who are either no longer required or have perhaps expertness that is no longer necessary, to leave without formal contract termination. is to encourage turn-over and reductions in staff. ·

It

We found that if we do not have this kind of thing we run into serious difficulties, in recruiting people initially, because when the Europeans come out of their own economy they have much greater difficulty in getting reestablished when they go back home than do the Americans. It is a practice which has existed in most of the European foreign services and one which we felt was justified in the case of the United Nations.

The rent allowance and subsidies will be terminated at the close of this year. It was originally set up because at the time they came to New York the only way that they could get housing was by going into a housing project, and taking over the whole contract for the housing. It was a group of buildings built by several Manhattan savings banks, and they had to pay a premium in order to get the housing. It was started at the conclusion of the war. You will remember the housing situation then. That will be out at the end of the year.

The representation allowance applies only to a limited number of people, the Assistant Secretary-Generals and certain directors and covers their representation expenses.

The nonresident's allowance, I do not recognize. I do not know what the committee is referring to there. I have tried to recall. I will continue my efforts to try to determine its nature and will put my finding in the record on that.

(The following explanation was submitted later:)

The nonresident's allowance is payable in the limited number of instances in which it is necessary to deviate from the general policy of recruiting staff in the lower grades in the country where the organization is located. For example, it is sometimes necessary for the United Nations in Geneva to recruit British secretaries or translating clerks, in which case the UN continues to pay them at the local rates-not on an international scale-but does provide them a little extra compensation to meet the extra cost that a foreigner always encounters in a country of which he is not a native.

The home-leave allowance is a provision which permits employees to go to their home lands for their leave every 2 years. The idea there is that the Frenchman, serving in New York, should not completely lose touch with France, or the American serving in Geneva should not completely lose touch with the United States. It is similar to the home-leave provisions we have in the Foreign Service.

We made an effort at the last assembly to get that reduced to a 3-year period. We thought that it would be a little sounder practice and that a little longer period would be better. We were defeated on that. We lost by a close vote.

The indemnity upon termination, is roughly the same as the repatriation grant but applying only to the people dismissed as a result of reductions of posts.

The income tax reimbursement is a situation which is peculiar to the American nationals serving in the secretariat. The organization originally established its salaries on a tax-free basis, free of income tax. We had doubts on that and took a reservation at the time. The majority of the members, however, felt that it was important that the individuals serving in the secretariat should be free from any national

income tax and therefore they inserted this tax-free provision in the salary plan and privileges and immunities convention.

During the first year it became apparent that the United States. nationals serving in New York would have to be subject to United States income taxes because there was no congressional authorization to exempt them from that tax. The General Assembly took cognizance of the problem and decided they wanted to have everyone working up there get equal take-home pay. It did not want the Cuban to get more than the United States national, so it did this: It established a UN staff assessment scheme, which was based roughly on the equivalent of the Canadian income tax level, which is above the United States income tax level, and it then paid, in effect, for the United States nationals their income tax, in effect from the proceeds of this assessment which was levied on all the officials of the secretariat. That is a very important point, and the Department is very anxious to obtain either a ratification of the privileges and immunities conventions to put the Americans on the same basis as the nationals of other countries, or obtain a special amendment to the Internal Revenue Code which would provide relief for United States nationals from double taxation.

Such legislation was pending in the last Congress but did not proceed to enactment, and the department will reintroduce that request in this new Congress.

SALARIES INCREASED WHEN ALLOWANCES DISCONTINUED

Mr. STEFAN. You will notice, Mr. Hall, when you stated that some of these allowances were discontinued, if you will look at the next paragraph of the report, it indicates where some of the allowances were discontinued they were incorporated into the regular salary. Instead of discontinuing them you just raised their salaries.

Mr. HALL. That was the same action as was taken in the United States by the Congress. The wartime cost of living increases were incorporated in the basic salary raises right after the war, and this is comparable to that, although it comes about 2 years later.

REASONS FAO ARE HEADQUARTERED IN ROME

Mr. STEFAN. Are you familiar with the organization that borrowed $800,000 to move to Rome?

Mr. HALL. I was not directly involved in that action, but my understanding is that the report does not fully reflect what happened. Actually, the situation was this; as I understand it-I believe the item you have referred to appears on pages 6 and 7.

Mr. STEFAN. The report reads:

Attempts by the Secretary-General to attract to the New York headquarters those of the specialized agencies which were not permanently located elsewhere have been met with resistance and lack of interest. Thus, recently, when the Food and Agricultural Organization had under consideration the offer of a $7,000,000 loan from the United States to finance a headquarters building either in the neighborhood of the United Nations site in New York, or at the site in Washington, the Food and Agricultural Organization determined to move its headquarters to Rome. Had they decided on the New York location, they could have taken advantage of an offer made by the Secretary-General of the United Nations to make five floors available at an appropriate cost until such time as permanent facilities could have been completed. To enable the move to Rome, the Organization borrowed $800,000 from the United Nations.

Does that refresh your memory?

Mr. HALL. I recall the situation. The Food and Agricultural Organization was located in Washington temporarily by a provision of its first resolutions. The United States was interested, and we have always felt that it would be desirable, for the Food and Agricultural Organization to be located in the United States. The President authorized us to make an offer to the organization that we would seek congressional authority to assist them in financing a permanent home, either in Washington or in New York. That offer was presented to the organization. The other members of the organization concluded that it would be more advantageous to remove to Rome. Their move to Rome, I think, was primarily conditioned on a factor referred to by the committee in another conclusion found on page 69, wherein they

say:

Arrangements must be made for the use of soft currencies on a larger scale than hitherto.

