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<br />1623 <br /> <br />I <br /> <br />In January of this year Senator Anderson <br />introduced his bill S. 69, in the Senate which <br />contains the language that Larry has included <br />in his resolution. At that time I was asked to <br />study the problem by two or three of the Sena- <br />tors, advise them what we thought of the Bill. <br />I did that and my comments on it at that time <br />were generally favorable. I think there is a <br />little better solution than that language we <br />might be able to get now, however. The trouble <br />with the present language in the bill is this - <br />it's based upon average yield to maturity and <br />in a time of increasing interest costs the <br />average yield on a Government bond of 15 years <br />or more period of maturity, is greater than the <br />interest rate. As an illustration, 15 years ago <br />you could purchase a bond, or sell a bond as the <br />Government did, at 2t% interest and as of June <br />30, 1959, the average rate of interest on all <br />those bonds was, excuse me, the average yield to <br />maturity on those bonds, was about 4-1/8%. Now <br />it was pointed out, the demand for the bonds has <br />gone down. In other words, we would have had a <br />period when bonds wouldn't sell and they were <br />being sold, not at a discount, but at premium. <br />The result would have been otherwise, but the <br />trouble is that we are starting projects at <br />times when interest rates are high and we are <br />going to get hurt. <br /> <br />Now how badly are we going to get hurt? I <br />ran a study on the Curecanti Project last June, <br />simply because it occurred to me at that time <br />that the Curecanti Project was going to get <br />started in 1960 and the yield on these long term <br />Government bonds, as nearly as I could determine <br />it without a certification from the Secretary of <br />the Treasury which I could not get, was between <br />4-1/8 and 4-1/4 percent. Being a conservative <br />individual I based my study on 4-1/4%. To be <br />honest with you I have since learned that the <br />Secretary of the Treasury has certified that <br />4-1/8% would be the correct amount. However, <br />as far as the illustration is concerned, it <br />doesn't make any difference. You are going to <br />get the same results approximately anyway. Now <br />here's what occurs with regard to the Curecanti <br />Project. Taking the Bureau of Reclamation's <br />financial and economic analysis of 1958 - I am <br />sure you have all seen copies of that - or taking <br />the economic justification report on the Cure- <br />canti Project, which was dated, I believe, April <br /> <br />I <br />