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shortage of operating funds thus created has re-
duced the working capital fund of the United
Nations to zero and compelled it to hold back on
the payment of bills and borrow from United
Nations agencies.

Prudence and good management require all in-
stitutions — public or private, national or interna-
tional — to keep their affairs in good financial
order. The Secretary General of the United Na-
tions, therefore, urged the adoption of, and the
members approved by a large majority, a three-
point plan to relieve the cash deficit and to avoid
the need for makeshift financing of emergency
operations designed to keep or restore tlie peace:

Point 1 is to cover anticipated expenses for the
United Nations operation in the Congo and for
the United Nations Emergency Force in the Mid-
dle East through the end of the present fiscal
year. The 16th General Assembly approved a
new appropriation for these purposes, assessed
against all members.

Point 2 is to resolve all doubt as to whether
delinquent members must pay special assessments
for the Congo (ONUC) and Middle East
(UNEF) operations, or face tlie loss of their vot-
ing rights. To this end, the United Nations
General Assembly requested from the Interna-
tional Court of Justice an advisory opinion as to
whether these special assessments, like regular
assessments, are "expenses of the Organization,"
legally binding on all members by the terms of
the United Nations Charter.

It is the opinion of the United States that special
assessments voted by a two-thirds majority of the
General Assembly are obligatory. We anticipate
a decision by early stunmer of this year. If our
view, which is shared by most of the members
of the United Nations, is confii-med by the Court,
then all members will have to pay their dues or lose
their right to vote in the General Assembly. It



February 26, 1962



311



is only fair that members tliat participate in the
privileges of membership should participate also
in its obligations.

Even if the Court's opinion goes as we believe
it should, the United Nations would still be faced
with a serious cash problem, aggravated by any
further delays in collecting back dues from those
who have not been willing to pay the special
assessments. Consequently,

Point 3 of the United Nations financial plan is
to acquire a special fund to relieve the present
cash deficit by paying off current bills and debts,
and by setting aside a reasonable reserve to help
finance United Nations peacekeeping operations
in future emergencies.

For this purpose the General Assembly has au-
thorized the Secretary General to issue $200 mil-
lion worth of United Nations bonds repayable at
2 percent interest over a 25-year period with an-
nual repayments charged against the budget of the
United Nations. All members are assessed a share
of that budget.

If this program is successful, the United Na-
tions will be in a vastly improved financial posi-
tion. It is my judgment that this plan is sound
both for the United Nations and for its members.
These bonds will be repaid with interest at the
rate of approximately $10 million a year, as part
of the regular assessment. Every nation — includ-
ing the Soviet Union- — will thus be required to pay
its fair share or lose its vote. And the United
States will be obligated, in the long run, to meet
only 32 percent of these special costs instead of
the nearly 50 percent we are presently contribut-
ing to the special operations of the United Nations.

I ask that the Congress act now to back the
United Nations by authorizing the purchase of
these bonds. Failure to act would serve the inter-
ests of the Soviet Union, which has been particu-
larly opposed to the operation in the Congo and
which voted against this plan as part of the con-
sistent Communist effort to undermine the United
Nations and undercut its new Secretary General.
For without the bond issue, either the United Na-
tions' executive arm will wither or the United
States will be compelled to pay a larger share of
the costs of operation than is reasonable for any
one member of an international organization.

The central purpose of the United Nations is to
keep the peace wherever possible and to restore
the peace whenever it is broken.



The United Nations has i-eceived the support
of both political parties since its inception.

By emergency action the United Nations turned
back aggression in Korea.

By emergency action the United Nations
brought a halt to war in the Middle East over 5
years ago, and ever since has safeguarded the
annistice lines.

By emergency action the United Nations has
prevented large-scale civil war and avoided
great-power intervention in the Congo.

We shall spend this year nearly one-half of the
Federal budget for national defense. This au-
thorization represents an investment of one-tenth
of 1 percent of that budget in the peacekeeping
capacity of the United Nations.

