My own poll in the Second District of Wisconsin showed that 57.7 percent agreed with the President's proposal originally to support the United Nations by purchasing $100 million in bonds. These indexes of public support, I believe, would be enhanced and dramatized if the citizens were allowed to purchase peace bonds for the United Nations. As you will note, these bonds bear a 2-percent interest rate, substantially lower than the interest rate that is normally given on savings bonds. For this reason not only would they save taxpayers' money, but they would be an excellent index to the measure of support in the public.

I would like to say only one final word. In the Senate Foreign Relations Committee there was some discussion as to the exact interpretation of the language of this bill. My own interpretation is that any funds received through the sale of peace bonds be used for any United Nations operations, the support of which is already authorized by the Congress. However, there have been other interpretations as to a possible reading of this legislation. In order to clarify the matter I have for insertion in the record three possible formulations which the committee might like to consider when taking up the matter. Mr. Chairman, I ask unanimous consent that a letter from the Treasury Department be placed in the record at this point. Mr. ZABLOCKI. Without objection that will be done."

(The letter referred to follows:)

TREASURY DEPARTMENT,

Hon. ROBERT W. KASTEN MEIER,

House of Representatives, Washington, D.C.

FISCAL SERVICE, Washington, D.C. July 18, 1962.

DEAR MR. KASTEN MEIER: This is in response to Mr. Alperovitz' informal request today.

Subsection (c) of section 9 of the United Nations Participation Act of 1945, as it would be added to H.R. 12383, would provide as follows:

"(c) Amounts realized by the Secretary of the Treasury from the sale of peace bonds shall be deposited in a special fund in the Treasury, and shall be available for use by the President in support of the activities of the United Nations." At the hearings on S. 2818, the question was raised whether, if this language were enacted, the President could spend the proceeds from peace bonds in support of activities of the United Nations without further action by the Congress. This in turn depends upon whether the language makes an appropriation.

As I stated at the hearing on S. 2818, without a clear indication of a different congressional intent, the Treasury would regard the language as not making an appropriation. It does not use normal appropriating language and it is being initiated through a committee other than an appropriation committee. On the other hand, the language would have meaning other than as appropriation language: it would authorize appropriations in support of United Nations activities which might otherwise be unauthorized. (I am not informed to what extent appropriations for United Nations activities are presently authorized.) In short, it would mean that appropriation language this broad would not be subject to a point of order on the floor of the Senate or House. (Again, I am not informed whether present substantive authorizations are broad enough to achieve this same result.)

If the Congress wished some other result it could, of course, obtain it by making its intent to that effect clear. While nothing I say here should be construed as a recommendation one way or the other on the policy to be followed, as a technical matter the Congress might indicate in a number of ways its intent that it wished to make the proceeds of peace bonds available without further action. One of these ways would be to substitute for the words "shall be available" the words "are hereby appropriated." On the other hand, if the Congress, in addition to not wishing to make the proceeds available without further action, wished to limit the authorization which the present language or subsection (c)

would provide, it could do so by specifying activities rather than using the broad generic term "activities" in subsection (c). It could also, of course, use narrower language in its subsequent appropriations.

Sincerely yours,

JOHN K. CARLOCK,
Fiscal Assistant Secretary.

Mr. KASTEN MEIER. I want to thank the committee for giving me this time today. I would urge most respectfully when considering the broadest ways to obtain a demonstration of support for the United Nations the committee should give positive consideration to this small piece of legislation.

Thank you.

Mr. ZABLOCKI. Thank you, Congressman Kastenmeier.

Is it your intention that H.R. 12382 be considered as a substitute for S. 2818 now under consideration by the Senate committee?

Mr. KASTENMEIER. No, Mr. Chairman. It actually provides no funds directly for the United Nations. Under the U.S. peace bond proposal, the funds would presumably not be adequate to support the United Nations in its present financial crisis. It is at best an adjunct to another bill, either the bill this committee is considering now with respect to loans to the U.N., or with respect to the U.N. Participation Act of 1945, or indeed any other appropriate measure.

It would depend upon one's conception of the bill, actually. There are some unresolved questions in the bill as I have proposed it. As originally conceived it was supposed to provide some moneys from American citizens interested in support of the U.N., to offset any loan or purchase of bonds that the Government or the President might undertake in connection with the U.N. However, I have been in consultation with the State Department and the Treasury Department. Now the bill before the other body, and my own bill, do contain somewhat broader language. The last line on page 2 being:

funds shall be available for use by the President in support of the activities of the United Nations.

