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INTRODUCTION-SCOPE OF THE REPORT.
By proclamation, issued November 13, 1912, the President of the United States, acting upon the authority given him by the act of Congress approved August 24, 1912, prescribed the following schedule of tolls to be paid by vessels using the Panama Canal:
1. On merchant vessels carrying passengers or cargo one dollar and twenty cents ($1.20) per net vessel ton—each one hundred (100) cubic feet—of actual earning capacity.
2. On vessels in ballast, without passengers or cargo, forty (40) per cent less than the rate of tolls for vessels with passengers or cargo.
3. Upon naval vessels, other than transports, colliers, hospital ships, and supply ships, fifty (50) cents per displacement ton.
4. Upon Army and Navy transports, colliers, hospital ships, and supply ships one dollar and twenty cents ($1.20) per net ton, the vessels to be measured by the same rules as are employed in determining the net tonnage of merchant vessels.
By the act of August 24, 1912, Congress provided that
Tolls may be based upon gross or net registered tonnage, displacement tonnage, or otherwise, and may be based on one form of tonnage for warships and another for ships of commerce. The rate of tolls may be lower upon vessels in ballast than upon vessels carrying passengers or cargo. When based upon net registered tonnage for ships of commerce the tolls shall not exceed $1.25 per net registered ton, nor be less, other than for vessels of the United States and its citizens, than the estimated proportionate cost of the actual maintenance and operation of the canal, subject, however, to the provisions of article nineteen of the convention between the United States and the Republic of Panama, entered into November eighteenth, nineteen hundred and three. If the tolls shall not be based upon net registered tonnage they shall not exceed the equivalent of $1.25 per net registered ton as nearly as the same may be determined, nor be less than the equivalent of 75 cents per net registered ton. The toll for each passenger shall not be more than $1.50. The President is authorized to make, and from time to time amend, regulations governing the operation of the Panama Canal, and the passage and control of vessels through the same or any part thereof, including the locks and approaches thereto, and all rules and regulations affecting pilots and pilotage in the canal or the approaches thereto through the adjacent waters.
In his proclamation of November 13, 1912, the President directed the Secretary of War to prepare and prescribe such rules for the measurement of vessels and such regulations as may be necessary to carry this proclamation into full force and effect." ”
The primary purpose of this report is to present the facts to be considered in formulating rules for the measurement of vessels and to recommend a set of rules to be followed in determining the tonnage upon which vessels using the Panama Canal shall pay tolls. The report includes a code of Panama measurement rules and a form of certificate to be issued to vessels measured for Panama Canal tonnage. The report is intended to explain the rules fully and to afford a guide to those whose duty it shall be to apply and interpret the rules. It is expected that the report will be consulted by the officials, American and foreign, who measure vessels and issue Panama tonnage certificates, by the administrative officials who pass upon those certificates when presented at the Panama Canal, and by those judges who may have to decide cases involving the interpretation that Panama Canal officials have given the rules. To carry out this purpose more effectively, an effort has been made so to write the report that it may readily be understood by those who do not have a technical knowledge of tonnage questions.
Rules for the measurement of vessels must, if possible, be so framed as to be readily and accurately applicable to the vessels that are to be measured. The rules must fit the ships, and ocean vessels of to-day are complicated structures of many types and designs. It thus seemed clear that this report upon the measurement of vessels ought to begin, as it does, with a brief illustrative description of the main types of ships whose tonnage will be determined by the rules to be formulated.
The words "ton" and "tonnage" have so many meanings that it is difficult, even for the technical man, to use the terms with strict accuracy. It is necessary, first of all, in framing rules for the determination of the tonnage upon which Panama Canal charges shall be imposed, to decide which kind of ton shall be made the basis or unit of the charges. The report in Part I explains the different kinds of tons and analyzes the provisions of the rules by which the United States, Great Britain, Germany, and the Suez Canal Co. determine the gross and net tonnage of vessels. This survey and analysis of the vessel-measurement rules of three important commerical countries and of the company operating the interoceanic waterway most comparable with the Panama Canal brings out the merits and defects of existing tonnage rules and makes clear what should be the main provisions of the Panama measurement code. Subsequent chapters of the report discuss the principles that should control in framing rules to determine the tonnage upon which vessel charges should be imposed. The report, as a whole, may thus be regarded as a treatise on tonnage and vessel measurement prepared with reference to framing rules to apply in determining the tonnage upon which Panama Canal charges shall be imposed.
The question is often asked why charges for the use of ocean-ship canals, such as the Suez, Kiel, and Panama Canals, are imposed upon the tonnage of vessels instead of upon the tonnage of the cargo carried by the vessels. The report seeks to explain why the capacity of merchant vessels for the accommodation of passengers and the stowage of cargo, rather than the cargo and passengers carried, is the more equitable and more practicable basis of canal charges; and the report also states the reasons why warships should pay tolls upon their weight or displacement tonnage, and not upon the kind of tonnage that is made the basis of charges upon vessels of commerce.
