Oct. 15 (Bloomberg) -- Jim Williams, who sailed through gales and Atlantic ice floes aboard British trawlers for almost 30 years, calls the crisis in Iceland ``poetic justice.''

Williams, 80, used to set out from Hull, his home in northern England, to catch cod 1,000 miles away off the coast of Iceland. He quit in 1973 as a dispute between the countries over fishing territory escalated, culminating in victory for Iceland and the demise of Hull's fleet two years later.

Relations between the countries are now at their chilliest since the so-called Cod War of the 1970s because hundreds of millions of pounds of U.K. savings are locked up in collapsed Icelandic banks. Iceland's struggle with the credit crisis is being marked as a reversal of fortune by the people of Hull, Europe's largest fishing port until 1975.

``People in their 40s and 50s, in a matter of a year or so they were unemployed,'' said Williams. ``You can understand the bitterness. It was disastrous. It wasn't just the industry, but the whole community.''

Prime Minister Gordon Brown threatened on Oct. 9 to freeze Icelandic company assets unless the country unlocked access to savings of British depositors who had been attracted by higher interest rates. A day later, a U.K. delegation arrived in Reykjavik to discuss who should compensate clients.

The last time talks between the countries were front-page news, about 35 years ago, it was Hull that ended up the loser as Iceland extended an exclusion zone for foreign fishermen to 200 miles from four miles in the 1950s.

``It's hard for everyone to forget and for other people to forgive,'' said Carl Minns, 33, the leader of Hull's local government. ``It kicked the crap out of the community.''

`Hard Feelings'

During the fishing dispute, the Icelandic coastguard cut inch-thick wires holding nets of British trawlers. Several ships from both sides were rammed. A compromise capped the number of British trawlers inside the extended zone.

Williams, who earlier served as a mate on the 191-foot Arctic Corsair side-trawler now moored as a memorial in Hull, remembered the tension as Icelandic gunboats came up alongside English ships. ``Tempers on the Icelandic grounds got a bit frayed,'' he said. ``It was a dangerous game they were playing.''

Throestur Sigtryggsson, 79, an Icelandic Coast Guard captain, said his country was just protecting its interests. Still, he's not surprised that some Hull fishermen feel a sense of justice from Iceland's current crisis.

``I think some of them might,'' says Sigtryggsson. ``There were very hard feelings toward Iceland at the time.''

Icelandic Prime Minister Geir Haarde called U.K. government comments about his country's treatment of British savers ``extremely unhelpful'' and said he is trying to ``mend fences.''

Sudden Collapse

The fishing industry in Hull was based at St. Andrew's dock, half of which was called the Iceland market. It boomed in the 1950s because stocks of cod, plaice and halibut had been left to replenish by the dearth of fishing during World War II.

Back then, there were about 150 trawlers that left port for three-week trips. Now there are three registered in Hull, according to operator Marr Management Ltd.

Instead, Hull's 256,000 people rely on the cargo port and employers such as health-care company Smith & Nephew Plc and household product maker Reckitt Benckiser Group Plc, Minns said. More than 1 billion pounds ($1.7 billion) of investment was announced or completed in the past year, he said. Developments include a mall on part of St. Andrew's dock.

Hull's fishing industry went into freefall in 1975, said Arthur Credland, the curator of the city's Maritime Museum since it opened that same year.

``The fishing fleet collapsed overnight, they just had nowhere to go,'' said Credland, 63. ``It remained a processing port, but the actual catching was just a shadow.''

`Ruthless'

Fishing families in the Hessle Road district, down by the Humber river, moved to new housing projects. The area once was home to about 50,000, according to former trawlermen.

Rob Ellis, 74, used to live on Hessle Road and skippered his first ship as a 25-year-old in 1959. Like Williams, he remembered skirmishes with the Icelanders in freezing waters.

``The Icelanders did wonderful rescue work, but when it came to the Cod War, they were very, very ruthless,'' said Ellis, a skipper until the end of 1974 before joining the merchant navy. ``It was looking really ropey so I thought it was time to get out. I did blame Iceland.''

Even 30 years on, Williams wouldn't attend the 2006 unveiling of a port statue celebrating the trading relationship between Britain and Iceland in the fishing industry.

The green statue, called ``Voyage,'' stares out to sea at the point where the Hull river meets the wider Humber before it flows into the North Sea. A plaque says it marks a ``bond created by more than 1,000 years of sea trading.''

Minns, whose predecessor approved the statue, said it divided Hull, though ``at some point you need to rebuild a shattered relationship.'' For Williams, it was a step too far.

``There was never any love lost,'' said Williams.

To contact the reporter on this story: Rodney Jefferson in Hull on r.jefferson@bloomberg.net

Last Updated: October 14, 2008 19:11 EDT