COAST AND GEODETIC SURVEY.

The satisfactory progress made in near and remote regions by the Coast and Geodetic Survey are given in detail in the Superintendent's report.

It is the aim of the Bureau to select localities where, according to the information at hand, the commercial needs or other demands are most pressing. Thus, at the request of the Chamber of Commerce of Seattle, one of the six vessels engaged in the survey of Alaskan waters was ordered to make a reconnoissance of the mouth of the Kuskokwim with a view to its buoyage. An interesting development of the general survey of Cooks Inlet was the delineation of the approaches of and anchorages in Knik Arm, which forms the nearest access for shipping to the Matanuska coal field, one of the two principal coal fields in Alaska. The results of this survey were prepared and photographic copies were furnished to the shipping concerned in advance of the issuance of the regular chart.

In response to a special demand, a surveying ship was dispatched to the Hawaiian Islands for the development of the hydrography close to the shores of Oahu.

In view of the early opening of the Panama Canal, I have directed the dispatch of a surveying ship and wire-drag party to Panama, for the purpose of making such a survey of the approaches as the exigencies of modern and prospective commerce demand.

In the Philippines the rapid progress achieved has been made possible by the cooperation of the Philippine government, whose interest, aside from that attaching to the safety of the United States and Philippine government ships, is made clearly apparent by the fact that, according to the report of 1910, not less than 162 steamers and 440 sailing vessels were engaged in the coastwise trade, while there were 872 clearances and a corresponding number of entries of foreign ships in the islands.

My approval has been given to various acts of cooperation with different bureaus of this and other departments for the purpose of obtaining data of value to the Survey, facilitating the work and rendering services in return.

At the request of the governor of Delaware, two experts, one from the Survey and one from the Bureau of Fisheries, aided that State in its oyster surveys, and the value of their services was acknowledged by a vote of thanks of the legislature, an unusual but gratifying recognition, to which it gives me pleasure to refer.

The delimitation of the Alaska frontier and the re-marking of the boundary between Canada and the United States is progressing under the direction of the Superintendent, acting for the Department of State. The triangulation along the one hundred and forty-first meridian has suggested the desirability of connecting it with the coastwise work at the mouth of the Yukon, by extending a network of triangulation down that river, which is one of the great rivers of the world. Such a triangulation would establish the necessary correlation between the topographic and other surveys already authorized by Congress in Alaska, and I therefore renew my recommendation of last year for an appropriation to initiate this work.

The overwhelming demands made on the Survey for its charts have necessitated a simplification of its chart work in all its branches, already referred to in my report of last year, and to this difficult task the office is devoting its energies. At the outset and for a considerable time, the changes which are being made will add much to the work of the office, but the changes are making themselves felt in increased output and resulting economy.

BUREAU OF NAVIGATION.

On June 30, 1911, the total documented merchant shipping of the United States comprised 25,991 vessels of 7,638,790 gross tons, an increase of 130,708 gross tons during the year. Improvement in conditions caused by the depression of 1909 has continued along the seaboard, but not on the Great Lakes. The slow growth of our shipping during the past three years is to be attributed to the same causes which checked the rapid increase of shipbuilding during the first years of the century. As nearly 40 per cent of our tonnage is still wooden construction, our rate of growth under normal conditions would be slower than that of the principal merchant navies of Europe.

The output of our shipyards during the past fiscal year was 1,422 vessels of only 291,162 gross tons, and on the Lakes shipbuilding, as anticipated, fell much below the annual average construction. At the beginning of last July work under way and shipbuilding contracts indicated for our shipyards another fiscal year of limited production.

PANAMA CANAL TOLLS.

I assume that there is no disposition to delay beyond the present session the necessary settlement of the more important questions concerning the actual operation of the Panama Canal, including the question of canal tolls. In last year's report I stated:

The question of Panama Canal tolls is now under consideration, and in view of the fact that the entire cost of the canal is assumed by the people of the United States every consideration consistent with our treaty obligations should be shown to American ships.

Congress definitely fixed the general policy of the United States in respect of tolls for the use of its improved rivers, harbors, and canals by section 4 of the river and harbor act of July 5, 1884. That section provides:

No tolls or operating charges whatever shall be levied upon or collected from any vessel, dredge, or other water craft for passing through any lock, canal, canalized river, or other work for the use and benefit of navigation, now belonging to the United States or that may be hereafter acquired or constructed.

