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BEFORE THE

COMMITTEE ON POREIGN RELATIONS 

UNITED STATES SENATE

EIG HT Y-SEVE NT H CONGRESS

SECOND SESSION

ON

KSU LIBRARIES

S. 281 8

A BILL TO PROVIDE AN OPPORTUNITY FOR THE PUBLIC 

TO GIVE SUPPORT TO THE UNITED NATIONS THROUGH 

THE PURCHASE OF U.S. TREASURY BONDS WHICH 

ARE TO BE ISSU ED UNDER THE TIT LE OF 

UNITED NATIONS PEACE BONDS

JULY 12, 1962

Printe d for th e use of the Committee on Foreign Relations

87904

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1962
<

COMMITTEE ON FOREI GN RELATIO NS

J. W. FU LBR IG H T, Arkansas, Chairman

JOHN SP A R K M A N , Alabama A L E X A N D E R W IL E Y, Wisconsin

H U B E R T H. H U M PH R EY, Minnesota 

M IK E M AN SFIE LD , Montana 

W A YN E M OR SE , Oregon 

R U SS ELL B. LO NG, Louisiana 

A L B E R T GORE , Tennessee 

F R A N K J. LA USC H E, Ohio 

F R A N K CH URC H, Idaho 

STU A R T SY M IN GTON , Missouri 

TH OM AS J. DODD, Connecticut

BO U R K E B. H IC K EN LO O PER , Iowa 

GEORGE D. A IK E N , Vermont 

H O M ER E. CA PE H A R T , Indiana 

F R A N K CA RLS ON, Kansas 

JOHN J. W IL LI AM S, Delaware

Carl Marcy, Chief of Staff

Darrell St. Claire, Clerk

I I
C O N T E N T S

Sta tement of— Pago Clark, H on. Joseph S., U.S. Senator from the State of Pennsylvan ia. _ 2

Cooke, Pau l, natio nal vice chairm an, American Veterans Com mittee. 82

Eichelberger, Clark M., executive director, American Association for

the United Nations________________________________________ 75

Goodman, Leo, on behalf of the United Auto Workers, AF L-CIO__ 51

McGhee, Hon. George C., Under Secretary of State for Political

Affairs, accompanied by John K. Carlock, Fiscal Assistant Secretary 

of the Treasury, and Wilbur H. Ziehl, Deputy Director, Office of 

Inte rna tional Administration, Department of State_____________ 27

Snyder, Edw ard F., executive secre tary, Friends Committee on Nation al Legislation__________________________________________ 46

Inserts:

Text of S. 2818....................................... ............... ................. ........... ....... 1

Press release announcing results of poll made by Senator Clark_______ 3

Resu lt of q uestionnaire_______________________________________ 4

Letter from Hon. Philip A. Ha rt, U.S. Senator from the State of

Michigan_________________________________________________ 24

Statem ent by Hon. Hu bert H. Hum phrey, U.S. Senator from the

State of Minneso ta_________________________________________ 24

Statem ent by Hon. Maurine B. Neuberger, U.S. Senator from the

State of Oregon____________________________________________ 25

Statem ent by Hon. Harrison A. Williams, Jr., U.S. Senator from the

State of New Jersey________________________________________ 25

Telegram from Ralph F. Cook, secretary-tre asurer, Mon tana F armers

Union____________________________________________________ 26

Statem ent b y Women’s In tern ational League for Peace and Freedom,

Washington, D.C __________________________________________ 26

Executive branch memorandum on contributions to the United States

for support of the United Nations____________________________ 40

Resolution on Inte rna tional Labor Solidarity adopted by the United

Automobile Workers 18th Constitutional Convention, May 4-10,

1962_____________________________________________________ 51

Exce rpt from final report resolutions committee, 18th Constitu tional

Convention of the United Automobile Workers_________________ 55

Press releases concerning trade union program in support of defense

savings bond program, dated April 9, May 2, and October 29, 1941. 63

Letter to Hon. Thomas E. Morgan, chairman, House Foreign Affairs

Committee, from Walter P. Reuther, president, Intern ationa l

Union UAW______________________________________________ 70

Supplemental statem ent by Clark M. Eichelberger, executive directo r,

American Association for the United Nations__________________ 81

American Vete rans Committee Resolution on “The Purchase of

United Nations B onds by Priva te Individuals and Nongovernmental Institutions and Organizatio ns” ___________________________ 83

Supplemental statem ent by Paul Cooke, national vice chairm an,

American Veterans Com mittee_______________________________ 86

Staff memorandum on questions posed during hearing _____________ 87

Summary index__________________________,___________________ 91

xn

UNITED NATIONS PEACE BONDS

THU R SD A Y , JU L Y 12, 19 62

U.S. Senate,

Committee on Foreign Relations,

Wa&hington, D.C.

The committee met, pursuant to notice, at 10:05 a.m., in room 4221, 

New Senate Office Building, Senator John Sparkman presiding.

Pre sen t: Senators Sparkman, Humphrey, Morse, Hickenlooper, and 

Capehart.

Senator Sparkman. Let the committee come to order, please. We 

expect other Senators to come in, but I think we had better get 

started.

The Committee on Foreign Relations today is holding a public 

hearing on S. 2818 as revised, a bill to provide an opportunity for 

the public to give support to the United Nations through the purchase 

of U.S. Treasury bonds which are to be issued under the title of 

United Nations Peace Bonds.

The committee is also prepared to consider related proposals submitted by other Members of the Senate.

S. 2818 was introduced by Senator Clark on February 7 for himself 

and eight cosponsors.

Following the receipt of comments from the executive agencies 

on the proposal as introduced, the bill was substantially revised on 

April 5.

I understand tha t the amended version of S. 2818, which is before 

us today, has the full support of the Department of State.

(S. 2818, as revised, is as follows:)

[S. 2818, 87th Cong., 2d sess.]

A BILL To provide an opportunity fo r the public to provide support for the activities of the

United Nations by the Purchase from the Treasury of United Nations Peace Bonds and 

to authorize the issuance of such bonds

Be it enacted by the Senate and House of Representatives of the United States

in Congress assembled, (a) For the purpose of providing an opportunity for the 

public to provide support for the activities of the United Nations, the Secretary 

of the Treasury is authorized and directed for a period of 5 years following the 

date of enactment of this Act to issue special obligations of the United States, 

designated as ‘peace bonds’, under section 22 of the Second Liberty Bond Act, as 

amended, except tha t peace bonds shall mature not more than 25 years from 

the date of issue, and shall be issued on a discount basis to afford an investment 

yield not in excess of 2 per centum per annum when held to maturity. The total 

amount of peace bonds outstanding at any time shall not exceed a face value of 

$100,000,000. The bonds shall be redeemable at any time in accordance with a 

preassigned schedule of values. The Treasury Department shall make peace 

bonds available for purchase through the same market channels as savings bonds, 

but the Department shall not undertake any promotional efforts on behalf of 

the peace bonds.

1
2 UNITED NATIONS PEACE BONDS

(b) Peace bonds shall have a face value of $25, $50, $100, $500, $1,000 when held to maturity. No person or business entity may purchase or hold peace bonds 

with a face value in excess of $10,000. (c) Amounts realized by the Secretary of the Tre asury from the sale of peace bonds sh all be deposited in a special fund in the T reasury, and shall be available for use by the President of the United States in supp ort of the activities of the 

United Nations.

Senator Sparkman. Senator Clark is scheduled to be the first witness this morning. I believe he will be followed by the Under Secretary of State for 

Political .Affairs, George C. McGhee, representing the executive 

branch, and it is my understanding that there are at least four public 

witnesses who wish to offer testimony on the bill.

Senator Clark, we are glad to have you, and you may proceed in 

your own way.

STATEMENT 0E HON. JOSEPH S. CLARK, U.S. SENATOR FROM THE 

STATE OF PENNSYLVANIA

Senator Clark. Mr. Chairman, thank you very much.

I would like to express my thanks to you and the other members of 

the committee who have been willing to schedule this hearing on my 

bill, which I hasten to add has been cosponsored by Senators Douglas, 

Ha rt, Humphrey, Oren Long, Neuberger, Smith, Harrison Williams, 

and Stephen Young.

A companion bill has been introduced in the House by Congressman 

Kowalski of Connecticut.

May I briefly sketch the legislative history of this bill.

LE GI SL AT IV E HIS TO RY OF T H E B IL L

It was originally prepared as an amendment to the bill which the 

Senate passed authorizing the President to loan up to $100 million to 

help the United Nations out of its present financial crisis.

I had intended to press it as an amendment to tha t bill, but at the 

request of both the administration and the leadership, I did not bring 

the amendment forward because it was felt that such an amendment 

would be widely misconstrued as being tied to the specific question of 

the authorization of the $100 million to help rehabilitate the finances 

of the U.N.

That was not my intention.

The administration was concerned, and so was the leadership, lest a 

vote on my amendment would, in the colloquial phrase, “rock the 

boat.”

At tha t time in conversations with the chairman of the Foreign 

Relations Committee I agreed not to press the amendment on the floor, 

and I was given the courtesy of a commitment that we would ha ve 

this hearing today.

T H E U N IT E D NATIO N S AN D PU BLIC O PIN IO N

Mr. Chairman, I think many Members of the Congress are laboring 

under a delusion with respect to public opinion in regard to the United 

Nations. In my opinion, the overwhelming majority of the people of
UNITED NATIONS PEACE BONDS 3

the Un ite d State s are s tro ng ly in su pp or t of th e Uni ted Nations, a nd 

most anx ious to hav e the Government of the United States act to 

str en gth en the Un ite d Natio ns.

Ag ain , in my opinio n, th ere is a sma ll and h ighly vocal grou p in this 

cou ntry, liv ing in the political and socio logical pa st, who th in k th at 

political pro fit c an be obtained by attack ing the Un ite d Na tio ns and 

the P reside nt ’s po licy o f intern ationa l c ooper ation on the g roun d th at 

this is an effo rt of inter natio na lism that is unp atriotic a nd it should be 

abh ored a nd opposed.

No thing, I think , is fu rther fro m the trut h. I call to the com mittee’s attention a Ga llu p poll tak en ea rli er this year, which showed 

th at 83 perce nt of the peo ple th in k it is very im po rtan t th at we try 

to make th e U nited N ations a success.

A POLL OF PUBLIC OPINION IN PENNSYLVANIA

I took a ran dom -based mail poll in Pe nn sylva nia 3 mo nth s ago. 

I thou gh t it im po rtan t to find ou t th e rea l opinion of the people of 

my St ate in rega rd to the U.N ., and with th e advice of experienced 

sam ple rs of pub lic opinion, I mailed a poll on forei gn policy and 

rel ate d issues to an obje ctively prep ared lis t of 10,000 Pennsylva nia 

voters.

Th e perce nta ge of answers received which appro ached 20 perc ent was 

a good deal hi gh er than is u sua lly ob tained in m ail polls on such issues.

Th e answers showed a very lar ge major ity favo rin g str on g efforts 

by ou r Gover nment to seek inter na tio na l solutions to ou tst an ding

world problems.

Indeed, it satis fied me th at the public opinion in my St ate was fa r 

ahe ad of preva iling politi cal views.

For example, with resp ect to the Un ite d N ations, 87 pe rce nt of those 

answering fav ored U.S . effo rts in va ry in g degrees to str en gthe n the

Thi rty- fo ur per cent ind ica ted th at the Uni ted States sho uld work 

to change the Uni ted Nations into —

an intern ationa l governmental organization of all countries, with autho rity to 

keep the peace through a system of enforcible world law aga inst aggression, 

binding on all n ations and all people.

Only 13 perce nt of those answ ering advocated U.S. w ith draw al from 

the Un ite d Na tions if Communist China were admited to memb ersh ip.

Mr. Ch air ma n, I ask permission to insert in th e record a sta tem ent 

summ arizin g the poll and a second sta tem ent giv ing the detailed 

answers to th e six questions which were asked.

Se na tor Spark man. W ith ou t ob jection, th at wil l be done.

(The documents re ferre d to a re as f ollows:)

[Fo r release Sunday, April 15, 1962. From the office of Senator Joseph S. Clark, 

Democrat, of Pennsylvania]

Senator Joseph S. Clark, Democrat, of Pennsylvania, announced today the 

results of a random-based mail opinion poll on foreign policy and rela ted issues 

taken in Pennsylvania during the la st 4 weeks.

“The answ ers given show a large majority favor strong efforts by our Government to seek intern ationa l solutions to outstan ding world problems,” Senator 

Clark state d. “Indeed, it would app ear that public opinion is fa r ahead of 

prevailing political views in several key area s.”
4 UNITED NATIONS PEACE BONDS

The principal findings of the poll can be summarized under four different 

headings.

(1) United Nations.—An overwhelming 87 percent favor U.S. efforts of varying 

degrees to strengthen the United Nations. Of this group, 34 percent believe 

“the United States should work to change the U.N. into an international 

governmental organization of all countries with authority to keep the peace 

through a system of enforcible world law against aggression, binding on all 

nations and all people.” Only 13 percent advocate U.S. withdrawal from the 

U.N. if Communist China were admitted to membership. (Questions 3 and 6.)

(2) Disarmament and arms control.—A 55-percent majority support a policy of 

negotiating with the Communists from a position of strength “to achieve general 

worldwide disarament under adequate international controls and a strengthened 

U.N. capable of keeping the peace.” Another 11 percent favor East-West negotiations to achieve arms control agreements. Only 18 percent knew the name of 

the new U.S. Arms Control and Disarmamens Agency. (Questions 1 and 5.)

(3) Nuclear testing.—Eighty-three percent favor U.S. resumption of nuclear 

tests in the atmosphere in view of the Soviet test series last fall and the continuing deadlock in negotiations to achieve a controlled ban on test. (Question 2.)

(4) Civil defense.—The administration’s civil defense program is opposed as 

“unwise” by 45 percent of those answering the Clark questionnaire on the 

ground tha t “civil defense cannot provide any real protection against nuclear 

attack.” Only 17 percent think the program “sound,” while 15 percent think it 

“inadequate” and favor doing more. (Question 4.)

Senator Clark said tha t “every effort was made to make the poll reflect prevailing opinion in Pennsylvania.” A proportionate number of questionnaires 

was sent to each of the 67 counties in the State and alternate male and female 

listings were chosen at random from telephone directories covering the State. 

Clark said tha t he was “highly gratified” tha t 16 percent of the 10,000 questionnaires mailed had been filled out and returned—an unusually high percentage 

for polls taken by mail.

The text of the questionnaire, showing the tabulated results, is attached.

Results op Questionnaire Sent by Senator Joseph S. Clark, Democrat, of

Pennsylvania, to 10,000 Persons in Pennsylvania on March 10, 1962

1. Which policy do you think the United States should follow? (Check one.)

(1) Prepare to launch preventive war to defeat the Communists—73 

(4.55 percent).

(2) Continue to build up U.S. armed strength to maintain balance with 

or superiority over the Communists in order to deter or meet with force any 

Communist attack—384 (23.96 percent).

(3) Maintain balance of forces with the Communists but try to negotiate 

arms control agreements with them to insure tha t the balance of forces is 

preserved and to reduce dangers of surprise attack—175 (10.92 percent).

(4) Maintain balance of forces with the Communists but try to negotiate 

agreement with them to achieve general worldwide disarmament under 

adequate international controls (and a strengthened United Nations capable 

of keeping the peace)—888 ( 55.40 percent).

(5) Try to reverse the arms race by disarming in part now without trying 

to negotiate a disarmament agreement, and urge the Communists to do 

likewise—36 ( 2.25 percent).

(6) Other (spell out)—43 (2.68 percent).

(7) Haven’t made up my mind—4 (0.25 percent).

Total, 1,603.

2. In view of the recent nuclear weapons test in the atmosphere by the 

U.S.S.R., the deadlock in East-West test ban negotiations, and continuing U.S. 

underground nuclear tests, which policy do you favor? (Check one.)

(1) U.S. resumption of atmospheric nuclear tests to improve existing 

weapons—513 (30.16 percent).

(2) U.S. resumption of atmospheric nuclear tests only if necessary to 

develop important new weapons, such as the antimissile missile—904 

(53.15 percent).

(3) Continued U.S. underground nuclear testing, but no testing in the 

atmosphere for any purpose—140 (8.23 percent).
UNITED NATIONS PEACE BONDS 5

(4) Discontinuation of all U.S. nuclear weapons tests—81 (4.76 percen t).

(5) Other (spell o ut)—50 (2.94percen t).

(6) Haven’t made up my mind—13 (0.76 percen t).

Total, 1,701.

3. Which policy to ward the United N ations do you favor? (Check one.)

(1) The United States should withdraw from the U.N.—52 (3.26 percent).

(2) The United States should stay in the U.N. but place decreasing importance on membership, because the U.N. is too weak and divided to keep 

the peace—111 (6.95 percent).

(3) The United States should continue to work through the U.N. as it 

does today and try to improve gradua lly the U.N.’s existing machinery for 

the peaceful settlemen t of disputes—466 (29.20 perc ent).

(4) The United States should a ttemp t through amendment of the present 

U.N. Charter or otherw ise to give the U.N. additional author ity to prevent 

war by peaceful means, or by force if necessary—381 (23.87 percent).

(5) The United States should work to change the U.N. into an international governmental organization of all coun tries with autho rity to keep 

the peace through a system of enforcible world law against aggression, 

binding on all nations and all people—538 ( 33.71 perc ent).

(6) Other (spe llo ut)—41 (2.57percent).

(7) Haven’t made up my mind—7 (0.55 perce nt).

Total, 1,596.

4. The adm inistration has proposed that the Fed eral Government encourage 

and finance construction and stocking of a $5 billion community fallout shelter 

program to provide 220 million fallou t shelter spaces by 1967 (70 million spaces 

in the coming year at a cost of $700 m illio n). Fallout shelters offer protection 

aga inst radiation fallout outside the blast are a of the nuclear explosion, but 

they will not protect against blast effects (impact, fire, heat, etc.). Wh at is 

your view about this proposal ? (Check one.)

(1) Adm inistratio n program is sound—276 (17.40 percent).

(2) Adm inistration program is inad equate and a much greater civil defense effort should be made—231 (14.56 pe rce nt) .

(3) Adm inistratio n program is unwise because civil defense can not provide 

any real protection against nuclear attack —716 (45.15 percent) .

(4) Other (spell ou t)—221 (13.93 perc ent).

(5) Haven’t made up my mind—142 (8.95 percent).

Total, 1,586.

5. Is there a special office in the executive branch of the Federal Government 

concerned primarily with disa rma ment and arms control? (Check one.)

(1) Yes (name of office, 77 (18.20 perce nt) —423 (29.38 percen t).

(2) No—206 (14.31 percent).

(3) Don’t know—811 (56.32p ercent).

Total, 1,440.

6. Should the Communist Chinese partic ipa te in disarmamen t or arms control 

negotiations between the United State s, the U.S.S.R., and other countries? 

Yes, 747 (52.75 percent) ; no, 600 ( 42.37 percent) ; no opinion, 69 (4.87 percent) ; 

total, 1,416.

(b) If Communist China is adm itted to the United Nations, should the United 

States leave the U.N.? Yes, 196 (13.43 percent) ; no, 1,226 (84.03 perc ent) ; no 

opinion, 37 (2.54 percent) ; total, 1,439.

PURPOSE OF THE BILL

Senator Clark. In tha t background, Mr. Chairman, I approach 

the present rather innocuous little bill. The purpose of this bill, 

which, you will see, is only three short paragraphs in length, is to 

provide an opportunity for the citizens of the United States to provide 

support for the activities of the United Nations.

It authorizes the Secretary of the Treasury to issue for a period of 

5 years special obligations to be designated as “peace bonds.”

These bonds are to bear an interest rate not in excess of 2 percent 

when held to maturity. They are to mature in not more than 25 years.

879 04-62- -2
6 UNIT ED NATIONS PEACE BONDS

Th e to tal am ount o f the issue sh all not exceed $100 million.

Th e Tr easu ry is asked to mak e these bonds ava ilab le for purchase 

th roug h the same mark et cha nne ls as sav ings bonds, bu t the Dep ar tme nt is for bid den to un derta ke any pro mo tional efforts on behalf of 

the bonds.

Lik e the sav ings bonds, these peace bon ds will be issued in small 

denomination s, $25, $50, $100, $500, and $1,000, a nd th ere is a lim it on 

the amount any ind ivi du al or any business en tity or corpo ration can 

hold of $10,000.

Th e am oun ts to be realized by the Se cre tar y of the Tr easury are to 

be dep osited in a special fund of the Tr easu ry and to be availab le for 

use by the Pr esiden t in su pp ort o f th e activities o f th e Un ite d Nation s.

PSYC HOLOGICAL EF FEC T OF T II E PE ACE BOND S

I wou ld like to comment on a couple o f facts.

F ir st th at , in my jud gm ent—and I believe th is will be support ed 

by othe r witnesses—th ese bonds will find a rea dy m ark et. No one can 

tell un til the y are issued. I f they do find a rea dy ma rket, this, I believe, will give gr ea t psychological su pp or t to the policies of the 

Pr esiden t of the Un ite d State s tow ard the U.N ., and bro ade n and 

str ength en supp ort of the U.N. throug ho ut the country.

I f th ey do not find a rea dy ma rket, no t much ha rm is done. They 

ju st w ill no t sell ma ny o f these b onds. I do no t believe th at anybody 

could effectively urge th e fact t hat these bon ds were no t sold in lar ge 

am oun ts as a reas on fo r do wn grading the policy of t he U nited State s 

towa rd the Unite d N atio ns.

Th ere fore, in my opinion, we h ave an op po rtu nity here to mak e a 

perce ptible im pact on po pu lar opinion in su pp ort of the Pr esiden t’s 

U.N. po licy , with ou t t ak in g any s ub sta ntial ri sk in the event the bonds 

do no t go over very well.

INTE RE ST RATE AT 2 PERC EN T

Now, we hav e d eliberately set th e int ere st rate at 2 pe rcent, which is 

fa r lowTer th an the inter est ra te on savings bonds, and substan tia lly 

low er th an the inter est rate on normal, lon g-term Government obligat ion s.

We have done t his because we wa nt to show th at there are enough 

people in the United State s int ere ste d in th e Un ite d Na tio ns to be 

wi lling to subscribe at a lower rate of inte rest th an they could get for 

alm ost any othe r sound investm ent, inc ludin g U.S . Gover nment sav ­

ing s b onds or o ther obliga tion s, as concrete evidence of th eir su pp ort 

fo r the U.N . policies of the Pr esiden t of the Un ite d Sta tes , and the 

Un ite d N ati ons itself.

We did no t wa nt this to be an or dina ry inv estment, and , according ly, we set th e inter est rate low, bu t we did provide some retu rn 

on inv est me nt because we did no t wa nt to put th is on a pu rely gi ft 

basis. We fe lt th at a 2-perce nt interest ra te is ju st abo ut the righ t 

place to fix this, to induce the greatest su pp or t fo r the U.N . witho ut 

lev eling wh at might be ch ar ge d: That this is merely anoth er kin d 

of Go vernm ent sec urity and the fa ct th at people bought it does not 

ind ica te any pa rtic ul ar supp ort fo r th e U.N.
UNITED NATIONS PEACE BONDS 7

AN OPPORTUN ITY FOR CITIZE NS OF THE UN ITED STATES TO LEN D DIRECT 

SUP POR T TO TH E U .N .

Now, as will appear from the testimony of the Under Secretary 

of State, gifts are presently being sent to the United States for the 

purpose of assisting its efforts to strengthen the U.N.

We thought it was wiser to make this a regular issue which goes 

out through the same public channels tha t the savings bonds are 

promoted on, so tha t these bonds could be made available at banks 

and tru st companies, and readily available to the public, but with 

no organized propaganda effort by the U.S. Government to sell 

them.

I would rely on the voluntary nongovernmental organizations, some 

of whom are here today to testify, to promote the sale of these bonds, 

and I think that if the U.S. Government does not actively promote 

them, this is a good thing, because then this leaves public opinion as 

the criterion.

This is the justification for the way in which the issue is proposed 

to be set up.

At present, there is no effective, tangible way in which support for 

the United Nations can be expressed. Money gifts sent to the U.N. 

general treasury, and there have been many, merely result in the 

automatic reduction of the regular dues of the government of the donor 

country.

This bill would make it possible for the first time for citizens of 

the United States to lend direct effective and tangible support to the 

United Nations.

I think, Mr. Chairman, tha t is about all I care to say.

Senator Sparkman. Thank you.

Senator Morse ?

Senator Morse. Just a few questions, Senator Clark.

You touched on my first questions, but I would like to have you 

expand on it a bit.

RISK OF DAMAGE TO U. S. POLIC Y

Is there not a real risk tha t the U.S. policy of support for the 

United Nations may be damaged rather than aided i f there is a m inimal public response to this offer of peace bonds ?

Senator Clark. I do not think so, Senator Morse. One has to take 

some kind of calculated risk in these efforts. I have endeavored to 

sound out, as best I can, the views of the very fine nongovernmental 

institutions which are supporting the U.N.

They feel confident that they are going to be able to get these 

bonds sold.

I th ink they are right.

My poll would indicate they are right. The Gallup poll would 

indicate they are right.

And I say, as I said earlier, that I think the calculated risk is rather 

minimal.

If the bonds should not succeed, it might give the opponents of the 

U.N. one more talking point, but I don’t think they could make much 

capital out of it in view of the very low ra te of return provided on
8 UNITED NATIONS PEACE BONDS

the bonds in comparison to other investments. I don’t believe this 

would have a really perceptible effect. Whereas, if the bonds succeed, 

I think it would be most effective in molding public opinion in support 

of the U.N. and in molding congressional opinion among those Members who rather doubt whether they can afford politically to support 

the United Nations.

"’Tiis must be a question of judgment, I agree.

PU RC HA SE OP PEACE BONDS BY CITIZE NS OF FOREIGN GOV ERN MENTS

Senator Morse. Can these bonds be purchased by citizens of other 

countries ?

Senator Clark. To the same extent, I guess, that U.S. savings bonds 

can be purchased by foreigners. It would be pretty hard for citizens 

of other countries or foreign governments to come in and buy them 

as a concentrated effort. As I pointed out earlier there is a $10,000 

limit provided in the bill for individual holdings.

Senator Morse. I was thinking about the citizens of France, England, West Germany, or any other country, not the governments.

Senator Clark. Without purportin g to be an expert on the views 

of the citizens of France, I cannot see too many French citizens coming 

in and buying U.S. bonds at 2 percent when they could buy U.S. 

savings bonds for 3% percent.

Senator Morse. That may be, but I see nothing in the bill tha t would 

seem to limit it to citizens of the United States.

Senator Clark. You are right.

I would have no objection to w riting in such a provision. I do not 

think it is necessary, but I certainly would not object.

Senator Morse. I am not suggesting it. I am just raising a question 

for clarification as to whether or not citizens of other countries could 

buy them.

Senator Clark. To recapitulate I would say tha t citizens of other 

countries would be as free to buy peace bonds as they are free to buy 

other obligations of the Government of the United States.

PU RC HA SE OF PEACE BONDS BY NO NP RO FIT ORG ANI ZAT ION S IN ME MBER

COUN TR IES

Senator Morse. Under the General Assembly resolution authorizing 

the issuance of bonds, the United Nations Secretary General, with the 

concurrence of the Advisory Committee on Administrative and 

Budgetary Questions may decide to offer the bonds to nonprofit 

institutions or associations in the member countries.

Would you consider the absence of such a determination to mean 

tha t the Secretary General believes tha t the responsibility for the 

governments of member countries to finance the United Nations 

should not be diminished ?

Senator Clark. I am afraid I am not in a position to answer th at 

question, Senator Morse, because I am not familiar with the resolution.

I would say only tha t I hope very much t hat this particular bill 

would be completely divorced from any other action by our Government in support of any United Nations activity. Is is certainly not 

my intention tha t this should be tied in any way to anything which
UNITED NATIONS PEACE BONDS 9

the Se cre tar y General may do, wh eth er or no t I h appen to appro ve the 

pa rtic ul ar action.

Se na tor Morse. Mr. Ch airma n, I am going to ask counsel to give 

this question to Secretary M cGhee so he can stu dy i t before ta ki ng the 

stand.

I t hi nk he is th e one t hat oug ht to a nsw er it, anyw ay.

DIS POSITION OF THE PROCEEDS OF PEA CE BONDS

Th e St ate Dep artm en t commen ts of Apr il 3 note th at if peace 

bonds are to be purch ase d in a period la te r th an the cutoff da te for 

the U nited Na tio ns bond offer, December 31, 1963—

the bill should specify wh at disposition should be made of the proceeds. If the 

intention is to effect a decrease in the amounts expended by the United States 

for prior purchases, the bill should so specify.

Can section (c) of S. 2818, as revised, be reg arde d as satis fying 

th at r ecomm endatio n ?

Se nator Clark. Th e Se na tor appre cia tes th at the Apr il 3 comments were made at th e t ime whe n it was thou gh t th at this bill would 

be a tta ched as an amend ment to the U.N . bond purchase. Th e situ atio n has cha nged since th en. Th e peace bond pro posal in its pre sen t 

form is un rel ate d to the ad minist ratio n’s U.N . bon d purch ase pla n. 

Th e Dep artm en t is prese ntly taki ng a fav orable attit ud e towa rd this 

bill in its revise d form .

Se na tor Morse. I am g oin g to ask the same question of the Sec retary . 

I only ask the question of you as the au thor of the bill. For the 

legisla tive h istory, will you s tat e wh at your int entio ns w ere in rega rd 

to it?

Se na tor Clark. Senator , I th in k I can best ans wer yo ur question 

abo ut the intended disposition of t he proceeds of the peac e bonds by 

read ing subsection (c) of th e bill.

Amounts realized by the Secretary of the Treas ury from the sale of peace bonds 

shall be deposited in a special fund in the Tre asury, and shall be available for 

use by the President of the United States in support of the activities of the 

United Nations.

I favo r giving the Pr esiden t the broadest possible rang e of uses, 

and I th in k th ese uses should supple me nt and no t r epl ace gen era l fund 

expenditures fo r Un ite d Na tio ns activities .

Obv iously, the Presiden t could no t use the money in excess of 

any au tho riz ati ons which the Con gress ha d given him fo r the bro ad, 

gen era l purp oses of sup po rti ng the Un ite d N atio ns.

Se nator Morse. I was a littl e distu rbed as I rea d the pa pe rs this 

mo rni ng in rega rd to the House act ion in conn ection wi th the bond 

issue.

Se na tor Clark. I share yo ur concern.

Se nator Morse. App aren tly the attit ud e of some Mem bers in the 

Hou se—I do n ot know how m any —is one of opp osition to th e so-called 

no nregular expenses of th e Un ite d Na tions, such as t he gre at hu man ita ri an p rogram s of the U nited Na tions in connection wi th c hil d care, 

the food progra m, va rious h ea lth pr ogram s, fo r which we m ake special 

contr ibu tio ns a t each me eting o f the General Assembly of the Un ite d 

Nation s.
10 UNITED NATIONS PEACE BONDS

Is it your intention tha t these funds obtained from the purchase of 

these bonds could be earmarked by the administration at any time 

for expenditure for these special services ?

Senator Clark. I would think, Senator Morse, only to the extent 

tha t the President is presently authorized to take such action, and, 

again, I think I have to come back to the specific language of subpara graph (c), which, I am frank to state, I intend as a relatively 

broad authority to the President, but, obviously, within the limits of 

existing authorizations.

Now, may I comment also, since you raised it, tha t the vote in the 

House yesterday represented scarcely more than one-half of the total 

membership. I hope very much indeed tha t before this bill comes 

before the Senate for final action, if it does—and I hope it will—that 

tha t particular situation will have been resolved, and the President 

will be given the authority he has requested.

Senator Morse. I share tha t hope. I hope the House will today 

reverse the action of yesterday, because I think it is a serious blow to 

the best interests of the American foreign policy in these troublesome times.

I do not have any doubts that Russia would like to see the United 

Nations weakened. I do not think we ought to do Russia’s job for 

her.

Senator Clark. I guess the rules of comity between the two bodies 

probably make it a little out of order for me to suggest that I would 

suspect that Mr. Khrushchev danced with glee in the Kremlin when 

he saw the action that was taken yesterday.

Senator Morse. I do not have any doubts but tha t you are right.

I have a few questions I want to ask you on the interest rate 

feature of your bill.

RELATIONSHIP BETWEEN U .N . BOND PURCHASE AND PEACE BONDS

One virtue of S. 2818 presumably is tha t it offers funds to the 

Treasury a t 2 percent rath er than at the normal interest rate entailed 

in raising money on the market.

But how would this factor operate in terms of the December 1963 

deadline for the purchases of United Nations bonds ?

Senator Clark. I do not think there is any relation, Senator. I 

have tried very hard to keep those two matters separate and distinct 

for the reasons I outlined in my testimony in chief, which are:

I think of this as a long-term support of the U.N., and I was 

persuaded by the leadership in the administration tha t it was a mistake to tie this proposal to the U.N. bond issue, which you and I have 

just been discussing.

