Treaty dismantled

However, the Irish Government did not go so far as to waive its own collection of annuities that were costing its farmers over £4m. annually. A further part of De Valera's policy to dismantle the Treaty was revoking the Oath of Allegiance and making the office of Governor General dysfunctional by appointing a close friend Domhnall Ua Buachalla who never took up office at the Viceregal Lodge nor exercised any official function, the post abolished under the External Relations Act of 1937. London had little option but to accept these circumstances, but was particularly enraged concerning the annuities^[2] . The British Prime Minister Ramsay MacDonald in order to recover the money, retaliated with the imposition of 20% import duty on Irish agricultural products into the UK, which constituted 90% of all Irish exports. UK households were unwilling to pay twenty per cent extra for Irish food products.

Ireland responded in kind by placing a similar duty on British imports and in the case of coal from the UK, with the remarkable slogan (from Jonathan Swift in the 1720s) "Burn everything English except their coal". While the UK was less affected by the ensuing Economic War, the Irish economy was virtually crippled, and the resulting capital flight reduced much of the economy to a state of barter. In the background unemployment was extremely high, the effects of the Great Depression compounded the difficulties, removing the outlet of emigration from Ireland and reducing remittances from abroad. The government urged people to support the confrontation with Britain as a national hardship to be shared by every citizen. Farmers were urged to turn to tillage in order to produce enough food for the home market.