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ceivable that action by the U.N. would be in the form of depriving 

 the countries able to exploit of that right. There might not be any 

 power in the U.N. to develop these resources on its own, except for such 

 arrangements as they might arrange with exploiting powers. 



Is this a real possibility ? 



Mr. Danzig. I have heard no one take that position in support of 

 this resolution. 



The contrary is the position taken by all those with whom I have 

 had an opportunity to discuss the matter, which is simply that there 

 not be an individual question or an individual nation question or that 

 it be open to all nations and that individual entrepreneurs not be 

 discouraged. 



Mr. Frelinghuysen. If I may interrupt, the Malta proposal does 

 say, I do not have the language in front of me — does say something 

 about reserving a segment 



Mr. Danzig. No, Congressman Frelinghuysen, it is attached- 



Mr. Frelinghuysen. Some reference to the lesser developed coun- 

 tries. 



Mr. Danzig. It is attached to my statement. I took the precaution 

 of adding the memorandum and I think that the language that you 

 are referring to are these words. 



If you will look on the memorandum, which is the second page, page 

 2, subparagraph (c), the last sentence talks of the net financial bene- 

 fits derived from the use and exploitation of the sea — "shall be used 

 primarily to promote the development of poor countries," and what 

 the Malta provision contemplates is precisely what Mr. Christy was 

 talking about, that these areas, just like the United States exploits 

 its present continental shelf, would be leased by open bidding avail- 

 able to all and that from these leases or royalties there would be in- 

 come forthcoming that would redound to the benefit of the poor 

 countries of the world as well as all countries, in my opinion. 



I do want to say a word about the permanent mission of Malta, be- 

 cause I have had an opportunity to discuss this matter at length with 

 them. 



I believe that they are impelled and were impelled to introduce this 

 resolution by a careful and thoughtful study in depth of the problem 

 and with no ax to grind or no selfish interest at heart. 



Mr. Frelinghuysen. That may be, but the language to which you 

 referred is what I was seeking. This is not the language of the resolu- 

 tion, this is the langage of the memorandum describing the resolu- 

 tion? 



Mr. Danzig. Right. 



Mr. Frelinghuysen. It says that the net financial benefit shall be 

 used primarily to promote development of poor countries. I am not 

 sure what "net financial benefit" means, but it could mean the pro- 

 ceeds of any exploitation, the net proceeds. What are net proceeds? 

 You describe this as a royalty, the right of exploiting should provide 

 for some kind of ground rent. However, this language could be in- 

 terpreted so that the proceeds shall be used to benefit the poor coun- 

 tries only. This could be interpreted as a deprivation of at least part 

 of the resources for the exploiter, and it might reduce the initiative 

 to zero. 



