs in Ireland. ¹³¹ Furthermore, not only had they opened doors for Irish leaders and the Irish Development Authority but they also successfully advertised the assets of Ireland in American business circles.

Conclusion

At the beginning of the 1950s, tourism development had become an extremely sensitive topic in political and government circles but also in public opinion. So, from the start, the ECA's efforts to promote dollar tourism were bound to meet opposition even though the American agency had the active support of the Department of External Affairs. American and Irish archive documents have revealed that the American agency unsuccessfully urged the Irish authorities to invest in the hospitality industry and that it was never in a position to compel the Irish government to allow American investment in this sector.

This said, as the E.C.A. had sensed it, its efforts did have an effect in the long-term. Throughout the 1950s and 1960s, the realization that government policies had to change slowly permeated through Irish government circles. The attitude of some members of the Irish administration had certainly become more positive towards the development of tourism. Christopher S. (Todd) Andrews ¹³² , for instance, in the mid-twenties considered tourism to be a ‘shoddy business […] more associated with national mendicity than with legitimate industry’. ¹³³ By the late fifties, he had come to adopt a forward-looking mindset going as far as proposing the opening of casinos in the country. ¹³⁴ A reflection of the new attitude that was going to prevail in the decades to come was the admission by Whitaker that efforts should henceforth ‘be made to attract American and other foreign capital and enterprise for hotel reconstruction and management’. ¹³⁵ The Hilton Group, whose offer had been put on hold, was eventually named as one of the companies whose participation should now be secured.

At the beginning of the 1950s, the United Nations echoed the arguments of the proponents of modernisation theory : “Ancient philosophies have to be scrapped; old social institutions have to disintegrate, bonds of caste, creed and race have to burst and large numbers of persons who cannot keep up with progress have to have their expectations of a comfortable life frustrated.” ¹³⁶ On the contrary, the Irish authorities chose to actively tap and take advantage of the “bonds of race”. Because it had become easier to travel to and from the United States in the 1950s, Irish-American millionaire businessmen started coming to Ireland on holiday and taking an increasing interest in investment opportunities in Ireland. Some of the latter collaborated with Irish businessmen like O’Regan as well as the Irish government. North contends change is normally incremental and the fundamental source of change is learning by entrepreneurs of organizations. What O’Regan learnt during his familiarization trip to the U.S. organized by the E.C.A. inspired a vision he then strove to fulfil in the ensuing decades. American investments had a pivotal role in his grand designs as they could be used to diversify the range of accommodation available in Ireland and boost the activities of the Shannon development.