At a United Nations Day observance on October 24, 1949, the delegations to the General Assembly and their guests attended the ceremony at which Secretary-General Trygve Lie laid the cornerstone of the United Nations Headquarters. The ceremony, presided over by the President of the General Assembly, General Carlos P. Romulo, was addressed by the President of the United States, who expressed the pleasure that the people of the United States feel in having the permanent headquarters of the United Nations in this country and congratulated the organization upon its accomplishments of the past 4 years. President Truman declared that the laying of the cornerstone was "an act of faith-our unshakable faith that the United Nations will succeed in accomplishing the great tasks for which it was created." The target date for completion of the Secretariat office building is March 1951. Excavation has been completed and the foundations have been laid for three other structures: the General Assembly meeting hall, the conference building, and an underground garage. Contracts for the construction of these three structures have been prepared, and it is expected that they will be let early this year. Their construction is expected to be completed by the end of 1951.

The city of New York has begun the improvements it agreed to undertake at the city's own expense on the public ways bounding the headquarters site. Contracts have been let by the city for improvements on Franklin D. Roosevelt Drive. Certain structures have been razed on Forty-second Street, and the city is removing utilities from under First Avenue to facilitate improvements on that thoroughfare. The cost of constructing, landscaping, and furnishing the permanent headquarters buildings is being met out of the $65,000,000 interest-free loan authorized by the United States Congress in an act approved on August 11, 1948. To the end of December 1949, the United States Government had made advances to the United Nations from the loan fund to a total of $22,614,934. These payments are made pursuant to the terms of the Headquarters Loan Agreement which was included as part of the authorizing legislation. Advances are made by the United States upon request of the Secretary-General of the United Nations or his deputy and only in amounts necessary to cover current requirements and obligations that will become due and payable within 60 days from the date of request. The United Nations renders an account on each advance and all unused amounts are required to be returned to the United States Government. Repayment of the loan will commence with a $1,000,000 installment due July 1, 1951, and is to be completed by July 1, 1982.

In making arrangements concerning all aspects of the permanent headquarters, the Secretary-General consults with a Headquarters Advisory Committee consisting of representatives of 16 member states in

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cluding the United States. In his general report on the development of the headquarters project to the General Assembly in the autumn, the Secretary-General reported that architectural and engineering plans have necessarily undergone certain modifications and readjustments, partly as a result of further analysis of the organization's requirements and partly to hold expenditure within the fixed budget. The Assembly was told that the essential features of the original plans were being preserved and that the structures would be well suited to the requirements of the organization and harmonious in architectural effect.

2. BUDGETS

The total expenditure budgets for the calendar year 1950 of the United Nations and all the permanent specialized agencies amount to approximately $81,000,000. Miscellaneous income reduces to approximately $72,500,000 the amount to be assessed against the members of these organizations. This latter figure is to be compared with a 1949 assessment figure of approximately $70,000,000. In addition, total cost for the fiscal year 1951 of the International Refugee Organization, a temporary specialized agency, is estimated at $54,965,909 as compared to $154,560,500 for the fiscal year 1950.

The United Nations and each of the specialized agencies votes its own budget. In each case the chief administrative officer prepares detailed budget estimates and justifications for consideration by the executive body and the representative assembly or conference of the organization. Detailed scrutiny of the budget generally takes place in committees constituted to review financial matters. In addition, the budgets of the specialized agencies are submitted to the General Assembly for an advisory review.

The process by which the United Nations develops its own budget is a particularly thorough one. The Secretary-General submitted, in June 1949, his estimates for the calendar year 1950. During the summer, the Advisory Committee on Administrative and Budgetary Questions, a standing committee of the General Assembly composed of nine experts from as many countries and serving in their individual capacities, devoted 8 weeks to a comprehensive review of the estimates and of the written and oral justifications presented by the Secretariat. The Secretary-General's estimates were in the amount of $44,314,398. The Advisory Committee recommended to the General Assembly that this amount be reduced by nearly $1,800,000. The Secretary-General agreed to accept many of the reductions before the proposed budget was considered by the Fifth Committee (administrative) of the Assembly, but he informed the Fifth Committee that he considered

certain proposed reductions to be destructive of good administration and felt obliged to contest them.

Over the ensuing 8 weeks of the Assembly's consideration of the matter, the Fifth Committee examined the budget estimates, heard the responsible officers of the Secretariat and the chairman of the Advisory Committee, and decided each item on its merits. In some cases the Secretary-General submitted revised estimates during the course of the session which approached the Advisory Committee's figures and were accepted. In other cases the Fifth Committee itself proposed the amount by which the estimates should be reduced. Due to the widespread devaluation of currencies which took place in September, a reduction of $500,000 was applied to the budget as a whole, representing the anticipated saving on United Nations expenditures in "soft" currency areas. Through a resurvey of contractual printing costs, a reduction of over $200,000 was made on the total estimated outlay for this item. At the same time, however, certain decisions of the General Assembly added new items of expense, particularly the decision approving the establishment of an international regime for Jerusalem, which alone added $8,000,000 to the budget.

