entering from ports within this area during the fiscal year ended June 30, 1894, was 4,015,715 net tons, while the corresponding foreign net tonnage was 4,748,150 net tons. The entries from Europe during the same period, as just stated, comprised only 341,876 net tons American, against 9,668,111 net tons foreign.

The repeal of the reciprocity provision, so far as the port of Panama on the Pacific is concerned, would be without appreciable effect. Navigation between that port and the United States is conducted entirely by the Pacific Mail and Panama Railway steamers. If these vessels proceeded direct to San Francisco they would, under the present law, be exempt from tonnage tax. It is their almost invariable custom, however, to enter at Acapulco, Mazatlan, Corinto, San José de Guatemala, or other ports for freight, and they thereby become subject to tonnage tax at the rate of 3 cents per net ton. The repeal of the reciprocity provision would not, accordingly, put any additional burden on these vessels, and should Congress see fit to reduce the rate to 2 cents, as recommended, the tonnage tax paid by these American lines would be reduced one-third.

Entries of vessels from the Atlantic coast of the United States of Colombia during the fiscal year ended June 30, 1894, comprised 73 American vessels, of 97,394 net tons, and 181 foreign vessels, of 83,090 net tons. The navigation from Colon and Bocas del Toro is exempt from tonnage taxes, while that from Cartagena, Barranquilla, and minor ports pays the half-rate tax. The bulk of this navigation under the American flag is carried on by the Pacific Mail and Colombian Line steamers from New York to Colon. The corporations together employ six steamers, aggregating about 10,000 net tons. The repeal of the exemption provision and the reduction of the tonnage tax to 2 cents per net ton for five voyages would add $2,000 to the tonnage taxes these corporations now pay to the United States, but this would be offset in part by a reduction of upward of $1,000 in the tonnage taxes paid by the same companies on their connecting steamship lines on the Pacific coast of Colombia. The proposition in hand would add about $600 to the tonnage taxes on foreign vessels from the two ports named.

The returns by customs officers of the entries and clearances of vessels are classed by countries and not by separate ports and islands. For this reason, in the case of the ports of San Juan and Mayaguez, in Puerto Rico, Grey Town, in Nicaragua, and the islands of Trinidad, Montserrat, Tobago, Grenada, and Guadeloupe, the precise statistics of navigation could have been secured only through a detailed examination of the books of the custom-houses, which appears unnecessary in view of the reasonable approximations possible without it.

During the fiscal year 1894 the tonnage of American vessels entering from the Caribbean coast of Nicaragua was 30,757 net tons, and of foreign vessels, 59,546 net tons. This tonnage enters in part from Greytown, an exempted port, and in part from Bluefields, a port the navigation from which is taxed at the 3-cent rate in this country. More than half of the tonnage enters from Bluefields, on which it is proposed to reduce the tax one-third, so that the proposition, while imposing, say, $300 taxes on American vessels from Grey Town, reduces it quite $100 on American vessels from Bluefields.

During the fiscal year 1894 the tonnage of American vessels entering from the British West Indies, which, beside Trinidad, Montserrat, Tobago, and Grenada, includes the important islands of Jamaica, the Bahamas, Bermuda, St. Lucia, Antigua, and the Barbados, was 163,561 net tons, and of foreign vessels, 443,747 net tons. If the entire Ameri

can tonnage had cleared from the exempted islands the amendment to the law proposed would add only $3,200 to tonnage taxes paid by American vessels. In point of fact much of this tonnage was employed in trade from ports where our law makes no exemption, and it paid the tax of 3 cents per net ton. The reduction of this rate to 2 cents as suggested will effect a saving to American vessels which will go far toward, if not altogether equalling, the taxes imposed by the repeal of the section under consideration.

Entries from the French West Indies (Guadeloupe, Martinique, etc.) for the fiscal year 1894 amounted to 12,741 American net tons, and 19,895 foreign net tons. Vessels entering from Martinique pay the 3-cent rate, while those from Guadeloupe are exempt. If the American tonnage be equally divided between the two the proposition in hand will tax American vessels from Guadeloupe in all only $120 a year, and will reduce the taxes on them from Martinique $60.

Vessels entering the United States from the Province of Ontario are exempt from tonnage taxes, while those entering from the Provinces of Quebec, Manitoba, and the rest of British North America are required to pay 3 cents per net ton for five voyages annually. The returns of entries into the United States, tabulated by the Bureau of Statistics, group under one head vessels from Ontario, Quebec, and Manitoba. In 1884 the tonnage entered from Canada at the lake ports of the United States amounted to 2,983,672 net tons; in 1894 it amounted to 2,964,806 net tons. While there has been a marvelous increase in our lake tonnage employed in transportation between our own ports, the tonnage employed in transportation between the United States and Canada is virtually stationary. For the fiscal year ended June 30, 1884, the tonnage tax collected at lake ports amounted to $53,827. Up to July 1, 1884, vessels entering the United States from Canada, as from all other countries at that time, were required to pay a tonnage tax of 30 cents per ton once a year.