At no time has the wisdom of the liberal navigation policy thus declared been seriously challenged in Congress or by the country. No one criticised it as a subsidy or a bounty to the vessels which have made use of our improved waterways. The policy was adopted and

has been pursued without dissent, because the country realizes that free navigation promotes commerce and that our commerce is as essential to the country's welfare as the great productive industries of agriculture, manufacture, and mining. Pursuant to that policy, since 1884 Congress has appropriated $527,065,707.94 for river and harbor improvements, compared with an estimated cost of the Panama Canal to the day of opening of $375,000,000.

Great and expensive as the undertaking has been, the Panama Canal would not call for any change in our policy of untaxed navigation under the act of 1884 if it did not in two respects differ from all our other improvements in navigation. Other improvements have been for the benefit of American commerce originating at American terminals. Even where millions have been expended at ports where foreign navigation serves our commerce-as, for illustration, at Galveston-the benefit to foreign ships from the improvements has been shared by American producers who furnish their cargoes. Again, in all other improvements we have consulted solely our own interest, because our outlay has been made within our exclusive jurisdiction.

It is expected that the Panama Canal will solve some of our great problems of domestic transportation. It will, of course, bring our States on the Atlantic and Pacific much closer together and will offer new opportunities to the States of the Gulf, but it will also give the grain and lumber of British Columbia and the Canadian Northwest an all-water route shorter to European markets by 5,000 miles than they now possess. To the west coast of South America it will mean closer business relations with the Old World. In many of the foreign commercial results to be wrought by the canal the United States will have no immediate share. Indeed, it is possible that some of them may be in a measure to our commercial disadvantage, in that other nations will reap profits from our great investment at the Isthmus. Nevertheless, we may look with satisfaction upon our contribution to such development, because in some form advantage must

come to us.

The Panama Canal will, of course, greatly increase the efficiency of our Navy and no doubt will prove to be the greatest single improvement in American commerce and navigation ever provided by Congress. If these were the only considerations, it should remain under the act of 1884, but that act was properly amended on March 3, 1909, so as to exclude the Panama Canal, because we can not be expected to maintain an untaxed waterway for the navies and merchantmen of other countries.

Before entering upon the undertaking we assumed certain obligations to other nations, recited in the first section of Article III of

the Hay-Pauncefote Treaty of 1901 and reiterated in Article XVIII of our convention of 1903 with Panama, as follows:

1. The canal shall be free and open to the vessels of commerce and of war of all nations observing these Rules, on terms of entire equality, so that there shall be no discrimination against any such nation, or its citizens or subjects, in respect of the conditions or charges of traffic, or otherwise. Such conditions and charges of traffic shall be just and equitable.

The treaties provide that every nation shall contribute with “ no discrimination" to the support of the canal in proportion to the use it makes of the canal. That principle will of course be observed. At the same time the purpose of section 4 of the river and harbor act of July 5, 1884, may be preserved in the most important engineering work that we have ever undertaken. This may be accomplished by the enactment of a law which shall provide that all tolls and transit charges which may be imposed on public vessels of the United States and on merchant vessels of the United States for passing through the Panama Canal shall be paid from any money in the Treasury not otherwise appropriated, and that there shall be appropriated annually, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary for the purpose, and that such appropriations shall be deemed permanent annual appropriations.

About 25 per cent of the Suez Canal tolls on foreign merchant vessels are now paid in some form from the treasuries of the nations whose flags those vessels fly, and we may assume that like provision, in at least some instances, will be made for the payment of the tolls that we shall assess on foreign merchant vessels. Foreign precedents, however, are merely illustrative. Every State in the Union with navigable waters crossing its boundaries furnishes precedents of congressional appropriations for the establishment and maintenance of improvements at the continuing expense of the Federal Treasury and without a dollar's help from the vessels which enjoy the advantages of such improvements. Where the future of American shipping is at stake, and the domestic commerce of both seaboards and the Gulf is involved, there is no apparent reason to depart from a principle which has been so constantly invoked.

The subject of Panama Canal tolls has been considered at some length because it is vital to the future of American merchant shipping. Our opportunity immediately after the war with Spain to adopt reasonable measures to secure creditable maritime rank was neglected. The Panama Canal is being built in the belief that it will benefit all sections of the country and nearly every form of American industry. Our merchant ships and shipyards are as essential to the Nation as our battleships. They have at least a claim to equal consideration in canal legislation and appropriations with other American industries. Every argument to tax the American merchant ship