If the Congress should now take the view that we should not proceed with the loan agreement or begin construction of the headquarters until these things were done, a heavy blow would be struck both at the organization and at the sincerity and prestige of the United States. It would be unfortunate if other members of the United Nations should feel that we were attempting to use our financial resources in this case to achieve a political end. It would be equally unfortunate if they were to feel that we had so little faith in the United Nations that we were unwilling to make this demonstration of our support.

It is proposed that we lend the organization a sum not to exceed $65,000,000. This will be repaid from the ordinary budget of the United Nations, to which we now contribute 39.89 percent of the total. What we would actually be advancing beyond our own proportionate share of the cost, therefore, is the balance over 60 percent of the principal of the loan. We would also, of course, in effect, be making a gift to the United Nations of some 60 percent of the interest which might have been earned had the money been invested in some other enterprise.

It will be clear to the Congress, I am certain, that there is no feasible alternative to financing the construction of the headquarters by a loan. Ordinarily it would have been desirable to raise the necessary funds through immediate cash contributions by all member states. But at this particular juncture, when so many are struggling to recover from the devastation of war and when all must contend with a critical shortage of dollar exchange abroad, dollar payments on the scale required would have imposed a very heavy burden on many states. Some would certainly have felt that, since the money was to be spent in this country, the United States might reasonably have been expected to make a higher proportionate contribution toward the cost of the buildings than it makes to the ordinary budget of the United Nations.

In my opinion, such an arrangement would have been most unfortunate. We have directed our efforts in the United Nations toward a reduction in our general budget quota. Our offer of an interest-free loan forestalled any suggestion that we should pay a disproportionate share of the construction costs.

A number of possibilities for financing were explored before the United States consented to enter into the loan agreement. Arrangements for private financing would have been far from satisfactory, Under the most favorable terms, a large part of the total cost would still have had to be contributed in cash. The interest rate quoted was high. It would have been necessary to mortgage the buildings as security-a step which would have involved serious legal problems and which would have required legislative action by State and possibly Federal authorities. The plans themselves would have had to be reviewed with the lenders to assure the convertibility of the headquarters to other uses in the theoretical event of foreclosure. Finally, there is a strong psychological objection to placing the United Nations under obligation to private financial interests.

Other methods of financing were also canvassed without encouraging results. It was discovered that under its Charter, the International Bank for Reconstruction and Development could make loans only to member nations, or to business enterprises with a guaranty from the Government concerned. Similarly, neither the Reconstruc tion Finance Corporation nor the Export-Import Bank appeared to

have the statutory authority to make such a loan without specific congressional authorization.

These were the circumstances in which the United States Government entered the picture. A thorough study of the problem by experts in the Department of State and the Treasury resulted in the preparation of the plan suggested by the President to the United Nations.

The interest-free feature of the proposed loan may be regarded as an offset to the financial advantages gained by the United States because the headquarters is located here. Quite apart from considerations of prestige, the principal benefits to the United States may be summarized as follows:

First, there is a substantial inflow of funds from abroad to finance United Nations activities in New York. It is conservatively estimated that about $20,500,000 was expended by foreign countries at the United Nations in 1947. This sum included the contributions of members to the United Nations budget, the expenditures necessary for maintaining permanent delegations in New York City, and expenses of the large delegations which attend the regular and special sessions of the General Assembly. There are also expenditures by delegates to smaller meetings, such as the Security Council, the Economic and Social Council, the Trusteeship Council, and many other gatherings held at the United Nations headquarters. This annual expenditure is likely to grow rather than to diminish.

Second, the United States Government makes an annual saving on the expenses of its own delegations because the United Nations Headquarters is located in New York rather than in a foreign country. If the General Assembly were held each year in Europe, for example, the additional cost to the United States in travel, communications, and other conference expenses would be at least $300,000 a year. Contact and communication between the Government in Washington and the United States delegation would be far less speedy and satisfactory. Third, the expenditures for construction of the headquarters will be made primarily in the United States. American labor will be employed on the project; American materials will go into the construction; and the furnishings and equipment for the buildings will be purchased from American manufacturers. Construction will extend over a period of several years.

