Originally the charge for the hire of a ship at so much a ton of its burthen. It was also a tax, first levied in 1303 by Edward I of England, on all imports brought by ship into England. A second tax, known as tunnage, of three shillings on each tun of wine imported, was levied in 1347 by Edward III.
It was from the first of these meanings, the cost of the hire of a ship, that the word tonnage came into use as an alternative to burthen. Although tonnage was still theoretically based on the number of tuns of wine that a ship could carry in its holds, it became necessary, both for taxation purposes and for calculating the harbour dues payable by a ship, to devise a rough and ready formula by which the tonnage could be quickly calculated. It was found, in the general design of ships of those early days, that the vessel's length in feet, multiplied by its maximum beam in feet, multiplied by the depth of its hold below the main deck in feet, with the product divided by 100, gave a reasonably accurate measurement of its tonnage, and this was the formula used for measuring warships as well as merchant vessels.
In 1694, when a law was introduced in Britain requiring the marking of a waterline on merchant ships, both when in ballast and fully laden, this tonnage formula was officially adopted, though marginally amended to make the product of length, beam, and depth divisible by 94 instead of 100. This remained the standard of ship measurement until 1773, when more accurate limits of measurement were established by a formula known as the Builders Old Measurement (BOM). This remained in force until the advent of iron for shipbuilding and steam propulsion revolutionized the design and shape of ships.
The BOM served its purpose well for the typical bluff-bowed, full-bodied ship of the timber and sail era but had no relevance to the longer, finer hulls of the iron ship in which the ratio of length to beam increased from the average three to one to four, five, and even six to one. In place of the old BOM a new calculation, known as Moorsom's Rule, devised by the Admiralty at the request of the Board of Trade in the mid-19th century, was introduced. The total capacity of a ship's hull below the upper deck was calculated in cubic feet and, by dividing it by 100, the resultant figure became known as a ship's gross tonnage.
But this figure did not, of course, bear very much resemblance to its cargo-carrying capacity, since it was calculated on the total hull space below the ship's upper deck and made no allowance for space taken up by crew's quarters, ship's stores, fuel, engines, etc. So a second calculation was made of the capacity in cubic feet of these spaces and, still taking 100 cubic as equivalent to one ton, was deducted from the figure of its gross tonnage to give a net tonnage.