THE German occupation of Denmark on April 9 peremptorily raised the question as to the future of Greenland and Iceland. In the long run, of course, the fate of these two islands depends on the outcome of the present war; their present status, however, is a matter of immediate concern to several governments including that of the United States. American consular representatives, for instance, have been sent both to Reykjavik and to Godthaab. The million dollar credit opened for Iceland by the Export-Import Bank in March 1940 has been confirmed. Both the American Red Cross and a privately organized committee are actively preparing to aid Greenland in the emergency. As for Great Britain, on May 9 she placed Iceland under British protection for the duration of the war. British troops are now stationed in Iceland to prevent a surprise landing there by German air or naval forces.

Greenland, last of Denmark's colonies, has been administered by a benevolent bureaucracy whose enlightened social and educational policies have been highly beneficial to the natives. Only in Greenland have the Eskimos grown in numbers; everywhere else under white rule their race has declined. Since Greenland is a colony, Denmark is legally free to transfer her sovereignty over it to Germany; or the German Government, acting as a self-appointed defender of a vassal Danish state, might seek to exercise the latter's rights there.

Iceland is in a very different position. The Law of Union of November 30, 1918, which was adopted by the Danish Rigsdag and the Icelandic Alting, placed the relations of the two countries on a new basis. Strictly speaking, this law was neither a statute nor a treaty, but a tertium quid. It recognized Iceland as a sovereign state and established a personal union between the two nations. It also provided a limited measure of real union in that the conduct of Iceland's foreign relations was left in the hands of Denmark until such time as Iceland should itself take over this function. However, any subsequent agreements which Denmark made with outside states were to be binding on Iceland only with the consent of the Icelandic Government. Unlike Austria and Hungary under the Dual Monarchy, Denmark and Iceland were separate entities in international law. The relation of Iceland to Denmark was, for all practical purposes, identical with that of the British Dominions to the United Kingdom under the Statute of Westminster. The absence of a common authority for the two countries was emphasized by a provision that the Swedish and Norwegian Governments should appoint arbitrators to settle disputes which could not be ironed out by direct negotiation between the two partners to the union.

The Law of 1918 also provided for the eventual abrogation of the union; after December 31, 1940, either country was to be free to demand the opening of negotiations for revising the Law. If no new agreement were effected within three years of such a demand, the parliaments might annul the union by a two-thirds vote, which had to be confirmed in a popular plebiscite by a three-fourths majority of those voting, with three-fourths of the electorate participating. Since 1918 there has been some speculation as to whether Iceland would exercise its right of separation after 1940. Some Icelanders were desirous of breaking off the remaining ties with Denmark because of long-remembered grievances, others because the union was of no practical value to the country.

By a curious inconsistency in the Law of 1918, the governments and electorates of both countries were required to participate in the process of separation; yet Iceland, as a sovereign state, would logically be entitled to separate from Denmark by the act of its legally constituted government, an act which the joint king, as a constitutional ruler, would have no choice but to sanction. As a matter of fact, upon the German occupation of Denmark the Icelandic Alting promptly exercised this constitutional prerogative by declaring the king temporarily incapable of fulfilling his functions and therefore entrusting his powers to the Icelandic Cabinet. It also regularized its international status by appointing diplomatic agents, particularly in England and the United States. Furthermore, in Article 19 of the Law, Iceland was declared permanently neutral, though this declaration apparently has force only as regards Denmark and Iceland, for there is no record of any international legislation creating a status for Iceland comparable to that of Switzerland since 1815.