The proposition submitted for legislative sanction is that a tax of 2 cents per ton shall be paid by vessels entering from Ontario, as well as from Quebec and Manitoba, for five trips, after which they will be exempt from further payments during the year. The maximum annual payment for any vessel will thus be 10 cents, or only one-third of the rate levied during the fiscal year ending June 30, 1884. The tonnage upon which it is proposed to levy the tax, as shown, is substantially the same. It may be assumed, then, that the proceeds of the proposed tax will be one-third of the proceeds in 1884, or, approximately, $18,000. This sum will include the taxes paid by vessels entering from ports in the Provinces of Quebec and Manitoba, which, during the fiscal year 1894, paid $5,133 at lake ports. It is proposed to reduce the rate from Quebec and Manitoba ports from 3 cents to 2 cents. On this basis the receipts from Quebec and Manitoba ports may be estimated at $3,500. Subtracting this sum from the estimate of $18,000 for all tonnage receipts on vessels from Canadian ports at lake ports there remains $14,500 as the probable receipts from vessels coming from ports in Ontario.

The Treasury statistics do not permit an exact estimate of the distribution of this tax among American and foreign vessels. The tonnage entering the United States from Ontario, Quebec, and Manitoba during the fiscal year ended June 30, 1894, comprised 992,354 net tons American and 1,965,844 net tons foreign. A very considerable portion of the American tonnage consisted of canal boats engaged in trade between the Province of Quebec and the United States. While exact figures

are lacking, it is probable that about two-thirds of the tonnage from Ontario on which it is proposed to restore a tonnage tax is foreign and one-third is American. That proportion holds good as to the tonnage from Ontario, Quebec, and Manitoba combined, as indicated. The restored tax to be levied on American vessels in this trade would thus amount to about $5,000 and that on Canadian vessels to about $9,500. The proceeds of tonnage taxes as stated are applied to the maintenance of the Marine-Hospital Service. For the fiscal year 1894 the lake ports contributed to this service $5,133. But the Marine Hospital during that year maintained one hospital at Chicago at a cost of $24,885, another at Detroit at a cost of $13,249, and 22 relief stations besides on the Lakes at a cost of $46,821. The lake ports thus contributed barely $5,000 toward the expenditure by the Marine-Hospital Service of nearly $85,000 for the benefit of their seamen. During the fiscal year 1894 the tonnage entering the United States from foreign ports was 19,989,663 net tons, of which 2,958,198 net tons, or about 15 per cent, entered our lake ports from Canadian ports. The receipts from tonnage taxes the same year were $539,000, of which $85,000, or about 15 per cent, were devoted to the relief of seamen on the Great Lakes. The expenditures for lake seamen thus bear a fair ratio to the expenditures for the seamen of other sections of our navigation, taking as a basis the tonnage engaged in foreign trade which furnishes funds for the Marine-Hospital Service. But the contribution of the lake ports to the Marine-Hospital Service for the year under consideration, as shown, was only $5,100, or less than 1 per cent of the $539,000 collected to maintain the Marine-Hospital Service.

Under the bill proposed the lake ports will contribute not over $20,000, or less than 4 per cent, though continuing to receive the benefit of the expenditure of 15 per cent of the aggregate proceeds of the tax. In view of these considerations, in justice to the rest of the country and in order to secure the desirable results pointed out, it does not seem that our lake navigation will be warranted in opposing the increase in tonnage taxes which will result from the repeal of the exemption from tonnage tax of vessels coming from ports in the Province of Ontario. The estimated addition to tonnage revenue from the repeal of the exemption clause, tabulating figures explained above in detail, is $104,800, as follows:

The receipts from the half-rate ports and islands of the Western Continent, including Hawaii, north of the eighth parallel of latitude, for the fiscal year 1894 were $101,673, of which $45,480 was paid by American and $56,193 by foreign vessels. The proposed reduction in this rate from 3 cents to 2 cents per net ton, levied on a vessel for not over five voyages annually, would accordingly reduce by one-third, or $15,160, the taxation on American vessels and $18,731 the taxation ou foreign vessels.

The two propositions combined in the bill recommended would thus reduce the aggregate tonnage tax on American vessels by about $6,000, increase the aggregate tonnage tax on foreign vessels by about $77,000, and as a net result increase the fund available for the Marine Hospital by about $71,000 a year.

Regarding particular American interests, the propositions, as indicated, place the International Navigation Company, our only transatlantic steam line, on a more nearly even footing with German and Dutch competing lines. The project will slightly reduce the tonnage taxes paid by the Oceanic Line to Australia and by the Pacific Mail Line in so far as their vessels to Hawaii and return are involved. These are our only transpacific lines. They will make a net increase of about $1,000 on the Pacific Mail and Panama Railroad lines connecting New York and San Francisco with the termini of the Isthmus railroad. The tonnage taxes on the New York and Cuba Mail Company, the Red D Line to Venezuela, the Clyde lines to Santo Domingo and Haiti, the International Line to St. Johns, New Brunswick, and most of the West Indian fruit lines will be slightly reduced.

