1146                        FOREIGN     RELATIONS.

any country possessing the Moorsom system of gross tonnage can deliver to
any of its
vessels a certificate, to be attached to the papers, which will give the
net tonnage,
either according to the Danube rule or according to the rule of 1871, as
may be selected
by the owner; and that this certificate shall be valid in all foreign ports
for the pay-
ment of dues.
  This expedient will secure uniformity of practice until the maritime powers
have
agreed upon a uniform law. Practically, it will lead to all vessels receiving
net ton-
nage under the Danube rule, as the latter is more favorable to ship-owners
than the
rule of 1871 by about 5 per cent.
  This decision on net tonnage closed the debates on tonnage questions; and,
although
no formal decision was at that time pronounced defining utilizacble capacity,
no one
could fail to conclude from the debates on net tonnage, that the net tonnage
of a ship,
as agreed upon by the commission, is the nearest approximation to her utilizable
capacity.
  The second subject which the commission discussed was the Suez Canal question.
The inquiry was contained in the following extract from the instructions
to the Otto-
man delegates:
  "Is the mode of levying the dues at the present time practiced by
the Suez Canal
Company in harmony with the provisi6ns of the concession and of the imperial
firman,
according to the interpretation which has been given to them by the vizieral
letters
addressed to his highness the Khedive?"
  It was not difficult for the British delegates, who opened the discussion
on this sub-
ject, to prove that the practice of the company is not in harmony with the
law thus
established, and they were supported by a large number of their colleagues
in proving
the illegality of the company's present proceedings. Most important individual
state-
ments were made by the Austrian, Dutch, German, Italian, Spanish, and Turkish
del-
egates, and the English delegates drew up a series of resolutions, which
are entered on
the minutes of the commission, and which pronounce in a formal manmer what
had
been stated on so many sides, that the company's proceedings are, illegal.
They
adduced, in addition-to the arguments already brought forward, M. de Lesseps's
own
publication of speeches in England at the time the concession was made, which
showed
what was the real meaning of the words by which he then defined the rights
of the
company, although he has since endeavored to explain them away.
  When the large majority of the commission were ready to vote these resolutions,
it
became possible to realize, in the interest of the company, a scheme of compromise
by
which, instead of compelling it suddenly to resume the levying of its tolls
on net
tonnage at the maximum of 10 francs per ton, which would have had a ruinous
effect
on its finances, a gradual return would be made to that only legal course
by concedin'
to the company a surtax decreasing in amount as the net tonnage increases.
  Negotiations were unofficially set on foot, through the instrumentality
of the dele-
gate of Sweden and Norway, so far back as the end of last October, with a
view to
bringing about an understanding. This led to the matter being privately discussed,
at first between the English and French delegates, then in presence of nearly
all the
delegates. The first English delegate set himself to examine the conditions
on which
an arrangement could be effected, looking first at the receipts and expenditures
of the
company, and then at the amount of traffic past and present and likely in
the future.
Colonel Stokes calculated that a surtax of 3 francs a ton, until the net
tonnage should
reach.2,000,000 in one year, and decreasing till it should finally cease
on the net ton-
nage in one year amounting to 2,300,000 tons, would give the shareholders
a dividend
at first of 3 per cent., risingto 5j per cent., and remaining between that
and 5 per
cent. until the surtax should cease.
  The French delegates wanted to have the surtax at 41 francs, and that it
should not
finally cease until the yearly tonnage should reach 3,000,000. The English
delegates
declined to advance beyond the amount they had offered. The English government
pTomptly sanctioned the actions of its delegates in this affair; but for
a long time it
did not seem likely to have any result, as the French government did not
approve of
the negotiation.
  The businees of the commission went on as above described. When the commission
began to discuss the question of the legality of thecompany' s proceedings,
the Russian
delegates offered to renew the negotiations for an arrangement which the
other dele-
gates were ready on their part to resume at the point where the others had
broken off,
and on the basis of Colonel's Stoke's proposal.
  The English delegates were willing to treat on a so-far-extended basis
that they
would admit an extension of the amount of yearly tonnage at which the surtax
should
cease, and they were willing to allow the company the benefit of the increase
of the
net tonnage which would result from the adoption of the commission's rules
since the
suspension of negotiations for a compromise, and which they calculated as
equal on an
average to one franc a ton on the old tonnage
  On these bases the following terms were privately agreed to as bases of
transaction
between his highness the Khedive of Egypt and the company: