The Canal Tolls ^^HWican Shippiu f Lewis NixoN CORNELL UNIVERSITY LIBRARY UNDERGRADUATE UBRARY Cornell University Library HE 537.9.T7N73 The canal tolls and American shipping. 3 1924 014 441 293 Cornell University Library The original of tliis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924014441293 THE CANAL TOLLS AND AMEEICAN SHIPPINa THE CANAL TOLLS AND AMERICAN SHIPPING BY LEWIS NIXON NEW YO^K McBRIDE, NAST & COMPANY t " .-m'' COPYRIGHT, 1914. BY McBride, Nast & Co. Published May, igif FOREWORD It is proposed in this book to submit to an impartial examination the different interpreta^ tions of the meaning of the Hay-Pauncefote Treaty. Lest the writer's long association with American shipping interests may seem to militate against a detachment from personal bias in this discussion, he deems it wise to add that he is no longer engaged in shipbuilding, nor has he any interest direct or indirect in any vessel engaged in the foreign or coasting trade of the United States. Finding many arguments advanced upon ideas gathered from hasty consideration which had not taken in both sides of the question, it was decided to try to put within these brief limits a general analysis of the Treaty's provisions, to review both sides of the controversy and to give furthermore all the state papers that show the development of the Treaty. If the reading of this book adds to the general information of the ordinary reader without time for exhaustive study and enables him to criticise with confidence the many addresses and papers on the subject I shall feel that it has served the pur- pose of its inspiration. Foreword There seems to be an impression that the con- tention respecting the right of the United States to remit toll charges on its own vessels is an academic question, and that such contention is simply a hattle of wits. As a fact it is the most serious determination that has been asked of our people for half a century. Our foreign trade is in the hands of our com- mercial rivals and if the Panama Canal policy is not determined aright it will remain there with ever strengthening control. Some of our people upon hearsay, others upon blind acceptance of the opinions of others, owing to the fact that treaties were not available, have developed a state of mind in which an insistence upon secure, moral and legal rights is viewed as a breach of treaty faith. Lewis Nixoh". New York, 7 April, 1914. CONTENTS CHAPTER PAGE I Preliminabt Steps 1 II The Clattok-Bulwer Convention .... 11 III Neutramtt and Equal Treatment and the Suez Rules 24 IV The Negotiation op the Hat-Pauncepote Treaty 45 V Insincerities 70 VI The Speech op Senator Elihu Root .... 76 VII The British Protest 88 VIII Regulation op Commerce 92 APPENDICES The Clayton-Bulwer Convention 101 The Hay-Pauncepote Treaty 106 The Hay-Bunau-Varilla Treaty 109 The Suez Canal Convention 122 Negotiation op the Hay-Pauncepote Treaty (Cor- respondence) 127 First British Protest 173 Second British Protest 175 Reply op Secretary op State Knox 188 President Tapt's Memorandum to Accompany the Panama Canal Act 197 Speech op Senator Elihu Root 206 Platform Declarations 238 Treaty op 1846 239 President Wilson's Message 241 Panama Canal Act 242 THE CANAL TOLLS AND AMERICAN SHIPPING THE CANAL TOLLS AND AMERICAN SHIPPING CHAPTER I PRELIMINAET STEPS Even Columbus hoped to discover a strait between the North and South American Conti- nents. The question of cutting through the Isthmus we find referred to many times from 1502 to recent years. In 1826 Secretary of State, Henry Clay, wrote to Messrs. Anderson and Sergeant, United States delegates to the Panama Congress, advising the consideration by that Congress of the matter of a canal. In 1835 the Senate adopted a resolution request- ing the President to consider the expediency of opening negotiations with the governments of other nations, especially with those of Central America and New Grenada, with a view to safe- guarding individuals or companies that might un- dertake to build a canal across the Isthmus. In 1839 the House of Eepresentatives took action along similar lines in response to a memorial from New York merchants. 1 2 Canal Tolls and American Shipping On February 10, 1847, President Polk transmit- ted with message to the Senate for ratification "A general treaty of peace, amity, navigation and commerce between the United States and the Ee- public of New Grenada, " concluded at Bogota, December 12, 1846. Under this treaty of 1846, the citizens, vessels and merchandise of the United States were to have reciprocal treatment with those of New Grenada in passage across any part of Panama, besides being relieved from any im- port duties on goods in transit. This in return for the positive and efficacious guarantee of the neutrality of the Isthmus — as well as the rights of sovereignty and property over it. The Panama Eailway completed in 1855 was an outcome of this treaty. The American and Atlantic Ship Canal Com- pany executed a contract with the Grovemment of Nicaragua August 27, 1849. Mr. Squier, United States Charge d'affaires, concluded a treaty ceding Tigre Island in the Gulf of Fonseea to the United States. On October 16, 1849, the British Diplomatic representative to Guatemala, Mr. Chatfield, with an armed force took possession of Tigre Island. Possession at that time would have meant war with Great Britain. We were in the midst of the bitter dis- cussions leading up to our Civil War and had we gone to war with Great Britain very probably the Civil War would have been precipitated with the Southern States as possible allies of Great Preliminary Steps 3 Britain. The conversion of English lumber camps on the eastern coast of Nicaragua and Honduras into what was practically British territory, through virtue of occupation in anticipation of the building of a oanal, was considered by American statesmen of the period as equivalent to a virtual abandonment of the Monroe Doctrine. In 1848, England seized and occupied Grey- town till 1860 under the mask of aiding the Mos- quito Indians, even crowning an Indian King as a "cousin" and "great and good friend" of Euro- pean sovereigns. The salary of the Mug was £1000 a year till he died in 1864. Just so long as England considered it necessary she maintained the protectorate over the Mosquito Reservation, getting the Austrian Emperor to bolster up her claims in 1880, and it was not till 1894 that the Mosquito Coast was turned over to Nicaragua and until work under Menocal on the Nicaragua Canal, which was carried on in 1891 and 1892, was aban- doned. So our Grovemment was driven to execute a treaty which violated the intent of the Monroe Doctrine. Just as one of the results of the Russo- Turkish War was to give England control of Cyprus, with the right to occupy territory near the Canal in British interests, and in Central America, though agreeing not to fortify or set- tle, (in Article I of the Clayton-Bulwer Treaty) we find her holding fast to the Mosquito Coast until 1894 and to Belize to the present day. While 4 Canal Tolls and American SMpping Great Britain engaged by treaty to vacate the coast she violated this treaty in letter and spirit. President Pierce, in a message in 1856, said : It is with surprise and regret that the United States learned that a military expedition under the authority of the British Grovemment had landed at San Juan del Norte, in the State of Nicaragua, and taken forcible possession of that port, the necessary terminus of any canal across the Isthmus within the territories of Nica- ragua. It did not diminish to us the unwelcomeness of this act on the part of Great Britain to find that she assumed to justify it on the ground of an alleged pro- tectorship of a small and obscure band of uncivilized Indians whose proper name had even been lost to his- tory, who did not constitute a State capable of terri- torial sovereignty either in fax;t or in right, and all political interests in whom and in the territory they occupied Great Britain had previously renounced by successive treaties with Spain when Spain was sovereign to the country and subsequently with independent Span- ish America. The following proclamation is another violation of treaty rights. Office of the Colonial Secretary. Beliee, July 17, 1852. This is to give notice that Her Most Gracious Majesty the Queen has been pleased to constitute and make the Island of Eoatan, Bonaeca, Utilla, Barbarat, Helene and Morat to be a Colony to be known and designated as the Colony of the Bay Islands. Augustus Frederick Garb, Acting Colonial Secretary. Preliminary Steps 5 Eoatan was one of the "islands adjacent" to the American Continent that had heen restored hy Great Britain to Spain under treaties of 1783 and 1786. Mr. Marcy, Secretary of State, informed the United States Minister to Great Britain, Jidy 26, 1856, as to the view taken hy the United States saying: Great Britain had' not at the time of the Convention of April 19, 1850, any rightful possessions in Central America, save only the usufructuary settlement at Be^ lire, if that really be in Central America, and at the same time if she had any she was bound by the express tenor and true construction of the convention, to evac- uate the same and thus to stand on precisely the same footing in that respect as the United States. The Dallas Clarendon Treaty of 1854, stating explicitly that the protectorate over the Mosquito Indians and continued possession of the Bay Islands would be terminated, was refused by Great Britain. At any rate it is known that there was much misunderstanding preceding 1850 and alarm over acts of British aggression. Mr. Lawrence, our Minister in London, making but little progress owing to the evasive policy of Great Britain, Mr. Clayton, Secretary of State, signed a convention in Washington directly with Sir Henry Bulwer. This treaty was ratified July 5, 1850, and is known as the Clayton-Bulwer Convention. While Great 6 Canal Tolls and American Shipping Britain made sure of land near to and command- ing the entrance of any Nicaragnan Canal, there can be no question but the English statesmen of the day fully appreciated the strength of the New Grenada Treaty of 1846. The wording of the eighth article of the Clay- ton-Bulwer Convention, the extension by treaty stipulation of protection, was to secure certain like terms of treatment over other routes. So from 1850 to 1901 we find every form of diplomatic strategy exerted to extend such treaty stipulations and so enjoy equal terms with the United States. The Treaty of 1846 gave reciprocal rights to the United States and before the provisions of the Clayton-Bulwer Convention could be extended to the Isthmus of Panama very material modifica- tions must have been made in the Treaty of 1846 and this could not be done without the consent of New Grenada. In fact the Treaty of 1846 with New Grenada stood in the way of the equal treatment guaranteed in the superseded Clayton-Bulwer Treaty, as it extended certain privileges in Panama tp the United States by virtue of our giving reciprocal conditions of treatment in Panama itself. It is an accepted principle in international law that fa- vored nation treaties do not preclude the extend- ing of a special privilege to another nation pro- vided a reciprocal privilege is secured in return. Thus the United States negotiated a commercial treaty with the Sandwich Islands in 1876, pro- Preliminary Steps 7 viding for certain reciprocal trade concessions. The British Government made the following comment thereon : As the advantages conceded to the United States by the Sandwich Islands are expressly stated to be given in consideration of and as an equivalent for certain reciprocal concessions on the part of the United States, Great Britain cannot, as a matter of right, claim the same advantages for her trade under the strict letter of the Treaty of 1851. Evidently Senator Boot's conclusions are that the Monroe Doctrine was in no sense binding upon Great Britain, and that her seizure of lands, in di- rect opposition to that doctrine, gave her a "coign of vantage which she herself had for the benefit of her great North American Empire for the control of the Canal across the Isthmus." England promised nothing in the Clayton-Bul- wer Treaty that she was not barred from holding by the Monroe Doctrine, and she gave up nothing, even after promising, and the coign of advantage thus embraced includes a claim over Panama, in the opinion of Senator Boot. For when asked whether the Treaty of 1846 did not influence the possible extension of the Clayton-Bulwer Con- vention to Panama, he took a position which seems contrary to the provisions and precedents of pub- lic law and in direct repudiation of the clearly ex- pressed attitude of successive administrations of the United States, Mr. Boot says : 8 Canal Tolls and American Shipping The whole Isthmus was impressed by the same obli- gations which were impressed upon the Nicaragua route, and whatever rights we had under our Treaty of 1846 with New Grenada were thenceforth bound to exercise, with due regard and subordination to the provisions of the Clayton-Bulwer Treaty. Every precedent and practice of international law seems in conflict with such a stand. Dr. Oppenheim says : Such obligation as is inconsistent with obligations from treaties previously concluded by one State with another cannot be the object of a treaty with a third State. In case the arbitration so vigorously urged by Senator Boot should find for Great Britain, should we refuse to accept such finding in order to keep our faith under the Panama Treaty or abrogate the Panama Treaty in order to submit to the find- ing? At all events Great Britain's adroit efforts to obtain a contract right by extending the treaty stipulations contemplated in Article VIII of the Clayton-Bulwer Convention can be noted from 1850 on. Thus in 1857 Mr. Cass in a letter to Lord Napier in response to a request for a joint agree- ment said : It would be inconsistent with the established policy of this country to enter into a joint alliance with other powers as proposed in your lordship's note. Preliminary Steps 9 Mr. Evarts in 1880 refused to consent to any agreement with, any foreign power to participate in the special rights already enjoyed by us in Panama. Mr. Blaine in 1881 said in a message to Mr. Lowell : In the judgment of the President this guarantee (of neutrality on the Isthmus) does not require reenforce- ment or accession or assent from any other power. In President Arthur's message of December 6, 1881, we find that he said that the prior guarantee of neutrality of the Isthmus of Panama was in- dispensable and that the interjection of any foreign guarantee might be regarded as a super- fluous and unfriendly act. He even went so far as to say that Great Britain might claim a share in such guarantee through, some wording of the Clayton-Bulwer Convention and recommended the abrogation of any clause that might possibly be so construed. Mr. Blaine refused to agree to an arbitration of the boundary between Costa Eica and Panama by a European sovereign saying that any question affecting the territorial limits of Panama was pf direct practical concern to the United States. Mr. Bayard accepted the findings later but required that the scope and effect should be defined with- out impairment of any rights of the third parties, not sharing in the arbitration. Mr. Grresham in 1893 made clear the position of 10 Canal Tolls and American Shipping the United States that our approval of an arbi- trated boundary in no way made the United States a party to the litigation. Mr. Bayard in 1886 spoke of the "serious con- cern the United States could but feel were a Euro- pean power to resort to force against a sister re- public of this hemisphere as to the sovereign and uninterrupted use of a part of whose territory we are the guarantees under the solemn faith of a treaty." We, during all this time, acted quickly to put down disorder or revolution, interfering with the use of the railway across the Isthmus. Thus Mr. Gresham cabled in 1895 : If for any reason Colombia fails to keep transit open and free, as that Government is bound by Treaty of 1846 to do, United States are authorized by same treaty to afford protection. While many such cases can be cited they all simply tend to the same end. We have shown : 1. That under the Treaty of 1846 the United States enjoyed certain special reciprocal rights with New Grenada over the Isthmus of Panama. 2. That there was a full realization of the dan- ger of permitting any European power to enter into the enjoyment of similar privileges by any form of treaty stipulation permitting a participa- tion in our contract rights. CHAPTER II THE CLATTON-BULWER CONVENTION The Convention signed April 19, 1850, is given in full in the Appendix to this volnme. The Convention was considered to be hurtful to the spirit of the Monroe Doctrine. Secretary of State Olney, in 1896, said : In short the true operation and effect of the Clayton- Bulwer Treaty is that, as respects all water and land interoceanic communication across the Isthmus, the United States has expressly hound itself so far to waive the Monroe Doctrine as to admit Great Britain to a joint protectorate. The Convention as stated in the preamble was "for facilitating and protecting the construction of a ship canal and for other purposes." It was primarily to cover the building of a particular canal starting with the river San Juan de Nicaragua on the Atlantic side. Article I debars either the United States or Great Britain from acquiring or holding any rights or advantages in regard to commerce or navi- gation through the said Canal which shall not he offered on the same terms to the citizens or subjects of the other. Even our English friends will admit this Article 11 12 Canal Tolls and American Shipping superseded as we have acquired rights on the Isthmus that cannot be enjoyed in common with Great Britain in addition to rights already ours under the Treaty of 1846. Besides in the Hay-Pauncefote Treaty England has assumed no obligation in connection with the use of the Canal. Article II says that even in the event of war be- tween the two nations their vessels using the Canal shall be exempt from blockade, detention or capture by either belligerent. While our right to use the Panama Canal as an addition to our war power is conceded by Great Britain, the concession is a guarded one and an admission by us that neu- trality is the same as equal treatment, would re- sult in a challenge of the right of the United States to have such power. Article III provides for a joint protection of the parties constructing the Canal, together with their property. Article IV pledges Great Britain and the United States to use their influence with States having or claiming jurisdiction over the territory through which the Canal passes, to facilitate the construction and to secure free ports at each end. Article V is of great importance, for in this ar- ticle Great Britain and the United States engage to jointly protect the Canal and guarantee its neutrality. Both parties, however, reserve the right to withdraw their protection or guarantee upon six months' notice provided the persons or The Clayton-Bulwer Convention 13 company undertaking or managing the Canal make discriminations against one or in favor of one over the other. It will be noted that management clearly covered the regulation of commerce by tolls and otherwise. The penalty arising from discrimination caused simply the withdrawal of protection by the one discriminated against, the neutrality being secured by joint protection or by the protection of one in case that one secured special treatment not ac- corded to the other. So we find the neutrality of this particular Canal provided for in Articles II and V. Article VI provides for inviting the cooperation of other nations by their entering into treaty stipulations with the two principals. Article VII has to do with the joint treatment of those who supply the money and do the work on the Canal with an expressed preference for the first reliable contractor that no time may be lost. Now let us see what Article VIII says : The Governments of the United States and Great Britain having not only desired, in entering into this Convention, to accomplish a particular olject, but also to establish a general principle, they hereby agree to extend their protection by treaty stipulations to any other practical communication, whether by canal or rail- way, across the Isthmus which connects North and South America; especially to the inter-oceanic communications should the same be practicable, whether by cable or rail- way which are now proposed to be established by the way of Tehuantepec or Panama. 14 Canal Tolls and American Shipping In. granting, however, their joint protection to any such canals or railways, as are by this article specified, it is always understood by the United States and Great Britain that the parties constructing or owning the same shall impose no other charges or conditions of traffic thereupon than the aforesaid governments shall ap- prove of as just and equitable; and that the same canals or railways, being open to the citizens and subjects of the United States and Great Britain on even terms, shall also be open on like terms to the citizens and sub- jects of every other state which is willing to grant thereto such protection as the United States and Great Britain engage to afford. Senator Root has several times hearkened back to Article VIII of the Clayton-Bulwer Convention for an argument to support his contention that we must treat the vessels of war and commerce of Great Britain upon terms of equality with our own vessels under all circumstances. The entire Clayton-Bulwer Convention speaks of equal treatment owing to the fact that equal obligations were undertaken in affording protec- tion and in guaranteeing neutrality. By Articles II and V of the Clayton-Bulwer Convention the two Governments provided jointly for the building of a particular canal, its protec- tion and its neutrality, the latter being secured by joint protection. But in Article VIII we find two conditions covered separately in the two para- graphs of the article. ' The first paragraph establishes as a general principle, to apply to all available routes, the par- The Clajrton-Bulwer Convention 15 ticular object aceomplislied by Joint protection in earlier articles of the Treaty, tbis object being the neutralization secured in Articles II and V by joint protection. The second paragraph provides tbat if the two countries do extend their contract joint protection by treaty stipulation to other routes, such routes shall be open to the two countries on equal terms and on like terms to other countries willing to join in the protection. An important fact in this connection already noted is that either party could withdraw the pro- tection by which neutrality and protection was secured by giving six months' notice, in case such equality of treatment was not secured. As provided by the Clayton-Bulwer Convention, the Canal specified to run through Nicaragua was to be neutralized by the two nations jointly; they were to join in the burdens ; they were to join in the protection; and they were to join hand in hand in controlling the Canal and in seeing that all na- tions did have exactly the same treatment by the Company building this canal through a territory alien to each of them. This partnership control you will see has been definitely and permanently ended by the last treaty, and this termination, we see from the pourparlers, proves beyond question that Great Britain understood this and acted in complete ac- cord with such understanding. Equality of treatment under Article VIII was 16 Canal Tolls and American Shipping the return for a joint assumption of burden and responsibility, yet the British contention is that since a certain privilege was obtained through joining in protection this privilege must continue even though Great Britain is relieved from this expensive and burdensome responsibility. That is, in absence of explicit yielding to Great Britain, our rights are to be limited or destroyed by impli- cation. But happily the wording of the Hay- Pauncefote Treaty is clear upon this point. Is it "equal treatment" or "neutrality" that is carried over from Article VIII? The preamble to the Articles of the Treaty says: "the objec- tions that may arise from the Clayton-Bulwer Convention to the construction of the Canal are to be removed without impairing the general prin- ciple of 'neutralisation established in Article Vin.' We supersede the Treaty in every other respect." The preamble to rule I of Article III of the Hay-Pauncefote Treaty says that the United States adopts as the basis of neutralization cer- tain rules substantially as embodied in the Suez Canal Treaty. And further light is thrown upon the meaning by the fact that in modifying the Suez rules only such parts as provided for neutralisation were retained and all references to equal treatment thrown out. We shall examine these rules further on. But Great Britain, and some American sup- porters of her protest, says that so long as she is The Claj^on-Bulwer Convention 17 not permitted to join in protection that neutrality- secured hy our protection becomes the same as eqital treatment secured by joint protection. It shows the demoralization of the public mind on this question when such preposterous conclusions are taken seriously. I should be the last one to decry British diplomatic capacity, nor do I find anything wrong in their diplomats making the best case possible for their Government. They certainly act upon Madame de Stael's saying that: "The patriotism of nations ought to be selfish." It has long been a favorite expedient of British diplomatist to lay claims long in advance through pourparlers. So the ingenious attempts up to the last minute to retain a partnership or contract participation in the Hay-Pauncefote Treaty were to be expected. The Treaty of Ghent, which some of those not knowing of its provisions are anxious to celebrate, signed fifteen days before the Battle of New Orleans, provided for the restoration of all terri- tory, places and possessions taken by either nation from the other during the war, with certain un- important exceptions. But the minutes of the Conference at Ghent kept by Albert Gallatin represent the English Com- missioners as declaring in exact words through Mr. Goulbum: We do not admit Bonaparte 's construction of the law of nations. We cannot accept it in relation to any sub- ject matter before us. 18 Canal Tolls and American Shippinj •V\Ol While the American Commissioners did appre- ciate the meaning, it became known afterwards that the British Ministry did not intend the Treaty of Ghent to apply to the Louisiana Pur- chase at all. From 1803 to 1815, Pitt, the Duke of Portland, Grenville, Perceval, Lord Liverpool and Castlereagh, denied the right of Napoleon to sell the territory to us. The words used by Mr. Goulbum were meant to lay the foundation for a claim on the Louisiana Purchase entirely external to the provisions of the Treaty of Ghent. And if Pakenham had not been defeated we should have been deprived of this territory and should have had no canal. Of course no one considers extraneous matter as per- tinent except those who cannot gain their ends through the plain terms of a contract. When the Treaty of 1824 between the United States and Eussia was about to be exchanged the Russian Minister informed Secretary of State Adams that he was instructed by his Government to file an explanatory note at the time of the ex- change of ratifications, stating the views of his Government as to the meaning and eifect of cer- tain articles of the Treaty. Mr. Adams informed him that such a note could have no effect whatever on the Treaty unless it was sent to the Senate with the Treaty and received its approval. We had a similar prior filing by Sir Henry Bul- wer of a statement that the British Government did not understand the engagements of the Clay- The Clayton-Bulwer Convention 19 ton-Bulwer Convention to apply to British settle- ments at Honduras or its dependencies. Fortunately, though, in the case of the Hay- Pauncefote Treaty the negotiations support all the American contentions as the letters exchanged clear up all points in dispute, and clearly restrict the sphere of operation of the rules to a field in which they affect all persons and vessels alike. I have already referred to the different para- graphs of Article VIII, hut Mr. Hay is so freely quoted in what he might say were he alive that I wish to advance the evidence of his written ideas at the time of the negotiations. In the memoran- dum prepared by him we find in referring to Ar- ticle IV of the Hay-Pauncef ote Treaty : " It is thought to do entire justice to the reasonable de- mands of Great Britain in preserving the gen- eral principle of newtraiisation and at the same time to relieve the United States of the vague, in- definite, and embarrassing obligations imposed by the eighth article of the Clayton-Bulwer Conven- tion." And yet, while plainly done away with by Mr. Hay, who in good faith preserves the general principle of neutrality, we find Senator Boot in his Senate Speech endeavoring to revive these same vague, indefinite and embarrassing obhgations of Article VIII. The Suez Canal had been neutralized in 1888 by certain rules and under the first Hay-Pauncefote Treaty certain rules were adopted to secure the 20 Canal Tolls and American Shipping free navigation of the Canal that were in many respects like those of the Suez and it was said these rules were to preserve and maintain the general principle of neutralization of Article VIII of the Clayton-Bulwer Convention, not the latter part of Article "VTII as Sir Edward Grey labors to prove by a process of elimination, which eliminates the general principle of neutrality al- together and substitutes for it equal rights. No one can deny that neutrality was secured by joint protection in the Clayton-Bulwer pact, just as was equal treatment. We were willing to carry on the neutrality of the Canal and it is definitely pledged and the rules by which we shall permit its neutral use are clearly set forth in rules given in Article III the protection being given by us alone. Surely if we had been desirous of giving equal treatment as well it would have been so stated. It is certainly not implied but on the contrary is definitely refused as we shall see when we trace the origin of the rules. Do not assume for an instant that we could not have built a canal without Great Britain's per- mission. This all too general assumption con- fesses a loyal subserviency abhorrent to Ameri- cans — at least to the far greater part of them. The Clayton-Bulwer Convention had been violated by Great Britain, but we were not goaded to abro- gate it even though justified. Sir Edward Grey says that if we had built the The Clayton-Bulwer Convention 21 Canal under the Clayton-Bulwer Treaty we must have given English vessels equal treatment with our own, and then conveniently forgets that the Hay-Pauneefote Treaty superseded the Clayton- Bulwer Convention. But we are not building un- der the Clayton-Bulwer bargain. President Pierce in a message of 1856 said: It was with surprise and regret that the United States learned that a military expedition under the au- thority of the British Government had landed at San Juan del Norte in the State of Nicaragua and taken forcible possession of that port, the necessary terminus of any canal or railway across the Isthmus within the territories of Nicaragua. It did not diminish to us the unwelcomeness of this act on the part of Great Britain to find that she assumed to justify it on the ground of an alleged protectorship of a small and obscure band of uncivilized Indians, whose proper name had even been lost to history, who did not constitute a state capable of territorial sov- ereignty either in fact or in right, and all political in- terest in whom and in the territory they occupied Great Britain had previously renounced by successive treaties with Spain when Spaiuwas sovereign to the country and subsequently with independent Spanish America. The Fifty-first Congress took up this subject very f uUy. The Committee on Foreign Eelations of the Senate presented to the Fifty-first Congress a re- port containing a review of the history of the Clayton-Bulwer Treaty and it reported to the 22 Canal Tolls and American Shipping Senate its conclusion that it had become obsolete and that The United States is at present under no obligation, measured either by the terms of the Convention, the principles of public law or good morals, to refrain from promoting in any way it may deem best for its own in- terests the construction of this Canal, without regard to anything contained in the Convention of 1850. To this report are appended the names of every member of the Committee among them two who have held the oflSce of Secretary of State, Messrs. Evarts and Sherman. The United States Government had to obtain the necessary powers from Congress to build the Canal, and it could not ask Congress to use the money of the United States in a project controlled in any way by a foreign nation. Abrogation would however have left both par- ties freedom of action in Central America, if we abandoned the Monroe Doctrine. The Monroe Doctrine already barred Great Britain from doing what she agreed not to do in the Clayton-Bulwer Treaty and the first Hay-Pauncefote Treaty was considered, as was the Clayton-Bulwer Treaty, in violation of the Monroe Doctrine and as un- duly limiting the power of the United States and was denounced hy the Democratic Party in its Denver Platform. The Clayton-Bulwer Treaty was really a convention covering an uncertain contingency as to time and place, leav- The Clayton-Bulwer Convention 23 ing to joint action the preparation of rules of management and control. The Clayton-Bulwer Convention is superseded. We have traced the bearings of facts up to the time of such abrogation. It is plain to be seen that if the joint protection by which neutrality and equal treatment could be secured in this convention should be extended by treaty stipulation that groTinds for claiming equal participation would be laid. Since 1850 we had been resisting adroit efforts to obtain such joint contract extension. Yet with a persistency and statecraft to be ad- mired we find the first treaty submitted in the Hay-Pauncefote negotiations embodying a sur- render of this principle on our part and as fast as beaten on one demand another was presented. Happily for us the influence of a firm and con- sistent traditional policy exerted for over fifty years prevented such surrender. CHAPTER III NEUTEALITY AND EQUAL TREATMENT AND THE SUEZ EULES We find that by the preamble to the Hay-Paunce- fote Treaty its object is To remove any objection which may arise out of the Convention of 1850, commonly called the Clayton-Bul- wer Treaty, to the construction of such canal under the auspices of the United States, without impairing the general principle of neutralization, established in Article VIII of that Convention. The American people very clearly were deter- nained that a participatioii by other, nations in a canal built by us would not be permitted. Some of our statesmen strongly recommended the abro- gation of the Clayton-Bulwer Convention and we had ample reasons for doing so, the Treaty hav- ing been violated in letter and spirit. This would doubtless have given rise to bad feeling as firm assertion of Ameirican rights for' some reason seems unpopular with a part of our people. Un- questionably the new treaty was executed to "save the face" of Great Britain for otherwise it must have been abrogated. So in order not to impair the general principle 24 Neutrality and Equal Treatment 25 of neutralization we adopt certain rules in Article III of the Hay-Pauncefote Treaty as a basis for such neutralization. It is stated that these rules are substantially as embodied in the Convention of Constantinople, for the free navigation of the Suez Canal. Much light will be thrown upon the controversy over the meaning of the Treaty by an examination of this convention which is given in the Appendix. For what is omitted is just as important as what is re- tained in clearing up the intention of the rules. The British contention is that under the rules as appearing in the Hay-Pauncefote Treaty, they are entitled to equal treatment because in a former treaty equal treatment was secured by joint pro- tection and joint protection being done away with equal treatment must result. The wording of the protest given iu full in the Appendix is so ingenu- ous that it must be given : It certainly was not the intention of His Majesty's Government that any responsibility for the protection of the Canal should attach to them in the future. Neu- tralization must, therefore, refer to the system of equal rights. In other words a certain privilege gained through joining in protection must remain al- though we relieve Great Britain from this ex- pensive and burdensome responsibility. Senator Eoot says that the Panama Canal is to be made '^neutral upon the same terms as were specified in tJie Clayton-Bulwer agreement." Sir 26 Canal Tolls and American Shipping Edward Grey by a strange coincidence makes the same misstatement in his protest. Read the Hay-Pauncef ote Treaty. It abrogates the Clayton-Bulwer Convention, preserving only the general principle of neutrality, and this neu- trality is to be secured by elaborate and stated rules based upon rules adopted thirty-eight years after the Clayton-Bulwer Treaty, and even these Suez rules of 1888 were radically changed that the United States might fortify the Canal and might have and enjoy all the rig'hts incident to construc- tion, as well as the exclusive right of providing for the regulation and management of the Canal. England in 1882 seized Egypt and when secure in possession in 1888, in compliance with Grreat Britain's proposition for a national conference of the Powers, a treaty of seventeen articles was drawn up between the following : Great Britain, Austro-Hungary, France, Germany, Holland. Italy, Spain, Eussia and Turkey, we find Great Britain became a party, with the reservation that the terms of such treaty should not be brought into operation in so far as they would not be com- patible with the transitory and exceptional condi- tion in which Egypt was put for the time being in consequence of her occupation by British forces, and in so far as they might fetter the liberty of action of the British Government during such oc- cupation (See Martens, 2d ser. Page 557). Not only has there been a desire to keep alive the abrogated Clayton-Bulwer Treaty, but since Neutrality and Equal Treatment 27 the Treaty of Constantinople was drawn upon in shaping the rules of neutrality there is an attempt to read into rules adopted by us in Article III for securing neutrality the various obligations of the Suez rules whether found in our rules or not. In revising the rules in order to adapt them to the intentions of the negotiators every feature not ap- plying to the neutrality which they engaged to offer was stricken out. Thus from Article I was taken out: "The Canal shall always be open in time of peace as in time of war regardless of flag." The rules do not guarantee at all time and for all powers the free use of the Canal, nor forbid the keeping of men of war in or near the Canal, nor provide that the Canal must remain open in time of war. In fact the changes made from the Suez Canal rules clearly put the United States in a class apart in all such respects. Since the rules as adopted are designed to em- body the conditions under which we agree to up- hold the neutrality of the Canal, let us seek the definitions of neutrality as given in Dr. Oppen- heim's International Law. He says : Neutrality may be defined as the attitude of impar- tiality toward beUigerents, adopted by third states and recognized by belligerents, such attitude creating rights and duties between the impartial states and the belliger- ents. No one but ourselves is permitted to maintain 28 Canal Tolls and American Shipping the neutrality of the Canal; we do not agree to be neutral toward an enemy, hence we hold the Canal neutral as to other powers. Again quot- ing from Dr. Oppenheim: Since neutrality is an attitude of impartiality it ex- cludes such, assistance and succor to one of the bellig- erents as is detrimental to the other, and further such injuries to one as benefit to the other. Eeading Eule 1 of Article III covers such con- tingencies of impartial treatment in that we treat the vessels of commerce and of war of all nations alike not simply as regards charges and conditions of traffic but in aU other ways in which we might aid or succor one or injure the other. How closely we follow in our rules the Oppen- heim doctrines is shown by again quoting him : Neutrals must prevent belligerents from making use of their neutral territory and of their resources for mili- tary and naval purposes during the war. A hurried resume of the rules shows that vessels of war of a belligerent must not embark or disembark troops, munitions of War, or warlike materials, that the Canal must never be blockaded, that vessels of war of a belligerent shall not re- main within three miles of either end, and that a vessel of war of a belligerent shall not depart within 24 hours from the departure of a vessel of war. In fact it will be found that every contingency connected with belligerent operations is covered Neutrality and Equal Treatment 29 by our rules but that having adopted such rules to preserve the neutrality of the Canal they are not capable of being construed nor stretched to cover conditions having to do with ordinary com- merce unaffected by helligerent operations. We have the support of Dr. Oppenheim in this ; following him further in defining and explaining neutrality we find : Neutrality is a condition during a condition of war only. Rights and duties deriving from neutrality do not exist before the outbreak of war. Hence in applying rules to conserve the neu- trality of the Canal such rules if directly apply- ing to accepted understanding of neutral obliga- tions could not be extended to cover the ordinary conditions and far more extended existence of peaceful commerce except by specific provisions or by implication from the fact that no articles in the treaty granted further powers. Now, Lord Lansdowne did attempt to make these rules apply to ordinary commerce when he suggested August 3d, 1901, an amendment that the neutrality rules should "govern aU inter- oceanic communications across the Isthmus. ' ' This will be referred to later as it shows clearly a request for the adaptation of the rules to the peaceful commerce using the Canal and the studied refusal of the United States to grant such re- quest. 30 Canal Tolls and American Shaping The action of the Senate is very enlightening upon this point as it struck out the expression "in time of war as in time of peace," but retained the linking together of vessels of war and peace, so that rules applying to one must ap'ply to the other. But the changes from the rule prove even more. There is an idea prevalent that the rules for neutrality are not applicable in their entirety to neutral obligations, and that Eule 1 is inconsistent unless applied to peaceful commerce. Let us ex- amine them as briefly as possible. The intention is to make sure that we shall not play favorites in time of war by extending any special privileges or treatment to one belligerent as against another, either by hradering or delay- ing his vessels of war or by interfering with his vessels of commerce. Hostile operations might be hampered, even by unjust or inequitable charges exacted in such a way that under particu- lar circumstances such charges might bear more heavily on one belligerent than another. So we agree not to discriminate as between nations in respect of the conditions or charges of traffic or otherwise — ^not simply tolls but any rules affect- ing passage through the Canal in the interest of one belligerent as against another. In fact the British interpretation would preVent us at any time favoring even vessels belonging to our Gov- ernment in the way of docking facilities, coaling arrangements, use of repair shops, signal stations, Neutrg.lity and Equal Treatment 31 anchWage grounds, wharf and watering facilities, or otherwise. But say the English partisans. Great Britain will not insist upon this. If we admit her right to insist, as we do, when we strip from Article III its bearing upon the neutral operation of the Canal, she can object and doubtless would. Each time an insurmountable objection which invalidates her claims is brought we find partisans eager to waive it. The equality of treatment covered in the rules is equality of treatment of belligerents meted out under the rules we have adopted to secure the neutralization of the Canal. We can only be neutral as between others; we cannot be neutral in case we are ourselves a belligerent. While this was admitted by Lord Lansdowne we find Sir Edward Grey, realizing that such prior admission was damaging to their case, endeavor- ing to extend us certain special rights for our man-of-war on the score that we now have sov- ereign rights in the Canal Zone. This is a dan- gerous concession, for if we are in a class apart with our man-of-war we are, of course, in a class apart with our merchant vessels, and changes, in vital respects, brought about by changed relations of principals, render the entire treaty voidable. Since Dr. Oppenheim states in his recent book- let that we have no such rights, a quotation from Sir Edward Grey's protest will be of interest. The protest says : 32 Canal Tolls and American Shipping Now that the United States has become the practical sovereign of the Canal, His Majesty's Government do not question its title to exercise belligerent rights for its protection. Since successful contention that "all nations" of Rule 1 includes the United States is manifestly impossible, the United States is of course in a class apart. WhUe this was conceded February 22, 1901, by Lord Lansdowne and by Sir Edward Grey in the late protest by the British Government, we find a labored argument in a recent booklet by Dr. Oppenheim, which taking as an axiom the fact that the United States is not in a class apart, proves to his satisfaction that we too are pre- vented from using the Canal to our advantage in time of war. As his premise is wrong his conclu- sion cannot hold and in view of the fact that what he contends for is already conceded by the British Government his inferences may be ignored. While wrong as to his premises however, he is too well versed in international law to attempt to give a strained and impossible definition to "neutral- ity." He says: There ought, however, to be no doubt that the United States is as much bound to obey the rules of Article III of the Hay-Pauncefote Treaty as Great Britain or any other foreign State. These rules are intended to invest the Canal with the character of neutrality. If the United States were not bound to obey them, the Canal would lose its neutral character, and, in case she were a belligerent her opponent would be justified in eon- Neutrality and Equal Treatment 33 sidering the Canal, a part of the region of war and could, therefore, make it the theater of war. Great Britain contended during the negotiations that while other nations if our enemy were free to violate the neutrality of the Canal in time of war in which we were engaged, she as a party to the Treaty could not. Lord Lansdowne said, August 3, 1901 : I understand that by the omission of all reference to the matter of defense the United States Government desires to reserve the power of taking measures to pro- tect the Canal, at any time when the United States may he at war, from destruction or damage at the hands of enemy or enemies. Mr, Hay clearly states his sense of our rights and they are in accord with Lord Lansdowne 's when he states that the omission of the words "in time of peace as in time of war" is that this "would give to the United States the clear right to close the Canal against another belligerent and to protect and defend itself by whatever means might be necessary. ' ' And that this omission dis- pensed with necessity of the Davis amendment. Is not this a clear intimation to Great Britain that our ships are not to be treated upon terms of equality with the vessels of other powers ? Now, Lord Lansdowne did attempt to make these rules apply to ordinary commerce when he suggested August 3d, 1901, an amendment that the neutrality rules should "govern all inter- 34 Canal Tolls and American ShJ|)ping oceanic cominiiiiications across the Isthmus." This was stricken out as explained elsewhere. But we have in force an article covering all com- munications not affected by the obligations and duties of neutrality. Let us read this strong, virile and unambiguous Article II, which says : It is agreed that the Canal may he constructed under the auspices of the Government of the United States, either directly at its own cost, or hy gift or loam, of m,oney to individuals or corporations, or through sub- scription to or purchase of stock or shares, and that, subject to the provisions of the present treaty, the said Government shall have and enjoy all rights incident to construction, as well as the exclusive right of providing for the regulation and management of the Canal. We agree in Article III not to use the Canal to advance the fortunes of any particular belligerent by a frank and open adoption of rules of neutrality to be applied by us to the nations of the world as the conditions under which they may use the Canal. If a belligerent should betray the faith we put in him by injuring the Canal for hostile advantage we could debar such nation from fur- ther use of the Canal after belligerent operations, or penalize such nation in our discretion. But outside of such obligations of neutrality we have in Article II full freedom of action. While under our favored nation treaties we shall prob- ably accord in general equal tolls to the vessels of other nations, there is nothing to prevent our mak- Neutrality and Equal Treatment 35 ing reciprocal concessions with other nations. I of course assumed that Senator Eoot justified on this score his negotiation of the Tripartite Treaty between Panama, Colombia and the United States, extending reciprocal concessions not accorded to all other nations. In similar manner the Hay- Bunau-Varilla Treaty extended special privileges to Panama. No one will question or deny that the rules of Article III are to be taken together. If the in- terpretation of one rule as forbidding preference for our own vessels of commerce and war renders the remaining rules absurd we have reasons as old as Euclid's teachings for setting such inter- pretation aside. Rule 1 says that the Canal shall be free and open to the vessels of Commerce and War of all nations observing these rules upon terms of en- tire equality. Now they construe this to mean that we are prevented from preferring our own vessels of commerce. But if it applies to vessels of Commerce it must in exact terms apply to vessels of War. In other words, under any unquibbled construc- tion of this section we cannot exclude vessels of war and include vessels of commerce under our flag unless we are in a class apart, as of course we are. Please read Sections 1, 2, 3, 4, 5 and 6, for they must be read together to clear up this question. All, I believe, will admit that the constitutional 36 Canal Tolls and American Shipping authority to build this canal existed in the war power of the United States. Two Presidents have confirmed this view in their statements that this canal is an addition to our war power as it ad- mits of quicker transfer of our naval forces from one ocean to another. Yet advocates of the British contention take the stand that we are forbidden to discruninate in favor of our own vessels of commerce, and as vessels of war and commerce are linked together, to be consistent they must argue that we cannot discriminate in favor of our own vessels of war. Hence they must take the position that if dur- ing war with a foreign power we find an enemy's man-of-war in the Canal, we cannot drive it out and if it leaves such waters we must wait twenty- four hours before giving chase. And since under Article II we are given the "Exclusive right of providing for the regulation and management of the Canal," if engaged in war our ships finding themselves in the Canal must chase themselves out. Can we reach any other logical sequence of their stand? Need its absurdity be pointed out? The rules in their entirety are simply a means of defining the conditions under which we shall hold the Canal neutral. There has been so much international misrepresentation that this fact has not been grasped except by those who have given this subject exhaustive study. The usefulness of these rules in respect to neu- tral treatment and how they are apart from tolls Neutrality and Equal Treatment 37 and regulations connected witli the commercial use of the Canal is not usually understood on account of the insincerity of those who attempt to uphold the British contention hy ignoring the object to be attained by the rules as weU as the clear pro- visions of Article II of the Treaty. I heard an eminent authority make the state- ment a few days ago that if Mr. Hay were alive he would say that the toll exemption clause was in violation of the Treaty. Unfortunately Mr. Hay is not here but he is on record in correspondence connected with the negotiations of the Treaty in which he says : ' ' Upon due consideration of these suggestions, and at the same time to put all the powers on the same footiug, viz. : that they could use the Canal only by complying with the rules of neutrality adopted and prescribed, an amendment to Lord Lansdowne's amendment was proposed and agreed upon." This amendment according to Mr. Hay secured the following: Thus the whole idea of contract right in the other powers is eliminated and the vessels of any nation which shall refuse or fail to observe the rules adopted and prescribed may be deprived of the use of the Canal. Here we find in Mr. Hay's own written words a full appreciation of the fact that these are rules of neutrality and that they are binding upon the vessels of other nations. This reduced to simple phrasing is that we 38 Canal Tolls and American Shipping only ask other nations to obey our rules of neu- trality and we pledge ourselves that in war in which we are not engaged this strait shall be held free and neutral by us to even the war vessels of belligerents, they being required to continue on their good behavior when they pass from the high seas to waters under our control, management, protection and ownership. Let us see whether the statement that the British Government considers these rules as be- ing formulated for the commeroial control of the Canal ; Lord Lansdowne under date of August 3, 1901, wrote : "It would appear to follow that the whole responsibility for upholding these rules and thereby maintaining the neutrality/ of the Canal would henceforward be assumed by the Govern- ment of the United States. In the same communication he says : While indifferent as to the form in which the point is met, I must emphatically repeat the objections of his Majesty's Government to being bound by stringent rules of neutral conduct not equally binding upon other pow- ers. I would therefore suggest the insertion in Rule 1 after "all nations" of the words "which shall agree to observe these rules." This addition will impose upon other powers the same self-denying ordinance as Great Britain is desired to accept, and will be an additional security for the neutralization of the Canal, which it will be the duty of the United States to maintain. We know this effort to obtain a contract right in canal management was defeated, but no one Neutrality and Equal Treatment 39 can logically contend that this does not show a clear appreciation and acceptance of the fact that these rules are for the purpose of defining our understanding of our neutral obligations. Of course, as the final treaty is "worded, we find in the words of Mr. Hay : That no other power had now any right in the prem- ises or anything to give up or part with as a considera- tion for acquiring such a contract right. Certainly no one will say that "all nations" as used in the above quotation from Lord Lans- downe's communication includes the United States. Following the use of the word "nations" and comparing Rule 1 of the second and final treaties given above, no open-minded man will deny the fullest British endorsement of the fact that "na- tions" as therein used refers to all other nations except the United States. The only conclusion is that instead of asking all nations to agree to ob^ serve these rules as a precedent to the use of the Canal by the vessels of such nations, we adopt the rules and require all nations to observe them, and under circumstances so clearly evidenced by the pourparlers the United States could not be one of "all nations" therein referred to. This is why well informed English diplomats leave to American sympathizers the task of influ- encing the American public mind by the continued assertion that "all nations" includes the United 40 Canal Tolls and American Shaping States when it is only necessary to follow the evolution of the phrase through successive treaties to know that it does not. Senator Eoot, in his various speeches, refers to the views of our past statesmen as indicative of our policy regarding a canal. When these were given everyone contemplated a canal through alien territory whose Governments were weak. If we expected European countries to respect the sov- ereignty and neutrality of the land of such coun- tries we should set an example ourselves. Con- ditions, as he very well knows, are entirely changed. A careful reading of the Suez Convention given in the Appendix will show the care exercised in eliminating every expression carried over to the Hay-Pauncefote Treaty that might extend equal treatment to ordinary peaceful commerce. Just as equal treatment in all the operation of the Canal was covered in the Clayton-Bulwer Convention so equal treatment except for Turkey was covered in the Suez agreement. Sir Julian Pauncefote took part in the Suez conference — ^he had before him. the rules of Suez when the Hay-Pauncefote Treaty was negotiated — if he were safeguarding equal treatment in peaceful commerce and trying in phrasing the rules to make neutrality signify equal treatment why eliminate every intimation of such treatment and so draw the rules that they covered conduct applying only to belligerents? Of course, this is Neutrality and Equal Treatment 41 ignored, but knowing that Sir Julian Pauncefote was naost familiar with the rules, let us quote XII of the Suez Convention in full : The High Contracting Parties by application of the principle of equality as regards the free use of the Canal, a principle which forms one of the bases of the present treaty, agree that none of them shall endeavor to obtain with respect to the Canal territorial or commercial ad- vantages or privileges, which may be in any interna- tional arrangements which may be concluded. More- over the rights of Turkey as the territorial Power are reserved. Here was a precedent for the use of the prin- ciple of equality — ^instead we find used in the Hay- Pauncefote Treaty principle of neutralisation. Why was the term "principle of neutralization" used? It was to place the United States in a class apart — the Canal is not neutralized in the ordinary sense of the term. The United States agrees to hold the Canal neutral as to belligerents in wars in which she is not concerned and reserves all the powers necessary to enforce such neutrality and assumes all the obligation. Article IX of the Treaty of Vienna which pro- vides for the neutrality of the free town of Cra- cord says that "no armed force shall be intro- duced upon any pretense whatever." In the Treaty of Paris, neutralizing the Black Sea, maintenance of armaments was prohibited. In neutralizing Luxemburg there was a provision 42 Canal Tolls and American Shipping that the City of Luxemburg should no longer be treated as a federal fortress. Article III of the Treaty of London, November 14, 1863, neutraliz- ing the Ionian Islands said: "The fortifications constructed in the Island of Carfu, having no longer any object, shall be demolished." The Berlin Treaty of 1878, referring to the neutraliza- tion of the Danube said: "all the fortresses and fortifications existing on the course of the river shall be razed and no new ones erected." Yet in neutralizing the Panama Canal the pro- hibition against fortifications is omitted by mutual consent. In other words there is a distinct departure from the true neutrality of the Clayton-Bulwer Con- vention which covered a canal not designed for warlike purposes. But the Suez Canal conditions coming up in the meantime found the nations of Europe having pos- sessions in the East imwiUing to concur in negotiating a treaty forbidding passage by the ships of a belligerent, so a more extended use of the term neutralization is used to cover the case of a nation in armed control agreeing to hold its canal neutral as to all other nations. Under our limited form of Government the Constitutional warrant for constructing the Canal will be found in the exercise of the war power of the United States, the Canal being an addition to such war power. Neutrality and Equal Treatment 43 So we are warranted in the conclusion that if the British contention is to stand we must revise that treaty as follows : — 1. That Article III is not to be read in its en- tirety but if any rule after the first makes the British interpretation absurd all such sections must be suppressed. 