1.
Tuesday, February 21, 1978
University Daily Kansan
UNIVERSITY DAILY KANSAN
Comment
Unassigned editorial represent the opinion of the Kansan editorial staff. Stated columns represent the views of only the writers.
Corps figures costly
"More money and just a little extra time" seems to be the prevailing cry heard while the U.S. Army Corps of Engineers is at work. And the Clinton Lake and Wayway project is proving to be no exception.
Historically, the Corps is notorious for violations of its projects' deadlines and original cost estimates. Time and again, the Corps promotes its river-damming and dredging projects with attractive time schedules and cost estimates. Then it recklessly abandon both.
Meanwhile, the taxpayer is kept waiting and paying.
and plains. The Corps has come to Douglas County with the damming of the Wakarau River and the promise of Lawrence's own corps masterpiece. The cost of Clinton Lake has risen from the original estimate of $45 million to $58 million. The completion for the Corps' flood-control and project has been changed from 1976 to sometime in 1979, when there will be merely a "usable" pool of water.
THESE FIGURES alone are appalling, but there unfortunately are more.
Clinton Parkway, a by-product of the Corps' lake project, is now expected to cost $9.8 million instead of the original estimate of $5.9 million.
The same problems accor.pany the Clinton Parkway project that accompany numerous other Corps-related endearbles, such as the costly and difficult nature of acquiring privately owned land for "public" purposes. Also at stake is the constant political struggle to ensure enough funds to cover cost overruns.
The federal government agreed in 1975 to fund 70 percent of the Clinton Parkway project. The remainder of the cost is to be shared by Lawrence and Douglas County.
The federal pledge was made when the estimated cost was almost $4 million lower, however, and now the city and county must
go back to Washington for more money to cover the increase.
BY NOW Congress must be accustomed to having the Corps and local governments running back to ask for more dollars. For Clinton Parkway, the primary financial sag flames over its 41-acre land from private developers so that the 41-foot four-way highway can be built.
There are 22 tracts of land inside the city limits needed for the roadway, and 18 tracts are needed outside the city. Needless to say, the land inside holding out for as much as possible.
military. The Kansas Department of Transportation recently finished appraising the land within Lawrence that is needed for Clinton Parkway, and the department offered what it thought were reasonable prices for the property.
Of the 22 offers made, 21 were turned down. This fact will force the settlements into court, where larger sums of money generally are given to private landowners. The additional amount of time involved in the litigation is, to say the least, disturbing
The landowners cannot be blamed for trying to get as much money as possible. That is a simple matter of financial common sense.
BUT POOR original cost estimates are inexcusable in such a Corps endeavor as Clinton. The cost-benefit ratio for any Corps project—the financial as well as non-financial pluses as well as minuses—is vital when the Corps is first wooing Congress and taxpayers to finance a parity of the cost. Cost esteem is firmly held down to a project attractive. As a result, the true financial feasibility of a Corps project may be concealed.
A lake or road initially appears to be a bargain. But in the end, that lake or road often turns out to be surprisingly costly and long overdue.
And the taxpayer is kept waiting and paying.
Kansans have been consuming more electricity than ever before. They also have been containing in proportion to their propensity for setting consumption records.
KP&L rate increases justified
Kansas Power and Light Co. which provides central and northeast Kansas with electric and gas service, had an annual revenue of $738 million during 1977, 21 percent more than the previous year.
Is the utility making exorbitant profits at the expense of the consumer? Not really.
Compared with the national averages for kilowatt-hour prices of electricity, KP&L. of 238 companies of 22% private utility companies.
THE SURVEY REEVALING that was conducted during the fall semester of 2013 Electric Institute, KP&L ranked 107th for the cost of 500 kilowatt hours; the institute's consumption across the nation.
A closer regional estimate of average residential monthly consumption probably would be that made by the Kansas Department of Public Works kilowatt hours a month. Even so, according to the Edison study, PKL &RKed 147th out of the 230 utilities when a bigger monthly consumption level of kilowatt hours was considered.
Despite colder temperatures,
residential consumers' electric
bills were lower during
the same period last year.
Clay Stauffer
Editorial Writer
For 50 kilowatt hours, KP&L-
charged $28.12, compared with
the national average of $22.77.
For 75 kilowatts, the cost to
KP&L consumers was $29.46,
compared with the national
average of $31.93.
