tonnage three times as large as the usual net tonnage or the average net tonnage.

Capt. MCALLISTER. Yes; for the average net tonnage of all vessels likely to use the canal.

Mr. MARTIN. So that, as has been suggested, if, figuring on the basis of $1 per net ton-and we want to do it economically as possible or do it through this block system-we would need to make a rate of one-third of $1?

Capt. MCALLISTER. Yes; for plain displacement about one-third of $1, but on the block system it would be perhaps less than 1 cent per cubic foot.

Mr. MARTIN. Do you mean that about displacement?

Capt. MCALLISTER. What I mean is that 1 cent or less per cubic foot under this block system represents $1 on the net tonnage system.

Mr. SABATH. Which system do you think would be most equitable and just?

Capt. MCALLISTER. The one I have recommended.

Mr. SABATH. And you have given this matter careful consideration, have you?

Capt. MCALLISTER. Yes; I have thought it over and talked it over with a number of technical men, and they all approved of it— thought it would be a very good system.

Mr. RICHARDSON. In the operating expenses, have you taken into consideration any matters connected with that in the fixing of the toll? How would you connect operating expenses with the amount of toll to be charged?

Capt. MCALLISTER. Well, I should think you would have to make a guess as to about how many vessels are in the American trade and the expected tonnage using the canal.

Mr. RICHARDSON. But that would have no effect whatever on your system?

Capt. MCALLISTER. No, sir; you could fix the system every year. Mr. RICHARDSON. Well, don't you think operating expenses of the canal ought to be figured very largely on what the Government charges as toll?

Capt. MCALLISTER. Yes; that is my opinion.

Mr. HAMILTON. Vessels passing through the Suez Canal pay how much per ton?

The CHAIRMAN. Six and three-quarter francs.

Mr. J. A. MARTIN. That is $1.305.

Mr. HAMILTON. How much do they charge for passengers? They have a charge for passengers, as I understand it, and a price for tonnage. Do you know how much for passengers?

Capt. MCALLISTER. I do not.

Mr. STEVENS. $2.50.

Mr. HAMILTON. Do you make any specific charge for passengers under your system?

Capt. MCALLISTER. No, sir; I have not made any statistics as to

that.

Mr. HAMILTON. It would have to do with the general income. Capt. MCALLISTER. It might in this way: A ship carrying seven or eight hundred passengers, under this system we would have to say to the passengers, "All of you will have to stay on board the ship

until the ship is measured," as their weight would count in the displacement.

Mr. J. A. MARTIN. Captain, before you go, let me suggest a proposition that has come to my mind. The Suez Canal has, I believe, some form of the net-register system.

Capt. MCALLISTER. Yes; they have their own rules.

Mr. J. A. MARTIN. And that net-register system has gone through a process of evolution, has been worked out over a considerable period of time, and has a number of modifications, etc., and is generally used and understood by water shippers. Is there not some danger in the adoption of a new system which is entirely revolutionary, which has never been experimented with, and which, like the netregister system, must undergo a certain process of development and evolution before it is understood? Is there not some danger in that proposition?

Capt. MCALLISTER. At the hearing I answered this question in the affirmative, but on further consideration I do not think there would be any danger or confusion, as the proposed system is so simple that it could be understood readily by all shipping men. It would not interfere in any way with "tonnage" charges for other purposes. Mr. STEVENS. I think right there this question ought to be asked. Mr. J. A. MARTIN. Well, the Suez system is the net-register system. Mr. STEVENS. Right there I think the captain should put on record some of the different purposes for which the net-register tonnage is used, such as port dues, light dues, etc. Just tell what different classes of charges the net-register charges are used for.

Capt. MCALLISTER. Well, port dues, light dues, and dry-dockage in the shipyards are on net tonnage.

Mr. STEVENS. Is pilotage on that basis?

Capt. MCALLISTER. Pilotage is fixed on draft.

Mr. STEVENS. But the point is: Everywhere in the world there are certain port charges, fixed on net registered tonnage, and in some nations they have light dues fixed on net registered tonnage, and in some places dock charges, which are fixed on net registered tonnage. Capt. MCALLISTER. You mean wharfage?

Mr. STEVENS. Wharfage and dockage.

