740B.5/5–1154: Telegram

No. 701
The Minister in Iceland (Lawson) to the Department of State


260. Inform OSD, OSAF, FOA and pass CINCLANT, Norfolk. Joint Legation–IDF message. Reference Department telegrams 226 and 228.1 In meeting today, Foreign Minister expressed great disappointment at United States’ reply. He said that it was unacceptable in every way. Furthermore, that US delegation had been informed that the Icelandic draft agreement represented their minimum position.

He was very critical of long delay which occurred in our replying to the March 29 detailed understandings.2 He was shocked to note that, despite the fact that the US negotiators had been in frequent [Page 1532] communication with Washington during entire discussions, “the reply was quite different from what we had expected. All points had been changed to our disadvantage”.

He was particularly disturbed over our insistence on specific language, stating their agreement that US possesses the right to determine the capability of Icelandic contractors. (This forces them to take a position on the issue at this time. They have sought to avoid this development and have always held that they cannot do so now and they see no reason why a decision on this issue cannot be postponed until 1955 contracts are allocated, particularly since there is agreement that whole matter will be considered in the spirit of the 1954 allocations. Our persistent return to this position undoubtedly has reduced their confidence sharply with regard to our intent to give appropriate contracts to Icelanders.)

He also referred to our refusal to accept their proposed broad language re the phasing-out of present prime contractor. He noted that there was no provision made in our proposals covering this point which is of such great importance to them. (He repeated that there was no objection to another American prime contractor.)

He made the point that we failed to offer firm commitments with regard to the separation of areas, the replacement of Icelandic apartments, etc. He claimed we made only “proposals” to seek funds for those purposes. (The need for this kind of language was explained to him as it has been on several occasions in the past but he did not seem to be fully convinced.)

He concluded by saying that “without any prospect of coming to an agreement” on these and the other points of implementation of the defense agreement “it is of no use to mention any additional military requirements” or the Njardvik Port. He informed me that he would hand me an aide-mémoire within a few days.

Foreign Minister declined to indicate contents aide-mémoire, saying he was not prepared to talk about it at this time. From remark dropped by Jonasson, however, it appears they may be thinking of request for basic revision 1951 agreement (rather than of implementation as hitherto) or request for termination.

After discussion in which I urged desirability keeping discussions going and disadvantages to both sides of breakdown, it was agreed that Foreign Minister and I would have further conversation at earliest opportunity, and that no Icelandic aide-mémoire would be presented in meantime.

. . . . . . .

In talk with Foreign Minister, I will attempt to bring areas of agreement and disagreement into sharper focus and to find modus [Page 1533] vivendi, if possible. I will have additional comment on political situation hereafter that talk but in meantime wish to repeat conclusion earlier messages that we are coming very close to point where we will have to weigh carefully risk we are taking if we press our position. It could well result overturn present pro-US government and/or request for termination of agreement.

Meeting was attended by General Hutchinson, Colonels Bailey and Hollister, Villon, Jonasson, Arnason and Sigurdsson. Bjorn Olafsson was not present.3

  1. Neither printed, but see the editorial note, supra.
  2. Not printed, but see Document 698.
  3. In response to this telegram, the Department of State informed the Legation in Reykjavik in telegram 237, May 13, that a new set of instructions was being formulated to replace those of May 5 and 6. (740B.5/5–1354) These new instructions were transmitted in telegram 238, infra.