DOCUMENTARY HISTORY OF THE FLORIDA CANAL 117

 The special board of review has made a further assumption with regard to
traffic which is contrary to experience. It has assumed that during the first
year in which the canal is opened only approximately 33 percent of the traffic
which might use the canal advantageously will do so; that it will require 5
years for approximately 85 percent oj this traffic to discover and avail itself of
the advantages of the canal, and that thereafter the remaining 15 percent will
not use the waterway. When it is considered that the operation of ships
is probably as keenly competitive as any business in the world, it is difficult
to understand how a ship-operating management could justify its failure to
take advantage of any savings, however slight, which might accrue by the use
of new and better facilities. The history of all navigation has been the dili-
gent search for, and seiaing upon, even slight savings in expenses, or in oper-
ating advantages in procurement and delivery. The assumption of the board
that only a comparatively small portion of the traffic which might advanta-
geously use the canal will do so during the first 5 years, and that thereafter
not more than 85 percent of this traffic will transit the canal, has resulted in
an unwarranted major reduction in the estimated revenues.
 Coming to the special board of review's findings as to the amount a vessel
will pay as toll it is seen that the board has assumed that a vessel will not
pay for the use of the canal more than a sum representing considerably less
than half of the savings to the vessel in operating expense and fixed charges.
Such a basis would leave to the vessel the entire value of the increased number
of voyages each year plus more than half of the direct savings in operating
costs and fixed charges. Experience has shown that a vessel ordinary will
pay as toll the full savings in operating costs and fixed charges if it can thereby
increase the number of voyages it can make. It would appear reasonable to
assume a revenue based upon tolls which represent something less than the
total savings In fixed charges and operating costs, but there seems to be no
adequate basis for assuming that this must be less than one-half of such total
savings. How materially this assumption of the board has affected the general
picture of the canal's revenues will be understood when it is considered that the
tolls (and the resulting revenues) assumed by the board might be doubled and
still be less than the total direct savings to vessels in operating costs and
fixed charges.
 To sum up: In making its findings the special board of review has employed
margins of safety represented by the following assumptions:
 1. That the potential traffic will steadily decline.
 2. That of this steadily declining traffic only a portion will avail itself of
the savings it could secure by use of the canaL
 3. That the portion which does use the canal will pay as toll considerably
less than one-half the direct savings in operating expenses and fixed charges.
 The result of the use of these margins of safety by the special board of
review has been its classification of the project as justifiable on general
economic grounds; as self-supporting insofar as the payment of operating and
maintenance expenses are concerned; and as capable of repaying its construc-
tion cost from net revenues in approximately 36% years; but as incapable
of carrying the additional burden of interest It will be seen that even a
slight modification of any of the above three margins would at once change the
classification of the project and show it to be self-liquidating upon any rea-
sonable terms of interest and amortization.

 GENERAL ECONOMIC JUSTIFICATION
 It should be borne in mind that all that has been said above pertains only
to the justification of the canal as a self-liquidating project. Most great river
and harbor projects (not subject to considerable depreciation) are justified
economically by capitalizing their general net economic benefits on a 3-percent
basis. If there is little or no question as to the proposed canal being self-
liquidating, there is an unanimous opinion to the effect that it is justifiable on
general economic grounds, when measured by the same yardstick used to deter-
mine the justification of other river and harbor projects.
 The direct economic benefits resulting from the construction of the pro-
posed waterway may be classified under the following heads:
 1. Direct benefits to shipping, in dollars and cents.
 2. Savings to the Government of the cost of constructing the connecting link
between the intracoastal canal systems of the Atlantic seaboard and the Gulf of
Mexico.