DOCUMENTARY HISTORY OF THE FLORIDA CANAL


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classes of skilled and unskilled labor; that the design is in accord with sound
engineering practice; and that the project is economically sound.
 "'It is recommended that the loan, with or without the grant, be made.'
 "The Administrator rejected these findings and did not approve the loan.
 He stated later to a subcommittee of the Senate Committee on Commerce that
he had not rejected the project as a river and harbor project but merely be-
cause he did not agree that cash tolls could be collected enough to represent
sufficient security for the loan under the regulation of the Public Works Ad-
ministration for self-liquidating projects, and that his action was without
reference to the merits of the project as a regular river and harbor item.
 "H. In December 1933 the board of survey of the Corps of Engineers com-
 pleted its work and made its report. In accordance with the usual procedure,
 this report was not made public but was filed with the Board for Rivers and
 Harbors, which ordinarily would examine the same and make a report to the
 Chief of Engineers, who would in turn report to the Committee on Rivers and
 Harbors of the House. The project, however, had been, by order of the Presi-
 dent, already placed in process In the Public Works Administration, which gave
 it a special status, and, until finally disposed of there, it was deemed inappro-
 priate to continue processing the project through the Board for Rivers and
 Harbors. Pursuant to usual practice, the Chief of Engineers did not make
 public this report but permitted its examination by Members of the Congress.
 "I. The above-mentioned report of the board of survey of the Army engineers
 indicated a preference for a lock canal along the same route called for in the
 preliminary survey, and estimated the cost of this lock canal at $190,000,000,
 with benefits to commerce of upward of $8,000,000 per year.
 "J. It should be noted the economic survey of the Army engineers was based
 upon an independent survey made by themselves and supplemented by a statis-
 tical survey made at their request by the Department of Agriculture. The eco-
 nomic survey made by the Public Works Administration was an independent
 survey. All of these surveys agreed substantially that the direct benefits to
 commerce would be something over $8,000,000 per year. The Public Works
 Administration and the Army estimates as to the cost of the project were, how-
 ever, $115,000,000 and $190,000,000, respectively. It developed that this was
 largely due to the fact that the Army was considering three locks and the
 Public Works Administration two locks, and to certain other differences in unit
 construction-cost estimates.
 "K. Early in 1934 the President constituted a special board of review com-
 prised of two Army engineers, two engineers from the Public Works Adminis-
 tration, and a fifth engineer from civil life selected by the other four. This
 board was instructed to review the reports of the Public Works Administration
 and the board of survey of the Army and to make a report with recommenda-
 tions to the President
 "L. The board of review undertook to pass upon the project as a regular rivers
 and harbors project and not as a self-liquidating project for a loan. In June
 1934 this board reported to the President that, in its opinion, a sea-level canal
 was feasible and preferable; that such a canal would have no serious effect
 upon the underground water supply of Florida; that it would cost $142,700.000.
 exclusive of interest during construction and land for right-of-way. The board
 recommended the construction of the canal to the President and stated that,
 based upon the economic data gathered by the Army engineers, the project was
 Justified on a 4-percent basis even up to a cost of $160,000,000.
 "M. Shortly after receipt of this report, the President instructed the board to
 examine the project with a view to determining whether, instead of being a
 regular rivers and harbors project, free from tolls, it could be made a self-
 liquidating project and used as a basis for a bond issue. On this particular point
 the board reported adversely in September 1904, basing its conclusion upon the
 assumption that a ship would not pay as cash toll more than 45 percent of the
 amount it would save. The board recognized, however, that the full amount
 saved by shipping would be ample justification for the construction of the
 canal as a rivers and harbors project.
 "N. In January 1985 the Administrator of Public Works, having up to that
 time withheld final action on the question of a loan for the construction of the
 canal as a self-liquidating project, overruled the recommendation of his engineer-
 ing, financial, and legal divisions and disapproved the loan.
 "O. At this point the project stood approved by the board of review as a
 rivers and harbors project, justified by the benefits it would yield to commerce,