Office of the Historian

862.5018/8–247: Telegram

The Chargé in Iceland (Trimble) to the Secretary of State

confidential
Reykjavik, August 2, 1947—6 p.m.

298. Department’s telegram 200, August 1.1

1.
With view to increasing Icelandic fish production so as to augment fish content German diet Acheson2 made following proposals in behalf bi-zonal authorities:
(a)
Negotiation of residual or open-end contract in which minimum delivery be guaranteed and market established for all possible fish at any time delivered at any German or continental port.
(b)
Contract renewable annually with reconsideration of prices and terms.
(c)
Partial payment in terms dollars or sterling with balance reimbursable at such time bi-zonal exports exceed imports on pari-passu basis with other participants in German food program including US and UK.
(d)
Down payment percentage and prices to be discussed upon Acheson’s return in two weeks. Latter necessarily conditioned by cost alternative sources of food.
(e)
Scheme must coincide with any decisions made under Marshall plan.
2.
Advantages to Iceland of above:
(a)
Participation in preview of Marshall plan.
(b)
No need to alter present trade channels or allocate to US any of Iceland’s presently disposable production.
(c)
Contract would give “support price” or “floor” to price of fish which would enable Iceland’s authorities to develop plans for increased production and at same time provide unique opportunity for long range economic planning i.e. measures to combat inflation.
(d)
No intention of bidding up prices thereby enhancing inflationary difficulties.
(e)
Opportunity immediately to reestablish normal and natural trade channels with Germany which were of primary importance to Iceland’s economy in pre-war period.
(f)
Possibility of applying for International Bank loan to finance that part of credit Icelanders feel that they themselves cannot carry.
3.
Except for observation regarding bank loan which was based on McCloy statement3 summarized July 29 radio bulletin aforegoing understood to be in line with instructions Acheson received from General Clay4 and bi-zonal authorities although I did not see their text.
4.
As gesture of good-will Acheson offered to negotiate immediate contract for 1,000 tons wet salted fish for early fall delivery to Greece, reserving balance of funds available for Mediterranean relief for bargaining purposes in connection with bi-zonal discussions upon his return here. However Iceland’s negotiators who had been advised by Thor Thors5 as to amount at Acheson’s disposal showed tendency to wrangle over price with result that agreement could not be reached during two and one-half days he was in Reykjavik.
Trimble
  1. Not printed.↩
  2. Edward C. Acheson, detailed as special emissary from the State Department with the personal rank of Minister to discuss purchases of fish in Scandinavian countries for the bi-zonal German population.↩
  3. John J. McCloy, President of the International Bank for Reconstruction and Development, stated that the Bank would correlate its resources for the general stimulation of production, thus supporting the aims of the Marshall Plan.↩
  4. Gen. Lucius D. Clay, Commanding General, United States Forces, Europe; Military Governor for Germany.↩
  5. Icelandic Minister in the United States.↩