The total tonnage of American sailing vessels entering the United States from foreign ports during the fiscal year 1894 was 1,655,065 net tons. It is estimated that the bill proposed would reduce tonnage taxes paid by about 1,100,000 tons and would leave unchanged the present rates on about 300,000 tons, while about 250,000 tons, of which 200,000 tons are estimated in trade with the Province of Ontario, would pay a tax from which it is now exempt.

But entirely apart from revenue considerations, to which attention has thus far been directed, is the matter of equitable treatment of all shipping interests. Tonnage tax is levied, to reiterate, to maintain the Marine Hospital Service. The benefits of that service are open to and enjoyed by seamen engaged in trade with the exempted ports as well as those in trade with ports which are not exempt. The justice of a project of law by which our navigation with the Provinces of Quebec, Nova Scotia, New Brunswick, Manitoba, and British Columbia, for example, contributes to the national care not only of its own sick and disabled seamen but also to the care of the sick and disabled seamen of navigation with the intermediate Province of Ontario, which contributes nothing, does not appear.

If the law was passed in the belief that the nations of the world would hasten to repeal navigation charges, it has been unsuccessful, for Germany and the Netherlands alone of maritime powers have accepted the invitation, and the exemptions they offer in their ports have been determined by considerations of national policy, quite apart from the action of the United States. The repeal of our own law, it may safely be predicted, will not lead Germany to impose tonnage taxes on vessels entering from the United States. Such taxes, under the most favored nation clause, usual in commercial treaties, must be equally imposed, and in order to put a tax on perhaps 2,000 tons of American shipping, Germany is not likely to tax 1,000,000 tons of German shipping and 500,000 tons of the shipping of other foreign nations annually entering German ports from the United States. The aboli tion of tonnage taxes by Germany was for the benefit of German, not American, vessels, as the abolition of tonnage taxes by the United States has been for the benefit of German, not American, vessels.

The bill under consideration is in strict conformity with our treaty obligations. It guarantees hereafter to the vessels of foreign nations the same treatment to be accorded to American vessels entering from

ports now exempt. As a matter of comity, however, it is desirable that a brief period of about a month should elapse between the passage and enactment of the measure, should it commend itself to Congress and to the President, in order that foreign authorities concerned may be duly notified of the change in our laws.

A bill to give effect to these recommendations on the subject of tonnage tax may be found under "Proposed legislation," bill D.

Appendix E contains, in addition to the usual statistics concerning tonnage tax, tables showing, as far as practicable, the navigation between the United States and exempted countries, ports, and islands for the years since the exemptions were declared by proclamation. The figures for the last fiscal year have not been secured in time for incorporation in these tables, but may be ascertained upon the issue of the report on commerce and navigation for the last fiscal year.

To carry into effect the proposed measure, it is desirable that section 4232 of the Revised Statutes be repealed. This section exempts from tonnage taxes in the United States mail steamships plying to Brazil as long as a similar immunity from taxes is granted to them by the Government of Brazil. The section is practically a dead letter at present, as the line of mail steamships between New York and Brazil has been discontinued. By Article IV of our treaty of 1858 with Belgium the steam vessels of both countries were exempted from tonnage taxes in. each other's ports. Our treaty of 1827 with the Hanseatic Republics provided that neither party should grant any particular favor to other nations which should not immediately become common to the other party. Bremen abolished tonnage taxes before 1860, and in 1861 tolls levied on American vessels ascending the Elbe to Hamburg were abolished, the United States paying the King of Hanover 60,353 thalers, as 'indemnification for the abolition of these tolls. Subsequently the claim was made under these several treaties that German steam vessels were entitled to the same exemptions as Belgian steam vessels, and by the acts of June 19, 1878, and March 2, 1889, Congress consented to a refund of tonnage taxes to German steam vessels, covering a period of years from 1862, with interest, amounting to $381,566. The exemption from tax of American steamships in Belgian ports, which never was of considerable value, was thus purchased for nearly $400,000. The immunity granted to mail vessels to Brazil would prove an equally expensive purchase to the United States if use were made of it under the proposed measure. If no use were made of it, as at present, the immunity, obviously, would be useless. On either ground section 4232 should be repealed as provided for in section 2 of bill D.

ABOLITION OF UNNECESSARY BONDS.

By the act approved January 16, 1895, Congress abolished the bonds. required since 1792 upon the registry, enrollment, or license of vessels, and substituted therefor a direct penalty for the misuse of a ship's papers. This act has met with the cordial approval of our shipping interests and has been incidentally a measure of economy to the Government. From reports of collectors of customs to this Bureau, tabulated in Appendix N, it appears that 29,459 such bonds were issued during the fiscal year ended June 30, 1894. The preparation and custody of these bonds was a source of unnecessary expense to the Government for salaries, fees, and storage, which has now been stopped. Upon the owners and masters of American vessels these bonds imposed a useless tax of time and money from which they are now relieved.