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Estimate of amount which could be realized from sale of UN property
1 Based on the latest plans and estimates of the United Nations Headquarters Planning Office. * Originally constructed in 1946 by the New York City Housing Authority and transferred to tbe United Nations on a rental-sale basis. Value has increased 25 percent. Could be used commercially without any alterations.
3 A typical modern office building. Conversion to commercial use would require only normal tenant changes. $3,000,000, representing special features required by the United Nations, has been written
off. 4 Estimated at two-thirds original cost, because of various interior alterations necessary to adapt the buildings to commercial use.
• Carried at original cost. Does not include value of property donated by the city of New York, as this must be repaid to the city in accordance with its agreement with the United Nations.
HISTORY OF THE TAX-IMMUNITY QUESTION IN THE UNITED NATIONS
(Memorandum submitted by Department of State, May 24, 1948)
PREPARATORY COMMISSION (1945)
The Preparatory Commission of the United Nations, composed of the original signatories of the Charter, made arrangements for the first sessions of the General Assembly and the Councils and submitted recommendations for organizing the United Nations within the broad framework of the Charter. One of the major preoccupations was how to assure that the Secretariat could secure a staff with the standards of efficiency, competence, and integrity required by article 101 of the Charter. Equality of conditions of service for members of the Secretariat was an implicit recommendation by the Commission to the General Assembly. The Commission also reported that an adequate system of immunities and privileges for officials, as provided in article 105 of the Charter, is essential. The draft convention on privileges and immunities which the Commission proposed to the General Assembly contained language which became section 18 (b) of the Convention on Privileges and Immunities of the United Nations. Finally, the Preparatory Commission raised the question whether the United Nations should not pay some "special allowance" to those of its employees who pay income taxes on their income from the United Nations in order to produce equality among the staff,
FIRST SESSION OF THE GENERAL ASSEMBLY (FIRST PART, JANUARY-FEBRUARY 1946)
Committee 5 (Administrative and Budgetary) discussed at length the problem of equality of tax treatment of Secretariat employees. It considered proposals for tax reimbursement schemes with a view to assuring equality among staff, but realized that such a procedure would produce inequities among members, all of whom would have to contribute to a budget made larger by the amounts of taxes collected by some of them. A subcommittee concluded unanimously that both equity and equality could be achieved only if each member exempted from income taxation salaries paid by the United Nations. Committee 5 finally recommended and the General Assembly adopted a resolution which provided for tax reimbursements and requested the Secretary-General to submit recommendations to the General Assembly on a staff-contributions plan (annex A). The resolution also requested members who did not already do so to exempt salaries paid by the United Nations from taxation.
The concept of staff contributions as a method of avoiding the creation of a class of tax-privileged international public servants had been discussed inconclusively in Committee 5. The reference to "exemption from national taxation" in the preamble of the resolution had been so phrased specifically to not foreclose the possibility of an internal levy.
United States position. The United States delegation abstained on this otherwise unanimous resolution. It had pointed out repeatedly in Committee 5 (as well as in the Legal Committee which dealt with the draft of the Convention on Privileges and Immunities) that the Congress is the only authority which can grant tax immunities to United States nationals.
FIRST SESSION OF THE GENERAL ASSEMBLY (SECOND PART, OCTOBER-DECEMBER 1946)
Committee 5 had before it a report by the Secretary-General, in accordance with the provisions of the resolution adopted by the General Assembly at the first part of its first session. Committee 5 agreed again to request members who had not accorded tax immunity for salaries paid by the United Nations to do so. A Union of Soviet Socialist Republics proposal to terminate the taxreimbursement authority after January 1, 1947, was defeated. The SecretaryGeneral bad submitted an analysis of the administrative and policy questions involved in the consideration of a staff-contributions scheme. His proposal to establish a special committee to consider these questions during the Assembly session was defeated, and Committee 5 recommended that the Advisory Committee on Administrative and Budgetary Questions (a standing committee of nine experts serving the General Assembly in their individual capacities) be requested to study the problem.
The General Assembly approved the recommendations of Committee 5 and adopted the resolution which is reproduced in annex B.
United States position.—The United States delegation abstained on the voting in Committee 5 and in the plenary meeting, believing it had no right to participate until the Congress had decided whether to accept the principle of tax exemption.
SECOND SESSION OF THE GENERAL ASSEMBLY (SEPTEMBER-NOVEMBER 1947)
By the time the second session convened, the tax reimbursements procedure had become a major question of controversy in Committee 5. In practice it was for the benefit of only United States and Canadian nationals, and many delegations expressed an opposition to continuing the authority which they regarded to have been only temporary, giving all members an opportunity to grant the desired exemptions. The United States delegation stressed that it had abstained when the original decision to make reimbursements had been made and that it would not oppose terminating the procedure, pointing out that the Congress had not taken final action on the principle of immunity. It was agreed to continue the authority for the Secretary-General to make reimbursement for one more year, i, e., for taxes on 1948 salaries, because termination without warning would create serious personnel contract and administrative problems. A compromise arrangement, whereby the members involved would pay larger contributions to the United Nations in the amounts of tax reimbursements received by their nationals in the Secretariat, was adopted at one stage in Committee 5 (annex C). The decision was later reversed. (A similar proposal had been accepted temporarily by Committee 5 during the first part of the first session.)
