PURCHASE OF UNITED NATIONS BONDS

THURSDAY, JUNE 28, 1962

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, D.C.

The committee met at 10:30 a.m., in the Ways and Means Committee room, 1102 New House Office Building, Hon. Thomas E., Morgan (chairman) presiding.

Chairman MORGAN. The meeting will come to order.

The committee meets this morning for a continuation of the hearings on purchase of United Nations bonds in support of the U.N. bond legislation. The witness is the Honorable George W. Ball, Acting Secretary of State.

Mr. Secretary, you have a prepared statement? You may proceed, sir.

STATEMENT OF HON. GEORGE W. BALL, UNDER SECRETARY OF STATE

Mr. BALL. Thank you, Mr. Chairman, I do have a statement.

I appear today in support of legislation authorizing the appropriation of up to $100 million for use as a loan to assist in financing the United Nations peace and security operations.

The President has succinctly summarized the problem before us in his message to the Congress on January 30, 1962, when he said:

The United Nations is faced with a financial crisis due largely to extraordinary expenditures which it incurred in fulfilling the pledges in its charter to secure peace, progress, and human rights. I regard it as vital to the interests of our country and to the maintenance of peace that the capacity of the United Nations to act for peace not be inhibited by a lack of financial resources.

Up to now, the United Nations has tried to meet the cost of its extraordinary peacekeeping activities in the Middle East and in the Congo-by special assessments levied on all members. These special assessments have been running at a rate of about $140 million a year, or approximately double the size of the regular assessments for the ordinary budget.

The United States and many other countries have paid their special assessments-indeed, the United States has made substantial voluntary contributions-but some nations are delinquent. Some claim that they are financially unable to carry the heavy added burden; others are out of sympathy with the operation; and still others deny their legal obligation to pay their share of the costs.

In spite of the accumulation of unpaid assessments, the United Nations has been able to meet its expenditures but only by drawing down its working capital, by internal borrowing operations, and by

deferring payment on some of the peacekeeping expenses it has incurred. Today, with an estimated deficit of about $137 million, the United Nations has exhausted its ability to finance itself by these methods.

To put its affairs on a sounder basis, the United Nations has adopted an interim financial plan. This plan includes, as its principal elements, a systematic program for collecting arrearages and a bond issue of $200 million payable in 25 years at 2 percent interest. It is envisaged that the United States would provide up to one-half of this financing needed to continue peacekeeping operations that have well served the national interest of this country.

I shall speak further about this financial plan in a moment, but first I propose that we look briefly at the usefulness of the United Nations. to the United States.

The United Nations is an imperfect organization in an imperfect. world. It has its obvious limitations, its manifest problems. Nevertheless, it remains an essential instrument of U.S. foreign policy— just as it is an instrument of the foreign policy of every other member

state.

The United Nations is not, of course, the only foreign policy instrument available to us, nor is it usable at all in many situations that arise in our relations with other nations. Yet it has served in the past, and it must continue to serve in the future, as a major mechanism through which we seek to maintain the peace and advance the cause of freedom. As the one major global institution the United Nations, directly and through its specialized agencies, engages in many different kinds of activities. Not all of these activities are of the same importancebut unfortunately this fact is not always recognized. All too often, in discussing the United Nations, we neglect to separate the essential from the merely useful. This has, I think, contributed to much of the misunderstanding and confusion that have characterized recent discussions of this vital subject.

What are the principal functions the United Nations performs today? Quite clearly, they are not those that mainly preoccupied the delegates at San Francisco in 1945, when the charter was being drafted. The assumption—or at least the hope-which inspired the drafters of that document was that the great powers, allied in World War II, would be able to live in relative harmony and could cooperate in policing the postwar world. They could settle whatever differences arose among them within the forum of the Security Council.

As we know all too well, the effort to fashion one world with one treaty hardly lasted through the first General Assembly. The Soviet Union disclosed quite quickly that its purposes were not those of the United Nations Charter. Over the next 4 years, the Iron Curtain dropped down to form a cage around one-third of the world's population-living on the great land mass that stretches from the Brandenburg Gate to the Yellow Sea.

