LIST OF SUBAPPENDIXES TO "OPERATIONS AND FINANCING OF THE UNITED NATIONS" 1. The United Nations financial position and prospects (the United Nations bond issue resolution). 2. United Nations bond purchases by other nations as of July 16, 1962. 3. Opinion of the legal adviser of the Department of State on legal issues arising in respect of the issuance of bonds and the contracting of loans by the United Nations. 4. Analysis of the United Nations financial position 5. Analysis of the United Nations financial position 7. Data on pricing of supplies and services supplied 9. Summary of 1961 and prior-year arrearages owed the United Nations, showing arrearages owed Dec. 31, 1961; arrearages paid, Jan. 1 to May 31, 1962; and arrearages owed, May 31, 1962. 10. Summary as of May 31, 1962, of collections and 6, p. 11, June-- arrearages for 1961 and prior years of United 366 11. 1962 assessments for the United Nations regular budget, as of May 31, 1962. 12. 1962 assessments for the United Nations Emergency Force, as of May 31, 1962. 13. 1962 Assessments for the United Nations Congo account, as of May 31, 1962. 14. U.S. contributions to United Nations operations in the Congo through June 30, 1962. 15. U.S. contributions to United Nations Emergency Force through June 30, 1962. 16. Statement by the Acting Secretary General on financial position and prospects. 17. Statement by U.S. representative in Committee 5 on United Nations Emergency Force and Congo financing. 18. Resolution of the United Nations on scale of assessments for the financial years 1962, 1963, and 1964. 19. Resolution of the United Nations financing the United Nations Emergency Force for Jan. 1 to June 30, 1962. 20. Resolution of the United Nations financing the 21. Resolution of the United Nations financing the See footnotes at end of table. 8, p. 15, June...- 7, p. 14, June-- 368 370 LIST OF SUBAPPENDIXES TO "OPERATIONS AND FINANCING OF THE UNITED NATIONS"-Continued 23. Resolution of the United Nations to request 6, p. 37, Feb.--- 390 advisory opinion from the International Court of Justice. 24. Summary of resolutions authorizing United Na- 25. Composition of Congo forces. United Nations Emergency Force, assessments 21, p. 98, Feb... 391 13, p. 21, June.. 396 14, p. 57, Feb.. 396 20, p. 60, Feb... 397 4(a)1, p. 25, Feb. 437 4(a)2, p. 28, Feb. 440 United Nations military operation in the Congo, 29. Pledges and contributions for certain United United Nations Expanded Technical Assist- United Nations Economic Fund for the Congo, September 1960 to December 1961. 30. Repayments under United Nations headquarters loan agreement between the United States of America and the United Nations. 458 31. The votes in the United Nations on the Secretary Text, p. 1, Feb. General's financing resolutions at the 16th Gen eral Assembly. These tables and data-in which only slight changes have been made-were previously printed as appendixes to either the joint committee print of Feb. 6, 1962, or in the supplement to this print dated June 25, 1962. Table number, page, and source are identified in this column. OPERATIONS AND FINANCING OF THE UNITED NATIONS Prepared by the Department of State I. SUMMARY AND CURRENT STATUS A. THE PRESIDENT'S REQUEST In January, the President requested authorization from the Congress to purchase up to $100 million of United Nations bonds. This request followed action last December by the General Assembly of the United Nations, which adopted a financing program designed (1) to overcome the present financial crisis and provide a breathing spell for the United Nations, (2) to put the financing of peace-andsecurity operations in the Middle East and the Congo on a sounder basis for the next year or so, and (3) to provide the legal basis for an aggressive program to collect arrears. The resolutions adopted included authority for the Acting Secretary General to issue $200 million worth of United Nations bonds, repayable over a 25-year period at 2 percent interest. B. KEY SUBSEQUENT ACTIONS 1. Senate bill S. 2768.-The Senate of the United States by a bipartisan vote of 70 to 22 approved S. 2768, which would authorize the appropriation to the President of up to $100 million for the purpose of making loans to the United Nations. The Senate bill also provides that the loan is not to be used to relieve United Nations members of arrearages and shall not exceed by more than $25 million the amount of loans made or agreed to be made by other nations. Further, the United States is to deduct each year from its U.N. assessments the amount the United Nations owes to us for repayment of principal and interest on its loan. A concluding section states that this loan shall not be considered a precedent for future large-scale borrowing. 2. Bond purchases by other nations.-As of June 18, 39 nations had pledged a total of about $65.7 million of bonds. This includes 11 nations Australia, Denmark, Finland, Iceland, Ireland, Israel, Italy, Norway, Sudan, Sweden, and Togo-who have already purchased $25,180,000 of the bonds. In addition, 22 other nations have already indicated they plan to make purchases, but have not made the amounts public. Therefore, the United Nations bond issue is now a going concern. II. THE UNITED NATIONS FINANCING PROGRAM A. THE SECRETARY GENERAL'S DILEMMA When U Thant became Acting Secretary General he found the United Nations in the midst of a grave financial crisis. The principal factor which caused the crisis was the unwillingness of some and the inability of other members to pay their assessed shares for the UNEF and the Congo operations. Unpaid United Nations bills, plus borrowing from other accounts, totaled over $113 million on December 31, 1961. Arrears on the regular budget, the UNEF, and the Congo totaled about $93 million. A summary of these arrears, and reconciliation, is shown in appendix 9, and an itemization of balances due as of May 31, 1962, by nation, in appendix 10. B. EFFECT OF ARREARS As indicated in appendix 4, the effect of the arrears in contributions. was the accumulation as of December 31, 1961, of $129.4 million in unpaid obligations. As against this amount, the United Nations had net cash resources of $15.5 million, leaving a net deficit of $113.9 million. Included in the unpaid obligation total of $129.4 million was an amount of $25.2 million, representing borrowings from the United Nations Working Capital Fund, which thus completely exhausted the Fund and made it unavailable to finance expenditures, even for the regular budget. The amount of $129.4 million also included borrowings of $8.7 million from various surplus accounts. Thus, the amounts actually payable by the United Nations to various governments and private concerns amounted to $95.5 million. (Comparable figures for March 31, 1962, are contained in app. 5.) In order to survive cashwise during 1961, the Secretary General found it necessary from time to time to borrow, as specifically authorized by the General Assembly, from various reserve accounts such as those for the Special Fund and technical assistance. He also found it necessary to use temporarily from May 2 to December 27, 1961, an amount of $10 million paid by the United States and destined for use by the United Nations Children's Fund (UNICEF). The temporary use of these funds did not, of course, in any way affect the operations of the voluntary programs and there is no intention on the part of the Secretary General to borrow additional amounts from UNICEF. C. THE SECRETARY GENERAL'S PROGRAM The Secretary General found not only that existing methods of financing these operations were not producing the needed funds, but that widespread opposition existed to continuing to finance UNEF and UNOC by special assessments as they had been in the past. Moreover, he found that some of those unwilling to pay argued they were not legally bound to pay except on the regular budget. The Soviet bloc and Cuba have taken the lead in this position. When added to the inability of many of the smaller countries to pay these heavy short-term emergency costs on a pay-as-you-go basis-in addition to their regular assessments-the outlook for the future was serious. The financial crisis threatened to cause the collapse of the United Nations peacekeeping operations. U Thant made three interrelated proposals, each of which was adopted by large votes: 1. Advisory Court opinion on arrearages.-The General Assembly voted to ask the International Court of Justice for an advisory opinion to settle the question of whether the assessments levied for UNEF and the Congo were "expenses of the Organization" and therefore man |