BOARD02386

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

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on it gets difficult to understand. In any
event, based upon this premise, whatever it is,
the federal government should not invest in any
activities which returns a lower rate of return
on the investment than that which occurs in the
. private sector. That is the basic theory of
this, and they quote with approval and adopt a
report made by a Mr. Goldfish -."

MR. KROEGER:

"I don't think so."

MR. SPARKS:

"Well, I can't think of the gentleman's
name right now but it is reported that he made
a study and determined that the average rate of
inveBtment in the private sector, the average
return on capital investment in the private
sector is 10.4 percent. Based upon this premise,
they condescended to reduce that to 7 percent
as the opportunity cost. It is very difficult
to rationalize this to the average person be-
cause you can see in the private sector that most
of the investments do not return any 10.7 percent,
or even 7 percent. So, where the economists who
prepared that report got this information is a
little difficult to determine. Apparently, it
is based upon his study. Anyway, that's what
the case is. That"s Stockfisch, not Goldfish,
Mr. Stockfisch.

The federal treasury has certified for this
year that the average rate of interest on long-
term federal securities is 5 3/8 percent. On
short-term obligations today, the interest rate
is only about 3 1/2 percent. That is the present
market level of United States Treasury bonds
that are issued on a daily basis. They are short-
term bonds.

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The proposed rate would be disastrous.
This is one of the factors that killed the Bijou
project. With the exception of one project that
we can still justify under the 7 percent rate,
it will eliminate most other projects that we
have, either in the planning stage or authorized
in Colorado today. For those of you who have

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