258 A TREATISE ON DREDGES AND DREDGING 



Annual Expenses. In the annual expenses are included the 

 interest of the capital invested in the plant, the sinking fund, insur- 

 ance, taxes, profit of contractor, general expenses, etc. 



The dredging plant required for any harbor or river improvement 

 as a rule is very expensive, being composed of complicated and 

 large machinery and numerous boats which necessitate the invest- 

 ment of a large capital. This capital if invested in any other wav 

 would certainly yield a profit, according to the conditions of the 

 market, of 4 or 5 per cent per year. Consequently it cannot be 

 said that the work performed by the machines has given a certain 

 profit unless this interest has been deducted. In dredging, owing 

 to the large capital invested in the plant, this interest charge is 

 not likely to be overlooked, as when the plant is owned by private 

 contractors, it is sometimes heavily mortgaged, and when owned 

 by a public corporation, it has been acquired with money obtained 

 from an issue of bonds, on which yearly interest must be paid. 

 In any case the engineers should deduct from the gross profit the 

 amount corresponding to at least 5 per cent of the total value of 

 the plant on hand. 



The life of any contractor's plant, especially one used for dredging, 

 is comparatively short. Notwithstanding the continuous repairs 

 which are made to the machine while at work, and the general 

 overhauling which is usually given at the end of each working season, 

 the machine depreciates continuously. The repairs increase from 

 year to year, until a point is reached, when to keep the machine 

 in working order, the expenditure required will be such as to justify 

 the purchase of a new machine. From the yearly gross profits of 

 the business a sinking fund should be set aside, so as to accumulate 

 money to purchase a new dredge. In a word the same method 

 must be used as for determining a sinking fund. It is difficult to 

 determine the life of a dredge, since it could be extended by constant 

 repairing for many years, but as a rule the life of the dredge is 

 estimated to be from 15 to 20 years. At the end of this period, 

 the machine, although greatly depreciated, will as junk still have 

 9 certain value, probably about 10 per cent of the original cost. 

 The annuity or amount of money to be set aside from the gross 

 profit of the undertaking should be such that at the end of 15 or 

 20 years will give an amount equal to nine-tenths of the original 

 cost of the plant. 



Another item of annual expense is the general overhauling 



