In the summer of 1936, W. H. Auden and Louis MacNeice visited Iceland on commission to write a travel book, but found themselves capturing concerns on a scale that were far more international. ''Though writing in a "holiday" spirit,'' commented Auden, ''its authors were all the time conscious of a threatening horizon to their picnic - world-wide unemployment, Hitler growing everyday more powerful and a world-war more inevitable.'' The result is the remarkable Letters from Iceland, a collaboration in poetry and prose, reportage and correspondence, published in 1937 with the Spanish Civil War newly in progress, beneath the shadow of looming world war.