The cost of these operations has been the principal factor leading to the financial crisis in the United Nations, details of which are given in later paragraphs.

Expenses of regular U.N. activities.-The regular expenses of the United Nations are financed by annual assessments against each member government. These regular expenses of the Organization in 1961, excluding the troop costs mentioned above, totaled $72.7 million, of which the United States paid $22.3 million. This was 32.5 percent, which was our regular percentage contribution to U.N. activities in 1961. All member states, including the Soviets, have been paying their regular dues within the time limits provided by the Charter. Some countries are slow to pay, but no nation objects on principle to making these payments.

Cost of peace and security operations.-The U.N. budget for the peace and security operations, UNEF and UNOC, is running about $140 million per year. In 1961, UNEF cost about $19 million of which we paid $7.9 million. UNOC's budget was $100 million for the first 10 months of 1961 of which the United States paid $47.5 million.

The cost of UNEF and UNOC is also assessed against every member of the United Nations by action of the General Assembly. In addition, the United States and other nations have made voluntary contributions, in cash and services, to reduce the burden on the smaller, less developed countries. However, the Soviets and their satellites take the position that they will pay only when they agree with the operation; they therefore have refused to pay their assessments to either UNEF or UNOC. The Arabs also do not pay for UNEF, and the French and the Belgians have declined to pay their share of UNOC. Although most of the smaller, less advanced nations believe the UNOC operation is important and necessary, many of them have been unable to keep up their payments on these special assessments on top of paying their regular assessments. All these nonpayments have produced the cash shortage in which the U.N. finds itself.

The Secretary General's dilemma.-When U Thant became Acting Secretary General he found that one of the basic problems of the U.N. was this cash deficit. As indicated above, this resulted from the inability of some members and the unwillingness of others to pay their assessed shares. As of December 31, 1961, the total unpaid contributions on the regular budget, the UNEF, and the UNOC accounts totaled about $94 million. Unpaid U.N. bills, plus borrowing from other accounts, were estimated at nearly $110 million.

Moreover, the Secretary General found that widespread opposition existed to continuing the financing of UNEF and UNOC from special budgets as they had been in the past. Principal among the reasons was the inability of many of the smaller countries to pay these heavy short-term emergency costs-in addition to their regular assessments-on a pay-as-you-go basis.

The Secretary General's program. The Secretary General 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 to pay the expenses of UNEF and UNOC create mandatory obligations on member states under the United Nations Charter. It is the opinion of the United States that such assessments, like other assessments levied to finance the activities of the United Nations, do bind governments. Several states, however, have refused to pay their assessments for UNEF and UNOC, claiming that they are not obligated to do so. We anticipate an opinion from the Court which will confirm the binding character of these assessments. Such an opinion should be of great value in inducing delinquent states to honor their financial obligations.

2. Interim financing: The General Assembly voted a new appropriation, assessed against all members, to carry UNEF and UNOC operations through June 30, 1962. This interim financing is needed to permit governments time to secure the approval of their legislatures for the longer range bond issue financing.

3. U.N. bond issue: The General Assembly authorized the Secretary General to issue $200 million worth of U.N. bonds, repayable at 2 percent over a 25-year period. These funds will finance peacekeeping operations for approximately 18 months from July 1, 1962. The bond issue will be repaid out of the regular budget. Repayments will amount to an annual charge of about $10 million, which will be assessed against all members as a part of the regular budget.

SUMMARY

The reasons for continued support by the United States of the United Nations and of our subscription to the United Nations bonds were summed up in President Kennedy's state of the Union message:

"No policeman is universally popular-particularly when he uses his stick to restore law and order on his beat. Those members who are willing to contribute their votes and their views-but very little else have created a serious deficit by refusing to pay their share of special U.N. assessments. Yet they do pay their annual assessments to retain their votes-and a new U.N. bond issue, financing special operations for the next 18 months, is to be repaid with interest from these regular assessments. This is clearly in our interest. It will not only keep the U.N. solvent, but require all voting members to pay their fair share of its activities. Our share of special operations has long been much higher than our share of the annual assessments-and the bond issue will, in effect, reduce our disproportionate obligation. For these reasons, I am urging Congress to approve our participation."

