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salaries directly into the United Nations treasury. If the Congress finds itself unable to accept section 18 (b) without reservation but would be willing to accept the compromise proposed by the Department of State, it would be possible to meet the minimum needs of the United Nations in order to achieve equity among members and equality among the staff. Under the compromise United States citizens would continue to be subject to United States tax laws. They would receive credit toward their Federal tax liability for the amounts paid by them to the United Nations. If their payments to the United Nations are less than their liabilities for Federal income tax, they would pay the difference to the United States Treasury. The loss of tax revenue to the United States will be offset by a corresponding reduction in the United States contribution to the United Nations except for the tax revenue of $400 now indirectly paid to the United States by other member governments.
It is strongly urged that the Congress make possible a positive solution to the present inequity among members and resolve the political difficulties facing the United States delegation by providing tax (redits for staff contributions to the United Nations. This compromise is sair and sound and protects the interests of the United Nations in providing equal pay for equal services, and at the same time protects the United States against the creation of a tax-privileged group of citizens.
DEPARTMENT OF STATE,
Washington, October 22, 1947. The Honorable CHARLES A. EATON,
House of Representatives. DEAR MR. EATON: I enclose for your information a memorandum which deals with the question of financing the construction of the headquarters of the United Nations in New York. The General Assembly of the United Nations is currently considering this problem and will need to reach a decision before the end of the present session.
It is contemplated that Ambassador Austin, Chairman of the Headquarters Committee of the present Assembly, by the end of this week or early next week, will express in the Headquarters Committee the willingness of this Government to conclude a loan agreement whereby an interest-free United States Government loan, not to exceed approximately $65,000,000, would be made available for the purpose of financing all or part of the cost of constructing the United Nations headquarters. He will at the same time make clear that the loan would be subject to congressional authorization, concerning which no commitments can be made. Such a loan would be extended for a period to be be determined by negotiations with the United Nations, and would be repayable in annual installments from the budget of the United Nations. The reasons for the decision to make this offer are set forth in the enclosed memorandum.
The Department will be glad to supply you with any further information you may desire. Sincerely yours,
ROBERT A, LOVETT, Acting Secretary.
FINANCING THE UNITED NATIONS HEADQUARTERS CONSTRUCTION
The United Nations is now ready to proceed with the construction of its permanent headquarters in New York City. There remains, however, the question of how to finance the initial capital expense at a time wben many members of the United Nations are facing a severe economic crisis and an acute shortage of dollars.
LOCATION OF UNITED NATIONS HEADQUARTERS IN NEW YORK
A brief survey follows summarizing the events leading to the decision to locate the headquarters in New York City.
The Charter of the United Nations was written at San Francisco in the spring of 1945, and ratified by the United States later in that same year. Likewise, on December 10 and 11, 1945, the two Houses of Congress unanimously adopted a concurrent resolution inviting the new organization to locate its permanent headquarters in the United States.
The best location for the headquarters of the United Nations was debated at length in the Preparatory Commission which preceded the first session of the General Assembly, and at the first part of the first session of the General As
sembly which met in January and February 1946. Throughout these discussions the United States representatives conveyed to the other members the cordial welcome of the Congress and the President, but abstained from taking a position on the issue. The Assembly decided to accept tthe invitation to establish its permanent headquarters in the United States and to make its temporary home in New York City. A Headquarters Commission was appointed to select a specific site in the vicinity of New York for approval by the Assembly.
The General Assembly at the second part of its first session, held October to December 1946, gave careful consideration to several alternative sites in the vicinity of New York, within the city, and in the areas of Philadelphia, San Francisco, and Boston. It finally determined to accept the offer of Mr. John D. Rockefeller, Jr., and the city of New York of a free site of approximately sis city blocks on the East River in New York City. The Assembly decided to build its permanent headquarters on this site, and authorized the Secretary-General to acquire the land, undertake any necessary demolition, and prepare plans for the architecture and financing of the headquarters itself.