Fourth, the headquarters, when completed, will be a permanent asset to the United States.

Gentlemen, I most earnestly hope that the Congress will not see fit to impose any delay in carrying out this project. The United Nations has been functioning in the United States since the spring of 1946. Since that time, foreign delegations and the staff of the Secretariat have been living and working under crowded conditions in the New York area. The temporary headquarters at Lake Success, and the temporary General Assembly building at Flushing Meadows were not designed for the use to which they are now being put. They are not the facilities the United Nations should have. Their location is inconvenient. I hesitate to attempt to compute the number of manhours lost in travel to, from, and between these buildings and the New York headquarters and residences of the various delegations.

The organization is greatly hampered in its day-to-day work by the physical handicaps under which it is operating. It is unreason

able to ask the delegations and the Secretariat staff to continue indefinitely on the existing basis.

If work could be started on the new headquarters within the next few weeks, it might be possible for construction to reach a point where the fourth regular session of the General Assembly, to be convened in September 1949, might be held in the new quarters. The third session, scheduled for September 21 next, will meet in Paris. The entire group of structures could not be completed until a later date. It is important for the prestige of the United Nations and the morale of the staff that the work go forward promptly. The members of the organization are eager to proceed.

It will be said that materials are scarce and construction costs high. Of course that is true. But can we be certain that structural materials will be more plentiful, or building costs lower, at any given future time? Already the United Nations has been forced to revise its plans once to remain within the $65,000,000 ceiling.

The headquarters project is an investment in hope, an investment in security and progress. It should be pressed forward without delay. as a token of the unshakable will of this great nation always to lead in the quest for peace. By affirmative action on this bill, the Congress can do its part in the endeavor. It can reaffirm its faith in the United Nations.

Mr. JAVITS. Mr. Ambassador, would it meet serious objection if there were included in this legislation a proposal which I very much favor myself, which would provide that if for any reason the Headquarters District is no longer used as a seat of the United Nations, that the United States should be entitled to recovery of the land and buildings in the Headquarters District in advance of any other creditors of the United Nations to cover any balance which is due on this indebtedness?

Mr. BLOOM. I thought that was provided, that the land and improvements would divert to the United States in case of any default.

Mr. JAVITS. There is the first right to purchase in the United States, then in the State of New York, and then in the City of New York, as I understand it, but this specific provision would make reverter pretty clear.

Mr. BLOOM. If it is not in there it should be.

Ambassador AUSTIN. There is no objection to this. If it should be adopted by the Congress, it would be acceptable to the United Nations.

Mr. BLOOM. Of course, if the State or any other person wants to come in and purchase that, and pay off the mortgage, then it goes to them.

Mr. JAVITS. Exactly, Mr. Bloom. This would set it up in just that way.

Mr. CHIPERFIELD (presiding). Mr. Lodge.

Mr. LODGE. Mr. Ambassador, I would like to extend a personal word of greeting to you and tell you how illuminating and informative I have found your statement this afternoon.

With respect to Resolution 59, with which I take it you are familiar, as I understand it, your principal objection to that resolution is that you feel that it is vital that we be prepared to submit some definite proposals in respect to amendments; is that correct?

Ambassador AUSTIN. I must say that I did not get the question clearly.

Mr. LODGE. As I understand, your principal objection to Resolution 59 is that at this time it would prove difficult because there is no agenda of amendments set up for us to propose at the conference which would be called under article 109; is that correct?

Ambassador AUSTIN. That is not exactly my ground of opposition to it. My ground is that it is utterly futile, in my judgment, for the Congress and the President of the United States to take the initiative of calling a general conference of the United Nations pursuant to article 109 for the purpose stated here.

In the present state of the world I doubt if you could get a handful of member states to participate in that at all. What you need in order to call it is a majority.

Mr. LODGE. It is two-thirds, is it not?

Ambassador AUSTIN. There are two different calls.

Mr. LODGE. I have it here. It is two-thirds, I believe.

Ambassador AUSTIN. Yes. For the tenth meeting it is just a simple majority, but at any other time it is two-thirds, and you could not get it.

Mr. LODGE. Now, amendments can also be proposed under article 108?

