1942: Iceland

In 1942 Iceland was less menaced by war than baffled by peace problems. As the stepping stone from the United States to her British and Russian allies the island remained a post coveted by Germany, but except for some slight bombings, her main troubles were those of inflation, strikes, political rivalries and parliamentary shifts.

This island, noted for its ice fields, volcanic eruptions and earthquakes, was of increasing importance during 1942, as both Russia and Britain required enormous quantities of United States supplies via Iceland. And with American troops moving eastward by many thousands, it became imperative that no German thrust against Iceland should succeed. The occupation of Norway, some 600 miles away, by Germany, made Iceland indispensable to the Allies; without it, plane and ship travel from and to America would have been critically interrupted. The presence of United States armed forces seemed still agreeable to the public, Iceland herself having invited them in 1941, and by a later vote of 39 to 3 approved the action. Resentment against Great Britain for her uninvited occupation subsided after the British troops left. The American Red Cross announced during the year its intention of erecting a building in Reykjavik, the capital, to cost $150,000. It was to include a restaurant, music rooms, accommodations for billiards, bowling, and other recreational features for the troops.

War conditions had brought to the island difficulties of quite a new nature. Through a thousand years, this people had lived quietly, peaceably, constructively. But on April 9, 1940, Germany had invaded Denmark, and on the next day Iceland's Althing assumed control of her foreign affairs. In May 1941, the Althing voted (as long anticipated under the Act of Union of 1918), to cancel the slender remaining union with Denmark, to declare Iceland completely independent, to elect a regent to function as the king, and to introduce a republican Constitution. As 1942 opened, Icelanders looked back on eighteen months of occupation by British and American troops; a flood of new consumers with quantities of money; an unprecedented demand for goods; Icelandic funds, amounting to from 150,000,000 to 160,000,000 crowns, frozen in Britain; rising prices; pressing needs for wage adjustments.

From 1939 until July of 1941 her trade with Germany had dropped from 7,600,000 crowns to zero; with Scandinavia from 23,000,000 crowns to about 2,000,000; trade with Great Britain had soared from 12,000,000 to about 180,000,000; with the United States, from 7,000,000 to about 24,000,000; her total trade had risen from about 69,000,000 crowns to some 220,000,000.

Government receipts for 1941 were about 18,000,000 crowns, expenditures slightly less. The budget for 1942 was the highest in history: income estimated at 34,000,000 crowns, expenditures at 29,000,000.

The year 1942 began with the United States agreeing to pay in United States dollars for all fish and fish products sold to Britain, thus giving Iceland American dollars for American purchases. But numerous strikes for higher wages led to differences within the Government, between the two largest parties on the one hand, the Independence and Progressive Parties, and the Socialist Party on the other. On January 8, a provisional law was signed by the Regent; it provided for arbitration in all wage matters; a keeping of wages in general at 1941 levels, with the invalidation of all contracts made since January 1, 1942; the fixing of prices on necessities; and the forbidding of strikes and lockouts.

On Feb. 15, the Althing convened, faced with rising prices and with the unprecedented budget. It was reported that because of war-time developments the trade balance had been 'favorable' for 1941, with imports at 129,000,000 crowns, and exports at 188,000,000; this fact, together with expenditures by occupying troops, aids fishing and mercantile groups much more than it does the farmers.

July was a dramatic month. On the 7th, the United States recognized by a special broadcast the first anniversary of the arrival of her troops on the island. In July Mr. Leland Morris, former American chargé d'affaires in Berlin, was appointed to succeed Mr. Lincoln MacVeagh as Minister to Iceland. The Icelandic Legation in Washington was enlarged by the addition of two new officials; and on July 11 the signing of a Lend-Lease agreement with Iceland was announced. Some of its provisions benefit Britain as well as the United States.

Germans turned their attention to Iceland in September, with several long-range bombing raids. No casualties were reported, and very little damage, the attacks being upon isolated points and fishing trawlers.

By mid-summer, Iceland was in the grip of inflation. The cost of living had risen 20 per cent in one year, 100 per cent since the beginning of the war. The occupying troops, the building industries, and fisheries were competing for labor. Unprecedented sums of money were in circulation.

In the October elections the results were, by parties: Independence, 20 seats; Progressives, 15; United Socialist (Communist) 10; Social-Democrats, 7. Preceding the meeting of the Althing late in the year party leaders were holding conferences on the advisability of a coalition government.

