r. CONNALLY, from the Committee on Foreign Relations, submitted the following

REPORT

[To accompany S. J. Res. 212]

The Committee on Foreign Relations, having had under consideran a resolution (S. J. Res. 212) providing for the extension of a loan the United Nations Organization in accordance with the loan agreent between the United States of America and the United Nations, ned at Lake Success, N. Y., March 23, 1948, unanimously report resolution to the Senate, without amendment, and recommend t it do pass.

1. MAIN PURPOSE OF THE BILL

The main purpose of the resolution is to authorize a loan not to ed $65,000,000 by the United States to the United Nations, in ordance with the agreement entered into between our Government the United Nations on March 23, 1948. The money is to be solely for the construction of the United Nations headquarters New York City, including necessary architectural and engineering k, landscaping, underground construction, appropriate improvet to land and approaches, and expenses incident thereto. The is without interest and is to be repaid in annual installments from

to 1982.

2. ACTION TAKEN BY THE COMMITTEE

nate Joint Resolution 212 was referred to the Committee on ign Relations on May 4, 1948. Chairman Vandenberg, on May 1948, requested Senators Connally and Hickenlooper to serve subcommittee to study the matter. In view of the action taken e House Foreign Affairs Committee and the careful study given subject by the United Nations, the subcommittee considered c hearings unnecessary. On June 10, 1948, after a consideration e issues involved, the subcommittee considered Senate Joint

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Resolution 212 and voted to report it to the committee for favorable action. The committee on June 15, 1948, adopted both the recommendations and the report of the subcommittee as its own.

3. SUMMARY OF PROVISIONS OF SENATE JOINT RESOLUTION 212

Senate joint resolution provides that:

(a) The President is authorized to bring the headquarters loan agreement into effect, following appropriation of the necessary funds, by the Congress. The text of the loan agreement is then quoted in full.

(b) Sums advanced under the loan agreement by the United States to the United Nations are to be disbursed by the latter within 90 days after their receipt. Funds not disbursed during that period are to be returned to the United States within 30 days thereafter. This provision is an enlargement upon article 2 of the loan agreement.

(c) If the headquarters district should cease to be used as the seat of the United Nations, the United States is entitled to recover from the land and buildings in the district, in advance of all other creditors of the United Nations, any indebtedness incurred under the loan agreement that is still unpaid.

(d) An appropriation of $65,000,000 to the Department of State for the purposes of the joint resolution is authorized.

4. BACKGROUND OF THE LOAN AGREEMENT

(a) Early steps.-The United Nations Charter, adopted at San Francisco on June 26, 1945, left the location of the United Nations headquarters to the General Assembly. Unanimously, on December 10 and 11, 1945, the House of Representatives and the Senate of the United States invited the United Nations to locate its seat and permanent headquarters in the United States. The invitation was accepted by the General Assembly in February 1946.

(b) The selection of New York.-Throughout 1946 the United Nations committee investigated various sites in the United States, particularly New York, Philadelphia, San Francisco, and Boston. It finally decided to accept a gift offer of an area in midtown New York made available by Mr. John D. Rockefeller, Jr., and the city of New York. On February 26, 1947, the Congress of the United States exempted the gift from gift taxes. The first meeting of the Headquarters Advisory Committee was held under the chairmanship of Ambassador Warren R. Austin in January 1947.

(c) The headquarters agreement.-An agreement covering the establishment of a permanent headquarters of the United Nations upon the New York site and also providing for the control of the headquarters was negotiated and signed between the United States and the United Nations on June 26, 1947. On August 4, 1947, both Houses of Congress unanimously authorized the President to bring the headquarters agreement into effect.

(d) The headquarters loan.-In August 1947 the United Nations Headquarters Advisory Committee requested the Secretary General to approach the United States on the matter of a loan. On October 29, 1947, after soliciting the views of appropriate congressional leaders, Ambassador Austin informed the Secretary General that the United

ates was willing to negotiate a loan on certain specific terms. The reement was signed by representatives of the United States and the nited Nations on March 23, 1948. On April 7, 1948, the President nsmitted it to the Congress.

On May 4, 1948, Senator Ives of New York introduced Senate Joint solution 212, authorizing the President to bring the loan agreement to effect on the part of the United States. The resolution was erred to the Committee on Foreign Relations.

5. METHODS OF FINANCING CONSIDERED

In normal times this type of a project would be financed by cash tributions of member nations; but critical dollar shortages make s an impossibility for most members of the United Nations. The possibility of private financing was carefully explored. It was and to be impractical because of the strong psychological objections placing the United Nations under obligation to private financial erests. It would not be consistent with UN dignity and prestige be the debtor of private interests. The legal impediment that vate creditors could not sue the United Nations would also be a ious deterrent to such a loan. Moreover, any private creditor uld be entitled to insist upon passing on the plans, and they would quire that UN members make a substantial initial contribution. ore construction could begin.

