nist bloc have become so close that he-as to whether he is incapable of pursuing a neutralist policy.

There are pluses and minuses on this. After all, Phoumi, with strong encouragement from the United States, December a year ago did throw him out in a military coup. So Souvanna Phouma has no particular reason to like us or to trust us, and I think there is enough reason on both sides for that distrust. Certainly one of the reasons why the Americans helped to unseat him was that they thought he was untrustworthy in terms of policy.

PROCEDURAL QUESTIONS

The CHAIRMAN. Mr. Secretary, time is getting on. I hope we will have something about the Congo, because that is very important. Can you go on to that?

Senator SYMINGTON. Mr. Chairman, may I ask a question at this point? I have some plans, and I would like to ask if we will meet this afternoon.

The CHAIRMAN. It is a question of time here. I was just trying to go along.

Senator SYMINGTON. Yes, I saw that. We are nearing the noon hour. Are we going to proceed this afternoon?

The CHAIRMAN. We have no agreement with the Secretary. I imagine he would probably have other commitments this afternoon.

Secretary RUSK. I would do my best-I have two or three appointments.

The CHAIRMAN. So do I.

Secretary RUSK. I can clear them.

The CHAIRMAN. How late can you go? If we go into the Congo and then go into questions-I would like to hear something about the Congo. There are two particular items that are very current, one is Congo, and the other is Indonesia, if you could say something about that. Go ahead.

PROGRESS IN CONGO DISCUSSIONS

Secretary RUSK. On the Congo, I might just mention what seems to us to be the situation over the last very few days, because I think the effort not only of the United States, but of Great Britain, France, Belgium, and private interests who have been working much more closely than some of the publicity would indicate, are beginning to bear some fruit.

The object all along has been to get the Adoula 12 government and Katanga consolidated within the framework of at least a federal Congo, so that there would be a moderate axis there which would be in strong enough position to resist pressures from the left.

In the discussions that have been going on between the Adoula government and Mr. Tshombe, 13 there seems to have been very considerable progress in the last week or 10 days. The Kitona agreement of eight points laid the basis for this.

12 Congo Premier Cyrille Adoula.

13 Moise Tshombe, President of the secessionist Katanga Province.

We know that Tshombe has been working among some of his own more extreme elements to get them to go along with the Kitona agreement. We believe that he is responding to the advice, among others, of the Union Miniere and the Belgian Government, as well as the French, those who have had the closest touch with him, to sit down and negotiate with Adoula a constitutional structure for the Congo which would, on the one side, keep a central government in being for certain national purposes, and leave very considerable autonomy to the provinces and give Katanga the kind of control over its own local affairs that it seems to want.

Senator HICKENLOOPER. You mean the establishment of a federal government?

Secretary RUSK. Yes, which is the only mutually tolerable result that could come out of this present situation.

ACTION AGAINST GIZENGA

Meanwhile, the central government has been moving against Gizenga, who, in a much less dramatic way, has been a secessionist of another sort over in Stanleyville.

The latest we have this morning is that Gizenga's 14 forces in Stanleyville have been scattered by Lundula's 15 forces that are loyal to the central government.

Gizenga has sent a message to Leopoldville saying he is coming back to the capital to take up his duties as vice premier, and to please prepare his office and residence. But the government meanwhile has gotten a vote of censure against him of approximately 70 to 1-I think there might have been 66 and 4 abstentions, perhaps, against Gizenga. He will not be restored to his office, and Adoula will reconstitute his government. If I can put this point off the record

The CHAIRMAN. Off the record. [Discussion off the record.]

UNITED NATIONS BOND ISSUE

Secretary RUSK. Mr. Chairman, I do want to make a comment on a matter coming down this week for your consideration, and that is the U.N. bond issue.

The essence of the problem is simply this: When we left the last session of Congress, I would suppose if we had a clear mandate coming out of our discussions in various committees, it was that we should do our best to get a broader base of financial contribution in the United Nations toward these peace and security operations in the Congo and the Middle East.

Over the last 18 months, beginning in June 1960, we have contributed either in cash or in value of services rendered, such as U.S. air transportation, something in the order of $113 million. which, if you take into account services as well, is about 60 percent of the total cost of the U.N. in the Congo.

Now, there have been some of those, not just the Soviet Union, but others like France and Belgium, who have not been willing to

14 Former Congo vice premier Antoine Gizenga.

15 Maj. Gen. Victor Lundula.

contribute to the Congo operation for direct political reasons of their own, and we have not gone at them publicly on this. We have pressed them to make their contribution, but we can understand some of their own problems on that point.

The question was how do we bring this back under control, prevent the U.N. Secretariat from this business of borrowing from its own funds, running into deficits, unpaid bills, failure of collections, and much greater dependence on the United States than we, and I presume the Congress, would want.

The principal alternative that came out of the discussions was the bond issue technique, that there would be between now and June 1962 an interim budget of the normal sort, that is, to give time to get the bond issue thing laid on, but for the 18 months after that, beginning in June 1962, the financing of these peace and security operations, not only in the Congo but in the Middle East, would be handled on the basis of a bond issue which would be placed upon the ordinary, regular budget of the United Nations in which our contribution is roughly 32 percent.

PAST DUE SPECIAL ASSESSMENTS

Meanwhile, every possible effort will be made to collect the outstanding assessments that are now overdue. I think the Soviet bloc alone is over $30 million on these assessments.

