private parties or for any other departments of the Government which may be represented on the Isthmus. It seems to me that it would be wise to start on this basis and to allow the organization to increase as demands are made upon it for commercial work or work for other departments. Such work should pay its own cost at least. The organization contemplates the erection of two permanent shops, one large one in conjunction with the dry dock near one end of the canal and the other near the other end. One of these shops would include bronze, iron, and steel foundries, and special machinery for electrical work; the other should be able to make light running repairs and emergency heavy repairs. The cost is made up as follows: 1 superintendent.. Office: 3 clerks, at $1,800.. 1 draftsman.. 1 draftsman. 1 messenger.. Large shop: $5,000 $5,400 1,800 1,500 600 9,300 1 master mechanic... 3,000.00 2, 100.00 49 gold employees.. 73, 642. 44 73 silver employees. 27, 442.08 108, 584.52 58, 615. 48 181, 500.00 To have charge of all receipts and disbursements and of keeping books for commercial statistics. At the head of the department is a treasurer, in charge of the main office in which the books and commercial statistics are kept. He is supposed to be without financial responsibility. To him report the disbursing officer, the receiver of moneys, and the examiner of accounts. The financial responsibility is supposed to be centered in the disbursing officer and the receiver of moneys. Their accounts receive an administrative audit in the office of the examiner of accounts, and are forwarded for final examination in the Treasury Department by the treasurer of the zone, who, however, as stated, has personally no financial responsibility, his action in the matter being merely administrative. The expenses for the proposed organization are divided as follows: The estimated cost of the personnel is, therefore, as follows: Operating department (about 730 men).. $1,040, 460 Engineering department (about 500 men). 914, 700 Quartermaster's department (about 930 men).. Electrical and mechanical department (about 200 men). Accounting department (about 56 men)....... 106,400 Total (about 2,416 men).... 2,825, 660 The foregoing is for personnel alone, except in regard to the floating equipment, in case of which the estimate covers the material required for operation and repair as well. At Sault Ste. Marie the operation of the canal on the American side in 1909 cost, in round numbers, $106,500, of which amount $86,800 was for pay roll and the remainder for material-that is, the material cost about one-quarter of the pay-roll expense. On the same basis, the material for operating the Panama Canal should cost about $700,000, bringing the total cost of operation to, say, $3,500,000 annually. The corresponding cost for the Suez Canal is, say, 14,000,000 francs, or $2,600,000. This does not include interest on funded debt nor cost of betterments. The foregoing estimate is put forward as very approximate. Before actually fixing upon the organization, that of each of the different departments should be studied by experts in the particular line of work involved. I think, however, it is safe to say that, for the first few years at least, the canal can be operated for the sum named, and that the aggregate cost during this time will not vary greatly from the total of the estimate. 1 superintendent, at $2,500. Lock force organization, 1 shift. 4 assistant superintendents, at $2,000. 6 lock masters, at $1,800....... 6 signalmen, at $900... 2 operators, switchboard, at $1,800. 24 lockmen, second class, at $900. 2 artisans, at $600. 1 foreman, at $900. 2 messengers, at $600.. 3 clerks, at $150, $100, and $75.. 3 recorders, at $900.. GATUN. $2,500 8,000 10,800 5.400 3,600 24,000 12,960 21,600 19, 200 3,600 3,600 5,760 1, 200 900 1, 200 3,900 2,700 130,920 8 operators, locomotive, at $1,500. 1 recorder, at $900. $12,000 4,320 7, 200 9, 600 3,600 1, 800 3,840 1, 200 900 1, 200 900 62, 060 MIRAFLORES. 1 superintendent, at $2,500.. 4 assistant superintendents, at $2,000. 4 lock masters, at $1,800... 4 signalmen, at $900... 2 operators, switchboard, at $1,800.. 4 pier men, at $900 2 recorders, at $900.. $2,500 8,000 7, 200 3, 600 3, 600 24,000 12,960 21, 600 19, 200 3,600 2, 400 4,800 1, 200 900 1, 200 1,800 118,560 Senator BRISTOW. We should like to have that. That has not been printed in any of our hearings. Prof. JOHNSON. That estimate, as I say, is that the operating expenses will be about $3,500,000 annually, and that Zone sanitation and Government will add $500,000 a year more, We are now paying Panama $250,000 a year as an annuity, payable under the treaty of 1903. The canal will cost us, up to the time we open it for commerce, $375,000,000. The CHAIRMAN. Are you including in that the proposed payment Columbia? Prof. JOHNSON. No; I am not. The CHAIRMAN. That would make an even $400,000,000? Prof. JOHNSON. Yes, sir. Senator PERKINS. Exclusive of fortifications? Prof. JOHNSON. That has not yet been approved by the Senate. Senator PERKINS. That does not include fortifications? Prof. JOHNSON. No; that does not include fortifications. Three per cent interest on $375,000,000 will be $11,250,000, making $15,500,000 to cover the items named. And if it is the policy of the American people eventually to return to the Treasury of the United States the sum that has