2. That the preamble to Article III must be ig- nored as it specifically states that these rules are for securing the neutralization of the Canal. 3. That "neutralization" must not receive the definition given it in International Law or the lan- guage of diplomacy, as such definition limits its control under such rules to time of war. 4. That all the obligations of the Clayton-Bul- wer Treaty must be carried over to the Hay- Pauncefote Treaty, although the former is super- seded by the latter. 5. That the negotiators when they substituted the "principle of neutralization" for the "prin- ciple of equality" assumed that "neutralization" expressed "equality" more clearly than "equal- ity" itself. Then we must ignore : — 1. That the Clayton-Bulwer Treaty provided free passage for all vessels during peace and war, f orbiddiug discrimination. 2. That the Convention of Constantinople did the same aiid forbade fortifications as well, and forbade any attempt to restrict the free use of the 44 Canal Tolls and American Shipping Suez Canal, in peace or war; even Turkey if at war could commit no act of hostility within its waters. 3. That the only thing in common to the Clay- ton-Bulwer and Hay-Pauncef ote pacts is the idea of neutralization, 4. That Great Britain was relieved of the great burden of the joint guarantee of neutrality and that we assumed all burdens of such guarantee as well as construction, defense, management and regulation. 5. That the rules of the Treaty of Constan- tinople were radically changed and only such parts as provided for neutralization were retained and all references to equal treatment dropped. 6. That from such rules were dropped all ideas of prohibition as to discrimination during time of peace. CHAPTER IV THE NEGOTIATION OF THE HAT- PAUNCEFOTE TREATY On February 5, 1900, Mr. Hay, Secretary of State, and Lord Pauncefote, British Ambassador, signed at Washington a convention, the object of which was declared to be to facilitate the construc- tion of a ship canal to connect the Atlantic and Pacific Oceans and to that end to remove any ob- jection which may arise oiit of the Convention of April 19, 1850, commonly called the Clayton-Bul- wer Treaty, to the construction of such canal under the auspices of the Government of the United States, without impairing the general prin- ciple of neutralization established in Article VIII of that convention. This was communicated to the Senate by President McKinley on the same day. The Senate gave its advice and consent to the Exchange of ratifications with certain radical amendments. The Treaty as sent to the Senate which we shall call No. 1 in referring to it was as follows : — The United States of America and Her Majesty the Queen of the United Kingdom of Great Britain and Ire- 4S 46 Canal Tolls and American Shipping land, Empress of India, being desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific oceans, and to that end to remove any objection which may arise out of the Convention of April 19, 1850, commonly called the Clayton-Bulwer Treaty, to the con- struction of such canal under the auspices of the Gov- ernment of the United States, without impairing the "general principle" of neutralization established in Article VIII of that Convention, have for that purpose appointed their Plenipotentiaries. ARTICLE I It is agreed that the Canal may be constructed under the auspices of the Government of the United States, either directly at its own cost, or by gift or loan of money to individuals or corporations or through sub- scription to or purchase of stock or shares, and that, subject to the provisions of the present Convention, the said Government shall have and enjoy all the rights inci- dent to such construction, as well as the exclusive right of providing for th« regulation and management of the Canal. ARTICLE II The High Contracting Parties, desiring to presei^e and maintain the "general principle" of neutralization established in Article VIII of the Clayton-Bulwer Con- vention, adopt, as the basis of such neutralization, the following rules, substantially as embodied in the Con- vention between Great Britain and certain other Pow- ers, signed at Constantinople, October 29, 1888, for the Free Navigation of the Suez Maritime Canal, that is to say: 1. The Canal shall be free and open, in time of war Negotiation of Hay-Pauncefote Treaty 47 as in time of peace, to the vessels of commerce and of war of all nations, on terms of entire equality, so that there shall be no discrimination against any nation or its citizens or subjects in respect of the conditions or charges of traffic, or otherwise. 2. The Canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed within it. 3. Vessels of war of a belligerent shall not revictual nor take any stores in the Canal except so far as may be strictly necessary; and the transit of such vessels through the Canal shall be effected with the least pos- sible delay, in accordance with the regulations in force, and with only such intermission as may result from the necessities of the service. Prizes shall be in all respects subject to the same rules as vessels of war of the belligerents. 4. No belligerent shall embark or disembark troops, munitions of war or warlike materials in the Canal ex- cept in case of accidental hindrance of the transit, and in such case the transit shall be resumed with all possi- ble dispatch. 5. The provisions of this article shall apply to waters adjacent to the Canal, withia three marine miles of either end. Vessels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time except in case of distress, and in such ease shall depart as soon as possible ; but a vessel of war of one belligerent shall not depart within twenty-four hours from the departure of a vessel of war of the other belligerent. 6. The plant, establishments, buUdings, and aU works necessary to the construction, maintenance and opera- 48 Canal Tolls and American Shipping ^ tion of the Canal shall be deemed to be part thereof, for the purposes of this Convention, and in time of war as in time of peace shall enjoy complete immunity from attack or injury by belligerents and from acts calcu- lated to impair their usefulness as part of the Canal. 7. No fortifications shall be erected commanding the Canal or the waters adjacent. The United States, how- ever, shall be at liberty to maintain such military police along the Canal as may be necessary to protect it against lawlessness and disorder. AETICUE ni The High Contracting Parties will, immediately upon the exchange of the ratifications of this Convention, bring it to the notice of the other Powers and invite them to adhere to it. The Senate amendments inserted in Article II the phrase "which convention is hereby/ super- seded"; also the insertion of the following at the end of Rule 5 in Article II : It is agreed, however, that none of the immediately foregoing conditions and stipulations in sections num- bered one, two, three, four and five of this article shall apply to measures which the United States may find it necessary to take for securing by its own forces the defense of the United States and the maintenance of public order. Article III was entirely stricken out. This draft as amended was not satisfactory to Great Britain though if it had been accepted much of her present contention would have, held. For years Negotiation of Hay-Pauncefote Treaty 49 we know that English diplomacy exerted every means to extend the contract stipulation, the joint contract features of the Clayton-Bulwer Conven- tion, and this was accomplished in this first draft. The first Hay-Pauncefote Treaty bound us hand and foot and fastened upon the United States every restriction of the Clayton-Bulwer Treaty. Happily this betrayal of the rights and interests of our country was rejected by a patriotic Senate. Article VIII of the Clayton-Bulwer Convention says that the two Governments agree to extend their protection by treaty stipulations to any other practical route. So the first Hay-Paunce- fote Treaty proposed, while purporting to re- move any objection to the building of the Canal which may arise out of the Clayton-Bulwer Con- vention, was in reality an adroitly worded supple- ment to that convention. It extended by treaty the stipulated joint protection by which equal treatment was to be secured as outlined in the sec- ond paragraph of Article VIII. It did not super- sede the Clayton-Bulwer Convention, It adopted rules forbidding discrimination under any con- dition either of peace or war, and made the build- ing of the Canal a partnership affair in which the United States bore all the burdens and, at the same time through the limitations incurred under the rules of Article III, barred the United States from enjoying any of the rights incident to con- struction. Of course this first treaty is a very tender sub- 50 Canal Tolls and American Shipping ject with, those sympathizing with Great Britain, but the gradual shaping of the betrayal of our country's rights and interests as existing in the first treaty into the final treaty gives us a ready means of finding out the intent of the last treaty as ratified and the pourparlers leading to the changes show plainly the acceptance by Great Britain of such changes, not blindly, but with per- fect understanding of their purport. Mr. Hay communicated the amendments made by the Senate to the British Government. That Government expressed its disapproval of the amended treaty and Lord Lansdowne submitted a new draft accepting some of the ideas contended for but stiU retaining the idea of the extension of contract stipulations and joint protection. Lord Lansdowne also in his communication of August 3, 1901, showed plainly an acceptance of the difference in the neutral conditions of the Pan- ama Canal as compared with the Clayton-Bulwer Canal. He pointed out that Great Britain's obli- gation would debar her from "any warlike act in or around the Canal, while the United States would be able to resort to such action even in time of peace to whatever extent they might deem nec- essary to secure their own safety." Mr, Hay put the case in this way in his explana- tion of the attitude of the United States : 1. That there should be in plain and explicit terms an express abrogation of the Clayton-Bulwer Treaty. Negotiation of Hay-Pauncefote Treaty 51 2. That the rules of neutrality adopted should not deprive the United States of the right to defend itself and to maintain public order. 3. That other powers should not in any manner be made parties to the treaty by being invited to adhere to it. Certainly a radical change from the wording of the first treaty. But the discussion following opened the eyes of Senators to the true bearing of proposed treaty provisions and determined pruning and amend- ments followed so that the Treaty as finally adopted was absolutely different in intent from the first draft submitted. What conception of equal treatment could be conjured up to deprive the United States of the right to use the Canal as a part of (heir war power? This shows very plainly that the neutral- ity considered was the neutrality always meant by men versed in international law and its mean- ing and that it was not in any way to be confused with equal rights. Mr. Hay in this connection explains that the omission of the words "in time of war as in time of peace" is that this "would give to the United States the clear right to close the Canal against the other belligerent and to pro- tect and defend itself by whatever means may be necessary." If we are to assume in order to be in accord with British contention, that neutral rights are equal treatment then even the privilege 52 Canal Tolls and American Shipping of using the Canal for our protection is held on sufferance. Again quoting from Mr. Hay's memorandum: In conformity with the Senate's emphatic rejection of Article III of the former treaty, which provided that the High Contracting Parties would immediately upon the exchange of ratifications, bring it to the notice of other powers and invite them to adhere to it, no such provision was inserted in the draft of the new treaty. It was believed that the declaration that the Canal should be free and open to all nations on terms of en- tire equality (now that Great Britain was relieved of all responsibility and obligation to enforce and defend its neutrality) would practically meet the force of the objection which had been made by Lord Lansdowne to the Senate's excision of the article inviting the powers to come in, viz., that Great Britain was placed thereby in a worse position than other nations in the case of a war with the United States. In other words the express desire of Great Britain at that time was to secure the same treat- ment by the United States as all other nations in time of war with the United States. Explaining the omission of the prohibition against fortifications from the new treaty Mr. Hay says: The whole theory of the Treaty is that the Canal is to be an entirely American Canal. The enormous cost of construction is to be borne by the United States alone. When constructed it is to be exclusively the property of the United States, and is to be managed, controlled and defended by it. Under these circumstances, and Negotiation of Hay-Pauncefote Treaty 53 considering that by the new treaty Great Britain is re- lieved of all responsibility and burden of maintaining its neutrality and security, it was thought entirely fair to omit the prohibition that "no fortification shall be erected commanding the Canal or the waters adjacent. ' ' And yet we had a few years ago Americans bla- tantly protesting against fortifications because a rejected treaty forbade them and accusing our Government of breach of faith, as they now do on the toll question. Again discussing the verbal changes in Section 1 of Article III wherein the British very adroitly labored to be considered as having a contract right in the Canal, Mr. Hay says: He (the President) believed also that there was a strong national feeling against giving to the other pow- ers anything in the nature of a contract right in an affair so peculiarly American as the Canal; that no other powers had now any right in the premises to give up or part with as consideration for acquiring such con- tract right ; that they are to rely on the good faith of the United States in this treaty; and that it adopts the rules and principles of neutralization there set forth. These rules are adopted in the Treaty with iSreat Britain as a consideration for getting rid of the Clayton-Bulwer Treaty and the only way in which other nations are bound by them is that they must comply with them if they would use the Canal. Upon due consideration of these suggestions, and at the same time to put all the powers upon the same foot- ing, viz., that they could use the Canal only by comply- ing with the rules of neutrality adopted and prescribed. 54 Canal Tolls and American Shipping an amendment to Lord Lansdowne's amendment was proposed and agreed upon. This made the clause: The Canal shall be free and open to the vessels of commerce and war of all nations observing these rules on terms of entire equality, so that there shall be no discrimination against any such nation. Thus the whole idea of contract right in the other powers is eliminated and the vessels of any nation which shall refuse or fail to observe the rules adopted and prescribed may be deprived of the use of the Canal. And please note that the rules are to be observed — ^not one rule. Lord Lansdowne under date of August 3, 1901, wrote : It would appear to follow that the whole responsibil- ity for upholding these rules, and thereby maintaining the neutrality of the Canal, would henceforward be assumed by the Government of the United States. The change of form is an important one but in view of the fact that the whole cost of construction of the Canal is to be borne by that Government, which is also to be charged with such measures as may be necessary to pro- tect it against lawlessness and disorder, His Majesty's- Government is not likely to object to it. Sir Edward Grey in his protest seems just to have awakened to this view of his predecessor. Again quoting the same memorandum: While indifferent as to the form in which the point is met, I must emphatically renew the objections of His Majesty's Government to being bound by stringent rules Negotiation of Hay-Pauncefote Treaty 55 of neutral conduct not equally binding upon OTHER powers. I would therefore suggest the insertion in Rule 1, after "all nations" of the words "which shall agree to observe those rules." This addition will impose upon OTHER powers the same self-denying ordinance as Great Britain is desired to accept, and will be an addi- tional security for the neutrality of the Canal, which it will be the duty of the United States to maintain. These negotiations clearly show the recognition by Great Britain of the United States as the Sovereign owner and sole protector of the Canal and the full concession of our right to provide for its regulation and management and that Great Britain was making sure that she would obtain equal treatment with other powers observing the rules adopted by the United States as the basis for the neutralization of the Canal. This is the meaning of the "general principle" of neutralization established by Article VIII of the Clayton-Bulwer Treaty. How can any unprejudiced man say that such principle of neutralization could be impaired by any preference the United States might see fit to extend to its own vessels? Could anyone attempt to say to a body of intelligent men that freeing our own vessels from tolls would in any way dis- turb the neutralization of the Canal? Can any- one say seriously that under this treaty Great Britain would not have the right to subsidize her vessels usin^ this canal or repay the tolls charged them in passage? 56 Canal Tolls and American Shipping In fact would it not be impertinent interference in the affairs of another nation for this Govern- ment to dictate the policy of Great Britain or any other nation with respect to their shipping? But blinded by sophistry we actually find men who contend that we cannot rebate toUs to our own ships, while they freely extend such rebate privileges to other nations. As a fact it is not our affair how other nations treat their vessels and after we have discharged our obligations to the world by affording equal tolls and according equal treatment to all other nations, their citizens and subjects that observe the rules the United States has prepared as a precedent to their use in furthering the priuciple of neutralization, we are free to extend such pref- erence as we like to our vessels in their use of a canal, built, owned and controlled by ourselves alone. The basis of neutralization adopted by the United States rests on the modified rules of the Convention of Constantinople for the navigation of the Suez Canal. "While built by a private cor- poration the Ottoman Empire exercised sov- ereignty over it and through such shadowy sovereignty enjoys preference for certain of its vessels. This fact is ignored by Sir Edward Grey, who finding no comfort, hies him back to Clayton-Bulwer. We know that a number of the signatory powers Negotiation of Hay-Pauncefote, Treaty 57 directly rebate tolls collected for the passage of their vessels, aad most of them do so indirectly. Their right to do so has passed imchallenged, yet my tory friends in this argument confront us with the weird contention that the United States hav- ing adopted these rules is barred from doing the very things that other nations, parties to such convention, have done and are doing. The Eussian Government in 1909 appropriated 650,000 roubles in exact terms to pay the toUs of the merchant steamers of the Eussian Volunteer Fleet both for tonnage and for all men, women and children carried. The British P. & 0. Company receives in sub- sidies enough to nearly pay all its canal dues although it operates through the Canal a number of boats apart from mail steamers. The North German Lloyd receives an annual subsidy on its vessels using the Canal of $1,385,- 000. Japan pays a subsidy of $1,336,947 to the Nippon Yusen Kaisha for its steamers through the Suez to Europe. The Massageries Maritimes, the largest French Company using the Suez Canal was paid for its lines to China, Japan, Australia and Madagascar, $2,145,000 in subsidies. Austria specifically provides by law for pay- ment of Suez tolls on Austrian steamers from Trieste to Bombay, Calcutta and Kobe. The Swedish Government calculates its subven- 58 Canal Tolls and American Shipping tion to the Svenska Ostasiatiska Kompaniet to represent the amount of tolls paid by the ships of the Company for passing the Suez Canal. So that the powers who ratified the Convention of Constantinople directly support by their aets our rights under the Hay-Pauncefote Treaty lo favor our own shipping, and certainly no one will contend that if we have the right to collect the tolls at Panama and then repay them that we have not the right to remit them in the first instance. As one of the reports of Congress on this ques- tion says : It is unnecessary to resort to a device or subterfuge in order to do indirectly what we have a right to do directly. Or to quote President Taft upon this question: If there is no "difference in principle between the United States charging tolls to its own shipping, only to refund them, and remitting tolls altogether" as the British protest declares, then the irresistible conclusion is that the United States, although it owns, controls and has paid for the Canal, is restricted by treaty from aiding its own commerce in the way that all the other nations of the World may freely do. If it is correct to assume that there is nothing in the Hay-Pauncefote Treaty preventing Great Britain and the other nations from extending such favors as they may see fit to their shipping using the Canal, and doing it in the way they see fit, and if it is also right to assume that there is noth- ing in the Treaty that gives the United States any Negotiation of Hay-Pauncefote Treaty 59 supervision over, or right to complain of, such, action, then the British protest leads to the absurd conclusion that this Government in constructing the Canal, main- taining the Canal and defending the Canal, finds itself shorn of the right to deal with its own commerce in its own way, while all other nations using the Canal in com- petition with American commerce enjoy that right and power unimpaired. The British protest is therefore a proposal to read into the Treaty a surrender by the United States of its right to regulate its own commerce in its own way and by its own methods — a right which neither Great Britain herself, nor any other nation that may use the Canal, has surrendered or proposes to surrender. The surrender of this right is not claimed to be in terms. It is only to be inferred from the fact that the United States has conditionally granted to all the na- tions the use of the Canal without discrimination by the United States between the grantees; but as the Treaty leaves all nations desiring to use the Canal with full right to deal with their own vessels as they see fit, the United States would only be discriminating against itself if it were to recognize the soundness of the British contention. We see a very lively appreciation of the fact that extension of joint treaty stipulation is eagerly sought by Great Britain, When the Treaty in form No. 1 was not found acceptable there is just the same persistent attempt to retain such con- tract participation in later drafts. Accepting Mr. Hay's ideas in a measure we find 60 Canal Tolls and American Shipping tliat on August 3, 1901, Lord Lansdowne sug- gested the following draft as being acceptable to the British Governlnent which we shall call No. 2. The United States of America and His Majesty, the King of the United Kingdom of Great Britain and Ireland, etc., being desirous to facilitate the construction of a ship canal to connect the At- lantic and Pacific oceans, and to that end to re- move any objection which may arise out of the Convention of the 19th April, 1850, commonly called the Clayton-Bulwer Treaty, to the construc- tion of such canal under the auspices of the Gov- ernment of the United States, without impairing the "general principle of neutrality" estab- lished in Article VIII of that convention, have for that purpose appointed their plenipotentiar- ies. AKTICLE I The High Contracting Parties agree that the present treaty shall supersede the aforementioned convention of the 19th April, 1850. ARTICLE II It is agreed that the Canal may be constructed under the auspices of the Government of the United States, either directly at its own cost, or by gift or loan of money to individuals or corpora- tions, or through subscription to or purchase of stock and that subject to the provisions of the present treaty, the said Government shall have and enjoy all the rights incident to such construe- Negotiation of Hay-Pauneefote Treaty 61 iion, as well as tlie exclusive right of providing for the regulation and management of the Canal. ARTICLE III The United States adopts, as the basis of neu- tralization of said ship canal, the following rules, substantially as embodied in the Convention of Constantinople, signed the 28th October, 1888, for the free navigation of the Suez Canal, that is to say: 1. The Canal shall be free and open to the ves- sels of commerce and of war of all nations which shall agree to observe these rules, on terms of entire equality, so that there shall be no discrim- ination against any nation so agreeing, or its cit- izens or subjects, in respect of the conditions or charges of traffic, or otherwise. Such conditions and charges of traffic shall he just and equitable. 2. The Canal shall never be blockaded, nor shall any right of war be exercised, nor any act of hos- tility be committed within it. The United States, however, shall be at liberty to maintain such mil- itary police along the Canal as may be necessary to protect it against lawlessness and disorder. 