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United States Department of State / Foreign relations of the United States diplomatic papers, 1943. Europe
(1943)

Iceland,   pp. 303-313 PDF (3.7 MB)


Page 303


ICELAND
REDUCTION IN PRICES CHARGED BY THE UNITED STATES NAVY IN
  ICELAND FOR PETROLEUM PRODUCTS IN RESPONSE TO REPRE-
  SENTATIONS BY THE ICELANDIC GOVERNMENT
859A.6363/31
      The Icelandic Mini ster (Thors) to the Secretary of State
  The Minister of Iceland presents his compliments to the Honorable,
the Secretary of State and has the,..honor to call the Secretary's atten-
tion to the following matter:.
  During the last twelve to fifteen years British companies have sup-
plied Iceland with all its requirements of gasoline, oil, petrol and
kerosene . This remained; so until last September when the United
States Navy began to supply Iceland with these commodities, accord-
ing to an agreement between the Government of the United States and
the United Kingdom and of which the Icelandic Government was
unaware.
  When the United States Navy had supplied Icelandic firms with
these commodities for almost two months it became known that the
United States Navy was charging considerably higher prices to the
Icelandic companies than they had been paying to the British sup-
pliers. As it is the firm policy of the present Icelandic Government to
fight the inflation that has occurred in Iceland, and not to allow any
raise in prices,. the Icelandic oil ompanies. have had to sell the. supplies
obtained from the United States Navy at a considerable loss. This
situation evidently cannot continue to exist and the Icelandic Govern-
ment is therefore faced with the alternative of giving way to raising
the prices unless the United States Navy is willing to sell these com-
modities at the same prices as the Icelandic companies had been pay-
ing the British suppliers.
  Gasoline, oil and petrol are very important factors in the cost of
production for Icelandic fisheries. It would result in extremely seri-
ous consequences should the Icelandic Government be unable to halt
the inflation by keeping the prices for these commodities at their
former level. In addition the Icelandic fishermen are not able to pay
higher prices for these necessities as the price of fish was fixed in a
previous agreement with the United States and Great Britain.
  The Minister of Iceland has been informed that the Department of
State has received details in this matter from the American Legation
                                                        303


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