For over a century and a half Greenland's economic connections have been almost entirely with Denmark. This situation is largely a consequence of the operation of the trade monopoly which has attempted, with notable success, to protect the Eskimos against the inroads of "civilized" epidemics, and to safeguard their scanty resources of livelihood against the dangers of over-rapid exploitation and possible exhaustion. The Greenland administration has consistently shown a deficit, and this has been made good by the home government, whereas the trading monopoly, in which the royal family reputedly has an interest, has shown a regular profit. The economic importance of Iceland, on the other hand, is substantial. Its relatively high standard of living has rested upon its participation in world commerce: in 1937, for instance, the per capita value of Iceland's foreign trade was $230, compared with $170 for Great Britain and $41.50 for the United States.[i] The economic crisis of the 1930's caused an important shift in Iceland's foreign commerce. In 1930 it sold 52.6 percent of its exports to (in order of importance) Portugal, Spain and Italy, and bought 81.7 percent of its imports from Denmark, Great Britain, Germany and Norway. The breakdown of a relatively free world economy wreaked havoc with Iceland's business position, and drastic trade and monetary controls had to be introduced. By 1937 the country's leading customers were Germany, Great Britain, Norway and Portugal, while the largest exporters to Iceland were Great Britain, Germany, Denmark and Sweden.[ii] Iceland's commercial ties with Great Britain have been reënforced by its dependence on the London money market: seventy percent of its total indebtedness is in British loans.[iii] With a per capita foreign indebtedness of $192 (1935) -- compared with $131 for Norway, $73 for Denmark, and $7 for Finland -- Iceland has depended to an extraordinary degree on foreign capital to make the most of its scanty resources and to raise its standard of living.

The economic interests of the United States in Greenland are slight. A cryolite mine at Ivigtut has been operated for several decades by an American company, but the exploitation of numerous other mineral deposits has remained economically impracticable. Whatever claims had been staked out in northwest Greenland as a result of the discoveries of Peary and Kane were abandoned by the declaration of August 4, 1916, which was made as a condition of the purchase of the Virgin Islands. During the early stages of the 1916 negotiations Secretary of State Lansing was willing to acknowledge full Danish sovereignty over Greenland on condition that Denmark recognized "the principle of equal opportunity in whatever concerns the commerce and industry of all nations" in her colony. The Danish negotiators urged with persistence, however, that the United States agree not to "object to the Danish Government extending their political and economic interests to the whole of Greenland." In this unqualified form, which became that of the final declaration, the United States abandoned, at the last moment in the negotiation, its half-hearted effort to safeguard the economic "open door" in Greenland.[iv]

American connections with Iceland have also been slight. In normal times there has been no direct shipping service between the two countries. Only during the emergency of 1917-1918, and again since September 1939, has a regular service been maintained in order to assure Iceland of its indispensable supply of foodstuffs and fodder. Its strongest bond to the United States and Canada is that supplied by the Icelandic settlements, chiefly in North Dakota and Manitoba. The colonies have preserved a lively sense of cultural attachment to the mother country and have contributed considerably to its economic progress. The Export-Import Bank, as already mentioned, accorded a million dollars in credit to Iceland in March 1940, and private credits are also reported to have been made available. One great obstacle to the expansion of American-Icelandic trade is that Iceland must buy where it can sell; the American market takes only a small portion of its fish products, which constitute the country's chief export commodity.

In recent years American interest in Greenland and Iceland has revolved primarily around their potential value as stepping stones along trans-Atlantic routes.[v] In 1928 Pan American Airways began its study of the northern route to Europe, and in 1932 Dr. Vilhjalmur Stefansson, the great explorer, became its adviser for northern operations. Pan American financed the Lindbergh expedition of 1933 and has also contributed to the work of four land expeditions. Its exploratory permit for Greenland aviation lapsed in 1939. In 1932 Pan American had acquired a franchise for Iceland from the Transamerican Air Lines Corporation. This expired on December 31, 1936, without regular service having been established. Negotiations for a new concession were continued, but for various reasons no new agreement had been reached when the outbreak of the war in Europe created an entirely new situation.

From 1928 to 1931 the German Lufthansa had collaborated with the Flug-fjelag Islands (Flying Company of Iceland) in maintaining a local service. When this German-Icelandic company went out of existence, Lufthansa secured a letter from the Icelandic premier which, according to the German interpretation, assured it of equal enjoyment of any flying rights which Iceland might grant to any other nation or its nationals up to April 1, 1940. Confronted with strong German pressure in March 1939, the Icelandic Government, while disputing this interpretation of the letter, preferred to postpone for a year all negotiations with foreign companies rather than give a foothold to Lufthansa.

