88 DOCUMENTARY HISTORY OF THE FLORIDA CANAL

canal route as compared with the present one via the Straits of Florida, and
the capitalization (by means of rates and fares charged) of the value of re-
duction in time of shipment and travel--are less definite in amount than
savings in operating expenses and fixed charges, but are none the less real, and
furnish additional evidence that vessel owners will willingly pay tolls equal
to the savings in operating and capital costs.
 The comprehensive investigation of actual voyages of vessels and of the
 operating expenses and fixed charges of such vessels made by Lt. OoL Gilbert
 Youngberg Indicated that the use of the proposed canal across Florida would
 have resulted in an annual saving in such expenses and charges of approxi-
 mately $12,0000000. The conclusion reached by Colonel Youngberg has been
 approved by your consulting engineer, Mr. Henry H. Buckman, who has also
 made a thorough study of the prospective traffic of the proposed canal The
 trafi investigation made by Colonel Youngberg indicated that tolls yielding a
 revenue equal to the actual saving in operating expenses and fixed charges,
 or yielding a substantially less amount, would make the canal self-supporting,
 L e., would cover operating expenses, maintenance, interest, and amortization.
 The advantages (other than reduction in operating and capital costs) listed
 above-advantages that would be secured by shipowners without payment of
 tolls-will not only strengthen the position of the proposed canal as a traffic
 route but will add to the benefits it will render to the public as well as to the
 carriers that make direct use of the waterway.
 Very truly yours,
 EMoar R. JOHNson.
 It may be noted that Dr. Johnson, who developed the economic
 data upon which the Panama Canal was based, and who devised
 the toll structure of that waterway, is of the opinion that vessels will
 pay up to the full amount of their savings over any such shortened
 route. This should be compared with the assumption of the Presi-
 dent's board of review as set forth in their supplementary report of
 September 15, 1984 (see Doe. No. 58) that ships would pay as toll
 only 45 percent of the savings The importance of the point lies
 in the fact that while all authorities substantially agree on the sav-
 ings to be effected by the canal they are in disagreement as to the
 portion of the savings which the ships would yield in the form of
 tolls. The project can be economically justifiable and at the same time
 not self-liquidating, depending upon the assumption that is made
 with regard to this point. If all of the agreed savings were yielded
 by the ships as tolls, the canal would liquidate itself within a period
 of approximately 20 years. If less than half of these savings can be
 counted as potential tolls, then the project probably cannot be made
 self-liquidating. The President's special board of review assumed
 that only 45 percent of the savings could be collected as tolls and
 therefore found the project not self-liquidating. The engineers of
 the Public Works Aministration assumed that 80 percent of the
 savings could be collected as tolls, and found that the project would
 be serf-liquidating. The eil board of Army engineers did not
 treat of the canal as a se liqdating project, since this is not cus-
 tomary in the examination o river and harbor projects. All three
 of these authorities found the project would yield savings which
 would justify its cost, but one of them found it was not self-liqui-
 dating, another that it was self-liquidating, and a third did not
pronounce upon this point.