The Danish Laws of Standing of 1871 or “the Law of 2 January 1871 on the constitutional standing of Iceland within the realm.”
These laws were an attempt to formalize and regularize the position of Iceland within the Danish nation and Danish legal system. Since 1848, after the abolition of the absolute Danish monarchy and the re-founding of the Icelandic Parliament or Althing as a consultative assembly with no real power in 1843. Icelandic leaders claimed that the Danish Constitution of 1848 did not apply to Iceland, since it had never been formally promulgated in that country, nor voted on by either the Icelandic people or the Althing. Whereas the Danish government and several legal experts disagreed stating that Iceland was part of Denmark and all Danish laws were in effect in Iceland.
In 1866 the Constitution of Denmark was put before the Althing. They agreed to it with some amendments. In 1867 the Danish Parliament rejected the Icelandic amendments to the Constitution.
“The Law of 2 January 1871 on the constitutional standing of Iceland within the realm” stated that Iceland was an inseparable part of Denmark. But in compensation for this outright rejection of the independence movement the Danish central government would give each Icelander 50 thousand rigsdalers every year for the next ten years and then 30 thousand rigsdalers a year for the next 20 years. Icelanders were happy to take the money but the Althing voted against the rest of the laws; ten members to fourteen members.
The Law of Standing established a new position of “Land Chief of Iceland” this person was to run Iceland according to directives from the Danish government. This position was similar to the British colonial position of Governor-General. The first person to hold this position took up his duties on 1 April 1873.
However, in 1874, after a new Icelandic Constitution was promulgated and Denmark granted Iceland home rule. In 1903 home rule was expanded and the position of “Land Chief of Iceland” was changed to Minister of Icelandic Affairs which resided in Reykjavik, the Iceland Capitol and was responsible to the Althing . The first Minister for Iceland took up his office in 1904. In December, 1918 in an agreement with Denmark, Iceland was recognized as a fully-sovereign state, called the Kingdom of Iceland in a personal union with the King of Denmark. So Iceland and Denmark were two separate countries with the same king, similar to England and Scotland in the 1600’s.
Gunnar Karlsson. “Iceland’s 1100 Years: History of a Marginal Society”. Hurst: London. (2000)