The United Nations was thus frustrated in its original objective of serving as a forum for reconciling differences among the great powers. This has not, however, destroyed its usefulness-indeed, its indispensability.

Instead, the United Nations has found its postwar destiny in quite different but no less effective endeavors.

I should like this morning to emphasize two of the most important roles that the United Nations has played-two roles that have rendered it an essential instrument of American foreign policy.

The first of these roles has been to prevent the confrontation of the great powers under circumstances that could lead to a nuclear conflict. If the United Nations has been unable to fulfill its original purpose of bringing the great powers together, it has at least succeeded, in significant instances, in keeping them apart.

By bringing about the settlement of conflicts through consultation and debate, and by interposing itself as an agency to keep the peace in areas where chaos might otherwise invite great power intervention, it has served a vital purpose in avoiding situations that might otherwise have produced a major war.

The U.N. was scarcely organized before it was involved in the difficult and dangerous business of peacekeeping in Iran, Greece, Indonesia, and Kashmir. Since then it has played a part in stopping aggression, threatened aggression, or civil war, in Palestine, Korea, at Suez, and in the Congo. In all of these conflicts the great powers had interests. In the absence of the U.N. they would in all likelihood have intervened to defend those interests. Intervention by both sides could have led to a dangerous confrontation.

The most recent and perhaps most spectacular of the trouble spots in which the U.N. has acted to prevent great power confrontation is, of course, the Congo. Here the U.N.-with full U.S. support-interposed itself in the nick of time. The Soviet Union was already moving in, and we could never have stood by while it set up shop in the heart of Africa.

The intervention of the U.N. prevented the chaos that could well have turned the Congo into another Korea. Today, it is doing its best to bring about the conditions under which an integrated Congo Republic can work its way toward stability and peace.

I would suggest, therefore, that in thinking about the Congo and about other areas where the United Nations is brought in to keep the peace, we should ask ourselves this question: From the point of view of our national security, would it have been better to send in the American Marines, or to act with others to send in the United Nations in the name of the world community?

Obviously, the U.N. cannot keep the peace without expense. Today, it has more than 20,000 men in the field-more than 22,000, I think-patroling the truce lines in the Middle East and keeping the lid on the Congo. This is manifestly the work of an executive agency of considerable capacity and skill, capable of performing pragmatic tasks such as mobilizing, transporting, commanding, and supplying substantial forces in the field when an emergency arises.

The U.N. has played a second role of vital importance by serving as a forum in which the industrial societies and the less developed nations can be brought together. This is an accomplishment of great significance, particularly when considered in the light of the revolution that has occurred since the end of World War II. In this brief period one-third of the world has made the eventful passage from colonial status to some form of national independence. Almost 50 new states have come into being; a dozen more are actively in the making.

This transformation, involving as it has the breakup of the great European empires, meant the collapse of a long-standing system of

world order. It meant the sudden rupture of old ties, the sudden emergence of new states, and the sudden liberation of a billion people from colonial dependence. The world has never known a comparable political convulsion.

Yet this revolution-this rapid transformation from dependence to independent nationhood of a billion people has for the most part been achieved in a peaceful and orderly manner and in a fantastically short time and largely because of the existence of the United Nations. Adrift from their previous associations, these new countries found in the United Nations an organization that gave them status on the world scene and a political system in which they could have a full sense of participation with older, advanced countries. They found there, too, a family of technical organizations whose international staffs could help conceive and carry out the development plans which these people now expect their governments to pursue.

Even had it done nothing else, the U.N. has fully justified its existence by its central role in the complex business of assisting almost 50 new states to make the perilous voyage from dependence to sovereignty a transition accompanied by speeches rather than by shooting. This is, I think, one of the striking achievements of our time.