In February 1940 a new element was injected into the situation with the arrival in the United States of a Scandinavian air mission representing the governments of Sweden, Denmark, Norway and Finland. The delegation discussed with American officials and aviation companies the possibility of opening a direct airline to Northern Europe by way of Iceland. This project, in which a strong interest was expressed on both sides, collapsed with the German invasion of Denmark and Norway.

The expectation that Greenland and Iceland would play an important rôle in commercial aviation has therefore not been borne out by events, for by the time political obstacles to trans-Atlantic aviation had been overcome, technical advances made it possible for commercial planes to be flown directly from Newfoundland to Ireland, and from Bermuda to the Azores. Careful study has also shown that Greenland is not very well suited to commercial aviation. Its southern part is dangerous in summer because of fog, in winter because of ice, although ports on the west coast, such as Holstensborg, are usable by hydroplanes during summer. While Greenland's ice cap and ice floes may serve as emergency landing fields for landplanes, they have no commercial value at present. Quite possibly Greenland may in the future be useful as a stepping stone from the American Middle West to Scandinavia and Russia, and, as the land mass nearest the North Pole, it may acquire value through the development of trans-polar airlines. Iceland's ports, on the other hand, can be used by hydroplanes throughout the year despite occasional fogs; facilities for landplanes could also be developed. The main importance of Iceland and Greenland in aviation lies rather in the military sphere. A strong air Power established in Iceland could destroy both air and sea traffic passing over the Great Circle route between Europe and America. Furthermore, Greenland could not be defended against an air force based on Iceland. From both Greenland and Iceland a large part of the North American continent is within range of large bombing planes, as President Roosevelt indicated in his speech to Congress on May 16, 1940. What happens in Iceland and Greenland is thus of vital strategic importance to the United States as well as to Canada.

While it is taken for granted that Greenland lies within the Western Hemisphere, the position of Iceland is not so clearly defined. A glance at the map shows, however, that the twelfth parallel of west longitude, which touches eastern Greenland, passes to the east of Iceland. Yet in air distances Iceland is much closer to the British Isles and to Scandinavia than to North America,[vi] and its political and economic ties are with Europe. Iceland's anomalous position shows that the concept of the Western Hemisphere is at bottom a political concept, and that the privileges and duties connected with being a part of this hemisphere cannot be defined by geography alone. For instance, the assumption that the United States could not conceivably allow any European state other than Denmark to possess Greenland needs to be weighed against the realization that Greenland could not be defended against a strong Power in control of Iceland.

In the event that Great Britain and France emerge victorious from the present war, we can assume that Greenland would be returned to the control of an independent Denmark, and that Iceland would be free to choose whether to restore the personal union with that country, to declare itself a completely independent state, to pass under some sort of dependence on Great Britain, or even, as a remote possibility, to join Canada. If, however, the war should result in a German victory, two questions would then arise. First, could the American Government, committed to the protection of a defeated belligerent, Canada, afford to see Iceland, and with it Greenland, fall into the hands of a Power which held Europe in its armed grasp and which would presumably be hostile to the United States? Second, could the United States afford to undertake the defense of Iceland against such a powerful state?

[i] The figures for Great Britain and the United States are for 1936.

[ii] Vilhjalmur Stefansson: "Iceland, the First American Republic" (New York, Doubleday, 1939), p. 275.

[iii] As of December 31, 1936. J. Bowering, "Report on Economic and Commercial Conditions in Iceland" (London, Department of Overseas Trade, 1937), p. 4.

[iv]Papers Relating to the Foreign Relations of the United States, 1917, p. 607, 618, 700; Papers Relating to the Foreign Relations of the United States: The Lansing Papers 1914-1920, II, 504; C. C. Tansill: "The Purchase of the Danish West Indies." (Baltimore, Johns Hopkins, 1932), p. 493-496.

[v] For a more detailed discussion of the importance of the American north as a base for air operations see Vilhjalmur Stefansson: "The American Far North," FOREIGN AFFAIRS, April 1939, p. 508-523.

[vi] From Reykjavik to Botwood (Newfoundland) is 1,487 miles; from Reykjavik to London is 1,171 miles.

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  • PHILIP E. MOSELY, Associate Professor of History in Cornell University; author of "Russian Diplomacy and the Opening of the Eastern Question in 1838 and 1839."
  • More By Philip E. Mosely