page 84


page 84
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84whether it be in banks, utilities, or monopolies, has become one of the most essential steps to a permanent fiscal restoration of Europe, and I am loath to have the United States embark upon enterprises not strictly governmental in their nature. The fact that a government can furnish capital at lower rates of interest is illusory, if there be taken into account that the public project pays no tax and, therefore, does not bear its share of the cost of government. It seems to me that if the project is one which can pay its way, private capital can be found. If it can not pay its way, then we should consider whether all the taxpayers throughout the United States should be taxed for the benefit of a part of the country.To these general principles, which I feel to be correct, there may arise exceptions. The Colorado River project involves the adjustment of the interests of seven States and a division of water between the United States and Mexico. In a project which involved a compact between different States and an international agreement, it is apparent that action must be had by the Federal Government if a satisfactory solution is to be obtained. It might be practicable to solve the problem through the Federal Government and still have the project constructed and operated by private enterprise. Congress may, however, feel that full or partial Federal Government ownership would be more convenient and under the particular circumstances the present case be made an exception to the general rule of sound policy.If my suggestion as to a more satisfactory way of financing the project meets the approval of the committee, I shall be glad to have prepared a draft of legislation along this line.The period of amortization of the cost of the project over 50 years seems to me a little long.Very truly yours,A. W. MELLON, Secretary of the Treasury.Hon. ADDISON T. SMITH, Chairman, Committee on Irrigation and Reclamation,Home of Representatives.(Thereupon the committee adjourned.)

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