859A.6363/30: Telegram

The Secretary of State to the Minister in Iceland (Morris)

26. Your 19, January 12,1 and other telegrams regarding supply of petroleum products for Iceland.

An investigation of the price of petroleum products charged Iceland by the United States Navy reveals that this price is the actual cost of delivery as determined by the War Shipping Administration. This price is higher than the price charged by the British because the latter price is based on artificial calculation of cost based on a subsidy. We are exploring possibility of bringing about a reduction in delivery price in Iceland.
For your strictly confidential information, the Navy Department informs us that responsibility for supplying Iceland with petroleum products was transferred from the United Kingdom to the United States in August 1942 at the request of the British Admiralty. Navy’s agreement was based primarily on military considerations and necessities rather than on Icelandic civilian factors which were considered relatively of lesser importance. We are also exploring this phase further and will inform you of the results.
  1. Not printed.