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

tonnage more space than is actually occupied by machinery and fuel. This percentage rule makes net tonnage for the majority of vessels appreciably less than their earning capacity. In Chapter IX will be found a full discussion of the origin of the percentage rule, of the efforts that have been made by the British Board of Trade to change the rule, and of the reasons why it is not deemed advisable to apply this rule at Panama.

4. The measurement rules of Great Britain and Germany, as applied to most ships, exempt large spaces that should be included in measurement, and thus make gross as well as net tonnage unduly low. The tolls at Panama are to be based upon net tonnage, but it is none the less important that the measurement rules should be such as to include in gross tonnage the entire closed-in capacity of the vessel. Spaces exempted from gross tonnage are thereby excluded from net tonnage, and unless gross tonnage includes the entire closed-in capacity of vessels, the net tonnage is almost sure to be an incorrect expression of earning capacity. The British and German rules are such as to exclude from gross tonnage not only spaces under a "shelter deck" fitted with a "tonnage opening" and spaces within superstructures provided with openings which make the spaces inclosed come within the technical definition of "open spaces," but the British and German rules also exempt numerous structures above the upper deck used for the navigation of the ship. The logical procedure, and the only one by which an accurate net tonnage can be calculated, is to include in gross tonnage the entire closed-in capacity of a vessel and to deduct therefrom, in calculating net tonnage, such navigation and other spaces as are not available for the accommodation of passengers or for the stowage of cargo.

5. The measurement rules of Germany exempt deck cargo from measurement, and thus exclude from the net tonnage upon which vessels pay charges large spaces used for carrying cargo and for earning freight revenue. Under the rules of Great Britain, deck loads are measured and the tonnage of the space occupied by deck cargo is added to the tonnage upon which light dues are paid. The objection to the British practice, however, is that cargo carried under a so-called "shelter deck" provided with a "tonnage opening" is treated as deck cargo and only such portion of the entire space under the "shelter deck" is measured as is actually occupied by the "deck" cargo. The practice of treating as deck loads the cargo carried under the "shelter deck" goes far to explain why the measurement rules of Great Britain are not so amended as to include within gross and net tonnage the spaces under the "shelter deck"-spaces which are quite regularly used for the stowage of dry as well as "wet" cargo.

OBJECTIONS TO ADOPTING THE EXISTING AMERICAN MEASUREMENT RULES FOR THE PANAMA CANAL.

The measurement rules of the United States give freight vessels and some passenger ships of American registry a larger gross and net tonnage than the same vessels would ordinarily have if registered in Great Britain or Germany, but the net tonnage of American vessels is in many cases less than the actual cargo and passenger capacity of the ship; and the rules are such as to discriminate largely between different types of vessels. The reasons why it would not be advisable to determine the tonnage upon which Panama tolls shall be paid by applying the American rules to the measurement of vessels using the canal may be briefly summarized as follows:

1. The provisions of the American rules which exempt from measurement the portions of a ship "used for cabins or staterooms and constructed entirely above the first deck, which is not a deck to the hull," would, if applied at Panama, unjustifiably exclude from the tonnage upon which tolls are paid relatively large spaces upon most steamers having passenger accommodations. Passenger steamers with more than one tier of passenger accommodations would be unduly favored as compared with other passenger vessels and with freight steamers. The exemption from measurement of the cabins and staterooms in the superstructures above the first tier is a defect in our tonnage rules that ought to be cured by the amendment of our navigation laws. The inclusion of such a provision in the Panama measurement rules would be inexcusable.

2. The deductions for propelling-power and fuel spaces under the American rules have, since 1895, been practically the same as the deductions made in Great Britain and Germany. The Board of Trade percentage rule is followed, and the deductions made thereby cause the net tonnage of most vessels to be less than their earning capacity.

3. The gross tonnage of vessels, as determined by the American rules, does not include the entire closed-in capacity of vessels, because of the exemption of cabins and staterooms situated "above the first deck which is not a deck to the hull," and because of the exemption from measurement of various navigation spaces located above the upper deck. The navigation spaces exempted under the American rules are designated and described in Chapters IV and XI. 4. The American rules exempt deck loads from measurement. In certain kinds of coastwise traffic the owners of vessels are tempted to put such large deck loads upon vessels as to endanger the safety of the ship and thus to place the lives of the crew in peril. To exempt the space occupied by deck cargo from the payment of Panama tolls would further strengthen the tendency to make vessels top-heavy. Deck cargoes need to be regulated by law, and there are special reasons why the spaces occupied by such cargo should not be exempted from canal tolls and other charges payable by vessels.

SPECIAL LEGAL AND POLITICAL REASONS AGAINST ADOPTING ANY ONE OF THE CODES OF NATIONAL MEASUREMENT RULES FOR THE PANAMA CANAL.

In addition to the above-mentioned specific objections to the adoption of the British, German, or American rules for the measurement of vessels to determine the tonnage upon which Panama tolls shall be paid, there is a legal reason calling for the adoption of special Panama measurement rules. The President's proclamation of November 13, 1912, provides that the tolls on merchant ships shall be "$1.20 per net vessel ton-each 100 cubic feet-of actual earning capacity"; and the Hay-Pauncefote treaty further provides "that there shall be no discrimination against any nation or its citizens or subjects." The President's proclamation makes it necessary that the Panama rules shall be such as to cause the tolls to be paid upon "actual earning capacity"; and the treaty, by prohibiting any discriminations against the citizens or subjects of any nation, practically prohibits unfair discriminations as between the owners of different types of vessels.

