II. The legal consequence of the General Assembly assessment resolutions, invoking and exercising the Assembly's au- thority under article 17, was to create binding legal obli- A. The General Assembly is empowered to create legally binding financial obligations on member states by levying assessments for "expenses of the Organiza- tion" under article 17 of the charter_. B. The power of the General Assembly to create legally binding financial obligations is not limited by the fact that the UNEF and ONUC assessments were levied to finance activities of the Organization for the maintenance of international peace and 1. The language of the charter_ 2. The practice of the League of Nations_ C. The power of the General Assembly to create legally binding financial obligations is not limited by the fact that the UNEF and ONUC assessments were for the purpose of financing expenditures under resolutions which, with respect to contributions of III. The validity of the resolutions establishing UNEF and IV. Contrary contentions advanced in discussions of the General Assembly and its subordinate organs are unpersuasive _ _ _ Appendix D: Oral statement by Abram Chayes, legal adviser, Department of State, United States of America, to the International Court of Justice on the financial obligations of members of the United Nations-- Appendix E: Statements submitted for inclusion in the record_ Letter to Hon. Thomas E. Morgan, chairman, from Arthur I. Blau- stein, executive director, United World Federalists, New York metropolitan area, on purchase of United Nations bonds.. Letter to Hon. Thomas E. Morgan, chairman, from Hon. Andrew J. Biemiller, director, department of legislation, American Federation of Labor & Congress of Industrial Organizations, transmitting statement adopted by the AFL-CIO executive council, February 20, 1962, on purchase of U.N. bonds--- Statement of Mrs. Ermine King Wright, representing Guardians of Our American Heritage, on purchase of U.N. bonds__ Letter to Hon. Thomas E. Morgan, chairman, from J. H. Rothschild, Phoenix, Ariz., concerning purchase of U.N. bonds.. Statement of National Society, Daughters of the American Revolu- Statement of the Unitarian Fellowship on S. 2768, relating to purchase Letter to Hon. Thomas E. Morgan, chairman, from legislative com- mittee, Women Strike for Peace, Washington, D.C., on purchase PURCHASE OF UNITED NATIONS BONDS WEDNESDAY, JUNE 27, 1962 HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, Washington, D.C. The committee met at 10:45 a.m., in the Ways and Means Committee room, 1102 New House Office Building, Hon. Thomas E. Morgan (chairman of the committee) presiding. Chairman MORGAN. The committee will come to order. Mr. PILCHER. I ask unanimous consent that our study mission report to the Far East, south Asia, and the Middle East may be filed as a House report. Chairman MORGAN. Without objection it is so ordered. Mr. BURLESON. Mr. Chairman, I make a similar request that the report of the congressional delegation to the United Nations General Assembly this last fall be filed as a House report. Chairman MORGAN. Without objection, it is so ordered. Today the Committee on Foreign Affairs begins testimony in open session on S. 2768 which authorizes a loan to the United Nations. Our witness this morning is the Honorable Adlai E. Stevenson, U.S. representative to the United Nations. Mr. Ambassador, you have a prepared statement, and you may proceed. STATEMENT OF HON. ADLAI E. STEVENSON, U.S. REPRESENTATIVE TO THE UNITED NATIONS Mr. STEVENSON. First, Mr. Chairman, let me thank you and the members of the committee for permission to be heard today rather than on Friday when I was originally scheduled. We have in session in New York the resumed General Assembly, and it is moving toward a conclusion, which makes my presence there necessary. Accordingly, it is a matter of convenience and importance to me, I believe, and to our delegation, if I can return and be in New York until the Assembly is concluded. I appreciate this opportunity to appear before the committee, and particularly to discuss a matter which affects the entire relationship between our country and the United Nations. Several of the members of this committee have served as delegates to the United Nations General Assembly on the U.S. delegation. Others have visited our mission to the U.Ñ. in New York, as I hope all of you will find occasion to do. I think those of you who have had that experience agree there is much in the working of the United Nations that is familiar to an American legislator. This is true even though the resolutions of the 1 General Assembly generally don't possess the force of law, as yours do. The United Nations parliamentary procedures are essentially the same as ours. The process of decisionmaking, public debate, of quiet diplomacy, of reconciling opposing interests, devising formulas which will command a majority vote, all of these elements are congenial to our American tradition. This common ground makes it immensely advantageous to the United States to have the support and advice of the Congress in our United Nations policy, and to have bipartisan representation from the Congress in our annual delegations to the General Assembly. I believe these, Mr. Chairman, are among the reasons why over the years under Democrats and Republicans alike the United States, has achieved such a measure of success and influence in the United Nations. There are other reasons, too, some of which I hope will emerge in my remarks this morning. But I do want to stress at the outset how greatly our congressional traditions are reflected in the spirit and the practices of this institution of the United