Senator Morse. Speaking hypothetically, then, assuming for a 

moment tha t the plan for the purchase of United Nations bonds should 

fail, and S. 2818 passed in this session of Congress, you could go rig ht 

ahead and sell peace bonds, irrespective of what happened to the 

United Nations bond issue that is now before the Congress.

Senator Clark. Yes. Of course it is my hope, however, that the 

U.N. bond purchase will be authorized even before action is taken 

on S. 2818. I had no intention of tying the two questions together, 

Senator.
UNITED NATIONS PEACE BONDS 11

Senator Morse. Tha t is the point I want to make very clear for 

this record: that this stands on its own footing.

Senator Clark. Exactly.

TH E INTE REST RATE

Senator Morse. Now a question or two about the 2-percent interest. 

When you fix it at 2 percent-----

Senator Clark. May I interject by saying tha t the rate is fixed at 

a minimum of 2 percent. It could go lower.

Senator Morse. Yes, it could go lower. That is one of the points

1 was about to raise.

I am a little disturbed about the maximum. Are you not really 

saying in the bill that we are so concerned about the future of the 

United Nations that we are going to make a plea for charity?

Senator Clark. I do not think so, Senator, because, in the first 

place, the administration, in my bill, is prohibited, at least the Treasury, from undertaking any promotional activities.

I do not think tha t the project could be presented in tha t view, 

and I do not think it could be distorted by opponents of it, so that 

any reasonably objective person would think tha t it was a plea for 

charity.

This must be a question of judgment, Senator, and I agree that you 

can make value judgment decisions in support of 4 percent, 3 percent,

2 percent, 1 percent, or no interest rate at all.

It is just my considered judgment tha t the 2-percent maximum will 

get us the greatest amount of bond sales with the least amount of 

adverse comment that people were just doing this because they wanted 

to make a good investment.

This must be a question of judgment.

Senator Morse. I understand it is a question of judgment, but it 

also involves some important questions of public policy, it seems to 

me.

Are you not really saying in this bill that we are going to make these 

bonds available to people who are of sufficient means tha t they can 

afford to sacrifice 1 or 1.5 or 2 or 2.5 percent th at they otherwise would 

be able to earn ?

Senator Clark. You are certainly making these bonds available 

to tha t class of people, and I would not deny that you are, and I hope 

they will buy a good many of these bonds.

But I point out tha t these bonds are also in denominations as low 

as $25.

You and I know from our own experience the large number of contributions of $25 and $50 made to the community chests in every one 

of the cities which you and I represent, by people with a great deal 

less money than those which are in the first category which you have 

suggested, to which part of my answer referred.

Senator Morse. That is true.

PEACE BONDS AS AN INVE ST MEN T

But, as far as the financial market is concerned, does not the bill, in 

fact, downgrade the United Nations in tha t it really does not make 

these bonds available to people who ought to be encouraged to buy
12 UNITED NATIONS PEACE BONDS

them, but who have to limit their investments to investments on which 

they can get a fair and reasonable return on their money, which these 

bonds will not give them? And, therefore, are we not shutting off 

thousands and thousands of investors in this country who might very 

well be willing to buy United Nations bonds instead of bond X, Y, or 

Z, the purposes of which—the institutions tha t they finance—are not 

nearly as important from the standpoint of the security of this country 

and the welfare of the world as United Nations bonds are ?

What disturbs me on this point is tha t we are just shutting off 

thousands of potential investors who would invest in United Nations 

bonds if they could get a fair return for their money.

Senator Clark. Tha t argument could be made, Senator. It is not 

persuasive with me. I would have no serious objection to making the 

interest rate the same as it is on savings bonds except that I do not think 

we would get the same impact in terms of public opinion and psychological support for the United Nations th at the lower interest rate 

provides.

I do not consider this critical, but my own judgment is tha t it will 

have a better impact, and along the lines which I think both you and 

T would like it to have, if the rate is fixed at 2.

Now, if the committee wants to move it up to 3%, I would not 

quarrel much.

Senator Morse. I want to dwell on that for a moment. I want to 

do what is in the best interests of the objective we have in mind.

Senator Clark. May I interrupt to say that, while I would not object to such an increase in the rate provided, I am a little bit afraid 

the Treasury would.

I cannot speak for them, of course. They are here. They have no 

objection to this bill.

If we were to raise the interest rate, I would be a little concerned 

as to what their reaction would be, but they are here to speak for 

themselves.

Senator Morse. I would be interested in the Treasury’s attitude 

as to what interest rate they think ought to be paid in financing monopolistic satellite programs.

Senator Clark. Of course, the Senator and I are among those 

who are constantly urging the Treasury to cut the interest rate in the 

hope of expanding the economy. This might be considered perhaps 

a move in that direction.

POSSIBLE RESULT OF TIIE PEACE BOND BILL

Senator Morse. Although it is not stated in your bill, as revised, 

I think that the presumed intention is for the purpose of the pur ­

chase of peace bonds to be used to reduce the amount of money the 

Treasury would have to raise to buy United Nations bonds if authorized to do so by the Congress.

Senator Clark. No, si r; this is not my intention.

Senator Morse. What is going to stop the Treasury from taking 

tha t position ?

Senator Clark. Nothing, but it is not my intention.

Senator Morse. Strike from my question, then, my statement of 

presumed intention and pu t it in terms of the results.
UNITED NATIONS PEACE BONDS 13

Th is is the result th at would follow.

Se na tor Clark. Th e peace bond pro posal is un related to the U.N . 

bond purch ase pro posal. If , however, th e Con gress autho riz ed the 

purchase of $100 millio n of U.N . bon ds by the Presiden t, bu t subseque ntly ap pr op riated only $50 mi llio n fo r this purpose, the peace 

bond fund could be used by the Pr esiden t t o mak e purchases of U.N. 

bonds in excess of $50 m illion a s long as th e autho riz ed l im it was not 

exceeded.

Se na tor Morse. Al thou gh you and I hav e expressed the hope here 

this mo rni ng th at the first action of t he Ho use i n re ga rd to the purchase of Un ite d Na tions bonds wrould no t be the final action, let us 

assume it is, and th at th ere is no passage of t he U nited Na tio ns bond 

legisla tion .

In ap prov ing S. 2818 und er those circumstanc es, would t he Congress 

be s aying th at t he Un ite d Na tions bond purch ase s are in th e national 

int ere st f or the public but no t f or the Gov ern ment ?

Se na tor Clark. We ll, of course, my own fee ling is th at there is 

no necessity for the Senate of the Un ite d States alw ays follow ing 

wh at the House of Repre sen tative s ha s done.

I think , by passing th e U .N. b ond issue throu gh th e Senate, we have 

clearly indica ted the views o f our body.

I t hi nk to some ext ent , not logically, no t legally, b ut c ert ain ly psychologically we would, by passi ng th is bill as well, reite rate our dis ­

agr eem ent with the action of th e House, if the y fail to ap pro ve the 

other.

Se na tor Morse. I w ant t o say, in closing my colloquy wi th you, t hat 

I s tro ng ly appro ve o f our doing those e ducation al things necessary to 

ge t the Am erican p eople to thi nk a bout the importance of the United 

Nations to th em, and this is a good education al device.

I t hi nk I wou ld pr ef er t hat we p ut it on a sound fina ncial offering, 

which I th in k it is, an d th at we give the Am erican people an op po rtu ni ty to invest in t hi s type of b ond, irresp ective of th ei r indiv idu al 

wea lth, on the basis of a fa ir re tu rn fo r th ei r investment.

PSYCHOLOGICAL EF FE CT OF LOW INTE RE ST RATE

I am wo rried about the possible psychological dang er of dow ngr ad ing the Un ite d Na tio ns wi th th e ur ging of a bon d low er th an a 

reasonable marke t in ter est rate.

I t sort of imp lies th at the insti tutio n is so weak th at it ha s to be 

supp orted by ch arity rat he r t ha n soun d finan cing . I do no t th in k th at 

is the case.

I th in k we ought to str en gthe n the United Nations fina ncially by 

offe ring these bonds and offerin g the m at t he m arke t rate.

But I am op en to pers uas ion on thi s ma tte r.

These questions crossed my mind as I asked my self why in the 

world wou ld we offer these bon ds at only 2 percen t. Loo k at the 

oth er appeals th at are mad e fo r inv estme nt both by indu str y and 

Governmen t.

We ar e n ot ask ing people to d onate pa rt of th e investme nt. I t seems 

to me th at is wha t we are doing here.

Se na tor Clark. I tak e the othe r view, Senator, which is th at the 

sale of thes e b onds wi th 2 p erc ent inter est would ind ica te the Am eri87904— 62------3
14 UNITED NATIONS PEACE BONDS

can people were prepared to pay a premium to support the institution 

which they strongly favor.

Senator Morse. I think they are, but I do not think they should be 

asked to.

I think they are willing to.

I think you would be surprised at the great response which you 

would get from a much larger group of purchasers if you had a market 

interest rate.

Senator Clark. Of course, then you run the risk th at people would 

say, and with some justification, that this is really a gimmick and, to 

some extent, a phony, calling these peace bonds, for the support of 

the United Nations.

It might be said, “Wha t the dickens, this is just another way of 

tryin g to market savings bonds.”

Senator Morse. Paying a full interest rate would not make them 

war bonds.

Senator Clark. True.

Senator Morse. That is all, Mr. Chairman.

Senator Sparkman. Senator Hickenlooper?

Senator Hickenlooper. Thank you, Mr. Chairman.

I am sorry to be late and perhaps some of the questions I ask may 

have been covered.

If they have, just let me know. I do not mean to burden the record 

with too much repetition.

PROPO SAL TH AT PEA CE BON DS BE ISS UE D BY TH E U .N .

As I read your proposal, Senator Clark, these bonds are direct obligations of the Federal Government ?

Senator Clark. That is correct.

Senator Hickenlooper. So, basically, it is not any indication of 

anybody’s confidence in the United Nations at all.

They would be buying the bonds based upon the faith and credit of 

the United States ?

Senator Clark. I would disagree with tha t because of the lower 

interest rate provided for peace bonds.

Senator Hickenlooper. Why not let the U.N. issue bonds solely in 

its own responsibility and let the American people see how many of 

them want to take the faith and credit of the United Nations for the 

payment of the bonds?

Senator Clark. I would have no great objection to that, Senator, 

although of course the Congress has no control over what the United 

Nations authorizes.

I just think that this is an important method of evidencing what I 

believe to be the overwhelmingly strong support of the American 

people for the U.N.

Senator Hickenlooper. Would tha t not be proven quite conclusively 

by letting the United Nations issue bonds solely on its own faith and 

credit without any responsibility whatsoever for payment by the 

United States and letting people see how much fait h they have in the 

United Nations credit over a period of years?

Senator Clark. This might be true, but it does not seem to me that 

the fact tha t we are suggesting an alternate method here need affect 

tha t judgment. I would have no objection if the United Nations au-
UNITED NATIONS PEACE BONDS 15

thorized bond purchases by citizens of member nations, but this bill is what I would like to see the Congress of the United States do to give 

the people of the United States an opportunity to show their support 

to the United Nations through th eir Government. Before the Senator 

came in I read into the record the result of some polls on which I based 

my confidence that this effort would be successful.

Senator Hickenlooper. You said their confidence in the United 

Nations throug h the U.S. Government.

Now, that is a different thing than an expression of confidence in 

the United Nations as a sole entity in and of itself.

Senator Clark. The Senator is correct.

Senator Hickenlooper. I think there would be a vast difference in 

the amount of purchases and the number of purchasers if these bonds 

were guaranteed as to principal and interest by the United States, on 

the one hand, than if they were the sole responsibility of the United 

Nations, on the other.

Under certain circumstances and proper terms, I am not so certain 

but what I would not welcome the opportunity to test out just how 

much the American people would be willing to invest in bonds of the 

United Nations which are the sole liability of the United Nations and 

for which the United States is no agent and has no responsibility.

We would test the good fa ith and the interest of the people who do 

talk so strongly for the United Nations financing plan.

I rath er imagine there would not be nearly so many people who 

would buy the bonds if it were the sole responsibility of the United 

Nations than there would be if it were the responsibility of the United 

States, especially in view of the record of delinquency in the United 

Nations now and failure of so many of the nations to pay their assessments, which poses a rather special problem.

I think the questions tha t I had here have already been covered 

and answered.

If you will excuse me just a minute, so I can review these.

SUBM ISS ION OF STA TEMENTS FOR TIIE RECORD

Senator Clark. While the Senator is looking at his notes, Mr. 

Chairman, may I request tha t the record be kept open for 1 week 

afte r termination of the hearings so tha t statements which I believe 

are on their way may be included ?

Senator Sparkman. Without objection, that will be done.

Senator Hickenlooper. Mr. Chairman, what are the statements?

Oh, your own statement ?

Senator Clark. No.

A couple of witnesses and several Senators who sponsored the bill 

are preparing statements which they would like to have go in the 

record and would like a few more days to do so.

Senator Hickenlooper. I would like an opportunity to see the statements.

Senator Sparkman. I may say tha t Senator Ha rt already has submitted a statement which I will include in the record afte r Senator 

Clark’s statement.

Senator Clark. There are seven cosponsors of the bill.

Several of them have indicated to me th at they would like to submit 

statements in support of the bill they are cosponsoring, but they
16 UNITED NATIONS PEACE BONDS

have not had an opportunity to prepare them. One or two outside 

witnesses, also.

Senator Hickenlooper. I have no particular objection. That is 

done quite often.

Senator Sparkman. I think it is customary.

Senator Hickenlooper. I do not want to foreclose the opportunity 

to examine these people on their statements.

Senator Capehart. Is it limited to Senators ?

Senator Clark. There are one or two outside witnesses, who we 

hoped could be here but, unfortunately, could not, and have said they 

would like to submit statements which have not come in as of this 

morning.

Senator Capehart. Would this include opposition statements, too?

Senator Clark. None such have come to my attention, Senator.

Senator Capehart. I know, but would your unanimous request include opposition statements?

Senator Clark. Oh, sure.

Senator Sparkman. If the record is kept open, it will be open for 

both.

Senator Capehart. Both opponents and proponents?

Senator Sparkman. Correct.

Senator Hickenlooper. This question may have been covered 

already but, if so, may I ask it again?

REPAYMENT OF THE BONDS

Under your contemplated bill will the interest and principal be 

paid from United Nations funds?

Senator Clark. No, sir. General revenues of the U.S. Government, 

the U.S. Treasury, would be used.

They are similar to the savings bonds, Senator Hickenlooper, except 

they carry a lower rate of interest.

Senator Hickenlooper. The United Nations would have no obligation to repay those bonds or to pay the interest?

Senator Clark. As far as I am concerned, there is a complete divorce 

between the United Nations and this proposal fiscally.

Senator Hickenlooper. What is the difference between this proposal, then, and just appro priating money out of the Treasury of the 

United States and giving it to the United Nations?

Senator Clark. Because this is a money-raising scheme and not a 

money-spending scheme.

Senator Hickenlooper. You have to raise the money. At least I 

used to think the theory was that you had to raise the money, before 

you could spend it. I guess we have outgrown tha t philosophy, 

perhaps.

We spend it now and then it all comes from the American taxpayer.

Senator Clark. I register a dissent to the Senator’s views.

Senator Hickenlooper. I do not see much difference between just 

appropriatin g money and laying on extra taxes to pay for it.

sen ator Clark. This is not an appropriation bill, Senator. This 

is a revenue-raising bill.
UNITED NATIONS PEACE BONDS 17

Senator Hickenlooper. Do you mean you consider as revenue 

money borrowed without the means of acquiring the money to pay 

for it ?

Senator Clark. To some extent, I may be considered a fiscal illiterate, but I think the way we state our administrative budget at present, all moneys coming into the United States, whether from taxes or 

from borrowing, are considered revenue.

QU ESTIO N OF COMM ITTEE JU RI SD ICTION OVER THIS LEG ISLA TION

Senator Sparkman. May I ask in that connection if you believe this 

committee has jurisdiction over this legislation ?

Senator Clark. We cleared it with the Parliamentarian.

Senator Sparkman. You did clear it with the Parliamentarian?

Senator Clark. Yes, sir.

Senator Sparkman. When you answered t hat this was a revenueraising measure, it made me wonder. The only connection between 

this bill and foreign relations is the fact tha t the money is to be used 

for United Nations affairs. And the Parliamentarian said tha t it 

would come under the judisdiction of this committee ?

Senator Hickenlooper. There might be a serious question about 

originating revenue measures in the House of Representatives.

Senator Morse. It might be a question, but not necessarily serious.

Senator Sparkman. I do not know, based upon the status of appropriations right now.

Senator Hickenlooper. I am a little confused these days as to 

whether the Constitution means what it says in English or not, b ut if 

this is a revenue measure, there is some language in the Constitution 

tha t bears directly on the question as to where revenue measures 

originate.

Senator Clark. I think my semantics were unfortunate.

TH E PROPOSED USE OF MO NEY DERIVED FROM SALE OF PEAC E BONDS

Senator Capehart. Is it the intention of this legislation that all 

of the money derived from the sale of these bonds would be earmarked 

for the United Nations ?

Senator Clark. Senator, I can best answer that by calling your attention to subparagraph (c). I have already answered tha t question in response to Senator Morse, but you attack it from a somewhat 

different angle.

Amounts realized by the Secretary of the Tre asury from the sale of peace 

bonds shall be deposited in a special fund in the Treasury, and shall be available 

for use by the President of the United States in supp ort of the activities of the 

United Nations.

That is as clear as I can make it.

Senator Capehart. In other words, it is the intention, then, tha t 

they be earmarked for the United Nations.

For example, if you sell $100 million worth of these peace bonds, 

the President could only use the $100 million for United Nations 

activities ?

Senator Clark. That is right, sir. within the general authorization 

which is given to him for that purpose by the Congress.
18 UNITED NATIONS PEACE BONDS

Senator Sparkman. Why did you not put in “peace and security 

operations of the United Nations” ?

Senator Clark. Senator, I guess because we did not think of it.

Senator Sparkman. That is your real purpose, is it not? You do 

not expect them to support technical assistance or UN ICEF or any 

of the activities like that, do you ?

Senator Clark. I can only go back to the subparagraph (c), Senator, and say tha t I wanted to give the President of the United States 

the broadest possible authority to use this money as he saw fit for the 

support of the United Nations within the limits of existing congressional authorization.

Senator H ickenlooper. I sponsored and supported a bill to authorize the loan of $100 million to the United Nations at an interest rate 

representing current costs of the money to the Federal Government. 

That did not quite get passed in the Senate. It was defeated. But 

tha t would have been a loan.

Senator Sparkman. I want to differ slightly with the Senator.

Is it not a fact that it was agreed to as an alternate course ?

Senator Hickenlooper. The measure I am talking about was defeated by a vote in the Senate.

Senator Sparkman. The loan of $100 million? It was pa rt of a 

compromise plan.

Senator Hickenlooper. That was another measure which had some 

different verbiage in it which was passed by the Senate. But the 

measure I am talking about was a sound ancl financially responsible 

one.

It seemed to me a very responsible position to take to just loan the 

United Nations $100 million over a short period of time at the cost 

of that money to the Federal Government.

As I say, th at proposal was defeated, and we have another rather 

nebulous plan now which is being considered.

I do not know what the House is going to do.

obligation or the united nations

It seems to me, Senator Clark, tha t this plan would ju st result in 

issuing more bonds of the United States on the faith and credit of 

the United States and providing money for the United Nations w ithout any responsibility of the United Nations to pay it back.

Senator Clark. The Senator is not asking me a question. Of 

course, he is entitled to his own opinion.

Senator Hickenlooper. Well, of course, I am, and I am expressing 

it. But I think you said a moment ago tha t there is no responsibility 

on the United Nations to pay this back. They would not be obligated 

to pay either the interest or the principal on this.

Senator Clark. Oh, no, this has never been the intention.

Senator Hickenlooper. That is just a contribution to the United 

Nations.

Senator Clark. No. I thin k I have covered tha t in previous 

answers.

Senator Sparkman. As a matter of fact, is it not intended that 

the President would use these funds as a loan to the Un ited Nations
UNITED NATIONS PEACE BONDS 19

and that there will be an obligation on the p art of the United Nations 

to pay it back to the U.S. Government?

Senator Clark. Senator, I hate to appear stubborn, but I can only 

go back again to subparagraph (c), “shall be available for use by 

the President of the United States in support of the activities of 

the United Nations.”

It does not say a loa n; it does not say a gif t; it does not say a 

contract.

LIMITATIONS ON THE PRESIDENT

The President would be free to do whatever he sees fit within the 

current authorizations of the Congress.

I assume tha t the Under Secretary of State can give a more responsive answer to tha t question than 1.

Senator Hickenlooper. It is not a question of what somebody 

might intend to do in the future. It is what this bill says.

Senator Clark. The Senator is quite correct.

Senator Hickenlooper. As far as this bill is concerned, it just says 

tha t the Treasury will go out and borrow on the faith and credit of 

the United States at a certain interest rate and the President can use 

that money any way he sees fit, and I think you testified a moment ago 

tha t it was not contemplated in this bill that the United Nations would 

have any responsibility to pay this back at all.

Senator Morse. Will the Senator from Iowa yield ?

Senator Hickenlooper. Yes.

Senator Morse. I am glad you are raising this point. I want to 

get this record clarified, in view of the question th at the Senator from 

Alabama, Mr. Sparkman, raised, based, I think, upon his belief tha t 

there is some limitation on the expenditure of this money once it goes 

into this special fund in connection with United Nations activity.

As I think Senator Clark stated—and if I am wrong in my inte rpretation, I would like to clarify it right now—I think that the President can use the money for any of the activities of the United Nations, 

including those mentioned in your question, Senator Sparkman.

FISCAL ACTIVITIES OF TILE UNIT ED NATIONS

Let me call your attention to one of the fiscal programs of the United 

Nations.

There are the so-called regular activities of the United Nations and 

then there are the activities of the United Nations in connection with 

its so-called humanitarian special service programs.

At each General Assembly of the United Nations—and I represented our Government in this session in the 15th General Assembly— 

there are the so-called pledging negotiations. Each nation makes a 

pledge as to what it is willing to contribute for these so-called extracurricular activities of the U nited Nations in humanitarian programs. 

Included are the health programs, child welfare programs, food programs.

They are not paid for out of the regular budget of the United 

Nations.

They are paid for out of the special budget of the United Nations, 

and I submit they are very important.
20 UNITED NATIONS PEACE BONDS

In the 15th General Assembly I was authorized to negotiate in 

behalf of our Government to an upper limit of $40 million.

I believe in this last General Assembly we upped our contribution 

to $60 million.

Now, these services of the United Nations, believe me, bring the 

United Nations very close to the people of the world, and I think we 

had better have it perfectly clear, unless I am mistaken, Senator Clark, 

tha t the money raised from these bonds could be used by the President 

in connection with these extra services of the United Nations for 

which we pledge each General Assembly the amount of money we are 

willing to contribute.

I interpret section (c) to mean it covers any and all services that 

are renderd or performed by the United Nations in which the President 

of the United States, through proper legal channels, has approved 

U.S. participation.

Senator Clark. That would be my view, subject to the general 

limitation tha t the Congress can, of course, put specific restrictions 

on it.

Senator Hickenlooper. I certainly agree with tha t 100 percent.

There would be no limitation on the President. He could spend it 

for any purpose of the United Nations that he saw fit in his discretion.

Senator Sparkman. Would the Senator yield to me there for just 

a very brief comment ?

Senator H ickenlooper. Yes.

Senator Sparkman. I agree with you that the way the bill is written, 

tha t is true.

Tha t is the reason I asked the question why he did not put in “peace 

and security operations,” and I did tha t for this reason.

We all know that this proposal grew out of the U.N. bond issue. 

This was offered as an amendment or was proposed to be offered as an 

amendment to the bill on the floor, and, apparently, it was aimed 

at doing the job, or helping to do the job, that the U.N. bond issue 

was to do.

That is the only reason I asked why it was not limited to that field, 

since I assumed that that was the purpose of it here, as it was when 

it was originally drawn up.

Senator Clark. May I comment, Senator, right briefly ?

Senator Hickenlooper. Yes.

Senator Clark. Even then I intended it, and I think the cosponsors 

did, to be a proposal which would stand on its own feet.

The U.N. bond issue was a convenient vehicle to attach this to as 

an amendment.

CLARIFIC ATION OF TH E TITLE “ PEAC E BONDS55

Senator Hickenlooper. Senator Clark, I notice in the title, and, of 

course, in the reference to this bill which goes out to the public, tha t 

it is a peace bond bill.

I do not find anything in the body of this legislation tha t says that 

this would be devoted to the purposes of peace at all.

Senator Clark. It is just the general purposes of the United Nations 

to keep the peace, and the proceeds of these bonds are for use in supporting the U.N.
UNITED NATIONS PEACE BONDS 21

Senator Hickenlooper. We all know that in the Charter of the 

United Nations there are some very fine declarations of peaceful intentions and peaceful objectives and all this, that, and the other thing, 

but they do a lot of other things, too.

It seems to me that the term “peace bonds” in the context of the 

body of the bill itself is somewhat of a misnomer.

Senator Clark. I would not agree with the Senator.

CONGRESSIONAL RESTRICTIONS ON THE FUND

Senator Capehart. Might I ask a question here.

Let us assume tha t $100 million worth of these bonds were sold. 

Under (c), the amounts “shall be available for use by the President 

of the United States in support of the activities of the United 

Nations.”

This $100 million becomes a direct obligation of the United States.

Now, does tha t mean, then, tha t the Approp riations Committees of 

the Congress and the Foreign Relations Committee and other committees would have absolutely nothing to say about the purpose for 

which this money was spent ?

Senator Clark. No, I would think, as I have said four or five times 

before, Senator Capehart, I thin k before you came into the room, 

tha t the general phraseology in support of the activities of the United 

Nations would, of course, be subject to congressional restrictions of a 

general nature dealing with what we would spend money for.

Senator Capehart. In other words, this would pass through the 

Appro priations Committee ?

Senator Clark. No, sir.

Senator Capehart. Would it be authorized by this committee?

Senator Clark. Senator, all I can do is to say th at I can say it no 

more clearly than has been said in the language of the bill.

The Treasury authorizes the sale of these bonds to the general 

public on the terms and conditions stated in the bill, subject to Treasury regulations.

The money comes into the Treasury of the United States.

When it gets there, it is put in a special fund, and that fund can be 

used by the President of the United States in support of the activities 

of the United Nations—period.

Senator Capehart. In any way he sees fit ?

Senator Clark. Yes, sir.

Senator Capehart. Then this-----

Senator Clark. As presently authorized, of course.

THE FUND AS AN ADDITION TO CONGRESSIONAL APPROPRIATIONS 

FOR THE U.N.

Senator Capehart. Then this $100 million would be beyond any 

moneys tha t the Congress appropriated for the support of the United 

Nations ?

Senator Clark. I think I would rath er have that question answered 

by the Under Secretary of State. The Treasury representative is here. 

My intention in drawing the bill was to give the President such 

discretion.

87904-62-
22 UNITED NATIONS PEACE BONDS

Senator Capehart. Will you not have confusion if the administration comes to the Congress, for X amount of money to be given to the 

United Nations for specific purposes, and the Congress grants tha t 

request and appropriates the money ? Is the President then going to 

give the United Nations money beyond what has been appropriated 

and what has been authorized ?

Senator Clark. Senator, obviously, he cannot go beyond authorization.

An analogy which comes to mind is the contingent fund which the 

Congress gran ts to the President, except that this fund would be for a 

special contingency stated in the legislation.

Senator H ickenlooper. Tha t is all I have.

Senator Sparkman. Senator Capehart, any further questions?

Senator Capeiiart. One other question.

ESTABLISHM ENT OF A PRECEDENT THROUGH THE ISSUANCE OF PEACE

BONDS

Will this establish a precedent t ha t someone may then want to introduce legislation to issue $100 million worth of 2-percent bonds to 

help South Vietnam or some other nation in the world or some other 

cause ?

Senator Clark. I would not think so.

Senator Capehart. I s it not a bad precedent tha t we are establishing?

Senator Clark. I would not think so, Senator.

The Senator and I, I think in various other committees, have discussed from time to time the validity of arguments about starting preedents. I have never been much impressed with them. I know many 

other Senators are.

Could I make a statement off the record, Mr. Chairman ?

Senator Sparkman. Yes, indeed.

Senator Hickenlooper. This is a public hearing. Newspapermen 

can write down whatever is said.

Senator Clark. Mr. Chairman, I am perfectly happy to make a 

statement on the record.

I would ask, within the limits of a free, open, and complete hearing, the indulgence of Senators. I have an airplane to catch at 12 

o’clock.

Senator Sparkman. You do not have much time.

Senator Clark. I have 20 more minutes.

Senator Sparkman. I think I will forgo questions in order that we 

may move along with the hearing.

Senator Clark. I really do have 20 more minutes.

Senator Morse. The senior Senator from Oregon wants to make this 

point for the record:

THE LIMITATIONS OF THE BILL

I have read this bill very carefully, and I do not think there is any 

testimony here this morning tha t changes what I think are the clear 

limitations of the bill.

I do not th ink section (c) gives the President any funds to be used 

according to his discretion free from the checks of the Congress.
UNITED NATIONS PEACE BONDS 23

The Senator refers to the contingency fund. The President does 

not get the contingency fund except each year by authorization and 

appropriation through the Congress.

I interpret this bill to mean tha t under section (c) we provide 

this way of raising and earmarking funds tha t the President has available to him for the activities of the United Nations, but activities 

of the United Nations, as far as U.S. participation is concerned, that 

the Congress has approved.

I do not think you could do it any other way.

Senator Capeiiart. Would the Senator yield ?

Would you want to write tha t into (c) ?

Senator Morse. I think we would becloud the issue a little bit.

Senator Sparkman. I would agree with the Senator on that, but, 

as a matter of fact, I cannot help but believe that the intent of this legislation was to be limited even more than that.

I think it was supposed to take care of peace and security operations and not go beyond that.

Senator Morse. You mean the other bond issue ?

Senator Sparkman. Yes.

I have thought of this as being a parallel to it.

Senator Morse. I do not think the point th at the Senator raises now 

is relevant to the issue that the Senator from India na has raised.

I would be glad to discuss his point, too. But I do not think that 

the bill could possibly be subject to the interpretation tha t it means 

anything except within the limits of authorizations for contributions 

or loans to the United Nations.

Senator Capehart. Does he have any objection to writing that 

into (c) ?

Senator H ickenlooper. Would you state that again ?

Senator Morse. I think t hat section (c) is bound to be interpreted, 

as a matter of law, as raising funds to be earmarked for the activities 

of the United Nations within the limits of authorizations for contributions or loans to the United Nations.

Senator Hickenlooper. I am afraid I cannot agree with you on 

that.

I said a while ago I agreed with you, and I may have misunderstood 

what you said.

No, personally I think this bill authorizes the Treasury to sell bonds, 

raise the money, deposit it in a special fund, and then section (c) 

says once th at money is deposited, that the President can use it for 

any purpose he wants to m connection with the activities of the 

United Nations. It is as plain as any language I know.

I do not think it requires any appropriation or any fu rther authorization once we authorize the Treasury to sell the bonds and deposit 

the proceeds in a special fund.

Senator Sparkman. I am not able to think of any activities in the 

United Nations in which we do not participate. Are there any?

Senator Hickenlooper. This would augment.

Senator Sparkman. I do not see tha t it would augment. I think 

that the Senator from Oregon is correct, bu t I do not admit that this 

is what we want to do.

Senator Morse. That is a different issue.

Senator Sparkman. Tha t is the point I have been trying to make.
24 UNITED NATIONS PEACE BONDS

My point is that we might limit this to peace and security operations 

and not go into the full field of the United Nations operations.

Now, that is something to be considered when the time comes for 

writing up the bill. I would be very glad if the Under Secretary of 

State would discuss that when he is on the stand.

I am sure he will.

Senator Morse. Tha t troubles me very much.

Senator Sparkman Tha t is something tha t we would have to decide 

in marking up the bill.

I would be very glad to hear from the Under Secretary of State 

01; that.

At this point I should like to insert in the record the letter from 

Senator Hart, who is one of the cosponsors.

(Senator Hart’s statement, as well as the documents previously 

referred to, follows:)

U.S. Senate,

Washington, D.C., July 10, 1962.

Hon. William Fulbright,

Chairman, Sena te Foreign Relations Committee,

U.S. Senate, Washington, D.C.

Dear Mr. Chairman : As one of the cosponsors of S. 2818, I would like to indicate for the record my support of this bill.

The idea of providing a concrete and constructive means whereby citizens of 

the United States can offer tangible supp ort for the United Nations made sense 

to me in February when the bill was introduced, and it makes sense now.

Not only would this measure be of assistance to the United Nations in providing additional financial resources, it would permit the people of our Nation who 

have wished to show the ir supp ort for it to do so in a most useful fashion.

Hopefully, your committee will act favorably on this bill.

Sincerely,

Philip A. Hart.

