not to use it and therefore submitted a separate request for authority to make this loan. Mr. FRELINGHUYSEN. I notice that the recommendations originally made by the President with respect to the language suggest that the $100 million should be used, and I quote, "for the purchase of United Nations bonds." The language in the Senate bill is an authorization for a loan to the United Nations. Is there any distinction, in your opinion, between the language originally proposed and the language as passed by the Senate? Mr. STEVENSON. Really, there is no distinction as to meaning. I think some of the Senators, during the discussion in the Senate, preferred a loan to the purchase of bonds because they were fearful of the precedent that the latter might establish. Mr. FRELINGHUYSEN. Isn't the loan money going to be used for the purchase of bonds if it is authorized Mr. STEVENSON. Yes; the bonds will be the evidence of the indebtedness. Mr. FRELINGHUYSEN. There isn't any difference, then? Mr. STEVENSON. No. Mr. FRELINGHUYSEN. It could be used. It is a broader authorization, but it will not be used in a way different from what was originally recommended; am I correct? Mr. STEVENSON. I think that is correct. Mr. FRELINGHUYSEN. You referred several times to the fact that the proceeds would be used for future expenses. As I understand it, the expenses are only those running up through the present fiscal year. The loan would not be for the future operations of the United Nations at all; is that not correct? Mr. STEVENSON. Yes; this money would be used to pay the operating cost of the special operations as long as the money would last. We assume that would be through a good part of next year. Mr. FRELINGHUYSEN. The President's message in January, point 1, says this money is to cover anticipated expenses for the U.N. operations in the Congo and the UNEF, through the end of the present fiscal year. I would assume that would only be available for expenses through the end of the present fiscal year? Mr. STEVENSON. That is the period the assessment covers. the period for which the proceeds of this loan would be used. Not Mr. FRELINGHUYSEN. That is not my reading of the language. It says, "To cover anticipated expenses through the end of the present fiscal year." Only those expenses running through June 30, not the ones thereafter. Mr. STEVENSON. I think what you are reading refers to the assess ments. Mr. FRELINGHUYSEN. I am reading from the message of the President of the United States, January 30, 1962. Mr. STEVENSON. I am going to ask Secretary Cleveland if he would be good enough to answer the question. STATEMENT OF HON. HARLAN CLEVELAND, ASSISTANT SECRETARY OF STATE FOR INTERNATIONAL ORGANIZATION AFFAIRS Mr. CLEVELAND. The President's message referred to three parts of the U.N.'s financial plan. One part was the reference to the Court which has been discussed. One part was the bond issue. The third part was an assessment to cover the period from the beginning of November last year to the end of our present fiscal year. The funds to cover that, as far as the United States is concerned, are actually in a supplemental appropriation request pending before the Congress. That is part of the present appropriation process here. This was a special assessment, in other words, to cover the expenses for the period up through June 30, 1962. From July 1 this year on, there is no assessment by the General Assembly, and no appropriation provided for in the President's budget as far as the U.S. share is concerned; that was on the assumption that the proceeds of this U.N. loan-bond arrangement would be available to pay the ongoing expenses for peacekeeping from July 1 on. Mr. FRELINGHUYSEN. Perhaps we will have greater leisure to discuss this with you at a later date, Mr. Cleveland. It still isn't clear to me if, for instance, a crisis arises in Rwanda, whether there will be funds available after the 30th of June that could be immediately utilized. Governor Stevenson, I believe, said that unless financing were available prior to the event he did not anticipate the United Nations could move any peacekeeping forces in any future emergency. I am not sure whether there are funds available or whether there are not, if the money should be forthcoming as a result of issuing these bonds. Mr. STEVENSON. The proceeds of these bonds would be available, if the General Assembly wanted to use them, for Ruanda-Urundi or any other purpose. Mr. FRELINGHUYSEN. For future emergencies? Mr. STEVENSON. Yes. Mr. FRELINGHUYSEN. It is not at all clear. It is also incomprehensible to me why, after a lapse of 6 months after the passage of the U.N. resolution, we have not already actively engaged in the process of