I think that general sentence from the report explains why the members of the FAO decided to move to Rome. They thought that they could pay a larger portion of the cost of organization in lire as against using dollars of which they were very short. It is a situation with which you are very familiar. To permit that move, the organization did request a loan from the UN working capital fund, and it was authorized. It is to be repaid at the end of 2 years and is being repaid by installments.

Mr. SANDIFER. The Government in Italy gave a building to the UN without cost, for its headquarters. Even if they had located in New York, ultimately they would have to have bad a building on the headquarters site to which they would have had to contribute. So far as the actual cost is concerned, they probably came out much ahead of the game by moving to Rome.

INCREASE OF FOUR POSITIONS

Mr. STEFAN. I assume, Mr. Sandifer, that if the committee does not allow you this requested increase of $22,000 for the four additional employees, you will go out and get them from somewhere and Mr. Wilber will absorb the cost.

Mr. SANDIFER. We will abide by the decision of the Appropriations Committee and the normal and regular procedures of the Department. Mr. STEFAN. You did not answer my question. From the testimony, you arbitrarily went out and employed 16 employees without authority from the committee, and my question is, whether you get. these additional ones or not, are you going to just take them and have Mr. Wilber absorb the cost?

Mr. WILBER. If I may interject, where the committee takes specific action on a question of this kind, we do not willfully violate the wishes of the committee.

Mr. ROONEY. You would not dare to do so if it were set forth in the report that you were to use so many employees and so mucn money for a certain purpose. We understand that, Mr. Wilber.

Mr. CLEVENGER. You know, I have expressed the feeling that gradually the Capital in Washington will become a sort of way station

to this UN Tower of Babel in New York. I have a much simpler and more direct way of reducing these expenses, if I could have my own way. I realize the complete futility of anything I may say or do, because I realize it is going to continue as long as they can get the money to do it, and as long as we are foolish to give it to them.

Mr. ROONEY. The point is not whether you need extra employees in the Bureau of United Nations Affairs as a result of the Korean crisis, the point is that you added 16 employees without the Congress knowing the first thing about it. You used funds which we gave you for other purposes and which must have been in excess of your needs. Then you come before us with the table on page 167, which I say is set up in a misleading manner, because you start with a base of 236 employees. In order to find out what you were doing, we had to get our last year's hearings. At page 618 we found the statement that you had 224 employees for the year 1950 instead of the 236 that you set forth on page 167 of the justifications submitted this year. That, to me, is the whole thing in a nutshell. I do not think we need to comment too extensively with regard to it.

Of course, we could have put in the report that you were to have so many employees and so much money for a specific bureau. We have not done that: we have trusted you to make transfers within the department only when you needed them to meet an emergency, but the testimony here is that you took 16 additional people right off the street and put them to work in this office. That is the testimony. Such was never intended because you came before this committee last year and with pride pointed to the fact that you were saving the taxpayers' money by eliminating eight jobs. That was the testimony before us last year. I do not know what further we can say and think at this point.

Thank you, gentlemen.

THURSDAY, MARCH 1, 1951.

ASSISTANT SECRETARY FOR PUBLIC AFFAIRS

WITNESSES

EDWARD W. BARRETT, ASSISTANT SECRETARY FOR PUBLIC AFFAIRS

HOWLAND H. SARGEANT, DEPUTY ASSISTANT SECRETARY FOR PUBLIC AFFAIRS

FRANCIS H. RUSSELL, DIRECTOR, OFFICE OF PUBLIC AFFAIRS MAX MCCULLOUGH, DIRECTOR, UNESCO RELATIONS STAFF ROBERT L. THOMPSON, CHIEF, DIVISION OF PUBLICATIONS, OFFICE OF PUBLIC AFFAIRS

CARLISLE H. HUMELSINE, DEPUTY UNDER SECRETARY FOR ADMINISTRATION

EDWARD B. WILBER, BUDGET OFFICER

Mr. ROONEY. The next item for the committee's consideration is entitled "Assistant Secretary for Public Affairs," which appears at page 170 of the justifications, which page we will insert at this point in the record.

81707-51--22

(The page referred to is as follows:)

Assistant Secretary for Public Affairs

Mr. ROONEY. Mr. Barrett, do you have a general statement? Mr. BARRETT. Yes; there is a general statement. Mr. Sargeant has specialized on this part of the presentation, and I will ask him to serve the part of principal witness.

Mr. SARGEANT. I have a short general statement that I will be glad to submit for the record.

Mr. ROONEY. We shall insert your general statement in the record at this point.

(The statement referred to is as follows:)

I appreciate the opportunity to discuss with this committee the work of the Office of the Assistant Secretary of State for Public Affairs. As the committee knows, there is a constantly growing desire on the part of people in every State of the Union to follow developments in the international relations and foreign policy of their country. I am proud of the efforts of our staff to meet this public demand, and we are glad to be able to tell you the story of what we are doing. The mounting tension in the international situation seriously affects the people of this country in almost their every activity-in their very way of life.

Important and far-reaching decisions are necessary to meet the exigencies of this crisis. These decisions have a material effect on our people. It is, therefore, extremely important that the American people are kept informed of these decisions the events which make them necessary, and why they must be made to preserve our way of life. It is equally important that public opinion be taken fully into account as our foreign policy is formulated.

The appropriation request now before you is for the purpose of assuring this flow of information.

Specifically, the appropriation request involves the immediate Office of the Assistant Secretary, the Office of Public Affairs and the UNESCO Relations Staff. While Mr. Barrett and I are also responsible for the United States oversea information and exchange-of-persons program, I understand that program will be discussed here at a later date.

The Assistant Secretary serves as top-level adviser to the Secretary of State on domestic and foreign public opinion and public relations. He is charged with making recommendations to the Secretary on all policy matters affecting the domestic information_program and the oversea information and educationalexchange program. Further, he is responsible for the over-all direction and coordination of these programs, including conducting any liaison with other