Nations. The question before the committee, as you have stated, sir, is whether the United States shall lend $100 million to the United Nations to relieve the financial crisis in the world organization and make possible the continuation of its peacekeeping activities which are in the national interest of the United States. The Senate, by a bipartisan vote of 70 to 22, has approved this bill authorizing the appropriation to the President of up to $100 million for such a loan to be evidenced by bonds of the United Nations. The bill provides that the loan is not to be used to relieve U.N. members of arrearages and shall not exceed by more than $25 million the loans made or agreed to be made by other countries. Further, the United States is to deduct each year from its assessments the amount due from the United Nations to this country for principal and interest on the loan. Finally, the bill states that the loan shall not be considered a precedent for further large-scale borrowing. Let me add in response to an inquiry that I have had here this morning that the repayment will be in dollars. The administration has endorsed the Senate bill and commends it to this committee. It seems to me that the proposed loan raises what are really two questions. First of all is a question of financial policy: Is the method of financing that has been proposed a sound method? Second, is the more basic question of foreign policy: Is the purpose for which the money is to be used a sound purpose? As to the financial question, the committee has before it a wealth of facts and figures, and two of my colleagues, Ambassador Plimpton and Assistant Secretary Cleveland, will testify as to the financial aspects in due course. I should say that I have considered this matter long and carefully with my associates in the U.S. Mission to the United Nations, and in the Department of State, and I am convinced that the method proposed by President Kennedy, and approved with certain amendments by the Senate, is sound. Indeed, I think there is no alternative method available to us at this time. The United Nations financial difficulties do not arise from its ordinary operations. Its regular budget, to which the United States now contributes 32.02 percent-as compared with 39.89 percent in 1946 is in good shape, and the arrears are of little importance. However, the major United Nations peacekeeping operations have caused financing problems not found in the regular budget. This is what we are concerned with. In fact, the Congo peacekeeping operation and the smaller United Nations Emergency Force in the Middle East, taken together, imposed on the members of the U.N. assessments far larger than the regular budget of the United Nations itself. Many member states fell behind in their payments for these special operations. Others, including the members of the Soviet bloc, refused to pay at all because they felt the United Nations actions cut across their own objectives. Questions were raised by some countries as to whether the assessments for these operations are legally binding. It happens that these actions do suit the policies and interests of the United States, because they serve the cause of peace and stability, and protect emerging nations from outside pressure, in two very critical areas of the world: the heart of Africa and the Middle East. Because of that the United States has not only paid its own assessed share for these activities. To help keep these U.Ñ. forces in the field, we have gone further and made voluntary contributions which, taken together with assessments, have meant that we contribute about 471⁄2 percent of the budgeted costs for peace and security operations. Let me only add that these voluntary contributions were not designed, and have not served, to reduce the amounts that are due from and payable by the Soviet Union or from any other delinquent country. These financing measures were obviously not a permanent solution. They did not bring in enough cash, and they were too dependent on voluntary contributions. Last year the General Assembly adopted a more businesslike financial plan, one result of which is the bill now before this committee. The first part of this financial plan is an energetic effort to collect arrearages. To clear up any legal doubts the General Assembly last fall asked the International Court of Justice for an advisory opinion as to whether assessments for UNEF and Congo operations are legally binding. If the Court's reply is in the affirmative, this will threaten the more seriously delinquent states with the loss of their votes in the General Assembly. The Court has already received both written and oral argument on this question from the United States and several other countries, and is expected to hand down its advisory opinion later this summer. The new financial plan also calls for loans by governments, in the form of 25-year bond obligations, in the amount of $200 million. It assures repayment of both principal and interest by providing that these expenses will be included in the regular U.N. budget to which all member states regularly contribute in accordance with their regular assessment percentages. This means that the United States will be contributing only its regular assessed percentage of 32.02 percent toward the repayment of these governmental loans, which will be used in large part to finance the cost of the Congo and Middle East operations. At this date, 39 states have already purchased or formally pledged the purchase of $65,701,175 of United Nations bonds. Twenty-two others have definitely said they intend to make purchases. Twentynine others, including the United States, are now considering the |