Union of Soviet Socialist Republics-Status of payments as related to art. 19

Mr. CHIPERFIELD. I hope you can give us some idea of how this permanent problem is going to be resolved.

I thank you very much, Mr. Secretary.

Mr. BALL. Thank you.

Chairman MORGAN. Mr. Zablocki.

Mr. ZABLOCKI. It is good to see you, Mr. Secretary. Since it is contemplated that the Congress will be in session until the latter part of August, probably until Labor Day, and in view of the fact that Ambassador Stevenson advised this committee that the advisory opinion of the International Court of Justice will be forthcoming in a few weeks, can you give us any reasons why the Congress should not withhold action on the U.N. bond issue until after the Court's opinion is studied?

Mr. BALL. I would say two things, Mr. Zablocki. First of all, that there is a very urgent need for funds on the part of the United Nations to maintain its current operations. Its cash position is very low indeed.

Secondly, that the action taken by the United States would have force on the other nations. The other nations have announced an intention to subscribe a third of the $200 million. I think if the Congress would act promptly we would have some assurance of other nations acting with commensurate speed.

The third point that I think that we have got to face squarely is that while we believe that the International Court of Justice is going to hold in accordance with the position that we have taken, we believe this because we think that our legal position is eminently correct and we would be very much surprised by a different opinion by the Court of Justice.

Nevertheless, if the International Court of Justice were to hold against us, we could still not, in my judgment, without great risk to the interests of the United States, fail to find financing to continue these operations. This is a matter where I think we have to be extremely hardheaded in this sense, that we have to look at it from what is the national interest of this country. It is our view that the national interest is greatly served by the continued availability of the United Nations to continue these operations.

It is our opinion that the United Nations-that our interest would be very seriously impaired if this if these operations would have to be discontinued. We are up against a hard financial crisis. So while we have great confidence that the International Court of Justice is going to make it easier to bring about the collection of these assessments, I don't think we can make the action that we take with regard to this bond issue depend on what the International Court of Justice does.

The bond issue remains valid no matter what the decision of the International Court of Justice is.

Mr. ZABLOCKI. It is generally agreed that this legislation would have an easier time in Congress if the opinion of the Court will be favorable to our position. You maintain, however, that because of the current financial distress of the United Nations, it would be prefable for the Congress to act expeditiously.

Mr. BALL. We feel that very strongly, Mr. Zablocki.

Mr. ZABLOCKI. On page 13 of your statement you state that the United States extended a $65 million loan to the United Nations for the construction of the U.N. headquarters. How much has been repaid on the loan?

Mr. BALL. I think all of it has been repaid. I am told there is no delinquency, that all the amortization and interest payments have been made on time. It is $65 million. It is spread over a period of 34 years, of which 14 years have transpired. There are 20 years to go. The principal outstanding is about $40 million.

Mr. ZABLOCKI. In other words, the $65 million is divided by 34 years?

Mr. BALL. That is right. I don't know if the amortization and interest payments are evenly spaced or not. I am told the present outstanding indebtedness with regard to this let's see, I have the repayment schedule here.

In July 1962-this doesn't show the-we will put the exact figures in. I think it is about $40 million yet outstanding.

Mr. ZABLOCKI. The experience with the U.S. loan seems to establish that the U.N. has a record of prompt repayment of its obligations. I would like the record to show this.

Mr. MURPHY. Will the gentleman yield?

Mr. BALL. Yes, sir; there has been no default.

Mr. MURPHY. Mr. Under Secretary, repayments are being paid out of the regular assessment of member states; is that correct? Mr. BALL. That is correct.

(The information is as follows:)

INFORMATION ON REPAYMENT OF THE UNITED NATIONS HEADQUARTERS LOAN

The amount which was repaid on the $65 million U.N. headquarters loan as of June 28, 1962, was $20 million. The remaining U.N. indebtedness was $45 million. The terms of repayment and repayments made are shown below: United Nations Headquarters-Loan agreement between the United States of America and the United Nations 1

1 The U.S. loan to the United Nations for the United Nations headquarters building in New York City was made in 29 separate advances between 1948 and 1953, totaling $65,000,000 U.S. dollars. Authorization for the loan was contained in Public Law 903, 80th Cong., Aug. 11, 1948.

The $2,500,000 repayment. due on July 1, 1962, has also been paid and on time.

Chairman MORGAN. Mrs. Kelly.

The

Mr. BALL. Excuse me, Mr. Murphy. Just as I may say it is contemplated that this loan would be repaid out of the regular assessments the amortization and interest payments each year. Senate bill contemplates we would deduct the amount of the amortization payment and interest due each year from our regular assessment. Chairman MORGAN. Mrs. Kelly.

Mrs. KELLY. Thank you, Mr. Chairman.

