436 



as to progress or discontinuance. The Board should comprise five members of 

 outstanding abilities in this field and should be appointed by the President and 

 included in the President's Office. 



Groioing importance of qualitative criteria 



Intan foible and nonmonetary benefit.? of water projects have long 

 been recognized as significant factors in decisions to proceed with 

 such projects. Saving of lives as well as reduction of risk of property 

 loss has certainly been a factor in flood control programs. Provisions 

 for tourism were made at such major earlier projects as Hoover Dam 

 and TVA — along with attention to architectural attractiveness of 

 structures. The Report of the Subcommittee on Benefits and Costs to 

 the Federal Inter- Agency River Basin Committee on Proposed Prac- 

 tices for Economic Analysis of Iliver Basin Projects, issued in May 

 1950 (the so-called "Green Book") , dealt mainly with quantitative eco- 

 nomic factors of project evaluation. However, it also took notice of the 

 fact that some effects "cannot be evaluated in monetary terms" and that 

 these should be "* * * d'^scribed with care and should not be over- 

 looked or minimized * * *." 



Such effects in the field of costs may involve the possible loss of a scenic or 

 historic site in connection with a proposed dam. On the otlier hand, intangible 

 benefits may embrace such effects as the strengthening of national security and 

 the national economy, the substitution of power from replenishable water re- 

 sources for power produced from limited and nonreplaceable fuel resources : the 

 encouragement of a more widely dispersed industry; the provision of opportuni- 

 ties for new homes and new investment; and the provision of new avenues for 

 the enjoyment of recreation at d wildlife." 



The study therefore recommended that all project effects sliould be 

 fully considered in making project recommendations. Moreover, said 

 the report: 



Project effects which cannot be given monetary values should be recognized 

 and considered apart from the analy.sis of monetary values. If intangibles are 

 considered sufficiently significant to influence either project formulation or selec- 

 tion, it is important that intangible benefits and intangible costs be considered 

 to a comparable extent. Hince there may be general intangible effects from any 

 economic activity, any intangible benefits or costs from using economic resources 

 for project purposes must be considered in the light of tlio.se that would ari.se in 

 the absence of the project, that is. from their u.se for other expected purposes. 

 If specific intangible effects are considered important enough to influence the 

 recommendation for or against a project or the recommended degree of project 

 development, the minimum value attached to such specific intangible effects in 

 determining the recommended degree of development should be clearly indicated. 

 This may result in either curtailing or expanding the scale of development as 

 compared with that justified by tangible effects.^^ 



Inasmuch as the fir.st Hoover Commission had been concerned with 

 the restoration of the administration to a peacetime footing, on the 

 basis of its existing goals and functions, it made no extensive examina- 

 tion of the objectives of the executive branch. It dealt instead with the 

 assignment and distribution of functions already in being. In the field 

 of water resources development, the question of basic objectives and 

 means for their achievement became the subject of a different com- 

 mission, established by the President by Executive order, January 3, 

 1950. After some 11 months of activity, this advisory group, the 



1" Federal Inter-Agency River Basin Committee on Proposed Practices for Economic 

 Analysis of River Basin Projects. Report to tlie * * *. Prepared by the Subcommittee on 

 Benefits and Costs. (Washington, U.S. Government Printing Office, May 1950), pp. 26-27. 



18 Ibid., p. 27. 