Now, this is somewhat broader than originally conceived; namely, to support only to be a replacement fund only for any loans that may have been made to the United Nations by virtue of the principal legislation we are considering on the subject now.

Mr. ZABLOCKI. I believe your proposal has merit. As you know, however, the need for a loan to the United Nations has been presented as being rather urgent. Further, it would take some time before arrangements could be worked out for individual participation. through the purchase of peace bonds, in the financing of U.N. operations. It would seem, therefore, that your proposal should serve as a supplement to the U.N. bond loan proposal.

Mr. KASTENMEIER. Yes. It could be used. Mr. Chairman. to replace the money out of our general funds that has gone into the loans. In this sense we have not only a similar rate of interest of 2 percent to replace the money but we also allow many citizens in this country to demonstrate their support for the United Nations through their own government, which I think is desirable.

Mr. ZABLOCKI. Is it your thought that the proceeds of peace bonds should be used to repay the U.N. loan?

B

THE UNIVERSITY OF

Mr. KASTENMEIER. That is my original thought. As I say, actually my bill has broader language than this, but this was the principal purpose of having the legislation.

Mr. ZABLOCKI. On page 3 of your statement you say:

The bill has the full and solid support of the State Department and the Treasury Department.

Yesterday, late in the afternoon, the committee received a report from the Department of State and without objection we will make it a part of the record at this point.

(The letter referred to follows:)

Hon. THOMAS E. MORGAN,

Chairman, Foreign Affairs Committee,
House of Representatives.

DEPARTMENT OF STATE,
Washington, July 18, 1962.

DEAR MR. CHAIRMAN: This is in further response to your letter of July 3, 1962, requesting the Department's comments on H.R. 12382, a bill, "to amend the United Nations Participation Act of 1945 to provide an opportunity for the public to provide support for the United Nations through the purchase of peace bonds."

It is the opinion of the Department of State that the enactment of legislation which would permit the citizens of the United States to participate more directly in the support of the United Nations is most desirable. The Department vigorously supports efforts to make it possible for our citizens to lend financial as well as moral support to the United Nations. It further believes that, by permitting a citizen to provide this support through the instrument of his own Government, a partnership and identity of purpose is created of positive value to both the citizen and his Government.

We wish to call to your attention a problem in connection with section (c) of the bill which became apparent during the recent Senate hearings on S. 2818. Senate sponsors of the bill there indicated that it was their intention that the proceeds from the sale of peace bonds, which are to be deposited in a special fund in the Treasury, are to be available "for use by the President of the United States in support of the activities of the United Nations" without the requirement of further appropriation action by the Congress. (It is less certain whether the sponsors intended that this bill should also be the sole substantive authorizing legislation.)

The Department's testimony in support of the bill before the Senate was clearly based on an interpretation of section (c) by the Treasury Department which construes the language as presently written as requiring subsequent appropriation action.

We have discussed the question of the interpretation of section (c) with staff of the House sponsor of the bill (Congressman Kastenmeier). We understand that he will advert to the question in his testimony and may well suggest additional language to clarify the matter, should the House committee believe this to be necessary.

The Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the presentation of this report for the consideration of the committee.

Sincerely yours,

FREDERICK G. DUTTON,

Assistant Secretary (For the Secretary of State).

Mr. ZABLOCKI. As you say the Department has questioned section (c) of your bill. I presume the insert you are putting into the record will explain that particular section.

Mr. KASTEN MEIER. Yes, Mr. Chairman. It is a letter directed to me from the Treasury Department dated July 18. It contains three alternatives which the committee might like to consider in construing that language, or indeed in changing the language to make it consistent with the intention of the committee in this respect.

Mr. ZABLOCKI. Merely for the record, it is my understanding that you do not intend that we amend the bill before us, but rather hope that we will consider your proposal separately, some time in the immediate future?

Mr. KASTENMEIER. It would be my personal view, or my personal desire, that the committee actually do consider amending the bill but I would think that the committee would have to consider whether the State Department and perhaps indeed the Treasury Department would consider this appropriate in terms of the legislation.

Now there are other considerations. Ideally speaking, I must say for my own part, I think it would be appropriate to the bill you are considering as an amendment thereto.

Mr. ZABLOCKI. In view of the fact that the other body is now holding hearings on your proposal and obviously will take some action on it, do you not think it would be better if we would defer our decision until some action is taken on your bill in the other body?

