ahead with a program of developing and improving the approaches to the site at an estimated cost to the city of $20,000,000. Since September the necessary excavation work has proceeded ahead of schedule. Excavation for the entire project is estimated to be approximately 80 percent complete as of the beginning of this year. A contract for the construction of the Secretariat building and for the construction of all of the foundation work has been let. It is anticipated that the Secretariat building will be completed during the latter part of 1950 and that the entire project will be finished by the summer of 1951. STAFF ASSESSMENT PLAN One of the most significant decisions made by the General Assembly was the decision to institute, as of January 1, 1949, a staff assessment scheme for the Secretariat. Staff assessments are a form of internal income tax levied by the organization on the compensation received by staff members from the United Nations. One of the earliest conclusions with respect to personnel matters reached by the General Assembly was that equality of treatment for the staff could not be achieved so long as staff members were subject to diverse systems of national income taxation. While some persons would be immune from taxes, others receiving the same salaries for similar jobs would pay taxes at varying rates. To eliminate this inequity, Members were requested to exempt from national taxation incomes received from the United Nations. At the same time, it has always been recognized that the granting of immunity from national income taxation would create a group of tax-privileged international public servants unless the United Nations itself acted to prevent such an undesirable result. The Secretary-General was instructed to study the problem and submit to the General Assembly proposals for a scheme of internal staff assessments. To facilitate consideration of the Secretary-General's proposals, the Fifth Committee called upon a group of tax legislation experts, one from each of the following countries: France, the Netherlands, the United Kingdom, the United States, and Uruguay. On the basis of the tax experts' unanimous report, which was received and revised in minor detail by the Fifth Committee, the General Assembly adopted the staff assessment scheme by a vote of 35 to 1, with 2 abstentions. The rates of assessment are higher than the United States income tax rates for 1947 and lower than the Canadian rates. (United States and Canadian nationals are presently the only members of the Secretariat who are subject to national taxation on their United Nations incomes.) The scheme incorporates the progressive features of all modern income-tax systems. It takes into account differences in family and dependency status, and the rates are progressively higher for persons in the higher salary brackets. United Nations salaries have been fixed on a "net" basis in the past. The salary scales for comparable employment in the area of the headquarters were taken as a guide and then reduced so that the "takehome" pay of United Nations personnel would be comparable to outside income after (United States) taxes. It is necessary therefore to adjust the United Nations salaries upward to assure that staff members will continue to have roughly the same net salaries after assessment deductions. The importance of these actions should not be underestimated because of the appearance of an immediately neutralized result. The significant aspects are these: (a) the staff assessment system assures that the granting by national governments of tax exemption for United Nations salaries to assure equal treatment for members of the Secretariat will not create a tax-privileged group of international public servants; (b) as conditions of employment outside the Secretariat change, the staff assessment system will provide a flexible means of achieving suitable adjustments; and (c) appropriate recognition now exists, as on the national level, for differences in marital and dependency status among employees. Pending action by Member governments to relieve their nationals who are in the Secretariat from liability for what would otherwise be a form of double taxation, the Secretary-General is authorized to reimburse employees for taxes paid on their 1949 salaries. APPOINTMENTS TO FILL VACANCIES IN Appointments to fill vacancies on subsidiary bodies which are composed of experts serving in their individual capacities are normally accomplished with a minimum of negotiation and debate. This year the continuation in office of one expert whose terms of office on the Contributions Committee and the Administrative and Budgetary Committee do not expire until December 31, 1950, and December 31, 1949, respectively, became a matter of heated discussion involving a significant principle. Dr. Jan Papanek, a Czechoslovak national, had become persona non grata with the Czechoslovak Government following the establishment of a Communist regime in the spring of 1948. The Czechoslovak Delegation requested the General Assembly to terminate his office in both committees. The basic issue involved was whether an individual who is elected to serve on one of the expert bodies subsidiary and advisory to the General Assembly can be continued in office if he ceases to be acceptable to his own government. The United States strongly maintained the position that it is inappropriate and undesirable to subject the membership of expert advisory bodies to the whims of changing national political regimes. The United States reasoned that the General Assembly had the choice of confirming the long-accepted principle of looking to committees of independent experts to assist in the consideration of complex administrative and financial matters, or of establishing the undesirable precedent that members of expert committees should represent their own national governments. If the General Assembly were to take the latter course, the Advisory Committee and the Contributions Committee would tend to represent the interests of only 9 and 10 Member states, respectively, instead of serving objectively the interests of the total membership. The United States position accorded fully with