This short confirms Mr. Krabs couldn't swim when he was a kid. However, in the episode Clams, even though he was missing his entire bottom half, at the time, he had no problem staying afloat. He probably learned about swimming between this short, and Clams.
This short, along with other episodes, shows that, even though the characters are underwater, there are underwater lagoons, pools, and seas.
"We paid ten dollars for this?"
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