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This article on censorship in emergency Ireland describes the initial reaction as one of incredulity, in part because it had been censored so thoroughly during the war.
'The average Dubliner’, according to an anonymous letter-writer to the Irish Times, commenting on the revelations about the Nazi Holocaust at the end of the Second World War, ‘would not be persuaded even though all the hosts of Hitler’s victims were to rise from the dead; he would only pour himself another drink muttering “British Propaganda”’. Such scepticism in the face of the emerging evidence was common in Ireland, and also in other countries which had not experienced the Nazis at first hand. The sense of incredulity was heightened by the poor reputation which atrocity stories had gained after the First World War; the horror stories about bloodthirsty ‘Huns’ mutilating babies, using bodies to make soap, etc. which featured prominently in Allied propaganda had been exposed as fabrications in the interwar years. In Ireland the credibility gap was widened because of the government’s policy during the war, or the Emergency as it was known, of ruthlessly censoring all reports of cruel or inhuman treatment by the belligerents, and by the continuing insistence in many circles on viewing all oppression through the lens of the British record in Ireland.