the spontaneous reaction of many other delegations. By a vote of 30 to 6, with 13 abstentions, the General Assembly decided against the termination of Dr. Papanek's office. During the course of the General Assembly session, Donald C. Stone, the United States national serving on the Advisory Committee on Administrative and Budgetary Questions, submitted his resignation because of the press of duties with the Economic Cooperation Administration in Washington. The General Assembly unanimously elected William O. Hall, Director of the Office of Budget and Planning, Department of State, to complete Mr. Stone's term of office, which expires at the end of 1949. ADOPTION OF SPANISH AS A THIRD WORKING LANGUAGE Culminating a discussion which began during the San Francisco conference in 1945, the General Assembly voted on December 7, 1948, to adopt Spanish as a third working language of the General Assembly in addition to the existing working languages, English and French. Spanish was already one of the five official languages. The decision was by a vote of 32 to 20, with 5 abstentions, despite a negative report by the Fifth Committee on this question, the United States voting in the negative. The United States Delegation strongly supported the recommendation of the Secretary-General and the Advisory Committee against the adoption of a third working language. The Delegation made clear throughout the discussions in the Fifth Committee, and during the plenary meetings of the Assembly itself, its view that the addition of any third working language would be undesirable because of the financial and administrative consequences. The United States Delegation pointed out that the existing rules of procedure concerning languages were sufficiently flexible to assure the 19 Spanish-speaking delegations that their practical working needs could be met without changing the status of Spanish and supported budgetary proposals designed to assure the meeting of such needs. The adoption of a third working language necessitated an increase in the 1949 budget of $300,000. This is on the assumption that the decision will not become operative until the Fourth Session of the General Assembly next fall. The decision on Spanish will raise the same question with respect to Chinese and Russian. ADMINISTRATIVE AND BUDGETARY RELA TIONS WITH SPECIALIZED AGENCIES The General Assembly, the Economic and Social Council, their subsidiary bodies, and the specialized agencies themselves have been preoccupied from the beginning with the problem of assuring that there is no duplication or overlapping of programs. They have also been concerned with the development of coordination in the administrative and financial fields with a view to improving efficiency and reducing the total costs of international organizations to the Member governments. Because the Charter assigns to the General Assembly and the Economic and Social Council special responsibilities in this area, the United Nations has taken the lead. Program and policy-coordination problems and decisions are mentioned elsewhere in this report. In the field of administrative and budgetary coordination the administrative heads of the United Nations and the specialized agencies have developed machinery which has already resulted in the solution of several complex problems and promises to produce even better results in the future. The Advisory Committee on Administrative and Budgetary Questions noted the pattern of ad hoc working parties and joint committees among the United Nations and the specialized agencies, which is assuring close cooperation, and expressed satisfaction that considerable efforts are being made to insure that funds are not wasted through duplication of activities. The General Assembly directed the Secretary-General, in consultation with the Advisory Committee on Administrative and Budgetary Questions, to continue efforts further to improve administrative and budgetary coordination between the United Nations and specialized agencies, including consideration of the possibility of developing a joint system for external audit and for common collection of contributions. INVITATION TO SECRETARY GENERAL OF ORGANIZATION OF AMERICAN STATES At its Third Regular Session in Paris in 1948, the General Assembly adopted a resolution inviting the Secretary General of the Organization of American States to be present as an observer at the sessions of the General Assembly. This action resulted from an Argentine proposal for a permanent invitation to the Secretary General of the Organization. The Legal Committee, which recommended this action to the Assembly, stated its informal understanding that a similar status for the highest officers of other regional organizations would be favorably considered by the Assembly. PERMANENT MISSIONS TO THE UNITED NATIONS Since the creation of the United Nations, the practice has developed of establishing permanent missions of Member states at the seat of the United Nations as a means of following more closely the activities of the organization. The credentials of these representatives were not submitted in any standard form, and it was sometimes difficult to determine whether delegates were entitled to represent their states on various organs of the United Nations. With a view to regularizing the submission of credentials of permanent representatives, the General Assembly at its 1948 regular session adopted a resolution recommending that credentials should be issued either by the head of the state or of the government or by the minister of foreign affairs and should be transmitted to the Secretary-General. States desiring their delegates to represent them on one or more of the organs of the United Nations were requested to specify the organs in the credentials. The Secretary-General was instructed to submit at each regular session of the General Assembly a report on the credentials of representatives. The second part of the resolution of the Assembly instructs the Secretary-General to study all questions which may arise from the institution of permanent missions and, if necessary, to report on this subject at the next regular session of the Assembly. 825285°-49- -12 |