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

IO Files: USGA/Ia/Del. Min./4 (Chr)

Minutes of Meeting of the United States Delegation, Held at London, 20 Grosvenor Square, January 26, 1946, 9:30 a.m.

London, January 26, 1946, 9:30 a.m.

secret

[Here follow list of names of persons (62) present (see the United States Delegation list, page 5), and a discussion of certain procedural problems. Each member of the Delegation then proceeded to give a review of the activities and progress of the General Assembly Committee on which he was sitting.]

Senator Vandenberg noted that he was making progress in Committee 5 because he now had thirteen votes on his side. He stated that a very shocking action had been taken by Committee 5.¹⁹ He pointed out that the Committee admitted that it had no power to exempt the salary of American employees of the Organization from American income taxes. This could only be done by the Congress of the United States. Nevertheless, the Committee had voted to increase the amount of the United States contribution to the Organization by the amount that was collected in income taxes from the American employees of the Organization. Senator Vandenberg said he thought this was an unconscionable act and he would not submit to it in London or in Washington. He reported that he had spoken frankly in the Committee.²⁰ He thought it was an ominous act. …

[Here follows discussion of other agenda items.]

19. On January 24 the Fifth Committee had received from a sub-committee, chaired by Senator Vandenberg, a report on the problem of tax equalization in respect of the salaries of United Nations officials. The report read:

    • “(1) The Sub-Committee believes there is no alternative to the proposition that tax exemption for United Nations Organization salaries is indispensable to equity among its Member nations and equality among its personnel;
    • “(2) It recommends that, pending this accomplishment, the budget should carry a contingent appropriation to equalize tax payments;
    • “(3) It recommends that all its files respecting staff contributions plans be referred to the Secretary-General for his information; and that further consideration of the matter be postponed pending his subsequent report and recommendation.” (United Nations, Official Records of the General Assembly, First Session, First Part, Fifth Committee, p. 11 [hereafter cited as GA(I/2), Fifth Committee])

    At the time that he submitted the report to the Fifth Committee for the subcommittee Senator Vandenberg was recorded as noting “… that this was a complex and controversial problem and that the report submitted was the best compromise possible taking into account the divergent views expressed in the sub-committee. The first paragraph had been approved unanimously, paragraphs (2) and (3) had been approved by 7 votes to 2 in each case the adverse votes being those of Australia and France with the United States of America abstaining.” (Ibid., p. 11)

    Fifth Committee consideration of the sub-committee’s report continued into a second day (January 25) at which time successive amendments were moved which changed paragraph (2) to read: “It [the Committee] recommends that, pending this accomplishment, the budget of the Organization should carry a contingent appropriation to refund tax payments and that an amount equivalent to such refunds to employees because of income tax, be added to the budget contributions of the Members whose nationals in the service of the United Nations were required to pay income tax on their salaries and allowances received from the Organization.” (Ibid., p. 17)

20. In the debate on the amendments Senator Vandenberg “urged the Committee to accept the wording of paragraph (2) proposed by the Sub-Committee without the addition suggested by the delegate for Mexico regarding an extra assessment. This proposal was in effect an attempt to obtain national exemption of taxation by indirect means. Such an attempt would be likely to produce the opposite effect to that desired. Countries like the United States which had a deep-rooted prejudice against tax exemption would be best convinced of its Tightness in this case by a simple and frank statement of the arguments.” (GA (1/2), Fifth Committee, p. 17) The amendments were accepted by the Committee by 17 votes for, 11 against.