DOCUMENTARY HISTORY OF THE FLORIDA CANAL 397

 We, therefore, advocate the completion of the canal and believe that shipping
safety, shortened distance, and lowered freight rates will benefit the entire
State of Florida and the whole United States.
 May we respectfully request your support in having this canal completed?
 With personal regards, we are,
 Sincerely yours,
 RAT & DAvIsoN, Proprietors.
 By W. C. BAY.
 I have received a large number of other communications disproving the
fallacy that damage to Florida's water supply would result from the completion
of the canal, but I shall not take your time to enumerate them.
 In answer to an inquiry relative to the nature and extent of available traffic
 to warrant the ultimate expenditure of approximately $140,000,000, General
 Markham recently said:
 "The special board of engineers had available data compiled by the Depart-
 ment of Commerce. In addition, they made a detailed study to determine the
 economic benefits to transportation which would result from the construction of
 the canaL While this information and data have not been reviewed in detail by
 the Board of Engineers for Rivers and Harbors, it is most complete and ade-
 quate for a full determination of the estimated value of the benefits to naviga-
 tion which will result from its construction."
 In commenting further relative to the economic Justification of the project,
 General Markham continued:
 "The special board of Army engineers made an extensive economic survey,
 and was aided in the preparation of its report by an independent survey under-
 taken by the Department of Commerce at the request of the Chief of Engineers.
 The determinations of the special board to shipping concerns, so that it might
 be informed as to their opinions with respect to the effect of the project on the
 individual interests of the companies concerned. In determining the economic
 justification of a proposed river and harbor improvement, the investigating offi-
 cers ascertain the definite savings in time and distance which will be made
 available to navigation without increased hazards as a result of the improvement
 in question. These savings in time and distance converted into monetary sav-
 ings and such other incidental benefits as clearly accrue to water-borne com-
 merce and the general public interest, such as a reduction in the hazards of
 navigation, form the basis for the determination of the economic justification of
 a .roject. The views of navigation and commercial interests as to the effect
 which the proposed improvement may have on their operations are an aid
 to the board in weighing the public value of the savings and benefits as deter-
 mined by the board."
 Attention 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 Administration and the special board of survey of the Corps of Engineers
 developed 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 differ-
 ences in plan and specifications make the estimates of total costs of these two
 examining agencies Incommensurate. Again, the board of review developed its
 cost estimate 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 con-
 sidered 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 addi-
 tional 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 depreciation, the net annual
 benefits are capitalized at 4 percent in lieu of charging amortization. In the