Papers Relating to the Foreign Relations of the United States, 1918, Supplement 1, The World War, Volume II

File No. 659a.119/84

Agreement between the Allied Governments and the Icelandic Government²

1. This agreement, made between the British, French, and Italian Governments (hereinafter called “the Allied Governments”) and the Icelandic Government, shall come into force on the date of its execution, and shall continue in force until the 1st May, 1919, and may be renewed by agreement from that date. Upon the execution of this agreement the existing agreement between the British Government and the Icelandic Government shall cease and determine.

2. The Allied Governments will facilitate the importation into Iceland, in vessels owned or chartered in Iceland, of the agreed rations set out in the first schedule hereto within the period specified in the said schedule, subject always (save as regards the coal, cereals, and petroleum next hereinafter mentioned) to the requirements from time to time of the Allied Governments. The Icelandic Government undertake that no export whatever shall take place of goods imported into Iceland under this agreement: Provided that this shall not apply to any article so imported employed as an ingredient in, or as covering for articles of, Icelandic produce exported in accordance with the terms of this agreement.

3. During the period specified in the first schedule hereto on account of the rations hereinbefore mentioned—

(a) The British Government undertake to license for export to the Icelandic Government, and the Icelandic Government undertake to buy f.o.b. United Kingdom ports, 30,000 tons of coal, to be paid for (unless otherwise agreed) by the Icelandic Government in kroner in Iceland against telegraphic advice of intended shipment, the British Government undertaking that no surtax, export duty, licence fee, nor any other surcharge whatsoever shall be levied by them in respect of such coal by way of discrimination against Iceland, and (unless otherwise agreed) that no licences for export of coal to Iceland shall be granted by them to consignees other than the Icelandic Government.

(b) The Icelandic Government undertake to purchase from the British and General Trading Association (Limited), 11,500 tons of cereals, and 7,500 tons petroleum, and 100 tons of benzine upon the terms and conditions of the contracts annexed to this agreement and forming the fourth schedule hereto.¹

(c) In the event of the direct shipment of dried fish from Iceland to Italy taking place (which the Icelandic Government undertake to use their best endeavours to procure on behalf of the Italian Government) the Italian Government undertake to sell and the Icelandic Government undertake to buy in Italian ports a quantity of salt or such other goods as may be arranged which shall be included within the ration equivalent to the quantity of dried fish shipped direct from Iceland to Italy, at prices to be agreed between the Italian and Icelandic Governments, payment by the Icelandic Government to be made in kroner in Iceland against telegraphic advice of intended shipment.

4. The Icelandic Government undertake that there shall be offered for sale to the agent of the Allied Governments in Iceland (hereinafter called “the agent”) f.o.b. at the Icelandic ports specified in the second schedule hereto¹ at the prices set out in the third schedule hereto¹ (a) on or before the 15th June, 1918, all wool of the clips of 1916 and 1917 in stock in Iceland other than 60 tons of wool, the property of the Danish Government; and (b) from time to time as hereinafter provided during the currency of this agreement all produce of Ireland, whensoever produced up to the 1st January, 1919, of the following classes, not required for actual home consumption in Iceland during that period, viz.:—

(1) All descriptions of wet salted fish or dried fish (salted or unsalted), including herring;

(2) Fish oils of all descriptions, other than 800 barrels steam boiled medicinal cod-liver oil and 250 barrels raw medicinal cod-liver oil, the property of the Danish Government, and 400 barrels industrial oil, 400 casks brown industrial oil, 900 casks light herring oil, also the property of the Danish Government;

(3) Cod roes;

(4) Fish meal of all kinds;

(5) Mutton;

(6) Wool;

(7) Skins.

The Icelandic Government undertake to prohibit up to the 1st May, 1919, the export of and all dealings for export in Icelandic produce after the 1st January, 1919, which is not required for Icelandic home consumption.

5. The Icelandic Government undertake that the various products specified in article 4(b) shall be offered to the agent as early as possible and will issue the necessary regulations or take such other steps as may be required for this purpose.