Mr. Secretary, I believe you stated this plan of financing is the one that you recommended most highly; is that correct?

Mr. BALL. That is right.

Mrs. KELLY. You also have said it is in the best interests of the United States; is that correct?

Mr. BALL. I certainly say that.

Mrs. KELLY. May I deduct from that that this plan is a U.S. plan? Mr. BALL. It is strongly supported by the United States and the United States participated in the development of the plan.

Mrs. KELLY. We initiated this particular plan; is that correct? Mr. BALL. I am told that we participated in it, but to say it is a U.S. plan as such would be somewhat overstating the situation.

Mrs. KELLY. Is there another plan which would be more desirable by other nations?

Mr. BALL. No. There were other possibilities of financing considered, but this plan was deemed by all the nations, I think, that participated in the development of it as being the best plan that could be developed under the circumstances.

Mrs. KELLY. Mr. Secretary, there are some problems bothering me at this time about this matter, more than any other problem since I have been a Member of Congress for 11 years. We have many important bills before us in Congress affecting our foreign policy; the trade bill, foreign assistance act, and now this bond issue. All of these are to secure peace in the world-freedom-and all of them are based on mutual responsibility and cooperation with our allies.

It seems to me, Mr. Chairman, that our allies of the free world are a little derelict in their responsibility at this time. I don't know what I can do as a Member of Congress to endeavor to change this. I have brought many of these problems to the attention of the previous administration and to you, Mr. Secretary. I am particularly annoyed by the trade behind the Iron Curtain-trade with the U.S.S.R. and the captive nations.

I think our allies import too much material, particularly Russian oil. This whole situation I think is annoying to Members of Congress. What can I do? What can we do?

As a nation we can't tell our allies how to act, so I am told. What can we do to make these people understand from now on there is mutual responsibility in everything we do?

Mr. BALL. Let's for the moment separate the two questions-one of the financial and material contribution to the keeping of the peace, and the defense of the free world. We are in a position where there are great forces at work in the world, great changes, where the nations of the world that were affected by the war most severely are now becoming relatively prosperous, many of them.

I don't think that their sense of responsibility has been developed commensurate with their developing prosperity. This is a matter

which is of real concern to us. It is a matter where we are continually active in bringing this to the attention of the nations.

We are making some progress. We have made progress in seeing Germany assume a much greater burden of helping the underdeveloped countries in the last 2 or 3 years. We have made progress in bringing about some strengthening of the force levels in NATO. This is still something we are working actively on.

The matter of contributing to the United Nations is something where I am reasonably confident we are going to see progress also. It isn't as fast as we would like. I think there are legitimate reasons why we should feel quite irked and impatient from time to time on this.

I fully share the view of the committee on this. I would hope that if we keep this matter constantly brought to the attention of these nations and urge them to take a larger share, that they will in time. But meantime we can't say because they are not fully meeting their obligations that we can abandon our efforts to see that the peace is maintained, to see that the free world is defended.

Our interests are too vital to be neglected or for us to let our exertions be reduced. This is a hard situation, but I think that is what it is in reality.

Mrs. KELLY. In other words, then, I must have greater faith in the administration to pursue the endeavor to persuade these nations to live up to their mutual responsibility.

Mr. BALL. We are doing the best we can and will continue to do so. Mrs. KELLY. Without any stronger action by amendments on the floor?

May I ask one more question? Take for example the problem of Canada's pledge. May we hope that they will be in a position to carry this out? May I also stress to you that I certainly think that a German contribution of more than $10 million should be requested. Mr. BALL. Germany is not a member of the United Nations.

Mrs. KELLY. I realize that. Because she isn't the free world is bearing the responsibility of protecting her interest. Germany is in an excellent economic position. Is it possible to have Germany increase purchases of the bonds?

Chairman MORGAN. Mr. Broomfield.

Mr. BROOMFIELD. Mr. Secretary, I have three questions I would like to ask you. The first is, the General Assembly on the vote on the bond issue was 58 for, 38 against, and 33 abstaining. It means only a bare majority voting for it.

Does it mean the bond issue is not a popular issue with many of the members of the U.N.?

Mr. BALL. Let met have a look if I may at the voting record.

As I understand it, the vote according to our records on the bond issue was 58 for, affirmative votes, 13 against, which consisted of the Communist bloc, plus France and Belgium, and 24 abstaining. The actual majority there is 58 to 13.

Mr. BROOMFIELD. Your figure is what? Twenty-four abstaining; I had 33. Regardless of the fact, what is the reason they didn't make known their feelings on the particular issue?

Mr. BALL. You are speaking of the abstainers?

Mr. BROOMFIELD. Yes; that is right.

Mr. BALL. I think that it related primarily excuse me for a moment. I will consult again—I am told by my colleagues, including Ambassa