Reikjavik

Reykjavík lies on the southern shore of Faxaflói in southwestern Iceland. Its name, "smoky bay," is associated with steam rising from the area's hot springs. According to the Book of Settlements, Ingólfr Arnarson established his farm here after his high-seat pillars, thrown overboard as he approached Iceland, were found on the shore. For centuries the place remained a farm rather than a town.

In 1752 Frederick V granted the Reykjavík estate to an enterprise led by Skúli Magnússon. Houses and workshops were built for wool manufacture, alongside ventures in fishing and other trades. The Danish crown granted Reykjavík a trading charter in 1786, and the settlement began to grow as a commercial town. Its workshops and harbor laid foundations for a new center of Icelandic life.