Station will be occupied with handling the large volume of U. N. mail, the United Nations paying for the services rendered at the rates prevailing in U. S. Post Offices. The station will also be available to U. N. staff members and to delegations and visitors to the U. N. Headquarters. The General Assembly requested the Secretary-General, upon conclusion of the agreement with the United States, to proceed with the necessary arrangements for the setting up of the U. N. postal administration at the earliest possible date and authorized him to appoint a committee empowered to approve designs for U. N. postage stamps.

C. BUDGETS

For the calendar year 1950, the assessments authorized to be made against members by the United Nations and those permanent specialized agencies which are financed primarily from annual member contributions were in the amount of approximately $72,500,000. This included, in the case of the United Nations, an amount of $8,000,000 earmarked for the establishment of an international regime for Jerusalem. As plans for an international administration for Jerusalem did not materialize, the $8,000,000 requirement was not called for and the total amount actually assessed in 1950 was approximately $64,500,000.

For the calendar year 1951 the amount authorized for assessment against member states is approximately $73,500,000. While this exceeds by $1,000,000 the amount authorized for assessment in 1950, the amount actually called for will be greater by $9,000,000. At the same time, member states will not be called upon to contribute to the support of the International Refugee Organization in 1951, since the work of that organization is to come to an end during the year and sufficient funds are available from previous contributions to carry out the operations planned. Assessments called for from member states in support of the International Refugee Organization in the fiscal year 1951 were in the amount of approximately $43,670,000.

The assessment budget for 1951 of the United Nations alone is approximately $43,000,000. The regular budgets of the permanent specialized agencies for 1951 are at about the same level as for 1950. The increase in total assessments for 1951 over 1950 is due mainly to the increase in the U. N. budget itself. This increase is attributable

to several factors, including the 1951 costs of moving Secretariat offices from Lake Success to the permanent headquarters in Manhattan, the first $1,000,000 installment in repayment to the United States of the headquarters loan, the increased responsibilities of the organization in areas of political tension and in regard to the former Italian colonies, and the decision of the General Assembly to hold its next regular session in Europe.

In addition to the regular programs of the United Nations and specialized agencies which are financed through assessments, there are special operating programs financed by negotiated contributions. The expanded program of technical assistance falls within this category. To this program member governments have pledged total contributions of approximately $20,000,000 for the initial financial period ending December 31, 1951. The requirements of the United Nations Relief and Works Agency for Palestine Refugees in the Near East have been fixed at $50,000,000 for the current year. A special program for the relief and rehabilitation of Korea was approved by the General Assembly with estimated total requirements of approximately $250,000,000 for a period of 12 to 15 months. For both of these latter programs, the General Assembly established a negotiating committee to discuss with member governments the amounts they would be able to contribute. The General Assembly also approved the continuation of the United Nations International Children's Emergency Fund, which will continue to be financed mainly by government contributions.

D. ASSESSMENTS

The percentage assessments of the United States for the regular expenditure budgets of the United Nations and the larger permanent specialized agencies for the calendar years 1950 and 1951 are as follows:

The net effect of the changes in assessment percentages, for 1951, has been to produce a dollar saving for the United States, as compared with the amount the United States would have been assessed if the 1950 percentages had remained unchanged.

Each of these organizations adopts its own scale of assessments, taking into consideration the particular membership of the organization, appropriate maximum and minimum shares, and, to a varying degree, the relative capacity of members to pay, and other factors such as the interest of each member in the agency's particular field of operations. It is the United States position that in normal times no one state should pay an unreasonable and preponderant share of those regular expenses of an international organization of sovereign states which member nations are committed to support. To permit any state to do so tends to compromise the international character of the agency. In the United Nations, the United Nations Educational, Scientific and Cultural Organization, and the World Health Organization it has been officially recognized that in normal times no single country should be assessed more than one-third of such expenses. In the United Nations, UNESCO, and WHO the United States percentage still exceeds the one-third ceiling accepted in principle. However, for 1951, as well as for 1950, the United States has been granted a downward adjustment in its percentage in each of these three organizations. In the specialized agencies there has been increasing pressure to move toward greater conformity with the principles of assessment adopted by the United Nations. The process of adjustment of the U.N. scale is therefore of particular importance. During the year the United Nations Committee on Contributions, acting under instruction from the General Assembly, reviewed the United Nations scale, and, in the light of the latest available information on the economic status of member countries, recommended that the assessments of 23 members be adjusted. Fourteen of the adjustments represent increases and nine, including an adjustment for the United States, represent decreases. The Committee took note of the improvement in the statistical information being made available to the United Nations by member countries. It stated, however, that the material being supplied was still of varying reliability and accuracy. Furthermore, when comparing national incomes of different countries, particularly for a period in which widespread currency devaluation had occurred, the Committee found it necessary to make calculations on alternative assumptions as to the appropriate rates of conversion to a common currency unit. Thus, the Committee recognized that any conclusions it might reach would be somewhat speculative.