PLANNING FOR CONSTRUCTION
Once the basic decision was made, events have moved rapidly during the last year. The Congress at its last session approved the necessary legislation to exempt the Rockefeller gift from Federal taxation. The property along the East River was duly acquired, and title passed to the United Nations in March. The city of New York presented to the United Nations the properties required to complete the site, and subsequently has undertaken extensive commitments estimated at about $20,000,000 to make alterations in the surrounding roadways and approaches. The buildings on the site have been demolished, except for one building which is suitable for immediate office use by the United Nations.
Plans for the construction of the new headquarters have been developed under the guidance of the Headquarters Advisory Committee, a 16-nation committee under the chairmanship of Ambassador Warren R. Austin. A group of internationally famous architects, led by Mr. Wallace K. Harrison of the United States, prepa red the architectural plans for a skyscraper headquarters. The original plans called for an expenditure of about $100,000,000. By simplifying the plans and postponing certain of the proposed construction, the estimates were reduced to $85.000,090, and subsequently to the present estimate of approximately $65,000,000.
The General Assembly now in session in New York is much concerned about the headquarters construction. Its special headquarters committee has given tentative approval to the plans and cost estimates of about $65,000,000, subject to agreement on satisfactory arrangements for financing. Most members of the United Nations are eager to proceed with the construction without delay. There is a general feeling that postponement would be seriously detrimental to the efficient operation of the United Nations. The temporary headquarters are in a converted factory, where the space is cramped and in large part unsuitable for use as offices. Likewise, the location is inconvenient, requiring the delegations and the secretariat to spend many hours commuting to and from New York City.
It is anticipated that the costs of construction will be borne by the 57 members of the United Nations in accordance with their proportionate contributions to the annual budget of the Organization. However, most of the members are faced with such a severe shortage of dollars that it would be virtually impossible for them to pay their respective contributions in dollars immediately.
ALTERNATIVE METHODS OF FINANCING
Several alternative methods for financing the construction costs over a period of years have been considered. At the beginning, the possibilities of private financing were fully explored. The most feasible scheme under private financing would call for immediate payment in cash of the United States share of about $26,000,000, the remainder to be financed by contributions from other members and loans at interest by private institutions such as insurance companies. This method would involve complex legal difficulties, owing to the immunity of the United Nations from suit, would complicate the planning by having to take into account the views of the holders of a mortgage, and would require the payment of interest at about 3 percent.
Suggestions that a loan might be secured either from the Reconstruction Finance Corporation or from the International Bank for Reconstruction and Development have been discarded as neither feasible nor desirable.
After the most careful consideration, the Department of State, the Treasury Department, and the Bureau of the Budget recommended to the President, who approved, that an interest-free loan by the United States Treasury would be the best solution. Such a loan would be a loan by the United States Government to the United Nations, backed by the obligation of all ember governments to contribute their proportionate shares of United Nations expenses. It would be repayable in installments from the annual budget of the United Nations.
The question of interest on such a loan has been very carefully considered. A pertinent factor is that special benefits accrue to the United States because the headquarters will be constructed in this country. Virtually the entire cost of consruction will be spent in the United States. For example, American labor will be used for the construction, the bulk of the materials will be purchased in the United States, and the existence of the building will constitute a permanent asset to the Nation. The annual saving to the United States in the expenses of participation, such as travel and communications, resulting from the location of the headquarters in New York rather than in Europe, is substantial, estimated to be at least $600,000. Finally, the location of the United Nations in the United States cannot but be a source of added prestige and influence for the United States in world affairs. In view of these special benefits, it has been decided that the proposed Treasury loan should be interest free.
It is recognized, of course, that no binding commitments can be made under any method of financing without prior congressional authorization. It is contemplated that Ambassador Austin, Chairman of the Headquarters Committee of the present Assembly, will at a very early date inform the Committee that the United States Government is prepared to enter into negotiations with the Secretary-General of the United Nations with a view to concluding an appropriate loan agreement. He will make it very clear, however, that such an agreement will be wholly conditional upon approval of the loan by the Congress.
SUMMARY OF VIEWS REGARDING RESOLUTIONS FOR IMPROVING THE UNITED NATIONS,
IN CONNECTION WITH HEARINGS OF THE HOUSE FOREIGN AFFAIRS COMMITTEE, BY ELY CULBERTSON As a general background, I should like to make part of this summary a pertinent editorial, attached hereto, from the Cleveland Plain Dealer of May 23. I hope the committee will overlook the irrelevant and exaggerately flattering reference to me.
