Conference files, lot 60 D 627, CF 169

No. 697
Memorandum of Conversation, by the Assistant Secretary of State for European Affairs (Merchant)

top secret


  • The Secretary of State
  • The Icelandic Foreign Minister, Dr. Kristinn Gudmundsson
  • The Icelandic Minister to Paris, Peter Benediktsson
  • Mr. MacArthur
  • Mr. Merchant

On the Secretary’s invitation the Icelandic Foreign Minister accompanied by the Icelandic Minister to Paris called at the residence this afternoon at 3:15 and spent approximately three-fourths of an hour with the Secretary.1 They were most friendly and obviously pleased at the opportunity to talk privately with the Secretary.

The Secretary opened the conversation by stating the importance the US attached to good relations with Iceland as a neighbor and a member of NATO. He pointed out the increased importance of Iceland in the air age. He then said that he had had the opportunity last week in Washington to discuss with Minister Lawson some of the problems in connection with the execution of our base agreement with Iceland which the latter’s government had brought to our attention.2 He said that he thought it was important that [Page 1528] friends should talk over difficulties together before they became serious and that needless to say we would do what we could to adjust them. The Secretary went on to say that we were living in a period of great danger and one in which the potential capability of the Soviet Union to strike through the air on the North American continent was increasing.

The Secretary then likened the present situation to the problem of the community faced by the risk of fire or outbreaks of lawless violence. He pointed out that experience had shown that the best way to deal with these problems was by banding together a fire department and police force which involved the payment of taxes and other inconveniences but which also gave assurance that no disaster would hit the community.

The Icelandic Foreign Minister at this point interjected that he wanted to make it clear that there was no change in his government’s policy of support of NATO. He said however that essentially two things were troubling them. The first was the control of construction labor imported from America and the second was the economic impact of heavy construction expenditures with all their inflationary implications on a small economy. He added that with the withdrawal of the expenditures involved in this construction program Iceland would face a difficult problem. He pointed out that with 4000 American military and around a thousand American workers in a total population of under 150,000, the impact was considerable, particularly taking into account the difference in pay scales. The Secretary acknowledged the fact that these were problems but it was pointed out that one had to balance the military necessities of completing certain construction projects as rapidly as possible against the purely economic desirability of spreading them over a long period of time. The Secretary also referred to his understanding that the Icelanders were anxious to introduce into certain air control and radar operations Icelandic personnel. He said that on this entire complex of problems the US was anxious to be as helpful as possible and that to this end it was planned to send to Iceland in the near future a State–Defense team to discuss the problems in detail on the spot. He said that he had no doubt that we could make real progress and reduce to manageable proportions the residual points of friction.

The Icelandic Foreign Minister emphasized that one of their difficulties was the importance of being able to controvert the attacks on the program emanating from Communist and fellow traveller [Page 1529] sources. At this point he was reminded that all our reports indicated that relations between the Icelandic people and the American troops themselves were good and that it would be unfortunate if the Icelandic Government felt it necessary to attempt to apply restrictions on the previous circulation of American troops in Iceland.

The conversation throughout was friendly and relaxed. The Foreign Minister gave every evidence of being pleased to have the opportunity to talk with the Secretary.

  1. Secretary Dulles, MacArthur, and Merchant were in Paris for the NAC Ministerial meeting of Dec. 14–16, 1953. For further documentation concerning this meeting, see vol. v, Part 1, pp. 455 ff.
  2. Minister Lawson had returned to Washington on Dec. 5 for consultations with various authorities on the response to be made to the Icelandic Government’s note of Dec. 4 (supra). No record of a conversation with Secretary Dulles has been found in Department of State files. Minutes of a meeting, dated Dec. 8, including Lawson and representatives of the Departments of State, Defense, Army, Navy, and Air Force, are in file 740B.5/12–853.