When governmental assistance with financing was investigated, it s emphasized that the International Bank for Reconstruction and velopment could make loans only to member nations or to business erprises with a guaranty of the government concerned. Neither Reconstruction Finance Corporation nor the Export-Import Bank ve the statutory authority to make the loan without specific conssional authorization.

6. THE UNITED STATES OFFER OF A LOAN

After a thorough study representatives of the Department of State, Treasury Department, and the Bureau of the Budget recommended t a direct loan by the United States was the most appropriate angement which could be made. Accordingly Ambassador Austin s authorized to state to the Secretary General that the President ld recommend to the Congress the granting of an interest-free dquarters loan of $65,000,000. Ambassador Austin so informed Secretary General in a letter dated October 29, 1947, in which he lained the proposed financing procedure.

7. TERMS OF THE LOAN AGREEMENT

The agreement between the United States and the United Nations March 23, 1948, provides that the United States will lend the ted Nations, without interest, a sum not to exceed $65,000,000, use in the construction of the United Nations headquarters on the York City site.

he loan will operate as follows: The United States will establish 55,000,000 credit against which the United Nations may draw as irements dictate. The United Nations Secretary General will

submit formal requests through the Secretary of State. All requests will be certified by the architect or engineer in charge of the building project as bona fide construction expenditures, which either

(a) have been at any time made by the United Nations or, (b) are due and payable, or (c) it is estimated will become due and payable within 60 days from the date of such request.

Any funds not used by the United Nations for construction purposes will be returned to the United States. No advances are to be made after July 1, 1951, unless the Secretary of State agrees to an extension. In any event, the expiration date of the credit will be not later than July 1, 1955.

Repayment of the loan is to be made out of the ordinary budget of the United Nations, according to a schedule beginning in 1951 and running over 31 years to 1982. If the United Nations does not require the entire $65,000,000, or is able to repay at a more rapid rate than provided by the schedule, adjustments will be made accordingly. During the period of indebtedness, the United Nations is enjoined from creating any mortgage, lien, or other encumbrance against the real property of the headquarters.

The agreement is to become effective on the date the United States notifies the United Nations that the Congress of the United States, with the approval of the President, has made available the necessary funds.

AIRPLANE VIEW OF THE PLAN FOR THE UNITED NATIONS HEADQUARTERS TO BE LOCATED ON THE NEW YORK CITY SITE

a. General Assembly.-This element consists mainly of a large auditorium for the plenary sessions of the General Assembly, seating the delegates and advisers of at least 70 member nations and 1,320 spectators and with provision for efficient circulation to galleries and adjacent secondary rooms and offices. Situated in the very heart of the site, it faces a landscaped plaza on the north, and is also accessible from the business court on the south.

b. Conference area. This long, low structure houses the three council chambers, three main conference rooms, and numerous smaller committee rooms, which, for reasons of efficient service and circulation, are grouped horizontally. As the

enter for numerous daily meetings, it must have direct connection with both the fices of the Secretariat (c) and the General Assembly hall (a).

c. Secretariat. In order economically to provide efficient and well-lighted office ccommodations for 4,200 members of the Secretariat staff, this building has been esigned as a skyscraper, 41 stories high. Placed at the business entrance court, is immediately accessible from Forty-second and Forty-third Streets, main teries for the commuting traffic of New York.

d. Library. This eight-story structure, erected by the city of New York in 947 and acquired by the United Nations, will, with appropriate alterations, be tegrated into the composition of the new group. It is capable of housing a orary of 325,000 books.

e. Delegations and specialized agencies.-The northern part of the site is left en for future building as required. This may include office buildings for the tional delegations and the international specialized agencies, which are not rt of the present project. Whenever they are erected, however, such structures Il not encroach upon the open plaza at the foot of Forty-seventh Street, which to be widened by the city of New York. The placing of all structures away from e property lines will make possible their future extension whenever this is reired by the growth of the organization.

The shaded area represents the program of the city of New York.-At its own exnse the city of New York has planned extensive improvements of the surroundg area, estimated by the city to cost $13,272,000. These include: (1) Construc-n of a tunnel under First Avenue along the entire length of the site, thereby noving, all heavy traffic from direct contact with the site; (2) relocation of the st River Drive, including construction of overhead ramps, to add space and prove circulation; (3) widening of Forty-seventh Street into a boulevard of proach to the site; (4) widening and landscaping surrounding streets at a series points as necessitated by tunnel entrances and ramps.

8. REPAYMENT OF THE LOAN

Repayment of the loan is to be spread over 31 years, according to chedule of annual installments ranging from $1,000,000 to $2,500,000 he schedule is as follows:

Present dollar shortages make it important to start with modest ments, and since current economic conditions are presumed to be y temporary, article 5 of the loan agreement makes it optional h the United Nations to repay at a more rapid rate than called for the schedule. Under this schedule half of the loan will be repaid

1966.

9. LOAN CARRIES NO INTEREST

One of the most debatable features of the loan is that it is to bear interest. Originally it was contemplated that interest should be rged, but upon further consideration the decision was taken to se the loan interest-free. The position of the Department of State