United Nations Financing

March 7, 1962

Report Outline
Sharp Controversy Over U.N. Bond Issue
Financial Procedures of United Nations
Financing of Peace-Keeping Operations
Special Focus

Sharp Controversy Over U.N. Bond Issue

A proposal by President Kennedy that the United States subscribe to one-half of a bond issue of $200 million, to be floated by the United Nations to finance its operations in the Congo and the Gaza Strip in the period beginning next July 1, has raised searching questions about the future of the world organization. Critics on Capitol Hill are asking whether this country should continue to provide a far larger share of U.N. financial support than any other country while finding it increasingly difficult to make its influence felt in the organization's affairs. They ask also whether continued, or at least additional, support is justified when only a small minority of the member states have kept current on their financial obligations to the United Nations. It is questions like these, rather than the money involved in carrying out the President's recommendation, that trouble members of Congress who have given thought to the proposal.

U.N. Obligations and Decision to Float Bonds

The $200 million U.N. bond issue was authorized in a resolution by the U.N. General Assembly last Dec, 20. Adoption came three weeks after Acting Secretary General U Thant had served notice that the organization's obligations threatened to exceed its cash on hand by more than $100 million at the end of 1961. Taking note of this warning, the resolution described the bond issue as an “extraordinary” measure which “should not be deemed a precedent for future financing of the expenses of the United Nations.” The resolution carried by a vote of 58–13, with 24 countries abstaining.

Ten days later, on Dee. 31, the United Nations balance sheet showed unpaid obligations of $129.4 million. About $95.5 million of the total was owed to governments and private concerns; the remainder represented borrowings of $25.2 million from the working capital fund of the United Nations and of $8.7 million from reserve accounts of U.N. voluntary programs. Cash on hand was down to $15.5 million. The net deficit of $113.9 million equaled the unpaid assessments against member states for the regular U.N. budget and for the U.N. military operations in the Congo and the Gaza Strip.

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