CHAPTER VIII. THE NECESSITY FOR SPECIAL PANAMA MEASUREMENT RULES. One question to be decided in recommending rules for the measurement of vessels for the Panama Canal is whether to select one of the sets of rules now in force-the American, the British, or the Suez rules or to formulate a special code of rules to determine the tonnage upon which the Panama tolls shall be paid. If it were practicable to select for Panama the American, the British, or the Suez measurement rules, it would be desirable to do so. The shipping of the world is already subject to an unfortunately large number of measurements, and the unification of existing rules rather than an increase in their number is needed. If a special measurement code is adopted for Panama, the reasons should be clear and conclusive, and consideration should also be given to the effect which a special set of Panama rules may have upon the ultimate unification of all measurement and tonnage rules. GENERAL REASONS FOR HAVING A SPECIAL SET OF PANAMA MEASUREMENT RULES. In the preceding chapter and elsewhere in this report, attention has been called to the fact that the necessity of treating the vessels of all nations with entire equality requires the application of the same measurement and tonnage rules to all merchant vessels using the Panama Canal. It has also been pointed out that the dissimilarity in the measurement and tonnage laws of different countries precludes the levying of Panama Canal tolls upon the tonnage of vessels as stated in their certificates of national registry. The lack of uniformity in the measurement rules and practices of different countries would, if tolls were paid upon the tonnage stated in certificates of registry, cause the United States to violate the provisions of the HayPauncefote treaty, which stipulate that there shall be no discrimination among nations or their citizens or subjects in respect of the conditions of, or charges for, the use of the Panama Canal. There must not only be one set of rules for all vessels, but the rules must be such as to be fair as between countries and as between ships of different types. It has been decided that Panama tolls shall be levied upon net tonnage and that the net tonnage upon which charges are paid shall accurately express the earning capacity of vessels. If any one of the existing sets of rules is to be adopted, a code must be found that provides for the measurement of vessels and the calculation of net tonnage in such a manner as to make the net tonnage closely approximate, if it does not exactly equal, the earning capacity of the vessel. The British, German, and American rules do not make net tonnage a close equivalent of earning capacity, and it is believed that the Suez rules would not be entirely satisfactory for Panama. The provisions of these various measurement rules have been so fully analyzed in Chapters IV and V that this chapter need only correlate and summarize the facts that make the adoption of any one of the existing measurement rules inadvisable. The Suez Canal Co. levies tolls solely for the purpose of securing revenues. It has been the policy of the company to keep its tolls low enough to permit the growth of traffic. Moreover, the tolls and other charges are levied upon the earning capacity of vessels, the rates of charges being adjusted from time to time with the growth of traffic and revenue. As far as tolls and tonnage rules are concerned, the same general policy may wisely be followed by the United States Government in the management of the Panama Canal. In the long run a canal owned and operated by the Government may justifiably have lower tolls than a private corporation would charge if it owned the same waterway, but the proper basis for the charge would be the same whether the canal were owned by a Government or by a corporation, i. e., the charges, whatever they are, should be levied upon the earning capacity of the vessels served by the waterway. The analysis that has been given in previous chapters of the measurement rules of Great Britain, Germany, and the United States shows that none of these national rules meets the requirement that net tonnage shall be the equivalent of actual earning capacity; indeed, the national rules are purposely framed with a view to making net tonnage low-less than the equivalent of the available cargo and passenger capacity of vessels. The owners of British ships naturally favor low net tonnage for vessels under the British flag. Nearly half of the shipping engaged in international trade is of British registry. These ships are required to pay, on the basis of their net tonnage, light dues or tonnage taxes and charges for wharfage, dockage, and, usually, for towing, not only in British ports but in foreign ports the world over. Ordinarily, a vessel having low net tonnage will have less to pay as port charges of various kinds than would have to be paid if the vessel's official net tonnage were higher. In order to compete with Great Britain on equal terms, Germany and some other countries have framed or interpreted their laws for the measurement of vessels in such a way as to make the net tonnage of their ships practically equal to the tonnage which the same vessels would have if registered in Great Britain. The measurement laws of different countries are unlike in many particulars and the practice of admeasurers is not uniform, but the policy of Great Britain has a large influence upon measurement practice. The result of this is that in Germany, and in the case of most countries, net tonnage as stated in certificates of registry does not include all of the actual earning capacity of vessels. The United States Government is under less incentive to make net tonnage low than are foreign shipowners or the shipping authorities of foreign countries, for the reason that most of the shipping under the American flag is engaged in the coastwise trade and has no tonnage taxes to pay. A comparatively small tonnage of American shipping is engaged in the over-sea international trade. Nevertheless, net tonnage, American registry, fails to include all of the space available for cargo and passengers. The deductions for propelling power is, by the American regulations, made in accordance with the percentage rule, 32 per cent being allowed for engine and fuel space in the case of screw-driven vessels whose engine-room space comes between 13 and 20 per cent of the gross tonnage of the vessel. Most freight steamers have engine rooms occupying only a little over 13 per cent of gross tonnage, and the propelling-power deduction is frequently