VII. Arrear assessments in respect of the Congo ad hoc account for 1960 and 1961-Continued ASSESSMENTS FOR THE PERIOD JULY 14 TO DEC. 31, 1960 VIII. Summary of contributions due and received as of Jan. 31, 1962 1 Under Financial Regulation 5.2(e), this amount is applied as an adjustment to the amount of the appropriations for 1961. 2 Includes credits from special financial assistance of $3,475,000. 3 Includes credits of $1,685,481.50 offset by voluntary contributions. * Includes credits of $1,389,474 to be offset by voluntary contributions. 5 Includes credits of $3,900,000 offset by voluntary contributions. • Includes credits of $15,305,596 offset by voluntary contributions. 7 Includes credits of $11,400,800 to be offset by voluntary contributions. Publicly announced pledges by other member states of the United Nations as of February 15, 1962 18, 989, 898 10, 102 9,750,000 48, 500,000 100, 000, 000 80, 000, 000 313, 933, 375. 82 73.33 4 1,656, 270. 57 5 29,655, 146. 25 6 66, 874, 992.00 7 12, 034, 501. 23 16.99 61. 14 66.87 15. 04 Senator AIKEN. I will take one question which I think can be wholly contained this morning. In the President's message to Congress on January 30 this year, he said, and I quote: "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." On February 6 of this year, Secretary Rusk in a statement to this Committee stated: "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 substantially from collection of arrearages." Which statement is correct? Mr. KLUTZNICK. Well, I think on the following day, Ambassador Stevenson clarified the situation in response to a similar question. The resolution itself expressly provides latitude to the Secretary General with respect to the utilization of the funds, since they go into the working capital fund. I think it has been made clear by Ambassador Stevenson after consultation with the Secretary of State, that the hope is that the collection of arrearages will be adequate to take care of these old bills, and that Senator AIKEN. Do you mean the whole $129 million worth? Mr. KLUTZNICK. No, there are about $95 million. Senator AIKEN. What about the $80 million that will be added from now until July? Mr. KLUTZNICK. I am about to-I have a difficult time thinking sometimes, too. Senator AIKEN. I have difficulty in getting an answer to this question, too. Mr. KLUTZNICK. No, I have no difficulty in answering. The resolution, if I may start again, provides that the resources shall be used through the working capital fund. Now, under normal circumstances that vests a discretion in the Secretary General and in the General Assembly. It was the expressed hope of the President and the Secretary of State by what they said that there would be sufficient collection from old debts to pay some of the back debts and that the $200 million would be available for forward operations. But on Wednesday, Ambassador Stevenson made it quite clear in response to a question, at least I thought it was clear, that the determination as to how this shall be done rests in the Secretary General of the United Nations. All we can do is express a hope in light of the bond resolution. “URGENT AND PRESSING" NEED FOR FUNDS Senator AIKEN. The Secretary General of the United Nations in a note to the permanent representative of the United States of America on the 5th of January of this year stated: "In view of the urgent and pressing need of the Organization for cash resources to meet its current obligation the Acting Secretary General expresses the hope," and so forth, that he will get some money from somewhere. It is evident, therefore, that money is needed now, isn't it? Senator AIKEN. There is nothing in the resolution which says that returns from bond sales shall not be expended until July 1. Mr. KLUTZNICK. No, there is nothing in the resolution that says that, that is quite true. Senator AIKEN. How shall we take the statement of Secretary Rusk that the income from the sale of bonds will be used to meet the currently estimated costs of peace and security operations from July 1, 1962, to December 1, 1963? Should we disregard that now? Mr. KLUTZNICK. I don't think you ought to disregard it. I think you ought to recognize it as a statement of hope in that connection, which I, too, hope will be possible if there are enough other collec tions. Senator AIKEN. We all hope for it but if you got those collections you wouldn't need any bond issue at all. Mr. KLUTZNICK. Hardly. Excuse me, because we only passed a financing resolution up to July 1 and, as you know, Senator, from past experience with these resolutions, they don't produce a hundred percent of the assessment. So you would still need proceeds from July 1 on. Senator AIKEN. Yes, but the $25 million working fund has taken note of those slight emergencies from year to year. I believe in your statement, you said that if the assessments were paid we would come out even. Mr. KLUTZNICK. As far as