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again readily be filled, and the ship's necessary ballast at sea could in this manner be easily replaced. It might also be possible for coal companies or even steamship companies to establish stations a slight distance from each entrance to the canal for the purpose of enabling vessels to replenish their bunkers or tanks after having passed through the canal and having paid the tolls. By entering the canal with a minimum amount of coal in the bunkers, and by coaling just after departing from the canal, a vessel would avoid the payment of tolls upon the weight of fuel it would normally carry.

3. The chief and conclusive reasons for basing toils neither upon the actual displacement nor upon the deep-load line displacement of vessels are that such tolls would be unfair as between different types of ships, and would violate the fundamental principle of giving main consideration to earning capacity in levying canal charges. Tolls upon the weight or displacement of ships would be unfair as between different types of vessels, because fast passenger steamers have maximum weight in machinery, fittings, and fuel as compared with the weight of paying load, while slow cargo steamers have a maximum capacity for freight as compared with the weight of, and space occupied by, machinery, fittings, and fuel. In the case of the passenger steamer, the paying load is relatively light as compared with the nonpaying weight or “tare," while the freight steamer has an earning load heavy in relation to “tare.” Otherwise stated, the fast ship of “fine” lines has a large displacement and small dead-weight capacity, while the ship with “full” lines has large carrying space in relation to light displacement. It is manifest that injustice as among different types of ships must result from taxing them upon the basis of their weight. In order to make tolls equitable for different classes of ships, it is necessary to base the charges primarily upon either what the ship is carrying or upon its earning capacity.

One method of levying tolls upon what the ship is carrying is to make “dead-weight tonnage the basis of the charges; and, in order to determine whether that would be a desirable basis for Panama tolls, it is necessary to explain briefly what is meant by “dead-weight" tonnage and what would result from making it the basis of dues payable for the use of the canal.

DEAD-WEIGHT TONNAGE.

A vessel's dead-weight tonnage is the difference between the weight or displacement of the vessel when “light” and when loaded to its maximum authorized draft. It is the number of tons avoirdupois that the ship can carry of fuel, cargo, and passengers; it is the vessel's dead-weight capability, its carrying power.

The term dead-weight is also applied in commercial practice, to some extent, to the weight of coal and cargo actually aboard a ship at a given time. In this sense the dead-weight tonnage of a ship at any particular draft is the difference between its displacement “light” and its displacement at its actual draft.

Would it be wise to levy tolls either upon a ship’s maximum dead-weight tonnage or upon the dead-weight of the fuel and lading actually aboard a vessel at the time of application for passage through the canal ? As an argument in favor of tolls upon maximum dead-weight tonnage, it is urged that charges based upon the ship's carrying power are placed upon the weight from which the owners of the ship may derive traffic revenues. This argument is strengthened by the fact that the rates charged for the use of chartered vessels-i. e., charter rates—are upon dead-weight tonnage and that, inasmuch as a large share of ocean freight is transported in chartered vessels, the commercial world is accustomed to charges based upon dead-weight tonnage.

The advantages to be derived from making maximum dead-weight tonnage basis of canal tolls are, however, more than offset by the objections to making that tonnage the unit of canal charges:

1. Freight ships, especially those employed in the transportation of bulk cargoes, would be heavily taxed, because of their large carrying power, while passenger steamers having comparatively little dead-weight capability would be but lightly burdened with canal tolls. Unless the rates of toll were different for different types of ships, there would be relative injustice as among different classes of vessels.

2. Even as between freight ships carrying different kinds of cargo the charges would be inequitable. The tolls payable would be largest for vessels loaded with the heaviest, and thus ordinarily the cheapest, commodities. Minerals, nitrate, lumber, grain, and other bulk commodities have large weight in comparison with value, and the canal tolls would fall most heavily upon the classes of commodities that ought to be most favored by the tolls. If cargo were made the basis of tolls, articles which are shipped as package freight ought to be charged tolls not upon their weight but u pon their measurement tonnage—40 cubic feet, instead of 2,240 pounds, being considered a ton. This would probably not be practicable, but unless it were done the discrimination against heavy bulk cargoes would be unjust to the shippers of “dead weight freight.” Carriers, moreover, would find tolls upon weight of cargo less desirable than charges upon space occupied by freight.

Would it be advisable to base Panama Canal tolls upon the actual weight carried by vessels using the canal? It would seem offhand that tolls upon the actual weight borne by the vessel would be on a proper and desirable basis. Ocean carriers would thus be called upon to pay charges for the use of the canal varying with the amounts transported through the waterway. The tolls would not be placed upon the vessel, but upon what is in the ship, and would be made to vary with the weight of the vessel's burden. Moreover, the tonnage upon which tolls were payable could theoretically be obtained without difficulty. It would be necessary only to read off from the vessel's displacement or dead-weight scale the difference between the ship's “light” displacement and its actual displacement at the time of passing through the canal.

