would provide, it could do so by specifying activities rather than using the broad generic term "activities" in subsection (c). It could also, of course, use narrower language in its subsequent appropriations.

Sincerely yours,

JOHN K. CARLOCK, Fiscal Assistant Secretary.

Mr. KASTENMEIER. I want to thank the committee for giving me this time today. I would urge most respectfully when considering the broadest ways to obtain a demonstration of support for the United Nations the committee should give positive consideration to this small piece of legislation.

Thank you.

Mr. ZABLOCKI. Thank you, Congressman Kastenmeier.

Is it your intention that H.R. 12382 be considered as a substitute for S. 2818 now under consideration by the Senate committee?

Mr. KASTENMEIER. No, Mr. Chairman. It actually provides no funds directly for the United Nations. Under the U.S. peace bond proposal, the funds would presumably not be adequate to support the United Nations in its present financial crisis. It is at best an adjunct to another bill, either the bill this committee is considering now with respect to loans to the U.N., or with respect to the U.N. Participation Act of 1945, or indeed any other appropriate measure.

It would depend upon one's conception of the bill, actually. There are some unresolved questions in the bill as I have proposed it. As originally conceived it was supposed to provide some moneys from American citizens interested in support of the U.N., to offset any loan or purchase of bonds that the Government or the President might undertake in connection with the U.N. However, I have been in consultation with the State Department and the Treasury Department. Now the bill before the other body, and my own bill, do contain somewhat broader language. The last line on page 2 being:

funds shall be available for use by the President in support of the activities of the United Nations.

Now, this is somewhat broader than originally conceived; namely, to support only to be a replacement fund only for any loans that may have been made to the United Nations by virtue of the principal legislation we are considering on the subject now.

Mr. ZABLOCKI. I believe your proposal has merit. As you know, however, the need for a loan to the United Nations has been presented as being rather urgent. Further, it would take some time before arrangements could be worked out for individual participation, through the purchase of peace bonds, in the financing of U.N. operations. It would seem, therefore, that your proposal should serve as a supplement to the U.N. bond loan proposal.

Mr. KASTENMEIER. Yes. It could be used, Mr. Chairman, to replace the money out of our general funds that has gone into the loans. In this sense we have not only a similar rate of interest of 2 percent to replace the money but we also allow many citizens in this country to demonstrate their support for the United Nations through their own government, which I think is desirable.

Mr. ZABLOCKI. Is it your thought that the proceeds of peace bonds should be used to repay the U.N. loan?

Mr. KASTENMEIER. That is my original thought. As I say, actually my bill has broader language than this, but this was the principal purpose of having the legislation.

Mr. ZABLOCKI. On page 3 of your statement you say:

The bill has the full and solid support of the State Department and the Treasury Department.

Yesterday, late in the afternoon, the committee received a report from the Department of State and without objection we will make it a part of the record at this point.

(The letter referred to follows:)

Hon. THOMAS E. MORGAN,

Chairman, Foreign Affairs Committee,
House of Representatives.

DEPARTMENT OF STATE,
Washington, July 18, 1962.

DEAR MR. CHAIRMAN: This is in further response to your letter of July 3, 1962, requesting the Department's comments on H.R. 12382, a bill, "to amend the United Nations Participation Act of 1945 to provide an opportunity for the public to provide support for the United Nations through the purchase of peace bonds."

It is the opinion of the Department of State that the enactment of legislation which would permit the citizens of the United States to participate more directly in the support of the United Nations is most desirable. The Department vigorously supports efforts to make it possible for our citizens to lend financial as well as moral support to the United Nations. It further believes that, by permitting a citizen to provide this support through the instrument of his own Government, a partnership and identity of purpose is created of positive value to both the citizen and his Government.

We wish to call to your attention a problem in connection with section (c) of the bill which became apparent during the recent Senate hearings on S. 2818. Senate sponsors of the bill there indicated that it was their intention that the proceeds from the sale of peace bonds, which are to be deposited in a special fund in the Treasury, are to be available "for use by the President of the United States in support of the activities of the United Nations" without the requirement of further appropriation action by the Congress. (It is less certain whether the sponsors intended that this bill should also be the sole substantive authorizing legislation.)

