240 DOCUMENTARY HISTORY OF THE FLORIDA CANAL
and Harbors, it is most complete and adequate for a full determination of the
estimated value of the benefits to navigation which will result from its
construction.
 Senator VAND NBEO. Mr. Buckman, General Markham does not
comment on the final suggestion in the resolution, does he, which in-
quires whether it is appropriate to proceed with projects of this
nature in his judgment without the normal and ordinary enabling
acts of Congress?
 Mr. BUCKMAN. There is only one additional paragraph to the let-
 ter, which I am not reading now, but which I will ask the committee
 to permit me to read a little later, because it does not refer to the
 point here discussed, but to the question of the evidence of the ship-
 ping concerns, as to whether a canal would be a good thing or not,
 and I propose to read that paragraph on that general subject at the
 point when I am discussing that. There is nothing else in the letter.
 Senator VANDENHBER. He does not discuss the point which I have
 raised
 Mr. BUCKMAN. He does not discuss the point.
 The attention of the committee is invited to a recapitulation of the
 record as regards the findings of the several examining agencies, with
 regard to cost and economic justification. In the first place, it should
 be borne in mind that the engineers of the Public Works Administra-
 tion and the special board of survey of the Corps of Engineers de-
 veloped their cost estimates from plans and specifications for a lock
 canal which varied in many important details. For instance, the
 engineers of the Public Works Administration planned a canal with
 two locks, while the special board of survey considered a canal with
 three locks. Other important differences in plan and specifications
 make the estimates of total costs of these two examining agencies in-
 commensurate. Again, the board of review developed its cost esti-
 mate from plans and specifications for a sea-level canal. As these
 board of review plans and specifications and cost estimate of $142,-
 700,000 have been approved by the Chief of Engineers, these elements
 of the project may be considered as definitely determined. It remains
 to consider the benefits found by the examining agencies, and to apply
 these benefits to the cost of the project. The method for determining
 the economic justification of a river and harbor project established
 and followed by the Corps of Engineers is as follows:
 The direct benefits to commerce are determined as accurately as
 possible in terms of dollars and cents per year. From these direct
 benefits are deducted the annual cost of maintenance and operation
 of the improvement, and, in the case of a certain class of structures
 which are subject to depreciation, an additional annual amount is
 deducted to amortize such structures over a reasonable period of
 time. The net remainder of benefits, when capitalized at 3 percent,
 should exceed the estimated cost of the project, if it is economically
 justified. Sometimes, when the whole project is subject to depre-
 ciation, the net annual benefits are capitalized at 4 percent in lieu
 of charging amortization. In the case of the canal under discussion,
 the only structures which are subject to depreciation are two small
 water-control works, and certain bridges, the cost of which is less
 than 2y percent of the total cost of the project. With this explana-
 tion, the essential conclusions which may be drawn from the findings
 and figures of the board of review are the following: