Foreign Relations of the United States, 1946, General; the United Nations, Volume I

IO Files: US/A/C.5/7

Memorandum by Mr. Paul H. Appleby to the Director of the Office of Special Political Affairs ( Hiss )⁷¹

secret

[ Washington ?] October 15, 1946.

UN Contributions

I am attaching the final report of the Committee on Contributions.⁷² As you know, I served on the Committee in my personal capacity and not as an official of the United States Government. Since I am an official of the United States Government,⁷³ however, I feel at liberty to offer you some comments on the Report and the Committee’s proceedings which may be helpful to the United States at the meeting of the General Assembly.

The first point I want to make perfectly clear is that the scale prepared is not the scale of contributions recommended for adoption by the Assembly. It is an index of relative capacities to pay and is submitted merely as a basis for negotiation in the Assembly.

I consider that the Committee fell short of completing its assignment when it decided not to prepare a scale that it would recommend for adoption. I personally felt very strongly that contributions should be determined by experts and taken out of politics as far as possible. As it is, the scale must now finally be determined by political argument in the Assembly.

The great obstacle in the way of a definite recommendation was the question of the United States contribution. While I agree that the statistical and economic data lead to the conclusion that the capacity to pay of the United States is over 49 per cent for the next three years, I decidedly do not agree, for reasons I shall elaborate upon later, that the United States contribution should be that high. I urged this position strongly in the Committee and was supported by Mr. Jacklin⁷⁴ from South Africa, but we had no success whatever in persuading the Committee to deviate from the principle of capacity to pay. Consequently, the compromise solution arrived at was the only way to achieve agreement in the Committee.

The Report of the Committee is unambiguous on the point that the scale is not a recommendation for adoption. I quote the concluding paragraphs in full:

“21. Conclusion

The Committee has confined its work to making estimates of relative capacity to pay, recognizing that factors other than capacity to pay including ceiling provisions, which raise political issues, may be discussed by the General Assembly if it so desires.

“By taking into account the combined effects of its estimates on account of war dislocation, war improvement, availability of foreign exchange and per capita incomes, the Committee made adjustments to the scale derived from the original national income figures, and thereby arrived at the scale of relative capacities to pay that it now submits to the General Assembly. While differences in capacity to pay are very large in some instances, the Committee has exercised restraint in respect both of war allowances and degree of progressiveness. It feels confidence in its results and considers that the scale provides an appropriate estimate of capacity to pay for the years 1946, 1947 and 1948. Before the end of that period it can be hoped that the distortions in national economies produced by the war will have greatly diminished and that revised estimates can then be worked out on a firmer statistical basis. Meanwhile the Committee hopes that the exploratory work it has done in working out the present scale will prepare the way for improvement in the future.

V. Scale

“22. The Committee on Contributions submits that the following scale be accepted by the General Assembly as reflecting relative capacities to contribute to the administrative expenses of the United Nations:” (italics supplied)

I believe a large part of the trouble lies in the instructions of the Committee. Possibly the most literal interpretation of those instruction restricts the Committee to the question of capacity to pay. The only peg on which you can hang other considerations is the sentence “The Committee should be given discretion to consider all data relative to capacity to pay and all other pertinent factors in arriving at its recommendations.” We argued that all other pertinent factors included factors other than capacity to pay. The majority of the Committee believed that the factors referred to were economic and nonpolitical factors of the same nature as capacity to pay.

There is, therefore, a possibility that the Assembly may have to revise its principles of assessment and make it clear that other factors are to be considered if it is to arrive at a scale of contributions that is acceptable to the United States.

When we started the negotiations, we thought that the idea of a ceiling would be acceptable to the Committee. We felt they would want no one nation to be predominant in the organization. We found that not to be the case. With the exception of Mr. Jacklin and Mr. Brigden,⁷⁵ everyone seemed to think that the more the United States paid the better. I was particularly surprised to find this point of view held by the United Kingdom member. I should have thought that questions of prestige might enter in. I do not know whether the Committee is an adequate index of the temper of the Assembly, but I suspect that we shall find more resistance to the idea of a ceiling than we have been assuming.

The Preparatory Commission report states that “If a ceiling is imposed on contributions, the ceiling should not be such as seriously to obscure the relation between a nation’s contributions and its capacity to pay.” I believe that a figure that would be acceptable to the United States and desirable for the United Nations would deviate seriously from its capacity to pay, especially for the administrative budget of the United Nations. I believe that other factors should have an important weight in determining contributions. Some of these considerations are:

1. A contributions scale should take into account the principle of sovereign equality as well as capacity to pay. Since every nation has one vote, the capacity to pay figure should be adjusted in the direction of equal contributions. Although the Committee refused to accept this idea I am sure it was unconsciously applied to the the assessments for Latin America. Had South America consisted of one country instead of 20, I am sure its total contribution would have been lower. If the budget was small enough I would favor a system of equal contributions for each country. As it is, I believe there should be a compromise between the principle of capacity of pay and the principle of sovereign equality. Needless to say, the Committee would not accept this position.

2. It is undesirable for any one country to bear too large a share of the budget. This is true from the point of view both of the country in question and of all other countries. If the United States pays a large proportion of the budget, other countries would be likely to tolerate administrative extravagances on the grounds that the United States is paying most of the bill. I think we have seen evidences of this already.

3. The contributions of the veto powers should not differ too widely. There is no need for me to labor this point as I know you are fully aware of it. Mr. Jacklin and I tried out on the Committee the idea that the Big Five contributions should be settled by special consideration, but we met with a most hostile reception.

After giving a great deal of thought to this matter, I am convinced that from the point of view of the United Nations, the contributions of the United States should not in any event exceed 35 percent and should probably be less. If the Assembly is persuaded to accept this position, it will have to reverse its previous decision about the relation of a ceiling to capacity to pay.

The Committee was as reluctant to accept the idea of a floor to contributions as it was a ceiling. At one stage, we had thought of a floor of .05 percent. This would result in inequities as between the countries to which the floor applied, and the countries just above the floor. As it is, no country in the scale has an allocation of less than .02 percent. This means $5,000 on a $25 million budget. If the United States contribution were lower than 50 percent the minimum would probably be raised. It would be at least sufficient to pay the fares of five delegates to the Assembly meetings.

[Here follow comments in some detail by Mr. Appleby on the scale decided on by the Committee with a table showing indexes of relative capacity to pay for each Member of the United Nations based on national income reported for 1938–1940 and estimated national income for 1946.]

71. Mr. Appleby’s memorandum was the first of two documents attached to a United States Delegation working paper, “Contributions Scale for the United Nations,” October 26, 1946. The covering memorandum stated that the Appleby memorandum “represents the personal comments of Mr. Appleby, who served on the Contributions Committee in a personal and individual capacity rather than as a representative or official of the United States Government. Accordingly the comments have no official standing and are attached solely for the information of the Delegation in its consideration of the report of the Contributions Committee. …”
72. Printed as United Nations document A/80, October 11, 1946, and found in depository libraries of United Nations documentation. Copy also found in central indexed files of the Department of State (501.AB/10–2646).
73. Mr. Appleby was Deputy Director of the Bureau of the Budget.
74. Mr. Seymour Jacklin was the member from South Africa on the Committee on Contributions.
75. Mr. J. P. Brigden, member from Australia on the Committee on Contributions.