Whatever its imperfections, the United Nations
effectiveness and existence are an essential part
of the machinery to bring peace out of this world
of danger and discord.

I earnestly hope that the Congress will give
early and favorable consideration to this request.



John F. Kennedy



The White House,

January 30, 1962.



A BILL To promote the foreign policy of the United States by
authorizing the purchase of United Nations bonds and the
appropriation of funds therefor

lie it cnartcd hij the Senate and Bouse of Representa-
tives of the United States of America in Congress asscm-
hlcd. That there is hereby authorized to be appropriated
to the President, without fiscal-year limitation, out of any
money in the Treasury not otherwise appropriated,
$100,000,000 for the purchase of United Nations bonds.

Sec. 2. Amounts received from the annual repayment
of principal and payment of interest due on such bonds
shall he deposited into the Treasury of the United States
as miscellaneous receipts.



STATEMENT BY SECRETARY RUSK

Press release 81 dated February 6

I welcome the opportunity to appear before you
on behalf of legislation to authorize the United
States to purchase up to $100 million worth of
United Nations bonds.

My remarks will be addressed to two separate
kinds of questions that have been raised about this
proposal. One kind of question is raised by a
small minority which is opposed to the principle of
the United Nations and our position of leadei*ship



312



Department of State Bvlletin



in it. The second kind of question is raised by
some -who regularly support the United Nations
and M-ant to be assured that we are proposing the
soundest possible solution to its present financial
crisis.

The proposal itself appears to be a narrow and
rather technical one. A large majority of the
members of the United Nations have voted ap-
proval for a three-point plan to resolve the present
financial crisis of the United Nations. One of
these steps is a $200-million bond issue to overcome
the cash deficit and permit the U.N. to put its
financial house in order. The bonds are to be re-
paid over 25 years in equal installments at 2 per-
cent interest. So the narrow question seems to be
whether the bond issue is a sound way to meet an
immediate and practical problem. "We believe that
it is and hope that you will agree with us after we
have had an opi:)ortunity to present our case in
detail.

But this proposal also raises basic questions of
foreign policy. "We are discussing the financial
viability of the United Nations in the yeai-s ahead
and therefore its capacity to serve as an effective
instrument for peace and world order. So we
necessarily are discussing the kind of world we
shall be living in. The proposal to invest in some
bonds therefore goes to the heart of our foreign
policy.

I therefore must dwell briefly on the broad ques-
tion of the role of the U.N. in United States foreign
policy — and the role of United States foreign
policy in the U.N.

U.S. Foreign Policy and the U.N.

At the very outset I should like to recall that
support for the United Nations has never been a
partisan political question. The charter itself is
the product of American leadership and bipartisan
endeavor. The proposals made at Dumbarton
Oaks were the subject of full consultation witli
Members of the Congress from both sides of the
aisle. The charter won overwhelming approval
of the Congress. It seems clear to us that the
people of this country do not think in pai'tisan
terms when they think of the United Nations. It
is precisely because of such very broad public sup-
port and bipartisan congressional attitudes that
the United States has been able to maintain a
position of leadership in U.N. affaii-s.

We cannot too often recall the purposes of the



United Nations, as set forth in the preamble to
the charter:

"to save succeeding generations from the scourge
of war";

"to reaffirm faith in fundamental human
rights" ;

"to establish conditions under which justice and
respect for the obligations arising from treaties
and other sources of international law can be
maintained"; and

"to promote social progress and better standards
of life in larger freedom."

Peace, human dignity, the rights of the individ-
ual, the rule of law, social well-being in larger
freedom — these are the purposes of the United
Nations.

They are not, of course, specifications for insti-
tutional machmery. They do not add up to a blue-
print or a master plan for resolving all the in-
herited quarrels and sins of the centuries. Much
less do these words provide any way to predict
future problems or solve them when they arise.

The preamble to the Charter of the United Na-
tions is simply a statement of goals derived from
the idea that man is born free, capable of exerting
conscious thought and free will toward the mastery
of his physical and social environment.