United Nations Peace Bonds—Statement by Senator Hubert H. Humphrey

Mr. Chairman, I am honored to appear before you this morning in support of 

S. 2818, a bill to auth orize the purchase of United Nations peace bonds by the 

general public. Let me say first that the bill is a trib ute to the leadership and 

initiati ve to my good friend Senator Joseph Clark, of Pennsylvania, who was 

good enough to ask me to join him in sponsoring the measure. S. 2818 demonstrate s the cha rac teristic belief of the Senator from Pennsylvania th at no 

major aspect of our foreign rela tion s lies outside the public domain. My distinguished colleague is a fearless, levelheaded exponent of sanity and wisdom in 

foreign affairs. He does not hesitat e to voice his firmly held convictions even 

when they clash with what is loosely called public opinion. When he asked me 

to cosponsor the bill now before us, I hastened to agree, for in my view public 

participation in the purchase of U.N. bonds by the United States is bound to 

have a most salut ary effect upon our foreign relations. I am gratified that the 

adm inistra tion shares this view and has accorded its supp ort to the proposal.

United Nations peace bonds, Mr. Chairman, will give the ordinary American 

citizen an opportunity which he now lacks to register his direct, personal support of the United Nations as an institution. The bill encourages the purchase 

of bonds by anyone who can afford to save as much as $18.75. The bonds are 

issued in denominations of $25, $50, $100, $500, and $1,000: they are within 

pocketbook range of the gre at majority of our citizens. Moreover, no person, 

corporation or synd icate can buy or hold bonds whose total face value exceeds 

the sum of $10,000.

These are bonds for peace and they are bonds for the peace-loving American 

people. If the bill is approved, the general public, which has alre ady signified 

its overwhelming moral support of the United Nations, will for the first time have 

a chance to signify its material support as well. Not everyone can or should 

lobby for the U.N., work in U.N. commissions, or represent his or her country 

at the U.N. Hea dquarters. If this bill is passed, however, everyone can con-
UNITED NATIONS PEACE BONDS 25

tribute within generous limits to the financial solvency of the world organization.

It is high time to rescue the U.N. from exclusive reliance upon governments 

who ask not what they can do for the United Nations but what the United 

Nations can do for them. Budgeta ry contributions to the U.N. by member governm ents is uneven, often slow in arriving, and subject to interruption as a 

result of extraneous political considerations. Assessments for the suppo rt of 

U.N. peacekeeping operations are, as we have seen, frequently honored more in 

the breach tha n in the observance. The U.N. bond issue in general is an emergency measure which is designed, in conjunction with a hoped-for decision of the 

World Court as to the mandato ry natur e of assessments for special operations, 

to give the U.N. time in which to put its financial house in order. The Senate 

has alre ady passed an excellent bill defining the conditions under which the 

Preside nt may commit this country to the purch ase of U.N. bonds. After arousing considerable debate in the Senate, the bond issue has found the going no 

easier in the House of Representatives. Controversy among legislators, however, is no reason to deprive the American people of the opportunity to make 

a double investment in the ir futur e—a personal dollar-and-cents investment 

with a guaranteed monetary return , and an equally important investment in 

world peace through contributing to the independence of the United Nations.

I well remember how schoolchildren during World War II saved the ir pennies, nickels, and qu art ers to buy U.S. wa r bonds. Scores of school systems 

would buy enough wa r bonds to finance the construction a B-17 Flying Fortress 

or some other costly item of war. This was a mighty contribution to the 

U.S. war effort, and every child who held one of those U.S. Treas ury certificates 

felt th at in his own way he had been on th e firing line.

Now I do not predict similar enthusiasm or mass participation in the purchase of U.N. peace bonds. Bu t I definitely anticipate th at the bonds will be 

snapped up eagerly—and th at a vital objective of U.S. foreig n policy will be 

served thereby.

Approval of S. 2818, Mr. Chairman, will earn dividends for the gre at human 

causes to which this cou ntry is dedicated.

Statement of U.S. Senator Maurine B. Neuberger, of Oregon

Mr. Chairman, I am most gra teful for thi s opportunity to express my views 

to the committee as a cosponsor of S. 2818, to authorize a special issue of peace 

bonds.

It is entirely proper th at our citizens be able to participate in maintain ing 

the costs of peace as, through war bonds, they once helped to bear the costs of 

war.

Americans who have faith in the United Nations as an instrument of international cooperation and who subscribe to the precepts of the U.N. Charter will 

welcome thi s opportunity to implement the ir faith. Like the Peace Corps, 

peace bonds will supply the answer to many citizens wTho ask wh at they can do for the ir country in the fields of intern ationa l cooperation and understanding.

Curiously, S. 2818 should evoke the support of congressional opponents, as 

well as proponents, of U.S. financial aid to the United Nations. Manifestly, 

funds provided by voluntary loans in the form of peace bonds will supply 

funds to supp ort U.N. activities which otherwise might have been draw n from 

the U.S. Treasury.

I respectfu lly commend the comm ittee’s favo rable consideration of S. 2818.

Statement of Senator Harrison A. William s, of New J ersey

Mr. Chairman, I appreciate this opportunity to submit a brief statem ent in 

supp ort of Senator Clark’s bill, S. 2818, which I h ad the pleasure of cosponsoring, 

to permit public supp ort for the activities of the United Nations through pur ­

chase of United Nations peace bonds.

In these days of unc ertainty about the importance of individual efforts in the 

field of intern ational affairs, I believe approval of this measure would offer a 

constructive method by which the citizens of this country could tangibly express 

supp ort for the activ ities of the United Nations.

It is my understanding th at S. 2818 would authorize the Tre asu ry to issue 

for sale to the public “peace bonds” in denominations of $25, $50, $100, $500,
26 UNITED NATIONS PEACE BONDS

and $1,000, at 2 percent intere st, compounded semiannually. It seems to me that 

this would accomplish several desirable objectives. First, while the bill would not sub stitute for this country’s commitment to purchase up to $100 million of bonds issued by the United Nations und er the bill passed by the Senate on April 5, it would enable individuals to relieve the Tre asury of pa rt or all of its prospective loss und er the U.N. bond issue, and thereby produce savings to the American taxpayer. Since the T reasury, in order to loan the money to the U.N. at 2 percent, would have to borrow itse lf at a higher intere st rate tha n 2 percent, the individual purchaser by buying peace bonds at 2 perc ent would assume the low intere st himself and thus save the Treasury the difference. This feat ure should help meet the objections of those 

who have opposed the U.N. bonds on fiscal grounds. But more important, approval of this measure would offer a tangible and important method by which those who supp ort the U.N. can directly and effec­ tively demonstrate th at support. Although the U.N. has been criticized of late both here and abroad, surveys clearly indicate the overwhelming supp ort which the U.N. h as among our citizens. Thus while all of us may question the wisdom of its decisions from time to time, I think the ma jority of the American people believe that the U.N. by and large has served our national interest. Recently I had the pleasure of discussing the United Nations with our Am­ bassador, Adlai Stevenson, and he pointed out th at “our view has prevailed in the United Nations on virtually every major issue th at has come before it .” In addition, I recall th at several years ago, during the turm oil in the Middle East, it was widely feared th at Soviet penetration and domination of this vital area was all but assured. But the Middle Ea st has remained relatively stable and free of Soviet peneration, than ks largely to the presence of the U.N. forces there. Most recently, the U.N. has achieved the difficult problem of stabilizing 

the Congo. Thus, I believe the U.N. has serve d us well. Now it is in serious financial trouble. This bill makes it possible for the American people to demonstrate their supp ort of the organizatio n. And it offers a way in which people can over­ come wh at seems to be a widesprea d doubt th at their individual action has 

real meaning in inte rna tional affairs. For these reasons, Mr. Chairman, I urge your favorable consideration of this 

legislation.

Great Falls, Mont., July 11, 1962.

Senator J. William Fulbright

Chairman, Senate Foreign Relations Committee

Senate Office Building, Washington, D.C.:

One hundred and thirty-one Montana Farm ers Union juniors voted co-op store savings at summer camp to purchase of U.S. bonds. The petition they signed urging the bill’s passage was sent to Senator Metcalf. Money is being held 

pending passage of S. 2818. May we fu rthe r urge affirmative action on our young people’s behalf.

Ralph F. Cook,

Secretary-Treasurer, Montana Farmers Union.

Statement op the U.S. Section, Women’s I nternational League for Peace

and F reedom, Washington, D.C., on United Nations Peace Bonds

The Women’s Int ern ational League for Peace and Freedom supports S. 2818, authorizing the U.S. Treasury to issue United Nations peace bonds for sale to the public. Support for the United Nations has been a major pillar in the policy of this organization ever since the United Nations was founded. The United Nations can only be as stro ng as the commitment of nations to its principles, and this depends on the commitment of people. We believe there is even gre ate r commitment by the people of the United States to the United 

Nations tha n has been reflected in official policy. We believe th at individuals should have an opportunity to make a tangible investment in the United Nations. The people certainly have a gre at stake in the future of world order, and we would like to encourage people of all member nations to seek ways of par ticipating more directly in the United 

Natio ns cause.
UNITED NATIONS PEACE BONDS 27

RESOLUTION ADOPTED BY NA TI ON AL BOARD ME ETING FEBRUAR Y 9 - 1 1 , 1 9 6 2 , RE UN IT ED

NAT IO NS PEA CE BON DS

“The National Board of the U.S. Section of the Women’s Intern ational League 

for Peace and Freedom, meeting in Philadelphia, Febru ary 9-11, 1962, while 

supporting purchase of $100 million United Nations bonds by the U.S. Government, also supp orts the bills introduced in the Congress which proposes th at 

the U.S. Tre asury sell special ‘peace bonds’ in small denominations to be applied to the paym ent of the share of the United States in the United Nations 

bond issue in orde r to extend the opportunity for concerned individuals to 

partici pate in this v ital assistanc e to the United Nations.”

Senator Sparkman. Thank you, Senator Clark.

Senator Clark. Thank you, Mr. Chairman.

Senator Morse. A very good statement.

Senator Sparkman. Mr. McGhee, will you identify those with you 

for the purpose of the record ?

We will be very glad to have you proceed in your own way.

STATEMENT OF GEORGE C. McGHEE, UNDER SECRETARY OF STATE

FOR POLITICAL AFF AIR S; ACCOMPANIED BY JOHN K. CARLOCK,

FISCAL ASSISTANT SECRETARY OF T HE TREASURY; AND W. H.

ZIEHL, DEPUTY DIRECTOR, OFFICE OF INTERNATIONAL ADMINISTRATION, DEPARTMENT OF STATE

Mr. McGhee. Thank you, Mr. Chairman.

I have with me Assistant Secretary Carlock from the Department 

of the Treasury, and Mr. Wilbur Ziehl from the Department of State.

I would like to say, Mr. Chairman, i t is a pleasure to be with you 

and the committee today.

I would like to commend the statement made by Senator Clark and 

the motivations which have prompted him to bring fo rth this bill.

I am here in support of it.

I have a statement which, with your forbearance, I will be glad to 

read to your committee.

I would just like to add at this juncture my deep concern and that 

of the Department over the matter which Senator Morse has expressed 

concern: namely, the action of the House in dealing with the $100 

million U.N. loan fund yesterday.

It is my earnest hope tha t the House will, in subsequent action, conform more closely to the action recommended by this committee in 

reporting favorably the bill to the Senate.

With your approval, Mr. Chairman, I will read my statement.

Senator Morse (p residing). Proceed.

THE PEACE BOND BILL IN RELATION TO T HE U. N. BOND PURCHASE BILL

Mr. McGhee. I appear before you in support of legislation authorizing the issuance of peace bonds by the Treasury Department to enable private citizens to participate more directly in support of the 

United Nations.

Members of the committee recognize, of course, that this proposal 

is in no way a substitute for the legislation, passed by the Senate and 

pending before the House, which authorizes the President to lend up 

to. $100 million to the United Nations to support its peace-keeping 

missions in the Congo and the Middle East.
28 UNITED NATIONS PEACE BONDS

Senator Hickenlooper. Do you mind an interruption, since I am 

going to have leave in just a few minutes ?

Mr. McGhee. Not at all, Senator Hickenlooper.

Senator H ickenlooper. You say this proposal is in no way a substitute for tha t $100 million lending authority?

Mr. McGhee. Yes, sir.

Senator Hickenlooper. Is it an augmentation ?

If it is not a substitution, it must be an augmentation.

US E OF T H E F U N D

Mr. McGhee. Senator, in our view, and I hate to differ with the 

views of Senator Clark in respect to his own bill, but, in our view, and 

this is really the Treasury view since they are the technicians in our 

Government, any use of this fund must be considered in use of authorization and appropriation.

Senator Hickenlooper. You say it must be ?

Mr. McGhee. Yes, sir.

This is the view of our Treasury Department. Mr. Carlock would 

be glad to respond to that in detail, if you would like.

Senator Morse. I thin k it is obvious from section (c) .

Senator Hickenlooper. I would be interested in seeing how you 

arrive a t that conclusion in view of the language in the bill.

Mr. McGhee. Would you like Mr. Carlock to go into that ?

Senator Hickenlooper. Not now. I do not want to interfere with 

your statement.

Mr. McGhee. Tha t is quite all right.

Senator Hickenlooper. You said it is not in substitution, and I 

say it, therefore, must be in augmentation ?

Mr. McGhee. No, sir.

In our view, it is not an augmentation.

Senator Hickenlooper. What is it ?

Mr. McGhee. The funds would be used, funds, appropriations 

made by the Congress, in the usual way.

Senator Sparkman. Then it would be up to the Congress to determine the activities for which they would be used ?

Mr. McGhee. That is correct.

This is our interpretation.

Senator Capehart. Will you yield?

Tha t is not what it says. Paragraph (c) says:

and shall be available for use by the President of the United States in support 

of the activities of the United Nations.

Senator Sparkman. We can easily insert some language to make it 

clear.

Mr. McGhee. This can be easily clarified.

Senator Capehart. Do you think it should be clarified ?

Mr. McGhee. Certainly, if there is any ambiguity. Perhaps you 

would like to hear from Assistant Secretary Carlock, who is the Fiscal Agent of the Treasury.

Mr. Carlock. We would construe this without more as being just 

an authorization, but the Congress could make it clear what it intended, and we would do, of course, what it intended. If it wanted 

it to be construed as an appropriation, why, we would construe it that 

way, and if this committee and the House committee-----
UNITED NATIONS PEACE BONDS 29

Senator Hickenlooper. Just a minute.

Do you construe things on the basis of convenience or on what the 

law is?

Mr. Carlock. No. We always construe it against its being an 

appropriation, unless the language clearly makes an appropriation, 

because it arises out of a committee tha t is not an appropriation committee. But if this committee made it clear tha t it intended this to 

be an appropriation and the Congress passed it that way, we would 

construe it as an appropriation.

Senator Capehart. Will you yield ?

If your interpretation is right, then how does this become a special 

fund ?

Mr. Carlock. It is a way of measuring the authorization out of 

which appropriations could be made.

Senator Capehart. Why not just get the $100 million at 2 percent 

and put it in the General Treasury and then follow the appropriations and authorization acts of Congress in spending i t ?

Mr. Carlock. That would be all right.

This measures the amount of appropriation authorized by this act 

by the amount—the fund would just be a way of measuring tha t 

amount.

Mr. McGhee. If I may say so, Senator, some of these questions 

may be answered in the statement, so tha t at any point I will be 

delighted to resume this statement.

Senator Morse. Go ahead with the statement.

Mr. McGhee. The conduct of foreign policy cannot be delegated 

to the random decisions of unidentifiable private citizens. The decision to support or not support the United Nations capacity to keep 

the peace must be made by the Government and this bill does not bear 

on that decision.

We understand tha t the sponsors of this proposal do not intend to 

gran t any new authority nor to create any additional resources beyond 

those appropriated by the Congress in the normal appropriation procedure.

I think I should say parenthetically it is obvious from Senator 

Clark’s testimony t hat this was not in fa ct in his mind, although this 

was our understanding prio r to appearing before you.

We understand tha t any moneys derived from the sale of peace 

bonds and used by the President to support United Nations activities 

would be applied against appropriation authorizations made by the 

Congress for those purposes: in other words, the use of these funds 

would reduce the demand on the general fund of the Treasury.

INDIVIDUAL EXPRESSIONS OF INTEREST IN THE U.N .

Financial support of the United Nations is, of course, ultimately 

borne by the private citizen in his role as taxpayer. Nevertheless, 

there is considerable evidence of a real desire on the part of a substantial number of citizens to feel tha t they are playing a more direct 

and a more personal p art in supporting the United Nations.

This feeling is expressed explicitly in a letter recently received by 

the President from a man in Cambridge, Mass., which begins:

While, as a taxpayer, I participate in U.S. support of the United Nations, I 

have long had a wish to share more directly and personally in support of a cause 

87904— 62------5
30 UNITED NATIONS PEACE BONDS

which provides so much hope fo r th e fu tur e of humanity * * * I would like to see 

a provision for people who believe in the value of the U.N. to back that belief— 

not only with words, b ut with money * * *.

This letter enclosed a personal check for $50, which the writer described as “earnest money as our expression of faith in the U.N.”

I do not wish to take your time with extensive quotations from 

similar letters received by the President in recent months, but perhaps 

two brief excerpts will illustrate the po int:

A family in Euclid, Ohio, sent in $3—$1 for each member of the 

family—with these words:

There are others who I know would do the same if they only had a chance. 

So why not let us the people each have a li ttle sta ke in the U.N.?

A man from Levittown, Pa., sent the President $4.24 in a letter 

which sai d:

I am a Republican, voted for Nixon, disagree with you on many issues and 

methods of handling things, but I think most everyone including our very grea t 

Preside nt past, Dwight Eisenhower, that this organizatio n (U.N.) is very vital 

to the life and security of the United S tate s and the world.

Senator Hickenlooper. Mr. Secretary, may I just interrupt there 

for a minute.

You did not see fit to put in the numerous letters which you have 

received in opposition to the U.N. and a lot of its activities, did you?

Mr. McGhee. You are quite correct, Senator.

The number of these I am not familiar with.

I assume tha t they exist.

I would also assume tha t probably people who do write are generally people who are for. Tha t would compel them to write more 

directly than the people who are against.

Senator Hickenlooper. T do not know how your mail runs. I 

have always voted for the U.N. appropriations. But I assure you I 

receive probably about as many letters criticizing the U.N. as in support, of it.

I just noticed you picked out favorable letters to insert in your statement.

Mr. McGhee. Of course these letters are not to illustrate the general public acceptance of the U.N., but the interest of individual citizens to contribute to the U.N. and probably individual citizens who 

did not want to contribute to the U.N. would not write to that point.

May I continue?

Senator Morse. Proceed.

Mr. McGhee. The volume of such mail reaching the President and 

the D epartment of State is not very great, but it is fairly steady and 

picks up at moments of crisis for the United Nations. We have not 

kept a statistical tabulation because, under present circumstances, we 

are obliged to return these personal contributions to the people who 

sent them or refer them to the United Nations directly.

Mr. Chairman, I assume that it must be a frustrating experience to 

make a decision—as a librarian in Ohio recently did—to contribute 

1 percent of her annual income toward U.S. support of the United 

Nations and then find that the U.S. Government has no authority to 

accept th at contribution. It seems to me that the offer itself is evidence of a more general sense of frustration that many people seem 

to feel about world affairs—an uneasy feeling that the individual has
UNITED NATIONS PEACE BONDS 31

no role to play, no personal contribution to make, toward a better 

world. The proposal before you would create an instrumentality 

through which individuals could gain some sense of direct participa ­

tion in world affairs—by having “a little stake in the U.N.” as one of 

the letterwriters put it.

DEPARTMENT OF STATE ENDORSEMENT OF THE LEGISLATION

For this reason, the Department of State warmly endorses the intention of the sponsors of this legislation to remove existing roadblocks to more direct citizen participation in support of the activities 

of the United Nations. I should think, Mr. Chairman, tha t it would be well to consider 

this proposal frank ly as an experiment. Since the language of the 

bill explicitly excludes promotion of peace bond sales by the Treasury 

Department, the necessary promotion would have to be conducted by 

private organizations. Most of the contributions which private citizens have tried to make to the President for U.N. support have come 

from people of limited means whose gifts are im portant symbolically 

but insignificant financially. And the maximum face value of the 

proposed peace bond issue—$100 million—is 2 million 50-dollar bills 

or 20 million 5-dollar bills. In light of these facts, I do not think it 

would be realistic to anticipate tha t revenues from peace bond sales 

would relieve the Treasury in a significant way.

Our endorsement of this legislation therefore is based on our conviction tha t a sense of personal identification with U.S. support of 

the United Nations would heighten a citizen’s interest and commitment to an essential institution in world affairs. By making possible 

a more direct contribution, this proposal would present an opportunity 

to our citizens to achieve such a sense of identification. We therefore 

invite your favorable consideration of the bill and the purpose that 

lies behind it.

This concludes my statement.

Senator Morse. This morning, Mr. Secretary, I sent down to you 

two typewritten questions tha t I asked Senator Clark.

Mr. McGhee. Yes.

Senator Morse. I wonder if you would mind reading them into the 

record and answering each one?

Mr. McGhee. Shall I read the question ?

Senator Morse. Yes.

PARTICIPATION BY NONPROFIT ORGANIZATIONS OF MEMBER COUNTRIES

Mr. McGhee. Shall I read the question ?

Under the General Assembly resolution authorizing I he issuance of bonds the 

U.N. Secretary General, with the concurrence of an Advisory Committee on Adm inistrative and Budgeta ry Questions, may decide to offer the bonds to non­ profit institution s or associations in the member countries. Would you con­ sider the absence of such a determination to mean that the Secretary General believes th at the responsibility for the governments of other countrie s to finance 

the U.N. should not be diminished?

Of course, in the final analysis, it is not possible to interpret what 

is in the mind of the Secretary General of the U.N. with respect to
32 UNITED NATIONS PEACE BONDS

this au thority , which has been granted . We would interpret, how ­

ever, the fact th at he turned first to governments as indicatin g that 

he looks pr im arily to g ove rnm ents to finance t his opera tion, an d that, 

although he still has the au thor ity to sell bonds to indiv idu al in stitutions, th at he pro bably elects to rese rve this as a so rt of a fall back.

Now, the prop osed legislation rea lly is a means of pa ying fo r na ­

tio nal con trib utions, so, in a sense, it does no t rea lly fall in the category of a direc t ap pea l to an indiv idu al o r an institut ion .

DISPOS ITIO N OF TH E PROCEEDS FROM PEACE BONDS

The other question th at Sen ato r Morse has ra is ed :

The State Department comments of April 3 note that if peace bonds are to be 

purchased in a period late r than the cutoff d ate for the U.N. bond offer—namely, 

December 31, 1963—and I quote from the letter, “the bill should specify what 

disposition should be made of th e proceeds.

“If the intention is to effect a decrease in the amounts intended by the United 

States fo r prior purchases, the bill should so specify.”

Would section (c) of S. 2S1S, as revised, be regarded as satisfying th at recommendation?

Mr. McGhee. Yes, sir.

In our view, it does, because it does pe rm it this money to be used 

fo r any purposes which hav e been autho riz ed and ap prop riated involving actions of the Un ite d N atio ns.

Senator Spark man. Mr. Ch air man, I th in k the Und er Secre tary 

has clea red up my questions very well fro m wh at h e has said, and I 

th in k the repres entative of th e Treasur y D epart ment, also.

OU TL INING TH E ACT IVITIES OF THE U .N . FOR W HIC H TH E FU ND IS TO 

BE USED

I can see, a nd I do feel, th at we would all feel easier if we pu t the 

lim ita tio n, the requirement, in the leg islation itse lf, th at these fun ds 

would have t o be sub ject to, o r would be limited to, a uth ori zed expenditures and sub ject to ap prop ria tio ns by the Congress of the Un ite d 

States.

Se na tor Humphr ey. I do n ot unde rst an d why you do tha t.

Se na tor Spark man. Tha t is w ha t he said.

Se na tor Humphr ey. Ar e thes e bonds th at are purch ase d by the 

citizen ry? Th e Governme nt of the United State s does n ot have a ny ­

thing to do w ith this except ac t as sort o f a collection agent.

Se na tor H ickenlooper. Or gu aran tor.

Se nator Hum phr ey. A gu aran to r? The public buy s them . Gua rantor , baloney.

Se na tor H ickenlooper. I t is no t balo ney at all. I t is the fa ith 

and cr ed it o f the United S tat es th at is beh ind these bonds.

Se na tor H um phrey. But who pays fo r the bon ds first, Senator?

Se na tor H ickenlooper. Th e peo ple buyin g them , bu t the Un ite d 

State s pa ys them back whe n the y come due.

Se nator H um phr ey. Th e fact of t he m atter is when you buy them, 

you pu t the money in ahead o f tim e before the y are p aid back.

Senator Spark man. May I say the question rea lly arose on the 

purpose f or which th e funds are to be used.

Se nator H umphr ey. Yes, I unders tan d.
UNITED NATIONS PEACE BONDS 33

Senator Sparkman. And it would be through the authorization 

and appropriation, procedure t hat that provision would be made.

Senator Humphrey. I do not mean to be sticky about it, but I think 

it is one thing-----

Senator Sparkman. Do you have an interpretation as to the purpose 

for which the funds should be used ?

Senator Humphrey. For whatever activities the President defines 

as “U.N. activities.” After all, this is not taxation. These are bonds.

Senator Hickenlooper. I happen to be in 100 percent agreement 

with you.

Senator Humphrey. These are bonds tha t people purchase and 

they are paid a very low rate of interest, and if the public wants to 

buy these bonds, tha t is their business. The Government is merely 

the agent.

Senator Sparkman. It is more than that. It is the guarantor.

Senator Humphrey. The guarantor ?

Senator Hickenlooper. The Government has to tax the people to 

pay the bonds back.

Senator Humphrey. Guarantor of repayment.

Fir st of all, the Government has been paid. What actually happens 

is tha t the Government itself gets the money from the individual citizen as a purchaser of the bond.

Senator Capeiiart. The Government has to pay it back.

Senator Humphrey. Yes, correct.

Senator Capeiiart. And it has to tax the people to get the money to 

pay it back.

Senator Humphrey. I s it your feeling tha t the activities of the 

U.N. should be outlined ?

Senator Sparkman. No, but the activities for which these bonds are 

to be used should be outlined.

SPEC IFIC PUR POSE OF TH E FU ND DERIVED FROM TH E SALE OF PEAC E BONDS

I may have gotten off on the wrong foot, but I felt these bonds were 

to be used for the peace and security operations of the U.N. There is 

no provision saying tha t in the bill, but it has been my understanding all the time tha t tha t was what promulgated this program.

senator Humphrey. It was in part.

Senator Sparkman. And my feeling is that what we are tryin g to 

do is relieve the United Nations of a bad situation right now, and the 

way to do it is by supporting the peace and security operations.

Frankly, if I were writing the legislation, I would limit i t to that, 

and I would hope tha t in making the appropriations, the Congress 

would make it for that purpose and no other purpose.

I do not see tha t we should lessen our regular contribution to 

UN ICE F, for instance, and let the President take care of it on a contingency basis.

I think we ought to carry on our regular activities as we have been 

doing, and if we issue these bonds, let them be used for the peace and 

security operations of the United Nations.

Senator Humphrey. I thin k that would be a good limitation.

Senator Morse. Would the Senator yield ?

Senator Sparkman. Well, yes.
34 UNITED NATIONS PEACE BONDS

CLARIFICATION OF TIIE BILL

Senator Morse. As I listen to this discussion, I think the issue that 

has been raised here this morning can be boiled down to this premise: 

If this bill means, as some of us think it means, th at the money raised 

from the sale of these bonds can be used by the President of the 

United States only for United Nations activities tha t are, in fact, approved by the Congress of the United States through its authorization 

and appropriation program, you have tha t check on the President.

Now, the question raised here is:

Is it intended, under the bill, to have the Government of the United 

States make these bonds available at 2 percent interest to be paid back, 

as the Senator from Indiana and I have pointed out, by the Treasury 

of the United States through our taxation program, and to be used 

for any activity that the United Nations decides it wants to engage 

in, and in respect to which the President of the United States approves 

with no check by the Congress of the United States.

There is quite a difference in the two procedures, and we need to 

get it very clear in this bill whether or not this legislation seeks to 

vest in the President of the United States the unchecked power to 

use the proceeds from these bonds for any activity tha t the United 

Nations decides upon, or whether the bill proposes-----

Senator Hickenlooper. Would you qualify tha t to say assuming 

United Nations action within its charter authority ?

Senator Morse. Yes; I will add that.

I presume tha t what I was referring to is a situation where the 

United Nations proposes something under its charter, but something 

in which we may not be participating.

But if we follow the second alternative as to intent, the President 

of the United States could put us in the program without any authorization or appropriation from the Congress.

I think it is very important we get that very clear.

Before you came in, Senator Humphrey, the Treasury witness supported the position that we have expressed. Section (c) does not 

mean that the President has any unchecked power.

Senator Humphrey. No.

Senator Morse. Section (c) means t hat the President can use the 

funds for United Nations activity tha t the Congress of the United 

Si ates has authorized and for which it has appropriated money.

Senator Humphrey. I think that is right.

Senator Capehart. Will the Senator yield ?

Senator Hickenlooper. Tha t may be the basic intention, but I 

submit that is not what the bill says.

Senator Capehart. Will the Senator yield ?

Then if tha t is t rue?

 and I think it is true, do you not defeat the 

very thing you are trying to do here, and that is to get people to support the United Nations by buying bonds at 2 percent, when they 

can buy regular Government bonds, following the same procedure, 

at 4 or 4.5 percent ?

Who is going to be foolish enough to buy a 2-percent bond when he 

could buy 1 at 4.5-percent, when the money for the purchase of 

the bonds is handled exactly the same way ?
UNITED NATIONS PEACE BONDS 35

So the lettere tha t you have read here in your statement mean 

nothing, then, because the people are not getting what they think 

they are getting.

Senator Morse. Before the Senator came in, I asked some questions 

of the Senator from Pennsylvania in regard to the 2-percent rate 

rather than the going rate of interest tha t we pay on Government 

bonds generally. I suggested tha t that might create some problems in 

regard to the sale of the bonds.

Senator Humphrey. I think tha t the Senator from Pennsylvania 

was of the opinion tha t there are a number of people in this country 

tha t would buy these bonds, simply because of their dedication to 

U.N. activities, particularly if these moneys were held in a special 

fund, and were not commingled with other public revenues or other 

public funds.

Senator Capehart. Will the Senator yield ?

But the Under Secretary of State and the representative of the 

Treasury have now testified that they would be commingled and 

they would be handled exactly the same as the proceeds for the sale 

of any other bonds.

Senator Humphrey. They shall be deposited in a special fund, 

however.

Mr. McGhee. Senator, I believe the intent, as we understand it, is 

that they shall be in a special fund and that these moneys will be 

used only for United Nations purposes.

Senator Humphrey. Exactly.

Senator Capehart. But subject to the appropriation and authorization of the Congress.

Mr. McGhee. That is correct.

Well, this is our interpretation.

As you have heard earlier, of course, it is not Senator Clark's 

interpretation.

But, as we see it, as I have stated here, Senator, this act is symbolic. 

That is why the question of 2 percent or 4 percent does not arise.

Of course, the purchaser of these bonds would not be doing so because i t is a good investment. But he does it as an act of symbolic 

support of the United Nations, knowing th at he is making a sacrifice.

Senator Capehart. If the money is going to be intermingled and 

used for the same purpose and go through the same processes of authorization and appropriation, why will he not just write a letter 

in and say: “Instead of buying this 2-percent bond, I am going to 

buy the 4-percent bond, but I would like to have my money for the 

4-percent bond used for this purpose” ?

Mr. McGhee. I think th at is the difference, Senator; that this bill 

does provide a way of assuring tha t his money goes to the U.N.

There is no way tha t I know of assuring tha t ordinary proceeds 

from savings bonds go to the U.N. and not to some other function 

of the Government.

Senator H umphrey. Will the chairman yield ?

I think the point is well taken by Senator Capehart on the matter 

of the regular activities of the U.N.

These are financed out of taxation, out of bond issues at the regular 

going rate which you pay if the Government sells bonds, right out 

of regular tax revenues. Therefore, when Senator Clark designed
36 UNITED NATIONS PEACE BONDS

this bill and asked some of us to join him as cosponsors, the the ory 

beh ind it was th at the re would be ex tra fund s made ava ilable by 

ded icated c itize ns in this country who were n ot concerned a t all abou t 

the inte res t ra te per se.

You pu t a 2-percent ra te on these bond because it is an adminis ­

trat iv e rat e, really, fo r its h andli ng , processing, and so forth , and at 

least give s some small rew ard fo r investment. Th e peop le th at will 

buy these bonds wa nt to see certain U.N . activitie s increased, intensified, and , there for e, th e bond money was to be set aside in a special 

fund , and the Pr esiden t of the United State s was to be giv en the 

use of these fund s fo r those activ ities in th e Un ite d Na tions with 

whi ch ou r Go vernment has associated itself.

Now, the re may be some activ itie s or some pro posals in the U.N. 

th at we are not for. But where th e Congres s of the Un ite d State s 

has alr eady mad e ava ilab le funds fo r ca rry ing out regu lar U.N . activitie s, by funds from thes e bond s. Tho se activitie s could be im ­

plemented over an d above the am ount of the reg ul ar U.S. contribu tions.