The Committee approved adjustments in the assessments of those countries for which the evidence justifying such action was unques tionable. However, the Committee considered that, under the circumstances, in recommending changes it should move cautiously and gradually. Therefore, it applied a working rule which limits upward or downward adjustments to 10 percent of the particular member's existing assessment.

In recommending a reduction of 0.87 percent in the United States assessment, from 39.79 percent to 38.92 percent, the Committee viewed it as a further step in implementing the principle that no one member should bear too large a share of common expenses. The amount of the decrease was arrived at by taking the balance of increases over decreases in all adjustments other than that for the United States.

The General Assembly approved the revised scale of assessments for established members for 1951 as recommended by the Committee on Contributions and also accepted the Committee's recommendation that there be an assessment of 0.60 percent for the Republic of Indonesia, a new member of the organization. The Committee on Contributions was instructed to review the scale further during 1951 and report to the next session of the Assembly.

While the percentage assessments of the United States decreased in the United Nations and in the two specialized agencies in which they are still above 333 percent, they increased in the International Labor Organization and in the International Civil Aviation Organization in both of which the United States percentage assessments had been below 25 percent. The United States assessment in the Food and Agriculture Organization remained unchanged at 27.10 percent.

During the year the United Nations Committee on Contributions studied the procedure to be followed in implementing the resolution of the fourth General Assembly which had authorized the Committee to advise the specialized agencies, on request, regarding scales of assessments. The Committee concluded that it should avoid assuming responsibility, even in an indirect way, for the scale of assessments of a specialized agency. Furthermore, the Committee considered that it should not attempt to apply, on behalf of any specialized agency, principles which were not similar to those on which U.N. assessments are based. The Committee did, however, arrange for the Secretariat to make available to the specialized agencies, upon request, information on national income, currencies, conversion factors, etc., used by the Committee itself.

E. STAFF ARRANGEMENTS

The United Nations Staff Assessment Plan has been in operation since the beginning of 1949. Under this plan all staff members pay to the general funds of the organization a graduated assessment, comparable to a national income tax, on the compensation they receive from the United Nations. The plan was designed to equalize the income-tax obligations of the organization's staff irrespective of their nationality. It also serves to prevent the creation of a tax-privileged group of international public servants.

Under the Staff Assessment Plan, all members of the Secretariat are assessed according to the most modern principles of national income-tax systems and at rates which rise by steps according to the amount of assessable income, viz, 15 percent on the first $4,000, rising by 5 percent for each additional $2,000 below $12,000. Still higher rates are levied on the relatively few salaries above that amount. These rates approximate the United States income-tax rates. They are subject to adjustment by the General Assembly as conditions change. The revenue derived from staff assessments, which in 1950 amounted to approximately $4,000,000, is entered as miscellaneous revenue on the books of the organization.

Through accession to the convention on privileges and immunities, 35 member states have specifically exempted U.N. staff members from national taxation on their compensation from the organization. The United States has not yet acceded to this convention.,

With certain minor technical exceptions the United States remains in practice the only member state that continues to tax its nationals in the Secretariat. These United States nationals, of whom there are approximately 1,500 stationed in the United States, are in effect subject at the present time to double taxation on their compensation. To meet this situation, the General Assembly has from year to year appropriated funds to reimburse the nationals of those states which have not yet acted to relieve their nationals from double taxation. The total amount required for tax reimbursements in 1950 was approximately $1,100,000, practically all of which went to United States nationals. The last General Assembly extended to 1951 the arrangement followed in the previous year for advancing the amount of any tax reimbursements from the Working Capital Fund. Working Capital Fund advances for 1950 were authorized to be repaid out of the supplementary appropriation for 1950. It is apparent that the members of the United Nations will be reluctant to continue indefinitely to appropriate funds for the reimbursement of taxes paid by nationals of a single member state.