Canadian fishing vessels entering ports of the United States are required to pay 3 cents per net ton tonnage tax. American fishing vessels entering Dominion ports for bait, provisions, etc., are required to pay a license tax of $1.50 per ton. During 1895 and 1896, under this arrangement, 124 American fishing vessels, of 10,104 tons, took out modus vivendi licenses at a cost of $15,156. For the four years, from 1890 to 1893, inclusive, 400 American vessels paid $48,556 in license fees.

Through this license system American fishermen thus contribute a considerable sum toward the bounties which the Canadian government devotes annually to its fisheries. The joint commission now engaged in considering matters of difference between the United States and Canada will, it is understood, make recommendations on the subject of the fisheries. Whatever those recommendations may be, the desirability of direct government assistance to American deepsea fisheries can not be affected. There is no reason in the nature of things why the American deep-sea fisheries should continue to yield to Canadian competition, intelligently promoted by the Dominion government. The relations of this Bureau to the fisheries are remote, and for this reason it does not deem it proper to make specific recommendations. The relations of deep-sea fisheries and fishermen to the merchant marine should, however, be considered in legislation. Information bearing on the subject may be found in Appendix F.

TONNAGE TAXES.

The receipts from tonnage taxes during the year were $846,771, compared with $731,770 for the previous fiscal year. This tax is imposed under the laws in the following manner:

First. Vessels entering the United States from foreign ports in North America, Central America, the West Indies, the Bahamas, Bermudas, the coast of South America bordering on the Caribbean Sea, Newfoundland, and Hawaii are required to pay 3 cents per net ton, not to exceed five times a year, making the maximum annual charge 15 cents per ton.

Second. Vessels from all other foreign ports are required to pay 6 cents per net ton, not to exceed five times a year, making the maximum annual charge 30 cents per ton.

Third. Vessels from foreign ports or countries in which no tonnage or equivalent taxes are imposed on American vessels are exempt from tonnage taxes. Under this provision vessels from the Netherlands, Copenhagen, the Province of Ontario, the ports of Panama and Colon in Colombia, and a few minor islands and ports in the West Indies and the Dutch East Indies are exempt from tonnage taxes.

Fourth. Vessels in the coasting trade of the United States are exempt.

It is

Fifth. In a few exceptional cases an additional penal or retaliatory tonnage tax, in some instances 50 cents and in other instances $1, is levied. This tax was levied only twenty times last year, and the receipts were only $1,048. In what follows this tax and the coasting exemption are not considered, as they are not pertinent to the discussion. also assumed that the tonnage tax is paid by the vessel on which it is levied, though in the last analysis it is paid in part at least by the producers and consumers of exports and imports here and abroad. It is also assumed that the flag of a vessel truly represents the nation

ality of the capital which operates it, although a considerable number of steamships under British, Belgian, and Hawaiian flags are owned and operated by American capital, while vessels under Norwegian and Spanish flags are owned in Great Britain.

The history of tonnage-tax legislation in this country, briefly recited, will be in itself an argument for the revision of the existing law. For a long period of years up to the period in the civil war when the necessities of Government compelled a resort to new measures of taxation, tonnage taxes were not imposed by the United States. This exemption of vessels from tonnage taxation was based on a careful regard for the interests of American navigation. For many years

two-thirds of the combined entries and clearances of vessels in the foreign trade at ports of the United States were of American vessels, and only one-third of foreign vessels. Thus, in 1860, the combined entries and clearances of American vessels in the foreign trade at ports of the United States amounted to 12,087,209 tons, and of foreign vessels to only 4,977,916 tons. Fully 70 per cent of any taxes which at that time might have been levied on the entries of vessels would have been charged against American vessels, and an entire exemption from such taxation was a reasonable policy to promote American shipping.

By the act of July 14, 1862, "increasing temporarily the duties on imports and for other purposes," Congress imposed a tonnage tax of 10 cents per ton on each entry of a vessel from a foreign port. Vessels engaged in the coasting trade, the fisheries, or trade with Mexico, the British provinces of North America or the West Indies were required to pay this tax only once a year. By the act of March 3, 1865, Congress increased this tax to 30 cents, preserving the difference in charges between trades established by the act of 1862. This second act was distinctively a war-revenue measure. The difference between rates recognized the fact that, while the war and Confederate privateering had driven our flag from the high seas, in the nearby trade with the rest of North America American tonnage retained its preponderance. For the fiscal year ended June 30, 1864, the tonnage of combined entries and clearances at ports of the United States of vessels engaged in the foreign trade was 6,157,382 tons American and 7,212,350 tons foreign. There was some reason to hope that with the return of peace American vessels might regain the position lost during four years of civil strife. Accordingly, by the acts of July 18, 1866, and of March 2, 1867, Congress prescribed that the tonnage tax of 30 cents on vessels engaged in oversea foreign trade should be levied only once a year, as in the case of the coasting and nearby foreign trade. Previous to this last act Congress by the act of July 28, 1866, had included the Sandwich or Hawaiian islands in the nearby foreign trade, in which the tax was levied but once a year.