The Advisory Committee on Administrative and Budgetary Questions had reported favorably on the principle of a staff contributions scheme but recommended that, for practical reasons, it not be adopted immediately. It made certain policy suggestions on questions raised by the Secretary-General in his report to the second part of the General Assembly's first session and recommended that the Secretary-General submit a detailed plan for a staff contributions scheme to the third session of the General Assembly (1948). These recommendations were adopted by the General Assembly in the resolution which was finally reported out by Committee 5 (annex D). The resolution also requests members to grant relief from double taxation to their nationals in the Secretariat. It was considered that such action would be necessary before the General Assembly could adopt a staff contributions scheme.
United States position. The United States delegation, as stated above, stated that it would not oppose the termination of tax reimbursements. It objected strongly to the proposal for increasing the assessments of members whose nationals receive reimbursements. It did not oppose the resolution as finally adopted.
ANNEX A. RESOLUTION ADOPTED BY THE GENERAL ASSEMBLY: FIRST PART OF FIRST
Having regard particularly to the administrative and budgetary arrangements of the organization, the General Assembly concurs in the conclusion reached by the Administrative and Budgetary Committee that there is no alternative to the proposition that exemption from national taxation for salaries and allowances paid by the organization is indispensable to the achievement of equity among its members and equality among its personnel.
Therefore the General Assembly resolves that:
Pending the necessary action being taken by members to exempt from national taxation salaries and allowances paid out of the budget of the organization, the Secretary-General is authorized to reimburse staff members who are required to pay taxation on salaries and wages received from the organization.
In the case of any member whose nationals in the service of the organization are required to pay taxation on salaries and allowances receives from the organization, the Secretary-General should explore with the member concerned methods of ensuring as soon as possible the application of the principle of equity amongst all members.
The records and documents of the Administrative and Budgetary Committee and of the advisory group of experts respecting staff contributions plans be referred to the Secretary-Treasurer for his information, and the Secretary-General be requested to submit recommendations theeon to the second part of the first session of the General Assembly.
ANNEX B. RESOLUTION ADOPTED BY THE GENERAL ASSEMBLY: SECOND PART OF FIRST
The General Assembly resolves that:
In order to achieve full application of the principle of equity among members and equality among personnel of the United Nations, members which have not yet completely exempted from taxation, salaries, and allowances paid out of the budget of the organization are requested to take early action in the matter.
The question of a staff contributions plan in lieu of national taxation is referred to the Advisory Committee on Administrative and Budgetary Questions, which may request the Secretary-General to submit new proposals to the next regular session of the General Assembly. ANNEX C. DRAFT RESOLUTION ADOPTED (LATER REVISED) BY COMMITTEE VOF
GENERAL ASSEMBLY: SECOND SESSION, 1947 The General Assembly,
Reaffirming the principles set down in the convention on privileges and immunities of the United Nations and in the resolutions adopted at the two parts of the first session of the General Assembly;
Considers that in order to achieve both equity between the Member States and equality between members of the Secretariat, there is no solution except to exempt national income taxes on the salaries and indemnities paid by the United Nations ;
Since several members have not as yet been able to establish this exemption, the General Assembly decides that the 1948 budget shall still include a credit permitting the reimbursement of officials for national income taxes they will have
The General Assembly decides that a sum equivalent to the reimbursement thus made to the officials for income taxes they have to pay shall be added to the sum of the contributions to the United Nations budget due from members whose nationals in the service of the organization have been obliged to pay income taxes on the salaries and indemnities paid by the United Nations.
PROPOSAL OF CHAIRMAN OF ADVISORY COMMITTEE
The General Assembly resolves :
(a) That a tax contributions plan with effect from July 1948 be introduced in accordance with the recommendation of the Advisory Committee. (Document A/396);
(b) That all staff members of the organization should, under the plan, pay taxation from their salary to the United Nations;
(c) That the total amount thus to be levied should at least equal any additional expenditure which may be incurred in converting salaries to a gross base;
(d) That members who have not yet complied with the terms of Resolution 78 should, pending such compliance, be requested to grant to their nationals, staff members of the United Nations, relief from double taxation.
