DOCUMENTARY HISTORY OF THE FLORIDA CANAL


of the enormous cost of building and maintaining additional highway bridges
at the cost of the people of the State. Such costs, coming after the canal has
been completed, will retard the development of the island of Florida. The
flooded valley of the Oklawaha will present a serious obstacle to any highway
crossing that valley.
 5. The engineers now making this joint statement do not believe that the low-
est unit construction costs can be reasonably expected for the project, and for
argument submit that:
 (a) Florida does not have within its borders all the necessary skilled and
common labor to man the project. The interstate railways of Florida continu-
ally bring from without construction and maintenance labor. The labor and
mechanics to be employed on the project will necessarily be subject to the work-
ing conditions and rates of pay which prevail in the United States, plus trans-
port costs A project of such magnitude will involve the costs of sanitary and
medical care for the employees.
 (b) Florida does not have much stone or gravel that will pass the customary
 specifications for hardness and toughness required for masonry specifications.
 Much of the coarse aggregate must be brought into the State. Florida has but
 few deposits of fine aggregate suitable for masonry, although there is much sand
 and sandy loam throughout the State. Much of the other construction mate-
 rials must come from beyond the State.
 (c) Florida does not have large local contracting organizations capable of
 handling any considerable part of the proposed work, and unit costs reported
 by the industrial plants in Florida since 1929 will be misleading if literally
 applied in the estimates of cost for the proposed work.
 (4) In fixing total construction cost of the work, consideration must be
 given to the shorter legal hours of service that may govern a project of this
 magnitude.
 6. On the basis of $300,000,000 cost, not including any interest during con-
 struction or development period, the project must earn annually a sum of money
 to provide for the following:
 (a) Interest on construction cost.
 (b) Taxes and public dues.
 (c) Credit for necessary additions and betterments, as and when traffic
 requires such improvements.
 (d) Maintenance of the property so created and for administration, opera-
 tion, and sanitation.
 (e) Reasonable profit on undertaking.
 (f) Amortization or sinking fund.
 In regard to these listed items, we can reasonably at this time point to two
 of them:
 (a) 5% percent interest on $30,000,000.--------------------$1- 500,000
 (b) Taxes and public dues------------------ __--- ----- -- 3,000,000
 Sum of above two items---.------.-----.--.-----.- -- 19,500,000
 In fixing the 5%-percent rate for interest, we follow the present rates of the
 Reconstruction Finance Corporation.
 Discussing the remaining items ((c) to (f) inclusive) we do not suggest
 what the cost of maintaining the completed project will be other than to point
 out the cost shown by the report of the Governor of the Panama Canal for the
 fiscal year 1982. Selecting those items that are applicable for comparative
 purposes, it appears that, on the Panama Canal basis, the annual operating
 expenses for the Gulf-Atlantic project as hereinabove described, may be ap-
 proximately $17,000,000. Neither of the two items ((a) and (b) above) in-
 clude amortization or depreciation, nor provide a sinking fund. The Panama
 Canal depreciation for fixed property for 1982 was $1,006,624. It is, there-
 fore, clear the $19,500,000 above cited is the minimum which this canal must
 currently earn, omitting consideration of the other listed items ((c) to (f)
 inclusive).
 7. In explanation of item for taxes and public dues (b), $3,000,000, we say
 that the capital available in the United States all comes now from the United
 States. When any portion of the capital is invested, that sum is lost as a
 source of taxation unless provision be made for a tax revenue from the project,
 hence the above inclusion (b). We do not overlook the requirement of section
 16, article 16, Florida Constitution, reading: