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Senator DUFFY. If you were on the Canal authority you would like to do it.

Mr. EWERS. I would do that too, sir, whereas with a disinterested person determining cargo-earning capacity, the rate has to be changed and not the rule.

The CHAIRMAN. Don't you think it ought to depend on a change in the rate rather than a change in the structure of the ship?

Mr. EWERS. I think that Congressman Lea this morning has very clearly pointed out, Senator Gore, perhaps what might be the crux of this whole thing from a somewhat definite understanding of what our tolls may be on which we can predicate our contracts of carriage, the entire situation is left for disposition at some future date by a readjustment of rules and a possible readjustment of rate. I don't think that is a desirable uncertainty in the interests of commerce.

Mr. LEA. The plan, of course, of referring this to a committee to report what they would recommend without the authority of anybody to put them into force would only be another delay which has characterized the whole opposition of this bill for 10 or 15 years. This provides a method of getting to definite results, the committee report, approval of the report by the President, and the new rates after 6 months going into effect. There can't be any method better than that. That was the method originally followed in fixing the tolls. The trouble was, so far as the legal difficulty was concerned, the opinion of the Attorney General, and I think the Attorney General's opinion was right-I don't question that-but it has made it an impossible situation from the standpoint of practical administration, and the object of this legislation is just simply to correct a mistake from the standpoint of Government administration that that decision resulted in.

As the chairman remarks, manifestly if tolls are to be changed it should be with the approval of the Government agency and not with the shipowner changing the structure of his ship. Nobody can defend that as a proper method. It is absurd that the Federal Government should not have control over its own tolls and say who should pay tolls and how much.

Refering to the authority of the Department of Commerce, the law gives authority that their decision should be final on these interpretations, and it isn't within the legitimate province of the President to go down and tell a body of that kind what its decision should be. The President couldn't go down and tell the Interstate Commerce Commission what decision it should make on rates; that would be ridiculous and make a joke out of the Commission.

The CHAIRMAN. The law in express terms places this as the final authority, as I understand it.

Mr. LEA. Yes; so we are simply in an impossible situation due to the legal limits that prevent a businesslike administration of the Canal.

As I indicated before, I don't approve or our committee doesn't approve of those higher interest rates that some have suggested, but they have a theoretical bookkeeping system on the theory that about 3 percent should be brought in from the revenues in the Canal as an interest-carrying charge or an amortization or whatever you might

call it. Anyway, when you compare this with the Suez Canal, built at an expense of one-third of what this Canal was built, charging higher tolls than we do, I think the shipping interests have no right to complain.

The CHAIRMAN. The law gives the Commissioner of Navigation authority to render final decision with respect to these points now. Mr. LEA. Yes.

The CHAIRMAN. If the President were given the power to revise his rules, might that possibly lead us out of this dilemma?

Mr. LEA. That is in effect all this bill does, just to give the President the power to revise the Panama Canal rules and eliminate that legal limit that now prevents regulation.

The CHAIRMAN. My point was that Mr. Petersen says that the President through the Secretary of Commerce and the Commissioner of Navigation controls it now. This bill proposes to vest that power in the President, you might say through the Canal authorities, but under the existing law the Commissioner of Navigation has final power to speak and action to decide, and the President has no power to revise an appeal from his decision to the President. I thought it might meet the objections of the representatives of the shipowners if we gave the President the power to revise the rules. and the decision of the Commissioner of Navigation. If the President is the final authority now, give him power instead of mere theoretical power. There is no practical control at all, as it rests with the President today, over the decision of the Commissioner of Navigation. Isn't that true?

Mr. LEA. Yes; that is true and it is ridiculous that it is. At the present time the President does not control through the Commissioner of Navigation; it is none of the President's business to go down and tell him how he shall interpret a rule. The President prescribes these rules, the Canal authorities would administer them, but the Canal authorities are not a discretionary body, they are simply an administrative body, a ministerial body to execute the rules prescribed by the President with power in the President to change these rules from time to time as circumstances may warrant within the limits prescribed by the bill.

I thank you very much, gentlemen.

The CHAIRMAN. Are there any other gentlemen representing the shipping companies who desire to be heard?