As a matter of fact, however, the objections to tolls based upon the actual weight carried by vessels are stronger than the merits of such a system of charges. There are the same practical and equitable reasons against making actual dead-weight carried the basis of canal charges as there are against the maximum dead-weight tonnage as a basis for tolls. There would be the same difficulty encountered in deciding what should be considered the “light” draft of a vessel and thus what should be taken to be its “light” displacement. Likewise there would be the same inequity of charges as among different types of ships and as between similar ships carrying different kinds of cargo.

BLOCK DISPLACEMENT.

A variation from the method of levying tolls upon a vessel's actual displacement at the time of passage through the canal would be to levy the charges upon the vessel's so-called “block displacement” or upon the cubical contents obtained by multiplying the length of a vessel's load water line by the vessel's breadth at the water line by its draft at any particular time. It would be the displacement of a parallelopipedon circumscribing the vessel, or of a block with dimensions equal to the length, beam, and draft of a vessel at the time of passage through the canal. The term “block displacement" is not generally used in tonnage literature, nor is the tonnage obtained by calculating the “block displacement” at present utilized for any purpose. "Block displacement” has never been adopted

has never been adopted as a basis for canal tolls, dock, or other port dues, or tonnage taxes, nor has it ever been used as the basis for registering ships. Yet the idea of making “block displacement” the basis of shipping charges is a very old one. It was proposed in France as a possible basis for dock charges by the French naval architect Bouguer as early as 1746. It was not adopted as the basis for dock charges, and Bouguer did not propose it as a possible basis for registering vessels or for any other purpose.

The tonnage determined by calculating the “block displacement” was also proposed to the Royal Commission on Tonnage of 1881, and was considered by that commission together with other possible bases for dock charges. The majority of that commission rejected all tonnage bases, except net tonnage; one member of the commission favored dead-weight tonnage,

1 This system was proposed as the basis for canal tolls, and the term “block displacement” was coined by Capt. C. A. McAllister, Engineer in Chief of the United States Revenue-Cutter Service. Hearings before House Committee on Interstate and Foreign Commerce, Jan. 15, 1912, p. 436.

2 See White's Manual of Naval Architecture (5th Ed.), pp. 51 and 71-72. * See Appendix XVIII.

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and another displacement tonnage; but the “block displacement” idea was unanimously rejected.

Until suggested as a basis for Panama tolls, “block displacement” had been considered only as a tonnage upon which to impose dock charges. The tonnage obtained by multiplying a vessel's length by its breadth and draft would roughly indicate the water space occupied by a ship when in a dock, hence the suggestion that the space so occupied would be a fair basis for dock charges. Obviously, the “block displacement” of vessels of different types has little relation to their earning capacity. As is stated by the British naval architect, Sir W. H. White, the proposal that “block displacement” should be made the basis of shipping charges, “proceeds upon the assumption that dock and harbor dues should be paid on service rendered, and not on the earning powers of ships; and this assumption, as has been shown, is not generally admitted.

In view of the full discussion of the subject in 1881, and the recommendations of the Royal Commission, as well as the continuous extensions of international obligations, it is obvious that the Moorsom system is now more thoroughly established than ever, and that no change seems probable, except as regards improvement in details."2

The advantages of “block displacement” as a basis for canal tolls would be those stated above in connection with actual displacement, with the additional advantage of greater simplicity. The tonnage or measurement officials of the Panama Canal could easily measure the length, breadth, and draft of a vessel applying for transit through the Canal, and there would be no necessity to consult the displacement curves and scales or other documents carried by the vessel.

“Block displacement” would have the same objections that actual displacement has as a basis for Panama charges, with the additional objection that block displacement is not the measure of anything actually in existence. Vessels are not block shaped; their coefficients of fineness vary from 0.4 to 0.9. “Block displacement” would discriminate most unfairly against vessels with fine lines, the discrimination increasing with the extent to which a vessel varied from the shape of the blunt freight steamer and the barge.

Tolls levied upon “block displacement” would violate the principle of basing canal charges. upon the earning capacity of vessels. As will be explained in Chapters V and VII, net tonnage, accurately determined, represents the actual earning capacity of each vessel. If earning capacity is the proper basis upon which to levy Panama tolls, the charges can not be imposed upon “block displacement."

1 The Moorsom system of determining the tonnage of vessels is described in the following chapter.
2 Manual of Naval Architecture, p. 72.

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CHAPTER IV

GROSS TONNAGE AND ITS MEASUREMENT.

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