That being said, it is true that we live in a
woi'ld in Avhich nobility of purpose is not yet tlie
determinant factor in world affairs. It therefore
is in the context, of an imperfect, real world that
we must assess the relevance and utility of the
United Nations to United States foreign policj'.

Two Views of Human Society

In that world there are two views about the
future of human society. One is the view still
professed, though with decreasing certainty I
think, by the doctrinal heirs of Karl Marx. It
is a view of a drab one- world of gray uniformity,
held together by coercion in the name of an ideol-
ogy based on an analysis of human history which
left out of accoimt the human mind and will.

The other is a view of a pluralistic world — a
world of color, variety, and movement, held to-
gether by consent in the name of an ideology which
interprets human history as the story of man's
effort to master his environment, to improve his
society, and to perfect his behavior.

The first view — however repugnant — is easy to



February 26, J 962



313



grasp, for it is a monotone product of a single
mold. The other view is much more difficult, for its
essence is diversity. It is not so tidy as a unifoi'm
world, and its behavior is unpredictable precisely
because it will be influenced by flesh-and-blood
men.

The United Nations — in its charter, its member-
ship, and its operations — denies the first view of
the future world and conforms with the second.

The charter is a creation of the human mind, an
act of will. It is not the result of any "iron laws"
of history.

The General Assembly is living proof that the
world is still made up of stimulating differences in
cultural, racial, religious, political, and personal
elements. It makes a mockery of the concept of a
uniform one-world.

The operations of the U.N. are based on con-
sent, illumined by debate, and confirmed by ma-
jority decision expressed by men, most of whom
demonstrate daily their independence of mind and
spirit. If it does not always perform exactly
the way we want it to, that is the price of a world
in which independence Ls valued as highly by
others as it is by us.

So the United Nations, theoretically and prac-
tically, fits with the view of a diverse world
struggling to master its own problems by con-
scious thought, by deliberate act, and by majority
consent, which is always difficult and sometimes
elusive. The basic objective of U.S. policy mani-
festly is to help steer the world toward a valida-
tion of that view.

Instruments of U.S. Foreign Policy

In our dealings with the world about us we
must, of course, use all the instruments available
to us.

The first instrument is national diplomacy to
protect and extend the national security. But to
think of national security entirely in terms of
militaiy power is too limited a conception. Na-
tional power is compounded of military, political,
economic, and moral strength.

We camiot, and do not, turn over to others the
protection of our vital national interests. But it
is in the interest of our national security to in-
crease our national power and influence by associ-
ating with others in common purpose and
enterprise. Thus we make common cause with
our NATO allies in defense of the West. Thus



we make common cause with the other members
of the Atlantic community to promote our own
prosperity and to further self-sustainmg growth
in the less developed world.

In similar vein we make common cause with
the other Republics of the Western Hemisphere,
not only in defensive alliance against Communist
penetration but in mutual assault on poverty and
traditionalism. Both purposes call for common
institutions which we help to build and help to
strengthen.

So we seek to build regional organizations which
add to the national power and expand the world
of consent, both absolutely and in relation to the
world of coercion.

At the universal, or near-universal level, the
United Nations and its associated agencies are the
instrvunents with which we work toward an ulti-
mate world community at peace, under law, in
freedom, and with expanding human welfare.

The United Nations has been in business for 16
years. Ambassador Stevenson will be here tomor-
row, prepared to testify out of first-hand experi-
ence on the current state of its health.

Inevitably the United Nations must reflect in
large measure the deep divisions of the contem-
porary world. But it also reflects the even deeper
trends toward international community and the
still deeper aspirations of peoples for peace, jus-
tice, and a more decent condition for man.

Indubitably the United Nations shares the risks
and the weaknesses of the world environment in
which it operates. But that simply means that
it is relevant to the real world of the 1960"s.

Indeed I cannot imagine the 1960"s without
something very much like the United Nations.
Nor can I see any hope for a future world in
haniiony with our views without a central place
for the United Nations.