1941: Iceland

United States Protection.

The entry of United States naval forces into Iceland on July 7, 1941 — fourteen months after British troops had occupied the island — was the first instance of extensive and intimate Anglo-American military cooperation in World War II. This move carried the series of outlying United States air and naval bases to within 900 miles of German-occupied Norway, and brought American forces into the very heart of the naval combat zone which Germany proclaimed on March 25. American bluejackets and Marines were dispatched to Iceland in accordance with an agreement concluded on July 1 between President Roosevelt and Icelandic Prime Minister Hermann Jónasson. Jónasson requested that the United States undertake the protection of Iceland for the duration of the war, on condition that the American Government (1) recognize the absolute independence of Iceland, (2) avoid interference with purely Icelandic affairs, (3) insure effective defense of the island, (4) bear full cost of the defense measures, and (5) supply the country with its essential imports.

President Roosevelt accepted these conditions on behalf of the American Government, and promptly issued orders to the Navy that all necessary steps be taken to insure the safety of maritime communications between Iceland and the United States. The difficulty of this assignment, however, was forcefully illustrated by the sinking of several United States supply vessels near Iceland in the following months. The United States Maritime Commission's Sessa was destroyed by torpedo on Aug. 17, the Montana on Sept. 11, the Pink Star on Sept. 19, and the Bold Venture on Oct. 16. In the wake of these losses, on Nov. 8 Secretary of the Navy Frank Knox named Iceland as one of six major Naval Operations Bases in the Atlantic.

The first field force of the United States Army to arrive in Iceland landed in mid-September, followed on Sept. 20 by a group of American Army nurses. Arrival of the nurses was disclosed on Sept. 25, although announcement of the troops in Iceland was not permitted until Oct. 1. The field force included infantry, artillery, engineer, signal, ordnance and medical units, as well as vast supplies of equipment and materials. The troops set immediately to work strengthening defenses previously begun by British forces and the United States Marines. On Nov. 13 General George C. Marshall, Army Chief of Staff, announced that the United States was enlisting 10,000 Army recruits for service in Iceland. Before United States forces entered the island in July, newspaper reports stated that there were 70,000 British and Canadian troops stationed there.

Iceland felt the direct impact of war on Feb. 10, when long-range German bombing planes machine-gunned the British-held airport at Reykjavik. Another Nazi plane was driven off by British and American aircraft during a reconnaissance flight on Aug. 20. Hitler's mention of Iceland in his address declaring war on the United States, in December, made many Icelanders fear that the Nazis might soon try to gain control over the strategic island base.

Foreign Relations.

Iceland severed its last ties with Denmark on May 17. At that time the Althing enacted four important constitutional amendments, under which Iceland (1) declared itself fully independent, (2) repudiated the Act of Union with Denmark, (3) resolved to elect a Regent to assume the King's function which had been provisionally taken over by the Althing on April 10, 1940, and (4) announced that a republican constitution would soon be introduced. Thus, for the first time in 678 years Iceland was politically free of all foreign ties, and for the first time since 1381 it was completely divorced from the Danish crown. On June 17 Sveinn Björnsson, formerly Icelandic Minister to Copenhagen, was elected to the Regency. President Roosevelt, on July 31, nominated Lincoln MacVeagh as first United States Minister to Iceland.

Domestic Issues.

The rapid influx of British and American forces created a number of acute domestic problems. Although the islanders in general welcomed their foreign defenders, sporadic instances of tension occurred, and following a Reykjavik café brawl in November Icelandic newspapers advised the natives to avoid American soldiers as much as possible in the future.

Most serious of all problems resulting from demands made by Anglo-American occupation forces was the almost inflationary rise in prices. Living costs soared almost 70 per cent during the first ten months of 1941. The need for labor to help in constructing airports, living quarters and storehouses pulled men away from the farms, and thus aggravated a serious food shortage. Attendant dissatisfaction led to the resignation of Prime Minister Jónasson's Government on Oct. 22. Regent Björnsson postponed acceptance of the Premier's resignation, and the Government again resigned on Nov. 7. The chief problems had not been solved by the end of the year, but Iceland's newly designated Minister to Washington, Thor Thors, indicated in November that all outstanding issues between Iceland and the United States were being settled in amicable and hopeful discussions. See also INTERNATIONAL LAW.

1940: Iceland

Separation from Denmark.

