PURCHASE OF UNITED NATIONS BONDS

FRIDAY, JULY 20, 1962

HOUSE OF REPRESENTATIVES,
COMMITTEE ON FOREIGN AFFAIRS,

Washington, D.C.

The committee met, pursuant to call, at 10:30 a.m. in room G-3, U.S. Capitol, Hon. Thomas E. Morgan (chairman of the committee) presiding.

Chairman MORGAN. The committee will come to order.

The committee meets this morning in open session for continuation of hearings on S. 2768, purchase of United Nations bonds.

STATEMENT OF RALPH SHOWALTER, NATIONAL LEGISLATIVE REPRESENTATIVE, UNITED AUTOMOBILE WORKERS; AND INDUSTRIAL UNION DEPARTMENT OF THE AFL-CIO

Chairman MORGAN. Mr. Showalter is our first witness. Mr. Showalter is the national legislative representative of the United Automobile Workers, and Industrial Union Department of the AFL-CIO. Mr. Showalter, have you a prepared statement?

Mr. SHOWALTER. No, Mr. Chairman. I just want to say that our organization supports the bill, and I wish to leave with you a copy of the letter that President Reuther sent to you back in March. It is a rather lengthy statement of our position on this matter, and I ask that it be put in the record.

Chairman MORGAN. Without objection, it is so ordered.
(The statement referred to is as follows:)

INTERNATIONAL UNION, UNITED AUTOMOBILE, AIRCRAFT &
AGRICULTURAL IMPLEMENT WORKERS OF AMERICA-UAW,

Hon. THOMAS E. MORGAN,

Chairman, Foreign Affairs Committee,

Detroit, Mich., March 26, 1962.

U.S. House of Representatives, Washington, D.C.

DEAR CONGRESSMAN MORGAN: Against the advance of the science of cosmic calamity, the people of the world have one great bulwark, the United Nations. I write you now to speak in favor of the $100 million U.N. bond issue and for the deeply cherished hope lodged in the continuing work of the United Nations. The million and a quarter members of the UAW share with the people of the world an uneasy apprehension over worldwide developments in the last decade. These developments give no one reason to believe that life on this planet, as we know it, can survive without the most dedicated commitment by each individual citizen to a new sense of international responsibility and morality.

But our personal and historical experiences warn us that the idealism of the people of the world will vaporize in the final blinding light of a nuclear explosion unless we strengthen the social and political instruments by which we can achieve a just and peaceful world.

The struggle for peace in a world, one-third free, one-third captive, and onethird in suspense, we are well aware, is a many-factored effort complicated by 120 sovereign national states insecurely associated in an unstable and volatile

world where hunger, disease, and ignorance are more often the rule than the exception.

We would be in an even more desperate situation now, except for the fact that the United Nations was brought into being 16 years ago as the expression of ageold longing for peace and in reaction against the horror of the most devastating and the cruelest war in human history. Today, after a sequence of hard trials, the United Nations still survives and in its continuing effort manifests the almost indestructible determination of human beings to persist against every discouragement in the search for social organizations that correspond with their ethical convictions.

We, in the American labor movement, do not claim that the United Nations will be set on a wide road to an easy final solution of the problems of the world by the enactment of the bill pending before your committee to authorize the United States to purchase $100 million of United Nations bonds. Nor do we challenge the good faith of those Americans who oppose this bill or who propose an alternate financial arrangement to the U.N.'s fiscal problems, although we are critical of their judgment and their computations.

We do not suggest that the United Nations will be dealt an immediate fatal blow by the rejection of the $100 million bond proposal.

We do believe, however, that the calculation of those who oppose the bond issue are made in terms which are not commensurable with the problem.

We do believe that the weight of a rejection of the U.N. bond issue will bear down heavily upon the United Nations and seriously impair its effectiveness in this critical period. It will weaken and hamper its efforts, and may set events in train that ultimately could transform the United Nations Building in New York into a mausoleum of human hopes comparable to the Palace of Nations in Geneva which once housed the League of Nations.

Without attempting to minimize in any way the imperfections of the United Nations until now, there can be no question that it plays as important a role in our efforts to wage peace as our Defense Establishment. There can be no question that our hope for avoiding war and for the ultimate prevalence of freedom depends as heavily on the General Assembly as on our missiles. In this context debater's tactics and semantic jockeying over the ultimate cash advantage over one method of financing the U.N. as against another are unseemly.

The fact is the United Nations and our representatives there have themselves determined that the bond issue now before the Congress for consideration is the most effective way of maintaining U.N. solvency and for averting a financial crisis which would jeopardize the U.N.'s effectiveness as an instrument for world peace.

