Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-11-22
CANAL To EARN
ACTUAL PROFIT
ON TOTAL COST
Governor Harding Submits
His Annual Report; Has
Closed the Best Year Fl
nanCiaIly in Its History.
tRy The Associnted Pressl

anna canal has closed the best year
financially in its six years Of opera
ton with an excess of S2,3S7, 500
in revenue over the expense OF OPP
Grafton and maintenance.
Brig. Gen. Chester Harding, gov
ernor of the Panama canal. pre-
dicted in his annual report to the
secretary of war, made public to-
day. that within a reasonable
period of normal world conditions
the canal will earn an actual profit
on it's cost, which has been $780,
$4,000, exclusive of expenditures
for its military and naval defense.
In the meantime, the general add
ed, the canal is performing an i'm
portant commercial service by
stimulating American trade with
the west coast of South America
and the Orient. More than rs per
cent of the cargo handled through
the canal since its opening was in
transit between the United States
and South America, and l4h per
cent was between the Atlantic coast
of the United States and the Orient.
Increase in Traffic.
Within the six years of opera
ton, General Hardings report said.
there has been a marked increase
in traffic through the canal. not
withstanding the fact that the
world war intertered with the nor
nal development of ocean-going
commerce. After the entry of the
United States into the war there
was a decrease in commercial traf-
fic, due to the diversion of certain
lines of ships to transatlantic
service, but this was more than Off
set by the increase in traffic grow
ing out of the war. chiefly on ae-
count of the development of the
nitrate trade with the Pacific coast
of South America.
Value of the Canal
Discussing the amount of money
expended by the United States on
the canal, Governor Harding said:
THE investment, from one point
of view, may be regarded as hav-
ing been made and justified in the
creation of an invaluable element
of national defense. If this be true
the canal has an additional value
in defending useful service in time
of peace, and in returning to the
to defray the expense of
its operation and maintenance. 1t
is capable of doing more than this,
and it is not an idle prediction to
state that with proper management
directed along the lines of a large
business enterprise, it will within
a reasonable period of normal
world conditions earn an annual
profit on the cost From an analy-
sis made under reasonable assump-
tons as to depreciation, obeles-
cence and interest, it is estimated
that with an annual revenue of
three times that of 1920 the canal
will make a financial return on the
The time required TO
produce this result will be affected
by any changes in legislation at
fecting charges for tolls
Tolls and Expenses.
In the year 2.745 vessels passed
through the canal, of which 2,478
were commercial transits. Tolls and
other revenue amounted to $685.
S71, while current expenses of OPP
Grafton and maintenance totaled to
$6,54S,272. The excess of revenue
this year reduced to $2,231, 091 the
excess Of expense and maintenance
over revenues for the six years the
canal has been in operation. At
the rate of revenues this year it Ia
expected that by June 80. 1921, the
collections for tolls and other canal
revenues will exceed by $1,000 600
or more the total current expenses
OF operation and maintenance from
the opening to that date. after
which, the canal authorities argue.
there should be an excess of $5,-
0O0, 000 or more each year.
Auxiliary Services.
The auxiliary services of the
canal have been largely utilized and
are of great value in carrying OUT
the policy of making it attractive
in all of the incidental services that
are considered by shipping inter-
ests in routing their vessels. Gen.
eral Harding said, adding that it
has not been the purpose to make
large profits on these activities, but
rather to regulate the charges so
as safely to cover the cost From
these miscellaneous services the
receipts for the year were: Coal,
$6,032,572; water. $55. 412; oil,
groceries and miscellaneous sup
plies, $1,274.556, and mechanical
repairs to ships, $3,S62,9S3.
With the growing traffic it will
be necessary to expand these aux
iliary facilities in the near future,
the general pointed out. He said
that drydock and shops Were in
adequate to meet the present re-
gu I. Of
ers and that if the development
was permitted to lag behind the
increasing traffic. the canal would
not be in position to handle all OF
the business offered
Dredging costs totaled $1,61l,-
$50 this year, or half million dol
lars more than last year because OF
the slides in Gaillard cut. The
first indication of the disturbance
came during a heavy rainfall in
october last year. The movement
continued without serious results
until February, 1920, when large
general slide carried huge masses
OF rock and earth into the canal,
obstructing the channel. except for
small draft ships.
Dredges kept the canal open to
all traffic with the exception of oc-
casional delays in February. March
and April and by June the channel
had been restored. Between Feb
ruary and September l. S90,S0o
cubic yards of material We're re-
moved. The motion of the slide
has been much retarded and new
period of stability is approaching,
The report said. On account of the
large amount of material moved It
is not probable that sudden move
ments of large masses will again
occur, according to the report, or
that movements will be more rapid
than the rate of removal by the
dredgeS