Mr. McGhe e. Senator, our in terp retatio n was th at the amoun ts 

could no t exceed th at ap prop ria ted.

I do not know wh eth er th at is c ons istent with wh at you hav e stated 

or not, bu t these are fun ds to be used wi thin the lim its ap prop ria ted 

by the Congress.

Se na tor H umphr ey. My in terp retatio n would be the y would b6 

funds th at could be used, not beyond au tho riz ation s by the Congress, 

but to im plement a pp ropriat ion s.

Now, I th in k this is a point th at needs to be clarified. I do not 

mean to argue.

Se na tor Morse. It s urely does.

Se na tor H umphr ey. I do no t mean to arg ue the valid ity or the 

cre dib ility of the case one way or anoth er, bu t I th in k we oug ht to 

have an un de rst an ding as to wh at the au thor of the bill had in mind.

I was n ot here when he testified.

Mr. McGhe e. Yes.

Se na tor H um phr ey. Bu t I do n ot th in k it goes beyond w hat are the 

au tho riz ation s of the Congress.

Bu t, since this is money th at is brou gh t in un de r very special 

arr angeme nts , and moneys th at are set asid e in special fun ds, it was 

my un de rst an ding th at these would be moneys th at would be utilize d 

to ca rry out esta blis hed policies w ith in auth oriza tio ns of the Congress.

I do no t think it would mak e very muc h sense to have an ei th er /o r 

pro position here th at one could, let us say, finance the act ivities of 

the pea cekeeping opera tions of the U.N. ou t of regu lar resources of 

the Government, which may req uir e some bo rro wi ng at 3.5 precen t 

of intere st, and ye t have anoth er fu nd ou t of which could be tak en ju st 

the 2-percent money.

Th is w as to increase the activitie s of the Un ite d N atio ns.

Senator H ickenlooper. Mr. Ch air ma n, is n ot this b ill, in effect, an 

autho riz ati on act in its elf ?

Senator H um phr ey. No.

Senator H ickenlooper. Th e word “auth orize ” is used righ t in the 

bill. I do not know wh at “au thorize ” means if it does no t mean 

“auth ori ze. ”

Se nator Humphr ey. Of ce rta in bonds.
UNITED NATIONS PEACE BONDS 37

Senator Hickenlooper. It authorizes the issuance of the bonds, the 

deposit of the money in a special account, and then section (c) says 

the President can use the money in any way he wants to for activities 

of the United Nations.

It seems to me tha t wraps it up.

LEGISLATIVE JUSTIFICATION FOR RETURNING GIFT MONEYS

By the way, there is another matter I want to call your attention 

to in connection with this. I note the regret which you have in your 

statement about having to send back a check for $3, one for $4.24, and 

one for $50.

You said you were not able to accept the money and spend it. That 

is too bad, of course.

There were good intentions on the part of the people who sent it. 

I would like to call your attention to section 635(d) of the Foreign 

Assistance Act of 1961 which reads as follows. I am reading section (d) :

The Pr es iden t may acc ept an d use in fu rthe ra nc e of the pur poses of this act 

money, fun ds, pro perty , an d services of any kin d made av ail ab le by gift, devise, 

bequ est, gr an t, or oth erw ise for such purpose.

It seems to me that you could take and spend the money that these 

zealous citizens wanted to contribute.

Senator H umphrey. I s that in the authorization act ?

Senator H ickenlooper. This is in the basic legislation.

Senator Humphrey. This is not the appropriations bill. This is 

basic legislation.

Senator Hickenlooper. The Foreign Assistance Act of 1961.

Senator Humphrey. This is exactly what I was saying about this 

particular fund.

Within the purview of our commitments to the United Nations, 

under basic legislation these funds could be utilized.

Senator Hickenlooper. Tha t is what I was telling Secretary 

McGhee.

It does not amount to a great deal of dollars. He referred in his 

statement to several contributions tha t have been sent in, and he said 

the President had to send them back because he could not accept them.

I just wonder what this section (d) means.

Senator Humphrey. It means just what you said it means.

Senator Hickenlooper. That is what I think it does. I do not 

know why they could not have taken this money and used it.

Senator Morse. May I say, Mr. Secretary, I need some help to get 

this through my head.

I am not a suspicious fellow by nature, but I tr y to be careful.

RECLARIFICATION OF THE INTENT OF THE BILL

I am jus t a little bit concerned as to the intent of this bill, because 

I have a lurking feeling th at in this bill is the intent th at we sell these 

bonds with the Government the guaran tor to pay them back, the President sort of a trustee of them with the authority attempted to be vested 

in him to spend the funds from the sale of the bonds for any activity 

tha t the United Nations has decided upon, and which falls within its 

87904— 62 ------ 6
38 UNITED NATIONS PEACE BONDS

jurisdiction under the charter, even though the Congress of the 

United States has not placed its stamp of approval on some specific 

activity, and that, thereby, the bill would get around the congressional check on the expenditure of Government funds.

I have a lurkin g feeling tha t some may think that is what the bill 

would accomplish.

Tha t raises the question of policy as to whether or not the Congress 

should approve it.

I am not passing judgment on tha t policy

I am only raising the question as to what the bill would authorize.

If the bill would authorize that, it ought to specifically say so in very 

clear language.

I agree with the Senator from Indiana and the Senator from Iowa 

in their earlier discussion.

If the bill means what I th ink it means, it ought to use the language 

tha t I used earlier this morning; section (c) ought to re ad :

Amounts realized by the Secretary of the T reasury from the sale of peace bonds 

shall be deposited in a special fund in the Tre asury and should be av ailable for 

use by the President of the United States in support of the activities of the 

United Nations with in the limits of auth oriz atio ns for contributions or loans to 

the United Nations.

Senator Humphrey. Exactly. Tha t is the intent of it. That 

should be the language.

THE POSITION OF THE DEPARTMENT OF STATE

Mr. McGhee. I would like to make our position very clear, Senator 

Morse.

We are here in support of a particular interpretation of this bill.

Now, this interpretation had been discussed between our legal staff 

and the various proponents of this bill, and it was our understanding 

(hat they were in agreement th at this bill provided funds which could 

be used only subsequent to both authorization and appropriation.

Senator Hickenlooper. You say you are here in support. How 

long have you been in support of th is particular bill, Mr. Secretary ?

Is it not a fact, when it was first presented to you in your D epartment, tha t you, let us use a rather clear saying, pulled back in the 

manger on this thing and that you finally became induced to support 

this legislation rathe r reluctantly ?

Is tha t not a fa ir statement?

Mr. McGhee. No, sir, I do not believe it is quite fair, Senator 

Hickenlooper. We supported starting April 3, if certain changes 

would be made. We had reservations on certain aspects of it. Now, 

you might say th at the degree of our support, the warmth of our support, has varied depending on the changes tha t have been made in 

the bill and interpretation of the bill. But we support it. I think my 

statement speaks for itself.

Senator Hickenlooper. Did you originate this legislation in your 

Department ?

Mr. McGhee. No, sir.

Senator Hickenlooper. It was presented to you from the Hill, was 

it not?

Mr. McGhee. That is correct.
UNITED NATIONS PEACE BONDS 39

Senator Hickenlooper. I s it not fair to say th at considerable pressure was put on your Department to get behind this bill and support 

it?

Mr. McGhee. No, sir. I am not aware of any particular pressure.

Senator Hickenlooper. Well, I suppose it depends on what one 

interprets as “pressure.”

Mr. McGhee. Like most legislation, we talk with people th at are 

interested in it, but, to my knowledge, it went no furthe r than that.

RETU RN IN G G IF T M ONE YS

Senator Hickenlooper. Do you have a comment on section 635(d), 

which I read a while ago, about authorizing the President to accept 

money ?

Mr. McGhee. Yes, I am in a dilemma on this point. Our legal 

interpretation has been that we cannot accept these funds. It appears 

to be contrary to what you just read, sir. Not being an authority on 

this matter, I am going to have to look it up.

Our Treasury representative, I do not think is too clear either.

We will look it up, sir, and if we have been remiss in returning 

these amounts-----

Senator Hickenlooper. I have already read it in the record. I 

will read it again. It seems quite clear to me.

It says flatly:

Section 635(d) : The President may accept and use in furtherance of the 

purposes of this Act money, funds, property, and services of any kind—

And this is pretty broad—

made available by gifts, devise, bequests, grants or otherwise for such purpose.

I just do not see why you could not have taken this money.

Mr. McGhee. Yes, sir. This was the Foreign Aid Act of?

Senator Hickenlooper. This is the Foreign Assistance Act of 1961.

Mr. McGhee. Yes, sir.

But did tha t include funds which these people were contributing? 

These people were contributing funds directly to the United Nations.

Senator Hickenlooper. Well, I will go to section 301(a) :

When he determines it to be in the national interest, the President is authorized to make voluntary contributions on a grant basis to international 

organizations and to programs administered by such organizations on such 

terms and conditions as he may determine in order to further the purposes of 

this part.

In other words, he has the right to contribute to international organizations, of which the United Nations is certainly the foremost, 

and (d) says he can accept funds and devote them to the purposes of 

this act. Well, it says:

money, funds, property and services of any kind made available by gift, devise, 

bequests, grants, or otherwise, for such purpose.

Mr. McGhee. It is clear that “purposes of this Act” embraces support of the United Nations?

Senator Hickenlooper. I do not think there is any question about 

it.

Mr. McGhee. We will certainly submit something to your committee explaining why our legal interpretation from the past has been
40 UNITED NATIONS PEACE BONDS

th at thes e funds could no t be app lied. I f we are in err or, we will 

correct it.

Se na tor Morse. Le t the un de rst an ding be th at St ate and Treas ury 

will file a memorandum dealing on the po int th at the Se na tor from 

Iowa ha s raise d.

Mr. McGhe e. Yes, sir.

(T he docu men t re ferre d to fo llo ws :)

E xecutiv e Branch Memorandum on Con tribu tions to th e Unite d State s

for Support of th e Unit ed Nation s

A number of individuals have sent contributions to the U.S. Government to be 

used in support of the United Nations. These contributions have been referre d 

to the Departm ent of Sta te and have been disposed of as follows: (1) Where 

the donor clearly intended th at the United States serve as a conduit for a direct 

contribution to the United Nations, as, for example, when the contribution was a 

check made out to the United Nations, the Departm ent has tran smitte d the contrib ution to the United Nation s; (2) Where the donor requested th at the contributio n be applied specifically to the purchase of United Nations bonds, the 

contribution has been return ed to the donor. It is the view of the Departm ent 

that this procedure was appropriate, in light of the decision of the administration to seek authorizing legislation for the purchase of United Nations bonds.

It has been pointed out th at section 635(d) of the Foreign Assistance Act 

authorizes the Presid ent to “accept and use in fu rthera nce of the purposes of this 

Act. money, funds, property, and services of any kind made available by gift, 

demise, bequest, gra nt or otherwise fo r such purpose.” Were the United Nations 

bonds to be purchased under the autho rity of the Foreign Assistance Act, section 635(d) would authorize the President to accept gifts earm arke d for the 

purchase of such bonds. However, in view of the decision to seek special authority for the purchase of United Nations bonds, in which case their purchase 

would not be “in furtheran ce of the purposes of [the Foreign Assistance Act]” 

the Departm ent has considered it app ropriate to ret urn the earm arked contributions.

A distinction can be dra wn between contributions earmarked for the support of 

the United Nations generally, and those earm arked specifically for support 

of United Nations bonds. Since many United Nations programs are financed 

under autho rity contained in the Foreign Assistance Act, section 635(d) is a 

legal basis for accepting contributions earmarked for supp ort of the United 

Nations. However, a review of our files indicates th at in only one case was a 

contribution return ed to the donor which might have been accepted pursuant 

to section 635 (d).

Se na tor Capehart. W hy do you no t pu t a dri ve on un de r th is law 

to ge t vo lunta ry contr ibu tions and keep this money the y send in?

Se na tor H ickenlooper. Yes, the y can send in all the y want.

Mr. McGhe e. We will look into th is.

ti ie special united nations fund for economic development

Se na tor Morse. I hav e one ad ditio na l comm ent on this othe r prob ­

lem of inter pr etation as to the intent of the act. Th e Un ite d Nations 

has as one of its activitie s a prog ram un de r SU NFE D , the Spe cial 

Un ite d Na tio ns Fu nd fo r Eco nom ic Dev elop ment. Th ere is a great 

difference in o pinion on th is com mittee as to wheth er we should pa rtic ­

ipa te in SU NFE D . I happ en to believe th at t he re is a gr ea t deal of 

me rit in t he S U N FED progra m.

For examp le, I th in k we m ay find in the no t too dista nt f ut ur e th at 

we may wish we were di strib ut in g food throug h the Un ite d Nations 

to sta rv ing people who may be behin d the Iron Cu rta in, ra th er than 

have ourselves in the position where we would be asked why we were 

not doing it un ila ter all y. Th is raises a lot of na cil lar y problems, 

political and o therwise, in o ur cou ntry.
UNITED NATIONS PEACE BONDS 41

INTERPRE TA TIO N OF THE BIL L

However, if you interpret this bill as permitting the President to 

go ahead and use the funds for any activity authorized by the United 

Nations, as he would use contingency funds, you have an entirely different act from one th at would check him by limitation of authorization and appropriation by the Congress. You would have an entirely 

different act, m my judgment, from the standpoint of gettin g it 

through the Congress.

Who can predict what the Congress will do? My guess would be 

you would have greater difficulty getting an act through that would 

treat these funds as falling within the discretion of the President to 

use them for any activity of the United Nations, than you would 

have if the bill is limited to activities of the United Nations for which 

the United States has authorized the expenditure of American dollars, 

as some of us have interpreted it.

Mr. McGhee. Yes, sir.

Senator Morse. I think I agree with the Senator from Minnesota 

tha t we ought to find out what the intent of the authors of the bill 

as a group really is, and ask them to clarify the bill to carry out their 

intent specifically.

If they propose the latter intent, I think our problem with the 

Foreign Relations Committee becomes quite different.

Mr. McGhee. Yes, sir.

I think it is very clear tha t we are here in support of the intent 

as interpreted by us, and tha t we would have to have a very careful 

look at it if there were any other intent.

Senator Humphrey. Would the Senator yield?

Senator Hickenlooper. Mr. Chairman, it seems to me, from the 

standpoint of verbiage, this is an authorization act to authorize the 

issuance of these bonds to create this fund. It would authorize the 

proceeds to go in a special fund which we say specifically shall be 

available for use bv the President of the United States in support 

of the activities of the United Nations.

What if we have another authorization act to authorize him what 

we have authorized him to do here? Tha t is the problem, unless 

you clarify this language.

USE BY TH E PRESIDE NT OF MO NE Y FROM BONDS

Senator Humphrey. Will the Senator yield ? I feel the clarification placed upon the interpretation of the Senator is the proper interpretation, which would mean that after the language—

and shall be available for use by the President of the United States in support 

of the activities of the United Nations within the limits of authorization or 

contributions or loans to the United Nations.

I say that because Senator Clark’s statement, which I have before 

me in the form of a press release, reads as follows:

The Pennsylvania Senator noted that the Chief Executive would be able to 

use the sums in the special peace bond fund in support of any U.N. activities 

in which the United States is authorized to participate by existing or future 

domestic law.

“I favor giving the President the broadest possible range of uses,” Clark 

said. “Such use would, of course, supplement, not replace, regular general 

fund expenditures for U.N. activities.”
42 UNITED NATIONS PEACE BONDS

I cannot imagine that we would be legislating to utilize moneys that 

are not at least given some review’ by the Congress in terms of public 

policy.

We surely are not proposing in this bill that we shall just utilize 

these funds for activities tha t are proposed by the United Nations. 

We are suggesting that these funds shall be used for activities proposed by the United Nations for which the U.S. Government, through 

its Congress, has made an authorization as to our participation in 

those activities. Now, there is a difference between “authorization” 

and “appropriation,” as we know.

The question needs to be resolved, and I think it is well raised 

here. Tha t is, whether or not we should go so far as to have these 

funds utilized within authorizations but without appropriations, or 

whether they should be within authorizations and also appropriated, 

even though they come from a special fund.

It might require, for example, in an appropriation tha t there will 

be $11 million from general appropriations and $2 million from the 

special fund. I cannot quite imagine tha t circumstance, but it is 

theoretically possible.

NEED FOR CONG RESSIONAL AUTHORIZA TIO N

My interpretation is, was, and has been that funds from the sale 

of these special peace bonds, designed to support the activities of 

the United Nations, shall be funds tha t fall within the limitations 

of congressional authorizations as to our participation in U.N. activities.

I think tha t ought to be spelled out. I do not think there ought 

to be any ambivalence or any lack of clarity here, and if we are going 

to pass this bill or act upon it in any way, this ought to be outlined 

in clear detail, so that there can be no doubt.

Mr. McGhee. Senator Humphrey, do you mean authorizations and 

appropriations?

Senator Humphrey. No, authorizations.

Mr. McGhee. Only?

Senator Humphrey. Within authorizations.

Mr. McGhee. Yes. Our understanding is even more narrow’.

Senator Humphrey. I realize tha t. I appreciate what your understanding is, and I think, as I said, this is a matter tha t ought to be 

fully clarified.

Mr. McGhee. Oh, indeed, yes.

Senator Morse. I think the satement just made by the Senator from 

Minnesota is a very important statement from the standpoint of legislative history of this bill, and the intent of the bill, because he is 

one of the cosponsors of the bill.

Senator Humphrey. This was my understanding of it. We had 

discussed it privately. I did not discuss it, may I say, with members 

of the State Department.

I think I once sat in on one meeting of general discussion about 

getting some activity on this particular bill but insofar as any pressure was concerned, I do not even recall sending the letter.

I am sure tha t the main sponsor, Senator Clark, asked for d epartmental reports and some activity here on the committee, but that is 

all.
UNITED NATIONS PEACE BONDS 43

I have a statement tha t I want to have included in the record in 

support of this bill.

Senator Morse. The statement of the Senator from Minnesota will 

be incorporated in the record following the statement of the Senator 

from Pennsylvania, Mr. Clark.

(The statement referred to was inserted in the record following 

Senator Clark’s statement.)

Senator Morse. Senator Hickenlooper ?

PO SS IB IL IT Y OF T H E U N IT E D N ATIO N S IS SU IN G T H ESE BON DS

Senator Hickenlooper. Mr. Secretary, what is wrong with letting 

the United Nations issue these bonds without the faith and credit 

of the United States behind the proposal ? Let the people who want 

to help the United Nations buy bonds and look to the United Nations 

for their repayment. Wha t is wrong with tha t ?

Mr. McGhee. First of all, Senator, the United Nations has not 

elected to do this, so this opportunity is not yet available.

Senator Hickenlooper. You say “has not elected to do this.”

They can do it?

Mr. McGhee. Yes, sir, but they have not.

Senator H ickenlooper. Whose responsibility is that ?

Mr. McGhee. The Secretary General.

Senator H ickenlooper. Why haven’t they done it ?

Mr. McGhee. They have been authorized to do it by the General 

Assembly, but the Secretary General has elected not to use the authorization.

Senator Hickenlooper. He is electing not to do anything, but 

rather he is looking to us to bail him out. Is tha t the situation ?

It would seem to me th at there are a lot of people who would be 

perfectly willing to contribute to the United Nations. If it is a 

matter of contribution, why not give them a chance ?

Why do we have to put the guarantee of the Federal Government 

behind these bonds ?

I would say that 9 people out of 10 who would buy these bonds 

would not buy them on the faith and credit of the United Nations. 

They would buy them because the Federal Government was gua ranteeing the repayment of the principal and interest.

Mr. McGhee. Yes, sir.

May I just add, Senator, tha t the authorization of the General 

Assembly does not actually refer to individuals b ut to nonprofit organizations, so that there is no real authority on the pa rt of the 

United Nations to borrow from individuals.

Senator Hickenlooper. These organizations are altruistic. They 

are humanitarian.

Would it not be right down the alley of their basic principles that 

they should get in and buy these bonds in furtherance of the humanitarian purposes ?

Mr. McGhee. But, you see, Senator, the bill, as we interpret it— 

and I regret that there is this difference in interpretation between 

ourselves and these sponsors of the bill—would not give a,ny additional amounts to the United Nations that we would not have given, 

in any event, because it would not exceed the annronriations of the
44 UN ITED NATIONS PEAC E BONDS

Congress. This would merely mean tha t a portion of the moneys 

given or lent would, in fact, have been contributed by people who 

bought the bonds for this particular purpose.

As has been pointed out, there could easily result a. considerable 

augmentation of funds available to the Treasury because it is unlikely 

tha t the people who would have bought these 2-percent bonds unless 

they did wish to support the United Nations.

Otherwise, they would have bought the bonds bearing a higher rate 

of interest.

Senator Hickenlooper. By the same token, the money could be 

equally available from the Treasury if Congress appropriated it ?

Mr. McGhee. Tha t is correct, but, as has been pointed out, the 

money has to come either from taxation or from the sale of bonds.

Senator Hickenlooper. Tha t is right.

Mr. McGhee. And since the sale of bonds is an important element 

of financing, if the anmunts received by the Treasury can be augmented due to this additional appeal, it should be of some benefit to 

the Treasury.

But, as I said earlier-----

Senator Hickenlooper. I certainly do not see how it is a benefit to 

the Treasury when the taxpayers have to pay it in the end, anyway. 

I just do not follow that line of reasoning.

Mr. McGhee. Well, I agree, it is to be paid back out of taxation in 

the final analysis, Senator.

Senator Hickenlooper. Certainly.

Mr. McGhee. But here are certain sums of money for which the 

Government would only have to pay 2-percent interest which would 

not otherwise be available through the sale of bonds, because, as I 

say, it is unlikely that people would have bought these bonds unless 

they had wished to do it uniquely. Otherwise, they would have 

bought bonds bearing higher rates of interest.

responsibility for repayment

Senator Hickenlooper. They can do it uniquely by buying bonds 

directly from the U.N. with U.N. responsibility to pay back.

Tha t would test their desire to really do something for the U.N. 

and take out of it the mercenary motive of the assurance from the 

Treasury of the United States that they would get their money back.

Mr. McGhee. Yes, sir; but I think, as Senator Clark pointed out 

earlier, one can hardly be considered mercenary buying 2-percent 

bonds when he can buy 4-percent bonds. This does indicate the altru ­

istic element in the individual’s motivation.

Senator Hickenlooper. I do not follow’ that reasoning because I 

think most people, if they are going to buy Government bonds, will 

buy them at the highest rate of interest that they can get. Those people w’ho really want to contribute to the U.N. would be probably just 

delighted to buy U.N. bonds and look to the U.N. for repayment of 

the bonds.

I cannot quite follow all this line of reasoning as to why we do not 

really want to test this out by urging the U.N. to issue its own bonds 

on its own responsibility. Then we can see how many people really 

want to support the U.N. or how many want to invest under the guise
UNITED NATIONS PEACE BONDS 47

fallout shelters and have encouraged contributions to the U.N. in lieu 

of buying a fallout shelter.

These various efforts to support the U.N. financially have now 

spread across the country and include the “Shelters for the Shelterless” program by the Fellowship of Reconciliation, Nyack, N.Y.; 

“U.N., Our Shelter,” Chapel Hill, N.C.; “Citizens for the United 

Nations,” Seattle, W ash.; “Shares in the F uture,” Boulder, Colo.; and 

“Pennies for Peace,” Evanston, Ill.

To date, these outright gifts to the U.N. have totaled more than 

$100,000. In addition, U.S. citizens contributed $1,647,988 to 

UN ICE F in 1961—most of th at th rough the trick-or-treat program— 

and some $70,000 to Congo relief and the U.N. program for Palestine 

refugees, about equally divided between the two. There were a dditional sums given by U.S. citizens to the U.N. High Commissioner for 

Refugees and the Food and Agriculture Organization.

These facts indicate to us tha t substantial numbers of concerned 

citizens may be ready to purchase U.N. peace bonds to support the 

U.N. efforts to keep the peace and improve living standards around 

the world.

(2) The issuance of U.N. peace bonds by the U.S. Government 

can stimulate public discussion of the crucial issue of financing the 

United Nations and focus public attention on the need to develop 

dependable sources of revenue for the U.N.

One of the major questions facing the U.N. is how its program can 

be soundly financed. This issue has been discussed to some extent in 

connection with the issuance of $200 million in U.N. bonds and President Kennedy’s proposal th at the United States purchase $100 million 

of these bonds. The impending decision of the Internatio nal Court 

of Justice will help resolve some of the questions surrounding special 

peacekeeping programs. But there is not yet underway the kind 

of fundamental and far-reaching examination which is essential. 

The Brookings Institution has commissioned an important study 

headed by Prof. John Stoessinger of Hu nter College on financing the 

United Nations, which should be carefully reviewed.

If many citizens purchase U.N. peace bonds, or even consider the 

possibility, they are much more likely to participate in the important 

public discussion which should take place as efforts are made to place 

the U.N. on a more stable financial footing.

(3) The sale of U.N. peace bonds will make available some additional funds to support U.N. activities.

Most of the U.N. programs in the field of health, education, agriculture. welfare, refugees, peacekeeping, and so forth, can readily 

use additional funds to expand existing activities or launch creative 

new efforts. Proceeds from the sale of bonds could be used for these 

purposes as the President directs, according to the legislation.

PR ESI DENTI AL A U THORIT Y AS CO NTA IN ED IN SE CT IO N (C )

Senator Morse. Tha t raises the very issue we have been talking 

about all morning.

Mr. Snyder. It certainly does, and we have raised th at in our testimony, Senator Morse.

We feel that section (c) is very unclear on this particu lar issue.
46 UNITED NATIONS PEACE BONDS

Senator Hickenlooper. By some governments.

Mr. McGhee. Individuals do not belong directly but through their 

government.

I think it is logical they would want to support the U.N. through 

their Government.

Under this act they would be making quite a sacrifice. They would 

get about half the income from these bonds that they would otherwise 

get.

Senator Morse. Thank you very much, Mr. Secretary.

Mr. McGhee. Thank you, Mr. Chairman.

Senator Morse. Our next witness will be Mr. Edward Snyder, executive secretary of the Friends Committee on National Legislation.

Mr. Snyder, you may come forward and proceed in your own way.

STATEMENT OF EDWARD F. SNYDER, EXECU TIVE SECRETARY OF 

THE FRIENDS COMMITTEE ON NATIONAL LEGISLATION

Mr. Snyder. Mr. Chairman, my name is Edward F. Snyder, executive secretary of the Friends Commitee on National Legislation. Our 

committee is composed of Friends appointed by a number of Friends 

organizations and as individuals, but it does not claim to speak for all 

Friends. However, Friends in general have had a long and continuing interest in the United Nations and in legislation which supports and strengthens the U.N.’s activities, such as the bill now being 

considered by the Foreign Relations Committee.

We appreciate the opportunity to appear before this committee to 

express our general support fo r the program outlined in S. 2818 which 

authorizes the Treasury to issue United Nations peace bonds for purchase by the public. Earlier this year in testifying before this committee on the purchase by our Government of $100 million in U.N. 

bonds, Raymond Wilson of our committee supported S. 2818. We 

now welcome this opportunity to comment in more detail on S. 2818 

as it has been amended.

REASONS I N SUPPORT OF T HE AUTHORIZA TIO N

We see at least three reasons why the Treasury should be authorized to issue United Nations peace bonds:

(1) Issuance of United Nations peace bonds would provide a 

method by which the American public could express its growing support for the activities of the United Nations.

To many in the United States and around the world it is increasingly apparent tha t a strengthened United Nations is man’s best hope 

to save succeeding generations from the scourge of war. The U.N. 

is at the center of all realistic plans to move mankind from the 

present state of international anarchy to a world of law and order.

More and more people are making their support of the U.N. felt in 

a tangible, financial way. On United Nations Hay, 1959, members of 

the Champaign-Urbana, Ill., Friends meeting launched a plan to tax 

themselves 1 percent of their gross annual income for the U.N., saying 

“this self-imposed tax is to be a token of our willingness to be 

taxed and governed by a system of world law.” Other groups have 

suggested tha t the U.N. offers a better hope for man’s future than
UNITED NATIONS PEACE BONDS 47

fallout shelters and have encouraged contributions to the U.N. in lieu 

of buying a fallout shelter.

These various efforts to support the U.N. financially have now 

spread across the country and include the “Shelters for the Shelterless” program by the Fellowship of Reconciliation, Nyack, N.Y.; 

“U.N., Our Shelter,” Chapel Hill, N.C.; “Citizens for the United 

Nations,” Seattle, W ash.; “Shares in the Future,” Boulder, Colo.; and 

“Pennies for Peace,” Evanston, Ill.

To date, these outrig ht gifts to the U.N. have totaled more than 

$100,000. In addition, U.S. citizens contributed $1,647,988 to 

UN ICEF in 1961—most of that throug h the trick-or-treat program— 

and some $70,000 to Congo relief and the U.N. program for Palestine 

refugees, about equally divided between the two. There were a dditional sums given by U.S. citizens to the U.N. High Commissioner for 

Refugees and the Food and Agriculture Organization.

These facts indicate to us tha t substantial numbers of concerned 

citizens may be ready to purchase U.N. peace bonds to support the 

U.N. efforts to keep the peace and improve living standards around 

the world.

(2) The issuance of U.N. peace bonds by the U.S. Government 

can stimulate public discussion of the crucial issue of financing the 

United Nations and focus public attention on the need to develop 

dependable sources of revenue for the U.N.

One of the major questions facing the U.N. is how its program can 

be soundly financed. This issue has been discussed to some extent in 

connection with the issuance of $200 million in U.N. bonds and President Kennedy’s proposal th at the United States purchase $100 million 

of these bonds. The impending decision of the Internatio nal Court 

of Justice will help resolve some of the questions surrounding special 

peacekeeping programs. But there is not yet underway the kind 

of fundamental and far-reaching examination which is essential. 

The Brookings Institution has commissioned an important study 

headed by Prof. John Stoessinger of Hunte r College on financing the 

United Nations, which should be carefully reviewed.

If many citizens purchase U.N. peace bonds, or even consider the 

possibility, they are much more likely to participate in the important 

public discussion which should take place as efforts are made to place 

fhe U.N. on a more stable financial footing.

(3) The sale of U.N. peace bonds will make available some additional funds to support U.N. activities.

Most of the U.N. programs in the field of health, education, agriculture. welfare, refugees, peacekeeping, and so forth, can readily 

use additional funds to expand existing activities or launch creative 

new efforts. Proceeds from the sale of bonds could be used for these 

purposes as the President directs, according to the legislation.

PRESIDENTIAL AUTHORITY AS CONTAINED IN SECTION (C)

Senator Morse. That raises the very issue we have been talking 

about all morning.

Mr. Snyder. It certainly does, and we have raised th at in our testimony, Senator Morse.

We feel that section (c) is very unclear on this particular issue.
48 UNITED NATIONS PEACE BONDS

w e would approach it not so much from the technical question as 

to whether the current language is an authorization or an appro priation, or whether additional authorizations or appropriations are necessary, but more from a point of view of whether the President is 

going to spend this money for additional programs, new programs, 

or expanded existing programs, which will strengthen the United 

Nations; or whether he is merely going to use these funds and can 

use these funds and may use these funds to reduce the existing contribution which the Congress would authorize and appropriate in any 

event.

Senator Morse. To use my hypothetical, take SUNFED . In your 

interpretation of the bill, the President could use some of these funds 

for SUN FED even though the Congress has made very clear thus 

far that it is opposed to SUNFED ?

Mr. Snyder. According to—that might very well be the case.

The question that was of more concern to us was that the President 

could use these funds to reduce the regular 30 percent, slightly over 

30 percent, contribution to the regular UN. assessment, or to the 

regular giving to the Children’s Fund or the technical assistance program, so there would be no net increase to those United Nations programs as a result of these people’s efforts in purchasing these bonds.

We would hope that there would be some language put in the bill 

or some clear legislative interpretation th at this is to go for an expansion and an improvement of United Nations programs, and not to 

reduce the kind of contributions which the Government would be 

expected to make in the normal course of events.

Senator Morse. I want to commend you for the statement that you 

have just made, because it just draws this issue just as clear as it 

can be drawn.

But also, in my judgment, a substantia] modification in the language 

of the bill would be required to carry out your purpose.

Mr. Snyder. Yes.

And we would anticipate th at might be the case, and we would hope 

tha^ such changes would be made in the language, if th at is necessary.

We have been doing a little bit of thinking about what kind of 

projects this money might be used for. Of course, there are a number 

of different projects, some which would be rather difficult to foresee 

in advance.

If this fund had been available a year ago, the United Nations 

might have borrowed from it, and it would not have had to borrow 

some funds from U NICE F for a temporary period.

There may be special peacekeeping functions which this money 

could be very usefully spent for.

It is our interpretation tha t the bill is not confined to peacekeeping 

activities of the United Nations; tha t it is broader and would include 

the health programs, the children’s programs, the technical assistance 

programs as well, although it originally grew out of the Congo operation and the bond issue.