6. On the receipt of every offer of any of such goods at one of the specified ports the agent shall have a period of fourteen days within which to notify the Icelandic Government of his election to purchase the same, or such extended period as shall be reasonably necessary to enable him or his representative to inspect the goods at such port, and communicate his decision, provided that no offer of goods at an ice-bound port shall be treated as an effective offer of such goods; provided, further, that the agent and the Icelandic Government may by agreement arrange that offers may be made of goods lying, at the time of offer, in places other than the specified ports, in which case the option shall remain open until the agent or his representative shall have had reasonable opportunity, having regard to all circumstances, to inspect the goods, but nothing shall affect the liability of the Icelandic Government, in the event of the acceptance of the goods, to deliver the same within a reasonable time f.o.b. at the specified ports, or at such shipping ports, as may in special cases be agreed.

7. All goods offered to the agent shall be accompanied by a certificate by sorters and weighers, appointed by the Icelandic Government, to the effect that the goods, the subject matter of the sale, are goods of the class and weight described.

8. Goods offered to, but not purchased by, the agent may be exported only to consignees in the countries of the Allied Governments or the United States of America, or to approved consignees in approved neutral countries.

9. The Allied Governments, anticipating that they will not desire to avail themselves of the option to purchase Icelandic herring, agree that, for the purpose of the export of herring, Sweden shall be regarded as an approved neutral country, to which, up to the 1st May, 1919, Icelandic herring may be exported subject to the following conditions:—

(a) The total quantity so exported to Sweden shall not exceed 50,000 barrels.

(b) Export shall be made solely by the Icelandic Government.

(c) Consignees in Sweden shall be solely the Swedish Victualling Commission, or such other consignees as may be approved by the Inter-Allied Committee at Stockholm.

(d) If so requested by the Allied Governments, the Icelandic Government will, prior to export, obtain, in respect of each consignment, guarantees against re-export from Sweden in a form satisfactory to the said Inter-Allied Committee, and the Icelandic Government shall, in order the better to prevent diversion of any consignment of herring shipped to Sweden, take steps to secure bonds, and will impose a fine of not less than double the value of the said herring in the country to which the cargo has been diverted upon any owner or captain or other person actually responsible for the forwarding, shipment, or carriage of the said herring, who connives at any action which permits the same to reach any other destination.

10. The Allied Governments agree that, up to the 1st May, 1919, Icelandic ponies may be exported to Denmark, subject to the following conditions:—

(a) The number of ponies so exported shall not exceed 1,000.

(b) Export shall be made solely by the Icelandic Government.

(c) Consignees in Denmark shall be solely such consignees as may be approved by the Inter-Allied Committee at Copenhagen.

(d) The Icelandic Government shall, prior to export, obtain, in respect of each consignment, guarantees against re-export from Denmark in a form satisfactory to the said Inter-Allied Committee, and the Icelandic Government shall, in order the better to prevent diversion of any consignment of ponies shipped to Denmark, take steps to secure bonds, and will impose a fine of not less than double the value of the said ponies in the country to which the cargo has been diverted upon any owner or captain or other person actually responsible for the forwarding, shipment, or carriage of the said ponies, who connives at any action which permits the same to reach any other destination.

11. The agent will pay for the goods purchased by him on shipment, and, in any case, within thirty days of such purchase, or the receipt by him of the necessary sorters and weighers’ certificates, whichever is the later date.

12. In the event of the weight or the grading of any goods other than oil not being agreed between the representatives of the Icelandic and the Allied Governments, such difference shall be referred for settlement as provided in clause 19 hereof, and for that purpose samples of the goods, the subject matter of the difference, shall be taken for submission to the referees or referee.

13. Oil purchased by the agent shall be regraded by experts nominated by the Allied Governments on arrival in the United Kingdom. For the purpose of regrading, samples shall be taken by sworn official meters at the ports of arrival. A representative of the Icelandic Government shall be entitled to be present and take part in the regrading. Such regrading shall be final, and the Icelandic Government will refund or credit the amounts overpaid or overcharged, as the case may be, on any over-graded oil, and the Allied Governments will cause payment to be made in Iceland of the amounts underpaid on any under-graded oil.