During this winter, peak-hour delivery records have been surpassed four times. The most recent peak-hour delivery record, set during a period of maximum consumption, was 1.12 million kilowatt hours, reached at 7 p.m. Jan. 15.
The company simply is not making exorbitant profits. An incredible amount of capital is needed for construction and planting plants, estimated at $639 million during the next four years.
KANSANS APPEARLY have been consuming more electricity while censuring KP&L for keeping the company in touch to attract capital investment needed to produce expansion.
KP&L management has been vilified for keeping the company one of the highest utility bond offerings in the nation. In January, the writer recommended KP&L mortgage bonds as attractive investments, offering almost a steady 9 percent rate
of return. For the average electricity consumer, a healthy private utility offers the lowest electric heat supply of cheap energy.
Generation and transmission of electric energy is inherently wasteful. About 70 percent of the energy of the fuel used to produce electricity is lost in generation and transmission to make an unavoidably inefficient energy production system economically efficient is a formidable problem.
KP&L REPORTED an increase in earnings for 1977 of 28 cents a share. Much of the year's increase in earnings was due to the allowances for funds used in the company's construction program, mainly at the Jeffrey Energy Center near St. Marys. The increased revenues were the same simply to windfall profits.
The notorious passed-on rate increases caused by fuel-cost increases were merely an accounting procedure for the
company. The rate increases bolstered revenues, but those gains were offset by increased fuel costs. Contrary to what consumers may believe, the company did not profit.
Consumers doubtless, will watch unhappily as their electric bills rise. But the blame falls on the supplier, not rest solely on the energy supplier. Consumers have accultivated themselves to cheap energy for decades. Anger over the supplier is misdirected.
I MIGHT DO MY IMPERSONATION OF LBJ AND JANBONE THEM INTO SUBMISSION!
NOW LETS SEE WHAT
WOULD JIMMY CARTER DO?
-OR--! COMB MY HAIR FORWARD
BECOME JFK -SHEER PERSONALITY!
Coal union has bitter, divided history
N. V Times Features
By STEVE SHAPIRO
HISPOP, W. Va.—The way that coal miners in southern West Virginia go on unauthorized wildfire states is becoming an issue. The United States is puzzling not only to miners in other parts of
I was born and raised in Santa Barbara, only moving to Kanas
To the editor.
the coal fields, but also to the country as a whole.
Many coal miners have come to see the wildcat strike as the only means available to them to their contractual job rights.
There are several reasons for this view and why the new
California expatriate defends state's reputation
contract that has been under negotiation by the Bituminous Coal Operators Association and the United Mine Workers of America will certainly fail to deal with these problems.
I won't go into any detail regarding Knox's claims and charges. Many of them, though grossly exaggerated, could be termed true. However, I don't believe that one may form a State of the Golden State by living there for a more seven months.
THE RECENT wave of wildcat strikes dates back to 1964, coinciding with the end of
As a transplanted Californiaian, I would like to take this opportunity to do my duty for my former home state regarding the N.Y. Times column by Marion Knox in the Feb. 16 Kansas. This is by far has my role for the part of the man who most likely adoratably toad the bottom of my bird cage, if I had one.
-KANSAN-
It is true that people are eccentric in California—one is called "ecentric" if one has a strong sense of humor. It called "nuts"-but the record will show that populated areas of California, with the exception of San Francisco, are conceived vote highly conservatively.
Smog does abound in Los Angeles, especially the San Fernando Valley, but there are other air sources from LA where the air is as
Letters
in July. In my 20 years in that town, nobody, in the whole population of more than 80,000, has ever called the town "SB." We reserve that abbreviation for the towns of Seal Beach or San Bernardino, or any other town with these initials.
clear as the prairie of Kansas.
Moreover, I visited LA at this time last year. When I arrived there, at 9:30 a.m., to my surprise I saw a blue, cloudless sky overhead. This actually sky was clear after moon, but the sky was clear and it was a weekday.
California does have problems with illegal aliens slipping across the Mexican border, but Knox seems to hint that this is the only state in Texas and Arizona and New Mexico also are border states and have similar problems.
Contrary to what was said by Knox, Santa Barbara has no place for comics. Moreover, the joke that was printed in the column would be good for a California audience but it would not be good for a country scratching their heads in bewilderment.