There is the possibility that in another World Refugee Year or 

something like that this money might be used to expand that particu lar 

program. Or floods or famine or earthquake in some particular pa rt 

of the world might create the kind of emergency where the President 

might want to draw on this partic ular fund through a United Nations
UNITED NATIONS PEACE BONDS 49

pro gram. Or he could give add ed empha sis to the malaria eradica ­

tio n prog ram or the com munity wa ter supp ly program , or perha ps 

insp ection systems, as we move tow ard dis arm am ent, or special tr ain ­

ing program s for pea cekeeping forces.

These fun ds m ight be used to s tim ula te our Government to u rge the 

Un ite d N ations to in itiate some surv eys or tas k forces on how to finance 

the Un ite d Na tions or how to increase its pea cekeeping act ivities and 

abiliti es or on ar bi tra tio n procedures, judic ial settlem ents, police 

forces.

Th ere are a variety of different th ing s th at such fund s m igh t be used 

for , and we w ould h ope th at the language which the co mmittee w ould 

draw would not be so res tricti ve that it wou ld lim it the kind of cre ative, new th ings t hat th e U .N. oug ht to be d oin g a nd which this m oney 

migh t be used to help su pp ort fin ancially .

COMMENTS AND SUGGESTIONS

We would like to mak e these ad ditio na l comments and suggestion s 

concerning S. 2818 as am en de d:

(1) Th is bill was originall y int ended to provide an op po rtu nity 

for the Am erican public to help subscribe to the U.N.’s cu rre nt $200 

millio n bon d issue. Th e bill has now been mad e g enera l and the p urposes significantly broadened . Ye t vestiges of the old bill rem ain. 

The cu rre nt lan guage states t hat the m aximum am ount of bon ds ou tsta nd ing at any tim e sha ll no t exceed a face value of $100 million. 

Th is figu re is the sum origi nally requested by the Pr esiden t for U.S . 

Government purch ase of U.N . bonds. I t is, of course, fa r in excess 

of an ything which th e public could rea son ably be expecte d to purchase un der p res ent circ umstanc es.

(2) More im po rta nt—th is is the que stio n which you rais ed, Senator —the lim ita tio n on inter est rate of 2 perce nt is carried over from 

the previous bill. We thi nk i t is true , as S en ato r C lark has sug gested, 

th at a numb er of citizen s would be willing to invest th eir money in 

the U.N. for new pu rpo ses at a sacrifice.

Bu t, looked at fro m anoth er po int of view, it would seem the 2- 

percen t int ere st rate discriminates ag ains t ou r co un try ’s efforts to 

su pp ort pea cef ul prog rams of the U.N . Th e person who purchases 

U.S . sav ings bonds, which finance p rim ar ily th e wa rm aking p ote ntial 

of the Un ite d State s as well as some civ ilian p rogra ms , cu rre ntly receives a 3% -pe rce nt re tu rn on his investment, while the person who 

purchases U.N. peace bond s, which finance im po rtan t U.N . activities 

appro ved by the Pr esiden t and Congress, wou ld receive only a 2-percent ret ur n on his investm ent.

Moreover, altho ug h 2 perce nt is the inter est rate fo r the curre nt 

U.N . bon d issue, it does not necessa rily follo w th at thi s intere st rat e 

will be the same fo r fu tu re U.N . bond issues. Bonds o f the In te rn atio nal Ba nk fo r Recon struct ion and Dev elop ment, which is associated 

wi th the U .N., cu rre ntly pay 4 ^ percen t. Of course, as has been dis ­

cussed, un de r th e lan guage of section (c) the P resid en t m ight also decide to allo cate the funds fo r some im po rta nt U.N. proje ct f or which 

no U.N. bonds are issued.

We urge t hat the 2 percen t lim ita tio n on int ere st rate be elim ina ted 

from the bill and the maxim um amo unt eit he r be le ft unspecified or 

increased to com pare more fav orably with othe r U.S . o b li g ati o n ^
50 UNITED NATIONS PEACE BONDS

(3) On a related issue, we urge elimination of the phrase, “but the 

Department shall not undertake any promotional efforts on behalf 

of the peace bonds.” If this prohibition and the 2-percent interest 

rate are retained, this whole program is under very severe handicaps. 

Without some oflicial notice of the availability of U.N. peace bonds by 

the Government, it will be difficult to notify all the people in the country who might be interested in purchasing them. It is difficult to understand why it is not possible and desirable for the Treasury to notify 

citizens of the availability of such bonds and, in appropriate ways, to 

encourage their purchase, if Congress has authorized their issuance 

and the President can use the proceeds at his discretion.

In conclusion, we wish to commend Senator Joseph Clark, of Pennsylvania, and the eight cosponsors of S. 2818 for offering th is important bill. We support its purpose and intent and hope tha t this committee will report it favorably as modified to include changes such as 

those suggested above.

Senator Morse. Mr. Snyder, I want to commend you highly for this 

very clear statement.

IN T E N T OF T H E BIL L

It is not only the intent of the bill, as you understand it, but of the 

United Nations program that you think the bill should encompass as 

far as U.S. support is concerned, through the funds raised by the 

bill, if it should be enacted.

I find myself in complete agreement with you as to the need for support of those programs.

I would be less than honest if I did not say, in my judgment, the 

present wording of the bill does not carry out your intent in many 

respects, but, as you say, it can be modified so that, if passed, it would 

carry out that intent.

As you can see very well from the discussion here this morning, this 

legislation is going to raise a considerable amount of discussion and 

differences of opinion within this committee, which I am sure will 

spread over into the Congress as a whole.

I cannot express too much my own personal conviction th at some 

way, somehow, we have to find the ways and means of giving the 

United Nations much greater support in connection with its programs 

tha t are over and above the so-called maintenance of peace and security 

programs of the United Nations. I am a little disturbed as to whether 

or not there is much hope of our being able to do this through this 

legislation.

But even debate on this legislation carries out part of the educational purposes that you say would be one of the results of the program itself.

I want to thank you for the educational material th at you have put 

in the record this morning.

The committee will stand in recess until 2 :30, at which time we will 

meet in the Foreign Relations Committee room of the Capitol, F-53.

At tha t time we will hear our longtime friend, Clark Eichelberger, 

executive director of the American Association for the United Nations; Dr. Paul Cooke, national vice chairman, American Veterans 

Committee; and Leo Goodman, representing the United Auto Workers, AFT^CIO.
UNITED NATIONS PEACE BONDS 51

We stand in recess until 2 :30 in F-53.

(Whereupon, at 12:30 p.m., the hearing was adjourned, to reconvene at 2 :30 p.m. of the same day.)

AF TE RN OO N SE SS ION

Senator Morse (presiding). Let the hearing come to order.

Our first witness will be Mr. Leo Goodman, representing the United 

Auto Workers, AFL-C IO.

Mr. Goodman, we are delighted to have you with us. Take the 

stand and proceed in your own way.

STATEM ENT OF LEO GOODMAN, ON B EH AL F OF TH E UN ITE D AUTO 

WORKERS, AFL-C IO

Mr. Goodman. Thank you, Senator.

I appreciate the opportunity to appear before the committee at this 

time in behalf of S. 2818.

I have a prepared statement, which, if you prefer, I would be glad 

to put into the record.

Senator Morse. I will follow your pleasure, whichever you care 

to do.

You may put the statement in the record and summarize i t or you 

can read it.

Mr. Goodman. I am Leo Goodman of the staff of the United Automobile Workers in Washington testifying here in behalf of pending 

bill, S. 2818, to provide an opportunity for the public to indicate their 

support for the activities of the United Nations by the purchase of 

peace bonds from the U.S. Treasury.

The organization with which I am connected is actively interested 

in support of the United Nations and the development of those conditions in international affairs which will make possible the survival 

of the world in a system based on freedom for the individual and 

economic opportunity and justice for all.

RE SO LU TI ON S ADOPTED AT UA W CO N ST IT UTIO N AL CO NVEN TI ON

I am here testifying in behalf of the United Automobile Workers 

and the Indu strial Union Department, AFL-C IO. I would like to 

insert into the record at this point and hand to the chairman a copy 

of each of two resolutions which were adopted unanimously at the 

UAW constitutional convention on May 4, the week of May 4, this 

past May.

Senator Morse. The resolutions will be received into the record at 

this point.

(The resolutions referred to are as follows:)

Resolution on I nternational Labor Solidarity, Adopted by UAW 18th

Constitutional Convention, Atlantic City , N.J., May 4-10,1962 

international labor solidarity

“Workers of all countries, races and creeds join in this mighty movement of 

free and democratic labor.

“Together we can destroy tyra nny and oppression and cre ate a world of freedom and human dignity.
52 UNITED NATIONS PEACE BONDS

“Together we can defe at the forces of w ar and aggression and create a world 

of peace and jus tice * * *”

Twelve years ago in London, the Intern ational Confederation of Free Trade 

Unions (ICFTU ) was born with the above appeal to the workers of all lands.

In the intervening years, the ICFTU has grown into a powerful fra ternity of 

60 million wage ea rners in more th an 100 free nations.

A movement which mobilizes a mighty moral force wherever work ers struggle 

for human righ ts and economic justice, the ICFTU speaks for the aspirations 

of the people of the world in a voice no nation and no combination of natio ns 

can ignore today.

In President Kennedy’s words, the American labor movement, by its own 

efforts and through its affiliation with thi s free world labor movement, has 

“strengthened the cause of freedom arou nd the world by strengthening the free 

union movements of other countries.” The President continued :

“It is not surp rising that so many of the new political leaders in Asia, Africa, 

and Latin America began th eir careers as labor leaders. It is not su rprising tha t 

in many of these countries the single, most dynamic and democratic force for 

change has been the labor movement. And, it is not surprising to find th at so 

many of these organizatio ns have been nurtu red and encouraged by material 

and moral supp ort from the gre atest free labor movement in the world.”

Through out the world, the achievement of each of the gre at hopes of the 

human race depends in large measure upon the continuing dedicated labors of 

the 60 million men and women who make up the family of the free world labor 

movement. The struggle to win a secure and just peace can be decisively 

influenced by the efforts of the free labor movement.

Strong, free and milita nt unions are bulw arks of peace wherever they exist. 

They assert, in each country where they operate, the yearning of the people for 

a sound and dura ble peace based upon ju st solutions of the problems that 

trouble rela tions between the nations of the world. They combat and curb the 

power of the irresponsible elements presen t in every society who, if left unchecked, could pre cipitate war. By improving the lives of the ir members, effective free unions help to remove th e souces of the discontent upon which irresponsible demagogues feed and thrive. The intern ational solidarity of free trade 

unions—the expression of the hopes and asp irations held in common by the 

workers of all lands—cuts across national boundaries and, by improving understanding amoung the peoples of the various nations, stren gthens the foundations 

of peace. Given concrete form in the intern ationa l organizations of the labor 

movement—the ICFTU and the tra de sec retariats such as the Intern ationa l 

Metalworkers Federation to which the UAW belongs—tha t solidarity is reflected 

in action. Through such organizations, the strong are enabled effectively to pool 

the ir experience and their resources to help the wea k; the workers of the 

developed economies are enabled to hasten the progress of the ir brothers in the 

developing nations. Through the work of such organizations, freedom ceases to 

be an abstraction in the new nations and becomes a concrete living rea lity in the 

lives of men ; and the fru its of freedom give them a stake in resisting infiltra tion 

and subversion by the forces of tyr ann y and war.

In this decade of development the United Nations has called for a vast program 

of aid to the new countries and the deployment of forces to provide food and 

medical care and education to the impatient two-thirds of the world’s population 

who, having won freedom, now demand the har ves t of well-being they expect as 

the fru it of their struggles.

Except thro ugh the effort of powerful democratic unions, the goods of the 

new countries, the oil and gas and minerals from the ir earth, the harvest of the ir 

fields, and the products of their labor could, as too often was the case in the 

past, enrich the privileged few and generate among the broad populations a 

discontent th at m ight res ult in f urther advances by the tot ali tar ian regimes and 

increase the ominous th reat of war.

Peace, freedom, and economic and social justice, as we have always known, 

are indivisible in the world, in the Nation, and in the community.

Our trade union experience has also engraved on our minds th at social justice 

and economic well-being cannot be put up in small packages and given to some and 

kept from others. Runaway shops and sweatshops and pockets of unemployment in this country erode the sta ndard s of wages and working conditions everywhere in the Nation.

In the same way, our standar d of living in th e United States and Canada, as in 

the other highly indu strialized countries, is undermined by the intolerably low 

wages and less t han subsistence living standard s in many parts of the world.
UNITED NATIONS PEACE BONDS 53

The relatively high living standard s of work ers in the United States and 

Cana da will obviously be in serious jeopardy and the ir furth er improvement 

made more difficult so long as hundreds of millions of people elsewhere in the 

world are compelled to live on the margin of starv atio n.

United Nations surveys reveal the ugly economic fact tha t 800 million people in 

the emerging natio ns of the world have annual incomes of less than $100 per 

person. This is less tha n the amount of the UAW ann ual improvement factor 

which is $125 a year or more. Helping the underprivileged peoples of the world 

to help themselves to achieve high er living standard s is not only the decent 

human thing to do, it is also the most effective way to protect our own living 

stan dards.

Trade is vita l to the continuance of freedom in the world. But the trade 

expansion program could boomerang in disa ster, unless strong democratic unions 

harmonize wages and working conditions upward and harmonize the workweek 

downward in the factories of the world. A common technology is spreading 

throughout the world in the face of enormous nation al disparitie s in levels of 

wages and fringe benefits. Giant internatio nal corporations such as those in 

the automobile and agricultura l implement industries install the same advanced 

machinery and production methods in all coun tries in which they operate. 

They export their technology along with the ir ca pi ta l; but they do not export 

the ir wage rat es to an y country in which they can get away with lower stan dards. 

Instead, they attem pt to play each national group of workers off against the 

others to hold back the progress of work ers in all coun tries under threa t that 

the ir work will be done more cheaply elsewhere—th at jobs, like water, will flow 

to the lowest level. This intern ational game of divide-and-rule played by international corporations with highly coordinated c entralized control can be defeated 

only by welding tigh ter the bonds of inte rna tional solidarity and improving 

coordination and cooperation among workers in all lands in the common effort 

to assure that workers everywhere may share the fru its of technology through 

higher living stan dards. In this effort the stron g must help the weak and those 

workers with the highest living standard s must help othe rs less fortunate, not 

only because they hold in common the same hopes and aspirations, but also out of 

self-interest—to protect the security and living standards of their own families.

This, in fact, is the way our own union was built. The UAW was born 

with the help of workers in other industries alre ady organized in their own 

unions. They knew their own standard s would be in dang er and that their 

own progress would be impeded so long as workers in other industries suffered 

from lower standard s and lacked the power anti protection of unionization. 

This lesson from our own history now must be applied on the internatio nal scene. 

We must now repay the debt we owe to those who helped bring the UAW 

into being by extending our hand to workers around the world who need our 

help.

We in the UAW have long recognized our stak e and our responsibility in the 

world.

Through our activ e cooperative effort with our 60 million brothers in the 

ICFTU, we have made a sub stantial contribution to the organization of new 

unions and, thereby, to the buttressing of democracy in Asia, in Africa, and in 

the Latin American countries.

We have helped establish and support union leadership schools at Calcutta, 

India, and at Kampala in Africa. New ICFTU schools will open soon for Frenchspeaking workers in Africa and for Latin American workers in Mexico City.

In partic ular, through our affiliation with the 8 million ind ustrial workers 

who are members of the International Meta lworkers’ Federation, we, in cooperation with the 6 other American unions—th e Steelworkers, the IUE, 

the Machinists, the Boilerm akers, the IBEW , and the Shipbuilders—have greatly 

advanced the prospects of an intern ational fair laboi" standard which will be 

a defense aga inst the efforts of intern ational employers to compete in world 

markets at the expense of the swe at of underpaid and exploited workers.

The UAW, through the Inte rna tional Meta lworkers’ Federation, is cooperating 

with unions in more than 30 countries in an intensive education and organization 

campaign. We are working with Ford work ers in Venezuela and GM workers 

in Mexico and Pakistan. Through the IMF co ntacts in Japan we are supporting 

wh at may become the birth of a significant, new, unified auto work ers union 

in Jap an.

A metal union in India, with a base among the giant new steel industries, 

alre ady operating an d which may some day become one of the larg est democratic
54 UNITED NATIONS PEACE BONDS

trade union forces in the world, is making encouraging strides forward with 

the support of the IMF. We a re working side by side with German metalworkers in the organization 

of Volkswagen workers in Canada and Ford workers in Germany. We have 

cooperated with GM workers in Australia, Ford workers in Belgium, and GM 

workers in England in common problems. We are supporting Ford workers in 

South Africa in a difficult and complex economic and racial situation. We 

played a decisive role in initiating the organization activities at the Willys plant 

in Turkey where wages, although only 17 cents an hour for unskilled and 56 

cents for skilled workers, were nevertheless higher than the average wages in 

Turkey. A new IMF office in Brazil will soon result in a close working relationship with the workers in the booming automobile industry of t hat country.

Our cooperation with workers in other countries through the Intern ational 

Metalworkers’ Federation (IM F) has already borne fru it in new or strange 

and more militant unions and in shortened workweeks and increased wages 

for automobile, ai rcraf t, and agricultural implement workers in many countries. 

In most countries of Western Europe significant progress has been made in the 

direction of a 40-hour week and the gap between thei r wages and ours have 

been narrowing. In West Germany, for example, the metalworkers have won 

wage increases of 9 percent or more in each of the past 3 years and will be 

on a 40-hour workweek by 1965. This is a significant increase in wages and 

a reduction of working hours from the 54-hour workweek which they worked 

in the early postwar period.

UAW President Walter Reuther also serves as the president of the Automotive Division of the Intern ational Metalworkers Federatio n which is the inst rument through which we coordinate our work with workers in the auto, aircraft, 

and agric ultural implement industry throughout the free world.

Plans now call for a worldwide coordination of corporate councils which 

will enable the UAW and the unions in the 20 or more countries tha t deal with 

automotive employers to plan a unified strategy for their members working 

for the same corporations.

Increasing emphasis is being placed on adoption and enforcement of an inte rnational fair labor standard to safeguard the wages and working conditions 

of workers throughout the free world.

New programs, imaginative in scale and decisive in their potential impact, 

are pending for metalworkers in Latin America, in Asia, and in Africa.

The challenging geographic sweep of our effort to shore up our security in 

the world by raising the standa rds of wage earners everywhere, requires 

methods, activities, and commitments, financial and otherwise, in dimensions 

and areas we have never contemplated before. Now we must realistica lly examine methods of financing these larger obligations in a manner tha t measures up 

to the size of our task and our new opportunities.

To meet what can only be described as an emergency in the labor movement 

of the free world, the ICFTU is seeking to raise a $10 million Intern ational 

Solidarity Fund by December 1963, to finance its organizing, education, and citizenship efforts, particularly in the new nations.

The Interna tional Metalworkers’ Federation organizing campaign in the many 

nations where steel, automotive machinery, and agricu ltural implement industries are now being established can only continue at its present pace if it is reinforced by substantial help from the workers in the industrialized countries of 

the world.

In this effort workers in India on annual wages tha t come to less than the 

monthly wages of American workers are making their contributions. Workers from ail p arts of the world—in Ja pan, in Greece, in Tunisia, in Chile, and Venezuela—have recognized the importance of this effort and have pledged support 

to the maximum of their capacity.

P.ut the greate r responsibility for financing the worldwide organization drive 

of the democratic unions rests upon the workers in the industrialized countries. 

In per worker contributions to this solidarity effort, workers in Sweden and 

Germany lead the free world.

Swedish workers equivalent to 8 percent of AFL-CIO membership have pledged 

to contribute $1 million to the Intern ational Solidarity Fund by the end of 

1963—an amount equivalent to 5 hours’ pay per member.

Trade union members in Germany have pledged $2 million by the end of 1963.

If more than 13 million union members of the AFL-CIO contributed on the 

scale of Swedish workers, the U.S. contribution would come to the astro-
UNITED NATIONS PEACE BONDS 55

nomical figure of an am ount in excess of $150 million. We are not trying to raise 

sums of this magnitude and such contribution is not sought from UAW members. It is clear, however, th at United States and C anadian workers, the highest 

paid in the world, can and must help rais e a large pa rt of the ICFTU Solidarity 

Fund and the funds needed to carry out the activities of the IMF.

In recognition of the fac t that UAW members and their families have a high 

stak e in the success of our efforts to build and strengthen the free world movement and to make it into a more effective instrument with which we can—

Strengthen our efforts to make peace and freedom secure in the world. 

Afford people everyw here a fuller measure of economic and social justice. 

Provide a positive answ er to Communist subversion which seeks to exploit poverty and social injustice.

Provide the best protection for our jobs and our living standard s a t home 

by raising living stan dards abroad.

Help achieve full employment at home by raising the living standa rds 

abro ad which will enable us to make a greater progress toward achieving 

a balan ce between gre ate r purc hasing power and our expanding productive 

power.

For these sound and compelling reasons, we, the delegates of the 18th Constitutiona l Convention of the United Automobile, Aircr aft & Agricultural Implement Workers of America propose th at the UAW constitu tion be amended to 

provide for the diversion of the intere st and dividend retur ns on UAW strike 

fund investments to the UAW Intern ational Free World Labor Defense Fund 

and, through thou ghtfully placed contributions from this Fund, assist the 

worldwide effort of the free labor movement to establish for all workers minimum fa ir labor standard s and to improve the health, education, and general 

welfare of workers everywhere. Contributions from the UAW Intern ational 

Free World Labor Defense Fun d shall be m ade only on the auth oriz atio n of th e 

UAW intern ational executive board and with proper accounting for such expenditures in accordance with the sound procedures th at govern UAW financial 

m at te rs : And

Pledge t ha t we will continue to supp ort our brother and sister union members 

through the ICFTU and through the IMF in this tru ly cooperative effort of the 

free world labor movement to win th e peace—to make freedom universal—to combat communism and all forms of tota lita rianis ms —to protec t our jobs and our living standard s—to achieve full employment a t home an d to raise living sta nda rds 

throughout the world.

Eighteenth UAW Constitutional Convention

IN TER N A TIO N A L A FF A IR S

The world in crisis

We, togeth er with the rest of hu manity, are in the middle of a world we must 

remake if we are to survive.

At a time when the altern ative to peace is annihilation, intere st in world 

affairs is no longer a ma tte r of voluntary choice for union members or anyone 

else.

Surviva l and solidarity

Survival and solidarity are the two major dimensions of our life today.

Pre sident Kennedy, in his speech before the United Nations in September 

1961, said :

“Today every inh abitant of this planet must contemplate the day when this 

planet may no longer be habitable. Every man, woman, and child lives und er a 

nuclear sword of Damocles, hanging by the slenderest of threads, capable of 

being cut at any moment by accident or miscalculation, or by madness * * *. 

The risks inherent in disarmament pale in comparison to the risk inhere nt in 

an unlimited arms race.”

The risks of national disa rma ment can be elim inate d by building the int ern ational forces of pea ce; and th is ou r Government proposes to do.

“The United Nations peace force reaches full streng th with such power that 

no single nation can challenge it.” Thu s reads parag rap h 7, stage 3, of the 

disarmamen t proposal of the United States to the Soviet Union, April 18, 1962, 

providing for a 30-percent reduction of all arm s in 3 years.

Survival depends on solidarity—on the solidarity of the people in the world 

through the United Nations.
56 UNITED NATIONS PEACE BONDS

Survival depends on solidarity, on the solidarity of the citizens of the United 

States with those people of Africa and Asia and Latin America, who have 

dedicated themselves and the ir fut ure to the cause of freedom.

Survival depends on solidarity—the solidarity of wealthy developed nations 

with poorer developing nations, because we cann ot live on the heights of affluence so long as two-thirds of the people of the world in the valleys of poverty are 

hungry, are sick, are cold, are ill housed, are illit era te, and are impatient.

Survival depends on solid arity—the solidarity of wage ear ner s in free unions 

voicing the moral strength of the people of the world against greed, against 

social injustice, and against all forms of tyrann y that would enslave the human 

spirit.

The stra tegy of waging peace

It is appropriate for us to acknowledge th at under the leadership of President 

John F. Kennedy a stra tegy for waging peace is now replacing obsolete security 

conceptions th at rely upon total nuclear terror.

President Kennedy’s dramatic call before the United Nations for an inter ­

national peace race, his candid recognition of the suicidal nihilism implicit in 

nuclear war, and his forthri ght declaration that we must not nego tiate from fear 

nor fea r to negotiate, dram atically opened to the people of the world a new 

avenue leading away from annihilation and toward survival.

By following this proposal with the creation in the Federal Government of 

a U.S. Arms Control and Disarmam ent Agency, he took the step which has put 

our national peace effort in a new relation to the Armed Forces and, for the 

first time in the history of the world, organized a general staff to prepare peace 

plans.

Out of this orientation toward peace has come the most recen t U.S. disarm ament proposal, which was designed to meet criteria established by both the 

United States and the Soviet Union. In the first stage, the one-tliird reduction 

of disarmament, with verification based on mathematical principles—meets 

earlier Russian objections and yet accommodates the need of the United States 

and the free world for inspection and control.

This venture into the futu re is flexible in the range of disarmament it permits, 

and practical in its reliance on the strengthenin g of the United Nations.

Most of all, it is realistic in its limited first goal. It proposes the first historic step forward in reducing the heavy and frighten ing burden of armaments. 

Economic consequences of disarmament

The foun datio ns have been laid, also, for planning to meet the economic 

consequences of disarmament. The new Disarmame nt Agency’s first published 

study dea lt with th at subject. It showed tha t, with proper planning, we need 

have no fear that disarmament would disrup t the economy. It pointed out 

the desirability of puttin g measures into effect now to fac ilitate adju stments of 

people and communities to presently occurring economic changes resembling 

the changes th at disarmamen t would bring. Many of the measures suggested 

for this purpose have long been supported by the UAW. The study showed also 

how the human and physical resources relea sed for constructive purposes by 

disarmame nt could be used to enrich and improve the quality of life in the 

United States and throughout the world. Not enough emphasis has yet been 

placed on planning for economic adjustments to disarmament and not enough 

resources have thu s fa r been made available for th at puropse. But a good 

beginning has been made.

The findings of the United Nations Economic and Social Council report on 

the economic and social consequences of disarmamen t parallel those of the 

United States. With respect to the United States, the U.N. report declares tha t, 

in the event of total disarmament, “* * * about 4.5 million persons—some 6 or 

7 percent of the total labor force in employment in 1958—would * * * have 

to change the ir employment from one industry group to another or find civilian 

instead of militar y employment * * * (i t is estimated) the number absorbed 

into expanding sectors (would be) some 600,000 less tha n th at released from 

the Military Establishm ent and the contracting industries. * * * This * * * 

would imply th at an increase of about 1 percent in total Government and 

private expenditure, sprea d over the d uration of the disarmamen t process would 

be required to preserve the general level of employment.”

While these figures are subject to a margin of erro r, they indicate that 

practic al planning is possible now, not only to relieve distress in the eventuality
UNITED NATIONS PEACE BONDS 57

of disarmament, but to provide a humane transition for all workers in the 

defense establishm ents in the event of any cutback or shift in production.

Since it is generally recognized th at “impediments to disarmament are being 

seen more and more as economic, political, and emotional in origin rather tha n 

as based on operational militar y considera tions,” the importance of more 

effective economic planning in this area becomes apparent.

Peace through abundance

Almost 15 yea rs ago the UAW proposed th at $13 billion, 1 percent of the cost 

of World War II, should be appropriated each year for a total peace offensive 

and an all-out wa r on ignorance and hunger and disease throughout the world. 

In one form or another, many political leaders and agencies have proposed a 

similar measure since then.

Delay in rela ting o ur peace efforts to our economic efforts on behalf of hungry 

people throughout the world unquestionably deprives us of powerful incentive 

th at might speed up the running time of a successful peace race.

F mZZ employment and peace

As a nation, we have not yet recognized the relationship between full employment and full production in the United States in our search for world peace. 

In 1961, according to conservative estimates made by the Council of Economic 

Advisers, $40 billion in goods and services was lost through underutiliz ation of 

our national capacity to produce. This is seven times our total expenditure on 

all types of foreig n aid. Many urge nt social needs at home could be satisfied at 

the same time our investment in human beings abroad could be doubled or 

trebled.

By harn essing abundance, the f ree nations of the world could launch a peace 

campaign based on a program of world reconstruction and development on a 

scale th at would dwarf any Soviet effort. In the ensuing economic and political 

competition the Soviets would be compelled step by step to reduce the ir arms 

effort to stay in the peace race or abdicate to the free world the race to win the 

allegiance of the uncommitted millions.

Such a move would reinforce the new peace tactics and would bring about a 

peace spiral to replace the arm s spiral, the thr ea t of w ar would dissipate, a time 

of peace would cleanse the ai r of nucle ar pollution, it would become evident that 

brea d and freedom can be achieved together, and a powerful democratic pull 

would be exerted on the people behind the Iro n and Bamboo Curtains.

Support President Kennedy 's peace efforts

We would be remiss, however, if we did not recognize that the failur e of the 

labor movement and of other community organizations to supp ort the President’s 

peace efforts with an adeq uate and convincing factual information program 

needed to raise the level of the public understand ing has handicapped the administration. We must intensify our educatio nal efforts so th at our members 

and the people in the communities w here we live provide the President with the 

backing he needs for the achievement of disa rma ment with app ropriate inspection and controls that will insu re our national secu rity in a peaceful world. At 

the same time i t is vital for the intere sts of wage earners th at we grea tly expand 

our education efforts to secure an und erstanding with in the community of the 

indivisibility of full employment, full production, and the struggle for peace and 

survival.

Solidarity through th e United Nations

Empty, indeed, would be the hope for peace and survival except for the fact 

th at a new world orde r is coming of age in the United Nations.

In the versatile, efficient, and wonderfully humane machinery of U.N. special 

agencies working in health, education, and other vita l fields, mankind has fallen 

heir to world agencies and operations which are equal to the gre at tasks before 

us if we ar e equal to their utiliza tion.

Fallout shelters, which at best could only prese rve a few soul-stricken people 

on a scorched and poisoned nuclear earth in the horrible even tuality of nucle ar 

war, afford less assu rance of survival tha n the establishm ent of what Preside nt 

Kennedy h as called a United N ations peace force.

In the Congo, the United Nations wrought what can only be considered a 

miracle. An army improvised overnight and flown thous ands of miles into the 

center of a society dynam ited into anarchy, prevented wa r and reestablished 

peace. Simultaneously, the United Nations civil service assembled and installed
58 UNITED NATIONS PEACE BONDS

the en tire b attery of governmental, health, and communal services for 13 million 

people in an area of 1 million square miles. Nor should we neglect to acknowledge the service of the United Nations to the people of the world by its presence in the Gaza strip. Here, peace, however uneasy, is being maintaine d and, under United Nations direction, programs have been put forward which give hope to the victims of w ar and promise eventually to establish a community of nations in the Middle E ast that will make it possible for Syrians, Iraq uis, Jordan ians, Israelis, and Egyptian s to join toge ther in a common creative effort to make the desert flower, to reforest the hills and to rees tablish in these ancient lands thriving centers of civilization worthy of the genius of the people who have been the source of our three gre at Western 

religions. No human achievement approaches th e record of the United Nations specialized agencies, the World Hea lth Organ ization; Food and Agriculture Org anization ; UNIC EF ; the C hildren’s Agency ; UNESCO ; the Technical Assistance Division ; the Special Fund ; or the refugee agencies in stamping out disease, in education, in the improvement of diet or the dissemination of knowledge. Morality and imag ination are combined as never before in the plan of Paul Hoffman, Managing Director of the United Nations Special Fund, for a decade of development whose prac tical and achievable goal is to concentrate the intel­ lectual energy and physical resources of the nations of the world on the elim ina­ tion of poverty, of disease, and of ignorance within the next 10 years. Insolvency and the bill collectors very nearly closed the doors of what has been called the meeting house of the family of man. We take note of the effort the UAW made to secure the prom pt enactmen t of the bill to authorize Pre sident Kennedy to lend the United Natio ns $100 million. We commend the officers and staff who organized the “United Nations appoint­ ment” for 200 UAW members to meet with the leaders of the U.N. agencies as a first step in a UAW campaign to focus the attention of our members on the 

vita l role of the U nited Nations in our lives. The appointment of President W alte r R euth er as adviser to the U.S. mission to the United Natio ns provides UAW members with an opportunity to relate the ir citizenship activ ities to the vital goals of the United Nations. With the e ntire world, we were saddened by the death of Dag Hamm arskjold, a citizen of the kind of world in which we believe and an arc hitect of the future for which all men of good will pray. We extend our deepest sympathy to his 

countrymen, the people of Sweden.

The worldwide freedom movement World events ha ve at least two mainsprings—the hope for peace and survival, but also th e im patient appetite for freedom and its fruits. Since the 51 member nations founded the United Nations on October 24, 1945, an equal number of coun tries have joined the family of nations, most of them new nations, born out of the drive for freedom and independence and dedicated to the proposition that all men ar e cre ated equal.