The Department's testimony in support of the bill before the Senate was clearly based on an interpretation of section (c) by the Treasury Department which construes the language as presently written as requiring subsequent appropriation action.

We have discussed the question of the interpretation of section (c) with staff of the House sponsor of the bill (Congressman Kastenmeier). We understand that he will advert to the question in his testimony and may well suggest additional language to clarify the matter, should the House committee believe this to be necessary.

The Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the presentation of this report for the consideration of the committee.

Sincerely yours,

FREDERICK G. DUTTON,
Assistant Secretary
(For the Secretary of State).

Mr. ZABLOCKI. As you say the Department has questioned section (c) of your bill. I presume the insert you are putting into the record will explain that particular section.

Mr. KASTENMEIER. Yes, Mr. Chairman. It is a letter directed to me from the Treasury Department dated July 18. It contains three alternatives which the committee might like to consider in construing that language, or indeed in changing the language to make it consistent with the intention of the committee in this respect.

Mr. ZABLOCKI. Merely for the record, it is my understanding that you do not intend that we amend the bill before us, but rather hope that we will consider your proposal separately, some time in the immediate future?

Mr. KASTENMEIER. It would be my personal view, or my personal desire, that the committee actually do consider amending the bill but I would think that the committee would have to consider whether the State Department and perhaps indeed the Treasury Department would consider this appropriate in terms of the legislation.

Now there are other considerations. Ideally speaking, I must say for my own part, I think it would be appropriate to the bill you are considering as an amendment thereto.

Mr. ZABLOCKI. In view of the fact that the other body is now holding hearings on your proposal and obviously will take some action on it, do you not think it would be better if we would defer our decision until some action is taken on your bill in the other body?

Mr. KASTEN MEIER. Mr. Chairman, the other body I think has finished its hearings on the matter and finished its hearings also not only on U.N. loans, but on the question of U.N. peace bonds. So they will presumably take no further action, at least at this time, relative to the U.N. loan legislation. However, in my view it would certainly be appropriate for this committee to do so, but this is a question for the committee.

Mr. ZABLOCKI. I have but one further question. Your bill does not spell out whether the peace bonds will be tax exempt or not.

Mr. KASTENMEIER. No, Mr. Chairman. As a result they would be treated as any other American savings bond. Presumably in many States interest would be exempt from State income taxation, but in terms of Federal taxes they would be subject to tax like any other savings bond.

Mr. ZABLOCKI. Thank you very much.

Mr. Chiperfield?

Mr. CHIPERFIELD. Thank you, Mr. Chairman.

Mr. Kastenmeier, I want to thank you for a very constructive statement. I am quite interested in your proposal. It seems to me to be worth while and should be carefully considered.

I am wondering if your bill was before the Senate when they considered the U.N. bond bill.

Mr. KASTEN MEIER. Mr. Chiperfield, my recollection is it was not before the Senate actually at the time they considered the U.N. bond or loan bill but they later, on Thursday, July 12, granted hearings specially for this purpose. I think that is correct.

Mr. CHIPERFIELD. I wish it had been because I believe your proposal has merit and it also has a great deal of appeal and I would have liked to have learned their thoughts on the proposal when they considered the bill before us. We are up against this situation now where the Senate has passed the bill and we are considering the measure before us and whether or not it would be advisable to consider your measure now in connection with this bill or as a separate measure, probably would be a matter for the committee to determine. As I say, I wish it had been before the Senate when they considered their bill and I would have been interested in the reaction they took after considering it.

Mr. KASTENMEIER. Mr. Chiperfield, there are not yet reports on the hearings of July 12 in the other body. I think we had a very similar situation there. They considered the U.N. bond or U.N. loan. measure while the peace bond proposal was in draft bill form. That is the peace bond measure was before the Senate at that time. Apparently the committee agreed to have it heard immediately after the major proposal was heard-unfortunately, in my view.

Mr. CHIPERFIELD. Well, some of us are not too happy about the manner in which these bonds are being raised and to me your proposal has considerable appeal.

I will raise the matter when we go into marking up this bill and have the committee make a determination.

Thank you, Mr. Chairman.

Mr. ZABLOCKI. Mr. Nix.

Mr. Nix. Thank you, Mr. Chairman.

