443 



The House subcommittee recommendations, made on December 5, 

 1952, were followed by a quick response from the Executive Office 

 of the President. Near the close of the administration of President 

 Truman, December 31, 1952, the Bureau of the Budget issued Circular 

 No. A-47, "* * * designed to set forth the standards and procedures 

 which will be used by the Executive Office of the President in re- 

 viewing proposed water resources project reports and budget esti- 

 mates to initiate construction of such projects, submitted in accordance 

 with existing requirements." It declared that "all reports submitted 

 after July 1, 1953, * * * must conform to the requirements of this 

 Circular." This circular required that least cost alternatives should 

 be considered. Costs and benefits should be expressed in monetary 

 terms as far as feasible. Amortization of capital outlays should be for 

 periods of 50 years or less. A method was specified for determining 

 interest rates into the future. Power costs were to be fully reim- 

 bursable, and reclamation deficits should be identified as a "subsidy" 

 to irrigation. Moreover, reclamation projects should be reviewed by 

 the Secretary of Agriculture as to their relevance to national needs 

 for production from the area to be developed. 



An agreement, March 12, 1954, involving the Bureau of Keclama- 

 tion, the Corps of Engineers, and the Federal Power Commission, 

 committed these agencies to use of principal criteria of Circular A-47 

 in developing recommendations to the Congress on multipurpose water 

 projects. 



Further emphasis was placed on tightening the precision of quanti- 

 tative cost/benefit analysis, by the Commission on Organization of the 

 Executive Branch of the Government (second Hoover Commission, in 

 1955). This advisory body offered three basic recommendations con- 

 cerning national water policy (paraphrase) : 



1. Full exploitation of water resources for national economic growth, strength, 

 and general welfare, organized by local and regional drainage areas, primarily 

 relying on State and local initiative ; "* * * before Congress authorizes or appro- 

 priates funds for Federal participation in any water resource project, it should 

 have substantial evidence that the project is economically justified and finan- 

 cially feasible, and that such project is essential to national interest :" consoli- 

 dation in one agency of hydrologic data collection, and in FPC the regulation of 

 rates for Federal power ; all pov&er revenues to be covered into the general fund 

 of the Treasury. 



2. Creation of a Water Resources Board of Cabinet and public members, in 

 the Executive OflBce of the President to determine broad policies and devise 

 methods of coordination within the Government. 



3. Strengthened evaluation of the merits of water development projects in the 

 Bureau of the Budget.^ 



The report of the Commission proper was supported by a three- 

 volume task force report on water resources and power, running 1,783 

 pages in length, that explored the subject in considerably deeper 

 detail. It stressed the need for fuller accounting of the costs involved 

 and for a more rigorous screening of asserted benefits from water 

 projects. It also suggested that priority should be given to projects 

 "preponderantly reimbursable" and that under conditions of high- 

 levef emplovment the benefit/cost ratio should exceed 1 : 25 to I.*'* 



*» Conitriission on Organization of tiip ExecutlTe Branch of the Government. A Renort to 

 the Congress, Water Resources and Power, Vol. 1, June 1955. (Washington, U.S. Govern- 

 ment Printlnc Office. 1955), pp. 36-39. 



«> Commission on Organization of the Executive Branch of the Government. Task force 

 report on water resources and power, June 1955. Three volumes. (Washington, U.S. Govern- 

 ment Printing Office, 1955), vol. 1, pp. 104-110. 