Freedom road in Africa The agony of Algeria, from which will soon emerge a nation consecrated to the ideal of national independence by the lives of hundred s of thousands of martyrs, is the climax to the liberation of a continent. In 10 years, the 225 million people who inhabit the African Continent have trav ersed two centu ries of political evolution. Algeria, Tanganyika, the most recently libe rated nation, will inevitably be joined—and soon—by Angola and the oth er Portuguese colo­ nies, by South-West Africa, by Kenya, the Rhodesias, and Nyassaland.

La tin America In Latin America, a different form of oppression is under siege a nd the tra ns ­ form ation of the hum an condition from an unchanging poverty into an impatient participation in a broad moral and social movement is now in progress. The collapse of the Tru jillo dictatorship , land reform in Venezuela, the direct con­ fiscation of huge estates by peasants in Peru, the mobilization of the resources of the Bra zilian people for an ass ault on the poverty of the northeast, are the signs th at mark an unprecedented, hemispheric-wide march of people toward a genuine economic and political democracy. Within the context of this movement, immediate decisive reform becomes a pre­ condition for the conservation of the hope for a free society in many of the
UNITED NATIONS PEACE BONDS 59

natio ns of the Western Hemisphere. For, as Pre sident Kennedy has noted, ref erring not only to the individually wealthy, but to relative ly affluent societies like 

our ow n: “I f a free society cann ot help the many who are poor, it cannot save 

the few who are rich.”

Economics of freed om

But the struggle for freedom only begins with politic al independence. The 

450 million people of the Republic of Ind ia have moved into p osition to challenge 

decisively the most ancient enemies of man—hunger, disease, and ignorance. 

Here, as in the United Nation s, the hope for mankind is on tria l. If the widerang ing democratic planning for the Ind ian society succeeds, hope for democracy 

in this cruc ial are a of the world will be more secure . Her e our good wishes could 

be pow erfully energized if only a portion of th e unused resour ces of our economy 

were available as inves tmen t cap ital in the most ambitious democ ratic effort yet 

undertake n.

Human expectations , however, run at high tide not only in the new nation s. 

A new region al society has appe ared in the Common M arke t on the continent of 

Europe. Founded on the principle—which has not yet been impleme nted in the 

United States—of full employment and full produc tion, the new Europe is outrunn ing the United Sta tes in economic g ro wth; and, und er the spu r of po werful 

free unions, wages are being raise d, hour s reduced, holiday s and vacat ions 

enlarged, and the s tan dard of living is impro ving.

Through the cr ack in th e Ir on Cur tain

The democ ratic commitment, based on the belief th at “numberless are the 

world’s wonders, but none more wond erful tha n man,” rejoice s in the tide of 

freedom and seeks to ride it into the future . But even the rigi dity of the t ota litar ian world has not been proof again st the th ru st of huma n hope. From the 

grim silence th at once ruled behind the Iron Curtain , the re now comes the 

sound of many voices—speaking of Polish freedom, renewing the expression of 

the yearning for liberty in Hungary , questio ning the dogma of the regime and 

its propaganda about the rea lity outs ide the walls of the closed Communist 

society. Cracks in the Iro n Curtai n are widening so th at people and ideas, as 

well as light, are beginning to get throu gh. The uni ty of the Communist conspiracy has been weakened—bamboo and iron have become increa singly incompatible.

Berl in wall of shame

Since our hopes and freedom and livelihoods are linked unbr eaka bly to every 

life on the world island, we could not—if we want ed to—stan d outside the 

strug gle for surv ival or for freedom or bread, wherever it is engaged.

Thus, in Berlin, we renew the pledge of so lida rity repea tedly given to the brave 

people of th at outpo st city in behalf of our Nation and our Union. The Berlin 

crisis must and will be resolved finally in the freedom and reunification of the 

German people in peace. The mo rta r has not been invented which will preserve 

the hideous, inhuman, Berl in Wall of Shame. Even now it is penetra ted each 

day by the headlong gallantr y of men and women and even children, in a lifeor-de ath dash for freedom. Ultim ately, the solidarity of the free people of the 

world, joine d with the reso lute bravery of the Berlin people, will reu nite the 

families a nd the commun ities which are now divided by concrete block, bayonets, 

and barb ed wire.

Lead ers of th e freedom m arch

Our fa ith in the solidarity of hum anit y gives us the rig ht to hail the heroes 

of th e worldwide freedom struggle as our own .

In the aw ard of the Nobel P eace Prize to Chief Luthuli of the Union of South 

Africa, we rea d not only a perso nal recognition of a gre at man, but a pledge by 

the free people of the world to sup por t the freedom movement where ver coloniali sm or p rivileg e or tyrann y o r te rror still rules.

To the thou sand s more th at can be named, we give our tha nks —those whose 

courage and devotion make them heroes in the strug gle for life aga inst death 

and tyra nny , aga ins t hun ger and disease, aga ins t ignorance and injustice. We 

salu te them all—in Ind ia, in Peru, in Venezuela, in Brazil, in Cuba, in Berlin, 

in Algeria, in Angola, in the Rhodesias, in Tang anyika, and in South Africa, 

and in o ur own United St ates.
60 UNITED NATIONS PEACE BONDS

The United States in the world

Responsibility, however, does not begin or end with applause for victory or 

lame ntations in defeat. As citizens of the wealth iest nation in the world, we 

have a particular responsibility to urge measures on our Government which will 

help realize the expectations of the people of the world for food, for shelter, for 

medical care, f or education, for peace, and for freedom.

Equal opportunities

Under the leadership of Presiden t Kennedy, opportunities in the Foreign 

Service of the United States have been opened to Americans, without respect to 

race, religion, or national origin. U.S. missions overseas are beginning now to 

represe nt a cross section of the American people. Despite our failure to date to 

implement fully a program which would provide equal rights, equal oppo rtunities, equal employment, and equal participation in the life of the Nation for 

every American—in the conduct of internatio nal affairs, our Government has 

nevertheless acquired a sensitive awareness of the rela tionship between moral 

behavior at home and moral pretensions abroad.

United States and the colonial powers

The realinement of the United States in the United Nations—so t ha t today we 

speak in supp ort of the just demands of the people of the colonial countries— 

has enabled our spokesmen to abandon the rhetoric cynicism for the language 

of freedom.

The appointment of G. Mennen Williams as Assistant Secretary of State for 

African Affairs and his dedicated involvement in African problems have been 

properly inte rpre ted by Africans as a restatement of the best of America’s democratic revolutionary heritage.

The Peace Corps

We. of the UAW, note with especial pride th at the Peace Corps, which we have 

urged on our Government for more tha n a decade, was established by President 

Kennedy in one of his first acts after inauguration. In less than a year of tria l, 

the Peace Corps has been hailed, even by thoses who ridiculed the proposal when 

it was first made, as the most successful recent innovation in internatio nal 

affairs. In the Peace Corps the idealism, the enthusiasm, and the special skills 

of our young people—and, increasingly, of older people as well—find expression 

in meaningful and valuable work side by side with the men and women in the 

new countries. The UAW worked closely with the adm inistration in the preliminary preparatio ns for the estab lishm ent of the Corps, and continues to cooperate with the agency by recruiting from our membership people w ith special 

skills which are needed overseas.

Food for peace

Food for peace, like th e Peace Corps and the Disarmament Agency, constitutes 

a new direction in internatio nal cooperation. Food in excess of the needs of 

the ma rke t for U.S. farm products is considered, not as surplus, but as capital 

available to invest in the fut ure of man. From 1945 through 1960, the United 

States distributed approximately $15 billion worth of food overseas, bu t not until 

the food-for-peace agency was established was the main purpose shifted from 

the distributio n of surplus foods to the investment of food as capital in land 

reform, in better agricultural methods, in education, in reforestation and in the 

strengthening of democratic institutions. The new concept has led to the conscious planning of our own agricultural activity to meet urgent n utritio nal needs 

in new coun tries and is today a significant tool in laying the foundatio ns of new 

nations. Under the leadership of former Congressman George McGovern, a 

commendable effort has been made to secure the participation of nongovernmental organizations in the food investment program with the object of tra nsforming a form al governmental activity into a truly people’s activity. The 

American labor movement must take the initiative to create a proper stru cture 

for full and active partici pation in this food-for-peace program.

The members of the UAW and the delegates to our constitu tional conventions 

have never been of the view that hungry people should have to qualify politically 

for food. Within the limits of our natio nal resources we are deeply committed 

to a policy which provides for the relief of the victims of natural disa sters and 

famines wherever and whenever they strike—in Chile or China, in Russia or 

Ruanda-Urundi, in India or Italy. For this reason, we especially welcome the 

recent affirmation of this tradition al American policy by the AFL-CIO.
UNITED NATIONS PEACE BONDS 61

Economic development

The major U.S. agency for economic assistance to the developing nations of 

the world is AID, the Agency for Interna tional Development. Largely as a consequence of the urging of Senator Hubert Humphrey, whose intellectual leadership 

in the shaping of the Nation’s development assistance programs has been of 

utmost importance, the AID program has shifted its emphasis from military to 

economic objectives, from the bartering for allian ces to the encouragement of 

democratic societies. New directives specify that the Agency will give assistance 

to democratic institution s and organizations, and th e reorganization of the Agency 

has been designed to channel more effort into education, health programs, cooperatives, land reform, and housing.

Allian ce for Progress

President Kennedy’s own announcement of the Alliance for Prog ress in the 

Western Hemisphere best describes the goals of the new assistance programs 

with its emphasis on a ctivities designed to improve the lot of workers, peasants 

and students.

Unfortunately , the declaration of intention has not yet been transl ate d into a 

powerful, grassroots effort which grips the imagination, the loyalty, and the 

participation of the people in the coun tries which receive United States and 

hemisphere assistance. In this effort, the willingness of the American labor 

movement to cooperate through its own intern ational organizations, the International Confederation of Free Tra de Unions, ORIT, and the Int ern ational 

Trade Secreta riats, has not been drawn upon to the degree a realiza tion of the 

hemisphere goals requires.

People to people

Attorney General Robert Kennedy, in his encounters with Japane se and Indonesian stude nts, demonstrated how powerfully effective direct and honest peopleto-people c onfrontations can be.

These contacts should be g reatly expanded with a new emphasis placed especially on exchange visits for workers, farmers, and students, partic ula rly to 

Latin America, Asia, and Africa.

Parallel with this effort the U.S. Agency for Trav el and Tourism should 

contin ue to be urged to promote tr ave l both of people from other countries within 

the United State s, and abro ad by Americans of average incomes through a reduction of f are s and through the development of low-cost tourist facilities. The 

UAW worker-to-worker travel program, which is writing a new page in the 

history of good-will tra vel by the local union preside nt delegation to the ICFTU 

Congress in Berlin, is the type of purposeful exchange which deserves encouragement.

It should be noted th at the UAW’s intern ational trav el activities could not 

have evolved so rapidly and successfully without the pioneering of the American Trav el Association which embraces within its cooperatin g organizatio ns 

unions, teache rs’ organizations, farm groups, cooperatives, the E uropean workertravel organizatio ns, and Histadru t, the Israel Fed eration of Labor. The fine 

working relationship the UAW has with this tru ly people-to-people organization 

should be continued and expanded.

ICFTU and, IM F

Every development in recent h istory lights up the e ntry of the mass of the people on th e inte rna tional stage.

The door through which we have ente red into the making of history is the 

tra de union. In our own country, in Europe, in Asia, in Latin America, in 

Africa—the new leadership and the new policies are the products of the 

democratization of the society.

Through our unions, through our association with our brothers and sisters in 

the 60-million-member Intern ational Confederation of Free Tra de Unions, 

thro ugh our participation in the dynamic worldwide organizin g efforts of the 8- 

million-member Intern ational Meta lworkers’ Federation, we, the members of the 

UAW, together with the wage ear ner s of the world, have a powerful resource in 

solidarity for the achievement of our historic goals.

We can reinforce the formal agreements between governments by joining hands 

in brotherhood with our fellow unionists in foreign lands. We can mobilize a 

worldwide unity to bring aid to oppressed wage earners wherever they may be.
62 UNITED NATIONS PEACE BONDS

Through the Intern ational Solidarity Fund we can multiply the number of 

schools where we are training democratic lead ership who will fuse ou r morality 

with our technology to produce for all.

In this world th at we can truthf ull y say we are helping to make, the democratic rights we have won give us new democratic responsibilities.

Through our union, the UAW, thro ugh the AFL-CIO, thro ugh our affiliation 

with the ICFTU and the IMF, through our union citize nship and education 

activities, we must tak e up the grea t challenges before u s :

The challenge of survival;

The challenge of hunger, of disease, and of ignoran ce;

The challenge of t yr an ny ;

The challenge of one world with peace, freedom and justice for all.

Mr. Goodman. My testimony will be based on the position taken in 

these resolutions and a statement of position on this subject taken by 

President W alter Reuther in a letter to the other body, which I will 

refer to later.

I quote briefly:

UN ITED AUTO WORKERS AND WORLD AFF AIRS

We in the United Auto Workers know’ the importance of an int ere st in world 

affairs. Today the president of the UAW, accompanied by a number of its officers and 35 presid ents of local unions, is in Berlin, expressing solidarity with 

the represen tatives of 65 million workers throughout the free world. Eighteen 

members of the AFL-CIO Executive Council, likewise, are in Berlin.

Because we know that the world is in a crisis of conflict between 

two systems of government, these union representatives are in Berlin 

to express tra de union solidarity with the people in Berlin in their 

struggle to maintain freedom in th at c ity ; but they know, as expressed 

in their unanimously adopted resolution just 2 months ago in Atlantic 

City that, and I quote:

Survival depends on solidarity—on the solidarity of the people in the world 

through the United Nations.

They went further in their expression of hope for the futur e; they 

pointed out, and again I quote from the resolution:

Empty, indeed, would be the hope for people and survival except for the fact 

th at a new world orde r is coming of age in the United Nations.

The resolution went on and spelled out the benefits and advantages 

which accrued to mankind from the functioning of the various affiliated bodies of the United Nations.

SUPPOR T OF THE PURCHA SE OF U .N . BONDS

All this requires money. The delegates to the United Auto Workers 

convention formally endorsed the position taken by the officers to 

the Members of Congress in support of the purchase by the U.S. 

Government of $100 million of the U.N. bond issue. They said, and 

again I quote:

We take note of the effort the UAW made to secure prompt enac tment of the 

bill to authorize President Kennedy to lend the United Nations $100 million.

If I may insert at this point, they not only asked fo r Government 

funds in this field, but they voted a $3 million fund of their own, which 

is recorded in the second resolution in the Internatio nal Solidarity 

Fund which I gave you, for expenditure in the international field,
UNITED NATIONS PEACE BONDS 63

and may well be the source for the purchase of some of the bonds of 

the type tha t we are talking about.

So tha t they put up their own money out of their own resources, 

and they are not merely asking others to contribute.

They have proven their own willingness to pu t hard cash on the line. 

Now, I come before this committee because of my personal experience in establishing a program of trade-union support for the Federal 

Government’s sale of baby bonds, defense bonds, and war bonds 

during World W ar I I.

PA RTICIPA TIO N OF ORGANIZED LABOR IN PREVIOUS BOND PLAN S

Early in 1941, at the request of the Secretary of the Treasury, 

two representatives of organized labor were appointed as liaison 

officers with the Treasury Department to help formulate a program 

of sale of U.S. Government bonds to workers in industrial plants.

The late Mr. Gilbert Hy att was appointed to represent the unions 

in the AFL, and I was appointed as a representative of the unions in 

the CIO. Right from the very beginning we merged our efforts, 

just as the CIO and AFL later merged into the A FL-CI O, to formulate what later came to be known as the payroll savings program.

LABOR AND THE DEFENSE SAVINGS BOND PROGRAM

In the spring of 1941, the trade-union program in support of defense 

savings bond program was announced and at this point, Mr. Chairman, 

I would like to give you the Xeroxed copies of the press release! 

announcing this support.

I am sorry, they are not too clear.

May I loan you the original ?

This one by William Green, this one by Phillips and Luhrsen of 

the Railroad Workers, and this one by P hillip Murray.

Senator Morse. The press releases, as identified by the witness, 

will be printed in the record at this point.

(The press releases referred to are as follows:)

[F or imm ediate release, Wednesday , Ap ril 9, 1941. Pr es s serv ice No. 24 -51]

Treasury Department

WAS HIN GT ON

William F. Green, president of the American Federation of Labor, this 

afternoon promised Secretary Morgenthau tha t his organization would put its 

wholehearted support behind the sale of defense savings bonds and stamps. 

The new bonds and stamps will be ready for distribution and sale on May 1.

Mr. Green said tha t he intended to issue an endorsement of the defense 

savings program to all the AFL unions, and through them to their 4 million 

members. In addition, he offered to distribute pamphlets, posters, and other 

information to all AFL members, and to include news of the defense savings 

program in AFL publications. Mr. Green told the Secretary tha t he considered 

the financing of the defense program a noble cause which would appeal to the 

workingmen of America.

“Nothing could be finer for national psychology at this time,” Mr. Green said 

to the Secretary. He added tha t he was sure the AFL unions would wish to 

buy savings bonds with their union funds and would also encourage their 

members to buy as individuals.
64 UNITED NATIONS PEACE BONDS

Secretary Morgenthau assu red Mr. Green th at none of the pressures exerted 

by employers on employees during the 1917-18 Liberty loan sales would be used 

in the present defense savings effort. The buying of defense bonds and stamps, 

he said, must be entirely voluntary.

At the end of the ir 15-minute talk, Mr. Morgenthau said th at he thought 

Mr. Green’s offer was highly encouraging for the success of the defense savings 

program.

Today’s meeting was the first time th at Mr. Green had ever visited any 

Secretary of the Treasury.

[For release, morning newspapers, Friday, May 2, 1941. Press service No. 24-95]

T reas ur y Dep artm en t

WA SHING TON

Civic organizations, business associations and labor unions the country over 

have been volunteering the ir aid in the defense savings program, the Tre asury 

Departm ent said today. In increasing numbers the groups have asserted their 

desire th at the effort reach its goal of stead y savings investment by most Americans so th at their spare money can help meet the tremendous demands of national 

defense.

J. A. Phillips, chairman, and J. G. Luhrsen, executive secretary of the Railway Labor Executives’ Association, representing the railw ay brotherhoods, called 

on Secretary Morgenthau Thursda y morning to pledge the all-out cooperation of 

the ir organizations in the program.

They informed the Secretary that the following resolution had been passed 

unanimously Thu rsday at a meeting of the asso cia tion: “Resolved, That the recommendation to assist and cooperate in every possible way for the distribution 

of these Government bonds among the railroad employees be wholeheartedly supported and endorsed.”

Lew Hahn, general manager and tre asurer of the National Retail Dry Goods 

Association has offered the services of its 5,900 store members in facilita ting the 

sale of bonds and stamps.

In announcing that payment in cash of $190,837,900 Home Owners Loan Corporation series L 5.8-percent bonds will be made on May 15, John H. Fahey, Cha irman of the HOLC Board of Directors, said :

“It is gratify ing that a liquidating agency of the Government which served a 

gre at public need in another crisis at this time can place this larg e amount of 

money in the hands of the public when it will add to the funds available fo r defense financing and thereby help in another and gre ater effort to preserve 

democracy.”

The Treasur.v announced that Federal credit unions had been designated as 

agents for the sale of the new bonds. The unions have 4,000 member ins titutions throughout the country.

“Presence of the Fed eral credit union offices on the ground will bring the sale 

of these defense savings bonds and stamps direc tly to the gre at working industri al public,” said C. R. Orchard, director of the unions. “Our members now 

have savings of approximately $75 million.”

The Women’s Federal Savings & Loan Association of Cleveland, Ohio, did not 

wait for the campaign to open. Every member of the staff already had pledged 

the purchase of bonds before the opening of the sale.

Members of 545 local councils, Boy Scouts of America, are distributin g 1 million posters calling atte ntion to the defense savings program. The Scouts went 

into action under orders of Wa lter W. Head, presiden t of the national council, 

after Preside nt Roosevelt had asked their aid. Late yesterda y an emergency 

call from Chicago asked for 50,000 additional posters.

State-ch artered banking ins titu tions were enabled to act as agents for the 

sale of defense bonds by the terms of a special act j us t passed by the Wisconsin 

State Legislature and signed by Governor Heil, the Tre asury was informed today. Rules were suspended to rush the legislation through.

Similar action is being take n in the Illinois and Michigan Legislatures. Legislative action is also pending in Massachusetts and New Jersey. The New York 

Sta te Banking Commission auth orized State ins titu tions under its control to 

act as agents las t week.
UNITED NATIONS PEACE BONDS 65

[F o r im m ed ia te re le ase to la b o r p u b li c a ti o n s, O cto ber 29 , 19 41]

Treasury Department, Defense Savings Staff

N EW S M ATE RI AL

The Defense Savings P rogram

II . LABOR PLEDGES COOPERATION

One of the key groups in the defense savings program is organized labor, with 

its 15 million members in the Congress of Industrial Organizations, American 

Federation of Labor, railway brotherhoods, and unaffiliated unions. Leaders of 

these organizations, to which the defeat of Hitlerism is a necessity for their 

continued existence, early came to the support of the program with public 

declarations.

“* * * Such bonds offer an excellent way to invest savings, besides offering an 

opportunity for voluntary cooperation and assistance to the Government of the 

United States in a period of grave emergency,” was the way Phillip Murray, 

president of the Congress of Industrial Organizations, pledged CIO support.

At its 61st convention in Seattle, the American Federation of Labor endorsed 

the defense savings program in a resolution which praised its dual purposes of 

aid for the defeat of H itler and intensified savings for the postwar readjustment. 

The final clause of the resolution re ad :

“Resolved, That the American Federation of Labor endorses and applauds the 

voluntary principle upon which the program of defense savings is based and its 

approval is especially extended to voluntary payroll allotment plans as sponsored 

by individual unions and entered into freely in accordance with sound trade 

union principles.”

Early in the program, James A. Phillips had spoken for the Railway Labor 

Executives Association. He said:

“Speaking for the railroad men of this country, I would say that we will buy 

defense savings bonds because each bond sold is a blow stru<< in the defense of 

our sacred freedom as a nation and the preservation of our democratic way of 

life. Through the purchase of these bonds and stamps the railroad men of 

America can help to give assurance to the struggling and oppressed workers of 

Europe and Asia that political and economic freedom shall not perish from the 

earth.”

As rapidly as international conventions of constituent organizations were 

held, these groups also went on record with support for the defense savings program. In addition to such pledges, these unions immediately began the purchase of defense savings bonds, many of them to the limit allowed under the 

law. As organizations, they were giving their active support to the defeat of 

Hitlerism, in the full knowledge tha t the modern world “could not exist, half 

slave and ha lf free.”

Mr. Goodman. Labor not only endorsed the program, but it went to 

work to put it into effect.

PAYROLL SAVINGS PROGRAM

By midsummer, outlines of the payroll savings program had been 

worked out and a staff of three people were assigned the task of securing cooperation of the millions of members of organized labor in the 

purchase of defense savings bonds.

Many leaders of Government and the unions were skeptical about 

the results which could be achieved. Many fiscal experts predicted 

failure of the proposed labor-management program. Many economists stated as fact tha t workers had no funds with which to buy 

Government bonds.

All these experts were proved wrong.

In just a few months the details of the results, some of which I have 

with me in these detailed reports, which the chairman has seen, proved 

the large level of participation, and the high level of percentage of
66 UNITED NATIONS PEACE BONDS

payroll, which went into the purchase of defense and later war bonds, 

company by company, industry by industry, and I would like to say, 

Mr. Chairman, I am very proud of the fact tha t the more highly 

organized industries had the highest level of participation and the 

highest percentage of payroll deduction for bond purchases.

And those industries tha t were most notorious in their antiunion 

attitudes also were notorious in their failure to cooperate with the 

Government in securing the cooperation in this program. It is all 

proven here by the figures.

I would give you the details of the fascinating experience which 

resulted in the sale of billions of dollars of bonds to workers thro ughout the country set up on a continuing basis within 1 short year. But 

I would like to tell you just one brief experience with the staff of 

the United Auto Workers, the organization with which I am now 

employed.

When word came on December 7, 1941, of the attack on Pearl H arbor, a number of us were in conference at the Harvard Business School 

in Cambridge, Mass., planning methods of joint labor-management cooperation, in the whole war effort.

DRIVE TO REPLACE THE BATT LESH IP “ ARIZONA5

’

The newspapers had on their desks that day a press release regarding the sales of defense bonds for the month of November, and the 

release stated tlm sales for th at month had totaled $233,487,000. The 

day after P earlH arb or, the UAW announced that they would sponsor 

a war bond campaign among their members to finance the replacement 

of the battleship Arizona. Many skeptics wondered how long it would 

take for the goal to be achieved. Some predicted 6 years. The union 

officers, being slightly wary, predicted 6 months. But the fact of the 

matter is tha t the records—later assembled and included in detail 

in the confidential files which I have here—show th at the workers in 

the automobile industry completed the campaign in 6 weeks, a short 

6 weeks.

And I might interrup t to say at this point, Mr. Chairman, that this 

was a reflection of the trust and the regard of the membership in the 

leadership given by the officers, because the officers showed the way 

by taking funds out of the union treasury for these purchases and 

then sought joint labor-management presentations in announcements 

of these campaigns to our members, and they followed suit in large 

numbers.

The percentages run close to 90 percent of all the workers in our 

plan t who were participating in this program within 6 months after 

its announcement.

A total of $147 billion of bonds have been purchased to date and 

the current rate of purchase, steady since 1956, is $2 billion a year, 

through payroll deductions.

I believe tha t labor will respond equally as vigorously to meet the 

financial crisis in the U.N. today as they did in December 1941, and 

the months which followed, to meet the crisis of the U.S. Government 

to finance the cost of World Wa r II .

And I would like to digress here and say, Mr. Chairman, at this 

point, that we did not seek to substitute at that time the sale of bonds
UNITED NATIONS PEACE BONDS 67

for the contribution that the citizen was obligated to make to his Government through taxes.

This was a supplementary purchase, a voluntary, supplementary 

purchase, unlike tha t program of forced savings in the dictatorship 

countries, and we secured this high level of cooperation voluntarily, 

and I believe th at this is an important point in drawing the distinction in your committee as to whether or not these funds are to merely 

supplement the U.S. assessment to the U.N. or whether or not they 

should be used, as I believe they should, to add new functions and new 

activities in the United Nations that will truly meet the desire of those 

who want to make voluntary additional contributions to expand the 

functioning activities of the United Nations.

U N IT E D N ATIO N S F IN A N C IA L CR ISIS

The United Nations is in a financial crisis, of course, otherwise none 

of these measures would be needed. The U.N. is in a financial crisis 

because it is engaged in two policing operations tha t have proved a 

drain on the organization’s revenues. When a police force runs out 

of funds, the logical question to ask is whether the policing operations 

which caused the deficit were necessary and were economically administered. One then should consider the alternatives. In the modern world can one do without a sheriff ? Would some other method of 

law enforcement cost less? Should one abolish the police force because some members of the community cheat on their taxes?

U N IT E D N ATIO N S EM ER GEN CY FO RC E OP ER AT IO NS

Let us consider the two policing operations in which the United 

Nations is currently engaged:

(1) The case for keeping the U.N. Emergency Force in the Middle 

East is extremely strong. Disbanding that Force would remove the 

buffer which now exists between Israel and Egypt and would probably 

lead to the sort of hostility th at has often disturbed tha t area and led 

to violence tha t endangered world peace. Hostility between the 

Arabs and Israel would inevitably lead to outside interference in the 

Middle East and would enhance the chances of demagogues to gain 

control of some of the governments in tha t area.

(2) The Congo is a parallel case. Organized government collapsed 

afte r independence because tha t country was not prepared for selfgovernment. In the chaotic vacuum thus created, demagoguery ran 

rife and outside intereference was invited. It is a fact tha t the 

Soviet Union actually delivered airplanes and military trucks to 

Lumumba in the Congo.

Had this state of affairs been allowed to continue, Soviet penetration would have increased. Inevitably, this penetration would have 

had to be countered; the heart of the African Continent is too sensitive 

and strategic an area to be surrendered by default.

But who could control such outside interference? Not allies in 

Europe because most of them had their own colonial mess. The 

United States could have intervened unilaterally; but financially this 

would have been much more expensive than the U.N. operation.

Politically, the cost would probably have been even greater. Every 

time an American boy—even if he were from our Northern States—
68 UNITED NATIONS PEACE BONDS

shot at a Congolese in self-defense or in defense of some missionary, 

Radio Moscow would have orchestrated a whole torrent of racialist 

accusations against this country.

The role of the U.N. in this area is characterized by the UAW 

resolution as a miracle. They said, and I qu ote:

In tlie Congo, the U.N. wrought what can only be considered a miracle. An 

army improvised overnight and down thousand s of miles into a center of society 

dynamited into anarchy, prevented war and reestablished peace.

Wha t has principally angered some people in this country is that 

a number of U.N. members have refused to share the Congo costs. 

Some of these members are our allies, and they might reconsider their 

refusal to pay afte r the World Court rules—as it is expected soon 

to do—that the Congo costs are assessable against every member of 

the U.N. But those who have principally caused the U.N. deficit are 

the Communist nation members; led by the Soviet Union, they have 

refused to pay their share. It would be best if all members bore their 

proper share of the cost of each U.N. operation; but article 51 establishes the principle of action by a group of like-thinking members in 

self-defense, and in the Congo, a “like-thinking” group of members 

acted to defend themselves and the world against a Communist attempt 

to infiltrate and therefore create an explosive source of world tension 

in the heart of Africa.

In a sense, the Korean war was such an operation whose costs were 

not borne by every member in the organization. It would be nice 

but not very realistic to expect the malfactor who wants to break 

into the house to pay for the upkeep of the police force who prevents 

him from housebreaking. It is not very realistic to expect the Russians to pay for the cost of the U.N. operations which have kept them 

out of the Congo. But because they will not pay their share, should 

we then abolish the police force?

Last year, because of delinquencies in payments, the U.S. Government had to pay approximately $57 million instead of the $40 million 

tha t would have been our proper share had everyone else paid his 

share. But, if we had policed the Congo with i6,000 U.S. troops 

instead of 16,000 U.N. troops, we would have paid $160 million last 

year, plus benefits over a long period of time to those veterans— 

not $57 million. Even if we add the amount of the bond issue to 

the cost of a 2-year operation in the Congo, the cost would still be 

less than if the United States had put its own troops into the heart 

of Africa.

And if we think of the alternatives which were (1) to allow Russian 

infiltration, (2) prevent Soviet infiltration by the use of U.S. forces, 

and (3) to finance the U.N. operation to prevent Soviet infiltration 

into Africa, it is obvious that the third alternative is by fa r the cheapest financially and certainly the wisest for us politically.

COST OF THE UN ITED NA TIO NS TO THE UN ITED STATES

Actually, the U.N. is a tremendous bargain in terms of financial 

outlay for the United States.

I know this is contrary to the thinking of many people who oppose 

the U.N., but I do not think they have stopped to realize this fact, 

and, to understand it, one should look at the assessments or the mem-
UNITED NATIONS PEACE BONDS 69

bership dues tha t the United States has to pay for membership in 

the United Nations.

Over and above the union dues, the United States pays an assessment by making contributions to economic development that are truly 

part of U.S. foreign economic aid. Some aid, only 1.8 percent of our 

total aid given by the United States, is channeled through U.N. agencies instead of U.S. agencies. These aid contributions, with which 

we are not dealing here, amount to only 1 cent per person per week 

in the United States, but the membership dues amount to approximate (1) for the regular Secretariat budget, $22,332,810; (2) for the 

Middle East Emergency Force, $6,115,519; (3) for the police operations in the Congo, $40 million; or a total of $68,448,329.

The United Nations has 16,000 men in the Congo. Sixteen thousand U.S. troops, even if they were not fighting, would cost a minimum of $160 million a year. While the United States has spent on all 

of these activities a total of $413 million throughout the years, the 

Secretariat has, d uring the same period of time, spent over $520 million in this country alone; so from a balance-of-payments point of 

view, the United States is ahead.

In addition, the delegations spend substantial sums of money in 

New York City and bolster the economy and the job opportunities 

there, and we know because we have many members working there, 

working for these delegations. But if the United States does not support the U.N. now in its present financial crisis, this organization 

will be dealt a crippling blow. It will have to suspend its operations 

in the Congo and the Middle East, but, even worse, the prestige and 

effectiveness of the U.N. will be crippled if it is refused help by one 

of the great powers tha t has enjoyed the most support for its own 

programs in the General Assembly. For we must not forget th at on 

all really important issues, the issues of peace and security, a majority of the U.N. has backed the position of the United States 9 times 

out of 10, and this astonishingly high percentage of support has not 

diminished during the past 3 years when the g reat influx of new nations occurred.

The United Nations has been uniquely successful as an instrument 

for international cooperation and solidarity. Our convention noted 

this fact in their resolution when they said, and again I quote:

In this decade of development, the U.N. has called for a vast program of aid 

to the new countries and the deployment of forces to provide food, medical 

care, and education to the imp atient two-thirds of the world’s population who, 

having won freedom, now demand the harve st of well-being they experience as 

the frui t of their struggles.