Mr. EWERS. Senator Gore, I would like to make a correction that I was taken to task for yesterday with respect to my statement that the proposed bill would leave tolls entirely without limitation. I would like leave to amend that so that it would be without any limitation that would be comparable to existing law; and to illustrate, if I might, what I intended to convey, because I didn't want to mislead the committee, in the computation of gross tonnage under the various rules of admeasurement certain space is measured and certain space is not. Then, after you have determined the gross, certain further deductions are made to determine the net. Under the proposed bill the hundred cubic feet limitation would be a limitation in a degree in that if you took the entire cubical content and multiplied it by 100 cubic feet, you would get some limitation. Assuming that there would be no change made in the Panama Canal

gross tonnage, which is hardly a warranted assumption because of the remarks of Congressman Lea, but assuming that that would not be changed with respect to one ship that I have just taken for one of the companies that I represent, you get this relative situation. The CHAIRMAN. State the company again.

Mr. EWERS. The steamer Hollywood of the McCormick Steamship Co. Her United States net registered tonnage is 3,519 tons, which multiplied by the $1.25 statutory maximum produces $4,498, which is the existing limitation on tolls. Her Panama Canal gross

tonnage

The CHAIRMAN. This other was net.

Mr. EWERS. Yes; that was United States net. Her Panama Canal gross tonnage of 6.582, multiplied by the $1 maximum proposed in the pending legislation, would produce a maximum of $6,582. On this particular ship her Panama Canal net is 5,033 tons, which at the 90-cent rate proposed by the Secretary of War would produce $4,529.70 in tolls.

The CHAIRMAN What is the difference between that and the first? Mr. EWERS. The difference there is in the neighborhood of $100, which would be further increased, as near as I can estimate it, by approximately $400 tolls on the excess of deckload over the 20-percent limitation.

Senator DUFFY. The difference is $31.70.

Mr. EWERS. That is right.

The CHAIRMAN. On the basis of 90 cents what would it be?

Mr. EWERS. That is the 90-cent difference.

Her Panama Canal net multiplied by the $1.20 rate is $6,039. The main difference on this type of vessel in the increase in toll rate would be in the tolls on the excess of the deckload.

The chairman asked yesterday whether we could give any figures showing the relationships of tonnage, and I have roughly taken a fleet of six vessels of the Sudden & Christensen, trying to give some percentages.

The CHAIRMAN. Is this in relation to the net gross?

Mr. EWERS. Yes; the relationship of United States net to United States gross is as 20 is to 33. The relationship of Panama Canal net to Panama gross is as 29 is to 39. The percentage of Panama Canal net to Panama Canal gross is 74 percent; the percentage of United States net to United States gross is 66 percent; the percentage of Panama Canal net to United States net is 68 percent.

The CHAIRMAN. That must be the other way around, because Panama Canal is greater than United States.

Mr. EWERS. Yes; it would be the other way around, and the relationship of United States gross to Panama Canal gross is approximately 87 percent on this fleet of six vessels which may or may not be representative of all the vessels which transit the Canal. The CHAIRMAN. Is this Hollywood a passenger ship?

Mr. EWERS. No, sir; she is a cargo vessel.

The CHAIRMAN. Could you tell why it is that the net tonnage under the United States rules is so much less than under the Panama Canal?

Mr. EWERS. The United States net is 3,519 and the Panama Canal net is 5,033.

The CHAIRMAN. What makes that difference? That is quite a disparity.

Mr. EWERS. My recollection of the Hollywood is that she is an original type of shelter-deck vessel. She was originally built as a shelter-deck steamer with a superstructure amidships over a relatively small portion of her deck. She is not a full shelter-deck vessel. She just has a bridge-deck space what is known as the "three-island type " of ship, which describes the profile of her deck view. She has a structure to the fore, a structure amidships, and a structure aft that extend over the main deck of the vessel. The difference would probably be partly attributed to that open space there. In other words, these vessels, to my recollection, if it serves me correctly-Mr. Sill can confirm it-are all the original type of shelter-deck vessel, originally built with that bridge-deck space.

The CHAIRMAN. And the shelter deck is counted in on the Panama Canal rules and not on the United States rules?

