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<br />1618 <br /> <br />MR. SPARKS: <br /> <br />for you to get into this agenda item, Larry." <br /> <br />"This telegram is dated September 9th and <br />reads as follows: 'Senate passed bill today <br />which alters the interest rate formula on <br />Colorado River Storage Act, changing the <br />formula from average yield on government <br />securities to average rate of interest paid by <br />the Government on its obligations. This means <br />the rate of interest on Colorado River Pro- <br />jects will be lowered. Bill now goes to <br />House for action'. <br /> <br />I <br /> <br />Now that item was a rider to the Norman <br />Project which was attached to the project by <br />Senator Anderson of New Mexico. The Norman <br />Project is an Oklahoma reclamation project and <br />Senator Anderson's rider to that project author- <br />ization'states that the Public Law 485 be changed <br />to the extent as set forth. What happened on <br />this interest rate back in 1956 and prior to <br />that time is that we had some people in the <br />Bureau of the Budget who were not favorable <br />to reclamation projects. They therefore wrote <br />a very harsh interest formula and the Bureau of <br />the Budget took the position that they would <br />not approve the project at all unless this <br />formula were adopted. The Upper Basin States <br />were in no position at that time to cross with <br />the administration. The administration backed <br />Public Law 485 and the President gave it very <br />active support, so the Upper Basin States were <br />. in no position to quarrel about the interest <br />rate when.'the President and his Bureau of the <br />'Budget said that was it.. <br /> <br />Subsequent experience has shown that this <br />interest rate is prohibitive and it is the only <br />reclamation project in the history of the <br />United States that has ever been saddled with <br />this interest rate. No other project ever had <br />this interest rate before or after the passage <br />of Public Law 485. All projects that have gone <br />through subsequent to 1956 have another interest <br />rate which is much lower. The present interest <br />rate is over 4% under the Colorado River formula, I <br />and the project cannot stand that rate of <br />interest. The going rate of interest of other <br />projects is a little over 2t%. The economic <br />feasiblity of the projects of the Colorado <br />River becomes in question when this present <br />