arrearages are concerned but not on going operations and we have not assessed past July 1 and we are going to have a deficit, the U.N. will have a deficit for, the first part of this year. Senator AIKEN. Haven't the assessments which have been made up to this time been sufficient to pay costs? Mr. KLUTZNICK. Are you talking about UNEF and Senator AIKEN. I mean all expenditures. Mr. KLUTZNICK. Well, the assessments technically balance out. Senator AIKEN. Yes. Mr. KLUTZNICK. But as I tried to indicate in my statement, as a practical matter they operate in the regular budgets to do exactly what you say, but because of the failure of collections in the peacekeeping budgets UNEF and ONUC, they don't operate to do it. "That is why we are in trouble. Mr. CLEVELAND. Senator Aiken, can I just add one thing? NO SPECIAL ASSESSMENT FOR PEACE AND SECURITY OPERATIONS PAST 1 on, JULY 1, 1962 Mr. CLEVELAND. I think it is important to be clear that from July the only source of current money for then current expenses will, in fact be the proceeds of this bond issue, if it succeeds. There is not an assessment beyond July 1, 1962, for any peace and security operations. We have not put into the fiscal year 1963 appropriation request funds for the Congo. From July 1 on the current expenses are going to have to be met out of this cash. Now, to the extent that the arrearage up to the middle of 1962 can be paid off by back collections, and that current collections meet the current expenses, this is the ideal that the Secretary was expressing. Now, we are not going to make it altogether, obviously, but if we had our 'd "ruthers" what the U.N. would presumably do would be to try to get the back bills paid off by the collection of arrearages and use the current funds for the current expenditures. It so happens, indeed, that the origin of the $200 million figure is that $200 million of bond proceeds would just about carry current operations (without paying any back bills) for about 18 months, that is until the end of the calendar year 1963. To the extent that back bills have to be paid up, and the arrearages are not collected, that will reduce the length of time during which peace and security operations can be maintained out of bond proceeds. So the Secretary was expressing the hope that was at one end of the spectrum. The reality may well be somewhat shorter than that. Senator AIKEN. Mr. Cleveland, haven't assessments for the costs of the Congo operations been made about twice a year? They were made in the fall of 1960, in the spring of 1961, and again in the fall of 1961. You say there are no plans for asking assessments to carry on the Congo operation after July 1 of this year. Mr. CLEVELAND. That is correct, sir. Senator AIKEN. Does that mean that it's bonds or nothing? Senator AIKEN. It appears that way. Mr. CLEVELAND. It means under the U.N. plan, that it is-after July 1, 1962-bonds, or go back to the General Assembly and work out something else. Senator AIKEN. Is the Assembly in session now? Mr. CLEVELAND. It is but it will be Senator AIKEN. Why don't you ask them for assessments in case the bond issue fails? Are you just going to abandon everything in the Congo if you don't get financing exactly the way you want it? Mr. KLUTZNICK. Senator Senator AIKEN. Yes. RECOMMENDATION TO GENERAL ASSEMBLY FOR ASSESSMENT IF BOND SALE FAILS Mr. KLUTZNICK. I think it ought to be understood that the work of the Fifth Committee was completed and discharged. The only committees that are in session now are the Political Committee and the Fourth Committee. That does not mean to say that you couldn't have an emergency session, and indeed if there is a failure on this bond issue, which I hope there is not, there would be need for an emergency session. But it would have been totally inconsistent with the Secretary General's program to have recommended an assessment resolution for all of 1962 when, as a practical matter, he expected the bond issues to start bringing in the money. Now, if it doesn't bring it in you may be quite right. But as a normal rule, it has not been the practice to have two resolutions a year. That has only happened where there has been a resumed session and there was a carryover as there was in the case of the 15th resumed session. Senator AIKEN. The Congo operation hasn't been in operation long enough to establish a practice of two resolutions a year. As I recall it, last year the Fifth Committee was called into session on pretty short notice. Mr. KLUTZNICK. In March. Senator AIKEN. They were called to provide for the financing for 1961. Mr. KLUTZNICK. Senator, that was because the Committee when it adjourned, when the 15th General Assembly adjourned, to meet in March, the Fifth Committee had permitted the Secretary General to continue to spend at the rate of $8 million a month, but had not provided appropriations. As a matter of fact, that is why we had to handle it at that time. |