The final recommendation of the Fifth Committee was for a budget of $49,641,773. This was submitted to the plenary session on the last day of the Assembly and approved by a vote of 48 (including the United States) to 0, with 7 abstentions (including the Soviet bloc). This amount is to be met in part by miscellaneous income in the amount of $5,091,740, and by savings and adjustments from prior years in the amount of $2,380,033, leaving a total of $42,170,000 to be assessed to members. This figure exceeds the 1949 assessment by $553,000.

The General Assembly also approved supplementary estimates for 1949 which result in a net saving on the 1949 budget of $283,048. To this saving should be added $108,890 representing excess miscellaneous income for 1949. Thus the United Nations is expected to close its 1949 books with a surplus of $391,938.

3. ASSESSMENTS

The United Nations and each of the specialized agencies finances its regular operations almost entirely from annual assessments of members. Each agency adopts its own scale of assessments in which each member is assigned a particular percentage share. In the calculation of the United Nations scale, and likewise the scales of the larger permanent specialized agencies, particular emphasis has been placed on relative capacity to pay.

The prominence given in this respect to relative capacity to pay is a reflection of the obvious disparity of the relative economic positions among member states, and particularly of the great concentration of economic power in one country, the United States. Also, in the years since the war, such factors as war damage, dislocation of production, and financial difficulties have had to be taken into particular account. However, relative capacity to pay has not been the sole determinant of assessment scales. Other considerations have been the appropriateness of the maximum and minimum share, and in the case of some agencies the interest of each member in the agency's particular field of operations.

The United States has maintained, since the earliest of the postwar organizations were in their formative stages, that in normal times no international organization of sovereign states should depend to an unreasonable and preponderant degree on the contribution from any one member for financial support of its ordinary program. It has been our conviction that excessive dependence upon the financial contribution of one member is inconsistent with the international character of an agency. A distinction is made between the regular budgets of permanent organizations and the large-scale, special operating programs represented by the International Refugee Organization, United Nations International Children's Emergency Fund, and United Nations Relief for Palestine Refugees, because it is clear that, if emergency programs of this latter character are to be carried forward at an effective level of effort, this country must be a very large contributor.

After three years of debate, the United Nations General Assembly in 1948 adopted the principle that in normal times no single country should contribute more than one-third of the total annual member assessments of the United Nations. The same principle was subsequently adopted by the two permanent specialized agencies in which assessments for the largest contributor exceed one-third of the total: the United Nations Educational, Scientific and Cultural Organization and the World Health Organization. In the other permanent specialized agencies the percentage of the largest contributor has been and is now below one-third of the total assessments. In the United Nations and the two specialized agencies just mentioned, the United States percentage shares still exceed the one-third ceiling accepted in principle. Although this Government recognizes that it is not practicable to expect its contributions to be reduced precipitously to the ceiling figure, it has continued to press energetically in these organizations for substantial adjustments in recognition of the ceiling principle and in 1949 was able to achieve a downward adjustment of the United States percentages in each of these three organizations. The

United States percentage in the World Health Organization was reduced from 38.54 percent to 36 percent, and, in the United Nations Educational, Scientific and Cultural Organization from 38.47 percent to 37.82 percent.

The reduction in the case of the United Nations is important because of the example which United Nations action in this regard sets for the specialized agencies. The United Nations scale of contributions was reviewed during the summer of 1949 by the United Nations Committee on Contributions acting on the basis of instructions set forth in various resolutions of the General Assembly. The Committee found that the national income of most member states had increased markedly since 1946 when the present scale of assessments was established, but found also that many of these states still faced serious economic and financial problems that made it difficult to calculate accurately their capacities to pay. The Committee, therefore, did not feel at the time that it could recommend a comprehensive revision of the existing scale. It did recommend, however, and the General Assembly later approved, minor reductions in the assessments both of the United States and Sweden.

The reduction for the United States was .10 percent (one-tenth of one percent) and for Sweden .02 percent. The only other change in the United Nations scale for 1950 was the establishment of an assessment rate of 0.12 percent for Israel, a new member of the organization. The Committee on Contributions stated in its report to the General Assembly that the downward adjustment in the percentage of the United States represents a first step in implementing the principle that no member should contribute more than one-third of the total required to meet the expenditures of the organization. As a result of the reduction, the assessment of the United States to the United Nations for 1950 is 39.79 percent as against 39.89 previously. During 1950 the Committee on Contributions will continue to review the United Nations scale.

Except in the case of the World Health Organization and the United Nations Educational, Scientific and Cultural Organization, the rates of assessment on the United States are considerably lower in the specialized agencies than in the United Nations itself. In the last few years the International Labor Organization has been in process of revising its scale which had come to be considered inadequate and outdated by its membership generally, having been based on the League of Nations scale devised to meet conditions prevailing at an earlier time. In the course of this revision, the share of the United States for 1950 has increased from 18.35 percent to 22 percent. In the Food and Agriculture Organization, an increase in percentage from 25 percent to 27.10 percent was assigned to the United States as its share in the