3. Vessels of war of a belligerent shall not re- victual nor take any stores in the Canal except so far as may be strictly necessary; and the transit of such vessels through the Canal shall be effected with the least possible delay in accordance with the regulations in force, and with only such inter- mission as may result from the necessities of the 62 Canal Tolls and American Shipping service. Prizes shall be in all respects subject to the same rules as vessels of war of the belliger- ents. 4. No belligerent shall embark or disembark troops, munitions of war, or warlike materials in the Canal except in case of accidental hindrance of the transit, and in such case the transit shall be resumed with all possible dispatch. 5. The provisions of this article shall apply to waters adjacent to the Canal within 3 marine miles of either end. Vessels of war of a belliger- ent shall not remain in such waters longer than 24 hours at any one time except in case of dis- tress, and in such cases shall depart as soon as possible, but a vessel of war of one belligerent shall not depart within 24 hours from the de- parture of a vessel of war of the other belliger- ent. 6. The plants, establishments, buildings and all works necessary to the construction, maintenance and operation of the Canal shall be deemed to be part thereof for the purposes of this treaty, and in time of war, as in time of peace, shall enjoy complete immunity from attack or injury by belligerents and from acts calculated to impair their usefulness as part of the Canal. ARTICLE III-A In view of the permanent character of this treaty, whereby the general principle established by Article VIII of the Clayton-Bulwer Conven- Negotiation Of Hay-Pauncefote Treaty 63 tion is reaffirmed, the high contracting parties hereby declare and agree that the rules laid down in the last preceding article, shall so far as they may be applicable, govern all interoceanic corru- nmnications across the Isthmus which connects North and South America, and that no change of territorial sovereignty, or other change of cir- cumstances shall affect such general principle, or the obligations of the high contracting parties un- der the present treaty. It will be noted that the United States now adopts the rules instead of Great Britain and the United States together. What steps shall Great Britain take to secure a contract participation? You will note in Eule 1 of Treaty No. 2 that the Canal is to be held free and open to the vessels of commerce and of war of all nations "which shall agree to observe those rules." Later we find the suggestion that the two con- tracting parties shall bring such rules to the at- tention of other powers and invite their adher- ence. The invitation and its acceptance would naturally constitute a contract and the claim would very certainly follow. Mr. Hay stated that there would be strong opposition ' ' to inviting other powers to become contract parties to a treaty affecting the Canal." This ingenious at- tempt was abandoned as soon as it was seen that its purpose was understood. So there was sub- stituted for the words "the Canal shall be free and open to the vessels of commerce and of war of 64 Canal Tolls and American Shipping all nations which shall agree to observe these rules ' ' the words "the Canal shall be free and open to the vessels of commerce ^nd of war of all na- tions observing these rules," and instead of "any nation so agreeing" the words "any such nation." Not securing the extension of joint protection upon which to claim equal treatment to what would a negotiator turn in order to secure such treatment. It will be noted in Article II of the final treaty that we are to have full powers of management and regulation. The omission of the words "in time of peace as in time of war"' confined the application of the rules to neutral conditions. Was there any way to broaden such application and at the same time to attempt again to secure contract joint protection through treaty stipulation? Let us re- peat Article III-A, suggested by Lord Lans- downe : In view of the permanent character of this treaty, whereby the general principle established by Article VIII of the Clayton-Bulwer Convention is reaffirmed, the high contracting parties hereby declare and agree that the rules laid down in the last preceding article, shall, so far as they may be applicable, govern all inter- oceamic communications across the Isthmus which con- nects North and South America, and that no change of territorial sovereignty, or other change of circumstances shall affect such general principle or the obligations of the high contracting parties under this present treaty. Negotiation of Hay-Paunbefote Treaty 65 Did we accept tMs? Not at all. Consistent with the fimi principle of refusing direct or indirect efforts to secure equal treatment with. U. S. vessels or to invalidate Article II vesting in us the enjoyment of the rights incident to con- struction it was changed to the following appear- ing as Article IV in the Hay-Pauncef ote Treaty : It is agreed that no change of territorial sovereignty or the international relations of the country or coun- tries traversed by the before mentioned Canal shall ef- fect the general principle of neutralization or the obli- gations of the high contracting parties under present treaty. Lord Lansdowne explains his consent to this change by saying that Mr. Hay contended that the general principle of neutrality was already men- tioned in the preamble and that to reiterate the idea in still stronger language and to give Article VIII of the Clayton-Bulwer Convention what seemed a wider application than it originally had would not meet with acceptance by the United States. Mr. Hay never intended that the rules for conserving neutrality should govern aU "in- teroceanic communications" and naturally re- fused to permit any such idea to find lodgment in the Treaty. While the phrase is ambiguous, at any rate it was omitted and the application of the rules was confined to the limitations of Article III. It shows the care of Mr. Hay in limiting the 66 Canal Tolls and American Shipping possibility of double meaning and amplification of the vague indefinite and embarrassing obliga- tions of Article VIII. Besides this we did not permit Great Britain to succeed in the attempt to adopt the rules jointly with us after refusing it in Article III, wherein the United States adopts the rules alone, as we see the appearance of the High Contracting parties adopting the agreement cut out. Now let us consider the Treaty in its final form. (See Ap- pendix.) The Literary Digest of December 22, 1900 states : The temper of the Senate was first made evident by its adoption of the Davis amendment (passed by a vote of 65 to 17) permitting measures which the United States may find necessary to take for securing, by its own forces, the defense of the United States and the main- tenance of public order. Two other amendments were proposed by Senator Foraker and accepted by the Committee on Foreign Eo- lations, the first declaring that the Clayton-Bulwer Treaty is hereby superseded and the other eliminating Article III, which provided that the other powers should be invited to adhere to the Treaty. The great wisdom of referring treaties to the Senate is demonstrated by the radical changes made in the Treaty from the form in which it was at first negotiated, signed and submitted to the Senate. The writer feels that the first treaty in no way Negotiation of Hay-Pauncefote Treaty 67 safe-guarded the interests of the United States. A good deal of the general misconception of the real meaning of the Treaty lies in the fact that a number of our public men get their impressions of the Treaty from this earlier form and have not followed its careful redrafting. In 1913 in speak- ing in answer to Mr. Choate at a Chamber of Commerce meeting the writer said: Kead standard treatises on International laws of Eng- land or any other country and you will find neutrality defined as a condition existing during time of war ; that neutral obligations cannot hold until actual war has be- gun. Therefore if we have rules for conserAdng the neutrality of the Canal, they are for the purpose of application to those who are belligerent. Mr. Joseph H. Choate here interrupted the writer's address saying: ''The Treaty says 'in times of peace and war.' " To which the writer replied: — I beg your pardon, Mr. Choate, you are mistaken. The Hay-Pauncefote Treaty says no such thing as these words were stricken from the first Hay-Pauncefote Treaty by the Senate as it whipped that betrayal of American rights into acceptable shape. Mr. Choate did not follow the subject further but his opinion that the Treaty confers equal rights has spread throughout the country. Historical facts should not be stated in mincing words. In 1891, long after Mr. Lowell's communication 68 Canal Tolls and American Shipping had been made, the Senate Committee on Foreign Eelations of the 51st Congress took up the inves- tigation of the Clayton-Bulwer Convention and unanimously stated their conviction that we were fully at liberty to proceed in any way we saw fit to promote the construction of an Isthmian Canal. The Committee was made up of such conserva- tive and capable men and was composed: John Sherman, Chairman, George Edmunds, William P. Frye, William Evarts, J. N. Dolph, John T. Morgan, Joseph E. Brown, H. B. Payne, J. B. Eustis. Conditions were such that the United States could no longer be bound by the Clayton-Bulwer Convention, we were justified in denouncing it by the flagrant violations of Great Britain and there was a growing sentiment favoring its termination. All the precedents and practices confirm our right to have done so. But we were loath to exercise such right. Great Britain really gave up nothing except a right of mere obstruction for all other rights claimed by her as to us were in violation of the Monroe Doctrine and the Clay- ton-Bulwer Treaty. I was a delegate to the Kansas City Convention of 1900 and there the Democratic Party Platform denounced the first treaty as follows : We condemn the Hay-Pauncefote Treaty as a sur- render of American rights and interests not to be tol- erated by the American people. Negotiation of Hay-Pauncefote Treaty 69 The discussion of the first Hay-Pauncefote Treaty under the mature and capable criticism of the Senate showed how we had simply extended the Clayton-Bulwer Convention's outlawed and violated provisions and validated them. Senator Foraker referring to this feeling says : I happen to know that Mr. Hay was familiar with this situation, and this sentiment and purpose. Doubtless the British Government had the same knowledge. At any rate negotiations were suddenly renewed with the result that on the fourth day of December, 1901, Presi- dent Roosevelt sent to the Senate what is known as the second Hay-Pauncefote Treaty. Yet every gain made in the shaping of the first into the final treaty as now existing is lost if we admit that neutrality means equal treatment and that under the Treaty the rules for conserving neutrality must govern all conditions of com- merce in peace and war and without regard to belligerency, which is what we refused to do in the Hay-Lansdowne negotiations. CHAPTEE V INSINCERITIES The writer has been criticised for saying that he has not read a single sincere argument in fa- vor of the English contention. Let us quote from the speech of a well-known statesman in which he says ; The merest schoolboy can pass upon the question. I am going to read you two clauses axid I should like to challenge any member to show how they can possibly be reconciled: "The Canal shall be free and open to the vessels of commerce and war of all nations 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." That is what the Treaty says : In the Canal Bill the clause is: "No tolls shall be levied upon vessels engaged in the Coastwise trade of the United States." Can you put these two things together and reconcile them in any possible way? Of course, it is an utter im- possibility. And just such argument is spread broad-cast. Men are not sincere in argument when they take from the body of a treaty a qualified and limited 70 Insincerities 71 clause and endeavor to have our people believe that it stands as an. unqualified obligation and our people are being misled throughout our coun- try by such misrepresentation. The men who do this know very well the true definition and appli- cation of neutrality. They know that if the rules were for securing the neutrality of the Canal that even without definite power given we should have the right to regulate the ordinary peaceful com- merce in our own way — ^yet, they ignore the broad powers given in Article II. This I claim is in- sincere. Then we have what is known as the Bard resolu- tion. During the discussion of the Treaty Sena- tor Bard offered the following resolution : — The United States reserves the right in the regulation and management of the Canal to discriminate in respect of the charges of traffic in favor of vessels of its own citizens engaged in the coast-wise trade. Senator Eoot, and those who base their view of the Treaty upon his speech spread broadcast, said: I say, the Senate rejected that amendment upon this report which declared the rule of universal equality without any preference or discrimination in favor of the United States, as being the meaning of the Treaty and the necessary meaning of the Treaty. Yet, when Senator Eoot made this statement he knew and his followers know when they pass along his arguments that Senator Bard had said 72 Canal Tolls and American Shipping over his own signature in a letter to Congressman Knowland read upon the floor of the House, that when his amendment was under consideration it was generally conceded by Senators that without his specific amendment the rules of the Treaty did not prevent discrimination and hence the Bard resolution was considered superfluous by his col- leagues. Now let us note that at the same time and by the same vote a resolution providing for fortifica- tions was voted down because it too was con- sidered superfluous. Mr. Hay reflects the very decided opinion of the Senate in refusing to ratify a treaty that forbade fortification. Senator Lodge who reported the Treaty in the Senate says it does not bar preference for our own vessels. President Eoosevelt who promul- gated the Treaty says it does not bar such prefer- ence. President Taft declares we have full powers to prefer our own vessels. After the rejection of the first treaty by the Senate, Mr. Hay said that he feared he could not negotiate a treaty that would be confirmed but Senator Foraker told him that a treaty supersed- ing the Clayton-Bulwer Treaty, doing away with all partnership and permitting fortifications would doubtless prove acceptable and a treaty was negotiated along such lines. Senator Foraker says : According to my recollections this very question (of Insincerities 73 right to discriminate in favof of our own ships) was raised by an amendment offered to the Treaty which amendment was voted down overwhelmingly because it was thought unnecessary to specify that a provision of such a character did not apply to us who were building the Canal, and were to have with respect to it, the usual rights of ownership and aJl the rights of regulation. Who best interprets the intent of the Senate at the time, Senator Foraker who aided in the de- velopment of an a,cceptable treaty, or Senator Eoot who did not take his seat in that body till years after? But the "evidence is not confined to one man nor a dozen men. A few months ago Senator Towne, who was in the Senate at the time wrote me : There is not the slightest doubt in the world that your impression as to the understanding originally prevalent among the members of the Senate in regard to the right of the United States under the Hay-Pauncefote Treaty, to discriminate in favor of its own ships, is correct. If Senators who have thus testified, and I have quoted men of both parties, who understood the Treaty at the time and who understood as the re- sult of critical study and discussion the essential differences between the second treaty as ratified and the first treaty as submitted for ratification, are not the judge* of what they meant, to whom must we apply? Yet Senator Eoot and others uses this unfair deduction from Senate proceed- ings in all his speeches and continues to use it after their attention is called to his error. 74 Canal Tolls and American Shipping Am I in error in saying sucli arguments are in- sincere? Similarly we find a favorite argument to be the quoting of Canadian Treaties providing in explicit and definite terms for absolute equality in respect of rules, regulations and tolls upon either Ameri- can or Canadian vessels in the canal and water system of the Great Lakes. When Canada in con- travention of this explicit agreement granted a rebate so as to reduce Canadian charges from twenty cents to two cents the United States ob- jected. Yet for twenty-one years, in spite of our ob- jections, Canada was supported in her dis- crimination and it was only after President Cleveland advised retaliatory legislation that the rebates in favor of Canadian vessels were sus- pended. But the crowning act of insincerity is that of spreading the idea that we are false to treaty obligations. The very men who for political advantage give currency to such untruth know that our people are very sensitive to attacks upon the national honor and so appeal to this sentiment for selfish ends. No nation has suffered more than this for bHnd adherence to treaties and conventions evaded and violated by others. Senator Lodge in a speech in the U. S. Senate April 9, 1914, said: Insincerities 75 We have scrupulously observed our international agreements and where differences have arisen we have settled them not with the high hand of power but by negotiation and arbitration. Yet the appeal to our people on this question of tolls wanting logical support is sought to be gained by misrepresenting the sentiment and policy of our people before the world. We shall conserve a decent respect for the opinions of man- kind as well by asserting our treaty rights as by standing fast to treaty obligations. CHAPTEE VI THE SPEECH OF SENATOR BLJHU ROOT ^ This speech was delivered in the Senate on January 21, 1913. It has been sent to all parts of the country, being printed by the Peace So- ciety and mailed under Grovemment frank. The high standing and distinguished public service of its author naturally give it great weight and it has been the cause of much misunderstand- ing upon this important matter. As to his statement about the exhaustion of the members, and the Treaty being considered by very few members, we must remember that much is done in Committee and that the discussion excited the liveliest interest and the records do not bear out his statements as to meager attendance nor as to vigor in discussion. As to the pretensions of Great Britain in Cen- tral America, history does not endorse the right- eousness of her cause so fully as Senator Eoot and while he quotes very fully what Great Britain engaged not to do in Central America the reader will note very careful omission to state that Great Britain continued to viblate the provisions of the Clayton-Bulwer Convention. iThis speech is given in the Appendix. 76 Tlie Speech of Senator Elihu Root 77 We must remember that in this speech Senator Eoot endeavors to justify England's claim of equal treatment. As there can be no ground found for such claim in the Hay-Pauncefote Treaty both Senator Eoot and Sir Edward Grey harken back to the Clayton-Bulwer Convention just as if it were in full force. Senator Eoot says that Article VIII is the "ex- plicit agreement for equality of treatment to the citizens of the United States and the citizens of Great Britain in any canal wherever it may be constructed across the Isthmus." He omits to state the equality of treatment is obtained through joint protection extended by treaty stipulation. We find Senator Eoot then drawing a parallel as to equality of treatment in American and Canadian Canals. It is true that explicit pro- visions for equal treatment were contained in the Treaty of 1871. It is true also as stated else- where and Senator Eoot knows it that we did not get such equal treatment, though we constantly demanded it from Great Britain till twenty-one years later when President Cleveland inspired drastic retaliatory legislation to force Great Britain's long and deliberate evasion of a direct and explicit treaty obligation. We search in vain, however, for any of the clear provisions found in the Great Lakes waterways treaties for equal treatment in the Hay-Pauncefote Treaty. It has been pointed out in another chapter how Senator Eoot goes counter to all the ideas of pub- 78 Canal Tolls and American Shipping lie law in saying that the provisions of the Treaty of 1846 had to be subordinated to the Clayton- Bulwer Convention. It is just the opposite and the strenuous attempts to obtain participation in such Treaty of 1846 by Great Britain and the steadfast refusal of our statesmen to grant such participation are a part of our country's history. It is to be regretted that Senator Eoot draws an entirely misleading conclusion from Secretary Olney's memorandum of 1896. He quotes Secre- tary Olney as follows: If changed conditions now make stipulations which were once deemed advantageous, either inapplicable or injurious, the true remedy is not an ingenious attempt to deny the existence of the Treaty or to explain away its provisions, but in a direct and straightforward ap- plication to Great Britain for a reconsideration of the whole matter. And then Senator Eoot says : We did apply to Great Britain for a reconsideration of the whole matter, and the result of the application was the Hay-Pauncefote Treaty. Of course, everyone knows that the reconsidera- tion suggested by Mr. Olney was not such as gave rise to the Hay-Pauncefote Treaty the burden of the Olney memorandum being that since we had for many years put up with violation of the Clay- ton-Bulwer Convention and had not abrogated it the Treaty should be considered as in effect. President McKinley stated the real needs of The Speech of Senator Elihu Root 79 the situation in his message of December 5th, 1898, in "which he said : That the construction of such a marine highway is now more than ever indispensable to that intimate and ready intercommunication between our eastern and western seaboards demanded by the annexation of the Hawaiian Islands and the prospective extension of our influence and commerce in the Pacific, and that our na- tional policy now more imperatively than ever calls for its CONTROL by this Government, are propositions which I doubt not that Congress will duly appreciate and wisely act upon. While Senator Boot quotes that our Govern- ment shall have and enjoy all rights incident to construction, as vrell as the exclusive right of pro- viding for the regulation and management of the Canal, his advice leads to relinquishment of all rights incident to construction and the limitation of regulation and management to the rules for conserving neutrality and that these rules must apply to ordinary commerce, ignoring entirely Article II. Then again he says: The principle of neutralization provided for by the eighth article is neutralization upon terms of absolute equality both between the United States and Great Britain and between the United States and all other powers. Here we see an abandonment of the CONTEOL considered indispensable by President McKinley 80 Canal Tolls and American Shipping and the doctrine that we cannot use the Canal to our own advantage in time of war in which we are engaged. And these un-American conclusions are advanced to bolster up a weak stand taken on weak premises. He glides quickly over the fact that there were several drafts submitted omitting to mention that the changes from the first draft and the gradual shaping of the final treaty opened the eyes of the Senate to the fact that the first treaty was a be- trayal of our country's interests and a reversal of a policy of refusal to admit others to contract par- ticipation heretofore steadfastly maintained by American statesmen. It is too bad that Senator Boot in quoting from Mr. Blaine's instruction to Mr. Lowell, June 24, 1881, did not include that the Treaty of 1846 did not require reenfarcements or accession or assent from any power. and that any attempt to supersede by an agree- ment of European powers would partake of the nature of an alliance against the United! States and would be regarded by this Government as an indication of unfriendly feeling. These ideas were not to be considered as a new policy since they were "nothing more than the pronounced adherence of the United States to principles long since enunciated by the highest au- thority of the Government, and, now, in the judg- ment of the President, firmly interwoven as an The Speech of Senator Elihu Root 81 integral and important part of our national policy." And if we now admit Great Britain to exactly the same participation in privileges without the obhgations originally demanded what becomes of such policy as was so persistently upheld? Why did not Senator Root in fairness quote from the communication from Mr. Blaine to Mr. Lowell, November 19, 1881, in which Mr. Blaine objected to the perpetuity of the Treaty on the ground that the Clayton-Bulwer Treaty gave the same right through the Canal to a warship bent upon an errand of destruction to the United States coasts, as to a vessel of the American Navy sailing for their defense, and that the United States demanded for its own defense the right to use only the same prevision as Great Britain so emphatically employed in respect of the Suez route, by the possession of strategic and forti- fied post and otherwise, for the defense of the British Empire. No one doubts but that the United States would have made a treaty exchanging an agreement ^or equal treatment through the Canal for absolute control of the Canal as a war power about that time. But Lord Granville was not ready to acquiesce in any concession. President Arthur, December, 1881, in strong language stated the position of the United States as follows: m 82 Canal Tolls and American Shipping Meanwhile this Government learned that Colombia had proposed to the European powers to join in a guar- antee of the neutrality of the proposed Panama Canal — a guarantee which would be in direct contravention of our obligations as the sole guarantor of the integrity of Colombian territory and of the neutrality of the Canal itself. My lamented predecessor felt it his duty to place before the European powers the reasons which make the prior guarantee of the United States indis- pensable, and for which the interjection of any foreign guarantee might be regarded as a superfluous and un- friendly act. Senator Eoot quotes statements made by Mr. Blaine in 1881 and Mr. Cass in 1857, thirty-three and fifty-six years ago and says that it was such self-denying and solemn assurance that the United States sought a notification of the Clay- ton-Bulwer Convention and entered into the Hay-Pauneefote Treaty with the clause continu- ing the principle of Clause VIII which embodied the declarations of equality and the clause estab- lishing the rule of equality taken from the Suez Canal Convention. Even Senator Eoot must confess that Article VIII of the Claytoh-Bulwer Convention covers neutrality as well as equal treatment and the care- ful pruning of the Suez Canal rules of every refer- ence to equal treatment certainly shows how far afield Senator Root has had to go to found his case. His case rests largely upon the fact that under The Speech of Senator Elihu Root 83 the conditions existing in 1850 and for a num- ber of years after the necessary capital had per- force to come from Europe and hence we were making as sure that we should preserve all rights possible. What was thought adequate up to the eighties was totally inadequate in 1900. I do not charge misquotation at all but certainly we see numerous examples of intentionally misleading quotation similar to picking one rule out of an article and giving it all the force it would have if it were un- limited and unqualified. No one can follow Senator Boot in his claim that President Eoosevelt's statement that we were carrying on a great work in the interest of mankind gives rise to an argument that we could not profit as a people generally as well as through specific collection of tolls. We do not debate the passage of the Canal but hold it free to the use of all nations upon equal terms, except such as will extend to us reciprocal advantages for spe- cial privileges as will be done when the people understand the simple problems involved. Why did not Senator Boot in his contentions respecting coasting trade citing long ago inten- tions of the United States quote the clearly ex- pressed attitude of this country as enunciated in the message of President Hayes when Mr. Evarts was Secretary of State: The policy of this country is a Canal under American 84 Canal Tolls and American Shipping control. The United States