been invested in the canal-that is, to amortize the debt-it would be necessary to include in annual outlay 1 per cent on the investment, or $3,750,000 additional. Those figures would make a total of $19,250,000 a year. If our revenues amount to that the canal will carry itself commercially, and eventually return to the Treasury the sum that has been invested in the enterprise. I do not speak at all of military and naval expenses, which I assume the military and naval budget pay properly be called upon to carry in the interest of national defense. Senator SIMMONS. Have you seen any official statement as to the probable amount required for these expenditures? Prof. JOHNSON. Congressman F. C. Stevens, of Minnesota, has put it at about $15,000,000. The CHAIRMAN. A year? Prof. JOHNSON. A year. Senator SIMMONS. Military and naval expenses? Prof. JOHNSON. Military and naval expenses. I do not know the basis of his estimates. The estimates that Col. Goethals has given me in an informal conversation, as I remember, were from $8,000,000 to $10,000,000 a year. Senator SIMMONS. That is about what I thought it was. know how I got the impression. I do not The CHAIRMAN. So that on the basis of Col. Goethals's informal statement of $10,000,000, $29,000,000 would be the entire amount annually that we should get from the canal if it is to be made selfsustaining? Prof. JOHNSON. Yes, sir. Senator BRISTOW. Do you recommend that tolls be fixed with a view of meeting all of these expenditures? Prof. JOHNSON. I recommend that the tolls be collected with the view of ultimately securing revenue that will make the canal commercially self-supporting. Senator BRISTOW. Why should this waterway be treated any differently from other waterways in which we are investing largely? Prof. JOHNSON. That question, I remember, Senator, was up for discussion two years ago when I was before the committee, and I do not know that we are any nearer agreement now than we were then; but I feel now as I did then, Senator, that this country has reached the point where it needs to conserve its revenues with business prudence. We have invested in this canal between the two oceans for the use of the commerce of the world, as well as for our own shipping, some $375,000,000-possibly it may run to $400,000,000 if the Senator's suggestion should be carried out and we should add $25,000,000 for Colombia. That is a very large sum invested quite outside of our territorial domain upon an international highway. It would seem a safe and prudent fiscal policy to adopt to make that enterprise carry itself so that we may have $400,000,000 more to invest in the development of our resources within the country. Senator BRISTOW. Do you regard this as not useful in the development of our resources? Prof. JOHNSON. Very useful; and, as I point out in the statement I have drafted, those who use the canal will derive direct and rather large profits from the use of it. They can, without burden to themselves, relieve the taxpayers of the country of this annual expense and of this capital investment. The CHAIRMAN. Who will be the principal users of the canal in commerce, Professor? Prof. JOHNSON. To answer your question as specifically as I can, Senator, my estimate is that during the early years of the operation of this canal, during 1915 or 1916-I do not say 1915, because it takes commerce some time to readjust itself to new routes and new conditions of trade--but during the initial years the figures indicate that the total net tonnage of vessels passing through the canal will be some 10,500,000 a year. Of that, 1,000,000 tons will probably be tonnage contributed by the commerce between our two seaports. The CHAIRMAN. Are you bearing in mind in that estimate that the railroad-owned ships will be excluded from the canal largely? Prof. JOHNSON. I am aware of that law, yes; and that those figures were made before that law was passed. Senator BRANDEGEE. Just there; there will not be so many railroadowned ships as there were, will there? Prof. JOHNSON. I do not think the tonnage coastwise will be less than 1,000,000 tons in 1915-16. Senator THORNTON. I take the liberty at this time to make the suggestion that was made two years ago and which was adopted by the committee and which I thought worked very well, and that was, when a witness had a connected statement to make to the committee that he he be allowed to make it and that all members of the committee who wished to ask questions of him would make notes as he went along of what they wished to propound to him afterwards and do it then without breaking in on the thread of his statement. I think it makes the proceedings a great deal better. The CHAIRMAN. You may conclude your answer to this question, then we will resume and follow that course. Prof. JOHNSON. It just happens, Senator Thornton, that the chairmen's question was in direct line with my statement. Senator THORNTON. I made that as a general suggestion. Prof. JOHNSON. I stated that of the 10,500,000 tons of shipping that will probably use the canal annually in 1915 and 1916, 1,000,000 tons will be contributed by the coast-to-coast shipping, and some 720,000 tons by American shipping, carrying the foreign trade of the United States. The remainder of the shipping, some 8,780,000 tons, consisting of foreign shipping carrying commerce of the United States and of other countries. |