68 DOCUMYTARY HISTORY OF THE FLORIDA CANAL DOCUMENT NO. 23 (FILES OF CHIEF OF ENGINEERS), FEBRUARY 10, 193 THE GULF-ATLANIc SHIP CANAL-mrH RELATION OF VEsEL SAVINGS To Tozu, BT HlENB HOLLAND BUCKMAN, UNDER DATE OF FEBBU- Anr 10, 1983 The following extract is taken from the above document which was presented to the special board of Army engineers. The entirely natural attitude of every shipowner to any projected canal is that It should be free. Failing this, it should impose the lowest possible toll. From his point of view, the usefulness (if not the value) of a free canal is fairly obvious, but the usefulness of a toll canal becomes debatable in pro- portion to the proposed tolls. To those familiar with the history of all the great canals, this attitude of shipowners and operators is proverbial. It was manifested in the discussion before the Suez Canal was built, and to an even greater degree in the case of the Panama Canal. A proposed shipway that will effect important savings and that is to be free seldom brings forth from ship operators any unfavorable comment But when an Important toll canal is proposed, shipping quite naturally and understandably takes up a trading position and beginsto minimize the value and magnify the hazard of the water- way, with the object of keeping the tolls as low as possible. Here and there, isolated special interests, for reasons often inscrutable, but occasionally patent, profess to see no real value whatever in the canal These considerations strongly indicate that, while the only safe source of facts pertaining to ship- ping is the actual ship operator, he cannot occupy a position for impartial interpretation of these facts, and that whenever his conclusions appear to be at variance with the accepted operations of economic law, it may be necessary for the impartial investigator to take them cum grano salls. GOVmNING OONlIDEATIONS Shipowners will send their vessels through the canal for any one or all of the following considerations: 1 Savings in money, due to time saved. 2 The time itself that Is saved. Maintenance or betterment of competitive position and miscellaneous advantages. Any of these three considerations alone may be, wander certain circumstances, sufficient to cause the vessel to use the canal, provided that the toll imposed is proportionate. Theoretically, the second and third considerations may be translated into the first, but practically the third is incalculable, and a clearer view of the situation is preserved if the second is considered separately. PICDH OABIES ARM EAL SAVINGS It is fairly obvious, and not disputed, that whatever a vessel may save by reason of direct reduced operating costs (such as fuel, wages, subsistence, repairs, etc.) by using the canal is a real saving and will bear a toll. The point is sometimes raised by those who are not sufficiently informed, or by those seeking to minimize the value of the canal to the vessel, that fixed charges represented by the hours saved are more apparent than real and will not bear a tolL That, except in a small percentage of cases, this is not true will be shown. If the time saved to the vessel is wasted, and not utilized for additional operation, then, to the extent that it is wasted, fixed charges represented by the hours saved will be apparent only. But if, as is the case in an overwhelm- ing percentage of the shipping here considered, the time saved is usefully employed, every dollar of fixed charges represented by the time is a real saving which, had it not been made, would have meant an actual disbursement of cash in the long run. This is true of interest as well as other fixed charges such as depreciation, administration, etc. Occasionally there is raised by uninformed persons the point that interest is not usually charged to vessel operation or expense and hence is not a proper element of fixed charges. This erroneous opinion possibly originated in the forms prescribed by the Interstate