96 TEE SCIENTIFIC MONTHLY
the traffic pay for the canal. By no means. We should not even ask the traffic to return to us any part of the canal cost^ but we may, in all fairness, ask for a small interest return in order that foreign shippings engaged in trade between foreign countries^ may not be relieved entirely of a fair contribution toward interest on the money invested in the canaL
In so far as the business having any United States port at one end is concerned, it would be not only proper, but desirable, to have the tolls arranged with a view to making no interest return upon the invested capital. Let the whole country, every section of which profits directly or indirectly, stand this part of the operating cost. But in the case of traffic through the canal with foreign ports at each end of the buainess transaction the matter is different, and whether the ships be under a foreign or under the American flag, the tolls should be somewhat higher, estimated perhaps as they would be estimated if the entire traffic through the canal were to yield a low interest rate on the investment.
Professor Emory R. Johnson, in his report as special commissioner on Panama traffic and tolls, addressed to the Secretary of War in 1912, passes lightly over these questions. He accepts the principle that "busi- ness prudence and political wisdom demand that the canal shall be com- mercially self-supporting, provided revenues large enough to enable the canal to carry itself can be secured without imwisely restricting traffic '* and says "the annual revenue ultimately required to make the canal self-supporting will be about $19,250,000." In this sum there are in- cluded $3,760,000 for amortization of the governments investment in the enterprise. Professor Johnson says :
In deciding what toUs shall be charged for the use of the canal, the funda- mental question is whether a Bystem of charges can be devised and levied that wiU ultimately yield about $19,250|000 per annum without unduly burdening American trade and without seriously limiting the abiUty of the canal to com- pete for traffic against the routes via the Straits of Magellan, the Gape of Qood Hope and the Suez Canal.
It is gratifying to find that in a later paper read before the Inter- national Engineering Congress in 1915 by Professor Johnson, there is an apparent modification of the view expressed by him in 1912. He
says:
The government should resist this pressure [to lower the rate of tolls] until the revenues derived from the canal cover the annual operation and maintenance expenses and the interest on what it cost to build the waterway.
This is sound doctrine, if we accept interest to mean interest at a low rate, except only for the fact that the government might do well to give way to the pressure long before interest on cost is fully covered by the earnings.
Professor Johnson in his recent paper points out that if the rate of
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