cannot consent to the sur- render of this control to any European power or to any combination of European powers. The Canal would be the great ocean thoroughfare between our Atlantic and Pacific coasts, and virtually a part of the coast line of the United States. I have looked in vain for any renunciation of this stand. To argue that Great Britain through our agreeing to neutralize a canal, still has an overlordship of territory under pur sovereignty, putting our territory under the servitude of a foreign power is to destroy our sovereign rights on the Isthmus. Senator Boot flouts this sov- ereignty in his Senate speech of January 21, 1913, saying of the Canal Zone: It is not our territory except in trust. The Hay-Bunau-VariUa Treaty does not bear out this statement. Article III of that treaty be- tween Panama and the United States says: The Republic of Panama grants to the United States aU the rigihts, powers and authority within the zone mentioned, which the United States would possess and exercise if it were the sovereign of the territory within which said lands and water are located, to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or auttiority. And under Article XIV covering the payment of the fixed sum of $10,000,000.00 and an annual payment after nine years of $250,000.00 we find : But no delay or difference of opinion under this article The Speech of Senator Elihu Boot 85 or any otker provisions shall affect or interrupt the full operation and effect of this convention in all other re- spects. As regards the grant of land in the Zone, Jus- tice Brewer decided that such a grant necessarily carried the fee title as it entirely excluded the rights, present or reversionary, of any other proprietor. If the United States has all the rights, ppwer and authority within the Zone, which its sovereignty of the Zone could possess, and is to exercise these powers in perpetuity to the entire exclusion of the enjoyment by the Ee- public of Panama of any such rights, power or authority, it is manifest that there is but one sovereign over the Zone and that it is the United States. Jefferson in doubt as to the Constitutional right to take over the Louisiana Purchase was given an opinion by Chief Justice Marshall as follows : The Constitution confers absolutely upon the Gov- ernment of the Union the powers of making war and of making treaties; consequently, that Government pos- sesses the power of acquiring territory, either by con- quest or by treaty. And if we wish British endorsement we find in the protest of Sir Edward Grrey: Now that the United States has become the practical sovereign of the Canal, His Majesty's Government do 86 Canal Tolls and American Skipping not question its title to exercise belligerent rights for its protection. And let us not forget that in Article I of the Hay-Banau-VariUa Treaty the "United States; guarantees and will maintain the independence of the Eepublic of Panama." The change of territorial sovereignty referred to in the Treaty did not contemplate ownership resting in one or the other parties to the Treaty. Of Course Senator Eoot's arguments as to coasting trade are far fetched and as we have full right to prefer all classes of our vessels they are not material. As far back as the Treaty of 1815 between the United States and Great Britain where equality of treatment of vessels was very clearly provided for we find coasting trade pre- ferred as to each country. Following the argument we see an attempt to justify the concession in the Grey protest that we may protect the Canal, by attempting to square the Suez rules with the Panama rules, of course omitting the presentation of such parts of the rules as make their claims impossible. Basing his premise upon the validity of the British claims Senator Eoot draws certain conclusions as to matters in dispute that are in no sense definite. Then he goes into the question of the arbitration of the Treaties. An effort has been, made to separate such arbitration disposal from the Senate. It is to be hoped this may not be done. The Speech of Senator Elihu Root 87 Think what we should have had were the first treaty now in force as it would be but for sub- mission to the Senate. The writer has not the space to go fully into this question. The interpretation of the Treaty as challenged by Great Britain does affect our independence, our honor and interest of third par- ties. It is a question whether land belonging to us shall be subject to limited sovereignty. Whether having acquired sovereignty over it such sov- ereignty is fraudulent. If another nation can enforce its decrees over the Canal it can enforce them over bodies of water in Central and South America and so jeopardize the Monroe Doctrine. It is not an arrogant refusal if we are within our rights in choosing not to go before a tribunal con- trolled by judges representing antagonistic in- terests. The remainder of the speech is an appeal to arbitrate because if we do not, even though clearly within our rights, we may be charged with sharp practice — an international game of dare, which has worked Avell of late and nearly to our undoing but which will end with our people's awakening. CHAPTER Vn THE BRITISH PROTEST This protest is based just as Senator Boot's was upon an attempt to read Article VIII of the Clayton-Bulwer Convention into the Hay-Paunce- fote Treaty. The protests and Mr. Knox's reply are given in the Appendix. The answer of Mr. Knox is so conclusive and convincing that but little need be said. But I find well informed men writing to the papers that we can grant subsidies equal to the tolls. They have not read the protest. For if we heed it we find very clear intimation that we must not do so. There is some very devious reasoning indulged in by Sir Edward Grrey. He says Article VIII does not mention belligerent action at all. But the Treaty recognizes that it covers neutrality and it is not mentioned except as a principle established. And what is protection for except to guard against possible harmful belligerent operations? The earlier chapters cover this phase of the contention and the reader can now grasp the subtlety of the argument. 88 The British Protest 89 We find quoted in the protest other treaty pacts calhng for equal treatment in language clearly ex- pressed and because we managed to get it in Canada after twenty-one years of protest equal treatment explicitly provided we are told we must now accord equal treatment because an instrument 64 years old and now superseded called for it un- der conditions not now holding. We again find stated that we surrendered the right to build by the Clayton-Bulwer Treaty and recovered it by the Hay-Pauncefote. Sir Edward says : The case cannot be put more clearly than it was put by Mr. Hay himself, who, as Secretary of State, nego- tiated the Hay-Pauncefote Treaty, in the full account of the negotiations which he sent to the Senate Commit- tee on Foreign Relations (Senate Document 746, 61st Congress, 3d Session). He quotes Mr. Hay as follows : These rules are adopted in the Treaty with Great Britain as a consideration for getting rid of the Clayton- Bulwer Treaty. Since he undoubtedly had the document before him there was no excuse, except that of grasping at straws, for failure to put this quotation as given; there is no period after treaty. The ac- tual statement is: These rules are adopted in the Treaty with Great Britain as a consideration for getting rid of the Clayton- 90 Canal Tolls and American Shipping Bulwer Treaty, and the only way in which other nations are bound by them is that they must comply with them if they would use the Canal. The finishing of this sentence disposes of Sir Ed- ward Grey's contention. No one could assume the protest anything other than a policy of desperation with which to capi- talize the great tory sentiment which seems now to be so prevalent in our land. Sir Edward Grey threatens another protest in case we treat the vessels of all nations on terms of equality by barring railroad owned vessels from the Canal. He says in effect, "Apply your laws to your own vessels but do not treat the vessels of other nations in the same way." Sir Edward Grey says he cannot see how the principle ''which provides for equal treatment of British and United States ships has been main- tained. ' ' No one else can, because it is not main- tained. In so far as Article VIII secured neu- trality it has been incorporated in principle. He cannot see what was obtained by England. If he will read Lord Lansdowne's communications he will see that she was relieved from the whole re- sponsibility of "upholding the rules and main- taining the neutrality of the Canal" — the saving surely of a tidy sum. Here is a definite ' acceptance by Lord Lans- downe of the fact that neutrality is secured through maintaining the rules of Article III. The British Protest 91 We have covered the matter of the tolls be- ing just and equitable. Suez pays 25 per cent, and over while foreign nations regard with com- placency tolls that pay us less than two per cent. There is a very clear intimatle'^at while gra- ciously consenting to our granting subsidies in some branches there may be cases where Great Britain will protest if used in connection with the Canal. The boom in American shipbuilding and con- sequent ship owning was a dire warning to the great maritime countries of Europe. They be- stirred themselves and the boom collapsed. Of course laying down the law for us and in- terpreting Article III to their liking it is easy to figure out that all violations of such interpreta- tion are in conflict with treaty provisions and in the end we are permitted to control the Canal ; an empty honor as Sir Edward Grey construes it and one which we had in the 1850 agreement if we had furnished the money. CHAPTER VIII EEGULATION OF COMMERCE We must assume that Congress wishes to regu- late commerce in the interest of the United States. The Baltimore Convention platform represent- ing the views of the party of the Administration advocates the encouragement of our merchant marine through constitutional regulation of com- merce. Hence we must seek the meaning of con- stitutional regulation. When the thirteen colonies of Great Britain achieved their independence, they were impover- ished, with a pitiable small merchant marine, and conditions were such that continuing as they were their poverty would increase and their marine would vanish. These thirteen States had as many means of regulating commerce, leading to endless confusion and loss. So it was realized that a central power to regulate commerce was necessary, and such necessity was the compelling cause of the adoption of the Constitution. We may safely believe that the men who took part in the framing of the Constitution knew what was meant by its provisions. They were leaders in public thought, so we find many of 92 Regulation of Commerce 93 them members of the First Congress that carried the ideals and intentions of the Constitution into effect by appropriate legislation, A close study of the debates leading up to the drafting of the Constitution and the speeches and reports of our statesmen engaged in early legisla- tion has shown me that the power to regulate com- merce contemplated discrimination when neces- sary or desirable. To show how entirely the great men of the day agreed upon great fundamental principles essential to the general welfare I quote from "Debates of Congress," by Colonel Thomas H. Benton: In the House of Representatives in 1794 occurred one of the most interesting and elaborate debates which our Congress has furnished. It grew out of the clause of the Constitution conferring power to regulate commerce with foreign nations and gives the interpretation of its authors, which is wholly different in its nature and also distinct from the power to lay and collect import duties. The latter was to raise revenue, the former to make such discriminations in trade and transportation as to pro- tect our merchants and ship owners from the adverse regulations and devices of our rivals. Let us examine the laws passed at the First Congress and see how commerce with foreign na- tions was regulated, for surely their authors knew the meaning of constitutional regulation. So clear was the course as charted by the Constitu- tion that Jefferson, Madison and Hamilton were in perfect accord. 94 Canal Tolls and American Shipping First a discrimination was secured by allowini 10 per cent, less duty on goods imported in Ameri' can vessels. Differential tonnage taxes were pro- vided, 6 cents per ton on American-built and owned vessels, American coasting vessels paying but once a year; 30 cents per ton on American- built and foreign owned vessels and 50 cents per ton on vessels foreign owned and built. The great Asiatic trade was secured by grading duties on tea far lower in American vessels than if brought in foreign vessels. American register was confined to American-built vessels. The same care then for our people on sea and shore inspired laws making the berthing and messing of our seamen the best in the world. What an ex- ample in constructive statesmanship! Shipbuild- ing, ship operations and seamen all fostered by constitutional regulation enacted by Constitution makers. Before these laws were passed English ship- ping was doing over 70 per cent, of our trade, but by 1812 this proportion was reversed. Until 1812 the average foreign balance due to profits in shipping, insurance, banking and passenger traffic was not less than $50,000,000. The drain of gold due to dependence upon foreign shipping, now about $350,000,000 annually, must be taken into account and added as an import; for balances of trade, not taking into account transportation charges, are as misleading as those of any shop Regulation of Commerce 95 which omits its delivery charges from its state- ments. Then the "War of 1812, purposely provided to check our maritime growth, was fought. In 1815, as the price of peace, we abandoned discrimina- tion in the direct trade, or trade to or from a country entirely in the ships of the two countries. But the crowning act of unwisdom and national betrayal was when we, in 1828, threw open our indirect trade to favored nations. As a result of abandoning preference for our own commerce there has been a constant decline of the proportion of our trade carried in our ships from 92^ per cent, in 1826 to about 8 per cent, at the present time. Of course the losses due to our Civil War, the change from wood to iron, and from sails to steam, discrimination against our shipping by foreign in- surance and rating companies, the bonded ware- houses giving credit for duties, contracts for ad- vance charters, foreign shipping conferences, trusts, pools and combines and payments now ag- gregating $50,000,000 annually to support their shipping, have supplemented this betrayal by our national legislators of a duty enjoined by the Constitution and their oath to support its pro- visions. Preference proven in effectiveness by the logic of successful application is what is feared by the foreign nations. They do not fear subsidies, for 96 Canal Tolls and American Shipping they know that competition on the ocean does not secure business, but, knowing the unpopularity of the word, they call helpful constitutional regula- tion "subsidy" to enlist such prejudice against it. Pro per regulation g ive s preference at mark et rates ; subsidie s must cut _ rates without c er- taiif^^ ^^jgr^erence. Again, they prate of monopoly and wish us to ignore the menace of vast portent which has grown up on the seas. We are faced upon the ocean by a monopoly of ship- building, of commeriae and of the arts and acces- sories of navigation, together with inordinate naval power. In many cases the disposition and price received by the producer are fixed by the carrier, so essentially necessary are trade connec- tions and distributing agencies to the great mari- time fleets of the present day, and, of course, such powers are used in every way possible to advance the material interests of the country of their flag. The coasting trade is in no sense a monopoly. Any American who has a vessel, large or small, can engage in it. The ridiculous claim that re- mission of toUs is in the nature of a subsidy falls in the face of the fact that rates quoted for future delivery via the Canal are at certain figures, plus the Canal tolls, if exacted. If constitutional regulation of commerce is to be adopted, we must adopt not only the policies of Jefferson for such regulation, but so great is our prostration that supreme effort is required to re- Begulation of Conunerce 97 habilitate our marine, and hence constructive statesmanship should adopt poUoies broadened along similar lines to utilize possibilities for preference not available in Jefferson's time. Preference in canal use squares with the prefer- ence of our early laws and is no more a subsidy than it was then. Thus discriminating duties offering lower duties or no duties on goods brought in American vessels, differential tonnage taxes offering lower taxes on American vessels and dis- criminating tolls, offering lower tolls or no tolls on American vessels, are no more a subsidy than is putting an article on the free list a subsidy to the foreign maker, whose product drives a domestic product out of the home market, which our maker is taxed to maintain. Article II of the Hay-Paunoefote Treaty as sev- eral times stated gives us full power to provide for the regulation and management of the Canal. Since American opponents are quick to grasp at strained interpretations we must throw light upon the meaning of regulation. Since the Clayton-Bulwer Canal had to be regu- lated as well, we find in Article V of that instru- ment as a basis for the withdrawal of protection : If the persons or company undertaking or managing the Canal had established regulations concerning traffic by making unfair discriminations or by imposing op- pressive exactions or unreasonable tolls. Certainly regulation as contemplated there 98 Canal Tolls and American Shipping covered the imposition of tolls and the laying down of conditions of traffic. And we see this is the same idea of regulation as was had by the makers of our Constitution and our earlier laws. The interpretation of regulation speaks just as clearly to-day as when even Jefferson, Madison and Hamilton were in accord as-lo its meaning. A later exposition is that of the late Justice Field of the Supreme Court of the United States : To regulate commerce is to prescribe the rules by which it shall be governed — ^that is, the conditions under which it shall be conducted, to determine how far it shall be free and untrammeled, how far it shall be burdened by duties and imposts and how far it shall be prohibited. We have control of • the Canal, we prescribe rules for its belligerent use and then are left, out- side the obligations of extending impartial bellig- erent use to enjoy the rights incident to construc- tion, with full power to use the Canal to our ad- vantage just as every other nation in the world would do. While under our favored nation treaties we shall in general accord equal tolls to the vessels of other nations, there is nothing to prevent our making reciprocal concessions to other nations. On no other score could Senator Eoot have justi- fied his negotiation of the tripartite treaty be- tween Panama, Columbia and the United States. APPENDICES APPENDICES THE CLAYTON-BULWER CONVENTION The United States of America and Her Britannic Majesty, being desirous of consolidating the relations of amity which so happily subsist between them, by setting forth and fixing in a Convention their views and intentions with reference to any means of communication by ship canal, which may be con- structed between the Atlantic and Pacific Oceans by the way of the River San Juan de Nicaragua and either or both of the Lakes of Nicaragua or Managua, to any port or place on the Pacific Ocean, — The President of the United States has con- ferred full powers on John M. Clajfton, Secretary of State of the United States; and Her Britannic Majesty on the Right Honorable Sir Henry Lytton Bulwer, a member of Her Maj- esty's Most Honorable Privy Council, Knight Commander of the Most Honorable Order of the Bath, and Envoy Extraor- dinary and Minister Plenipotentiary of Her Britannic Majesty to the United States, for the aforesaid purpose; and the said Plenipotentiaries having exchanged their full powers, which were found to be in proper form, have agreed to the following articles : ARTICLE I The Governments of the United States and Great Britain hereby declare, that neither the one nor the other will ever ob- tain or maintain for itself any exclusive control over the said Ship Canal; agreeing that neither will ever erect or maintain any fortifications commanding the same, or in the vicinity thereof, or occupy, or fortify, or colonize, or assume or exer- cise any dominion over Nicaragua, Costa Rica, the Mosquito Coast, or ainy part of Central America; nor will either make use of any protection which either affords or may afford, or 101 102 The Clayton-Bulwer Convention any alliance which either has or may have, to or with any State or People for the purpose of erecting or maintaining any such fortifications, or of occupying, fortifying, or coloniz- ing Nicaragua, Costa Kica, the Mosquito Coast, or any part of Central America, or of assuming or exercising dominion over the same; nor will the United States or Great Britain take advantage of any intimacy, or use any alliance, connection or influence that either may possess with any State or G-ovem- ment through whose territory the said Canal may pass, for the purpose of acquiring or holding, directly or indirectly, for the citizens or subjects of the one, any rights or advantages in re- gard to commerce or navigation through the said canal which shall not be offered on the same terms to the citizens or sub- jects of the other. ARTICLE II Vessels of the United States or Great Britain, traversing the said Canal shall, in case of war between the contracting parties, be exempted from blockade, detention or capture, by either of the belligerents; and this provision shall extend to such a distance from the two ends of the said Canal as may hereafter be found expedient to establish. ABTICLE III In order to secure the construction of the said Canal, the contracting parties engage that, if any such Canal shall be un- dertaken upon fair and equitable terms by any parties having the authority of the local Government or Governments through whose territory the same may pass, then the persons employed in making the said Canal and their property used, or to be used, for that object, shall be protected, from the commence- ment of the said Canal to its completion, by the Governments of the United States and Great Britain, from unjust detention, confiscation, seizure or any violence whatsoever. ARTICLE IV The contracting parties will use whatever influence they re- The Clayton-Bulwer Convention 103 spectively exercise, with any State, States or Governments pos- sessing, or claiming to possess, any jurisdiction or right over the territory which the said Canal shall traverse, or which shall be near the waters applicable thereto; in order to induce such States, or Governments, to facilitate the constniction of the said Canal by every means in their power; and furthermore, the United States and Great Britain agree to use their good offices, wherever or however it may be most expedient, in order to procure the establishment of two free Ports, — one at each end of the said Canal. ARTICLE V The contracting parties further engage that, when the said Canal shall have been completed they will protect it from inter- ruption, seizure or unjust confiscation, and that they will guar- antee the neutrality thereof, so that the said Canal may for- ever be open and free, and the capital invested therein, secure. Nevertheless, the Governments of the United States and Great Britain, in according their protection to the construction of the said Canal, and guaranteeing its neutrality and security when completed, always understand that, this protection and guarantee are granted conditionally, and may be withdrawn by both Governments, or either Government, if both Govern- ments or either Government, should deem that the persons or company, undertaking or managing the same, adopt or es- tablish such regulations concerning the traffic thereupon, as are contrary to the spirit and intention of this Convention, — either by making unfair discriminations in favor of the com- merce of one of the contracting parties over the commerce of the other, or by imposing oppressive exactions or unreasonable tolls upon passengers, vessels, goods, wares, merchandise, or other articles. Neither party, however, shall withdraw the aforesaid protection and guarantee without first giving six months notice to the other. lARTICLE VI The contracting parties in this Convention engage to invite 104 The Clayton-Bulwer Convention every State with which both or either have friendly intercourse, to enter into stipulations with them similar to those which they have entered into with each other; to the end that all other States may share in the honor and advantage of having con- tributed to a work of such general interest and importance as the Canal herein contemplated. And the contracting parties likewise agree that, each shall enter into Treaty stipulations with such of the Central American States, as they may deem advisable, for the purpose of more effectually carrying out the great design of this Convention, namely, — ^that of con- structing and maintaining the said Canal as a ship-communi- cation between the two Oceans, for the benefit of mankind, on equal terms to all, and of protecting the same; and they, also, agree that, the good offices of either shall be employed, when requested by the other, in aiding and assisting the negotiations of such treaty stipulations; and, should any differences arise as to right or property over the territory through which the said Canal shall pass, — ibetween the States or Governments of Cen- tral America, — and such differences should, in any way, im- pede or obstruct the execution of the said Canal, the Grovem- ments of the United States and Great Britain will use their good offices to settle such differences in the manner best suited to promote the interests of the said Canal, and to strengthen the bonds of friendship and alliance which exist between the contracting parties. ARTICLE VII (It being desirable that no time should be unnecessarily lost in commencing and constructing the said Canal, the Govern- ments of the United States and Great Britain determine to give their support and encouragement to such persons, or com- pany, as may first offer to commence the same, with the neces- sary capital, the consent of the local authorities, and on such principles as accord with the spirit and intention of this Con- vention ; and if any persons, or company, should already have, with any State through which the proposed Ship-Canal may pass, a contract for the construction of such a canal as that The Clayton-Bulwer Convention 105 specified in this Convention,— to the stipulations of which con- tract neither of the contracting parties in this convention have any just cause to object, — and the said persons, or company, shall moreover, have made preparations and expended time, money, and trouble on the faith of such contract, it is hereby agreed that such persons, or company, shall have a priority of claim over every other person, persons, or company to the pro- tection of the Governments of the United States and Great Britain, and be allowed a year, from the date of the exchange of the ratifications of this Convention for concluding their ar- rangements, and presenting evidence of sufficient capital sub- scribed to accomplish the contemplated undertaking; it being understood, that if, at the expiration of the aforesaid period, such persons, or company be not able to commence and carry out the proposed enterprise, then the Governments of the United States and Great Britain shall be free to afford their protection to any other persons,- or company, that shall be prepared to commence and proceed with the construction of the Canal in question. ARTICLE VIII The Governments of the United States and Great Britain having not only desired in entering into this Convention, to accomplish a particular object, but, also, to establish a gen- eral principle, they hereby agree to extend theii; protection, by Treaty stipulations, to any other practical communications, whether by Canal or rail-way, across the Isthmus which con- nects North and South America; and, especially to the inter- oceanic communications, — should the same prove to be prac- ticable, whether by Canal or rail-way, — ^which are now pro- posed to be established by the way of Tehuantepec, or Panama. In granting, however, their joint protection to any such Canals or rail-ways, as are by this Article specified, it is always un- derstood by the United States and Great Britain, that the par- ties constructing or owning the same, shall impose no other charges or conditions of traffic thereupon, than the aforesaid 106 The Hay-Pauneefote Treaty Governments shall approve of, as just and equitable; and, that the same Canals or rail-ways, being open to the citizens and subjects of the United States and Great Britain on equal terms, shall, also, be open on like terms to the citizens and subjects of every other State which is willing to grant thereto, such protection as the United States and Great Britain engage to affordi ARTICLE IX The ratifications of this Convention shall be exchanged at Washington, within six months from this day, or sooner, if possible. In faith whereof, we, the respective Plenipotentiaries, have signed this Convention, and have hereunto affixed our Seals. Done, at Washington, the nineteenth day of April, Anno Domini one thousand eight hundred and fifty. John M. Clayton. [seal.] Henry Lytton Bulwee. [seal.] THE HAY-PAUNCEFOTB TREATY Whereas, a Convention between the United States of Amer- ica and the United Kingdom of Great Britain and Ireland, to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans, by whatever route may be consid- ered expedient, and to that end to remove any objection which may arise out of the Convention of the 19th April, 1850, com- monly called the Clayton-Bulwer treaty, to the construction of such canal under the auspices of the Government of the United States, without impairing the "general principle" of neutral- ization established in Article VIII of that Convention, was concluded and signed by their respective plenipotentiaries at the city of Washington on the 18th day of November, 1901, the original of which Convention is word for word as follows : The United States of America and His Majesty Edward the Seventh, of the United Kingdom of Great Britain and Ireland, The Hay-Pauncefote Treaty 107 and of the British Dominions beyond the Seas, King, and Em- peror of India, being desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans, by whatever route may be considered expedient, and to that end to remove any objection which may arise out of the Con- vention of the 19th April, 1850, commonly called the Clayton- Bulwer Treaty, to the construction of such canal under the auspices of the Government of the United States, without im- pairing the "general principle" of neutralization established in Article VIII of that Convention, have for that purpose ap- pointed as their Plenipotentiaries: The President of the United States, John Hay, Secretary of State of the United States of America; And His Majesty Edward the Seventh, of the United King- dom of Great Britain aiid Ireland, and of the British Domin- ions beyond the Seas,. King, and Emperor of India, the Right Honourable Lord Pauncefote, G. C. B., G. C. M. G., His Maj- esty's Ambassador Extraordinary and Plenipotentiary to the United States; Who, having communicated to each other their full powers which were found to be in due and proper form, have agreed upon the following Articles: — AETICLE I The High Contracting Parties agree that the present Treaty shall supersede the afore-mentioned Convention of the 19th April, 1850. ARTICLE 11 It is agreed that the canal may be constructed under the auspices of the Government of the United States, either directly at its own cost, or by gift or loan of money to individuals or Corporations, or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present Treaty, the said Government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and management of the canal. 