JANUARY 19, 1962.

BUREAU OF INTERNATIONAL ORGANIZATION
AFFAIRS, DEPARTMENT OF STATE.

Senator SPARKMAN. As I said when I introduced S. 2768, the question of the financial emergency in the U.N. raises other questions about the functions of the U.N. and its successes and failures since 1945. There is no use in trying to make a rigid separation between the question of saving the U.N. from bankruptcy and other questions because the next question is, inevitably: Is the U.N. worth saving from bankruptcy?

The importance of these questions is given emphasis by the presence of the Secretary of State here today as the first witness of the administration.

Secretary Rusk, we are glad to have you here. We have copies of your prepared statement. You may proceed as you wish. You understand, of course, that the entire statement will be printed in the record and you may read it in full or summarize it or discuss it as you see fit.

STATEMENT OF HON. DEAN RUSK, SECRETARY OF STATE

Secretary RUSK. Thank you very much, Mr. Chairman, and members of the committee. If the committee is agreeable and since the statement is relatively short, I would be glad to read the entire

statement.

Senator SPARK MAN. Very good.

Senator RUSK. I appreciate this 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 leadership in it. The second kind of question is raised by some who regularly support the United Nations and want 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 approval 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 repaid over 25 years in equal installments at 2 percent 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 opportunity 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 years 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.

ROLE OF THE U.N. IN U.S. FOREIGN POLICY

I therefore must dwell briefly on the broad question of the role of the United Nations in U.S. foreign policy-and the role of U.S. foreign policy in the United Nations.

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 with 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 partisan terms when they think of the United Nations. It is precisely because of such very broad public support and bipartisan congressional attitudes that the United States has been able to maintain a position of leadership in U.N. affairs.

We cannot too often recall the purposes of the United Nations, as set forth in the preamble to the charter:

*

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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 individual. 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 institutional machinery. They do not add up to a blueprint or a master plan for resolving all the inherited quarrels and sins of the centuries. Much less do these words provide any way to predict future problems or solve them automatically when they arise.

The preamble to the charter of the United Nations 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 world in which nobility of purpose is not yet the 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 U.S. foreign policy.

TWO POSSIBLE COURSES FOR THE FUTURE

In that world there are two views about the future of human society, at least two. 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 ideology based on an analysis of human history which left out of account the human mind and will.

The other is a view of a pluralistic world-a world of color, variety, and movement, held together 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 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 uniform world and its behavior is unpredictable precisely because it will be influenced by flesh-and-blood men.

The United Nations-in its charter, its membership, 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 United Nations are based on consent, illumined by debate, and conformed by majority 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 is valued as highly by others as it is by us.

So the United Nations, theoretically and practically, fits with the view of a diverse world struggling to master its own problems by conscious thought, by deliberate act, and by majority consent which is always difficult and sometimes elusive. The basic objective of U.S. policy manifestly is to help steer the world toward a validation of that view.

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

NECESSITY FOR NATIONAL DIPLOMACY

The first instrument is national diplomacy to protect and extend the national security. But to think of national security entirely in terms of military power is too limited a conception. National power is compounded of military, political, economic, and moral strength. We cannot, 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 increase our national power and influence by associating 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-sustaining 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 instruments with which we work toward an ultimate 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 tomorrow, prepared to testify out of firsthand experience on the current state of its health.

THE UNITED NATIONS AS A SYMBOL

Inevitably, the United Nations must reflect in large measure the deep divisions of the contemporary world. But it also reflects the even deeper trends toward international community and the still deeper aspirations of peoples for peace, justice, 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 harmony 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 multilateral diplomacy. We shall continue to work with and seek to strengthen the concerts of nations joined in more limited communities based on consent and dedicated to common enterprise. But our ultimate hopes would lack all substance without the United Nations, for the United Nations foreseen in the charter is the vision we hold of the future.

It is in this perspective that the United Nations plays such an important role in U.S. foreign policy, and why U.S. foreign policy lays such store by the United Nations.

DEPLETION OF UNITED NATIONS FUNDS

During the 16th General Assembly, the financial situation of the United Nations became intolerable. The Organization had been