from 6 to 9 per cent of the gross tonnage in excess of the percentage of gross tonnage that would be deducted if the allowance were equal only to the actual space occupied by the machinery and fuel. Moreover, the American measurement rules, as has been pointed out, contain a provision that should long since have been repealed, exempting from measurement, in the case of passenger ships, all tiers of superstructures except the lowest. This provision excludes from gross and net tonnage the large spaces included in the second and third tiers of superstructures regularly found upon the large transoceanic passenger steamers. Although the owners of vessels will always desire measurement rules that make net tonnage as low as possible, and although Governments desirous of promoting the development of the merchant marine under their respective flags may deem it wise to keep the registered tonnage of national shipping lower than it would be if it accurately expressed the capacity of vessels for the transportation of passengers and cargo, there are no special reasons why the Panama measurement rules should make net tonnage less than the actual earning capacity of the vessels measured. The charges imposed upon ships that use the canal and the revenue derived by the Government from the management of the canal will be influenced both by the rules followed in determining tonnage upon which tolls are paid and by the rate of tolls charged. Of these two factors the measurement rules should be the constant and the rate of tolls the variable. Net tonnage should be an accurate expression of the earning capacity of vessels. The rate of tolls can be made as high or as low as may be deemed wise, and the rate of charges can be, and ought to be, changed from time to time with reference to the growth of traffic and revenue. If it be desired to try to promote the commerce of the world by keeping the canal revenues at a low figure, it will be necessary merely to adjust the rate of tolls accordingly. The tonnage upon which the charges are imposed can be kept equal to the earning capacity of vessels Whatever tonnage rules are enforced at Panama, they must apply to all vessels using the canal, American as well as foreign. It would not be permissible, even if it were desirable, to have one set of rules giving ships under the flag of the United States a low net tonnage and another set of rules giving foreign vessels a higher tonnage. Its treaties and its traditions require the United States to treat the vessels of all nations with entire equality. Thus nothing is to be gained for the owners of American ships by making the tonnage of vessels upon which canal charges are levied less than the equivalent of the earning capacity of ships, nor would low net tonnage for all ships, American and foreign, at Panama in any way affect the charges payable by American-owned ships at foreign ports. The charges payable by vessels at the ports of the world are, with few exceptions, based upon the registered tonnage of the vessels. OBJECTIONS TO ADOPTING THE BRITISH OR GERMAN MEASUREMENT RULES FOR THE PANAMA CANAL. It is to be regretted that the British measurement rules are not such as to give the ships measured by those rules a net tonnage closely corresponding to the earning capacity of vessels. Nearly half of the shipping of the world engaged in international trade has British registry, and the measurement rules of Germany, and to a less extent of some other countries, are so interpreted by national admeasurers as to give vessels registered in Germany and elsewhere a net tonnage roughly corresponding to the tonnage vessels would have if registered in Great Britain. Because of international competition, the British precedent as to measurement has a large influence in other countries, but the rules of different countries are not uniform, and may be interpreted by national admeasurers with a view to lightening the burdens of the owners of ships. The lack of uniformity in international rules, the tendency on the part of national admeasurers to interpret rules in such a way as to aid the shipping of their particular countries, and, most of all, the fact that the British and other national measurement rules fail to make net tonnage an exact expression of the passenger and cargo capacity of vessels, are the general reasons which make necessary special Panama measurement rules. The specific objections to adopting the present British or German measurement rules for the determination of the tonnage upon which Panama Canal tolls shall be paid may be stated in summary form as follows: 1. The British and German rules exempt from measurement large spaces under the socalled shelter deck-spaces which in actual practice are used regularly for the stowage of cargo. The shelter deck, it will be recalled, is the uppermost full-length deck provided with one or more "tonnage openings," which, while technically permanent openings, are in reality capable of being temporarily so closed as to keep out the sea. By no means all vessels have a shelter deck, but the large freight steamers for the transportation of general cargo are now usually of the shelter deck type. If the Panama rules were made the same as the British, as regards the treatment of shelter deck spaces, the vessels of different types would be treated unfairly and the United States Government would lose a part of the canal revenues to which it would be justly entitled. 2. The British, and likewise the German, measurement rules may cause admeasurers to exempt relatively large spaces in inclosed superstructures-spaces available for cargo or passengers because of the lenient or loose interpretation given to the phrase "permanent closed-in spaces on the upper deck available for cargo or stores, or for the berthing or accommodation of passengers or crew." British and German admeasurers may exempt large bridge spaces which under the American and Suez rules are properly regarded as closed-in. These different definitions of closed-in spaces result in discriminations among vessels of different types and make the net tonnage of registry less than real net tonnage. The British and German practice, past as well as present, regarding the exemption of spaces under shelter decks and within superstructures generally is fully discussed in Chapter XI. 3. The Board of Trade percentage rule regarding deductions for propelling-power and fuel spaces, the rule which is applied in Great Britain, Germany, and also in the United States, discriminates largely in favor of vessels of low speed and power, and also deducts from gross |