The act of March 2, 1867, imposed a uniform tonnage tax of 30 cents per net ton a year on all vessels in the foreign or domestic trade. This system obviously bore heavily on American shipping in the coasting trade, and by the act of July 14, 1870, "to reduce internal taxation and for other purposes," Congress abolished tonnage taxes on vessels engaged in the coasting trade or the fisheries, trades confined to American vessels.

The legislation thus far considered was guided by enlightened selfinterest, modified by the varying requirements of the revenue. there be an exception to this statement, it may be found in the

failure of the acts of July 18, 1866, and March 2, 1867, to differentiate between the tonnage taxes imposed on the trade with near-by foreign ports and the trade with over-sea ports. The tonnage-tax provisions of the act of July 14, 1870, remained in operation until July 1, 1884, when the act of June 26, 1884, went into effect. The collections for the last year in operation of the act of 1870—the year ended June 30, 1884 were $1,295,772.

By the act of 1884 Congress returned to the principles of the acts of 1862 and 1865. It restored the difference in rates between vessels from remote and neighboring ports. It provided that the payment of tonnage taxes should be distributed over several entries instead of being made in an annual lump sum on the first entry of a vessel. The distinction in tonnage or equivalent taxes between vessels making voyages from foreign ports near home and those remote from home is drawn by practically all maritime nations. It rests on two considerations: First, vessels making short voyages are, as a rule, of light draft compared with over-sea vessels. In the improvement of harbors they entail much less expense on the Government making such improvements, and where tonnage contributes to the expenses of improvements of navigation their contribution should be relatively less than that of deep-draft vessels. Second, the trade of nations with near-by foreign ports usually closely resembles coasting trade, and it is the practice of maritime nations to assimilate it in respect to charges and in other respects to the coasting trade. Thus the phrase "home trade" in British laws applies to the trade between ports of the United Kingdom and of the Continent of Europe between the river Elbe and Brest, inclusive, as well as to the strictly coasting trade of the United Kingdom. Because trade with near-by foreign ports is carried on by smaller vessels, it is usually carried on by vessels of the nations lying near one another, and through lower charges a preference is given to domestic vessels. This preference, by the consent of a longestablished practice of nations, is regarded as no contravention of treaty stipulations, insuring equal treatment to the vessels of the contracting nations. Congress, in 1884, undoubtedly had these considerations in view when it provided that the former uniform tonnage rate of 30 cents per annum should be superseded by a maximum annual charge of 30 cents on vessels engaged in over-sea navigation, while the maximum charge on vessels engaged in what corresponds to the French term "cabotage international" should be only 15 cents. During the year ended June 30, 1884, the tonnage of vessels which entered the United States from the more remote foreign ports was: American, 810,999 tons; foreign, 7,676,616; while the tonnage entered from nearby foreign ports was: American, 2,391,294 tons; foreign, 4,189,919 tons. The act of 1884, by this provision, thus held in view the interests of American shipping, while at the same time conforming strictly to the customs of maritime nations. The proposition to impose one uniform rate of tonnage taxes on vessels from all foreign ports is delusive in the argument that treaties contemplate it, and in practice would be oppressive to our national interests.

The acts of 1862 and 1865 imposed tonnage taxes at each entry of a vessel from a foreign port, thus making the charge in a measure the equivalent of the extent to which the vessel used a port, its improvements, and safeguards. This is the practice of substantially all the maritime nations. By the acts of 1867 and 1870 vessels were required to pay at the first entry a tonnage tax of 30 cents, and thereafter were

exempt for the rest of the year, regardless of whether one or many entries were made. The harshness of this rule is evident. The imposition of the entire tax at the first entry deprived the shipowner of interest on the sum thus paid for nearly a year, while its payment from voyage to voyage would materially ease the burden. Again, the inequality of levying a tax of 30 cents per ton at one entry of a ship making the voyage from an Asiatic port to an Atlantic port of the United States, where only one round voyage a year is practicable, and of levying the same amount on a trans-Atlantic steampship making four, five, or more entries in a year, is evident. Making six voyages, the steamship would pay practically only 5 cents at each entry, and making twelve voyages, as is now done, she would pay only 2 cents at each entry, compared with 30 cents tax imposed on the single possible entry of the ship. The act of 1884 partially remedied these inequalities. It distributed the maximum annual tax over five voyages and divided in the same manner the payment of the tax of 15 cents on vessels entering from near-by foreign ports. Thus the rate at each entry was fixed at 6 cents or 3 cents per net ton, according to the foreign port of clearance. The rates imposed by that act are those now in force in the United States. The receipts from tonnage dues during the fiscal year ended June 30, 1885-the first year of the new act-were $390,875, compared with $1,295,772 of the year ended June 30, 1884.