developing a program for long-term financing of these peacekeeping operations. Why do we argue that we can't do anything, that our hands are tied until the advisory opinion of the International Court of Justice has been handed down? This seems to me very shortsighted. It seems to me we have two alternatives-either this opinion is going to be affirmative, or negative. Should we not develop alternative programs, in any event, about the long-term problem facing us regardless of the decision of the World Court? Mr. STEVENSON. If I gave you the impression that we haven't done work on this or thought about it, I was in error. I think I said that we have reflected over a great many alternatives, at least all the alternatives that have occurred to us. I enumerated them. Our studies in this field have advanced very far. We don't have any consensus on them. We don't have any agreement of the Secretary General. We don't have any agreement among other countries. It has been very difficult to do this and our other work concurrently. I haven't any doubt, once the immediate financing problem is out of the way, that these plans we have made and these sugges tions we have developed will have active consideration by the Secretary General. Mr. FRELINGHUYSEN. Do your possible plans include a revision of the charter? Mr. STEVENSON. Not a revision of the charter for this express purpose. We have active plans for revision of the charter for other purposes, largely the enlargement of the Council-the Economic and Social Council, and the Security Council. Mr. FRELINGHUYSEN. I notice that the December U.N. resolution authorizing these bonds says that the proceeds of the sale of the bonds can be used, and I quote, "for purposes normally related to the Working Capital Fund." I wonder what the Working Capital Fund is? Specifically, would the Congo operation be related in some way to the Working Capital Fund? Mr. STEVENSON. The Working Capital Fund is to accommodate the situation that results from the fact that assessments are made and are payable in January. Actually, the assessments are made in January but they don't have to be paid for a year afterward. As a result of this, there have been shortages frequently in the United Nations operating resources, and for that purpose, a Working Capital Fund has been established in order to carry us over these periods in which Mr. FRELINGHUYSEN. These funds would be available to make up for the arrearages in the normal accounts of delinquent nations? Mr. STEVENSON. Yes. Mr. FRELINGHUYSEN. Not the special peacekeeping Mr. STEVENSON. For all purposes. Mr. FRELINGHUYSEN. How many of the nations which have already pledged to buy bonds are currently delinquent in their obligations to the U.N.? Wouldn't it be more advisable for them to pay up their arrearages than to pay out on bonds? Mr. STEVENSON. We think it would have been desirable, yes, but they didn't pay up. How long it is going to take us to collect from them is a question. Mr. FRELINGHUYSEN. How many of the commitments to purchase bonds are being made by nations which are already delinquent on their current obligations? Mr. STEVENSON. If your question is how many nations have promised to buy bonds, who are already delinquent in their assessments for special operations, I would have to provide you that information. Mr. FRELINGHUYSEN. I don't know whether this is true, because I haven't time to check. I assumed you would know. I understand there are about 15 nations which already owe $16 million, which have pledged to buy somewhat over $12 million worth of bonds. Mr. STEVENSON. That could be. Mr. FRELINGHUYSEN. This doesn't seem to be very strong support for the U.N. bond issue if a substantial amount is coming from nations which are already delinquent to the U.N. for greater amounts? Mr. STEVENSON. I am sorry, Mr. Congressman. I can't answer that question or explain what their circumstances are without knowing who they are. (The following information has been supplied for the record:) It was determined that, in order to put the United Nations financial house in order, a breathing spell of about 18 months would be needed. During this breathing spell all nations would be urged to pay up their past arrears, to pay their current assessments without delay, and to purchase some of the United Nations bonds. The following is a list of countries which have purchased or have pledged to purchase U.N. bonds to help finance the organization, even though they are in arrears in U.N. payments to the regular budget, UNEF, or UNOC as of May 31, 1962: I. Total: Seventeen such countries have purchased or pledged: 1. Countries in arrears only on regular budget: Israel (purchased $200,000). Pakistan (pledged $500,000). 