BOARD02386

• Board Meeting Date: 3/8/1972
• Description: Agenda or Table of Contents, Minutes, Memos
• Board Meetings - Doc Type: Meeting

MR. STAPLETON:

MR. SPARKS:

in computing things such as flood control ben-
efits. Unfortunately, the Corps is not allowed
to put any monetary value on human lives. So
you scratch the three people who were drowned -
they are of no value at all from an economic
viewpoint.

I

In any event, at the present time it
appears that we have no alternative except to
go along with the new plan and urge the speedy
authorization of the revised plans to include
a dam on West Bijou and channelization into the
Narrows of the residual flows."

"Would you explain to me, all the other
members of the board know, how this interest
rate is going up to 7 percent when the prime
rate is now down to 4 1/2 or 4 3/4? What is
the light? I can realize that two years ago it
was up to 8 and 9 percent and now it is going
down to 7 while the prime rate is going to 4 1/2."

"We will get into a detailed discussion of
that in our agenda item on the proposed federal
principles. Actually, the short-term bond
interest rate that the federal government is now
paying has dropped to less than 4 percent and
has held at less than 4 percent for the last
ninety days.

However, these high-priced economists who
worked out these principles pay no attention to
that factor. They state that the real interest
rate, in their opinion, should be 10.4 percent.
They say that is the return on the investment
of private capital and that the government
should not invest money which will return a
lesser rate than 10.4. However, since the 10.4 I
figure seemed to be exorbitant even by their
standards, they condescended to come down to 7
percent. If that is the case, then all of you
who are investing money and getting less than
10 percent should cease doing so, and no one
should buy government bonds. The short-term
bonds today are paying less than 4 percent and

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