108 The Hay-Pauneefote Treaty ARTICLE III The United States adopts, as the basis of the neutralization of such ship canal, the following Rules, substantially as em- bodied in the Convention of Constantinople, signed the 28th October, 1888, for the free navigation of the Suez Canal, that is to say: 1. The canal shall be free and open to the vessels of com- merce 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 traflBc, or otherwise. Such con- ditions and charges of traffic shall be just and equitable. 2. The canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed withiu it. The United States, however, shall be at liberty to main- tain such military police along the canal as may be necessary to protect it against lawlessness and disorder. 3. Vessels of war of a belligerent shall not revietual nor take any stores in the canal except so far as may be strictly neces- sary; and the transit of such vessels through the canal shall be effected with the least possible delay in accordance with the Regulations in force, and with only such intermission as may result from the necessities of the service. Prizes shall be in all respects subject to the same Rules as vessels of war of the belligerents. 4. No belligerent shall embark or disembark troops, muni- tions of war, or warlike materials in the canal, except in case of accidental hindrance of the transit, and in such case the transit shall be resumed with all possible dispatch. 5. The provisions of this Article shall apply to waters adja- cent to the canal, within 3 marine miles of either end. Ves- sels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time, except in case of distress, and in such case, shall depart as soon as possible; but a vessel of war of one belligerent shall not depart within The Hay-Bunau-Varilla Treaty 109 twenty-four hours from the departure of a vessel of war of the other belligerent. 6. The plant, establishments, buildings, and all works neces- sary to the construction, maintenance, and operation of the canal shall be deemed to be part thereof, for the purposes of this Treaty, and in time of war, as in time of peace, shall en- joy complete immunity from attack or injury by belligerents, and from acts calculated to impair their usefulness as part of the canal. abticm: IV It is agreed that no change of territorial sovereignty or of the international relations of the country or countries traversed by the before-mentioned canal shall affect the general principle of neutralization or the obligation of the High Contracting Parties under the present Treaty. ARTICLE V The present Treaty shall be ratified by the President of the United States, by and with the advice and consent of the Senate thereof, and by His Britannic Majesty; and the ratifi- cations shall be exchanged at Washington or at London at the earliest possible time within six months from the date hereof. In faith whereof the respective Plenipotentiaries have signed this Treaty and thereunto afiSxed their seals. Done in duplicate at Washington, the 18th day of Novem- ber, in the year of Our Lord one thousand nine hundred and one. John Hat. [seal.] Pauncbfote. [seal.] THE HAY-BUNAU-VARILLA TREATY The United States of America and the Eepublie of Panama being desirous to insure the construction of a ship canal across 110 The Hay-Bunau-Varilla Treaty the Isthmus of Panama to connect the Atlantic and Pacific Oceans, and the Congress of the United States of America hav- ing passed an act approved June 28, 1902, in furtherance of that object, by which the President of the United States is authorized to acquire within a reasonable time the control of the necessary territory of the Republic of Colombia, and the sovereignty of such territory being actually vested in the Republic of Panama, the high contracting parties have re- solved for that purpose to conclude a convention and have accordingly appointed as their plenipotentiaries, — The President of the United States of America, John Hay, Secretary of State, and The Government of the Republic of Panama, Philippe Btinaii-Varilla, Envoy Extraordinary and Minister Plenipo- tentiary of the Republic of Panama, thereunto specially empowered by said government, who after communicating with each other their respective full powers, found to be in good and due form, have agreed upon and concluded the following ar- ticles : ARTICLE I 'The United States guarantees and will maintain the inde- pendence of the Republic of Panama. ARTICLE II The Republic of Panama grants to the United States in per- petuity the use, occupation and control of a zone of land and land under water for the construction, maintenance, operation, sanitation and protection of said canal of the width of ten miles extending to the distance of five miles on each side of the center line of the route of the canal to be constructed; the said zone beginning in the Caribbean Sea three marine miles from mean low water mark and extending to and across the Isthmus of Panama into the Pacific Ocean to a distance of three marine miles from mean low water mark with the pro- viso that the cities of Panama and Colon and the harbors adja- The Hay-Bunau-VariUa Treaty 111 cent to said cities, which are included within the boundaries of the zone above described, shall not be included within this grant. The Republic of Panama further grants to the United States in perpetuity the use, occupation and control of any other lands and waters outside of the zone above described which may be necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal or of any auxiliary canals or other works necessary and convenient for the construction, maintenance, operation, sanitation and protection of said enterprise. The Republic of Panama further grants in like manner to the United States in perpetuity all islands within the Limits of the zone above described and in addition thereto the group of small islands in the Bay of Panama, named Perico, Naos, Culebra and Flamenco. ARTICLE III The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article II of this agreement and within the limits of all auxiliary lands and waters mentioned and de- scribed in said Article II which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority. ARTICLE IV As rights subsidiary to the above grants the Republic of Panama grants in perpetuity to the United States the right to use the rivers, streams, lakes and other bodies of water within its limits for navigation, the supply of water or water- power or other purposes, so far as the use of said rivers, streams, lakes and bodies of water and the waters thereof may be necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal. 112 The Hay-Bunau-Varilla Treaty AKTICtB V The Kepublic of Panama grants to the United States in perpetuity a monopoly for the construction, maintenance and operation of any system of communication by means of canal or railroad across its territory between the Caribbean Sea and the Pacific Ocean. AETICLE VI The grants herein contained shall in no manner invalidate the titles or rights of private land holders or owners of pri- vate property in the said zone or in or to any of the lands or waters granted to the United States by the provisions of any Article of this treaty, nor shall they interfere with the rights of way over the public roads passing through the said zone or over any of the said lands or waters unless said rights of way or private rights shall conflict with rights herein granted to the United States in which case the rights of the United States shall be superior. All damages caused to the owners of private lands or private property of any kind by reason of the grants contained in this treaty or by reason of the operations of the United States, its agents or employes, or by reason of the construction, maintenance, operation, sanitation and protection of the said Canal or of the works of sanitation and protection herein provided for, shall be ap- praised and settled by a joint Commission appointed by the Governments of the United States and the Republic of Panama, whose decisions as to such damages shall be final and whose awards as to such damages shall be paid solely by the United States. No part of the work on said Canal or the Panama Railroad or on any auxiUary works relating thereto and authorized by the terms of this treaty shall be prevented, delayed or impeded by or pending such proceedings to as- certain such damages. The appraisal of said private lands and private property and the assessment of damages to them shall be based upon their va|ue before the date of this convention. The Hay-Bunau-Varilla Treaty 113 ARTICLE VII ■The Republic of Panama grants to the United States within the limits of the cities of Panama and Colon and their adjacent harbors and within the territory adjacent thereto the right to acquire by purchase or by the exercise of the right of eminent domain, any lands, buildings, water rights or other properties necessary and convenient for the con- struction, maintenance, operation and protection of the Canal and of any works of sanitation, such as the collec- tion and disposition of sewage and the distribution of water in the said cities of Panama and Colon, which, in the dis- cretion of the United States may be necessary and con- venient for the construction, maintenance, operation, sanita- tion and protection of the said Canal and railroad. All such works of sanitation, collection and disposition of sewage and distribution of water in the cities of Panama and Colon shall be made at the expense of the United States, and the Government of the United States, its agents or nominees shall be authorized to impose and collect water rates and sewerage rates which shall be sufficient to provide for the payment of interest and the amortization of the principal of the cost of said works within a period of fifty years and upon the expiration of said term of fifty years the system of sewers and water works shall revert to and become the properties of the cities of Panama and Colon respectively, and the use of the water shall be free to the inhabitants of Panama and Colon, except to the extent that water rates may be necessary for the operation and maintenance of said system of sewers and water. The Republic of Panama agrees that the cities of Panama and Colon shall comply in perpetuity with the sanitary or- dinances whether of a preventive or curative character pre- scribed by the United States and in ease the Government of Panama is unable or fails in its duty to enforce this com- pliance by the cities of Panama and Colon with the sanitary ordinances of the United States the Republic of Panama 114 The Hay-Bunau-Varilla Treaty grants to the United States the right and authority to enforce the same. The same right and authority are granted to the United States for the maintenance of public order in the cities of Panama and Colon and the territories and harbors adjacent thereto in case the Republic of Panama should not be, in the judgment of the United States, able to maintain such order. ARTICLE viir The Republic of Panama grants to the United States all rights which it now has or hereafter may acquire to the prop- erty of the New Panama Canal Company and the Panama Railroad Company as a result of the transfer of sovereigrity from the Republic of Colombia to the Republic of Panama over the Isthmus of Panama and authorizes the New Panama Canal Company to sell and transfer to the United States its rights, privileges, properties and concessions as well as the Panama Railroad and all the shares or part of the shares of that company; but the public lands situated outside of the Zone described in Article II of this treaty now included in the concessions to both said enterprises and not required in the construction or operation of the Canal shall revert to the Republic of Panama except any property now owned by or in possession of said companies within Panama or Colon or the ports or terminals thereof. ARTICLE IX The United States agrees that the ports at either entrance of the Canal and the waters thereof, and the Republic of Panama agrees that the towns of Panama and Colon shall be free for all time so that there shall not be imposed or col- lected custom house tolls, tonnage, anchorage, light-house, wharf, pilot, or quarantine dues or any other charges or taxes of any kind upon any vessel using or passing through the Canal or belonging to or employed by the United States, di- rectly or indirectly, in connection with the construction, The Hay-Bunau-Varilla Treaty 115 maintenance, operation, sanitation and protection of the main Canal, or auxiliary works, or upon the cargo, officers, crew or passengers of any such vessels, except such tolls and charges as may be imposed by the United States for the use of the Canal and other works, and except tolls and charges imposed by the Republic of Panama upon merchandise des- tined to be introduced for the consumption of the rest of the Republic of Panama, and upon vessels touching at the ports of Colon and Panama and which do not cross the Canal. The Government of the Republic of Panama shall have the right to establish in such ports and in the towns of Panama and Colon such houses and guards as it may deem necessary to collect duties on importations destined to other portions of Panama and to prevent contraband trade. The United States shall have the right to make use of the towns and harbors of Panama and Colon as places of anchorage, and for making repairs, for loading, unloading, depositing, or trans-shipping cargoes either in transit or destined for the service of the Canal and for other works pertaining to the Canal. ARTICLE X The Republic of Panama agrees that there shall not be im- posed any taxes, national, municipal, departmental, or of any other class, upon the Canal, the railways and auxiliary works, tugs and other vessels employed in the service of the Canal, store houses, work shops, offices, quarters for laborers, factories of all kinds, warehouses, wharves, machinery, and other works, property, and effects appertaining to the Canal or railroad and auxiliary works, or their officers or employees, situated within the cities of Panama and Colon, and that there shall not be imposed contributions or charges of a personal character of any kind upon officers, employees, laborers, and other individuals in the service of the Canal and railroad and auxiliary works. ARTICLE XI The United States agrees that the official dispatches of 116 The Hay-Bunau-VarUla Treaty the Government of the Republic of Panama shall be trans- mitted over any telegraph and telephone lines established for Canal purposes and used for public and private business at rates not higher than those required from oflBcials in the service of the United States. ARTICLE XII The Government of the Republic of Panama shall permit the immigration and free access to the lands and workshops of the Canal and its auxiliary works of all employees and workmen of whatever nationality under contract to work upon or seeking employment upon or in any wise connected with the said Canal and its auxiliary works, with their re- spective families, and all such persons shall be free and ex- empt from the military service of the Republic of Panama. ARTICLE XIII The United States may import at any time into the said zone and auxiliary lands, free of customs duties, imposts, taxes, or other charges, and without any restrictions, any and all vessels, dredges, engines, cars, machinery, tools, explosives, materials, supplies, and other articles necessary and conven- ient in the construction, maintenance, operation, sanitation and protection of the Canal and auxiliary works, and all pro- visions, medicines, clothing, supplies and other things neces- sary arid convenient for the officers, employees, workmen and laborers in the service and employ of the United States and for their families. If any such articles are disposed of for use outside of the zone and auxiliary lands granted to the United States and within the territory of the Republic, they shall be subject to the same import or other duties as like ar- ticles imported under the laws of the Republic of Panama. ARTICLE XIV As the price or compensation for the rights, powers and privileges granted in this convention by the Republic of The Hay-Bimau-VariUa Treaty 117 Panama to the United States, the Government of the United States agrees to pay to the Eepuhlie of Panama the sum of ten million dollars ($10,000,000) in gold coin of the United States on the exchange of the ratification of this convention and also an annual payment during the life of this conven- tion of two hundred and fifty thousand dollars ($250,000) in like gold coin, beginning nine years after the date aforesaid. The provisions of this Article shall be in addition to all other benefits assured to the Republic of Panama under this convention. But no delay or difference of opinion under this Article or any other provisions of this treaty shall affect or interrupt the full operation and effect of this convention in all other respects. ARTICLE XV , The joint commission referred to in Article VI shall be es- tablished as follows: The President of the United States shall nominate two persons and the President of the Republic of Panama shall nominate two persons and they shall proceed to a decision; but in case of disagreement of the Commission (by reason of their being equally divided in conclusion) an umpire shall be appointed by the two Governments who shall render the decision. In the event of the death, absence, or incapacity of a Commissioner or Umpire, or of his omitting, declining or ceasing to act, his place shall be filled by the appointment of another person in the manner above indicated. All de- cisions by a majority of the Commission or by the umpire shall be final. ABTICLB XVI The two Governments shall make adequate provision by future agreement for the pursuit, capture, imprisonment, de- tention and delivery within said zone and auxiliary lands to the authorities of the Republic of Panama of persons charged with the commitment of crimes, felonies or misdemeanors with- 118 The Hay-Bunau-VariUa Treaty out said zone and for the pursuit, capture, imprisonment, detention and delivery without said zone to the authorities of the United States of persons charged with the commitment of crimes, felonies and misdemeanors within said zone and aux- iliary lands. ARTICLE XVII The Repuhlic of Panama grants to the United States the use of all the ports of the Republic open to commerce as places of refuge for any vessels employed in the Canal enter- prise, and for all vessels passing or bound to pass through the Canal which may be in distress and be driven to seek refuge in said ports. Such vessels shall be exempt from an- chorage and tonnage dues on the part of the Republic of Panama. ARTICLE XVIII The Canal, when constructed, and the entrances thereto shall be neutral in perpetuity, and shall be opened upon the terms provided for by Section I of Article three of, and in conformity with all the stipulations of, the Treaty entered into by the Governments of the United States and Great Britain on November 18, 1901. AHTICLB Xlk The Government of the Republic of Panama shall have the right to transport over the Canal its vessels and its troops and munitions of war in such vessels at all times without paying charges of any kind. The exemption is to be extended to the auxiliary railway for the transportation of persons in the service of the Republic of Panama, or of the police force charged with the preservation of public order outside of said zone, as well as to their baggage, munitions of war and sup- plies. ARTICLE XX If by virtue of any existing treaty in relation to the ter- ritory of the Isthmus of Panama, whereof the obligations The Hay-Bunau-Varilla Treaty 119 shall descend or be assumed by the Republic of Panama, there may be any privilege or concession in favor of the Government or the citizens or subjects of a third power rela- tive to an interoceanie means of communication which in any of its terms may be incompatible with the terms of the pres- ent convention, the Republic of Panama agrees to cancel or modify such treaty in due form, for which purpose it shall give to the said third power the requisite notification within the term of four months from the date of the present conven- tion, and in case the existing treaty contains Jio clause per- mitting its modifications or annulment, the Republic of Pan- ama agrees to procure its modification or annulment in such form that there shall not exist any conflict with the stipula- tions of the present convention. AETIOtE XXI The rights and privileges granted by the Republic of Pan- ama to the United States in the preceding Articles are under- stood to be free of all anterior debts, liens, trusts, or liabil- ities, or concessions or privileges to other Governments, cor- porations, syndicates or individuals, and consequently, if there should arise any claims on ^.ccount of the present concessions and privileges or otherwise, the claimants shall resort to the Government of the Republic of Panama and not to the United States for any indemnity or compromise which may be required. ARTICLE XXII The Republic of Panama renounces and grants to the United States the participation to which it might be entitled in the future earnings of the Canal under Article XV of the concessionary contract with Lucien N. B. Wyse nOw owned by the New Panama Canal Company and any and all other rights or claims of a pecuniary nature arising under or re- lating to said concession, or arising under or relating to the concessions to the Panama Railroad Company or any exten- sion or modification thereof; and it likewise renounces, con- 120 The Hay-Bunau-Varilla Treaty firms and grants to the United States, now and hereafter, all the rights and property reserved in the said concessions which otherwise would belong to Panama at or before the expira- tion of the terms of ninety-nine years of the concessions granted to or held by the above mentioned party and com- panies, and all right, title and interest which it now has or may hereafter have, in and to the lands, canal, works, prop- erty and rights held by the said companies under said con- cessions or otherwise, and acquired or to be acquired by the United States from or through the New Panama Canal Com- pany, including any property and rights which might or may in the future either by lapse of time, forfeiture or other- wise, revert to the Republic of Panama under any contracts or concessions, with said "Wyse, the Universal Panama Canal Company, the Panama Railroad Company and the New Pan- ama Canal Company. The aforesaid rights and property, shall be and are free and released from any present or reversionary interest or claims of Panama and the title of the United States thereto upon consummation of the contemplated purchase by the United States from the New Panama Canal Company, shall be absolute, so far as concerns the Republic of Panama, ex- cepting always the rights of the Republic specifically secured under this treaty. ARTICLE XXIII If it should become necessary at any time to employ armed forces for the safety or protection of the Canal, or of the ships that make use of the same, or the railways and auxil- iary works, the United States shall have the right, at all times and in its discretion, to use) its police and its land and naval forces or to establish fortifications for these purposes. ARTICLE XXIV No change either in the Government or in the laws and treaties of the Republic of Panama shall, without the con- sent of the United States, affect any right of the United The Hay-Bunau-Varilla Treaty 121 states under the present convention, or under any treaty sti|)ulation between the two countries that now exists or may hereafter exist touching the subject matter of this con- vention. If the Republic of Panama shall hereafter enter as a con- stituent into any other Government or into aiiy union or confederation of states, so as to merge her sovereignty or in- dependence in such Government, union or confederation, the rights of the United States under this convention shall not be in any respect lessened or impaired. ARTICLE XXV For the better performance of the engagements of this con- vention and to the end of the eflftcient protection of the Canal and the preservation of its neutrality, the Government of the Republic of Panama will sell or lease to the United States lands adequate and necessary for naval or coaling stations on the Pacific Coast and on the western Caribbean Coast of the Republic at certain points to be agreed upon with the Presi- dent of the United States. ARTICLE XXVI This convention when signed by the Plenipotentiaries of the Contracting Parties shall be ratified by the respective Gov- ernments and the ratifications shall be exchanged at "Wash- ington at the earliest date possible. In faith whereof the respective Plenipotentiaries have signed the present convention in duplicate and have hereuntd affixed their respective seals. Done at the City of Washington the 18th day of November in the year of our Lord nineteen hundred and three. John Hat [seal] P. BUNAIT VarILLA [seal] 122 The Suez Canal Convention THE SUEZ CANAL CONVENTION (Signed at Constantinople October 29th, 1888.) Her Majesty the Queen of the United Kingdom of Great Britain and Ireland, Empress of India; His Majesty the Em- peror of Germany, King of Prussia; His Majesty the Em- peror of Austria, King of Bohemia, etc., and Apostolic King of Hungary; His Majesty the King of Spain, and in his name the Queen Regent of the Kingdom ; the President of the French Republic; His Majesty the King of Italy; His Majesty the King of the Netherlands, Grand Duke of Luxemburg, etc.; Sis Majesty the Emperor of All the Russias; and His Majesty the Emperor of the Ottomans; wishing to establish, by a conventional act, a definite system destined to guarantee at all times, and for all the powers, the free use of the Suez Maritime Canal, and thus to complete the system under which the navigation of this canal has been placed by