Servicing Mexican Treaty, $1,000,000, power litigation costs, and AEC sub

Mr. CANNON. It is difficult to estimate what that would cost, Doctor. What would you say would be the cost of compiling that data?

Mr. DOMINY. We have the records as to the allocations on all of our projects, and, as I understand the question, Congressman Fenton merely wanted a tabulation of the construction costs and the amount that had been allocated to nonreimbursable functions, and then a tabulation of the 3 percent interest compounded on that construction cost over the repayment period for the reimbursable features. Is that what you are asking for, Doctor?

Mr. FENTON. That is right.

Mr. CANNON. You will be in a position to give that?

Mr. DOMINY. The latter would take some calculating and take some time but it can all be supplied without an exceptional amount of work.

INTEREST RATES

Mr. RABAUT. In view of the fact that we have under consideration here in Congress the question of a higher interest rate on money that the Government will borrow, how do you feel this should affect the interest rate that you people are charging at this time?

Mr. DOMINY. Of course, some of the more recent authorizations have required us to charge interest at the cost of interest to the Treasury at the time the feature goes into construction. Is that right, Mr. Bennett?

Mr. BENNETT. The most recent expression we have had out of the Congress on interest rates is that contained in the Water Supply Act of 1958.

The language written into that act at the present time produces an interest rate of about 2.7 percent.

On the other hand, we have authorization of projects, such as the upper Colorado, which requires a computation of interest rate at the present time at about 4% percent, so frankly we are not sure just what the policy is here.

Mr. RABAUT. Even this latter rate would be below what has been proposed for Government borrowings.

Mr. BENNETT. Yes, sir; that is correct.

Mr. PILLION. Has not your interest rate been based upon the sales by the U.S. Government of its bonds? Is that not the basis for your interest rate on these power projects?

Mr. BENNETT. In our authorizing acts, which have spelled out an interest rate, the formula has not been consistent at all. Some of it has gone to longtime average; some has gone to the value at maturity; some has gone to 15-year averages. There has been no consistency. Mr. PILLION. In the Colorado project does that require your charging interest at a rate determined by the sales of U.S. Treasury bonds over the past number of years?

Mr. BENNETT. I do not recall the specific language. The Secretary of the Treasury is required to certify the rate to us each year as of the end of June.

Mr. PILLION. Yes, based upon the sale of Treasury bonds.

Mr. BENNETT. I do not recall the exact language. It was at 27% percent up until about 2 years ago when it went to a little over 3, and the one we had last June was 418.

On the other hand, I point out that subsequent to that Congress did pass the Water Supply Act of 1958 which produces at the present time a rate of 2.7 percent.

Mr. PILLION. Is that being applied to the Colorado project?
Mr. BENNETT. No, sir; that is a general law.

Mr. PILLION. A general law in the absence of any specific law?
Mr. BENNETT. Right.

Mr. RABAUT. If this legislation should pass consideration would probably have to be given to place these new projects, at least, on a paying basis.

Mr. CANNON. Dr. Fenton?

Mr. FENTON. Mr. Chairman, I have just one more observation here.

OUTSIDE WORK BY BUREAU EMPLOYEES

Last year Mr. Jensen, on page 15 of the hearings, asked a question regarding employees of the Bureau performing outside work.

He said this

Mr. CANNON. I believe we discussed that yesterday.

Mr. FENTON. Last year we had a list of the Bureau employees who had performed outside work which might be in conflict.

The question asked is why was not former Commissioner Dexheimer's name on this list?

Is it not true that he did perform work such as outside work? Mr. DOMINY. Mr. Dexheimer, as I understand it, did serve as a consultant on his free time on a few occasions at the time he was employed with the Bureau of Reclamation in Denver prior to his being named as Commissioner of the Bureau of Reclamation.

As to why his name was not included in this list, this list was compiled in April of 1959 at a time when Mr. Dexheimer had already made arrangements to retire from the Federal service effective May 1, and he did not consider himself employed any longer after that date, and since this was furnished right at the close of April he did not submit the information which was furnished by the other employees.

He was given an opportunity to fill out that same information but declined to supply it on the grounds he was retiring from Government service.

Mr. FENTON. I believe you also know that the list you gave covered only part of the regional offices. Have you since obtained a similar list of these offices, and, if so, will you supply it for the record?

Mr. DOMINY. My recollection is that we did limit this to the Denver office of the Chief Engineer and Assistant Commissioner and the region 7 which is located there across the street from the Chief's Office.

We explained to the committee last year that this was not extended beyond these two Denver offices because of the time limitations and because the principal interest centered on our employees who had worked in Denver.

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