Mr. COVINGTON. How about towing charges? Are not they also on net registered tonnage?

Capt. MCALLISTER. There seems to be no uniform system for towage charges.

The CHAIRMAN. Then, Captain, on your statement all revenue charges throughout the world are adjusted on net registered tonnage? Capt. MCALLISTER. On "net tonnage," generally.

The CHAIRMAN. Well, that would involve the danger of inconvenience generally in port business everywhere as to all ships, would it not?

Capt. MCALLISTER. I do not know about the inconvenience. They would all have to change, too.

The CHAIRMAN. They would have to change?

Capt. MCALLISTER. There would be no change about it.

Mr. STEVENS. There are two other things I think ought to be suggested before 12 o'clock. One has been suggested by Mr. Covington. You said, Captain, your system would not cause any difference in methods of construction of shelter decks or other methods of con

struction. Let me ask you then: Would it not encourage a lighter system of construction-lighter beams, and lighter plates, and lighter machinery? Would not that ship have lighter displacement if designed to use the Panama Canal?

Capt. MCALLISTER. No, sir; I do not think so; because they make them as light now as is consistent with safety.

Mr. STEVENS. But the point is that in order to make them conform to the Suez Canal conditions they disregarded the idea of safety. Now, would they not disregard the question of safety for the Panama Canal if your system was adopted?

Capt. MCALLISTER. I hardly think so, because they now cut them down as low as they can, machinery and other parts of the ship.

Mr. STEVENS. Well, what I want to say is this: There are certain laws in this country regarding certain crew space.

Capt. MCALLISTER. Yes; a certain allowance of space per man. Mr. STEVENS. Well, Great Britain has laws, hasn't it?

Capt. MCALLISTER. Yes, sir.

Mr. STEVENS. But Norway and Italy have not. Well, for the sake of argument, will not the crew space have to be taken from the cargo? In other words, it would not be earning space; and in the vessels from Norway and Italy, which do not require fixed deductions, a good amount of crew space can be diminished, it can be minimized; that is, the crew can be accommodated in a smaller space instead of a larger space, as with us. Does not that encourage the diminishing of crew space so that they can increase the cargo space?

Capt. MCALLISTER. I do not think so, Mr. Stevens, because if they increased the cargo space, they would have to pay on that, on the weight.

Mr. STEVENS. Yes; but the cargo is worth more than the crew. It would be more valuable and they could afford to pay a little higher increase if they could carry 500 tons more of cargo. On account of diminishing the crew space they could afford to diminish the weight of their crew space, would not they?

Capt. MCALLISTER. Yes; I believe so.

Mr. STEVENS. Then the danger would be the construction of cheap vessels which do not have good crew space rather than modern vessels, as in America, which do have good crew space?

Capt. MCALLISTER. There might be a tendency that way.

Mr. COVINGTON. That system does not take into consideration any matters relating to the interior of the ship-it is based upon exterior measurements entirely?

Capt. MCALLISTER. Yes.

Mr. STEVENS. Will not the result be something like this: Cheap cargo would have to pay an extra rate, which might be burdensome, because a vessel paying on its displacement would have to pay on its empty space, passenger space, and its diminished cargo space. other words, would not the cargo that is carried in the medium class of vessels have to pay a proportionately higher rate which would be burdensome?

In

Capt. MCALLISTER. Well, the proportionately higher rate they would pay would be more than offset by the proportionately higher freight rate they would receive.

The CHAIRMAN. And the rapid speed.

Capt. MCALLISTER. Yes; and the rapid speed. That is all taken into consideration in the fixing of the rate.

Mr. DRISCOLL. That is all taken into consideration in fixing the rate?

Capt. MCALLISTER. Yes. And the vessel carrying the heavier freight would get the advantage of this because he gets a less freight

rate.

Mr. STEVENS. Would not this be the case when the canal opens: There will be sharp competition between certain classes of freightbetween the Panama Railroad and the canal. There will be no competition between the bulky freight which you have just spoken of carried in slow vessels. There may not be much competition as to that, but as to the other freight of high grade-merchandise-carried in the fast vessels, there will be competition. Now, does your plan allow such a high rate on that kind of freight as to discourage competition of the canal with the railroads?

Capt. MCALLISTER. I do not think that at the rate which you propose to fix there will be any great trouble about it.

