No. 695
Memorandum by the Director of the Office of British Commonwealth and Northern European Affairs (Raynor) to the Assistant Secretary of State for European Affairs (Merchant)1

  • Subject: Situation in Iceland
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I am much concerned about the steadily deteriorating public attitude in Iceland toward the need for a sustained Western defense effort, which is being specifically expressed in demands that the U.S.–Icelandic Defense Agreement of May 1951 be amended to curtail the scope of U.S. operating rights in Iceland. This has developed particularly, and rather spectacularly, since the new Government was formed in Iceland in September.

The Icelandic public has never been markedly sympathetic to the presence of U.S. defense forces in Iceland. The successful negotiation of the 1951 Agreement was due, on the Icelandic side, to the drive and foresight of a mere handful of government leaders, in particular the-then-Foreign Minister Bjarni Benediktsson. The implementation of the Agreement, which proceeded smoothly enough initially has become a source of annoyance to various Icelandic economic interests and an object of attack by nationalist and isolationist elements. Delays in construction, alteration of plans, the inability of Icelandic contractors to bid favorably, the sometimes “freehanded” labor relations policies of the American prime contractor, have been some of the causes of dissatisfaction.

Other attacks have been aimed against the association of U.S. troops with Icelanders, operation of the Iceland Defense Force radio (programs designed for G.I. listening, and very popular also with Iceland’s young people), the privileges accorded our troops in P.X. purchases, the difference in wage scales of U.S. workers and troops on one hand, and Icelandic workers at Keflavik on the other, exemption from Icelandic customs duties of U.S. matériel, the wear and tear on Icelandic roads and facilities by U.S. troops, and indications that the U.S. is seeking an expansion of its present rights in Iceland.

The Icelanders’ basic “anti-foreign army attitude” has received considerable impetus from the Soviet “peace drive” which followed Stalin’s death and on which the Communists in Iceland have capitalized. This drive has persuaded many Icelanders—and the belief has mushroomed—that the reasons for putting up with the “evil of a foreign army” have become less cogent. In fact, complacency has set in to an alarming degree, based on what appears to be a rather widespread impression that the cold war, if not over, is tapering off comfortably. While thus far only a minority would abrogate the Defense Agreement, a majority is apparently in favor of making greater demands on the U.S. and qualifying more sharply the terms under which we are “permitted” to defend Iceland. In brief, the concept of Western defense is finding itself in a “buyers market” in Iceland.

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… Government in this small community is likely to be swayed by the popular opinion steadily being whipped up by elements either hostile to the U.S. or unsympathetic to the idea of integrated Western defense. Indeed, the situation is such that we may be faced with the problem of keeping what we already have in Iceland, rather than being in a position to secure additional facilities.…


The following are tentative suggestions, rather than recommendations, which I should like to discuss with you:

In anticipation of an Icelandic request to re-negotiate the Defense Agreement, and in a genuine effort to get to the bottom of the various sources of annoyance and dissatisfaction, we might send a State-Defense team to Iceland to sift through the various charges together with Icelandic authorities. This would serve at least to clear the air of what we believe are many unfounded complaints which would place us at a serious disadvantage in re-negotiation if they were not previously cleared up. At the optimum, such a joint examination of the problem might convince the Icelanders that re-negotiation is not warranted or desirable.
Because there have been serious “gaps” or delays in what is known in Washington, both in Defense and State, and in Reykjavik by the Legation, of how the Defense Agreement is being implemented, and because the Defense Force operates at a distance of 35 miles from the Legation without benefit of continuing political advice, I believe we should consider assignment of a capable FSO-3 as First Secretary in the Legation to serve as liaison officer with General Brownfield’s staff at Keflavik. We would hope that such a man could do much toward achieving better relations between the IDF and the Icelandic authorities, and toward scotching sources of annoyance and rumors before they assume harmful proportions.
Our USIA program in Iceland is currently running on two cylinders, relative to the job it should be doing. We have a tremendous public relations job in Iceland that we are trying to do with pennies. The Russians are making an all-out effort including the sending of concert artists, “cultural” and propagandists into Iceland in numbers, and these are being well received. During the past year, our one achievement in this line has been the visit of the Air Force Band in February 1953. USIA, Reykjavik, has lost one American and four locals in the RIF. Owing to the RIF Reykjavik lost its radio operator and has now been without the wireless bulletin for over five weeks. A new operator is to arrive in Iceland December 7. Icelandic newspapers have depended heavily on the bulletin because costs prohibit all but a very limited use of commercial press services. We should make a request for reconsideration of USIA’s budget for Iceland with the view to doubling to trebling it. We have a tremendous investment in Iceland and we want to put more in it; it is the worst sort of economy not to protect it with a maximum program designed to win popular support, or at least to minimize public opposition.
Another factor contributing to our burden of maintaining a positive Icelandic attitude on defense is the Iceland-Soviet trade agreement signed August 1, 1953, wherby Iceland is disposing of large quantities of fish and is receiving such commodities (normally paid for in dollar or sterling) as oil, gasoline, and cement in sufficient quantities to take care of Iceland’s entire annual needs. Russia has reaped a harvest of good-will in Iceland as a result. Meanwhile, private trawler interests in Great Britain have been boycotting the landing of Icelandic fish in Britain, which has aroused considerable feeling against Britain in Iceland, and the U.S. Tariff Commission in October held hearings on the application of U.S. fishing interests for the imposition of quotas and higher duties on the import of frozen fish fillets.
The situation in Iceland as in many other Western European countries, underlines the need for an early statement by the President, along the lines of his April 16 speech,2 pointing out that the Soviet peace drive is over if indeed it ever existed, that the Soviet Union has reverted to its true hard line, and that Soviet ambitions and aggressiveness threaten the West as seriously under Malenkov as they did under the guidance of Stalin. A communiqué pointing this up following the Bermuda conference would also be of considerable help.3
I believe that you, and the Secretary also if feasible, should use the opportunity which will present itself at the December NATO meeting at Paris to meet with the Icelandic Foreign Minister, Dr. Gudmundsson, to arouse in him and his Government a higher sense of Iceland’s responsibilities as a NATO member and to urge upon him the need for the highest degree of cooperation by Iceland in our mutual defense effort.4
You may wish to consider calling Minister Lawson to Washington for consultation so that we may have his views of the situation and discuss the proposals set forth above. He can come by MATS with little expense, therefore, involved.

  1. Drafted by Proehl.
  2. The speech, entitled “The Chance for Peace,” was delivered before the American Society of Newspaper Editors. For text, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1953, pp. 179–188.
  3. For documentation concerning the Bermuda Conference, Dec. 4–8, 1953, see vol. v, Part 2, pp. 1710 ff.
  4. For an account of Dulles’ meeting with Gudmundsson at the North Atlantic Council meeting in Paris, Dec. 14–16, see Document 697.