Of course it is a pleasure to have our colleague here, Mr. Chairman. I, of course, am sympathetic to the idea of having the American people have an opportunity to express their interest in the United Nations. But I am afraid that your proposal will give aid and comfort to a great number of persons in this country who are today opposed to the purchase of United Nations bonds. I think the immediacy of the problem requires us first of all to dispose of that question and to purchase those bonds.

Now, if your proposal is in conjunction with that and is taken up later, I think it might receive favorable reception. But for myself, I think it serves to muddy the water and give some semblance of an argument to the people who now take a position contrary to the interest of the United States.

Mr. KASTEN MEIER. I can only say I would hope what you say would not be true. I would think there are some people in the administration who would feel such an addition might complicate such matters. It is, in my view, sufficiently simple and commonsense in its approach so that this wouldn't necessarily be the result that my good colleague from Pennsylvania suggests. I would certainly hope not.

Mr. Nix. I would just like to say this: I have heard many comments from people who are opposed to the President's proposal and in my view those comments are not based on reason and are not consistent with the interests of the United States. I am impatient with the delay. I am impatient with the arguments; all of which I feel are without merit. I feel a great urgency to grapple with the problem because I think the United Nations life is at stake and it is to our interest to see that it is preserved. The best way to do it, in my opinion, is to support the President.

Mr. ZABLOCKI. Mr. Whalley.

Mr. WHALLEY. I have no questions, Mr. Chairman.

Mr. ZABLOCKI. Mr. Seely-Brown.

Mr. SEELY-BROWN. I have no questions.

Mr. ZABLOCKI. Thank you, Bob.

Perhaps you have some indication of the attitude of the public toward your proposal. What indications have you received from the rank and file as to their interest in the peace bond issue?

Mr. KASTENMEIER. I have not had a great deal of mail on this particular subject, Mr. Chairman. But the written letters I have had on

it have been favorable and there have been a couple of favorable editorials from newspapers who have heard about the proposal. The editorials I have seen have been in papers of different political views and I haven't seen any objection. As I say, even the State Department has adopted the view that this is a worthwhile enterprise. I do not think it is really a question of opposition, because there really hasn't been opposition. It hasn't really been tested in that sense. What comment has been elicited has been favorable, Mr Chairman. Mr. ZABLOCKI. Thank you very much. We appreciate your presentation. It has been most interesting.

Mr. SEELY-BROWN. Mr. Chairman, could I ask a question of the staff in connection with what has just been said?

Mr. ZABLOCKI. Yes.

Mr. SEELY-BROWN. Does the United Nations itself offer bonds which can be bought by the general public in any country?

Mr. CRAWFORD. No, sir. Under the terms of the resolution authorizing this bond issue, it was not made available to individuals. Mr. ZABLOCKI. I will now call on the Honorable John V. Linsday, Member of Congress from the State of New York. Mr. Lindsay, we welcome you and look forward to hearing your statement.

STATEMENT OF HON. JOHN V. LINDSAY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. LINDSAY. Thank you, Mr. Chairman and members of the committee.

I am not going to read a prepared statement. I prefer to speak informally.

I come here to urge the committee to lend its support to S. 2768 and to state that it has my total and complete support. As I see the issue it comes down to the question as to whether or not the U.N. is to be preserved as a peacekeeping operation.

I have spent a great deal of time in that international body, it being a part of the congressional district that I represent. Technically, it is extraterritorial but it is within the bounds of the 17th District of New York. Only last Sunday I was across the street from the United Nations, on U.N. Plaza, addressing the Assembly of European Captive Nations which, as you know, is an organization which has not been wholly in agreement with aspects of the United Nations. Yet even with this worthy organization I could feel a great sense of support for the institution of the U.N. by the representatives of the nine captive European nations.

I have spent some time in the United Nations. I have spent time in the corridors, and in the assembly hall and sitting at times with members of the Foreign Affairs and Foreign Relations Committees who were delegates to the U.N. Assembly. I know something of the importance of the United Nations purely as an escape valve. This is not to be discounted under any circumstances. When the pressure of steam in international relations gets so high that it is at the exploding point, there has to be an outlet somewhere. It exists in this organization. Here is the escape valve that allows enough steam to blow off so that a direct confrontation between the great powers can be avoided.