The President's proclamation fixing Panama Canal tolls makes displacement tonnage the basis of the charges upon warships, while the dues payable by vessels of commerce are to be imposed upon the earning capacity of ships. The Suez Canal Co. does not make this distinction between warships and merchant vessels, but levies tolls upon the net tonnage of vessels of war as well as of vessels of commerce. The application of the Suez, or other, measurement rules to warships can, however, result only in an artificial net or capacity tonnage that but roughly indicates the size of different classes of war vessels. In fact, rules for the determination of the gross and net tonnage of merchant vessels are not applicable to warships. Warships are fighting machines that have no earning capacity and can have no real net tonnage. The size of vessels of war is more accurately indicated by their weight, or displacement, than by the capacity of their inclosed spaces. It may be otherwise with vessels that serve armed ships. Army and Navy transports, colliers, supply ships, and hospital ships are structurally similar to merchant vessels, and may, without much difficulty, be measured by rules applicable to passenger and freight carriers. Such auxiliary vessels of war may be readily and equitably charged tolls upon their net capacity or net tonnage, but charges upon fighting ships ought, for reasons that are set forth in the report, to be levied upon their displacement tonnage.
The charges required of a vessel of commerce for the use of the Panama Canal might theoretically be either upon the tonnage of the ship or upon the tons of cargo in the vessel; and, in either case, there might also be a toll charged upon each passenger carried. If the tolls were imposed upon the cargo, the charge might be upon the tons of the commodities in the ship without regard to differences in the kinds and values of the articles carried, or the tolls upon the cargo might, like railroad rates, be made to vary with commodities or with classes of articles. As a matter of fact, tolls upon cargo or upon commodities and classes of articles are administratively impracticable. Fortunately, it is not necessary to make cargo the basis of canal tolls in order to realize equity in canal charges. If the canal tolls and other charges payable by merchant vessels are levied upon
the ship and not upon the cargo carried, the charges may be either upon the weight of the ship or upon the size, or closed-in capacity, of the vessel. If the charges are placed upon the weight of the vessel—the displacement tonnage--the weight taken as the basis of the tolls would be the weight of the ship and its load.
Tolls might also be levied upon the difference between the weight of vessels when loaded and when "light.” In the latter case, the tolls would be levied upon the vessel's carrying ability or its “dead-weight capacity.”
If the canal charges are made such as to tax vessels of commerce according to their size or closed-in capacity, the charges may be upon the entire capacity of the vessel or upon only the closed-in space available for the stowage of cargo and stores and for the accommodation of passengers. The entire closed-in capacity of a ship, in units of 100 cubic feet, is its gross tonnage. The capacity of a vessel, in units of 100 cubit feet, for the transportation of cargo, and passengers is the vessel's net tonnage.
In the report made in 1912 upon “Panama Canal Traffic and Tolls,” the possible bases upon which the charges for the use of the Panama Canal might be imposed were necessarily considered in a preliminary way; and it was recommended that the tolls payable by merchant vessels should be imposed upon their earning capacity, and that charges upon warships should be levied upon their displacement. The reasons for those conclusions are presented at length in the following report; and the rules for the measurement of vessels, other than warships, have been so drafted that the net tonnage of vessels, as determined by the rules, will be as exact an expression as it is practicable to obtain of the capacity of vessels—which are of many types and designs—for the stowage of cargo and for the accommodation of passengers.
It was necessary to have a special set of rules for the measurement of vessels of commerce to determine the tonnage upon which Panama Canal tolls shall be paid. The adoption of the rules followed by the United States in measuring vessels for registry was inadvisable; and none of the national vessel measurement rules of foreign countries would have met the requirements. The Suez Canal Co.'s tonnage rules, having been formulated by an international tonnage commission with a view to establishing an equitable basis upon which to impose the charges for the use of a great interoceanic waterway, are more nearly like the rules required for the Panama Canal than is any one of the national measurement codes; but the Suez rules, drafted 40 years ago, contain some provisions that ought not to be included in the Panama rules. The detailed analysis, in this report, of the measurements rules of the United States, Great Britain, Germany, and the Suez Canal Co. makes clear why special Panama measurement rules are necessary. The main reasons why it is not advisable to adopt for the Panama Canal one of the existing measurement codes may be briefly summarized:
None of the national measurement rules, neither those of the United States nor those of foreign countries, is framed with a view to making registered tonnage an accurate expression of the earning capacity of vessels. If any one of these sets of rules were adopted to determine the tonnage upon which Panama Canal charges shall be paid, the charges would not be relatively fair as among different types of ships, tolls would not be imposed as closely as is desirable in accordance with the ability of vessels to pay the charges, and the Government might be deprived of a portion of the revenues which it would be justly entitled to receive for the service of passing ships through the canal.
Still less would it be possible to accept as the tonnage upon which Panama Canal charges shall be paid the tonnage of vessels as stated in their respective national certificates of registry. The measurement rules in force in the several commercial countries differ in important particulars both as regards the spaces included in gross tonnage and as regards the deductions made therefrom in determining the net tonnage upon which shipping charges are imposed.