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<br />OOil3 4 ~~, <br /> <br />37 <br /> <br />We should like to second that recommendation. It's a simple <br />thing. The graph will show the time streams, the benefits, and <br />the costs. II <br /> <br />Honorable Pie1"re S. Du Pont IV, Member of Congress <br /> <br />"I recommend that all Federal water resources projects be <br />evaluated at the rate of return on private investments and if it is <br />deemed desirable to subsidize wate1" resource projects on a <br />specific type 01" in a specific region, that an explicit decision to <br />do so be made. Continuation of the existing subsidy to water <br />resource projects through the discount rate, as demonstrated by <br />the proposed seven percent rate, in my opinion should be <br />terminated. II <br /> <br />***** <br /> <br />II .. under the present system many years elapse between <br />authorization of a water resource project and initiation of con- <br />struction. Th1"oughout this period, the cost and benefits of a <br />project are annually updated and revised for p1"esentation to the <br />House and Senate Appropriations Subcommittee of the Committee <br />on Public Works. All the costs and benefits associated with the <br />p1"oject are annually updated with one important exception- -the <br />dis count rate. II <br /> <br />)::: * * * * <br /> <br />"Continuing to use a discount rate appropriate to 1948 in <br />1972, while updating all other costs and benefits pa1"ameters, is <br />economically and socially absurd. .. II <br /> <br />:::~ * * );: * <br /> <br />"I recommend these proposed guidelines terminate the <br />grandfather clause and require at least the recommended 7 per- <br />cent, and preferably a 10 percent, discount rate be applied to all <br />projects after approval of the Principles and Standards for <br />Planning Water and Related Land Resources by the President. <br />Continuation of the discount rate grandfather clause se1"ves no <br />social or economic purpose. " <br />