14. All goods purchased by the agent and lying at ports other than the specified ports or such other ports as may be agreed as shipping ports in special cases, as provided in article 6 hereof, shall be stored by the Icelandic Government free of charge. All goods purchased by the agent shall, after delivery at specified ports or other agreed shipping ports as aforesaid, be stored by the Icelandic Government free of Chargé for the period of one month, at the expiration whereof storage for the same shall be for account of the Allied Governments. The rates of storage shall be the usual rates, or such as may be agreed. All goods purchased by the agent shall, after delivery at the specified ports or other agreed shipping ports as aforesaid, be insured against fire for the amount of their values, according to the third schedule hereto, by the Icelandic Government at their own cost for the period of one month from the date of the purchase, at the expiration of which period the insurance shall be for account of the Allied Governments, but shall be effected and maintained by the Icelandic Government at the current rates. Provided, however, that notwithstanding this provision the Icelandic Government shall effect and maintain such insurances at their own charges upon all goods purchased by the agent and lying at ports other than the specified ports or other agreed shipping ports as aforesaid.

15. The Icelandic Government undertake that no goods of the classes hereinbefore specified shall be exported from Iceland during the currency of this agreement, except by the agent, unless a certificate shall have been previously obtained from the representative of the Allied Governments nominated for that purpose to the effect that such goods have been offered to and refused by the agent, and the Icelandic Government will issue the necessary regulations or take such other steps as shall be required for this purpose.

16. The rate of freight for all goods exported by the agent from Iceland to the United Kingdom under this agreement in steamers owned or chartered by the Icelandic Government shall be fixed at 90s. per ton deadweight.

17. The Allied Governments will procure credit for the Icelandic banks to the extent of not more than £500,000 for purposes approved by the Allied Governments, if such banks should lose the credit which they possess with their present connections on account of the completion of this agreement.

18. Nothing in this agreement shall derogate from any general conditions which any of the Allied Governments may impose in the exercise of their belligerent rights, but subject thereto, the Allied Governments undertake that Icelandic vessels shall be cleared from the ports under their control without unnecessary delay. Unless otherwise requested by the Allied Governments the existing regulations regarding vessels clearing from Icelandic ports shall continue to be observed and enforced by the Icelandic Government.

19. In the event of any dispute arising under this agreement the same shall be referred to the Prime Minister of Iceland and the representative of the Allied Governments to be nominated under article 15 hereof, whose decision shall be final, and, in default of their agreement, to a person to be nominated by them, whose decision shall be final.

Dated, London, this 23rd day of May, 1918.

For the Icelandic Government:

K. Jonsson

Richard Thors

Eggert Briem

For the Allied Governments:

W. Mitchell-Thomson

J Charpentier

(ad referendum)

J Giannini

(ad referendum)

[Annex 1]

First Schedule

list of icelandic rations for period of 12 months from may 1, 1918, to may 1, 1919

	Metric tons
Cereals, or the equivalent quantity of flour, excluding rice, sago, and tapioca, but including peas and beans	10,750
Rice*	500
Sago and tapioca*	250
Potatoes	1,500
Coal	60,000
Petroleum, including crude oil	7,500
Petrol and benzine	100
Lubricating oil	150
Salt	50,000
Coffee	450
Cocoa and preparations, including chocolate	60
Tea	5
Sugar and syrup	1,750
Edible fats	200
Condensed milk	75
Cheese	80
Onions	32
Fruit, fresh and dried	130
Jams, marmalade, and fruit preserves	20
Spices, including mustard	20
Tobacco	80
Cordage (including manila, hemp, and oakum, nets, lines, ropes, string, all forms of twine and yarn other than woollen yarn)	300
Raw cotton and cotton manufactures, other than cotton canvas and cordage	100
Cotton and linen canvas	20
Flax, linen, and hemp manufactures, other than cordage and canvas	60
Jute and manufactures (including Hessians) in all forms other than cordage	120
Woollen manfactures, including yarn	45
Linoleum	15
Rubber and rubber manufactures, other than waterproof articles of clothing	18
Oilskins, waterproofs, and articles of clothing	40
Leather and leather manufactures, other than boots and shoes	30
Boots and shoes	50
Linseed oil and varnish	25
Paints and painters’ colours	75
Tar	80
Soap, soda, and starch	250
Paper and stationery	175
Brazil wood	30
Other timber and wood manufactures	10,000
Sheep dip	40
Tin plate	½
Scythe blades	35,000 in number

Applications relating to commodities other than those specified in the above list will be considered on their merits.