2. Countries in arrears only on Congo account: Austria (pledged $900,000). Ecuador (pledged $12,000). Iran (pledged $500,000). Italy (purchased $8,960,000). Yugoslavia (pledged $200,000). 3. Countries in arrears only on UNEF and Congo: Afghanistan (pledged $25,000). Ethiopia (pledged $200,000). Jordan (pledged $25,000). Venezuela (pledged $300,000). Pakistan 4. Countries in arrears only on regular and Congo: Cambodia (pledged $5,000). 5. Countries in arrears on all three accounts: China (pledged $500,000). Mr. FRELINGHUYSEN. One final question if I have the time, Mr. Chairman. I wonder whether currencies other than dollars could be used to purchase bonds? Mr. STEVENSON. I think the answer to that is that they could be if the Secretary General so decides. Mr. FRELINGHUYSEN. That isn't an unreasonable imposition on the Secretary General? In other words, he would be likely, I assume, to authorize purchases of bonds in currencies other than dollars, would he not? Mr. STEVENSON. Where, for example, he has local bills payable, as, for example, for troop support in India. There are a large number of these forces in the Congo that come from India. Chairman MORGAN. The gentleman's time has expired. Mr. Gallagher. Mr. GALLAGHER. Thank you, Mr. Chairman. Mr. Ambassador, as to the planting of the germ of partisanship, which may have been injected into this hearing, I would think the record should disclose, while one part of the State Department which you are vitally concerned with, would happily accept the use of the President's contingency fund as a method of operation, there is another part that would feel that the contingency fund that the President has requested would be completely depleted if the U.N. bonds were purchased from the contingency fund. While the operation in the past has been partly supported through the contingency fund, the foreign aid authorization request this year does not include the United Nations bond proposal. Anticipating the proceedings of several weeks from now on foreign aid, I would like the record to show this. Mr. STEVENSON.. I think if I may interrupt to say I don't think any of us would be pleased with using the contingency fund as a means of financing the United Nations. I think we have to have a much more solid and firm basis. Mr. GALLAGHER. Thank you. There is another school of thought which contends that we ought to wait until there is a declaratory judgment in the World Court and it has been handed down. Is it not so that, regardless of the judgment, the need for these funds will be strongly required whatever the decision may be? Mr. STEVENSON. Yes. I tried to make that clear in response to Mrs. Church's question. I think whatever the decision of the Court is these funds are going to be necessary in any event. We can't begin to collect all those arrearages, and even if we could collect them right away they wouldn't be adequate. Mr. GALLAGHER. Is not this question vital? One is how are we going to collect the arrearages, and the second part is how are we going to pay for the future operations which is what the U.N. bond issue concerns itself with. Mr. STEVENSON. Yes. Mr. GALLAGHER. I would like to take this time to reply to the gentleman who was discussing budgets with you, why is the NATO budget not in the same proportion as the United Nations budget. The fact of the matter is the United Nations includes the adversaries of the NATO. The aims and mission of NATO are far more harmonious than they would be in the United Nations. Another question which I would like for the record, it probably would help us out when we get to the hearing on this-the fight on the floor on this-this question: If we only explored other avenues of raising this money which you explained to the committee, Mr. Ambassador, just what explorations were made, did anyone come up with another solution more palatable than the one we are discussing today? Mr. STEVENSON. The answer is that many possible solutions were considered. None were advanced which would be as palatable or as satisfactory as this one. Mr. GALLAGHER. What nations, if any, Mr. Ambassador, have pledged themselves for the purchase of bonds over and above their normal assessment? Mr. STEVENSON. Your question was what nations have promised to purchase or have purchased bonds in addition to paying their regular assessments? Mr. GALLAGHER. No, sir. What nations have purchased or have pledged to purchase an amount of bonds exceeding their assessment. The premise being that one of the criticisms is that the United States is solely carrying this bond proposal. Mr. STEVENSON. I could enumerate a number of countries, including all the Scandinavian, who have pledged more than their regular assessment. |