We shall continue, of course, to serve our vital
national interests through bilateral as well as mul-
tilateral diplomacy. We shall continue to work
with and seek to strengthen the concerts of nations
joined in more limited communities based on con-
sent and dedicated to common enterprise. But
our ultimate hopes would lack all substance with-
out the United Nations, for the United Nations
foreseen in the charter is tlie vision we hold of
the future.

It is in this perspective that the United Nations
plays such an important role in United States



314



Department of State Bulletin



foreign policy and wliy U.S. foreign policy lays
such store by the United Nations.

Meeting U.N. Financial Crisis

During tlio IGth General Assembly the financial
situation of the United Nations became intoler-
able. The organization had been forced to borrow
money from other U.N. accounts. It was holding
back on the payment of substantial bills. The
working capital fund was drawn down to zero.
Some members were in arrears, only to a minor
extent on regular assessments but to a serious ex-
tent on the two peace-and-security assessments.

The financial crisis is due directly to the con-
tinuing high cost of policing the armistice lines in
the Middle East and especially to the cost of the
Congo operation, which has been running at an
average rate of about $10 million a month. Both
were unexpected emergencies which had to be met
with immediate action to preserve the peace.
Some members contested the binding nature of
assessments passed for such emergencies and so
far have declined to pay their shares. Some of
the smallest members simply felt imable to pay,
or at least to pay promptly.

There is nothing imprecedented in a financial
crisis caused by hea\^ miexpected expenditures.
It happens time and again to business and other
organizations — and to families and individuals as
well. But a sound institution cannot operate on
an unsound financial basis. A solution had to be
foimd.

Toward the end of the last General Assembly
the Acting Secretary-General [U Thant] con-
sulted key member governments on how to put his
financial house in order. Out of these consulta-
tions came a three-part plan to put the U.N.'s
financial house in order. After careful study the
executive branch detennined that this was a sensi-
ble plan and, indeed, the best that could be devised
luider the circumstances. We therefore voted
with a large majority of the membership in favor
of supporting tlie plan — subject, as in any such
U.N. action, to the constitutional processes of each
member government. The bill before you is of
course a first step in the U.S. procedures for par-
ticipation. All three parts of the plan received
the overwhelming support of the General Assem-
bly — by margins of about 5 to 1. Only the Soviet
bloc and three other members voted against the
bond issue.



The first point in that plan was to vote a special
assessment to carry forward the Congo ^ and Mid-
dle East ■* operations through June 30, 1962.

The second point was to seek an advisory opin-
ion from the International Court of Justice to
settle once and for all the question of the obliga-
tory nature of Congo and Middle East assessments
voted by two-thirds of the General Assembly. An
affirmative opinion should induce nations which
have not paid to make full payment on their out-
standing assessments. The United States expects
to present arguments in the case before the Court.

The third point in the financial plan is to issue
$200 million worth of U.N. bonds, repayable over
a period of 25 years with interest at 2 percent, to
permit the U.N. to meet the currently estimated
costs of peace-and-security operations from July
1, 1962, to December 31, 1963.= This assumes a
continuation of the present spending rate for these
purposes and that back bills will be paid substan-
tially from collection of arrearages.

This proposal raises at least two basic questions.
Wliat were the alternatives open to us and to the
United Nations? Wliy did we decide to support
the U.N. bond plan in the Assembly as the best
way to help the organization get over its financial
difficulties during the next year and a half?

One suggestion advanced was that the five per-
manent members of the Security Council should
defray the entire cost of the U.N. peacekeepuag
operations. An obvious weakness with this pro-
posal is that it tends to weaken rather than
strengthen the principle of collective financial re-
sponsibility of all the members of the U.N. for
operations favored by two-thirds of the Assembly.
Moreover, we certainly could not count on the
Soviet Union to participate in a loan to liquidate
costs of peacekeeping operations when it has re-
fused to pay assessments for the same purpose.
Such a proposal therefore would have meant in
effect a special scale for the United States far in
excess of the present 331/^ percent authorized by
law, and with the U.S.S.R. continuing its policy
of fiscal erosion in the U.N.