• Kl. J.
• R. T.
• E. B.
• W. M.-T.
• J. C.
• J. G.

[Annex 2]

The Allied Delegates to the Icelandic Delegates

London, May 23, 1918.

Gentlemen: With reference to the agreement signed to-day, we understand it to be agreed that the following supplementary provisions shall apply:—

As regards wool, the produce of 1916 and 1917, referred to in article 4(a), called herein “old wool stocks,” if valid offers are made by the Icelandic Government to the agent of 1,000 tons of old wool stocks before the 15th June, 1918, and if regulations satisfactory to the Allied Governments are made by the Icelandic Government to ensure that no 1918 wool is either concealed by the holder or exported as old wool stocks, the Allied Governments will instruct the agent not to exercise the option to buy old wool stocks in excess of a total quantity of 1,000 tons.

As regards dried and salted fish, the produce of years prior to 1918, called herein “old fish stocks,” if regulations satisfactory to the Allied Governments are made by the Icelandic Government to ensure that no 1918 fish is either concealed by the holder or exported as old fish stocks, the Allied Governments will instruct the agent not to exercise the option to buy old fish stocks.

For the purpose of carrying out the foregoing provisions regulations would be regarded as satisfactory to the Allied Governments which provided inter alia for:—

(a) The taking forthwith of a declaration from all holders in Iceland of old wool stocks or old fish stocks as to the amounts and descriptions of such stocks held by them;

(b) The imposition of severe penalties, including confiscation to the Icelandic Government of the goods in all cases of false declaration, concealment, or wrongful export or attempted export.

The Icelandic Government will furnish to the representative of the Allied Governments, to be nominated under article 15 if desired by him, copies of the list of declarations as to old wool and fish stocks, and will inform him of all cases of evasion of their regulations and of the penalties inflicted thereunder.

As regards article 5. The Icelandic Government will so far as possible ensure, by the regulations or other steps therein referred to, that goods, the produce of 1918 are offered not later than two months after their production or manufacture is completed, and in particular they will ensure that proceedings shall be taken against all persons found in possession after the 28th February, 1919, of any goods, the produce of 1918, in the absence of proof that such goods have been offered to and refused by the agent or other reasonable excuse, and that such persons shall on conviction be liable to severe penalties, including the confiscation to the Icelandic Government of the goods.

As regards article 16. The Icelandic Government undertake to give a prior call on freight space in steamers owned or chartered by them for goods purchased by the agent under this Agreement over all other goods, except goods the property of the Icelandic Government.

We shall be glad if you will be good enough to confirm this arrangement.

Your obedient Servants,

(For the Allied Governments)

W. Mitchell-Thomson

J. Charpentier

J. Giannini

[Annex 3]

The Icelandic Delegates to the Allied Delegates

London, May 23, 1918.

Gentlemen: In reply to your letter of to-day, we agree that it is understood that the supplementary provisions referred to therein shall apply to the agreement signed by us to-day.

We are, yours faithfully,

• Kl. Jonsson
• Richard Thors
• Eggert Briem

2. The text of the agreement and appended notes is that of a British print received Nov. 6, 1918, as enclosure to despatch from the Chargé in Great Britain, No. 10151, Oct. 28. A copy of the agreement was also received from the British Embassy on an undetermined date in June (War Trade Board Files: Negotiations with U. S. and Allies, Iceland).
1. Not printed.
1. Not printed.
1. Not printed.
2. In lieu of the whole or part of the rations for (a) rice, and (b) sago and tapioca an equivalent weight of cereals may be substituted. [Footnote in the original.]
3. In lieu of the whole or part of the rations for (a) rice, and (b) sago and tapioca an equivalent weight of cereals may be substituted. [Footnote in the original.]