Later they sa id: z

United Nations surveys reveal the economic fac t that 800 million people in 

the emerging natio ns of the world have ann ual incomes of less tha n .$100 per 

person.

Poverty is the worst counselor. It leads to desperation and to the 

search for illusory shortcuts tha t mean no more usually than resolution and an extension of the cold war. The U.N. with our help, 

has provided the most effective and least expensive form of economic 

development.

I would like to read a brief excerpt from Walter Reuther’s letter, 

our president of the United Auto Workers, to the chairman of the
70 UNITED NATIONS PEACE BONDS

Foreign Affairs Committee of the House, on this whole issue, and 

again I quote:

We, in the American labor movement, do not claim that the United Nation s 

will be set on a wide road to an easy final solution of the problems of the world 

by the enactment of the bill pending before your committee to authorize the 

United Stat es to purchase $100 million of United Natio ns bonds.

Nor do we challenge the good fai th of these Americ ans who oppose this bill 

or who propose an alternate financial arrangement to the U. N. ’s fiscal problems, 

although we are cr itic al of their judgm ent and their computations.

We do not suggest that the United Natio ns will be dealt an immediate fat al 

blow by the rejection of the $100 million bond proposal.

We do believe, however, that the calculation s of those who oppose the bond 

issue are made in terms which are not commensurable with the problem.

I request tha t the entire letter from President Reuther to the chairman be placed in the record.

Senator Morse. It will be inserted at this point.

(The letter referred to is as follows:)

I ntern ational Uni on, United Automob ile, Aircraft &

Agricultu ral I mpl em en t W orkers of America-UAW,

Detro it, Mi ch., March 26,1962 .

Hon. T homa s E. Morgan,

Chairma n, F ore ign Affa irs C ommi ttee,

U.S . House o f R epr esen tatives Washing ton, D .C .

Dear Cong ressma n Morgan : Again st the advance of the science of cosmic 

calamity , the people o f the world have one great b ulwar k, the United Nations.

I write you now to speak in favor of the $100 million U.N . bond issue and 

for the deeply cherished hope lodged in the continuing work of the Unite d 

Nation s.

The million and a quarte r members of the UA W share with the people of 

the world an uneasy apprehension over worldwide developments in the last 

decade. These developments give no one reason to believe that lif e on this 

planet, as we know it, can survive without the most dedicated commitment by 

each indiv idua l citizen to a new sense of international responsibility and 

morality.

Bu t our personal and historic al experiences warn us that the idealism of 

the people of the world will vaporize in the final blinding ligh t of a nuclear 

explosion unless we strengthen the social and political instruments by which 

we can achieve a ju st and p eaceful world.

The struggle for peace in a world, one-third free, one-third captive, and onethird in suspense, we are well aware, is a many-f actored effort complicated by 

120 sovereign nation al states insecurely associated in an unstable and volat ile 

world where hunger, disease, and ignorance are more often the rule than the 

exception.

We would be in an even more desperate situation now, except for the fa ct that 

the United Natio ns was brought into being 16 years ago as the expression cf 

age-old longi ng for peace and in reaction against the horror of the most devastating and the cruelest war in human histo ry. Toda y, after a sequence of 

hard tria ls, the United Natio ns still survive s and in its continuing effort manifests the almost indestructible determin ation of human beings to persist again st 

every discouragement in the search for socia l organizations tha t correspond w ith 

their ethi cal convictions.

We, in the Amer ican labor movement, do not claim that the United Natio ns 

will be set on a wide road to an easy final solution of the problems of the world 

by the enactmen t of the bill pending before your committee to authorize the 

United Stat es to purchase $100 million of United Natio ns bonds.

Nor do we challen ge the good fai th of those Amer icans who oppose this bill 

or who propose an alternate finan cial arrangement to the U.N .’s fiscal problems, 

although we are crit ical of their judgm ent and their computations.

We do not suggest that the United Nations will be dealt an immediate fat al 

blow by the rejection of the $100 million bond proposal.

We do believe, however, tha t the calculati ons of those who oppose the bond 

issue are made in terms which are not commensurable with the problem.
UNITED NATIONS PEACE BONDS 71

We do believe that the weight of a rejec tion of the U.N. bond issue will bear 

down heavily upon the United Nations and seriously impair its effectiveness 

in this critical period. It will weaken and hamper its efforts, and may set 

events in tra in th at ultimately could tran sform the United Nations Building in 

New York into a mausoleum of hum an hopes comparable to the Pa lace of Nations 

in Geneva which once housed the League of Nations.

Without attempting to minimize in any way the imperfectio ns of the United 

Natio ns until now, ther e can be no question th at i t plays as important a role in 

our efforts to wage peace as our Defense Establishment. There can be no question 

that our hope for avoiding war and f or the ultimate prevalence of freedom, depends as heavily on the General Assembly as on our missiles. In this context 

deb ater’s tactics and semantic jockeying over the ultimate cash adv anta ge over 

one method of financing the U.N. as against another are unseemly.

The fac t is the United Nations and our representativ es there have themselves 

determined th at th e bond issue now before the Congress for consideration is the 

most effective way of maintaining U.N. solvency and for ave rtin g a financial 

crisis which would jeopardize the U.N.’s effectiveness as an instrument for 

world peace.

Our nation al adm inistra tion has assured the American people th at the bond 

issue, as proposed in the bill before you, promotes our national int ere st better 

tha n any other alternative . In reality, the choice now is not “Yes” or something 

else, but “Yes” or “No”. In this circum stance, surely it is incongrous to split 

statistical ha irs in an effort to esta blish irre levant, hypo thetical savings as an 

argu men t for a method of financing th at has not been proposed to us by the 

United Nations, and which, at best, would require a long period of debate dur ­

ing a period when time itse lf is unravelin g and th e peace of the world is eroding 

in Africa, in Berlin, in Asia, and perhap s in our own hemisphere.

For these somber reasons, it is inappropriate for one side to score political 

points aga inst the other side on the basis of dubious argu men ts about which 

is the better method for encouraging self-reliance and sound credit practices 

among the nations of the world now in arrears on the U.N. books.

It is the judg men t of the men and women in the American labor movement 

th at the deficiencies and delinquencies of other nations with respect to the U.N. 

are a challenge to us to strengthen the world organization and not an excuse 

for diluting our own commitment.

During the last yea r the U.N. has dem onstrated its effectiveness in such ex 

plosive situatio ns as the Congo—where without U.N. intervention, chaos and 

civil wa r would have resulted and the peace of the world would have been in 

grave jeopardy.

The most significant advances made tow ard peace and justice in the world 

have been in those are as where the world community has worked thro ugh the 

United Nations. Through the U.N. the free nations of the world have won new 

allies in the commitm ent to the principle of world order, have rebuffed Communist efforts to emasculate the U.N. ability to act to car ry out the will of the 

people of the world, and have fru str ated the Communist attempt to subv ert the 

possibility for a rule of justice in th e Congo.

Simultaneously with the direct Communist attacks on the inte grity of the 

United Nations, there has been a par allel effort to reduce the U.N. ineffectiveness by cu tting off its funds.

Thus, the Soviet bloc has refused to contribute any financial supp ort to the 

U.N. forces in the Gaza strip or in the Congo, despite a specific initial Soviet 

vote in fa vor of a U.N. Congolese force.

Under the rules governing the United Nations, the Soviet powers can now 

refuse to pay the cost of these special programs w ithout jeopardiz ing the ir standing or vote in the U.N. organizations.

However, any nation which fall s 2 years or more in arrears in the payment 

of the regular assessments for the maintenance of the U.N. is suspended and 

loses all its rights as a member organization.

By making use of this principle, the proposed United Nations bond issue would 

present the Soviet bloc with the choice of paying its sha re of the cost of the 

Congo and Gaza str ip programs or, in effect, with drawin g from the world 

organizatio n.

Wh at has made it possible for the non-Communists in the United Nations to 

compel the Soviet bloc to pay up on its obligations or to get out is the rule 

which excludes the possibility of a Soviet veto in U.N. administrative decisions. 

Free from the para lyzing effect of the veto, the General Assembly of the United
UNITED NATIONS PEACE BONDS

Nations voted to issue $200 million in bonds to pay its debtors, restore its solvency, 

and to finance its continuing activities. These obligations will be repayable over 

a period of 25 years at 2 percent interest. Income from assessments on all the 

members of the U.N. will furnish the fu nds to p ay off the bonds and interest.

Two years ago, speaking before the AFL-C IO intern ationa l affairs conference 

in New York, I declared that each dollar we spend through the United Nations 

in the struggle for a world we can live in, is worth $10 sp ent unilaterally.

In the 2-year interval the exchange value of money spent through the United 

Nations has, if anything, increased.

In summary, I hope you will note th at by the purchase of the bonds, the 

United States will actually reduce its sha re of the cost of U.N. peacekeeping 

efforts from 47.5 percent to 32 percent as the procedural rules which will be 

writte n compel the Soviet bloc to pay its proper proportion of the U.N. budget.

In the past, the United States did purchase U.N. bonds to make possible the 

erection of the U.N. building and you know, of course, th at the U.N. met the 

payments on these obligations punctually.

It is also our belief that the preponderance of Americans take for granted 

th at the financial advantages of the bond issue a re relatively unimporta nt when 

compared with the overwhelming need of the world for the effective and solvent 

operation of the United Nations.

For all these reasons we hope the app arently technical provisions of this legislation will not obscure its vita l importance to the people of the entire world and 

th at the Congress enacts the necessary enabling legislation without delay.

Wh at the Congress is considering now is a proposal to lend the United Nations 

a sum th at is less tha n the amount spent las t year by some American corporations to advertise soap. It is less than one-tenth of the profits of certain other 

American corporations l ast year, a fifth of 1 percent of the cost of sending a man 

to the moon.

Actually, what the United Nations has requested and the Preside nt has urged 

on us is, in effect, tha t each American lend the United Nations approximately 55 

cents, which th e United Nations will repay.

We in the labor movement sincerely hope you will keep before you these two 

choices in the b ala nce: One choice, 55 cents from each American for the United 

Nations; the other choice, serious impairment and possible destruction of one 

of the g rea t pillars on which our hope for peace and survival rests.

Sincerely yours,

Walter P. Reuther, P re si de nt .

Mr. Goodman. In conclusion, Mr. Ch airma n, I urge the com mittee to vote fav orably on S. 2818 so th at tho usa nds of U.S . citizens, 

eit he r indiv idua lly or throug h th ei r org aniza tions, throug h such 

tech niques as we used in the w ar b ond prog ram i n 1940, ma y have an 

op po rtu nity, if they so desire, to id en tif y th ei r su pp ort of the Un ite d 

Nations throug h the purch ase of peace bonds dir ectly fro m the U.S . 

Treasury.

Se na tor Morse. Mr. Goodma n, you hav e give n us an excellent s tatement.

I have no t any doubt t hat i f the op po rtu nity to buy United Nation s 

bonds were made ava ilab le to th e Am erican people, there wou ld be 

the kin d of success th at you have testified you believe will occu r in 

this c ountr y in rega rd to t he ir sale.

You were at the hea rin g th is m orn ing .

I have only one question th at I t hi nk I would like to have you make 

on record.

RECOMMENDED MODIFICATION OF THE BILL

W ha t recom mendation w ould you make to th e co mmittee for modification in the lan guage of the b ill th at wou ld accomplish the b roader 

purposes of the bill which yo ur testim ony shows y ou th in k should be 

mad e availabl e in the ex penditu re of these fu nds?
UNITED NATIONS PEACE BONDS 73

Would you recommend th at the bill be modified so i t cle arly sta tes 

th at th e purpose is to give dis cre tio nary power to t he Preside nt of the 

United State s to spe nd the bon d fu nd fo r activ itie s of the United 

Na tions over and above the activitie s th at are autho riz ed an d fo r 

whi ch fun ds are a pp ropr iated by th e C ongress ?

U. S. ASSESSMENT TO THE U .N .

Mr. Goodman. Before I ans wer th at directly, I would like to sta te 

my po sition rega rd ing th e whole questio n of th e U .S. assessment t o th e 

U.N . because it seems to me th at very fund am en tal here is th e q uestion 

of ab ility to pay.

I f th e Un ite d States were pa ying und er a form ula o f a bility to pay 

its assessment, in my opinion, it wou ld be much la rg er th an it s p res ent 

assessment.

Th e reason fo r th at is th at a minim um fee has been set fo r the 

smaller and poorer nation s, and , in order to fit th e U nited St ates into 

the for mu la, actua lly we benefit and do no t m ake as g reat a con tribu ­

tio n as ability to pay wou ld establ ish as o ur total, if we were to meet 

th at for mu la.

There for e, I th in k the Un ite d State s is actua lly pa ying less tod ay 

th an a fa ir sta nd ard or record would determ ine. But I b elieve th at, 

havin g live d un de r th is form ula fo r a perio d of yea rs, th at it would 

be difficult and probably undesirable to tr y to cha nge it at t hi s time, 

and I wou ld hop e th at t he c omm ittee w ould pu t into the lan guage of 

the bil l or into the legisla tive his tory the true int entio n of the su ppo rte rs of the bill, as I know to be of ou r org aniza tio n, th at it w ould 

be possible fo r the Pr esiden t to allocate these fund s to addit ion al 

fun ctions and activitie s to str en gth en the Un ite d Nations, to expand 

its activities as a pea cem aking and econ omic-developing agency, and 

mak e it possible fo r the wishes of those who are seeking ad dit ion al 

su pp ort of the U.N. to be achieved .

MODIFICATION OF THE BILL

Se nator Morse. I h ave one p roblem which I thi nk o ug ht to be mentioned in con nection wi th this suggestio n of yours.

I th in k the United Na tions are bound to be exp andin g. I hope 

10 years fro m now the Un ite d Na tions will be doing a good many 

things in additio n to its pre sen t activities. Bu t fro m the sta nd po int 

of the lon gtim e U.S . su pp ort of an expanded prog ram of the United 

Nations, do you not th in k it is des irable th at we dra ft the bil l in 

lan guage th at will req uir e congres sion al au tho riz ation and ap prov al 

of the program s for the su pp ort of w hich th e Presiden t is autho riz ed 

to use the money, even thou gh we ma y hav e an edu cation al job to 

do here in the Senate in ge tti ng a major ity vote fo r the sponsorship 

and a utho riz ation of those prog rams ?

RESTRAINING PRESIDENTIAL POWER

Before y ou r answ er, let me make this add ition al co mment in e xp lanation of my question.

Th ere is a very str on g fee ling in th e Congress, an d I th in k it is 

gro wing, th at we mu st plac e more and more checks on Pr esiden tia l
74 UNITED NATIONS PEACE BONDS

power; th at the Chief Execu tive of this country has alr eady been 

given too much power in respec t to the expenditu re of fun ds, in re ­

spect to taki ng us into situatio ns before the fact and the n com ing to 

the Co ngre ss for appro val a fter the fac t.

We mentio ned th is mo rning the con ting ency fund prob lem. I t 

happene d to be my amendmen t in th is com mittee th at reduced the 

Pr esiden t’s contingency fund in the forei gn aid bill this ye ar fro m 

$400 to $300 m illion. If I could hav e gotten the votes, I wou ld have 

reduced it to $200 m illion or to $100 million, because i t takes him such 

a sho rt time to pres ent his case for the need f or any fun ds.

An d with the wor ld situatio n such as it is, there is a considerable 

po int of view in this country th at a close check should be kept on 

the President, no matter who he is, as fa r as the exercise of dis cre ­

tio nary power is concerned.

As one who is so sym pathe tic to an expa nsion of the services of the 

Un ite d Nation s, I mak e thes e comments fo r your reactio n, because I 

think i t would be very u nf or tu na te if we lost the bill because we did not 

mo dif y it to main tai n checks on the President. I doubt ve ry much 

if you could ge t a bill passed, certa inly in th is session of Congress, 

unless it con tain ed checks on the Pr esiden t. Tha t is my speech.

Mr. Goodman. I would defer to th e distinguished dean of the law 

school in the constitutional kno wle dge o f this problem of checks and 

balances of ou r Fe deral Gov ernment. But it seems to me th at we 

have a slightly d iffe rent problem here.

Th is prob lem is, Ho w do we imp lem ent the desire of Mr. Joe Doakes, 

ordina ry citizen , no po wer or functio n, who wa nts to show th roug h his 

own person al purch ase of a bo nd his desire to h elp the U nited Nations.

Now, if the com mittee so desired , ra th er than pu t the au thor ity in 

the Pr esiden t of the Un ite d State s as to the allo cation of the fun d, 

because of his m any oth er duties, it w ould be perfe ctl y pro per, in my 

opinion—I h ave had no cha nce t o check this w ith a ny of ou r officers— 

to pu t the au thor ity in the h ands of the U.S. Am bas sad or to the United 

Nations.

Th is fu nd sh ould be allo cated to the b est use of the U nited Nations.

I t wou ld seem to me th at th at is the des ire of the ind ivi duals and 

the organiz ations who, by bu ying the bonds, wa nt to ind icate their 

desire fo r g reater assista nce to th at or ganiz ation in the prese nt chaotic 

world.

There for e, I would agree th at if there is a fee ling in the Congress 

th at too muc h pow er is bei ng c oncen trated in th e hands of the Pr es iden t, or th at he is too busy wi th too ma ny othe r details , a different 

des ign ation could be made.

Bu t is no t the problem reall y th at of how does simple Jo e Doakes 

on the st ree t c om er have an o pp or tunity to walk up to a bond window 

and say, throug h his purch ase of a low er inter est ra te be ari ng bond, 

“I want th e world to know th at I su pp ort th is organiz ation.”

Tha t is wh at we did throug h hu nd red s of tho usa nds of rallies and 

cam pai gns in 1940 and 1941 an d 1942 in dev eloping su pp ort for the 

war effort, and I believe th at you could find in th e lab or m ovem ent a nd 

in other org aniza tions equal ardo r an d equal effo rt to say, “I w ant my 

vote recorded, my assistance reco rded, f or the peace effort.”

And I am very pleased, the refore, ha ving been thro ug h the baby 

bond and the defen se bond an d th e w ar bond, to be testif ying here to day 

fo r th e peace bond.
UNITED NATIONS PEACE BONDS 75

Se na tor Morse. I wan t to say, Mr. G oodman , I am de lig hte d to have 

this testimony of yours in the record. I t is going to be very he lpf ul 

to us.

Th an k yo u very m uch.

INTRODUCTION OF MR. EICHELBERGER BY TH E ACTING CHAIRMAN

The next witness will be Mr. Clark M. Eichelb erg er, executive di ­

rec tor ?

 the Am erican Association fo r th e United N atio ns.

While Mr. Eichelb erg er composes his view s fo r a mom ent, because 

I know him to be a modest man, I would like to hav e th is record con tain 

thes e com ments fro m the acting chairm an.

I doubt very much if it is possible fo r all the supp orters of the 

Un ite d Na tions in the Un ite d State s to rea lly ade quately appre cia te 

the ded icated service th at Mr. Eichelb erg er has given to the Un ite d 

Na tions since its for ma tion, and pr io r to its for ma tion.

Th is witness is one of the most ded icated men I know in the field 

of Am erican foreign policy in his relat ionship wi th the work of 

the Un ite d Nat ions.

He was very active in the form ati on of the United Na tions, and 

he has serv ed as counsel and advis er to mem bers of th is committee 

tim e and tim e aga in.

Th ere has no t been a sing le U.S . delega tion to the Un ite d Nations 

th at has no t benefited very much fro m the kno wle dge and advice 

an d counsel t hat C lark E ich elb erg er has given to the m over t he ye ars.

Th ere fore, I w’ant to say to you, Mr. Eichelb erg er, it is a grea t 

ple asu re fo r me to welcome you to this he aring this aftern oon.

You hav e he ard th e discussion this m orn ing .

I do no t know of anyone who is be tte r qualified to straighten out 

some of the c onfusion th at I think exists in the rec ord as of t he moment, and to give us the benefit of judg men t as to wh at changes, if 

any, ou gh t to be inc orporat ed in th is bil l to accomplish the pur pose 

th at those of you th at a re s ponso ring the peace bon d movement have 

in mind.

You may proceed in your own way.

STATEMENT OF CLARK M. EICHELBERGER, EXECUTIVE DIRECTOR, 

AMERICAN ASSOCIATION FOR THE UNITED NATIONS

Mr. E ichelberger. Th an k you, Se nator.

(T he com plete prep ared sta tem ent of Mr. Eichelb erg er is as 

fol low s:)

Statement of Clark M. Eichelbekgeb, Executive Director, American Association for the United Nations

Mr. Chairman, I am delighted to appear in support of S. 2818, a bill to provide 

an opportunity for the public to provide support for the activities of the 

United Nations by the purchase from the Treasury of United Nations peace 

bonds and to authorize the issuance of such bonds.

I appear as an individual because the board of directors of the American 

Association for the United Nations has not had an opportunity to express 

itself and the association as an educational organization does not as a rule 

support legislation. However, I think I can say tha t this resolution would 

have the overwhelming support of the officers of the association and its membership.
76 UNITED NATIONS PEACE BONDS

The desire of the public to partic ipa te in financing the United Nations is 

irresistible. Some $150,000 has been sent directly from American citizens to the 

United Nations. Unfortunately, if the donor does not indicate to what program of the U.N. his contribution is to go, it must go into the general trea sury 

and thu s reduce the regular dues member nations must pay. This $150,000 

is in addition to the large contributions which Americans make to UNICEF, 

to the UNESCO gift coupon program, etc.

And I thin k it is good for Americans to realiz e th at this same desire to help 

the United Nations financially is to be found in some other countries. For 

example, las t yea r the British people contributed $650,000 to the famine relief 

fund in th e Congo.

Our association receives various letters from people who wish to purchase 

United Nations bonds, or who offer various schemes for public participation 

in United Nations financing. It is not by accident that the United Nations 

Charter, after some debate at San Francisco, begins with the phrase, “We 

the peoples of the United Nations * * * instead of “We the high contracting 

parties * * It is very encouraging that so many people wish to have a 

part in financing the United Nations.

Looking into the future , it is clear that the United Nations is going to need 

a very much larg er budget than it now has, if its program is to grow to meet 

the larger challenges which the world situ atio n presents. This is particu larly 

true if a real United Nations police force is to accompany worldwide disarm ament with adequate inspection and control. The American Association for 

the United Nations, through its researc h affiliate, the Commission To Study 

the Organization of Peace, has studied and will continue to study means of 

independent sources of income for the United Nations.

Obviously, the bill S. 2818 is not the final answ er to the whole question of 

United Nations financing, but it is a brea kthrough in that it enables the public 

to express its supp ort of the United Nations in this way. This is not a bill 

to auth orize the public to purchase United Nations bonds directly. If it were, 

I would be opposed to it because it might give governments an excuse to avoid 

their obligations on the ground th at citizens were going to cover them. However, this is a bill to enable the public to purchase peace bonds floated by the 

U.S. Government, the fund s from which would go into a special fund on which 

the Presiden t could draw by auth ority and upon his discretion.

There are thr ee kinds of United Nations budgets: the regular budget; the 

emergency budget for peacekeeping operations, such as in the Middle East and 

in the Congo; an d the budgets to which contributions on the p art of governments 

are volun tary. I assume the funds realized from the sale of peace bonds would 

not be used to take care of the American contribution to the regular budget, 

which would continue to be autho rized by the Congress.

In summarizing, I congratula te the sponsors of this resolution for having 

sensed the desire of the American people to participate in financing the United 

Nations. This resolution, if passed, would make it possible for m any American 

citizens to have a sense of more direct participation in the United Nations by 

assisting in its financing through the purc hase of peace bonds. Indeed, it might 

stimulate other countries to follow a similar policy.

Mr. Eichelberger. I will be very brief, because I would like to confine myself to some of the questions and points tha t came up this 

morning.

I would like to begin by congratulating you, Senator Clark, and 

other members of the committee, for this resolution. I think it is 

very significant.

Senator Morse. I do not happen to be a cosponsor of it.

Mr. Eichelberger. I thought you were. I am sorry.

Senator Morse. No. I do not happen to be a cosponsor of it, Mr. 

Eichelberger. I must have been too busy for them to reach me.

desire of tiie public to help the u.n.

Mr. Eichelberger. I think one of the important facts about the 

bill is that it provides a way of expressing the almost irresistible de-
UNITED NATIONS PEACE BONDS 77

sire of the public in this country—and it is a sentiment in other countries, as well, although it does not come under this bill—to help in 

United Nations financing.

Some of the Senators this morning were questioning how much 

people would actually contribute. I wonder if they realize tha t the United Nations has had over 

$150,000 mailed to it by American citizens who said: “We want to 

help the United Nations directly.” Of course, if a check goes out to the United Nations and it is not 

earmarked, it goes into the General Treasury, and thus cuts down the 

dues tha t governments would pay, rath er than increasing its income.

The vast majority of those checks were properly earmarked for 

Hoffman’s fund for expanded technical assistance and so on, and I 

think it is healthy for us to realize tha t tha t sentiment exists in other 

countries, even though it does not come under this proposed legislation. The United Nations has had $800,000 contributed to it abroad, of 

which $650,000 were contributions of the British people to help the 

United Nations in its fund for the elimination of disease and starvation in the Congo, a remarkable contribution from the United 

Kingdom. Almost every day, Senator, letters come into our office: “How can 

I purchase U.N. bonds? How can I contribute to the United 

Nations?” I do not khow how a certain radio commentator found where I was 

staying this morning, but early this morning I had a telephone call 

from someone who said, “I read the story in the paper about the action 

of the House yesterday which would block all contributions to the 

United Nations. What can we do to help? Is it possible to start a 

worldwide stamp plan to raise money for the United Nations?”

It is not practical, but those are all indications of a desire on 

the part of people to contribute to the United Nations directly.

I think, of course, it is a reflection of the fact tha t the United 

Nations, much more than the League of Nations, seems to be a people’s movement. It is not an accident tha t at San Francisco the 

liberals won out over the traditionalists and the charter began with 

the phrase, “We, the peoples of the United Nations,” instead of, 

“We, the high contracting parties.” I believe tha t there is an almost irresistible desire on the part 

of the American people to contribute to the United Nations directly, and I have no doubt a bit but if this bill is passed, the Treasury 

would be surprised at the number of people who would like to purchase United Nations bonds.

IMP ORTANCE OF THE PROPOSED LEG ISLATION

In the first place, I would like to say tha t I think the importance 

of this bill is that it somehow is recognizing a public desire to par ­

ticipate. Sure, it all comes out of the Treasury of the American taxpayer 

anyway, whether Congress taxes him to pay dues to the United Nations or whether the taxpayer gives money directly, but there is a 

psychological desire for participation and identification, which I think 

is very helpful.
78 UNITED NATIONS PEACE BONDS

I realize that in time to come the whole question of United Nations financing has got to be considered on a very broad basis.

I think it is something tha t you and others here might be addressing yourselves to, if you had time, and I understand tha t Senator Hickenlooper raised the point this morning about direct contributions or direct purchase of U.N. bonds.

I think we all realize, you said so a moment ago, that as the wTork 

of the United Nations grows, it is going to need a great deal more 

money, particularly if we have total disarmament with the United 

Nations Police force and adequate inspection controls.

We will be in an era of billions instead of millions.

At the present time governments will vote any amount of money 

for an out-of-space shot or for a new cruiser and then hesitate terribly for a few million dollars for the U.N.

Tha t is a comparison of our peacetime thinking over a long period 

of time.

We will eventually come outof that.

AN INDEPENDENT INCOME FOR THE UNITED NATIONS

I know that the Brookings Institutio n and our association, I know 

a great number of people and organizations, are addressing themselves 

to the question of a direct source of income to the United Nations.

I would not object a bit if the United Nations had its own bond 

issue in time, that people would find some way of contributing to the 

United Nations directly.

I would not object a bit, as was said this morning, if a reserve in the 

International Bank were earmarked to the U.N., if there were a tax 

on some of the services tha t the U.N. is performing.

It is performing tremendous services and it should reach some revenues from that.

I can conceive of the time when the United Nations would have a 

very large independent income, in addition to what governments would 

give.

I realize this bill does not meet that, but I think this bill starts the 

thinking along t hat line. I could sense that in even some of the more 

critical members of the committee this morning.

So if Senator Hickenlooper were here, I would say I would have no 

objection for the U.N. making it possible for individuals to participate in its financing, but tha t is something tha t has to be thought 

through very carefully. Governments must determine that they are 

willing that the U.N. have is own funds besides what the governments 

give. It is not anything tha t could be passed immediately.

It is something for long-range thinking.

It is something that does not in any way take the place of this.

DIVISIONS OF THE U .N . BUDGET

Now, as I see it, the U.N. budgets can be divided into three divisions.

There is the regular, normal budget, and I would assume that this 

legislation would not apply to tha t particularly; tha t the President 

would not be expected by Congress to dip into this fund to relieve 

Congress of the need of voting the regular budgets for the United 

Nations.
UNITED NATIONS PEACE BONDS 79

But then there are two other United Nations budgets, and here I 

think your questions have been directed to, and Senator Sparkman 

was referring this morning to the peacekeeping operations of the 

United Nations.

There is an interesting area that has just arisen.

Now, the United Nations has said, and the Soviet Union and others 

have objected, tha t these peacekeeping operations, these emergency 

operations, were charged in the regular budget, and I presume the 

World Court will give a decision next week, and I think all of us hope 

it will be a decision in favor of the rulin g of the General Assembly.

AUTH O RIT Y OF T H E PRESI DENT TO USE T H E FU N D

But I can see—you asked the question of what authority the President should have—I can see th at in an emergency he might want to 

dip into this fund, and then secure the approval of Congress afterwards.

Suppose that trouble were to develop today between the two states, 

Ruanda and Urundi, and the U.N. had to step in with a token force 

to keep the peace.

It has a hard enough time paying for these operations it is now 

doing, but suppose the peace of Africa depended on tha t quickly.

I think the President should have the right to dip into those funds 

to help in an emergency situation and then find some authority and 

approval afterwards.

Then there is the third budget of the United Nations where the 

United Nations determined what the items in the budget will be, but 

it depends on voluntary contributions, all sorts of relief and refugee 

problems and health problems, apart from the contributions to the 

general budget.

I think you have posed the most pertinent question of the day. 

That is, how much authority or discretion the President should have 

and how much he would be limited by congressional authorization.

I stand somewhere between those tha t think tha t he should have 

unlimited authority to use the money any way he wants to, and the 

rather restrictive interpretation tha t was given by State and Treasury.

I agree with you th at in the long run our job is education, generally 

speaking, so Congress is willing tha t greater sums go to the United 

Nations, and you cannot shortcut it by giving the President authority 

to do things that he could not get congressional authorization for.

On the other hand, I think there is a marginal area in which the 

President should have authority in emergency situations.

I do not think, for instance, th at he should have the authority to 

contribute to SUNFE D when it is against American policy to be 

for SUNFED.

I am in favor of SUN FED , but until American policy is for 

SUN FED , there should not be a shortcut.

On the other hand, if a great emergency arose and the peace of 

the world might depend on the U.N. having to act quickly and having 

emergency funds, I think the President then should have authority 

to act by virtue of our own public policy, by his discretion, and the 

very obligations we have taken under the charter.
80 UNITED NATIONS PEACE BONDS

So I would say tha t the latter part of this resolution, I am sure 

Senator Clark and all would agree, the hearing today has been very 

helpful in giving some guidelines for the provision of that.

I think it has to be done very carefully so th at the proper congressional authority and authorization is maintained, and so that 

the President has some general discretionary authority, which I 

think the public, who would purchase the bonds, would want.

It may very well be tha t there will be people who will want to 

contribute directly to the obligations of the U.N. and not be limited 

by congressional authorization.

Tha t would involve direct contributions to the United Nations, 

which is something to face when all of us face the broader question 

of a larger source of income for the United Nations.

Senator Morse. It is a very, very helpful statement.

MODIFICATION OF THE LEGISLATION

Mr. E ichelberger. I would like to supplement my statement with 

some comments as a result of the hearing today, if tha t is not secondguessing.

Senator Morse. I was just going to say—you are ahead of me— 

that I would like to have a supplementary prepared statement from 

you—and, as it was ruled this morning, this record will be kept open 

for a week. I also would like to have you, along with such advisers 

as you might want to call in, take this bill, and in ligh t of the discussion tha t we have had today, make some suggestions for redrafting 

the legislation in case the committee decides this step would be wise.

Since the noon hour I have talked to three members of the committee, and they expressed the view tha t some redrafting was necessary.

I have not had a chance to see Senator Clark, because he left to 

go to Pennsylvania, but I shall see him when he returns.

I want to carry out the objectives of the bill as fa r as my own senatorial position is concerned. I want to change the language form 

in order to get that one vote over 50 percent. That is the only vote 

tha t is important.

Mr. Eicitelberger. Right.

Senator Morse. And also my record consistently over the years has 

been one of trying to see to it tha t we work the check-and-balance 

system. In the long run I believe that is the best way to support the 

program.

If you keep that system working, you will have much less trouble 

with any program than you would have if you tried in some way to 

circumvent it, and I know you have no intention of doing that.