Mr. STEVENS. Now, can you give us any estimate as to how it would work?

Mr. J. A. MARTIN. Will the class of vessels that will carry this class of freight have a small net registered tonnage?

Mr. STEVENS. That is just it, with regard to the small-cargo tonnage.

Capt. MCALLISTER. I think not.

Mr. J. A. MARTIN. I would like to suggest right here that a certain high class of ships have a rather low net registered tonnage. I would like to call attention to the statement of the Commissioner of Navigation that may meet this very objection. The law has been enacted in England, and the commissioner recommends a similar law for this country. It reads as follows:

The British law was amended in 1907 to provide that deductions for propelling power shall not exceed 55 per cent of the gross tonnage after crew space, etc., have been subtracted. The passage of a similar law is recommended. (Annual report of Commissioner of Navigation, 1911.)

Mr. STEVENS. The chairman has suggested that

The CHAIRMAN. I suggested, Mr. Martin, that if you are going to fix a minimum for allowances, it would be simpler to use gross tonnage.

Mr. STEVENS. No; but how would it work, Captain? Would it not operate to lay an unduly high charge on that class of traffic?

Mr. KNOWLAND. You have in mind, Mr. Stevens, the moving of citrus fruits; moving on fast steamers in order to reach the market in good condition?

The CHAIRMAN. Now, the idea in my mind is, what percentage of difference would a toll of $1 per ton produce in competition with the transcontinental railroads on a slow ship as compared with fast freight?

Capt. MCALLISTER. It would give the slow ship an advantage.

The CHAIRMAN. Well, would it be perceptible? I mean, compare the slow ship with the railroads. In other words, what effect would $1 a ton toll have on the canal in competition with the railroads? Capt. MCALLISTER. I don't think I can answer that without making some computations.

H. Doc. 680, 62-2-29

Mr. KNOWLAND. It would have an effect on the passenger or possibly the freight?

Capt. MCALLISTER. My statement is taken on the Cristobal. If she paid $1 per ton, that would be $6,095; if she paid 40 cents per ton on displacement, it would be $6,880; if under this system of mine she pays 1 cent per cubic foot-that is, under this proposed block displacement system-she would pay $7,728.

Mr. SABATH. Well, would not that rate be too high?

Capt. MCALLISTER. I can not answer about that; I do not think it would.

Mr. SABATH. I do not know anything about railroad rates, do you? Capt. MCALLISTER. No, sir; I do not know anything about railroad rates. As to applying it to this, I do not know.

Mr. STEVENS. Well, would not your rates be awkward in longshore work on the docks in storing freight and handling freight? Would not that make a great difference in storing freight under your plan? In some places they have different methods of storing freight than in others; some store high, some store low, some economize space differently. Would not your plan operate badly as to that?

Capt. MCALLISTER. No, sir; I do not think it would affect it at all. Mr. MARTIN. You would be paying just the same whether it was stored high or low.

Mr. SABATH. Whether it was stored high or low, the rate would be the same?

Capt. MCALLISTER. Yes.

Mr. STEVENS. Some ports store to more advantage than others, to economize space better.

The point I was driving at was, would not it encourage light storing; second, would not it encourage diminished crew space, which would give a larger cargo space; and, third, would not they abuse this cargo space by storing too much in that cargo space in order to save toll?

Capt. MCALLISTER. They do it now, Mr. Stevens.

Mr. SABATH. Would not it revise the regulation applying to crew space?

Mr. STEVENS. We have it now.

Mr. SABATH. Well, speaking of foreign vessels, we have that foreign authority.

Capt. MCALLISTER. I do not think it would be worth figuring; it would be so slight.

Mr. GOULD. It would not be worth considering.

Mr. MARTIN. Captain, you call your system the block displacement system. Now, after you have made your measurements upon any given body, in what form do you get your results as to forming a basis for computation, in the form of cubic feet, or what?

Capt. MCALLISTER. I would suggest cubic feet."

Mr. MARTIN. Well, in proceeding upon that basis, of course, we would be proceeding upon something that is unknown in navigation measurements. In navigation they are known as either gross or net tons, are they not?

Capt. MCALLISTER. Yes, sir.

Mr. MARTIN. How could we reduce your system to tons?