As for positive aspects of California, which Knox probably did not see—or want to see—in seven months, they are numerous. For example, it is a fact that the number of Malibu, I was there about 10 times last year, and there is no finer feeling than to drive down
the Pacific Coast Highway on a sunny afternoon from Point Mugu to Santa Monica. When the sun reflects off the water, it almost takes one's breath away. You can see the Coast Ranges at night, and look back as moonlight richoets off the ocean.
Like the quaint Swedish town of Lindsborg, Kan., Solvang is famous for its berries. Only 40 miles northeast of Santa Barbara, it has gained national attention and interest for its eight-day festival.
The list goes on and—from the redwoods and the beautiful city of San Francisco in the north, down through the Sierra Nevadas and the San Joaquin Valley, to Mission Bay in San
Diego and the fertile Coachella Valley in the south.
Like the "Ugly American," it is people from New York who come out to California determined not to like it that give the Golden State a tarnish. I am extremely thankful that Knox is back in New York. I don't think he already enter California each day, I don't think the state needs anyone like Knox.
the era of John L. Lewis, who was president of the union for 40 years. This wave stems in part from the UMW's unresponsiveness toward the law. W. Anthony "Tony" Boyle, whose murder conviction was upheld last week, and the union's inability to provide effective leadership under Arnold R. Miller.
Knox is right; California is lacking in some areas. I can name three things that New York has to offer that California can offer: tenements, power blackouts and a high crime rate.
Lionel C. Tipton Bennington junior
Unsettled local grievances gradually wind up in the hands of a professional arbitrator who must rely on dividing his companies and the union to ensure his future business as an arbitrator. Unlike a judge, who is independent, any coal-fired arbitrator by law or management from deciding futures cases. A contract violation by a company continues to be in effect until it must cease as an arbitrator might order the company to correct it.
feeling that justice delayed is justice denied, coal miners go on out wildcat strikes over job rights, despite the avalanche of federal court injunctions, heavy fines and jail time so they do. Two U.S. Supreme Court decisions effectively eliminated the right of miners
to strike over any arbitrable contract issue, including safety.
contract issue, including safety.
MINERS THINK that coal can be mined through shred grievance handling whatever they might have lost at the bargaining table and established an ongoing grievance-handler training program. There is a high turnover among grievance com-
IN THE NEGOTIATIONS for a new contract, the only substantive changes in the grevance procedure were that all miners who go out on wildcat strikes and a proposal for a "local" right-to-strike over wages, which apparently was intended as a trade-off item.
The special tragedy is that a real opportunity to take a hard look at the real causes of the poor labor regulations in the coal industry and to bring about a climate in which problems at the mine site could be settled there is being passed by.
Steve Shapiro is president of United Mine Workers local union 6925 at Bishop, W. Va.
Interest-rate nostrum could spark housing crisis
by LELAND PRITCHARD
Guest Writer
In the Feb. 10 Kansas there appeared a New York Times feature article, "Raise Interest Rates for Home Money," adapted from a speech by the former CEO of Wells Fargo and Co. of San Francisco.
After a period of adjustment to this initial step, he advocates raising interest ceilings on all consumer savings accounts in all institutions now subject to loan associations and mutual savings banks. In financial institutional the flexibility to meet the needs of the housing industry."
As Cooley notes, there have been seven boom-bust cycles in the housing industry since World War II. He views that those periodic crises in the housing industry are largely attributable to "dismintermediation—which means that money flows between banks and thrift institutions..." His solution? Have 'the Federal Reserve Board and other regulators ... take the immediate step of raising the interest rate so summer time deposits nationwide, by or 2 percent ."
1 AM CERTAIN Cooley's interest-raising nostrum, far from curing the patient, would actually create crises in the housing industry that could otherwise be avoided. Take, for
example, the housing crisis of 1966. In December 1965, the monetary authorities raised interest cellings on consumer savings accounts in all insured commercial banks from 4.5 to 7 percent over seven months—January 1966-June 1966 time deposits in commercial banks increased by $18.1 billion, compared with an increase of less than $500,000 in commercial banks and loan associations. Housing starts decreased by almost 50 percent and for a time it was
A housing crisis existed, and the Federal Reserve authorities diagnosed the cause as disintermediation. But instead of demand, the Fed could Cooley would suggest, the cellings were lowered to 5 percent in July 1966. The effect of this reduction in interest rates held savings accounts was to sharply reduce the volume of
almost impossible to obtain financing for the sale and purchase of existing houses.