The act of 1884, as amended by the act of 1886, requires amendment in several particulars. The rates of tonnage tax imposed by the United States are very much lower than corresponding taxes imposed by other maritime nations. First, there is no apparent national policy in these low rates. While so large a proportion of the shipping engaged in our deep-sea carrying trade is under foreign flags, these low rates are in effect contributions by us toward the maintenance of foreign competitors with American shipping. Second, the aggregate contribution of shipping in the foreign trade toward the maritime expenditures of the United States is wholly inadequate when regarded from the point of view of similar contributions toward the maritime expenditures of foreign nations or of the extent and nature of our national expenditures for the improvement and safety of salt-water navigation.

FOREIGN CHARGES ON TONNAGE

In the annual report of the Secretary of the Treasury for 1897 it was stated:

In view of our large expenditures for the benefit of navigation, amounting to about $20,000,000 a year, and of the fact that about 75 per cent of the tonnage engaged in our foreign trade is composed of foreign shipping, Congress may well consider whether there should not be a readjustment of tonnage taxation.

The British Government levies light dues, corresponding to our tonnage taxes, ostensibly to maintain its light-house establishment, but in fact the receipts from this source are in excess of the expenditures for lighting the coast and are applied to other purposes. For the British fiscal year ended March 31, 1898, the amount collected for light dues was £603,000, or, in round numbers, $3,000,000. The report for this year has not been received, but the report for the British fiscal year 1896 (Appendix H) shows that the receipts from light dues were $850,000 in excess of all expenses for lighting the

coast. This surplus was applied to various purposes, among them, in part, to the mercantile marine offices (corresponding to our shipping commissioners' offices), life-saving apparatus, relief of distressed British seamen abroad (for the corresponding relief of American seamen Congress makes annual appropriations), boiler inspections, pensions to mercantile-marine officers, etc. These light dues are levied theoretically on the basis of light-houses passed in entering and clearing a port, and therefore vary at the different ports and at the same port, according to the direction from which a vessel enters or toward which she clears. The tables showing these rates fill 150 large printed pages. Light dues are charged against vessels both when they enter and when they clear. They are charged at every entry and every clearance. They consist of general light dues and local light dues. In response to inquiry through the customary official channels, the British Board of Trade has furnished a table of the general and local light dues charged on a vessel from New York and entering and clearing at eight of the principal seaports of the United Kingdom (Appendix H). It show that on a voyage from New York a vessel to Liverpool pays 9 cents per net ton, to London 10 cents, to Southampton 6 cents plus, to Cardiff 8 cents plus, to Bristol 8 cents, to Swansea 74 cents, to Belfast 8 cents, and to Greenock nearly 10 cents. The uniform tounage tax levied at ports of the United States is 6 cents on vessels from the British ports named. The British rate is uniformly higher than the American rate. Furthermore, the American tax is imposed only five times during a year, the maximum annual charge being 30 cents, while the British charge is imposed at each entry and clearance. During a year twelve trans-Atlantic round trips are frequently made by express steamships between New York and Liverpool or Southampton, and fourteen voyages have been made. A steamship making twelve voyages would thus pay annually 30 cents in tonnage taxes at New York, and annually in light dues $1.08 at Liverpool, $1.26 at London, and 74 cents at Southampton.

The Bureau does not overlook the fact that at its late session Parliament passed an act materially reducing general light dues in the United Kingdom. This act will go into effect on April 1, 1899, and its main provisions may be found in Appendix H. It will impose a tax of 4 cents per ton on sailing vessels and 5 cents per ton on steam vessels in the foreign trade, the tax to be levied not more than six times during a year and the maximum annual charge to be 33 cents in the case of a steam vessel and 25 cents in the case of a sailing vessel. To these figures must be added, however, the various light dues levied by local authorities at certain British ports. There are no such dues at Liverpool, Cardiff, or Swansea. At Southampton they amount to a fraction under 1 cent or 10 cents on twelve voyages, making the proposed rate at that port 43 cents annually on a steamship from New York. This coming reduction in British light dues to rates not exceeding by more than 50 per cent American tonnage taxes should be no guide for the action of Congress. It is essentially a measure for the protection of British shipping. As illustrative, attention is invited to paragraph 6 of the act which in effect partially refunds light dues to British vessels under certain conditions, and in principle is thus a general bounty in which all British shipping may participate if it desires to do so (Appendix H). For several years British shipowners have endeavored to secure a reduction in light dues. A year ago they protested against the charges, then and now in force, on the