The year 1940 will go down as a key date in the historic annals of Iceland. This little country has been independent since 1918, but has remained bound to Denmark by a personal union under which King Christian X ruled both countries, and the Danish Foreign Minister represented Iceland in international matters. The Act of Union provided that in 1943 either the Danish Rigsdag (Parliament) or the Icelandic Althing (oldest representative assembly in the world, founded in 930 ad) might sever this dual bond. Immediately after the occupation of Denmark by German troops on April 9, the Althing unanimously adopted two momentous measures in a proclamation issued by the Icelandic Government:

'(1) Whereas: the present situation has made it impossible for the King of Iceland to exercise the powers vested in him by the Constitution, the Althing hereby proclaims that it empowers the Government of Iceland to assume these functions for the present.

'(2) Whereas: owing to the present situation Denmark is unable to conduct the foreign affairs of Iceland in accordance with Article 7 of the Danish-Icelandic Act of Union, and the coast defenses in accordance with Article 8 of the same Act, the Althing hereby proclaims that Iceland shall take complete charge of these matters for the present.'

Prime Minister Hermann Jónasson explained to the Icelandic people that in accordance with this declaration the home government would temporarily assume powers formerly vested in the King. As a result of the Althing's action, on April 25 Mr. Bertil Kuniholm was appointed first United States Consul to Iceland, and the Icelandic Trade Commissioner in New York, Mr. Vilhjalmur Thor, was elevated to the rank of Consul General. (See also DENMARK.)

British Occupation.

On May 10 British forces occupied Iceland as a preventive measure to forestall possible German seizure of the island. Britain pledged to evacuate its troops as soon as hostilities ceased. When the need for British manpower became more acute in the British Isles, during the campaign in Flanders, some troops were withdrawn from Iceland, and on June 18 the first contingent of a Canadian expeditionary force landed on the island. The sudden addition of almost 35,000 men to Iceland's population of only 120,264 created serious housing problems, which were solved by the construction of cottages for soldiers all over the island. This work, as well as the building of roads between strategic points, provided full-time employment for every available Icelandic laborer. At the end of the year, the British were employing 1,300 Icelandic workers at union rates in Icelandic money. Defense works were erected by Canadian troops in the first few months after their arrival at the island, and in December the establishment of a protected anchorage for British naval vessels was indicated by a warning to mariners to avoid a 'dangerous area' in Hvalfjordr, a deep-water fjord about 15 miles north of Reykjavik, the Icelandic capital. Since the British forces did not interfere with Icelandic government, and paid for all their local purchases in sound currency, relations between the troops and the island population were unusually cordial. The Icelandic radio and press remained uncontrolled, and the people were free to hear nightly broadcasts from both London and Berlin. Iceland's 1940 fishing season was extremely productive, both in the total catch and its monetary return. Britain bought the entire haul of codfish as well as the whole output of herring meal and herring oil.

1939: Iceland

Iceland, an independent island State, is situated between Great Britain and Greenland, bounded south by the Atlantic Ocean and north by the Arctic Ocean at the southern edge of the Arctic Circle. It has an area of 39,709 sq. mi. and in 1938 had a population of 117,692 inhabitants almost entirely Icelandic and Scandinavian. The Capital and principal city is Reykjavik.

The Island's principal crops are potatoes, turnips, and hay. An important industry is carried on with the raising of horses, cattle, sheep, and goats. The most important industries are the fisheries. In 1936 their value was 22,245,000 kronur (the kronur or crown averaging $.22). In 1938 exports totaled 58,988,000 kronur and imports 53,309,000 kronur. The State of Iceland is joined with the State of Denmark under one King: Christian X. The King exercises through his ministry an executive power; and a Parliament, called Althing, shares with the Sovereign legislative power. The present Premier, appointed by the King July 29, 1934, is Hermann Jonasson. Governmental revenues for 1939 were estimated at 17,004,960 kronur; government expenses at 16,705,791 kronur.

During the year 1939 Iceland's foreign relations were bound up with those of the other Baltic States. On March 22, a report was circulated that Germany was seeking an air base on Iceland, and a German delegation from the Deutsche Lufthansa began negotiations for an air field on the Island for their north Atlantic route. This was refused. On March 31, 1939, Iceland recognized the Franco régime in Spain. After the outbreak of the European War, a British airplane with a crew of nine made a forced landing on Iceland and were interned. The airmen escaped to England, but on Oct. 11, the pilot returned to Iceland voluntarily to be interned for the duration of the war.