ANNEX D. RESOLUTION ADOPTED BY GENERAL ASSEMBLY: SECOND SESSION, 1947
The General Assembly,
Reaffirming the principles set forth in the Convention on the Privileges and Immunities of the United Nations and in resolutions 13 and 78 adopted at the two parts of the first session of the General Assembly with respect to taxation;
Considering that in order to achieve both equity among the member states and equality among the staff members of the organization, member states should exempt from national income taxation salaries and allowances paid by the United Nations, and
Noting that certain members have not yet established this exemption,
1. That members which have not acceded to the Convention on Privileges and Immunities are requested to take the necessary legislative action to do so in order to exempt their nationals employed by the United Nations from national income taxation;
2. That the Secretary-General is requested to prepare and submit to the next regular session of the General Assembly a staff contributions plan in accordance with the recommendations of the advisory committee (document A/396);
3. That, pending granting tax exemption, members are requested to grant relief from double taxation to their nationals employed by the United Nations;
4. That the Secretary-General is invited to omit from all future personnel contracts any clause which binds the organization to refund national income taxation in the absence of annual authorization by the General Assembly;
5. That, in order to achieve equality among staff members, the Secretary-General is authorized to reimburse staff members for national taxes paid on salaries and allowances received from the United Nations during the years 1946, 1947, and 1948, and
6. That the Secretary-General is requested to submit a report to the next regular session of the General Assembly on the action taken under this resolution.
SUPPLEMENTAL STATEMENT OF ROBERT J. BISHOP TO THE HOUSE COMMITTEE ON
FOREIGN AFFAIRS, RE HEARINGS ON STRUCTURE OF UNITED NATIONS ORGANIZATION
Mr. Chairman, and members of the committtee, as suggested by Mr. Vorys, I submit herewith a supplemental statement to my original testimony before your body on May 13.
My opinions, generally, were definitely strengthened by hearing the testimony of other witnesses. I sincerely believe that the presentation of Mr. Thomas K. Finletter was a most significant contribution.
I am now convinced, more than ever, that article 109 must be used first. If Russia ultimately refuses to participate in an article 109 reorganization the onus of refusal to cooperate is then on her. However, it would be a great mistake to pessimistically assume in advance that she would refuse, and thereby foreclose the possibility of her cooperation.
Use of 109 demonstrates our good faith toward all nations and all peoples, Whereas, by using article 51 in the first instance, we are taking the lead in initiating an anti-Russian combine. Our motives would be subject to question by nations large and small and many of them would very likely join us reluc. tantly, if at all.
Another important consideration in first using 51, is that by initiating the anti-Russian combine we place in Russian hands a most effective propaganda weapon, for we will have thereby demonstrated our refusal to Russia of an opportunity to cooperate. It is easy to anticipate their screams that "The bour geois imperialists in the United States show again their refusal to cooperate in the name of peace and intensify their preparations for war against the Union of Soviet Socialist Republics."
The testimony of other witnesses did convince me that by using 109 first we still have an “ace in the hole" in article 51. It should be considered as a second approach, to be used in the event of Russian refusal to participate in a 109 reorganization. Used as a second approach it does not subject us to any charge of bad faith.
I have not mentioned more than fundamental principles. In so short a statement detailed discussion is not possible.
I sincerely hope that committee will report favorably H. R. 59. If deemed necessary the word "immediate" could be changed. In any event, we should proceed as rapidly as possible, all factors of the situation being considered. Respectively submitted.
ROBERT J. BISHOP, Vice President, United States Junior Chamber of Commerce.
MIDDLETOWN CITIZENS COMMITTEE,
Middletown, Ohio, May 20, 1948. Hon. CHARLES A. EATON, Chairman, Committee on Foreign Affairs,
House of Representatives, Washington, D. C. DEAR CHAIRMAN EATON: Herewith the brief synopsis of the Middletown citizens testimony as suggested by Congressman Vorys of Ohio.
The Middletown Citizens Committee would like to register three points with your committee:
Point 1. Public opinion is impressively in favor of action now to strengthen the United Nations Charter in general accord with the A. B. C. plan presented in House Concurrent Resolutions, 163 submitted by Mr. Judd, and 168 submitted by Mr. Raymond Burke of Ohio. We know because for 2 years we have made it our business to find out. By corresponding regularly with 1,600 people in all 48 States and in 18 foreign countries we have learned that these people and their communities want an effective, strong United Nations. From 30 radio broadcasts and over 300 speeches given by our committeee members we are convinced that public opinion is behind any move by Congress to take the initiative now, to strengthen the United Nations by means of House Resolution 163.
Additional and factual popular support is best demonstrated by the following list of community, county, state and national organizations which have formally approved the Middletown plan (i, e., the A. B. C. plan) and have expressed their approval by resolutions sent to Washington.
LOCAL (MIDDLETOWN, OHIO)
Altrusa Club (Hamilton, Ohio).
Co-Operative Club. Alturian Club, Middletown, Ohio. Council of Churches. American Citizens Club.
Current Events Club. American Hellenic Educational and Pro- Fabricating Foremen's Club-Armco. gressive Association.
Federation of Women's Clubs. American Legion Post 218.
Independent Unions. Ancient Order of Hibernians.
Industrial Council. Blythe-Williams American Legion Post. Insurance Underwriters Association. Business and Professional Women's International Lyceum Association. Club,
Junior Board of Trade. Chamber of Commerce.
Junior Chamber of Commerce. City Commission.
Junto Club. Civic Association.
Lincoln Community Center.
Lions Club of Cambridge, Ohio.