Our national administration has assured the American people that the bond issue, as proposed in the bill before you, promotes our national interest better than any other alternative. In reality, the choice now is not "Yes or something else", but "Yes or No." In this circumstance, surely it is incongruous to split statistical hairs in an effort to establish irrelevant, hypothetical savings as an argument for a method of financing that has not been proposed to us by the United Nations, and which, at best, would require a long period of debate during a period when time itself is unraveling and the peace of the world is eroding in Africa, in Berlin, in Asia, and perhaps in our own hemisphere.

For these somber reasons, it is inappropriate for one side to score political points against the other side on the basis of dubious arguments about which is the better method for encouraging self-reliance and sound credit practices among the nations of the world now in arrears on the U.N. books.

It is the judgment of the men and women in the American labor movement that the deficiencies and delinquencies of other nations with respect to the U.N. are a challenge to us to strengthen the world organization and not an excuse for diluting our own commitment.

During the last year the U.N. has demonstrated its effectiveness in such explosive situations as the Congo-where, without U.N. intervention, chaos and civil war would have resulted and the peace of the world would have been in grave jeopardy.

The most significant advances made toward peace and justice in the world have been in those areas where the world community has worked through the United Nations. Through the U.N. the free nations of the world have won new allies in the commitment to the principle of world order, have rebuffed Communist efforts to emasculate the U.N. ability to act to carry out the will of the people of the world, and have frustrated the Communist attempts to subvert the possibility for a rule of justice in the Congo.

Simultaneously with the direct Communist attacks on the integrity of the United Nations, there has been a parallel effort to reduce the U.N. to ineffectiveness by cutting off its funds.

Thus, the Soviet bloc has refused to contribute any financial support to the U.N. forces in the Gaza strip or in the Congo, despite a specific initial Soviet vote in favor of a U.N. Congolese force.

Under the rules governing the United Nations, the Soviet powers can now refuse to pay the cost of these special programs without jeopardizing their standing or vote in the U.N. organizations.

However, any nation which falls 2 years or more in arrears in the payment of the regular assessments for the maintenance of the U.N. is suspended and loses all its rights as a member organization.

By making use of this principle, the proposed United Nations bond issue would present the Soviet bloc with the choice of paying its share of the cost of the Congo and Gaza strip programs or, in effect, withdrawing from the world organization.

What has made it possible for the non-Communists in the United Nations to compel the Soviet bloc to pay up on its obligations or to get out is the rule which excludes the possibility of a Soviet veto in U.N. administrative decisions. Free from the paralyzing effect of the veto, the General Assembly of the United Nations voted to issue $200 million in bonds to pay its debtors, restore its solvency, and to finance its continuing activities. These obligations will be repayable over a period of 25 years at 2 percent interest. Income from assessments on all the members of the U.N. will furnish the funds to pay off the bonds and interest.

Two years ago, speaking before the AFL-CIO International Affairs Conference in New York, I declared that each dollar we spend through the United Nations in the struggle for a world we can live in, is worth $10 spent unilaterally.

In the 2-year interval the exchange value of money spent through the United Nations has, if anything, increased.

In summary, I hope you will note that by the purchase of the bonds, the United States will actually reduce its share of the cost of U.N. peacekeeping efforts from 47.5 to 32 percent as the procedural rules which will be written compel the Soviet bloc to pay its proper proportion of the U.N. budget.

In the past, the United States did purchase U.N. bonds to make possible the erection of the U.N. Building and you know, of course, that the U.N. met the payments on these obligations punctually.

It is also our belief that the preponderance of Americans take for granted that the financial advantages of the bond issue are relatively unimportant when compared with the overwhelming need of the world for the effective and solvent operation of the United Nations.

For all these reasons we hope the apparently technical provisions of this legislation will not obscure its vital importance to the people of the entire world and that the Congress enacts the necessary enabling legislation without delay.

What the Congress is considering now is a proposal to lend the United Nations a sum that is less than the amount spent last year by some American corporations to advertise soap. It is less than one-tenth of the profits of certain other American corporations last year, a fifth of 1 percent of the cost of sending a man to the moon.

Actually, what the United Nations has requested and the President has urged on us is, in effect, that each American lend the United Nations approximately 55 cents, which the United Nations will repay.

We in the labor movement sincerely hope you will keep before you these two choices in the balance: one choice, 55 cents from each American for the United Nations; the other choice, serious impairment and possible destruction of one of the great pillars on which our hope for peace and survival rests. Sincerely yours,

WALTER P. REUTHER, President International Union, UAW. Chairman MORGAN. The next witness is Dr. Francis O. Wilcox, Division of Peace and World Order, General Board of Christian Social Concerns of the Methodist Church. Dr. Wilcox was head of the staff of the Senate Foreign Relations Committee for many years,

and then went to the executive branch, and he is very familiar with both the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations.