The General Assembly voted to send the question to the World Court as to whether these special assessments are equally as binding under the charter as the regular assessments. We know from a number of governments if the World Court's decision on that is yes, as we expect it to be, that a number of governments that have not been paying their special assessments will, in fact, pay them. The bond issue is not to replace the special assessments. Every effort will be made to collect these past due assessments, and they will build up a problem of voting rights in the Assembly just as would subscriptions to the regular budget of the United Nations.

We do not believe that there can be any problem of these bonds being in default while we continue to pay our regular assessments. Senator HUMPHREY. What is the Court going to decide? Secretary RUSK. I think the Court almost certainly

Senator HUMPHREY. I mean, what is the issue before the Court? Secretary RUSK. As to whether these special assessments are legal obligations under the charter. In other words, whether there is any difference between special assessments or ordinary assessments.

Senator LAUSCHE. Whether the costs in the Congo are to be borne by voluntary or by what I would call obligatory or mandatory responsibilities to the United Nations.

ASSESSMENTS WERE NOT INTENDED TO BE VOLUNTARY

Secretary RUSK. Well, the military budget, Senator, was on the basis of a General Assembly resolution which was never intended to be voluntary. It was an actual assessment, and the question is whether that kind of an assessment is equally binding along with the normal assessments under the charter.

Senator LAUSCHE. The Soviets take the position that it was not a binding obligation, but one that was dependent upon the will of those who gave.

Secretary RUSK. That is correct. It takes either the position that it was not binding or, whether it was binding or not, they were not going to pay it. But we won't run into any problem about these bonds being in default .

Senator AIKEN. So long as we pay them.

Secretary RUSK. So long as there is a United Nations, and we have dues owing to the United Nations.

STATUS OF REGULAR BUDGET

Senator SPARKMAN. May I ask a brief question?
Secretary RUSK. Yes.

Senator SPARKMAN. What is the status of the regular budget? Are the countries all pretty well paid up on that? Are any of them more than 2 years in arrears?

Secretary RUSK. The record on that is not too bad. They manage to keep ahead of the sheriff, Senator, by keeping well within the 3year rule.

Senator SPARKMAN. I believe I have seen a figure of 82 percent paid up.

Secretary RUSK. At any one time the figure can vary considerably because of fiscal years and questions of that sort, but the collections there have been pretty good over the years.

USE OF LOAN REPAYMENTS

Incidentally, we have collected on time and in full the obligations that the United Nations has owed us under the U.N. headquarters agreement on the loan that we made for the building of the structure. But we assume that the Congress-if it is good enough, as we hope it will be, to approve our taking part in this bond issue-we assume you would want the annual repayments of those loans to go into the general receipts of the Treasury. Whether or not that would be your wish on it, we would suppose that when an annual installment of these bonds becomes due they would be, in effect, used to pay that part of our annual contributions to the United Nations. We would not be in the position of paying our dues fully, on the one side, and holding a past due bond on the other, so to that extent these are perhaps tax anticipation bonds or something of that sort.

ALTERNATIVE TO BOND ISSUE

The CHAIRMAN. What is the alternative of bonds? Supposing you do not get it?

Secretary RUSK. The alternative, Mr. Chairman, would be for us to struggle along on the basis which has been used thus far, trying to get governments to pay their special assessments to the United Nations, and continue to bear something on the order of 50 percent of the cash budget ourselves and perhaps more than that in terms of additional services.

INTEREST RATE

Senator CAPEHART. Mr. Secretary, why the 2 percent interest? Why not the going rate of interest on government bonds? Why have any interest at all if not the normal interest that we pay when we borrow money?

Secretary RUSK. I am not technically briefed on that point, Senator, quite frankly. The arrangements were worked out between the Secretary General and Mr. Eugene Black of the World Bank, who was a consultant on this.

I think, quite frankly, the point is that the higher interest rate would put that much more of a burden on the ordinary budget, and this would be a reasonable compromise.

It does add somewhat to our 32 percent contribution.

Senator CAPEHART. We have trouble with moneys we are loaning to SBA and for many other purposes in the United States, where we have a much higher rate.

Now we are going to ask our own American taxpayers and citizens to pay a higher rate, and here at the United Nations we are going to give it to them at 2 percent. Why any interest at all unless the normal interest?

Secretary RUSK. We have, of course, in the aid program, adjusted interest rates downward as a matter of aid below the actual cost to us of the funds.

Senator CAPEHART. I do not approve of it. Psychologically, it is bad. I think you could use the argument that it reduces the cost; where you said it reduces the cost, well, why any interest at all?

Secretary RUSK. To me one of the most important things about this bond issue is that every member, including the smallest one, will take their regular share of it in accordance with their proportions of the regular assessments.

Senator CAPEHART. It would be more tolerable to the American people if it carried at least the same amount of interest we are paying on the mortgages.

BOND ISSUE AND U.N. VOTING RIGHTS

Senator AIKEN. Isn't it a fact, Mr. Secretary, if there would be a favorable opinion from the World Court that the Soviets will lose its vote late this spring, and under the bond issue the Soviets could stall for the next 30, 40 years, and still retain a vote?

Senator SYMINGTON. That is what I was going to ask. There was an article in the Wall Street Journal this morning which at least implied, first, there would be the bond issue, and then the bonds would be assigned to the general levy of cost to the nations in the United Nations, and that then if those nations did not put up whatever was their part of the cost, including what would be their part of the bond issue, that they would lose their vote. That was the implication in the article in the Wall Street Journal this morning, and I would like to ask your comments on that this morning. It reads right against what the Senator from Vermont was asking.

Secretary RUSK. There are two separate points. One has to do with those assessments which have been refused and are already past due. That question goes to the World Court.