the fir- man of His Imperial Majesty the Sultan, dated the 22nd February, 1866 (2 Zilkade, 1282), and sanctioning the conces- sions of His Highness the Khedive, have named their pleni- potentiaries. ARTICLE I The Suez Maritime Canal shall always be free and open, in time of war as in time of peace, to every vessel of com- merce or of war, without distinction of flag. Consequently, the high contracting parties agree not in any way to interfere with the free use of the canal, in time of war as in timfi of peace. The canal shall never be subjected to the exercise of the right of blockade. ARTICLE n The high contracting parties, recognizing that the fresh- water canal is indispensable to the maritime canal, take note of the engagements of His Highness the Khedive towards the Universal Suez Canal Co. a^ regards the fresh-water canal; The Suez Canal Convention 123 which engagements are stipulated in a convention bearing date the 18th March, 1863, containing an expose and four articles. They undertake not to interfere in any way with the se- curity of that canal and its branches, the working of which shall not be exposed to any attempt at obstruction. AETICLE III The high contracting parties likewise undertake to respect the plant, establishments, buildings, and works of the mari- time canal and the fresh-water canal. AETICLE IV The maritime canal remaining open in time of war as a free passage, even to the ships of war of belligerents, accord- ing to the terms of Article I of the present treaty, the high contracting parties agree that no right of war, no act of hos- tility, nor any act having for its object to obstruct the free navigation of the canal, shall be committed in the canal and . its ports of access, as well as within a radius of 3 marine miles from those ports, even though the Ottoman Empire should be one of the belligerent powers. Vessels of war of belligerents shall not revictual or take in stores in the canal and its ports of access, except in so far as may be strictly necessary. The transit of the aforesaid vessels through the canal shall be effected with the least possible de- lay, in accordance with the regulations in force, and with- out any other intermission than that resulting from the neces- sities of the service. Their stay at Port Said and in the roadstead of Suez shaU not exceed 24 hours, except in case of distress. In such ease they shall be bound to leave as soon as possible. An inter- val of 24 hours shall always elapse between the sailing of a belligerent ship from one of the ports of access and the departure of a ship belonging to the hostile power. ARTICLE V In time of war belligerent powers shall not disembark nor 124 The Suez Canal Convention embark within the canal and its ports of access either troops, munitions, or materials of war. But in case of an accidental hindrance in the canal men may be embarked or disembarked at the ports of access by detachments not exceeding 1,000 men, with a corresponding amount of war material. ABTICIiE VI Prizes shall be subjected, in all respects, to the same rules as the vessels of war of belligerents. ARTICLE VII The powers shall not keep any vessel of war in the waters of the canal (including Lake Timsah and the Bitter Lakes). Nevertheless, they may station vessels of war in the ports of access of Port Said and Suez, the number of which shall not exceed two for each power. This right shall not be exercised by belligerents. ARTICLE VIII The agents in Egypt of the signatory powers of the present treaty shall be charged to watch over its execution. In case of any event threatening the security of the free passage of the canal, they shall meet on the summons of three of their num- ber, under the presidency of their doyen, in order to proceed to the necessary verifications. They shall inform the Khedivial Government of the danger which they may have perceived, in order that that Government may take proper steps to insure the protection and the free use of the canal. Under any circumstances, they shall meet once a year to take note of the due execution of the treaty. The last-mentioned meetings shall take place under the presidency of a special commissioner nominated for that pur- pose by the Imperial Ottoman Government. A commissioner of the Khedive may also take part in the meeting, and may preside over it in case of the absence of the Ottoman com- missioner. The Suez Canal Convention 125 They shall especially demand the suppression of any work or the dispersion of any assemblage on either bank of the canal, the object or effect of which raight be to interfere with the liberty and the entire security of the navigation. ARTICLE IX The Egyptian Government shall, within the limits of its powers resulting from the Firmans, and under the conditions provided for in the present treaty, take the necessary meas- ures for insuring the execution of. the said treaty. In case the Egyptian Government should not have suflScient means at its disposal, it shall call upon the Imperial Ottoman Government, which shall take the necessary measures to re- spond to such appeal; shall give notice thereof to the signa- tory powers of the declaration of London of the 17th March, 1885 ; and shall, if necessary, concert with them on the subject. The provisions of Articles IV, V, VII shall not interfere with the measures which shall be taken in virtue of the present ai-ticle. ARTICLE X Similarly, the provisions of Articles IV, V, and VIII shall not interfere with the measures which His Majesty the Sul- tan and His Highness the Khedive, in the name of His Im- perial Majesty, and within the limits of the firmans granted, might find it necessary to take for securing by their own forces the defense of Egypt and the maintenance of public order. In case His Imperial Majesty the Sultan or His Highness the Khedive should find it necessary to avail themselves of the exceptions for which this article provides, the signatory pow- ers of the declaration of London shall be notified thereof by the Imperial Ottoman Government. It is likewise understood that the provisions of the four articles aforesaid shall in no case occasion any obstacle to the measures which the Imperial Ottoman Government may think it necessary to take in order to insure by its own forces 126 The Suez Capal Convention the defense of its other possessions situated on the eastern coast of the Red Sea. ARTICLE XI The measures which shall be taken in the eases provided for by Articles IX and X of the present treaty shall not interfere with thfe free use of the canal. In the same cases the erection of permanent fortifications contrary to the provisions of Ar- ticle VIII is prohibited. ARTIC!LE XII The high contracting parties, by application of the principle of equality as regards the free use of the canal, a principle which forms one of the bases of the present treaty, agree that none of them shall endeavor to obtaih with respect to the canal territorial or commercial advantages or privileges in any inter- national arrangements which may be concluded. Moreover, the rights of Turkey as the territorial power are reserved. AETICIiE XIII With the .exception of the obligations expressly provided by the clauses of the present treaty, the sovereign rights of His Imperial Majesty the Sultan, and the rights and immuni- ties of His Highness the Khedive, resulting from the firmans, are in no way affected. ARTICLE xrv The high contracting parties agree that the engagements re- sulting from the present treaty shall not be limited by the duration of the act of concession of the Universal Suez Canal Company. ARTICLE XV The stipulations of the present treaty shall not interfere with the sanitary measures in force in Egypt. ARTICLE XVI The high contracting parties undertake to bring the present Negotiations of Treaty 127 treaty to the knowledge of the States which have not signed it, inviting them to accede to it. ARTICLE XVII The present treaty shall be ratified, and the ratifications shall be exchanged at Constantinople within the space of one month, or sooner if possible. In faith of which the respective plenipotentiaries have signed the present treaty and have affixed to it the seal of their arms. Done at Constantinople, the 29th day of the month of Octo- ber, in the year 1888. [l. s.] W. a. White, [l. s.] Radowitz. [l. s.] Calice. [l. s.] Miguel Floeezt Garcia, [l. s.] C. De Montebello. [l. s.] a. Blanc, [l. s.] Gus Keun. [l. s.] Neleqow. . . [l. s.] M. Said. NEGOTIATION OF THE HAY-PAUNCEPOTB TREATY Prepared by Mr. Hay. The Senate's amendments to the former treaty required (first) that there should be in plain and explicit terms an ex- press abrogation of the Clayton-Bulwer treaty; (second) that the rules of neutrality adopted should not deprive the United States of the right to defend itself and to maintain public or- der; and (third) that other powers should not in any manner be made parties to the treaty by being invited to adhere to it. iFor a better understanding of the scheme of the new treaty. 128 Negotiations of Treaty- it may be well briefly to advert to the objections suggested by Great Britain to these several amendments. AS TO THE ABROGATION OF THE CLATTON-BTJLWEE TREATY Lord Lansdowne's objections were as to the manner of doing this and as to the substance. It was insisted that in the negotiations which led to the making of the former treaty no attempt had been made to ascertain the views of the Brit- ish Government on such complete abrogation, and that the Clayton-Bulwer treaty being, as it claimed, an international compact of unquestionable validity, could not be abrogated without the consent of both parties to the contract. There was in this connection an apparent misconception on the part of His Majesty's Government in respect to the proper function of the Senate in advising the ratification of a treaty with amendments proposed by it. It seemed to be regarded as an attempt on the part of the Senate to accomplish by its own vote, as a final act, the abrogation of an existing treaty, without an opportunity for full consideration of the matter by the other party. It was overlooked that the Senate was simply exercising its undoubted constitutional function of pro- posing amendments to be communicated to the other party to the contract, to ascertain its views upon the question, and it was hoped by the President — and the hope was expressed in submitting the treaty as amended by the Senate to the British Government — that the amendments would be found acceptable by it. Failing this, there was a full opportunity for His Ma- jesty's Government, by counter propositions, to express its views on this and the other amendments, and so by a continu- ous negotiation to arrive, if possible, at a mutually satisfactory solution of all questions involved. Nevertheless, in view of the great importance of the Senate's amendments, taken to- gether, it was deemed more expedient by Lord Lansdowne to reject them, but to leave the door open for fresh negotiations, which might have a more happy issue; and he earnestly depre- cated a final failure of the parties to agree, and emphatically ^Negotiations of Treaty 129 expressed the desire of his Government to meet the views of the United States on this most important matter. The principal substantial objection to the Senate's amend- ments, completely superseding the Clayton-Bulwer treaty, was that if this were done, the provisions of Article I of that treaty, which had been left untouched by the original Hay- Pauneefote treaty, would be annulled, and thereby both powers would, except in the vicinity of the canal, acquire entire free- dom of action in Central America, a change which Lord Lansdowne thought would certainly be of advantage to the United States, and might be of substantial importance. AS TO THE RIGHT Or THE UNITED STATES, NOTWITHSTANDING THE NEUTRAL RULES ADOPTED BY THE TREATT, TO DEFEND ITSELF BY ITS OWN FORCES, AND TO SECURE THE MAINTENANCE OF PUBLIC ORDER, COVERED BY WHAT WAS GENERALLY KNOWN AS THE DAVIS AMENDMENT. His Majesty's Government criticised the vagueness of the language employed in the amendment, and the absence of all security as to the manner in which its ends might at some fu- ture time be interpreted; but thought that, however precisely it might be worded, it would be impossible to determine what might be the effect if one clause permitting defensive meas- ures and another clause (which has now been omitted) pro- hibiting fortification of the canal were allowed to stand side by side in the same convention. This amendment was strenuously objected to by Great Brit- ain as involving a distinct departure from the principle of neutrality which had theretofore found acceptance by both Governments, inasmuch as it would, as construed by Lord Lansdowne, permit the United States in time of peace as well as in time of war to resort to whatever warlike acts it pleased in and near the canal, which would be clearly incon- sistent with its intended neutral character and would deprive the commerce and navies of the world of the free use of it. It was insisted that by means of the amendment the obliga- 130 Negotiations of Treaty tion of Great Britain to respect the neutrality of the canal under all circumstances would remain in force, while that of the United States, on the other hand, would he essentially modified, and that this would result in a one-sided agreement, by which Great Britain would be debarred from any warlike act in or near the canal, while the United States could resort to any such acts, even in time of peace, which it might deem necessary to secure its own safety. Moreover, it was insisted by this amendment, in connec- tion with the third amendment, which excluded other powers from becoming parties to the contract. Great Britain would be placed at a great disadvantage as compared with all other powers, inasmuch as she alone, with all her vast interests in the commerce of the world, would be bound under all circum- stances to respect the neutrality of the canal, while the United States, even in time of peace, would have a treaty right to interfere with the canal on the plea of necessity for its own safety, and all other powers not being bound by the treaty could at their pleasure disregard its provisions. AS TO THE AMENDMENT STRIKING OUT THE ARTICLE IN THE TREATY AS SUBMITTED TO THE SENATE, WHICH PROVIDED FOR AN INVITATION TO THE OTHER POWERS TO COME IN AND AD- HERE TO IT. This was emphatically objected to because if acquiesced in by Great Britain she would be bound by what Lord Lansdowne described as the "stringent rules of neutral conduct" pre- scribed by the treaty, which would not be equally binding upon the other powers, and it was urged that the adhesion of other powers to the treaty as parties would furnish an addi- tional security for the neutrality of the canal. In the hope of reconciling the conflicting views thus pre- sented between the former treaty as amended by the Senate and the objections thereto of the British Government, the treaty now submitted for the consideration of the Senate was drafted. Negotiations of Treaty 131 The substantial differences from the former treaty are as follows : First. In the new draft of treaty the provision superseding the Clayton-Buhoer treaty as a whole, instead of being paren- thetically inserted, as by the former Senate amendment, was made the subject of an independent article and presented as the first article of the treaty. It was thus submitted to the consideration of the British Government in connection with the other substantial provisions of the treaty which declared the neutrality of the canal for the use of all nations on terms of entire equality. Second. By a change in the first line of Article III, instead of the United States and Great Britain jointly adopting as the basis of the neutralization of the canal, the rules of neu- trality prescribed for its use as was provided by the former treaty, the United States now alone adopts them. This was regarded as a very radical and important change and one which would go far toward a reconciliation of the- conflicting views of the two Governments. It relieves Great Britain of all responsibility and obligation to enforce the neutrality of, the canal, which by the former treaty had been imposed upon or assumed by her jointly with the United States, and thus meets the main stress of the ob- jection which seemed to underlie or be interwoven with her other objections to the former Senate amendments. The United States alone as the sole owner of the canal, as a purely American enterprise, adopts and prescribes the rules by which the use of the canal shaU be regulated, and assumes the entire responsibility and burden of enforcing, without the assistance of Great Britain or any other nation, its absolute neutrality. It was also believed that this change would be in harmony with the national wish that this great interoceanio waterway should not only be constructed and owned, but exclusively controlled and managed by the United States. ThiJd. The next important change from the former treaty 132 Negotiations of Treaty- consists in the omission of the words "in time of war as in time of peace" from, clause 1 of Article III. No longer Insisting upon the language of the Davis amend- ment — ^whieh had in terms reserved to the United States ex- press permission to disregard the rules of neutrality pre- scribed, when necessary to secure its own defense, which the Senate had apparently deemed necessary because of the pro- vision in Rule I, that the canal should be free and open "in time of war as in time of pea«e" to the vessels of all nations — it was considered that the omission of the words "in time of war as in time of peace" would dispense with the necessity of the amendment referred to, and that war between the con- tracting parties, or between the United States and any other power, would have the ordinary effect of war upon treaties when not specially otherwise provided, and would remit both parties to their original and natural right of self-defense and give to the United States the clear right to close the canal against the other belligerent, and to protect it and defend itself by whatever means might be necessary. Fourth. In conformity with the Senate's emphatic rejection of Article III of the former treaty, which provided that the high contracting parties would, immediately upon the exchange of ratifications, bring it to the notice of other powers and invite them to adhere to it, no such provision was inserted in the draft of the new treaty. It was believed that the declaration that the canal should be free and open to all nations on terms of entire equality (now that Great Britain was relieved of all responsibility and obli- gation to enforce and defend its neutrality) would practically meet the force of the objection which had been made by Lord Lansdowne to the Senate's excision of the article inviting the other powers to come in, viz., that Great Britain was placed thereby in a worse position than other nations in case of war with the United States. Fifth, r/se next change from the former treaty is the omis- sion of the provision in clause 7 of ArUcle III, which prohib- Negotiations of Treaty 133 ited the fortification of the canal, and the transfer to clause 2 of the remaining provision of clause 7, that the United States shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder. The whole theory of the treaty is that the canal is to be an entirely American canal. The enormous cost of constructing it is to be borne by the United States alone. When constructed, it is to be exclusively the property of the United States and is to be managed, controlled, and defended by it. Under these circumstances, and considering that now by the new treaty Great Britain is relieved of all the responsibility and burden of maintaining its neutrality and security, it was thought en- tirely fair to omit the prohibition that "no fortification shall he erected commanding the canal or the waters adjacent." Sixth. It will be observed that, although the words "in time of war as in time of peace" had been omitted from clause 1 of Article III upon the theory that the omission of these words would dispense with the necessity of the Davis amendment, and that war between the United States and any other power would have the -ordinary effect of war upon treaties and remit both parties to their natural right of self-defense — ^the same words are retained in the sixth clause of Article III, which provides that the plant, establishment, buildings, and all works necessary to the construction, maintenance, and operation of the canal shall be deemed part of it for the purposes of this treaty, and "in time of war as in time of peace" shall enjoy complete immunity from attack or injury by belligerents and from acts calculated to impair their usefulness. lit was considered that such specific provision was in the general interest of commerce and of civilization, and that all nations would regard such a work as sacred under all cir- cumstances. It was hoped that the changes above enumerated from the former treaty would practically reconcile the conflicting con- tentions of the two Govei-nments and would lead to the much- 134 Negotiations of Treaty- desired result of an entire concurrence of views between them. With the exception of these changes care was taken in the draft of the new treaty to preserve the exact language, which had passed both the Senate and the British Government with- out objection, and, as is believed, without criticism. The' hope that the changes thus made had effectually met the British objections to the former treaty as amended by the Senate was almost realized. The proposed draft of the new treaty was transmitted to Lord Lansdowne, and after mature deliberation he proposed on the part of His Majesty's Government only three sub- stantial amendments. He recognized the weighty importance of the change by which Great Britain was relieved of all responsibility for en- forcing the neutrality .and maintaining the security of the canal, and that all this burden was solely assumed by the United States. He also appreciated the importance of the other proposed changes in the direction of harmony. Under this modified aspect of the relations of the two na- tions to the canal, he was not indisposed to consent to the ab- rogation of the Clayton-Bulwer treaty if the "general princi- • pie" of neutrality, which was reaffirmed in the preamble of the new treaty as well as of the former one, should be preserved and secured against any change of sovereignty or other change of circumstances in the territory through which the canal is intended to pass, and that the rules adopted as the basis of neutralization should govern, as far as possible, all interoceanic communication across the Isthmus. He referred in this con- nection to Articles I and VIII of the Clayton-Bulwer treaty. He therefore proposed, by way of amendment, the insertion of an additional article, on the acceptance of which His Maj- esty's Government would be inclined to withdraw its objection to the formal abrogation of the Clayton-Bulwer treaty. The amendment thus proposed by him was in the following language, viz. : In view of the permanent character of this treaty, uohgreby the Negotiations of Treaty 135 general principle established hy Article VIII of the OlaytonrBulwer treaty is reaffirmed, the high contracting parties hereby declare that the rules laid down in the last preceding article shall, so far as they may Be applicable, govern all interoceamc communication across the Isthmus tchich connects North and South America, and that no chaiige of territorial sovereignty or other change of drcum- stanoes shall affect such general principle or the obligations of the high contracting parties under this treaty. This proposed article was regarded by the President as too far-reaching for the purpose in view, and as converting the vague and indefinite provisions of the eighth article of the Clayton-Bulwer treaty, which contemplated only future treaty stipulations when any new route should prove to be practicable, into a very definite and certain present treaty, fastening the crystallized rules of neutrality adopted now for this canal upon every other interoeeanic communication across the Isth- mus, and as perpetuating in a more definite and extended form, by a sort of reenaetment of the eighth article, the embarrass- ing effects of the Clajrton-Bulwer treaty, of which the United States hoped to be relieved altogether. He believed that now that a canal is about to be built at the sole cost of the United States for the equal benefit of all na- tions, it was sufficient for the present treaty to provide for that one canal, and that it was hardly within the range of possi- bility that the United States would ever build more than one canal betweeij the two oceans. The President was, however, not only willing, but desirous, that the "general principle" of neutralization referred to in the preamble of this treaty should be applicable to this canal now intended to be built, notwithstanding any change of sov- ereignty or of international relations of the territory through which it should pass. This "general principle" of neutraliza- tion had always in fact been insisted upon by the United States, and he recognized the entire justice of the request of Great Britain that if she should now surrender the material interest which had been secured to her by the first article of the Clayton-Bulwer treaty, which might result in the in- defitnite future should the territory traversed by the canal 136 Kegotiations of Treaty undergo a change of sovereignty, this "general principle" should not be thereby affected or impaired. These views were communicated to His Majesty's Govern- ment, and as a substitute for the article proposed by Lord Lansdowne the following was proposed on the part of the United States: It is agreed that no change of territorial sovereignty or of the international relations of the country or countries traversed hy the tefore-mentioned canal shall affect the general principle of neu- tralization, or the oiUgations of the high contracting parties under the present treaty. Upon a full exchange of views, this article proposed by the United States was accepted by Great Britain and becomes Article IV of the treaty now submitted. It is thought to do entire justice to the reasonable demands of Great Britain in preserving the general principle of neutralization and at the same time to relieve the United States of the vague, indefinite, and embarrassing obligations imposed by the eighth article of the Clayton-Bulwer treaty. During the discussions upon this article it was suggested that although no particular route was mentioned in the pro- posed treaty as the route to be traversed by the canal, yet as the canal had been so commonly mentioned as the "Nicaragua Canal," and the intended treaty as the "Nicaragua Canal treaty," it might possibly be claimed that the treaty did not apply to a canal by the Panama route, or by any other possi- ble route. But it had always been intended by the President that the treaty should apply to the canal which should be first constructed, by whichever or whatever route, and to remove the apprehension referred to and to exclude all possible doubt in the matter, it was agreed that the preamble should be amended by inserting in the preamble after the word "oceans" the words "by whatever route may be considered expedient." His Majesty's Government at first strenuously objected to the absence from the treaty of any provision for other powers Negotiations of Treaty 137 coming in, so as to be bound by its terms. It protested against being bound by what it regarded as stringent rules of neu- trality which should not be equally binding upon other powers. Lord Lansdowne accordingly proposed the following amend- ment, viz.: To insert in Rule I of Article III, after the word "nation," the words "which shall agree to observe these rules," and in the fol- lowing line, after the word "nation," the words "so agreeing," so as to make the clause read : "1. The canal shall be free and open to the vessels of commerce and of war of all nations which shall agree to observe these rules, on terms of entire equality, so that there shall be no discrimination against any nation so agreeing," etc. The President, however, could not consent to this amend- ment, because he apprehended that it might be construed as making the other powers parties to the contract and as giving them contract rights in the canal, and that it would thus prac- tically restore to the treaty the substance of the provision which the Senate had struck out as Article III of the former treaty. He believed also that there was a strong national feel- ing against giving to the other powers anything in the nature of a contract right in an affair so peculiarly American as the canal; that no other powers had now any right in the prem- ises or anything to give up or part with as consideration for acquiring such a contract right; that they are to rely on the good faith of the United States in its declaration to Great Britain in this treaty; and that it adopts the rules- and prin- ciples of neutralization there set forth. These rules are adopted in the treaty with Great Britain as a consideration for getting rid of the Clayton-Bulwer treaty, and the only way in which other nations are bound by them is that they must com- ply with them if they would use the canal. It was also apparent that the proposed amendment if ac- cepted would make Rule I more objectionable than the third article of the former treaty, which was stricken out by the Senate's amendment, for that only invited other powers to 138 Negotiations of Treaty- come in and become parties to the contract after ratification, whereas the proposed provision would rather compel other powers to come in and become parties to the contract in the first instance as a condition precedent to the use of the canal by them. Upon due consideration of these suggestions, and at the same time to put all the other powers upon the same footing, viz., that they could use the canal only by compljdng with the rules of neutrality adopted and prescribed — an amendment to Lord Lansdowne's amendment was proposed and agreed upon, viz.: To strike out from his amendment the words, "which shall agree to observe" and substitute therefor the word "observing," and in the next line to strike out the words "so agreeing," and to insert before the word "nation" the word "such." This made the clause as finally agreed upon and found in the treaty as now submitted for the consideration of the Sen- ate: 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, etc. Thus the whole idea of contract right in the other powers is eliminated, and the vessels of any nation which shall refuse or fail to observe the rules adopted and prescribed may be de- prived of the use of the canal. One other amendment proposed by Lord Lansdowne was regarded by the President as so entirely reasonable that it was agreed to without discussion. This was the insertion at the end of clause 1 of Article III the words: "Such conditions and charges of traffic shall he just and equitable," and the word "convention," wherever it occurs, has been changed to "treaty." It is believed that this memorandum will put the Senate Negotiations of Treaty 139 Committee on Foreign Eelations in full possession of the his- tory of all changes in the treaty since the action of the Senate on the former amendment. No. 1. Lord Pauncefote to the Marquis of Lansdowne. Washington, December 24, 1900. (Received Jan. 7, 1901.) My Lord: I have the honor to transmit to your lordship a copy of a note which I have received from the United States Secretary of State, formally announcing to me, for the infor- mation of Her Majesty s Government, the ratification of the Nicaragua Canal treaty by the Senate on the 20th instant, ■with three amendments. Mr. Hay, after giving the text of those amendments, states that he has instructed the United States ambassador in London to express to your lordship the hope of his Government that the amendments will be found acceptable to that of Her Maj- esty. I have, etc., Patjncefotb. [Inelosure 1 in No. 1.] • Mr. Hay to Lord Pauncefote. Depaetment of State, Wash/ington, December 22, 1900. ExCEiiLENCT : I have the honor to inform you that the Senate by its resolution of the 20th December last, has given its advice and consent to the ratification of the convention, signed at Washington on the 5th of February last by the re- spective plenipotentiaries of the United States and Great Britain, to facilitate the construction of a ship canal to connect the Atlantic and Pacific oceans and to remove any objection 140 ^Negotiations of Treaty which might arise out of the convention conunonly called the Clayton-Bulwer treaty, with the following amendments: 1. After the words "Clayton-Bulwer convention" and before the word "adopt" in the preamble of Article II, the words "which convention is hereby superseded" are inserted. 