However, I fully appreciate this last point tha t you have made in 

regard to this area of giving the President emergency power, which 

is what we would do with our contingency fund. But even in connection with the contingency fund, we have certain restrictions that 

we impose on the President, and I think at least those ought to be 

incorporated in this bill, and I have no doubt they would be.

So I hope you will give a little more thought to that. You can 

either make this part of your supplemental statement for the record 

or you can send it directly to the committee for our consideration in 

executive session when we discuss the bill.
UNITED NATIONS PEACE BONDS 81

Mr. Eichelberger. I might do both because if this is only open for 

a week, it will take a little longer than a week to consult with some 

authorities with whom I would like to consult.

Senator Morse. You can do both.

I do not speak for the committee and I do not speak fo r the chairman. I am just acting chairman. But I think th at the chairman this 

morning suggested a week, and I suppose he has in mind an adjournment da te; if we are going to get anywhere with consideration of this 

bill in executive session of the committee, we ought to be in a position 

to start it shortly after a week has passed.

So let us have something in a week, and then later give us the additional memorandum that I have suggested.

(The above-mentioned supplemental statement is as follows:)

You have raised some pertinent questions, Mr. Chairman, concerning the 

inte rpretation of paragraph (c) of S. 2818, which states that the “Amounts 

realized by the Secretary of the Treasury from the sale of peace bonds shall 

be deposited in a special fund in the Treasury, and shall be available for use 

by the President of the United States in supp ort of the activities of the United 

Nations.”

You have raised the question as to whethe r or not the President can use this 

money for any United Nations purposes he wishes, at his own discretion, or 

whether any amount so used must follow congressional authorization. The 

witnesses th at have ap peared today on behalf of this legislation have taken quite 

different views. On one side are those who would like to have the money to he 

used by the President entirely at his own discretion and thus in effect make 

possible contributions to United Nations activities in addition to those autho rized by the Congress. At the other extre me is the narrow interp retation of the 

Tre asury that the P resident can use the money only to pay for United Nations 

expenses authorized by the Congress. In the la tte r case, practically speaking, 

there is not to much difference between money rais ed through tax ation and 

money borrowed from the American public thro ugh peace bonds, which must be 

paid back at 2 percent interest. There is, however, an inte resting moral difference. People who buy peace bonds will have a gre ate r sense of participation in 

the program of the United Nations tha n otherw ise.

This hearing, Mr. Chairman, shows th at much thought needs to be given to 

the meaning of paragra ph (c).

I wonder if there is not a middle course between the extre me points of view 

presented today. I do not believe that any of the money realized by the peace 

bonds would be used by the President to defray any of the U.S. sha re of the 

regular budget of the United Nations, which is voted by the Congress. And in 

the extraord inary items, items for UNEF and the Congo, for illustra tion, it is 

the position of the Government of the United States that such emergency peacekeeping expenses are as legally binding upon the members as the regula r budget. 

The Int ern ational Court of Justice in an advisory opinion on July 20 sustained 

this view. However, emergencies may arise suddenly. The peace of the world 

might depend upon the U.N. acting instantly. It might very well be that the 

fund at the disposal of the President from the sale of peace bonds be used by 

him in such emergencies in support of peacekeeping activities of the United 

Nations which are consistent with American public policy. Authorization for 

the ir use could be soug ht a fte r th e fact.

Let us assume, Mr. Chairman, that the peace of the world might depend tomorrow on the United Nations interposing a U.N. “presence” and a peace force 

between the two states th at grew out of the trus t area of R uanda-Urundi in order 

to prevent violence. Such a step to be effective migh t need to be taken overnight. The President should be able to use money from the peace bond fund 

to help finance such emergency peacekeeping operations withou t having to seek 

the advance authorization of Congress.

It may be th at some of the fund s from the peace bonds will be used by the 

President toward payment of U.S. pledges to those parts of the U.N. budget 

where contributions are voluntary.

In summation, Mr. Chairman, in the main the fund s from the sale of peace 

bonds should be expendable for purposes authorized by the Congress. But 

there should be room for the Pre sident to maneuver to make emergency con-
82 UNITED NATIONS PEACE BONDS

tributions. Within the realm of public policy the President should have considerable authority to use these funds for the maintenance of world peace.

Mr. Eichelberger. All right.

Senator Morse. Thank you very, very much.

Mr. Eichelberger. Thank you, Senator.

Senator Morse. Our last witness will be Dr. Paul Cooke, national 

vice chairman of the American Veterans Committee. Dr. Cooke, we 

are delighted to have you with us. You may proceed in your own 

way.

STATEMENT OF PAUL COOKE, NATIONAL VICE CHAIRMAN, 

AMERICAN VETERANS COMMITTEE

Mr. Cooke. Mr. Senator, this is AVC on the U.N. bond issue.

This is a statement of the American Veterans Committee before the 

U.S. Senate Committee on Foreign Relations in support of S. 2818, 

to authorize the Treasury to issue peace bonds to the American public.

My name is Paul Cooke. I am national vice chairman of the American Veterans Committee (AVC), an organization in which I have 

held voluntary elective offices for the past 15 years. At the District 

of Columbia Teachers College, Washington, D.C., I serve as acting 

dean and professor of English.

The American Veterans Committee appreciates this opportunity 

to express its views on the subject of the U.N. bond issue, especially 

on the question of permitting individuals to purchase bonds.

Our executive director, Mr. J. Arnold Feldman, appeared before 

this committee on Monday, February 19, 1962, to expres the vigorous 

support of our organization for the proposed purchase of $100 million worth of United Nations bonds by the United States. We are 

pleased that the U.S. Senate approved the resolution.

AM ER ICAN VET ERA NS CO MM ITT EE’S SUPPORT OP THE U .N .

AVC, which is an organization composed of honorably discharged 

veterans of World Wars I and II and the Korean conflict, has steadily 

supported the United Nations. Beginning with our first national 

convention in Des Moines, Iowa, in 1946, our platform has always 

contained a platform plank of strong support for the concept of peace 

through the United Nations. At our 14th national convention in 

Atlantic City last month, we unanimously adopted the following 

platform plank:

The United Nations continues to be man’s best hope fo r peace, and support 

of the United Nations must be an essential part of our foreign policy.

At the same convention AVC’ers from many parts of the country 

approved a resolution entitled “The Purchase of United Nations 

Bonds by Private Individuals and Non-Governmental Institutions 

and Organizations.” Pa rt of this resolution, which in full is appended to my statement, supports the position tha t “the opportunity 

be given to the American public to subscribe to such bonds.”

Senator Morse. May I interrupt to say that the entire resolution 

will be printed at this point in the record.

(The resolution referred to is as follows:)
UNITED NATIONS PEACE BONDS 83

American Veterans Committee (AVC)

Washington, D.C.

AVC Resolution on “The Purchase of United Nations Bonds by Private

Individuals and Nongovernmental Institutions and Organizations” 

(Adopted at the 14th annual convention in Atlantic City, June 1962)

The resolution by which the United Nations General Assembly authorized the 

creation and sale of United Nations bonds—Resolution 1739 (XVI) adopted 

December 20, 1961, authorizes the Secretary General to issue United Nations 

bonds in accordance with the terms and conditions set forth in the annex to 

tha t resolution.

Paragraph 7 of the annex to Resolution 1739 (XVI) reads as follows:

“The bonds shall be offered to states members of the United Nations and 

members of the specialized agencies and of the International Atomic Energy 

Agency, as well as to the official institutions of such members, and, if the 

Secretary General, with the concurrence of the Advisory Committee on Administrative and Budgetary Questions shall so determine, to nonprofit institutions 

or associations.”

While at least one of the proposals relating to purchase of United Nations 

bonds presently before the Congress includes a provision tha t the opportunity 

be given to the American public to subscribe to such bonds, there is no certainty tha t such a provision will survive the legislative process. If such a 

provision is incorporated in the final legislation, the American Veterans Committee welcomes the provision, and urges the American public to subscribe, on 

whatever terms may be contained in the legislation.

The American Veterans Committee calls attention to the circumstance that, 

despite the activities of many groups whose aims include support of and 

strengthening of the United Nations, there has been as yet no concerted move to 

open the possibility of participating directly in the important activity of financing the United Nations to interested American private individuals, and nongovernmental institutions and organizations.

The American Veterans Committee therefore calls for the necessary planning 

and negotiations with the office of the Secretary General of the United Nations 

so that, if there is no provision for public subscription in the legislation, a 

nonprofit association which will meet the criteria set forth in paragraph 7 of 

the annex to Resolution 1739 (XIV) may be promptly established, and so that 

interested individuals, institutions and organizations may be able to subscribe 

to the United Nations bonds.

The American Veterans Committee urges tha t the Federal Government take 

whatever action may be appropriate so th at United Nations bonds in the hands of 

private individuals or corporations receive the same freedom from Federal 

income tax now granted to certain municipal securities, so tha t the 2-percent 

interest payable on the United Nations bonds may be tax free.

The American Veterans Committee announces its willingness to participate 

actively and to cooperate with other interested groups in the establishment of 

such a nonprofit association.

Mr. Cooke. Such an opportunity would be available if Senate 2818 

introduced by Senator Clark, and supported by many other distinguished Senators, were to be approved by the Congress. *

We have supported the U.N. bond issue for we consider adequate 

funds for the United Nations a significant factor for success of its 

program of peace among the nations of the world. We have supported the U.N. bond issue because this means of providing money for 

the U.N. operation is a reasonable proposal.

Now we support the legislation to make it possible for the individual 

American citizen to purchase peace bonds. Such action is evidence 

of further support for the U.N., is similarly a reasonable and practical 

financial proposal, and gives the U.N. a broad-base foundation and 

support not only from member states but from many individual 

persons who treasure this means to peace.
84 UNITED NATIONS PEACE BONDS

What is the question now ? The question is no longer the matter of 

whether the United States should purchase the U.N. bonds, for the 

Senate has voted that.

May I observe parenthetically, of course, the House has not. But 

the question before this committee, at least, is purchase by individuals 

of the bonds. The question is on the bill to authorize such.

OPPORTUNITY FOR U. S. CITIZENS TO SUPPORT THE U .N .

AVC believes the purpose inherent in the legislation—to provide 

an opportunity for persons individually to support the United 

Nations—is sound. Persons should be allowed, in fact encouraged, to 

support the U.N. They can indicate their support of the U.N. They 

can indicate their support by using their money to buy the bonds. We 

consider the title of the bonds—“Peace Bonds”—symbolically appropriate. And we consider the handling of these bonds in the manner 

of the U.S. savings bonds and their issuance by the U.S. Treasury as 

entirely reasonable. The denominations of the bonds are such as to 

provide for real “grassroots support.” Further, the long-term nature 

of the bonds and the relatively low rate of interest will both attra ct 

persons honestly in sympathy with the cause.

AVC, without any reservations, urges the Senate Foreign Relations 

Committee to vote support for S. 2818, to authorize individuals to 

purchase from the Treasury the U.N. peace bonds.

o ppo r tu n it y fo r n on governm en tal organiz ati ons to su pp ort

TIIE U .N .

I might, add to that, Mr. Chairman, the reading of one passage from 

the attached resolution.

The resolution is entitled, “The Purchase of United Nations Bonds 

by Private Individuals and Nongovernmental Institutions and 

Organizations.”

I read this provision because I believe that some of the Senators this 

morning, Senator Hickenlooper raised appropriate questions, and I 

wanted to indicate tha t AVC does support the sale of these bonds, not 

only through the Treasury of the United States, but would support it 

if it is possible for a nonprofit organization to be set up by the United 

Nations and for individuals to buy and to support the United Nations 

through this nonprofit organization.

Our resolution observed the legal machinery tha t the U.N. must 

go through, through its own resolutions and its own regulations, and 

then in the fourth para graph I s ay :

While at lea st one of the proposals relatin g to purchase of United Nations 

bonds prese ntly before the Congress includes a provision that the opportunity 

be given to the American public to subscribe to such bonds—

tha t is this bill here now—

there is no c ertain ty that such a provision will survive the legislative process.

I do not want to put any dim on it. I have every hope that it will 

survive the legislative process, but we make the observation at this 

late time in the 2d session of the 87th Congress tha t it might not.

If such a provision is incorporated in the final legislation, the American Veterans’ Committee welcomes the provision and urges the American public to 

subscribe, on wh atever terms may be contained in the legislation.
UNITED NATIONS PEACE BONDS 85

Now, the next clause:

The American Veterans Committee calls attention to the circumstances that, 

despite the activities of many groups whose aims include support of and 

strengthening of the United Nations, there has been as yet no concerted move to 

open the possibility of participating directly in the important activity of financing the United Nations to interested American private individuals, and nongovernmental institutions and organizations.

The American Veterans’ Committee, therefore, calls—

and this, of course, is not directed to this committee now—

for the necessary planning and negotiation with the Office of the Secretary General of the United Nations so that, if there is no provision for public subscription 

in the legislation, a nonprofit association, which will meet the criteria set forth 

in paragraph 7 of the annex to Resolution 1739—

tha t is the U.N. General Assembly’s resolution setting out the issuance 

of the bonds—

may be promptly established, so tha t interested individuals, institutions, and 

organizations may be able to subscribe to the United Nations bonds.

I make tha t observation because I do not think it ought to be put, 

as it may have been suggested by one of the Senators this morning, on 

an either/or proposition. I do not know whether it is possible to have 

our cake and eat it.

In other words, I believe that it is possible fo r the U.S. Senate to 

go on and approve S. 2818 and make it possible for the American 

public to buy bonds through the Treasury as proposed in this legislation, and, at the same time, for other groups to persuade or to try 

to establish the nonprofit organization which would negotiate directly with the United Nations for the sale of bonds to people who 

would want to buy their bonds from the U.N.

Again, I say, 1 repeat myself, I do not think it is either/or.

I do not think the implication of the Senator’s remarks that we must 

either possibly abandon the consideration in the Senate of S. 2818 and, 

therefore, turn to the nonprofit association—I believe it is possible to 

work along both roads.

So I would urge for the American Veterans Committee, Mr. Chairman, that the committee make every effort to approve this legislation 

tha t makes it possible for me as an American citizen to buy a peace 

bond from the U.S. Treasury just as I get savings bonds each month, 

but, at the same time, if I want to work for the nonprofit association 

any buy a bond directly from the U.N. through the nonprofit association, I would treasure that opportunity, too.

I urge you to consider that.

I am glad, Mr. Senator, tha t you have kept the record open a week 

or more, because there are quite a number of issues of authorization, 

of limitations of funds, tha t have been raised this morning and this 

afternoon tha t A VC has not had an opportunity to consider, and I 

would like to have time to consider it.

We have not reviewed this question of whether the money, for example, should be limited to peace and security, which Senator Hum ­

phrey mentioned this morning and Senator Sparkman, or whether 

the President’s authorization should be limited, as there are other 

limitations in the contingency act.

We would like the opportunity to augment this statement with a 

further declaration of views within this period of time.

(The supplement referred to is as follows:)
86 UNITED NATIONS PEACE BONDS

American Veterans Committee (AVC)

Washington, D.C.

AVC on the U.N. Bond Issue—Supplementary Statement

Gentlemen, the American Vete rans Committee (AVC) presented a stat eme nt 

of its position on the U.N. peace bond legisla tion to the Senat e Foreign Relations 

Committee on Thursday, July 12, 1962. On the questions th at arose at the 

morning and aft er sessions of the committ ee’s h earing , I am pleased to provide 

this supplemen tary stateme nt in behalf of AVC.

The questio ns th at arose are abou t aut hor ization and app ropr iatio n, purpose, 

and use of the money, amount of money to become a vailable, the rela tion ship of 

the proposed U.S. bond issue to the United Natio ns bond issue, and to th e e xisting 

U.S. app ropr iation for the U.N.

AVC sets for th views on these additional subje cts and reaffirms its suppo rt 

of the U.N. bond issue and the U.S. peace bond proposal. In our first stat eme nt 

we attach ed a resolu tion indic ating the position of AVC on the bond issue question, a position hamme red out at our 14th ann ual convention in Atla ntic City 

las t month.

Aut horisatio n

The Congress should auth oriz e the Pre sident to expend the sums from the 

$100 million bond issue with in the l imits of a sta ted purpose, which the Congress 

should declare. Below, AVC suggests purpo ses and use of the bond issue money.

AVC has alway s supported the American Governm ent and the Fed eral system 

of checks and balances. There is no need, we judge, to depar t from these basic 

princip les ; we therefo re urge auth oriz atio n.

Appropriations

AVC urges, of course, th at the Congress app rop riat e the sum of $100 million 

for the purc hase of th at a mount of U.N. bonds.

AVC vigorously objects to any action th at might reduce the cur ren t appropriation of the United Sta tes to the U.N. as a member sta te contrib utin g to the 

reg ular day-to-day, yeab-to-year operation.

Correspondingly, we should expect th at t he bond issue would rend er unnnecessary U.S. appr opriations for special U.N. operation s like the Congo and Gaza 

str ip p rojects .

The U.S. peace bond sale

The sale of the U.S. peace bonds by the U.S. Treasur y, as proposed in the 

Clark-Ko walski legislat ion, would be a pa rt of the $100 million bond issue (p ur ­

chased by th e United States from the U.N.).

The amount of the public sale would not reduce the $100 million U.S. bond 

purchase n or affect the amou nt of money t ha t the Un ited States would be making 

available to the U.N. by means of the purch ase. The purc hase by the public 

would be one way th at American citize ns migh t show the ir supp ort for the U.N. 

Of course, every $25 or $50 or $1,000 put in to the bonds by t he citizen reduces by 

th at much the actual out lay by the Trea sury .

Purp ose and use for the bond money

AVC has strongly supported the orga nization of the U.N .; the work of the 

specialized agencies in health, food dist ribu tion , science, and ed ucati on ; the 

peace and secu rity proje cts of the Congo, the Gaza strip, etc. Inasmuc h as the 

problem of adeq uate financing for the U.N. ha s aris en out of the peace and 

security projects, we are especially inte rest ed in the bond issue money being 

used to pay for these costly but neces sary proje cts. Likewise, we are vitally 

interested in the cont inuation and expan sion of U.N. health-education -sciencefood and nut ritio n-cultu re program. And, of course, the Organization mus t be 

guaranteed the money to run from Monday thro ugh Fri day and again on Sa tur ­

day a nd Sunday.

The nonprofit org anis atio n proposal

AVC does not believe th at we make a choice between the U.S. peace bond 

proposal and the possibility of sale of bonds by a nonpro fit orga nization which 

may be authorize d to p urch ase bonds from the U.N. Both are possible and must 

become, we have resolved in convention, a reali ty.

The United States can purchase bonds and sell them to citize ns who wan t 

to buy them. Other person s can organize the nonprofit orga nization and sell
UNITED NATIONS PEACE BONDS 87

U.N. bonds. The United States need not wa it for the nonprofit org aniza tion; 

the latter need not sit back for the Government to act.

Again, we note that no reduction in U.N. assessment and payment of 

ordinary member-state contribution should obtain for the United States should 

an American nonprofit organization be formed to sell bonds. We are essentially 

looking for ways to maintain the U.N. in adequate financial shape without 

undue burdens falling on our country—and not for ways to reduce our obligations at the expense of this world peace organization.

In summary, for the American Veterans Committee (AVC), I urge the Senate 

Foreign Relations Committee to approve and recommend the Clark bill, S. 2818. 

We have urged some changes in the proposal, an amended version that in no 

way would weaken its intent and possible accomplishment but would be consistent with the country’s historical position on authorization. I have offered 

some interp retations and furth er suggestions to spell out purpose and use of 

the money accru ing from bond sales—purpose and use to help the U.N. to 

continue both its forward huma nitarian program and an encouraging peaceand-security operation.

At the same time, this country must not use the bond issue to reduce its net 

suport in any fashion or to avoid its obligations. And the supp ort of the U.S. 

peace bond sale is in no way contradictory of support of the sale of U.N. bonds 

directly by the U.N. to nonprofit organizatio ns.

Yours truly,

Paul Cooke, National Vice Chairman.

Senator Morse. Dr. Cooke, I am glad to have this testimony, and 

I welcome a supplemental memoradum from you on any of the points 

that were raised this morning, and particularly on this last point that 

you raised yourself.

The record will be kept open until 5 p.m., 1 week from today, I now 

officially rule.

LEGAL OBSTACLES TO PASSAGE OF TH E BIL L

In closing this hearing, it might be helpful to those preparing supplemental memoranda if I make these comments:

First, let me say to counsel for the committee that I shall officially 

now request counsel for the committee to prepare a memorandum for 

the committee dealing on Dr. Cooke’s query whether there are any 

legal obstacles that would be in the way of having S. 2818 in its present 

form passed, which provides for the sale of U.S. Treasury peace bonds, 

and, at the same time, have a procedure allowing voluntary, nonprofit 

organizations also to sell peace bonds.

I would like to have counsel also include in tha t memorandum, 

hypothetical as it is, the authority of the United Nations under the 

resolution passed in the last General Assembly to set up a program 

of bond sales in the various member countries.

(The memorandum referred to follows:)

Memorandum for the record.

Fr om : Carl Marcy, chief of staff, Senate Foreign Relations Committee.

Su bje ct: Response to questions posed during hearings on S. 2818.

Following testim ony by the representativ e of the American Vete rans Committee on S. 2818, the actin g chairman, Senator Morse, requested the Foreign 

Relations Committee staff to prepare a memorandum on these two points: (1) 

whethe r th ere are legal obstacles to pursuing the course of approving the revised 

S. 2818—to auth orize issuance and sale of peace bonds to the public by the 

U.S. T reasury—simultaneously with persuading or establish ing a nonprofit association in this country to accept United Nations bonds, if offered; and (2) the 

autho rity of the United N ations und er the resolution of the las t General Assembly 

[173 9(XVI)] to sell U.N. bonds to individuals in member countries. This
UNITED NATIONS PEACE BONDS

response is based upon information received informally from the Office of the 

Legal Adviser of the State Departm ent and from the U.S. mission to the United 

Nations.

In answ er to the first question, there app ear to be no legal obstacles to the 

simultaneous course of action described above. On the other hand, certain 

relevant factors should be noted. Acting Secretary General U Thant is described as most relu ctant to employ any means of offering U.N. bonds other 

than to governments and the ir official institutions. Apparently, only as a last 

resort would he seek th e agreement of the Advisory Committee on A dministrative 

and Budgetary Questions to offer the bonds to “nonprofit institution s or associations.” The definition of this las t phrase is not entirely clear, but it seems 

that an organization like the Ford Foundation was what the drafter s had in 

mind. While it is most unlikely th at U.N. bodies or indiv iduals would pick 

out or seek to rule on the eligibility of any specific organization, it might be 

mentioned th at there would be no legal objection in this country to the American 

Association for the United Nations filling the need contemplated by the AYC.

In answ er to the second question, General Assembly Resolution 1739 (XVI) 

conta ins no autho rity for the U.N. to set up a program of bond sales to individuals in the member countries. Should dire ct sales to individuals be contemplated—and the U.N. Secretary General is strongly opposed to this concept—additional authority would have to be sought from the member countries 

in the General Assembly.

The pertinent paragraph 7 in the annex to Resolution 1739 (XVI) read s as 

follow s:

“7. The bonds shall be offered to states members of the United Nations and 

members of the specialized agencies and of the Intern ational Atomic Energy 

Agency, as well as to the official institutions of such members, and, if the Secretary General, with the concurrence of the Advisory Committee on Administrativ e and Budgetary Questions, shall so determ ine, to nonprofit institutions 

or associations.”

PEACE BONDS AS A SUBST ITU TE FOR CONGRESSIONAL APPROPRIATION S FOR 

THE U .N .

Se na tor Morse. Also I h ope t hat in prep aring me moranda fo r su ppleme nta l statem ents the sponsors of the legislation would keep in 

min d these po int s th at are tro ub lin g me as acti ng chairman.

T am conc erned abo ut the possibility th at a bond sales pro gra m 

migh t be used as a sub stitut e for dir ect a pp ropriatio ns by the Congress 

for the paym ent o f the costs of the so-called regu lar bu dget activities 

of the Unite d N atio ns.

I am fa m ili ar w ith the way C ongress sometimes mak es use of w hat 

T, for w ant of a be tte r te rm, ca ll escape hatches. It h as a resp onsibility 

to su pp or t the regu lar activities of th e United Nations.

I t hi nk ou r testim ony tod ay shows th at the sponsors of this bill w ant 

us to do more th an th at , th at the y think we should do more than 

that.

We should maintain the regu lar activities , but there are so man y 

oth er needed services in the world th at can be pe rfo rm ed effectively 

by the Un ite d N ations that, we need more money fo r those.

And it is very difficult to get the Congres s to ap pr op riate adequate 

fun ds, fo r example, fo r child car e in some remote pa rt of the wor ld, 

for disease con trol, fo r some of our needed food pro gra ms , as contem pla ted by SU NFE D .

Th ere for e, any mate ria l we can get into this record th at will help 

us both procedurall y and substan tively in connectio n with using the 

money obtained from the sale of bond s for these very m uch desired, but 

over and above the so-called re gu lar budget, act ivities of the Un ite d 

Nation s sh ould be incl ude d in these m emorand ums.
UNITED NATIONS PEACE BONDS 89

It also gives me concern in regard to the attitude of the members 

of the United Nations in connection with their payments of their 

official share of the costs of operating the United Nations.

PURCHA SE OF BONDS BY CITIZE NS OF FOR EIGN GOVERNM ENTS

Suppose, hypothetically, there should be set up a United Nations 

worldwide bond sale program among the citizens of the member 

countries.

Should the proceeds from those bond sales be in addition to the reg ­

ular assessments tha t the member countries owe, or should the proceeds from those bond sales constitute a deduction of what each country would otherwise have to pay by way of its regular assessment?

We have to be careful, i t seems to me, tha t we do not work at crosspurposes here.

PROCEDURE OF RAISING MO NEY FOR TH E U .N .

We are dealing in pa rt with the procedural question of how to 

raise money for the support of needed United Nations activities.

We recognize that the procedure that has been followed heretofore 

of relying upon the countries to pay their regular assessments does 

not give us adequate funds- to meet the needs of the United Nations 

when a Middle Eas t or Congo-type emergency arises. Countries such 

as Russia, France, Belgium, and others take a position tha t they will 

decide for themselves whether or not they are going to support the 

peace activities of the United Nations. Thus we find them delinquent 

m their payments for supporting peace activities.

We somehow had better work out a procedure to go the bond route 

whereby it is made very clear in the legislation tha t the funds raised 

by the bonds may be used, not necessarily so, but may be used, for 

services performed by the United Nations over and above its services 

covered by the regular budget.

Mr. Eichelberger earlier this afternoon made mention of the special 

services of the United Nations that fall under the jurisdiction, as fa r 

as the American delegate is concerned, of the American official in 

charge of our share of it, Paul Hoffman.

That is the program tha t I referred to this morning when I said 

that at each General Assembly there is alw’ays a special pledging 

negotiating session to which all the member nations come. Afte r 

discussion and negotiation each nation announces the amount of 

money th at it is going to pledge to help pay the cost of those special 

services. It does not involve an assessment. That is all a voluntary 

matter.

We have been making a very large contribution to tha t program. 

Some of the other countries have not been making any, or very little.

What I am seeking to do, Dr. Cooke, is to point out here t ha t we 

have to be careful tha t our bond approach does not defeat a much 

larger program represented by a very great need, and give the pa rliaments in the various countries an escape hatch using the bond sales 

as a basis for deducting from the appropriations tha t they otherwise 

would make.
90 UNITED NATIONS PEACE BONDS

PURPOSE OF TH E LEG ISLATI ON

One of the purposes of this legislation, if I understand it correctly, 

is to help enlarge the services of the United Nations in the fields in 

which we all know a service needs to be rendered, but for wh ich there 

is no hope of such service under the present limited funds of the 

United Nations.

It is the feeling of the sponsors of t his legislation that if you could 

get a bond issue program adopted, the hearts of the people of the 

world would respond to the need by causing the individuals to purchase the bonds for those special services.

I thin k that is all I wish to say b y way o f suggestion to the sponsors 

of this bill as to how th ey can be he lpf ul to us by w ay of supplemental 

statements.

I f there is not any thin g fu rth er, the h earing is closed and the record 

wi ll be kept open fo r 1 week.

(Whereupon, at 3:45 p.m., the committee adjourned, subject to the 

call o f the Chair.)
SUMMARY INDE X

(List of witnesses appears alph abetically in contents)

Page

Activities of the U.N. for which the fund is to be used, outlining the_____ 32

Alliance for Progress_____________________________________________ 01

Auth ority of the President to use the fun d_______________________ 19, 41, 79

Capehart, Senator Homer E .:

Examination of witnesses:

Carlock, John K_________________________________________ 28-29

Clark, Hon. Joseph S___________________________________17, 21-22

McGhee, lion. George C________________________________ 28, 35, 40

Citizens of foreign governments, purchase of bonds by________________ 8, 89

Clarification of inte nt of the bill________________________________ 34, 37, 50

Clarification of the title “Peace Bonds”_____________________________ 20

Congressional appropriation for the U.N .:

Peace bonds as a substitute for_________________________________ 88

The fund as an addition to____________________________________ 21

Congressional authorization , need for_______________________________ 42

Congressional restriction s on the fun d______________________________ 21

Contributions to the United States for supp ort of the U.N., executive

branch memorandum on________________________________________ 40

Cost of the U.N. to the United Sta tes_______________________________ 68, 73

Desire of the public to help the U.N________________________________29, 76

Department of State endorsement of the legislation__________________ 31,38

Disarmam ent, economic consequences of____________________________ 56

Disposition of th e proceeds of peace bonds___________________________ 9, 32

Divisions of the U.N. budget______________________________________ 78

Economic Development, the Special U.N. Fun d for___________________ 40

Esta blishment of a precedent through the issuance of peace bonds_____ 22

Financial crisis of U.N___________________________________________ 67

Fiscal activities of the U.N__________________________________________ 19

Food for peace__________________________________________________ 60

Hickenlooper, Senator B ourke B .:

Examination of witne sse s:

Carlock, John K_________________________________________ 29

Clark. Hon. Joseph S_______________________________ 14—17,18-19

McGhee, Hon. George C_______________________ 28, 30, 38-40, 43-46

Humphrey, Senator Hubert H .: Examination of wi tness: McGhee, Hon.

George C________________________________________________ 35-36, 41-42

Importance of the proposed legislation______________________________ 77

Independent income for the U.N___________________________________ 78

Individual expressions of intere st in the U.N________________________ 29, 76

Interest rates on peace bonds_______________________________ 5, 6,11,12, 49

Int erp retation of the bill_________________________________________ 41

Legal obstacles to passage of the bill________________________________ 87

Legislative histo ry of the bill_____________________________________ 2

Legislative justification for retu rning gift moneys____________________ 37, 39

Limitatio ns of the bill___________________________________________ 22

Limitatio ns on the Pre sident_____________________________________ 19

Modification of the legislation_____________________________________ 72. 80

Money derived from sale of bonds, proposed use of___________________ 17, 28

Morse, S enator Wayne:

Examination of witne sse s:

Clark, Hon. Joseph S________________________________ 7-14, 19-21

Eichelberger, Clark M______________________________________80-81

Goodman, Leo____________________________________________ 72-75

McGhee, Hon. George C_____________________________ 31, 37, 40-41

Snyder, Edw ard F________________________________________ 47-50

(91)
92 SUMMARY INDEX

Page

Nonprofit organizations in member countries, purchase of peace bonds by— 8, 31

Obligation of the United Nations__________________________________ 18

Opportunity f or U.S. citizens to supp ort the U.N---------------------------------- 84

Organized labor, participation of, in previous bond p lans----------------------63-66

Peace bonds as an investment_____________________________________ 11

Poll of public opinion in Penn sylv ania ______________________________ 3

Possible result of the peace bond bill________________________________ 12

Presiden tial authority as contained in the bill__________________ 41,47, 73, 79

Procedure of raising money for the U.N_____________________________ 89

Proposal th at peace bonds be issued by the U.N_____________________ 14,43

Proposed value of peace bonds___________________ __________________ 2, 24

Psychological effect, of the peace bond______________________________ 6,12

Public opinion regarding the United Nations________________________ 2, 29

Purc hase of peace bonds by citizens of foreign governments------------------ 8, 89

Purpose of S. 2818_____________________________________________5, 45, 96

Question of committee jurisdiction over this legislation----------------------- 17

Relationship between U.N. bond purchase and peace bonds____________ 10, 27

Repayment of the bonds__________________________________________ 16

Resolution by American Veterans Committee on purchase of U.N. bonds— 83

Resolutions adopted by United Auto W orkers________________________ 51

Responsibility for repayment of bonds______________________________ 44

Risk of damage to U.S. policy_____________________________________ 7

S. 2818, as revised, tex t of_________________________________________ 1

Sparkm an, Senator J oh n:

Examination of witnesses:

Clark, Hon. Joseph S________________________________17,18, 20, 22

McGhee, Hon. George C___________________________________ 28

Specific prpose of the fund derived from the sale of peace bonds________ 33

United Nations emergency force operations_________________________ 67

Use by the President of money from bonds_____________________ 41, 47, 73, 79

o