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<br />002761, <br /> <br />-14- <br /> <br />is 4 5/8 percent. In about a week, it is going to go up to 4 7/8 percent. <br />It has been my feeling that you cannot very well argue with the increase <br />of the interest rate factor, that the cO'st of money is such that no good <br />American should figure that the evaluation process shoul.d use a totally <br />ficticious figure. I think personally, that 3 1/4 percent" which is a <br />normal figure, is in that realm in light of today's econoni>y and the <br />cost of money. I am sure that you fellows are as painfully aware as I <br />am that the changed rate tampers with only one side of this so-called <br />sacred B. C. ratio business, and if we are to really evaluate water <br />resources projects on the proper basis, we have to work at both sides <br />of that equation. By that, I mean simply and purely--and I am going <br />to get away from the script here for a bit-- simply and purely that we <br />must have a more thorough, more realistic basis of analyzing the <br />benefits which accrue from water resources projects. The use of <br />the B. C. ratio, of course, as it was originally conceived was only to <br />be one of many working tools. Because it is so simply expressed,I <br />suppose it'has become almost a sacred figure. I think water resources <br />projects--well, I know, more than any other type of public expend- <br />iture--is more directly dependent upon that so-called benefit-cost <br />ratio. <br /> <br />." .... <br />-,.- <br /> <br /> <br />The principal effect of this new interest rate; of course, has been to <br />increase the equivalent annual cost, and we all know that costs are <br />rising every day. We all know the benefits from projects, however, <br />go far beyond those which are presently recognized. I have said for <br />several years, that if Senate document 97 had been properly.imple- <br />mented, properly.interpreted, properly.put into effect, we would not <br />have had the crisis arise all over this United States when the interest <br />discount factor was raised because there are methods within Senate <br />Document 97 to evaluate ,projects far beyond the evaluations that have <br />taken place in the past. <br /> <br />Those of us.frorn:the West are aware of the value of irrigationtothe <br />farmer, the business man, to the government through increased taxes, <br />widespread national benefit. You folks from the East and the North <br />and the South have the same kind of value awareness concerning flood <br />control and navigation projects. The business and industrial values, <br />economical development, the whole list of benefits which the Governor <br />rattled off, if you recall, everyone valid, everyone thel'e, everyone <br />known by pure gut reactions, but often difficult to get a handle on, <br />awfully difficult to fit into dollar values. I would be the last one to <br />suggest that water resource projects be evaluated on an emotional basis. <br /> <br />-....-.... <br /> <br />~):;fF: <br /> <br />~1FA1II1II~~'\~~Ii!4f~~ <br />