Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

740B.5/4–854: Telegram

No. 702
The Secretary of State to the Legation in Iceland¹

secret
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Washington, May 14, 1954—7:55 p.m.

238. Joint State–Defense.

I. Construction Procedures:

1. We agree your signature of text construction memorandum of understanding as approved by Icelanders and further we appprove the “agreed minutes” stand as submitted by Icelanders (both as contained Legdes 262²). We accept assurances in aide-mémoires as reported urtels 220 and 225.³ While we will make determined effort to end field construction work of present prime contractors by December 31, 1954, we prefer not to remove Metcalf–Hamilton as prime contractors doing allocated work after 1954 since assigning work Icelanders unable to perform (urtel 225) to new US prime contractors excessively expensive. You may feel free to give and take within terms this instruction and your judgment recognizing possible Congressional reaction on final construction arrangements. You should emphasize in this connection our agreeing to minutes and draft is predicated on an air of reasonableness and cooperative spirit having in mind as mutual goal and governing spirit objectives set forth para 1 of memo.

2. We agree that issue of capability should be decided in annual allocation “in the same spirit as that of 1954 allocation” through joint consideration US–Iceland Government representatives in expectation that objectives para 1 memorandum will govern both sides in deciding capabilities. We understand that each annual allocation will review what we expect will be increasing capability of Icelandic contractors and in light thereof will allocate for the following year all unallocated projects.

II. Requirements:

We prepared to deploy units to Iceland to meet NATO responsibilities but effectiveness of defense activities would be limited if personnel figure 6200 not accepted by the Icelanders. We, however, if they accept 6200 figure, would seek ways and means to continue to reduce this by use of indigenous personnel where appropriate skills and security considerations permit. Present increase of one thousand most helpful but additional personnel and off-base sites required to provide effective defense of Iceland. We appreciate Icelanders have final Njardvik port plan but have yet to commit themselves. Therefore, request Icelandic Government submit changes, if any, in definitive plan in order that we may jointly agree to construct this project now. In this respect we prepared to have US engineers assist Icelandic Government to review plan if Icelanders so desire.

III. Impact Problem:

We fully agree that good community relationship should exist. We must insist that Icelanders accept military commander arrangements along previously indicated lines as adequate to meet Icelandic Government objectives. Matter should therefore be deleted from memo understanding and note. Additionally you should obtain Iceland assurance not to spell out details publicly and to restrict any publicity to statement that satisfactory arrangements this subject worked out between Iceland representatives and COMICEDEFOR. Para V of Deptel 226 applies here.⁴

IV Other Issues:

You may assure Icelanders that we willing to reallocate presently available funds to accomplish separation of areas and replace apartment buildings as previously agreed to in discussions as soon as understandings signed. You have authority and flexibility to obtain satisfactory agreement on points covered in memo of understanding on Separation of Areas at Keflavik Airport dated March 25.

. . . . . . .

Re urtel 264 suggest you request Foreign Minister delay departure in order you and he may thoroughly discuss all aspects and conclude negotiations by exchange notes.⁵

FYI You will realize above position our minimum one. While you fully authorized go to it, anything can be salvaged above it so much the better. You should assess total situation and try for best possible solution. While we have been forced by overwhelming military considerations, particularly our NATO obligations, to agree to Iceland position on capability and phase-out of prime contractor, we hope you will be able to realize more on additional requirements. Further, at time exchange notes we desire you make statement emphasizing great degree of responsibility Iceland has undertaken toward NATO defense system and our expectation that arrangement which might otherwise be most difficult to work under will be made to work by mutual efforts and good faith.…

Dulles

1. Drafted by Proehl and cleared with Raynor and Rogers of State, Hensel of Defense, and Radford of the Joint Chiefs of Staff.
2. Not printed, but see Document 698.
3. Telegram 220, Apr. 7, transmitted the text of an Icelandic aide-mémoire agreeing that the United States held the right of final decision on construction bids, acknowledging the receipt of a U.S. statement reserving the right of decision on qualifications of Icelandic contractors, and maintaining that the Icelandic Government should have the right of decision on qualifications. (740B.5/4–754) Telegram 225, Apr. 8, recommended alterations in the language of the draft agreement in order to reconcile the U.S. and Icelandic positions. (740B.5/4–854)
4. Paragraph V of the instructions contained in telegram 226 to Reykjavik, May 5, contained the U.S. position that regulating the movements of U.S. personnel and “arrangements governing social relationships with local population” were matters to be worked out between the commander of the Icelandic Defense Force and Icelandic authorities, and were thus not appropriate subjects for understandings at the governmental level. (740B.5/3–2954)
5. Telegram 264 from Reykjavik, May 14, noted that Gudmundsson planned to depart for Strasbourg on May 16 for a 1-week visit. (740B.5/5–1454)