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In fixing a schedule of tolls for the use of the Panama Canal and in prescribing rules to determine the tonnage upon which the tolls shall be paid, it is necessary to decide whether or not the same tolls and the same tonnage rules shall apply to warships and to vessels of commerce. The proclamation issued by the President, November 13, 1912, decided this question, in a preliminary way, by making the tolls upon warships 50 cents per displacement ton and upon merchant vessels with cargo or passengers $1.20 per net ton, with a reduction of 40 per cent in the rate for merchant vessels in ballast without cargo or passengers. The reasons for making displacement instead of net tonnage the basis of tolls upon warships need to be set forth in this report, and in order to carry out the President's proclamation it is necessary to stipulate which displacement tonnage—for displacement tonnage has several meanings shall be subject to the tolls that have been established.

The Suez Canal Co. has but one schedule of tolls and but one set of measurement rules applicable alike to warships and to merchant vessels. This may be due to the fact that the Suez Co.'s tonnage rules were prescribed for the company by an international commission, whose set of rules, as formulated in 1873, the canal company has felt obliged to observe. The application of the Suez measurement rules to warships is a laborious task, and if the Suez Co. were obliged to measure the warships that apply for passage through the canal, it is probable that the company would seek to make displacement, rather than net tonnage, the basis of the charges upon warships. The measurement of warships, however, is performed by the officials of the Governments to which the several warships belong, and inasmuch as fleets of warships make but infrequent use of the Suez Canal, no country has thought it worth while to seek to have the Suez Co. substitute displacement for net tonnage as a basis of its charges.

It is the practice of the British Government to issue a certificate of net tonnage to each vessel in its navy. The vessels of the British Navy enter foreign ports from time to time, and when they do so they are obliged to pay tonnage taxes, and possibly other port charges, based upon net tonnage. The general regulation of the British Government providing for the issue to warships of net tonnage certificates in accordance with the British and Suez rules is as follows:

The register tonnage according to British rule is to be inserted in all pilotage certificates, and is to be the basis of all tonnage payments at foreign ports by His Majesty's ships, except when entering Port Said or the Suez Canal, in which case the tonnage according to the Danube rule is to be issued. The Board of Trade tonnage certificate, which shows the registered tonnage according to both rules, is furnished to all ships as they are commissioned at home ports. The weight in tons shown in the navy list is in no case to be used for the payment of pilotage, nor to be mentioned in pilotage certificates.

The United States Navy Department does not regularly measure American naval vessels to ascertain their gross and net tonnage. The Chief of the Bureau of Construction and Repair states that

Certain types of American naval vessels which have been built under merchant rules have been measured for gross and net tonnage by the representatives of the Department of Commerce, but this practice is not extended at all generally. Many vessels, however, which have used the Suez Canal, and for which there are reasons to believe such provision was desirable, have been calculated, in the bureau, for gross tonnage and Suez tonnage, and certificates of Suez tonnage have been issued to these vessels.

If Panama tolls upon warships were levied upon net tonnage it would be necessary for the vessels of war belonging to countries other than the United States to be specially measured

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