Regarding specific suggestions for legislative action, the following considerations should be kept in mind :
1. The Congress and the public are at all times bound to listen respectfully to the advice of the State Department, especially when it is led by a great American such as Secretary Marshall.
2. Those favoring revision of the United Nations, both in Congress and outside, represent a very large part of public opinion—I believe it to be a majority-and their wishes must also be taken into serious account.
The two principal objectives of the antirevisionists, as set forth in the State Department approved resolution introduced by Senator Vandenberg, seem to be: (a) Preparation of the ground for United States backing of the western European bloc against aggression; and (b) adequate time in which to renew State Department efforts for strengthening the United Nations by voluntary agreements.
The two principal objectives of the revisionists seem to be: (a) An effort to revise the UN Charter by amending it in accordance with articles 108 or 109, so as to eliminate the crippling veto in matters of aggression, establish interdational control of atomic energy and enforced limitation of other important armament, and provide the UN with an adequate but tyranny-proof police force; and (6) If this proves impossible, to set up within the framework of the United Nations an iron-clad system of collective security for mutual defense of all States which wish to join, under article 51 of the Charter. It has not been expected by the revisionists that such a vital issue as the revision of the United Nations would be acted upon by the executive branch of our Government in the few remaining months before election. All that was intended was to bring the issue of revision before the public and before Congress, and to prepare the ground for its effective solution without needless delay.
Hence it does not seem that the objectives of the State Department and of the revisionists are necessarily incompatible at present. I believe that a proper formula could be worked out by the House Foreign Affairs Committee and embodied in a resolution that would avoid needless dissensions and satisfy all concerned. Such a resolution, in my opinion, should make it clear to the millions of Americans who have been following with increasing admiration the initiative of the House Foreign Affairs Committee that, while deferring to the wishes of the antirevisionists to allow more time for the State Department to proceed along its present lines in trying to make the UN work, the committee is determined, if such efforts continue to fail after a reasonable trial, to reopen the issue of a thorough and effective revision of the United Nations before it is too late.
[Editorial, Cleveland Plain Dealer, May 23, 1948]
Senator Arthur H. Vandenberg's working paper, designed to support the United Nations and give American aid to "regional and other collective arrangements for collective and individual self-defense,” should be considered carefully in the light of its origin as well as its aims.
Unanimously approved by the Senate Foreign Relations Committee, this declaration of the Senate's views on policy would also pursue “voluntary agreement to remove the veto from all questions involving pacific settlements of internațional disputes and situations, and from the admission of new members.”
Two goals which appear related are sought by this declaration. We will assist the countries of western Europe with military help, pending executive and legislative approval, provided they help themselves. This gives substantial backing to the western European federation growing out of the Marshall plan, but particularly to the Brussels Conference countries, Britain, France, Belgium, the Netherlands, and Luxemburg, which are working out a hard-and-fast military alliance,
The second goal of the declaration is obviously to head off the widespread public demand for revision of the United Nations Charter. This demand has found expression in a score of resolutions in the House of Representatives. Hearings on UN revision ended a week ago before the House Foreign Affairs Committee. Secretary of State Marshall and Warren R. Austin, American Ambassador to the United Nations, testified against any revision at this time because, with the known objections of Russia, the world organization might be killed.
Vandenberg's working paper is the product of the conference held 3 weeks ago in the State Department by Secretary Marshall, John Foster Dulles, Republican foreign policy adviser, and the Michigan Senator.
The best assessment we have noted of this administration endeavor to circumvent public opinion was made by Ely Culbertson, interested as a conscientious citizen in world peace, in his testimony before the House committee 10 days ago.
Culbertson, who spoke in Cleveland Friday night before the International Affiliation of Sales and Advertising Clubs told the House group that Marshall and Austin were "men of the past” who "are apparently oblivious of the elementary fact that between the San Francisco Conference (establishment of the UN) and today there are not 3 years, but 3,000 years—there is a vast gulf, created by the Hiroshima bomb."
