CHAPTER XXV
FIXING THE TOLLS
Long before the Panama Canal was finished shipping interests in every part of the world began inquiring minutely as to probable rates of toll, stating that it would be necessary for them to have this information before making plans to meet the changed conditions. Some wanted to plan construction of new ships, while others desired principally to readjust their transportation lines in accordance with the new conditions.
With this in mind, President Taft in 1912 recommended to Congress the passage of a law fixing the tolls and providing for the permanent operation of the canal. Congress, acting upon this recommendation, passed what is known as the Permanent Canal Law. In this law are stated the terms under which the canal may be used by the shipping world. It authorizes the President to prescribe, and from time to time to change, the tolls that shall be levied by the Government of the United States for the use of the canal. No tolls may be levied on vessels passing through the canal from one United States port to another. Provision was also made that tolls might be based upon gross or net registered tonnage, displacement tonnage, or otherwise, and that they might be lower on vessels in ballast than upon vessels carrying cargo. When based upon net registered tonnage, for ships of commerce, the tolls can not exceed $1.25 per ton, nor be less, other than for vessels of the United States and its citizens, than the estimated proportional cost of the actual maintenance and operation of the canal. The toll for each passenger was fixed at not more than $1.50.
Acting under the law authorizing him to fix the rates within the limitations stated by the law itself, President Taft issued a proclamation fixing the toll at $1.20 per net registered ton on all ships of commerce, other than those carrying cargo from one United States port to another. The net registered ton is the unit of measuring a ship's cargo-carrying capacity, used throughout the world in general, and by British shipping in particular. It consists of 100 cubic feet of space, so that when a ship is measured its net registered tonnage is determined by the number of these units of space it contains. A ton of cargo seldom fills a hundred cubic feet of space; frequently it will not fill more than 40 cubic feet. The charge per ton of actual freight under this toll of $1.20 per net registered ton ranges from 44 to 80 cents a long ton upon the freight carried, depending upon the class of cargo. Such a toll adds from 2 to 4 cents per hundredweight to the freight rate between two points through the canal. It might cost 5 cents to take a barrel of flour from Colon to Panama, or vice versa.
While ships will be charged tolls on the basis of net registered tonnage, not all ships carry freight upon that basis. In the majority of cases cargo is taken on at "ship's option"—either by weight or space. Forty cubic feet is estimated as the space occupied by an ordinary ton of freight, and ships usually carry cargo at rates based on that amount of space for each ton. The 40 cubic feet method of determining the amount of cargo carried is adopted by maritime interests because a long ton of wheat occupies about that amount of space. From this it will be seen that for the purpose of collecting tolls the United States allows 100 cubic feet of space for a ton, while the ordinary shipping firm allows only 40 feet per ton. Thus it happens that a shipowner charges the shipper for carrying 21⁄2 tons where the United States charges the shipowner for carrying 1 ton.
Notwithstanding the fact that the shipowner collects for the carrying of 21⁄2 tons where he pays toll on 1 ton, he still has to pay what seems, in the aggregate, a large sum of money each time his ship passes through the canal. An ordinary 5,000-ton ship will be charged $6,000 for passing from one ocean to the other. A ship like the Cleveland, the first around the world tourist steamer advertised to pass through the canal, will have to pay $14,000 for the 12-hour trip from Colon to Panama. A steamship like the Lusitania will have to put up some $30,000 for a single passage. The average ship will pay from $5,000 to $10,000 for its passage. This seems like a high rate, even though it does amount to only 2 or 4 cents per hundredweight of cargo, but when one takes into consideration the time saved in passing through the canal, and the cost of maintaining a ship on the high seas, the rate becomes a reasonable one.
The average ship costs about 10 cents per net registered ton per day for keeping it in operation. Thus a 10,000-ton ship will save about a thousand dollars for each day its voyage is shortened. If this voyage be shortened by 20 days, the shipowner makes a net saving of $8,000 when he selects the Panama route over some other route. In fact, he may save even more than this, for the other route might involve the giving of additional space for bunker coal, which otherwise would be used for cargo. Convenient coaling stations mean a minimum of space required for the operation of the ship and a maximum of cargo-carrying capacity. In this way a merchant ship might save several thousand dollars additional by choosing the Panama route over the Strait of Magellan.
It is estimated that the tolls it will be necessary to collect to make the canal self-supporting will be $15,500,000 a year, since that amount will be required to meet the expense of operation and return 3 per cent interest on the investment. The $15,500,000 is made up of $3,500,000 for operations, $250,000 for sanitation and government and $11,250,000 for interest on the $375,000,000 the canal cost. This takes no account of approximately $10,000,000 which will be required for the support of the troops on the Isthmus. Should this be considered, the total annual charges to be made would approximate $25,000,000, but this, in the view of those who have considered the matter, is not a proper charge against the cost of operation.