Mr. EWERS. That is correct. I thought I would like that correction. So far as the maximum is concerned, the original maximum is $4,498 of transit. The maximum, at a dollar rate, with no change in the Panama Canal gross, which would, however, be subject to change under the authority given, would be $6,582, or an increase of almost 50 percent.

Mr. SILL. Did you say gross? I don't understand how you get the limitation on the gross. The bill provides it shall be charged on the net tonnage, not on the gross.

Mr. EWERS. Yes: but a hundred cubic feet-the rules themselves would have to determine what deductions from gross would be made to determine net. Within that sphere the discretion of the President prescribing rules would be plenary.

I might illustrate that a little bit further by showing just how these different systems of admeasurement work out. Mr. Sill can correct me if I am in error. My recollection is that, under the British system of admeasurement in determining gross, certain space is not included in determining gross and therefore not exempt in determining net. Under the United States the same space is included in determining gross, and an appropriate exception is made in determining net, so that the final result would be practically identical, although arrived at under somewhat different formulas.

I just wanted that correction to be made so as not to mislead the committee.

The CHAIRMAN. If there is nothing more to be heard on behalf of the shipping concerns, Mr. Sill, we will hear from you. (The Chairman swore Mr. Sill as a witness.)

STATEMENT OF F. deV. SILL, CHIEF ADMEASURER VESSELS OF THE PANAMA CANAL, BALBOA, CANAL ZONE

Mr. SILL. I have not prepared a statement but I am here at the direction of the Government to answer any question that may come up as to the technical application of the rules at the Canal and to answer any other questions that may be asked by the members of the committee and by the steamship people appearing at this hearing.

The CHAIRMAN. I suggest that you proceed in your own way, Mr. Sill, to make any comments on the testimony that has been given and to shed any light on it that may occur to you, and then you can subject yourself to questions.

Mr. SILL. Both Mr. Smith in his testimony yesterday and Mr. Lea in his testimony before the committee this morning have covered the essential features of why this legislation is deemed necessary for the proper conduct of the Government business at the Canal on a businesslike basis.

The CHAIRMAN. You live in the Canal Zone?

Mr. SILL. Yes, sir.

The CHAIRMAN. How long have you lived there?

Mr. SILL. Something over 27 years.

The CHAIRMAN. And your business is measuring these ships?

Mr. SILL. Yes, sir. I went down as an engineer on the construction of the Canal in 1907 and except for nearly 2 years when I was away in the war I have been continuously employed by the Panama Canal. The CHAIRMAN. You are familiar, I suppose, of course, with both sets of rules, the United States rules, the Panama rules; and are you more or less familiar with the rules that obtain in foreign countries?

Mr. SILL. Yes.

The CHAIRMAN. Suez Canal?

Mr. SILL. Yes, sir.

After the Canal was completed I was transferred to the Marine Division for the purpose of measuring ships. That work started just before the Canal opened, so that some of our work was actually performed under the rules set down by Mr. Emory Johnson prior to the opening of the Canal, and the vessels were assessed tolls on that tonnage up until the time of the decision of the Attorney General, when we were forced to take into consideration the tonnage under the United States rules of measurement as a limitation as set forth in the Panama Canal Act.

The CHAIRMAN. How long a period was that?

Mr. SILL. It was a little less than a year.

The CHAIRMAN. Have you made any comparison between the tolls charged and paid during that period on the same ships; I mean as compared with tolls collected subsequent to the decision of the Attorney General?

Mr. SILL. I have no figures on that. Of course, there were figures prepared, because the tolls collected in excess of the amount that should have been collected under the decision of the Attorney General were returned to the vessels; an appropriation was made to return those tolls.

The CHAIRMAN. Do you remember whether there was an excess on all vessels or was there an excess on some and deficit on others? Mr. SILL. There was an excess on some and on some there was no excess. Under the rules in force at the time the Panama Canal Act was passed shelter decks and superstructures were not allowed exemption under the United States rules of measurement. Doublebottom tanks used for fuel oil and anything else other than water ballast were included in the tonnage.

The CHAIRMAN. As to superstructure and shelter decks at that time, when you were collecting under the Panama Canal rules for a