Mr. KASTEN MEIER. Mr. Chairman, the other body I think has finished its hearings on the matter and finished its hearings also not only on U.N. loans, but on the question of U.N. peace bonds. So they will presumably take no further action, at least at this time, relative to the U.N. loan legislation. However, in my view it would certainly be appropriate for this committee to do so, but this is a question for the committee.

Mr. ZABLOCKI. I have but one further question. Your bill does not spell out whether the peace bonds will be tax exempt or not. Mr. KASTENMEIER. No, Mr. Chairman. As a result they would be treated as any other American savings bond. Presumably in many States interest would be exempt from State income taxation, but in terms of Federal taxes they would be subject to tax like any savings bond.

Mr. ZABLOCKI. Thank you very much.

Mr. Chiperfield?

Mr. CHIPERFIELD. Thank you, Mr. Chairman.

other

Mr. Kastenmeier, I want to thank you for a very constructive statement. I am quite interested in your proposal. It seems to me to be worth while and should be carefully considered.

I am wondering if your bill was before the Senate when they considered the U.N. bond bill.

Mr. KASTEN MEIER. Mr. Chiperfield, my recollection is it was not before the Senate actually at the time they considered the U.N. bond or loan bill but they later, on Thursday, July 12, granted hearings specially for this purpose. I think that is correct.

Mr. CHIPERFIELD. I wish it had been because I believe your proposal has merit and it also has a great deal of appeal and I would have liked to have learned their thoughts on the proposal when they considered the bill before us. We are up against this situation now where the Senate has passed the bill and we are considering the measure before us and whether or not it would be advisable to consider your measure now in connection with this bill or as a separate measure, probably would be a matter for the committee to determine. As I say, I wish it had been before the Senate when they considered their bill and I would have been interested in the reaction they took after consider ing it.

Mr. KASTEN MEIER. Mr. Chiperfield, there are not yet reports on the hearings of July 12 in the other body. I think we had a very similar situation there. They considered the U.N. bond or U.N. loan measure while the peace bond proposal was in draft bill form. That is the peace bond measure was before the Senate at that time. Apparently the committee agreed to have it heard immediately after the major proposal was heard-unfortunately, in my view.

Mr. CHIPERFIELD. Well, some of us are not too happy about the manner in which these bonds are being raised and to me your proposal has considerable appeal.

I will raise the matter when we go into marking up this bill and have the committee make a determination.

Thank you, Mr. Chairman.

Mr. ZABLOCKI. Mr. Nix.

Mr. Nix. Thank you, Mr. Chairman.

Of course it is a pleasure to have our colleague here, Mr. Chairman. I, of course, am sympathetic to the idea of having the American people have an opportunity to express their interest in the United Nations. But I am afraid that your proposal will give aid and comfort to a great number of persons in this country who are today opposed to the purchase of United Nations bonds. I think the immediacy of the problem requires us first of all to dispose of that question and to purchase those bonds.

Now, if your proposal is in conjunction with that and is taken up later, I think it might receive favorable reception. But for myself, I think it serves to muddy the water and give some semblance of an argument to the people who now take a position contrary to the interest of the United States.

Mr. KASTEN MEIER. I can only say I would hope what you say would not be true. I would think there are some people in the administration who would feel such an addition might complicate such matters. It is, in my view, sufficiently simple and commonsense in its approach so that this wouldn't necessarily be the result that my good colleague from Pennsylvania suggests. I would certainly hope not.

Mr. Nix. I would just like to say this: I have heard many comments from people who are opposed to the President's proposal and in my view those comments are not based on reason and are not consistent with the interests of the United States. I am impatient with the delay. I am impatient with the arguments; all of which I feel are without merit. I feel a great urgency to grapple with the problem because I think the United Nations life is at stake and it is to our interest to see that it is preserved. The best way to do it, in my opinion, is to support the President.

Mr. ZABLOCKI. Mr. Whalley.

Mr. WHALLEY. I have no questions, Mr. Chairman.

Mr. ZABLOCKI. Mr. Seely-Brown.

Mr. SEELY-BROWN. I have no questions.

Mr. ZABLOCKI. Thank you, Bob.

Perhaps you have some indication of the attitude of the public toward your proposal. What indications have you received from the rank and file as to their interest in the peace bond issue?

Mr. KASTENMEIER. I have not had a great deal of mail on this particular subject, Mr. Chairman. But the written letters I have had on