Sometimes we are irritated by the performance of certain of these newer nations in the United Nations and its General Assembly-and this irritation tends to be transferred to the U.N. itself. In assessing their attitudes and actions, however, we should realize that in the eyes of the new nations the U.N. has a very special significance.

The immediate and natural ambition of every new nation is to establish its national identity. Membership in the United Nations has served this purpose; it has become the badge of independence, the credential of sovereignty, the symbol of nationhood and the passport to the 20th century.

When the delegation of a new nation is seated in the U.N., it has arrived; it can look the world in the eye and speak its piece. And even if that piece may on occasion be discordant to our ears, the fact that it can be spoken has helped to stabilize the postwar period.

Yet the U.N. is more than a place for letting off steam; it is also a school of political responsibility. While some of its members may represent closed societies, it is itself an open society. The General Assembly is staged for all the world to see, and performing upon that stage sometimes though not always helps turn demagogues into

statesmen.

How else can one explain the fact that at the last General Assembly the most anticolonial members of the United Nations decisively rejected a Soviet resolution calling for independence of all remaining dependent areas by 1962? They sponsored instead moderate and sensible resolutions for which we and most of our European friends could vote without reservation.

Because it can paradoxically perform the task of bringing some nations together and keeping other nations apart, the United Nations is indeed a unique instrument of policy.

But if the United Nations is an instrument of U.S. policy it is only one of many instruments available to us. It is one of the tasks of the Secretary of State and the State Department, when confronted with a particular problem, to select and utilize that instrument most appropriate for the purpose.

Clarity in understanding this task helps resolve the contradiction some people seem to find in American foreign policy, a contradiction between our reliance on the institutions of the Atlantic Community and our participation in the United Nations.

No such contradiction exists in fact. The founders of the United Nations recognized the necessity for regional institutions and explicitly provided for them in the charter. Indeed the charter calls upon members to seek settlement of disputes within the framework of regional agencies or arrangements before bringing them to the U.N. In practice we use the various institutions to which we belong for quite different purposes. The North Atlantic Treaty Organization is, of course, the backbone of our military defense of the free world against the Communist bloc. Through our own massive force and through NATO we maintain the armed strength that is the principal deterrent to Communist aggression. But just as the U.N.'s capabilities are limited, so are NATO's. Quite clearly NATO could not have intervened in the Congo to restore order when Belgium withdrew. Only a world organization could have done so without arousing anticolonialist reactions.

It is true that the United Nations cannot, by itself, maintain the peace between the major powers. It is equally true that NATO was not qualified to supervise the peaceful change from colonialism to independence. Their roles are different and distinct. Each is essential and, therefore, we support each for different reasons.

The same observation can be made with regard to the OECD (Organization for Economic Cooperation and Development) which came into being last September. The Organization of American States, as another example, gives institutional form to the American system. And the Alliance for Progress provides for a massive cooperative effort between the United States and Latin America.

Each constitutes a different instrument to serve the diverse purposes of our foreign policy.

But I am here this morning because the continued use of the United Nations as an instrument of policy is in danger. It is threatened by a financial crisis. The time has passed when short-term palliatives will permit it to meet its outstanding obligations.

What is necessary is the opportunity to put its financial house in order. This is possible through an interim program, involving longterm borrowing, together with expected authority to enforce collection of delinquent assessments.

The U.N. budget now has three major accounts. What has been termed the "regular" budget, under which all members are assessed according to an agreed formula, which meets the normal costs of operating the Organization, such as the expenses of the Secretariat, costs of annual meetings, and expenses of regional commissions. It includes some of the lesser peacekeeping expenditures, such as the truce supervision activities in Palestine and Kashmir.

This account for the current fiscal year totals $74 million before credits. The payment record has been good. For 1961 and prior years only $5.6 million remains unpaid.

To meet the much larger peacekeeping expenses of the United Nations Emergency Force and the Congo, the United Nations, for reasons of accounting convenience, established two special accountsthe special account for the Emergency Force in the Middle East,