170. Telegram From the Mission to the United Nations to the Department of State 1
3150. Subject: UN Deficit.
Summary: Four-Power mtg held PM Oct 1 under Hambro auspices to discuss UN deficit. French said willing make voluntary contribution of $3.9 million toward current UN deficit. USSR stated it prepared contribute towards deficit of $31.9 million, which was minimum deficit [Page 315]figure found by Comite of 14 in 1965; however, would announce contribution only after learning what US would contribute. UK took passive position since previously made voluntary contribution of about $9.5 million. Bush pointed out figure of $31.9 million was only minimum estimate of deficit arrived at six years ago and it pointless consider dealing with it alone since this would not solve UN financial problem. Much of mtg taken up by intransigent restatement of Sov position. Mtg concluded with Ambs Bush and Malik agreeing meet privately in near future to discuss their respective positions. Hambro, chairman, requested no public announcement be made of mtg.
- Four-Power (UK, France, USSR, US) mtg held afternoon Oct 1 at Norwegian Mission to discuss means of dealing with UN deficit. Mtg chaired by Amb Hambro (Norway) with Ambs above perm UN Missions present, accompanied by advisers. Turner (UN Controller) also present. While no mtg agenda, Hambro opened discussions drawing on his earlier aide-mémoire.
- In introductory remarks, Hambro mentioned “encouraging” reaction from most UN members contacted by him but that solution to problem “hinged on attitude of great powers.” Said problem was twofold, i.e., necessity to deal with present deficit and, secondly, take steps to ensure that causes of deficit were dealt with in order to avoid same problem in future. Pointed out that intention was not to discuss “matters of principle” to which various member states subscribed, but to deal with real problem, recognizing “political solution” was necessary.
- France said without recognizing any debt but as political gesture to meet SYG appeal it willing contribute $3.9 million, which was “important sum” mentioned by Fon Min Schumann at recent press conf. Explained that this amount arrived at by applying 7.5 per cent against current deficit of $52.3 million, which lower figure used in para 4 of Hambro aide-mémoire. Emphasized this percentage above current UN assessment of 6 per cent. Said, if all govts acted in similar manner, deficit problem could be solved. During subsequent discussion, French resisted making commitment as to whether this amount first step of contribution or total amount it willing contribute; French said not interested in knowing against which part of deficit UN would apply this voluntary contribution.
- UK took generally passive position on basis it had earlier made contribution of about $9.5 million and felt UK had done its part.
- Most of mtg taken up by Amb Malik, who repeatedly argued and restated Sov position. In nutshell, Sovs under instruction to contribute against $31.9 million, which was lower figure for current deficit included in report of Comite of Fourteen (A/6289) to 21st GA. Malik refused to recognize Comite of Fourteen higher figure of $53.3 million as having any validity, even when explanation provided by Turner. [Page 316]Also, Malik would not accept Hambro’s conclusion that current deficit today is $52.3 million as minimum and $69.9 million as maximum, nor willing consider amount of $119.4 million remaining to amortize UN bonds. Malik argued must first resolve $31.9 million deficit (which existed at 30 Sept 1965) and, if US announced amount it willing contribute against this deficit, USSR would follow and make known its voluntary contribution. Only after this deficit ($31.9 million) resolved was USSR willing to discuss other aspects of deficit problem. This two-phase approach of Sovs could result in voluntary contribution by them against $31.9 million deficit as first step with no commitment to make further contribution as second phase. Significant to note figures used by Sovs were lower ones included in both Comite of Fourteen report and Hambro’s aide-mémoire.
- Amb Bush took strong exception to Sov approach and emphasized essential to deal with total UN deficit problem, including amortization of UN bonds, since to do otherwise would be rejecting reality and not result in solution to problem. When pressed by Malik for amount US would contribute against $31.9 million figure he used, Bush replied, if Soviets insisted on limiting consideration of problem only to this amount, US would contribute “zero.” Went on to emphasize that US willing consider making substantial contribution but only within context of solution to total UN deficit problem—past, present and future, including amortization of UN bonds. Malik stated and restated original position with arguments that $31.9 million deficit only amount GA had agreed to, juridically valid, etc. These arguments rebutted by Bush to no avail.
- In attempting restate various positions and arrive at negotiating point, Hambro who took positive and constructive position throughout meeting, reiterated need to deal with total deficit problem along lines his aide-mémoire, at which point Malik accused Hambro of being a “good spokesman for the US.” Hambro rejected this charge outright as offensive and unfair.
- Mtg concluded with Hambro suggesting private consultations between Bush/Malik in order hopefully to resolve impasse. Suggested that subsequently Four Powers should meet again as follow-up to this initial discussion. Both Bush and Malik agreed, and mtg will be scheduled at earliest possible date. Hambro also suggested no public announcement be made of Friday’s mtg. Before mtg concluded, Bush asked whether French $3.9 million voluntary contribution was total amount France willing contribute and against what base this would apply. French evasive, responding this amount “nothing more nothing less” than a voluntary contribution. Bush replied it may be necessary for him to meet privately also with French at later date.
- USUN analysis of mtg is, while there some possibility of future useful discussions among Four Powers, Sovs and French, especially [Page 317]former, will be as difficult as ever to deal with on this subject. Sov approach looks like “dusted off” position of 1966 without updating to account for present reality. Appears both want US to “buy a pig in a poke,” i.e., agree to a minimal voluntary contribution from both and leave to trust their willingness to make further contributions. While this totally unacceptable to US rep, as long as there willingness on part USSR and France to continue discussions, he believes US should participate actively under Hambro’s auspices.
- Would appreciate views of Dept soonest.2