It is a pleasure to welcome you back to this committee today. If you have a prepared statement, you may proceed.

STATEMENT OF HON. FRANCIS O. WILCOX, DIVISION OF PEACE AND WORLD ORDER, GENERAL BOARD OF CHRISTIAN SOCIAL CONCERNS OF THE METHODIST CHURCH

Mr. WILCOX. Thank you, Mr. Chairman. It is always a real privilege for me to appear before this distinguished committee. I shall not trespass long upon the time of the committee, because I am sure you are familiar with the issues and the details involved in the bill before the committee.

The testimony which I am presenting today is presented on behalf of the Division of Peace and World Order, which is the official agency of the Methodist Church assigned to work in the field of international relations. I happen to be a member of the Metropolitan Memorial Church here in Washington, and I am the chairman of the Christian Social Concerns Commission of that Church.

As you know, the Methodist Church is very deeply interested in the work of the United Nations, and it has consistently supported that Organization. It has not gone on record officially and specifically with respect to this particular bond issue, but I think from the resolutions which the General Conference of the Methodist Church approved at its last session in 1960, that the support of the leaders of the church for the Organization is quite clear, and one could certainly draw conclusions from those resolutions that the church continues to favor adequate support for the work of the United Nations.

There are a good many reason why I believe it is very much in the national interest for the Congress to support the President's request for the authority he needs to rescue the United Nations from its present financial crisis. While the bill before you is certainly not a perfect solution, it is the best the wit of man has been able to devise. It is an extraordinary step designed to meet an extraordinary situation. It would pull the United Nations back from the brink of bankruptcy and it would give the members a much needed breathing spell during which time we can assess the situation and lay plans for a longer range solution to an extremely difficult problem.

There are a good many advantages, it seems to me, Mr. Chairman, in approaching this problem in this particular way. I like the bond issue idea because it would reduce substantially our own contribution toward the cost of maintaining United Nations forces in both the Middle East and the Congo, and it would underline, it seems to me, the responsibility of the Soviet Union and certain other countries to help pay for important peacekeeping operations like the Congo.

It also has a very significant practical aspect in that in arranging for a 25-year repayment period it would encourage many smaller countries with very limited resources to shoulder their share of the burden.

There are, of course, a few people left in this country who think we ought not to continue to support the United Nations. This opposition to the Organization, it seems to me, is based more on fear than on fact, more on theory than on practice. It is based primarily on the fear which people have that the United Nations will become an uncontrollable organization in view of the admission of all the new countries from Asia and Africa. They could exercise a controlling influence in the General Assembly if they could agree upon a common program of action, but the divisive forces among them are very great indeed, and it is not likely they will be able to stand together on very many important issues.

Nor should we assume that they are going to vote against the interests of the free world. Certainly the United States has fared exceedingly well in the United Nations. This is partly because the great objectives which are outlined in the charter are virtually identical with the overall objectives of American foreign policy.

The last session of the General Assembly is a very good case in point. At that time a number of people were suggesting that the United Nations was about ready to collapse, and I think in view of the tremendously difficult problems that faced the Assembly, the members did a remarkably good job discharging their responsibilities with a good deal of restraint and moderation. The record, I think, was a surprisingly good one.

Also, I am quite impressed with the response of the smaller countries to the financial crisis which the United Nations faces. Four of the nonalined countries-Ethiopia, Malaya, Tunisia, and Yugoslavia took the lead with Canada, Denmark, Norway, and Pakistan in sponsoring the resolution relating to the bond issue against the opposition of the Soviet bloc.

Also, of course, the response since that time has been very good, with more than $72 million in bonds having been purchased or pledged on behalf of 43 nations. Forty-five other states are currently considering the matter, many of them favorably. I think it is an excellent record.

Moreover, if the advisory opinion of the World Court, which probably will be handed down today or tomorrow, is favorable, the United Nations could make a great deal of progress in collecting past arrears. The Soviet Union, for example, by 1964 would be in arrears sufficiently to bring into play the penalty provisions of article 19 of the charter, which provides that a state shall lose its vote in the General Assembly if it is in arrears the equivalent of 2 years of its contributions.

May I say just a word, Mr. Chairman, about the two crises which gave rise to the present financial difficulties of the United Nationsthe Middle East and the Congo. Since I served as Assistant Secretary of State from 1955 to 1961, I participated in the decisions which helped to launch the United Nations on these two very fateful ventures. I believed then and I believe now that they were right decisions, decisions which prevented world crises of a far more serious nature. We supported United Nations intervention in the Suez crisis because we believed that the best chance of preserving world peace there was through collective action. The presence of U.N. forces made possible the withdrawal of foreign troops from Suez, and the continuing presence of the U.N. Emergency Force in the Middle East has