INSTEAD THESE deposits were transferred through the savings and loan associations—and consequently became a homebuyer industry. During the August-December 1966 time period, time deposits in commercial banks increased only $2 billion, and savings accounts in savings and loans increased to an immediate increase in the volume of loan funds available
"saved" demand deposits being shifted into time deposits.
" WELL, NELL, YOU GOT IT ALL IN ONE LOAD. THAT'S RIGHT ECONONICAL OF YOU, JIMMY."
to the housing industry, and the industry gradually recovered. In the hope of forestalling this decline, the Federal Reserve authorities collaborated with the Federal Home Loan Bank Board to have interest ceilings imposed on savings and loans as well as the commercial banks. They introduced September 1966 with the proviso that the rates for savings and loans would be one-half of a percentage point higher—later reduced to one-quarter of the percent limit—the setting rates imposed on commercial banks.
It is obvious from those data that the commercial banks suffered no disintermediation in the January-July 1966 period but the savings and loans did even better to accept any interest rate ceilings. Why this seeming contradiction?
DISINTERMEDIATION occurred in the savings and loans because their loan inventory was mostly made up of 4 to 5 percent long-term home mortgagees, combined when most of the commercial banks chose to go to the 5.5 percent ceiling. The commercial banks suffered no disintermediation before or after the ceilings were lower for the simple reason that more disintermediation is not predicated on interest rate ceilings.
Disintermediation for commercial banks can exist only in a situation in which
there is both a massive loss of faith in the credit of the banks and an inability on the part of the Federal Reserve to prevent bank credit contraction as a consequence of currency withdrawals from the banking system intermediation for the commercial banks occurred during the Great Depression, which had its most force in March 1933. Ever since 1933 the Federal Reserve has had the capacity to take unified action, through the creation of a currency to prevent any outflow of currency from the banking system by forcing the banks to contract credit.
Unlike savings and loans and other financial intermediaries, the commercial banks suffer no disinintermediation when savers lend to them. They can also another type of investment. Shifting from time deposits in commercial banks to nonbank funds is more risky because of the effect on the total assets or the volume of earning assets of the commercial banks. It merely involves a transfer from time to time between the banks within the banking system.
COMMERCIAL BANKS do not loan out time deposits, demand deposits or the equity of bank owners. Commercial banks earn assets through the creation of new money. When commercial banks make loans to, or buy securities from, the nonbanking community, demand deposits—is created in the banking system.
The aggregate lending capacity of the commercial banking system is determined by the monetary policy of the Federal Reserve Bank of America on the savings practices of the public. People could cease to hold any savings in the commercial banks and the legal lending institutions of the banking system, given our current institutional arrangements, would be unimpaired.
INSOFAR AS there is an interest-rate solution to the problem in the home and the business you recommend that interest ceilings on savings
accounts held by savings and loans and other financial intermediaries be removed and that interest ceilings be placed on all types of time deposits in commercial banks. Existing banks would gradually decrease the proportion of time to demand deposits, increase the flow of funds available to the so-called thrift industry, reduce the costs and increase the profits of the commercial banks.
Leland Pritchard is professor of economics at the University of Kansas.
THE UNIVERSITY DAILY KANSAN
*Published at the University of Kansas daily August 1, 2015*
*Students pay $8 per hour and July and August Saturday, Sunday and午休**
*Subscriptions by mail will be a $5 annuity or $14**
*a year as a member of the county. Student subscriptions are**
*a year at the university the county. Student subscriptions are**
*a year at the university the county.*
Editor
Barbara Rosewicz
Barbara Rosewicz
Managing Editor Editorial Editor
Jerry Sasa John Mueller
Instructor Editor
Campus Editor
Associate Editor Editors
Associate Editor Editors
Deb Miller, Leon Smith
Associate Sports Editor
Associate Editor Editors
Walt Braun
Entertainment Editor
Entertainment Editor
Pam Healy
Play Designer Editor
Business Manager
Patricia Thornton
Assistant Business Manager
Advertising Manager
Promotional Managers
National Advertising Manager Classified Manager
Karen Thompson
David Hedges
Lannie Dawson,
Kathy Long
Kim Morrison
Kathy Perengart
Publisher
David Dary