Ambassador AUSTIN. Article 108 is the article that determines when an amendment becomes effective, sir.

Mr. LODGE. When they come into force, it is by a vote of two-thirds, including all the permanent members of the Security Council.

The point I have in mind there, Mr. Ambassador is, would you have any objections to proceeding under 108, or are we in fact proceeding under 108 at this time in attempting to amend the Charter?

Ambassador AUSTIN. 108 is not a procedural article. That is the article that establishes the status of the amendment, you see, after ratification. I will read it:

Amendments to the present Charter shall come into force for all members of the United Nations when they have been adopted by a vote of two-thirds of the members of the General Assembly and ratified in accordance with their respective constitutional processes by two-thirds of the members of the United Nations, including all permanent members of the Security Council.

That, you see, is not an article defining the method of amendment. Article 109 is the method of amendment. Now, you can have a general conference under 109. There are alternatives.

Mr. LODGE. My point is that although 109 is one method of amending the Charter, it is my understanding that it is not the only provision, and that you could propose an amendment at this time, or any nation could propose an amendment to the Charter.

Ambassador AUSTIN. I will accept your word on that.

Mr. LODGE. I believe that Resolution 59 could be a very useful thing, in that it seems to me that if we went into such a conference, with a prepared agenda of amendments, we would not necessarily be bound to try to form another United Nations if there were any objections to these amendments, but it would cast a light once again upon the recalcitrance of certain nations and perhaps help to underline the problems. I can well understand your feeling with respect to 163. I am less able to understand your feeling with respect to Resolution 59. That is why I thought perhaps you would elucidate a little further your point of view on that particular resolution.

Ambassador AUSTIN. I must say I am not ready to take the position that article 108 is an appropriate basis for proposing an amendment to the Charter in the General Assembly on which there has been no prior agreement.

Mr. LODGE. I was not suggesting necessarily that we proceed under article 108. What I was trying to point out was that it seems to me that under the Charter, the Charter can be amended without proceeding under 109, and that therefore I wondered why you objected so strongly to the calling of the conference under 109, since the mere calling of this conference would not bind us to any disruptive activity within the United Nations.

But, if we proceed under Resolution 163 there might be cause for grave misgiving.

Ambassador AUSTIN. All I am called upon as a witness to do in this regard I think is to express an opinion. I cannot do more than that. I have no feeling against this resolution, you know. As a matter of fact, my private ambition has always been to see the United Nations develop into a real world government, and I want it to get there as reasonably fast as it can. I do not want, however, to destroy it on the

way up.

What I have expressed here is an opinion that this concurrent resolution will be a futility, so far as getting a convention goes.

Mr. LODGE. That is, so far as achieving any amendments is concerned?

Ambassador AUSTIN. Yes; that is my opinion about it. All these resolutions are aimed at the veto. The last action I had was the meeting in my office of the five permanent members on January 19, 1948, at which amendment of the Charter was discussed pursuant to General Assembly resolutions which I have put in the record here. It was a formal and solid matter, and there was only one country there willing to accept amendment and that was the United States.

Mr. LODGE. In other words, what you are saying, Mr. Ambassador is that we have already attempted to amend the Charter, outside of 109. or we have started and have not succeeded.

Ambassador AUSTIN. No; we have not attempted to do that. We have attempted to discuss amendment of the Charter with respect to chapter VI, and with respect to admission of new members. It has not been with respect to chapter VII.

Mr. LODGE. I did not mean any specific amendment, Mr. Ambas sador. I meant that we have considered for some time amending chapter VI of the Charter?

Ambassador AUSTIN. Oh, yes.

Mr. LODGE. You do not have to proceed under article 109 to do it You can proceed as we have proceeded. My only point is that sinc we have favored certain amendments I wondered wherein there wer dangers of any great damage in calling a conference under 109 and submitting these amendments to that conference.

Mr. VORYS. Would the gentleman yield to me?

Mr. LODGE. Certainly.

Mr. VORYS. Would the gentleman tell me whether he is willing t commit Congress in advance to any proposals that the President, ou representative, and our Secretary of State may wish to make wit reference to enacting, interpreting, or enforcing world law to preven