Of course it will be understood that the United States could not adopt for the measurement of vessels using the Panama Canal the national rules as such of Great Britain or any other foreign country and accept for the payment of Panama tolls the tonnage stated in British or other national registry certificates. If the United States were to adopt the British rules for Panama, they might not long remain the same as the existing British rules. The present British measurement laws first enacted in 1854 were amended in 1867, 1876, 1889, 1906, and 1907. In order to keep the Panama rules and those of Great Britain identical, it would probably be necessary for the United States from time to time to adopt the changes made by Great Britain in her rules. If the United States were to adopt the definite policy of keeping the Panama measurement rules the same as those prevailing in Great Britain, the United States would thereby give Great Britain an indirect control over the Panama Canal revenues. Naturally, the United States would not care to adopt such a policy.

REASONS AGAINST MAKING THE PANAMA MEASUREMENT RULES THE SAME AS THE SUEZ RULES.

While there would be strong and controlling reasons against adopting for the measurement of vessels using the Panama Canal either the British, German, or American rules, there would be much less objection to making the Panama rules practically the same as those of the Suez Canal Co. The adoption of the Suez rules at Panama and the acceptance of Suez tonnage certificates at Panama and of Panama certificates at the Suez Canal, would be of advantage to commerce, and, if practicable, the tonnage rules of the Suez and Panama Canals ought, ultimately if not immediately, to be made identical. It would seem that the Suez and Panama measurement rules might, without great difficulty, be made substantially the same, and the great desideratum of international unity in vessel measurement and tonnage be thus brought

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nearer realization. The Suez and Panama rules are certain to have the following points in

common:

1. The Suez rules are applied to vessels to determine the tonnage upon which tolls shall be paid for the use of an interoceanic canal whose services to the world's commerce are similar to those that will be performed by the Panama Canal. Measurement and tonnage rules that experience has proven to be satisfactory at Suez ought to prove satisfactory at Panama. The fact that the Suez Canal is owned and operated by a corporation and that the Panama Canal will be a Government enterprise will not necessarily affect the principles that should control in the formulation of rules for the determination of the tonnage upon which charges shall be imposed.

2. The Suez rules are applied to the measurement of vessels solely to determine a tonnage that may equitably be made the basis of charges for the use of the canal. Unlike the several national rules for the measurement of vessels, those of the Suez Canal Co. are not, and naturally would not be, formulated with a view to promoting the shipping of any one nation or to favor any particular class of vessels. The Suez Canal Co. would have the same reasons for basing its measurement rules upon accurate principles as the United States would have in deciding upon the regulations to be followed in determining the tonnage upon which Panama charges shall be levied.

3. The Suez Canal toll is levied upon the "ton of capacity" as defined in 1873 by the International Tonnage Commission that met in Constantinople. This body, made up of delegates from the leading commercial nations of Europe, formulated the Suez Canal Co.'s measurement rules with a view to making gross tonnage, as determined by those rules, approximate the closed-in capacity of vessels, and net tonnage the capacity available for the accommodation of passengers and the stowage of cargo. The Suez rules include within gross tonnage several spaces which the national rules improperly exempt from measurement, and, with few exceptions, the Suez rules exempt only such spaces as are not actually inclosed. Moreover, the Suez rules, as is fully explained in Chapters IX and XI, are more accurate than any of the national rules as regards deductions made from gross tonnage to determine net tonnage.

The largest single deduction made from gross tonnage is the space allowed for propelling power and fuel and as regards this deduction, the Suez rules are much more accurate than the percentage rule, the one followed in Great Britain, Germany, and the United States. The Suez regulations, as has been explained, give the owners of many vessels-ships that have fixed coal bunkers-the choice between having the propelling-power deductions made according to the German or actual-measurement rule or according to the Danube rule, which, in the case of screw-propelled vessels provides for a total propelling-power deduction of a space equal to one and three-fourths the space occupied by the engine room. In Chapter IX the objections to the percentage rule for propelling-power deductions are discussed at length.

However, the Suez rules, though based upon sound principles, do not fully realize the ideal of making gross tonnage the equivalent of the entire closed-in capacity and of making net tonnage synonymous with actual earning capacity. Some compromises were necessary in the formulation of rules framed by a commission composed of delegates representing rival commercial nations, and the practices then prevailing, especially in Great Britain, as to exemptions and deductions of particular spaces within vessels, naturally influenced the provisions of the rules as adopted.

Moreover, the steamship companies and navigation interests affected by the Suez rules have from time to time sought to bring about the amendment of the rules in such a way as to reduce the tonnage upon which tolls are paid. The amendments made to the rules by the canal company in 1904 were brought about by the interested navigation companies.

The provisions of the Suez measurement rules, as they were formulated in 1873 and as the rules are to-day after amendment, are fully analyzed and explained in other portions of this report. It is sufficient in this connection to say that the Suez rules as they stand to-day are not entirely logical. They fail, in several particulars, to observe the fundamental principles upon which the rules as a whole are based, and it would not be advisable to adopt, without