Funding the new Republic: the External Dáil Loan
By Robin Adams
As historian David Fitzpatrick has argued, ‘Ireland’s revolution was moulded, in its priorities and funding, by emigration’. This was particularly the case when it came to the funding of the revolutionary government, Dáil Éireann. Of the £1,120,328 collected by the Dáil and held in Dublin during the Irish War of Independence, 67% came from the US. By the end of the war, the Dáil could call on a further $3m (ca. £750,000) on deposit in US banks. Funds raised in America played a crucial role in determining the outcome of the Irish War of Independence. The way in which they were raised also reveals much about the way the Dáil’s leadership wished to be perceived.
In line with its pretensions to legitimate statehood, the Dáil raised funds not by collecting donations, but by selling bonds. The Dáil launched three successful bond issues in the course of the war of independence: the National Loan in Ireland in 1919-20 and the First and Second External Loans in the US in 1920 and 1921. A fourth bond drive, in Argentina, was launched in late 1921 but was cut short by the signing of the Anglo-Irish Treaty. Coinciding with de Valera’s tour of the US, the First External Loan was the most lucrative of these issues, raising $5,151,800 from 276,219 subscribers.
Commonly known as the ‘bond drive’, the First External Loan was launched in New York on 17 January 1920. As ‘President of Ireland’, Éamon de Valera received the freedom of the city from Mayor Hylan, who purchased the first bond of the issue in a ceremony open to the press. De Valera explained the terms of the loan to the journalists in attendance, using the language of statehood while taking care not to misrepresent his case. ‘It will be distinctly understood by each subscriber to the loan that he is making a free gift of his money. Repayment of the amount subscribed is contingent wholly upon the recognition of the Irish Republic as an independent nation.’ To avoid accusations of fraud, the Dáil’s bonds were called ‘bond certificates’, which were exchangeable for bonds of the Irish Republic once that entity had gained international recognition.
Reminiscent of the war bonds sold during the Great War, the Dáil’s bonds were sold in small denominations, designed to attract subscriptions from as many people as possible. Certificates for $10 were to be paid in cash in a single instalment; certificates of $25 and over were to be paid 25% on application, 25% in 30 days, 25% in 60 days, and 25% in 90 days. US Liberty Loan bonds were accepted at par in exchange for Dáil bonds, implying parity of legitimacy between the US and Dáil governments. The Dáil also accepted the Fenian Brotherhood’s bonds of the 1860s in exchange for Dáil bonds, implying historical continuity between the two organisations.
De Valera’s reception at City Hall marked the beginning of Irish Loan Week, the ten days from 17 to 26 January 1920. This was a period of intense canvassing, with promotional events in New York, Chicago and Philadelphia. Widening its geographical footprint, the drive was then launched around the country at public meetings. The initial focus of each state was the large cities, with the less populated areas to follow. The meetings were addressed by prominent local personalities, but as ‘President of the Irish Republic’ de Valera was the main attraction. Reinforcing the Dáil’s poise as a legitimate state, local organisers under strict instructions that the ‘dignity of Chiefs [sic.] position is suitably maintained in everything’.
The bond drive closed for new subscriptions on 14 October 1920. According to historian Francis Carroll, its $5,151,800 in proceeds was the largest amount ever raised by the Irish movement in America. Leading the pack was New York, which raised a whopping $1,453,014, representing some 26% of the total. Manhattan alone subscribed over $600,000. The New York total was followed by $1,037,896 from Massachusetts, and then Pennsylvania, California, Illinois, which raised $540,781, $386,941, and $381,345 respectively. When measured in per capita terms, Massachusetts was by far the biggest contributor, with $2,692.42 per 10,000 inhabitants.
The largest subscription, $20,000, came from John McGinley, Chairman of the West Penn Steel Company, while Edward L. Doheny, the Californian oil baron and inspiration for the movie There Will be Blood, subscribed $10,000. Another large subscription, for $10,000, came from Thomas J. Maloney, the Kentucky-born son of Irish parents who was President of the Lorillard Tobacco Company in Jersey City. However, in the words of the bond drive’s secretary for Manhattan, most of the subscribers were poor people, who ‘put their savings of years on the altar of the Irish Republic’. Indeed, 210,190 (76%) of the 276,219 subscribers nationwide purchased bond certificates in denominations of just $10, making up $2,101,900 of the $5,151,800 total.
As well as providing the Dáil with much needed finances, the First External Loan added weight to the Dáil’s pretensions to statehood. The use of bonds rather than donations added an air of formality to the fundraising campaign, as did its acceptance of US Liberty Loan bonds at par. Much like the US Liberty Loan campaigns, the Dáil’s bond drive also engendered a sense of belonging to the nation. As recalled by an IRA volunteer in Dublin, ‘it provided a means whereby sympathisers both at home and abroad could, by their contributions, become positively identified with the cause of Irish freedom.’ In the words of one of the bond drive’s American organisers, those who bought subscriptions joined ‘a roll of honor for the Irish race’.
Robin J.C. Adams is an Economic Historian based in Queen’s University Belfast and St Peter’s College, Oxford.