Another possibility would have been to attempt,
in the same way as we have over the past several
years, to finance the peace-and-security operations
by the normal "pay as you go" financial resolu-



' U.N. doc. A/RES/1732 (XVI).
* U.N. doc. A/RES/1733 (XVI).
° U.N. doc. A/RES/1739 (XVI) and Corr. 1.



February 26, J 962



315



tions. We concluded that this would have required
the United States to offer to pay even more than
the 471/2 percent it has paid, through assessments
and voluntary contributions, toward the Congo
budget m 1961.

Six Factors Favoring Bond Plan

These and other possibilities were studied care-
fully, in prolonged negotiations in the General As-
sembly's Budgetary Committee. In our judgment
the U.N. bond issue is the most rational and busi-
nesslike way in which to provide the United Na-
tions with the necessary loans to carry on its
peace-and-security business. Wliy is this the case ?

In the first place the U.N. bond issue does not
relieve the Soviet Union or any other country in
arrears from the obligations of paying what they
owe on the UNEF [United Nations Emergency
Force] and Congo assessments. Because the bond
issue will be repaid out of the regular budget, it
bolsters the principle of collective fuiancial
responsibility for U.N. operations.

A second important fact is that the bond issue
would be large enough to put the U.N. finances on
a firmer footing starting July 1, 1962.

Thirdly, the U.N. bond issue has a significant
effect on our own contributions. By having the
bond issue repaid within the regular budget, we
would be contributing to U.N. peacekeeping op-
erations not on the basis of our present 471/2 per-
cent share but rather 32.02 percent. Under the
Secretary-General's plan it will not be necessary
to ask Congress for appropriations for Congo
operations during fiscal 1963.

Fourth, it is our hope that those members of the
international community who do not happen to bo
members of the U.N. but who in fact benefit from
the charter will help resolve the organization's im-
mediate financial problem by purchasing U.N.
bonds.

Fifth, the plan provides that all members pay
the interest and amortization charges for the bonds
on the basis of the regular scale of assessments,
which, for us, means paying one-third rather than
close to half of the peacekeeping costs.

Sixth, because the repayment period is 25 years,
most members ought to be in a position to under-
take payment without undue hardship.

In my judgment the financial plan adopted by
the General Assembly is sound in itself and the



best alternative open to it. The bond issue is cen-
tral to that plan and is a better method, from our
point of view, than the methods used for financing
U.N. peace-and-security operations in the past
several years.

The issue before us can be put simply : Is the
United States prepared to lend the United Nations
up to $100 million of the money it needs to restore
its financial integrity and meet the immediate fu-
ture in a financially responsible manner ? A great
deal depends upon that answer.

It seems to me overwhelmingly plain that our
national interests allow us no choice. Both our
short-range and long-range mterests — both the
real world of today and the better world we fore-
see for tomorrow — demand that we use, improve,
and strengthen the machinery, procedures, and
prestige of the United Nations.

There is no more important or urgent step in
that direction than to do our full share toward
resolving the present cash crisis of the United Na-
tions so it can put its financial house in order and
get on with its pressing business in an atmosphere
of stability and confidence.

U.S. Support of Plan in General Assembly

May I conclude, Mr. Chairman, with the reflec-
tion that the financing plan advanced by the
United Nations seems to me to meet the concerns
expressed by the many Members of the Congress
with whom I discussed this matter last year.
After many meetings with congressional commit-
tees on U.N. financial affaii-s, I came away with
the clear impression that Members of the Congress
were anxious to see U.S. support for active steps
to collect arrearages and to apportion the costs of
peacekeeping operations on a more responsible
basis. The Department of State shared these con-
cerns. We therefore worked actively within the
U.N. in support of the plan which gained the
approval of the General Assembly.

We were careful, of course, to be quite explicit
on the point that the executive branch cannot
commit the Congress. In this connection I should
lilve to quote several sentences from the statement



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 46, Jan- Mar 1962) → online text (page 62 of 101)