“What,” Culbertson asked, “has the present, impotent, veto-ridden United Nation accomplished to remove the atomic cloud now gathering over the homes of the world? It grieves me deeply to observe that in his testimony before this committee the Ambassador (Austin) had no place for the atomic bomb, although he did find room for exalting the present United Nations in its achievements for aiding Peru to establish refrigeration and storage facilities for its fishing industry'."
Culbertson called Vandenberg's working paper a "walking paper, leading exactly nowhere” because it depends on voluntary agreements to limit the veto, a method that has repeatedly failed. Then he posed the question that reveals the contradiction and the unreality of the Vandenberg-State Department document:
“How could the State Department attack the revision of the United Nations on the ground that it might wreck the UN by reason of Russia's opposition, and at the same time advocate a military defense alliance obviously directed against Russia ?"
The man who has done so much to crystallize public opinion on the great issue of collective security then expressed succinctly the feeling of millions of his fellow Americans :
"Our only hope of averting the third world war is through a revised United Nations. And the only formula which is both effective and acceptable for such a revision is a formula which provides specific methods for the elimination of three basic defects in the present structure of the United Nations—the elemination of the veto in matters of aggression, the elimination of the atomic and armament race, and the establishment of a tyranny-proof but powerful international police force."
These aims, unfortunately, may not be achieved at this session of Congress, but the ground work has been laid for early action at the next session. By attaching appropriation items to its resolution, the House has made sure that its views will be heard and that the Vandenberg working paper will not be passed, as was intended, without House concurrence merely as an expression of Senate opinion.
It is difficult to understand the attitude of the administration. Certainly defense of the western European nations is essential, but it is only a temporary stopgap until an effective United Nations is created as an instrument of international peace. One complements the other. If they do not, then the only answer is conflict.
HARTFORD 3, CONN., May 27, 1948. Hon. WALTER H. JUDD, Committee on Foreign Affairs, House of Representatives,
Washington, D. C. DEAR CONGRESSMAN JUDD: In response to your courteous letter of May 20, forwarded to me here, I am glad to enclose as suggested by you: (a) A supplemental written summary of my views and (6) specific suggestions for legislative action.
I gathered that you wished this letter to be in the form of a concurrent resolution; and therefore, although with much hesitation, drafted one. For your convenience I have styled it "Resolution X" and accompanied it with a running commentary.
Let me, however, make it clear that I regard your House Concurrent Resolation 163 (with its companion resolutions) as a very satisfaetory method of approach. My suggestion is offered with reluctance, and exclusively for the purpose of strengthening your handiwork. It embodies only two or three real departures although it omits a number of details, not because of any opposition to them but for the sake of greater elasticity.
House Concurrent Resolution 59 is brief and well drawn, and my only suggestion there is founded upon my belief that a General Conference of nations under article 109 should not be called unless and until amendment under article 108 has failed. I have included this as an alternative remedy.
I greatly appreciated the committee's courtesy in hearing me with such patience and assure you of my readiness to render any further assistance its members may desire, whether from here or in Washington. Sincerely yours,
ANSON T. McCOOK, Chairman, Foreign Relations Commission, American Legion.
SUPPLEMENTAL STATEMENT OF ANSON T. McCook, CHAIRMAN, FOREIGN RELATIONS
COMMISSION, THE AMERICAN LEGION (AS REQUESTED MAY 20, 1948), WITA COMMENTS ON OTHER TESTIMONY (TRANSCRIPT Not Yet RECEIVED)
International law and order are essential to peace. Economic, social, and cultural considerations are of great importance likewise, but they can avail little without peace.
The first words of the Charter declare: "The purposes of the United Nations are: (1) To maintain international peace and security, and to that end: To take effective collective measures for the prevention and removal of threats to the peace, and for the suppression of acts of aggression
The United Nations can be the greatest power for peace. But peace is imperiled, and the very life of the United Nations is imperiled, by its inability to prevent aggression and enforce peace. If it cannot function, it is bound to become valueless and go the way of the League of Nations. That would be a tragedy,