DOCUMENTARY HISTORY OF THE FLORIDA CANAL


There seems to be a general agreement upon two fundamental points, i. e., that
the traffic now moving through the Straits of Florida and which would move
through the proposed ship canal would do so at an annual direct saving in oper-
ating and fixed charges at the outset of approximately $12,000,000, and that the
average rate of acceleration of this traffic is such that these annual savings would
amount to approximately $20,000,000 by 1945, or within 10 years of the opening
of the canal.
 It is our opinion that the traffic should bear at least one-half of this saving by
means of tolls. Projected gross revenue of the canal may, therefore, be taken as
a gradually increasing amount, beginning with $6,000,000 for the first year and
rising to $9,600,000 per year by the end of the tenth year.
 In order to determine whether or not this project will be self-liquidating, it is
necessary to determine-
 (a) The cost of the money required to build it, i. e., the interest rate. Also
the rate of amortization required.
 (b) The maximum total construction cost.
 (c) Operation, maintenance, and all other items which must be paid out of
gross revenue.
 RATE OF INTEREST
 The rate of interest will be a pivotal factor during the years immediately fol-
lowing the opening of the canal. We believe that it may be fairly represented
to the Reconstruction Finance Corporation, and that that body may with pro-
priety recognize, that the thirty or forty million dollars of annual savings to the
commerce of the Nation and the value to national defense, which do not appear
in the direct revenue of the canal, may be accepted as ample justification for a
low interest rate. We believe that 3 percent is as much interest as this project
should be charged with during its earlier years, and we have assumed this rate
in our computations.
 AMORTIZATION
 The rate of amortization may be determined arbitrarily, but an examination
 of the attached table will show that the amounts available for this purpose indi-
 cate that repayment of the construction cost within 40 years is entirely possible.
 COST OF THE CANAL
 It is impossible at the moment to fix the exact actual cost of constructing the
 canal, but so much data has been gathered, so many surveys have been made,
 and general knowledge and experience of working conditions in the territory
 through which the canal will be constructed are such that it is possible to state
 a figure above which the construction cost should not go, and this maximum
 figure (if it is not too great) is all that is necessary for the present purpose.
 Available data developed by competent authorities show that the construction
 of a sea-level ship canal along any one of several routes will involve the removal
 of not more than 600,000,000 yards of material. Problems involved are of a
 routine nature; and the project represents, on the whole, a major operation in
 dredging.
 From our study of the data, and based upon our experience, it is our opinion
 that the total cost of the project should not exceed $160,000,000.
 OPERATING COSTS
 Since a ship canal will be tax free under the constitution of the State of Florida,
 and since it will be of the sea-level type, charges deductible from gross revenue
 are confined, in the main to maintenance and operation.
 The results of our study are outlined in the table attached hereto. It is our
 opinion that the project is self-liquidating in character, and it is recommended
 for financing.
 Yours very truly,
 BUCKMAN & Co.,
 By HENRY H. BUCKMAN.

 The above is the first formal presentation of the project as a sea-
 level canal and the first formal estimate of cost.