2. A new paragraph is added to the end of section 5 of Article II in the following language: It is agreed, however, that none of the immediately foregoing conditions and stipulations in sections numbered 1, 2, 3, 4, and 5 of this article shall apply to measures which the United States may find it necessary to take for securing by its own forces the defense of the United States and the maintenance of public order. 3. Article III reading: The high contracting parties will, immediately upon the exchange of the ratifications of this convention, bring it to the notice of the other powers, .and invite them to adhere to it — is stricken out. 4. Article IV is made Article III. I inclose a printed copy of the convention as signed,^ and a copy of it showing its reading as amended by the Senate. I have instructed Mr. Choate to express to the Marquis of Lansdowne this Government's hope that the amendments will be found acceptable to that of Her Majesty. The supplementary convention which I signed with you on the 5th May last, prolonging the time within which the ratifi- cations of the convention of the 5th February last shall be exchanged, for a period of seven months from the 5th August last, has been consented to by the Senate without amendment. I have, etc. John, Hat. [Inclosure in No. 1.] Convention of February 5, 1900, as amended by the Senate. The United States of America, and Her Majesty, the Queen 1 See United States No. 1 (1900.) Negotiations of Treaty 141 of the United Kingdom of Great Britain and Ireland, Empress of India, being desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans, and to that end to remove any objection -which may arise out of the convention of the 19th April, 1850, commonly called the Clay- ton-Bulwer treaty, to the construction of such canal under the auspices of the Government of the United States, without im- pairing the "general principle" of neutralization established in. Article VIII of that convention, have for that purpose ap- pointed as their plenipotentiaries : The President of the United States, John Hay, Secretary of State of the United States of America; And Her Majesty the Queen of Great Britain and Ireland, Empress of India, the Right Honorable Lord Pauneefote, G.C.B., G.C.M.G., Her Majesty's ambassador extraordinary and plenipotentiary to the United States; Who, having communicated to each other their full powers, which were found to be in due and proper form, have agreed upon the following articles: ARTICLE I It is agreed that the canal may be constructed under the auspices of the Government of the United States, either di- rectly at its own cost, or by gift or loan of money to indi- viduals or corporations or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present convention, the said Government shall have and enjoy all the rights incident to such construction, as well as the ex- clusive right of providing for the regulation and management of the canal. ARTICLE II The high contracting parties, desiring to preserve and main- tain the "general principle" of neutralization established in Article VIII of the Clayton-Bulwer convention, which conven- tion is hereby superseded, adopt, as the basis of such neutrali- 142 Negotiations of Treaty zation, the following rules, substantially as embodied in the convention between Great Britain and certain other powers, signed at Constantinople, the 29th October, 1888, for the free navigation of the Suez Maritime Canal, that is to say : 1. The canal shall be free and open, in time of war as in time of peace, to the vessels of commerce and of war of all nations, on terms of entire equality, so that there shall be no discrimination against any nation or its citizens or subjects in respect of the conditions or charges of traffic, or otherwise. 2. The canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed within it. 3. Vessels of war of a belligerent shall not revictual nor take any stores in the canal except so far as may be strictly necessary; and the transit of such vessels through the canal shall be effected with the least possible delay, in accordance with the regulations in force, and with only such intermission as may result from the necessities of the service, Prizes shall be in all respects subject to the same rules as vessels of war of the belligerents. 4. No belligerent shall embark or disembark troops, muni- tions of war, or warlike materials in the canal except in case of accidental hindrance of the transit, and in such case the transit shall be resumed with all possible dispatch. 5. The provisions of this article shall apply to waters adja- cent to the canal, within 3 marine miles of either end. Ves- sels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time except in case of distress, and in such case shall depart as soon as possible; but a vessel of war of one belligerent shall not depart within twenty-four hours from the departure of a vessel of war of the other belligerent. It is agreed, however, that none of the immediately fore- going conditions and stipulations in sections numbered 1, 2, 3, 4, and 5 of this article shall apply to measures which the United States may find it necessary to take for securing by Negotiations of Treaty 143 its own forces the defense of the United States and the main- tenance of public order. 6. The plant, establishments, buildings, and all works nec- essary to the construction, maintenance, and operation of the canal shall be deemed to be part thereof, for the purposes of this convention, and in time of war as in time of peace, shall enjoy complete immunity from attack or injury by belligerents and from acts calculated to impair their usefulness as part of the canal. 7. No fortifications shall be erected commanding the canal or the waters adjacent. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disor- der. ARTICLE III The present convention shall be ratified by the President of the United States, by and with the advice and consent of the Senate thereof, and by Her Britannic Majesty, and the rati- fications shall be exchanged at Washington or at London, within six months from the date hereof, or earlier, if possible. In faith whereof the respective plenipotentiaries have signed this convention and thereunto affixed their seals. Done in duplicate at Washington, the 5th day of Tebruary, in the year of our Lord, 1900. John Hat. Pauncefote. No. 2. The Marquis of Lansdowne to Lord Pauncefote. Foreign Office, February 22, 1901. Mt Lord: The American ambassador has formally com- municated to me the amendments introduced by the Senate of the United States into the convention, signed at Washing- 144 Negotiations of Treaty- ton in February last, to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans. These amendments are three in number, namely : 1. The insertion in Article II, after the reference to Article VIII, of the Clayton-Bulwer Convention, of the words "which convention is hereby superseded." 2. The addition of a new paragraph after section 5 of Article II in the following terms: It ia agreed, however, that none of the immediately foregoing conditions and Btipulations in sections numbered 1, 2, 3, 4, and 5 of this article shall apply to measures which the United States may find it necessary to take for securing by its own forces the defense of the United States and the maintenance of public order. 3. The excision of Article III, which provides that — The high contracting parties will, immediately upon the ex- change of the ratifications of this convention, bring it to the notice of other powers and invite them to adhere to it. Mr. Choate was instructed to express the hope that the amendments would be fqund acceptable- by Her Majesty's Government. It is our duty to consider them as they stand, and to inform your^ excellency of the manner in which, as the subject is now presented to us, we are disposed to regard them. It will be useful, in the first place, to recall the circum- stances in which negotiations for the conclusion of an agree- ment supplementary to the convention of 1850, commonly called the Clayton-Bulwer Treaty, were initiated. So far as Her Majesty's Government were concerned, there was no desire to procure a modification of that convention. Some of its provisions had, however, for a long time past been regarded with disfavor by the Government of the United States, and in the President's message to Congress of Decem- ber, 1898, it was suggested, with reference to a concession granted by the Government of Nicaragua, that some definite action by Congress was urgently required if the labors of the Negotiations of Treaty 145 past were to be utilized, and the linking o£ the Atlantic and Pacific Oceans by a practical waterway to be realized. It was further urged that the construction of such a maritime high- way was more than ever indispensable to that intimate and ready intercommunication between the eastern and western seaboards of the United States demanded by the annexation of the Hawaiian Islands and the prospective expansion of American influence and commerce in the Pacific, and that the national policy called more imperatively than ever for the "control" of the projected highway by the Government of the United States. This passage in the message having excited comment, your excellency made inquiries of the Secretary of State in order to elicit some information as to the attitude of the President. In reply, the views of the United States Government were very frankly and openly explained. You were also most em- phatically assured that the President had no intention what- ever of ignoring the Clayton-Bulwer Convention, and that he would loyally observe treaty stipulations. But in view of the strong national feeling in favor of the construction ef the Nicaragua Canal, and of the improbability of the work being accomplished by private enterprise, the United States Gov- ernment were prepared to undertake it themselves upon ob- taining the necessary powers from Congress. For that pur- pose, however, they must endeavor, by friendly negotiation, to obtain the consent of Great Britain to such a modification of the Clayton-Bulwer Tteaty as would, without affecting the "general principle" therein declared, enable the great object in view to be accomplished for the benefit of the commerce of the world. Although the time had hardly arrived for the insti- tution of formal negotiations to that end, Congress not hav- ing yet legislated, the United States Government, nevertheless, were most anxious that your excellency should enter at once into pourparlers with a view to preparing, for consideration, a scheme of arrangement. 146 Negotiations of Treaty Her Majesty's Government agreed to this proposal, and the discussions which took place in consequence resulted in the draft convention which Mr. Hay handed to your excelleney on the 11th January, 1899. At that time the joint high commission over which the late Lord Hersehell presided was still sitting. That commission was appointed in July, 1898, to discuss various questions at issue between Great Britain and the United States, namely, the fur-seal fishery, the fisheries off the Atlantic and Pacific coasts, the Alaskan boundary, alien-labor laws, reciprocity, transit of merchandise, mining rights, naval vessels on the Great Lakes, definition and marking of frontiers, and conveyance of per- sons in custody. But serious difficulties had arisen in the attempt to arrive at an understanding, and it had become doubtful whether any settlement would be effected. In reply, therefore, to a request for a speedy answer with regard to the convention, the Marquis of Salisbury informed Mr. White, the American charg^ d'affaires, that he could not help contrasting the precarious prospects and slowness of the negotiations which were being conducted by Lord Hersehell with the rapidity of decision proposed in the matter of the convention. Her Majesty's Government might be reproached with having come to a precipitate agreement on a proposal which was exclusively favorable to the United States, while they had come to no agreement at all on the contro- versy where there was something to be conceded on both sides. Shortly afterwards Lord Hersehell intimated that the dif- ficulties in regard to the question of the Alaskan boundary seemed insuperable, and that he feared it might be necessary to break off the negotiations of which he had hitherto had the charge. Upon this Lord Salisbury informed Mr. White that he did not see how Her Majesty's Government could sanction any convention for amending the Clayton-Bulwer Treaty, as the opinion of this country would hardly support them in making a concession which would be wholly to the benefit of Negotiations of Treaty 147 the United States, at a time when they appeared to be so little inclined to come to a satisfactory settlement in regard to the Alaskan frontier. The last meeting of the joint high commission took place on the 20th Tebruary, 1899. Except for the establishment of a modus vivendi on the Alaskan frontier, no progress has been made since that date toward the adjustment of any of the questions which the high commissioners were appointed to dis- cuss. It was in these circumstances that the proposal for a canal convention was revived at the beginning of last year. iOn the 21st January your lordship reported that a bill, originally introduced in 1899, had been laid before Congress, empowering the President to acquire from the Eepublics of Costa Eica and Nicaragua the control of such portion of ter- ritory as might be desirable or necessary, and to direct the Secretary of War, when such control had been secured, to construct the canal and make such provisions for defense as might be required for the safety and protection of the canal and the terminal harbors. It was probable that the bill would be passed, and it was clear that additional embarrassment would be caused by an enactment opposed to the tepns of the proposed convaition, and in direct violation of the Clayton-Bulwer Treaty. On the other hand, your lordship's information led to the con- fident expectation that the convention as signed would, if agreed to by Her Majesty's Government, be ratified by the Senate. In these circumstances Her Majesty's Government consented to reopen the question, and, after due consideration, deter- mined to accept the convention unconditionally, as a signal proof of their friendly disposition and of their desire not to impede the execution of a project declared to be of national importance to the people of the United States. Your Excellency stated that the United States Government expressed satisfaction at this happy result and appreciation 148 Negotiations of Treaty of the eoneiliatory disposition shown by Her Majestjr's Gov- ernment, i The convention was forthwith submitted to the Senate for ratification, and on the 9th March the committee charged with its examination reported in favor of ratification, with the in- sertion, subsequently adopted, after section 5 of Article 11, of a paragraph containing provision that the rules laid down in the preceding sections should not apply to measures for the defense of the United States by its own forces and the main- tenance of public order. This alteration was discussed by the Senate in secret session on the 5th April, but no vote was taken upon it nor upon the direct question of ratification. The bill empowering the President to construct and pro- vide for the defense of the canal passed the House of Repre- sentatives by a large majority on the 2d of May. The Sen- ate, however, postponed consideration of the bill, although, favorably reported by the Committee on Interoceanic Canals. After the recess, during which the presidential election took place, the discussion was resumed in the Senate. On the 20th of December the vote was taken, and resulted in the ratifica- tion of the convention with the three amendments which have been presented for the acceptance of His Majesty's Govern- ment. The first of these amendments, that in Article II, declares the Clayton-Bulwer treaty to be "hereby superseded." Before attempting to consider the manner in which this amendment will, if adopted, affect the parties to the Clayton- Bulwer treaty, I desire to call your excellency's attention to a question of principle which is involved by the action of the Senate at this point. The Clayton-Bulwer Treaty is an international contract of unquestionable validity, a contract which, according to well- established international usage, ought not to be abrogated or modified, save with the consent of both the parties to the con- tract. In spite of this usage. His Majesty's Government find Negotiations of Treaty 149 themselves confronted by a proposal communicated to them by the United States Government, without any previous at- tempt to ascertain their views, for the abrogation of the Clayton-Bulwer Treaty. The practical effect of the amendment can best be understood by reference to the inclosed copy of the articles of the treaty, Nos. I and VI, which, assuming that the United States Government would imdertake all the obligations imposed by Article IV of the treaty, contain the only provisions ^ not re- placed by new provisions, covering the same ground, in the convention. Under Article I of the Clayton-Bulwer Treaty the two pow- ers agreed that neither would occupy or fortify or colonize, or assume or exercise any dominion over any part of Cen- tral America, nor attain any of the foregoing objects by pro- tection afforded to or alliance with any State or people of Central America. There is no similar agreement in the con- vention. If, therefore, the treaty were wholly abrogated, both powers would, except in the vicinity of the canal, recover entire freedom of action in Central America. The change would certainly be of advantage to the United States, and might be of substantial importance. Under the other surviving portion of the treaty (part of Article VI) provision is made for treaties with the Central American States in furtherance of the object of the two powers and for the exercise of good offices should differences arise as to the territory through which the canal will pass. In this case abrogation would, perhaps, signify but little to this country. There is nothing in the convention to prevent Great Britain from entering into communication, or exercising good offices, with the Central American States, should difficulties hereafter arise between them and the United, States. The other two amendments present more formidable dif- ficulties. The first of them, which reserves to the United States the 1 Printed in italics. 150 Negotiations of Treaty- right of taking any measures -which it may find necessary to secure by its own forces the defense of the United States, ap- pears to His Majesty's, Government to involve a distinct de- parture from the principle which has until now found ac- ceptance with both Governments — the principle, namely, that in time of war as well as in time of peace the passage of the canal is to remain free and unimpeded, and is to be so main- tained by the power or powers responsible for its control. Were this amendment added to the convention the United States would, it is presumed, be within their rights, if at any moment when it seemed to them that their safety required it, in view of warlike preparations not yet commenced, but con- templated or supposed to be contemplated by another power, they resorted to warlike acts in or near the canal — acts clearly inconsistent with the neutral character which it has always been sought to give it, and which would deny the free use of it to the commerce and navies of the world. It appears from the report of the Senate committee that the proposed addition to Article II was adopted from Article X of the Suez Canal Convention, which runs as follows: Similarly, the provisions of Articles IV, V, VII, and VIII,i shall not interfere with the measures which His Majesty the Sultan and His Highness the Khedive, -in the name of His Imperial Majesty, and within the limits of the firmans granted, might find it neces- sary to take for securing by their own forces the defense of Egypt and the maintenance of public order. In case His Imperial Majesty the Sultan, or His Highness the Khedive, should find it necessary to avail themselves of the ex- ceptions for which this article provides, the signatory powers of 1 Article IV guarantees that the Maritime CJanal shall remain open' in time of waryas a free passage even to the ships of war of belligerents, and regulates the revictualing, transit, and deten- tion of such vessels in the canal. Article V regulates the embarkation and disembarkation of troops, munitions or materials of war by belligerent powers in time of war. Article VII prohibits the powers from keeping any vessel of war in the waters of the canal. Article VIII imposes on the agents of the signatory powers in Egypt the duty of watching over the execution of the treaty, and taWng measures to secure the free passage of the canal. Negotiations of Treaty 151 the declaration of London shall be notified thereof by the Imperial Ottoman Government. It is likewise understood that the provisions of the four articles aforesaid shall in no case occasion any obstacle to the measures Vi^hich the Imperial Ottoman Government may think it necessary to take in order to insure by its own forces the defense of its other possessions situated on the eastern coast of the Red Sea. It is, I understand, contended in support of the Senate amendment that the existence of the above provisions in the Suez Canal Convention justifies the demand now made for the insertion of analogous provisions in regard to the proposed Nicaragua Canal. But the analogy which it has been attempted to set up fails in one essential particular. The banks of the Suez Canal are within the dominions of a territorial sovereign, wto was a party to the convention, and whose established interests it was necessary to protect, whereas the Nicaragua Canal ■will be constructed in territory belonging not to the United States, but to Central American States, of whose sovereign rights other powers can not claim to dispose. Moreover, it seems to have escaped attention ihat Article X of the Suez Canal Convention receives most important modi- fication from Article XI, which lays down that "the measures which shall be taken in the cases provided for by Articles IX and X of the present treaty shall not interfere with the free use of the canal." The article proceeds to say that "in the same cases, the erection of permanent fortifications contrary to the provisions of Article VIII is prohibitedi" The last paragraph of Article VIII, which is specially al- luded to, runs as follows: They [i. e., the agents of the signatory powers in Egypt] shall especially demand the suppression of any work or the dispersion of any assemblage on either bank of the canal, the object or effect of which might be to interfere with the liberty and the entire security of the navigation. The situation which would "be created by the addition of the new clause is deserving of serious attention. If it were to be added, the obligation to respect the neutrality of the canal in 152 Negotiations of Treaty all circumstances would, so far as Great Britain is concerned, remain in force; the obligation of the United States, on the other hand, ■would be essentially modified. The result would be a one-sided arrangement under which Great Britain would be debarred from any warlike action in or around the canal, while the United States would be able to resort to such action to whatever extent they might deem necessary to secure their own safety. It may be contended that if the new clause were adopted, section 7 of Article II, which prohibits the erection of forti- fications, would sufBciently insure the free use of the canal. This contention is, however, one which His Majesty's Govern- ment are quite unable to admit. I will not insist upon the dangerous vagueness of the language employed in the amend- ment, or upon the absence of all security as to the manner in which the words might, at some future time, be interpreted. For even if it were more precisely worded, it would be im- possible to determine what might be the effect if one clause permitting defensive measures, and another forbidding for- tifications, were allowed to stand side by side in the conven- tion. To His Majesty's Government it seems, as I have al- ready said, that the amendment might be construed as leav- ing it open to the United States at any moment, not only if war existed, but even if it were anticipated, to take any meas- ures, however stringent or far-reaching, which, in their own judgment, might be represented as suitable for the purpose of protecting their national interests. Such an enactment would strike at the very root of that "general principle" of neutral- ization upon which the Clayton-Bulwer Treaty was based, and which was reaffirmed in the convention as drafted. But the import of the amendment stands out in stronger relief when the third proposal is considered. This strikes out Article III of the convention, under which the high con- tracting parties engaged, immediately upon the eonveption be- ing ratified, to bring it to the notice of other powers and to in- vite their, adherence. If that adherence were given, the neu- Negotiations of Treaty 153 trality of the canal would be secured by the whole of the ad- hering powers. Without that adherence it would depend only upon the guarantee of the two contracting powers. The amendment, however, not only removes all prospect of the wider guarantee, but places this country in a position of marked disadvantage, compared with other powers which would not be subject to the self-denying ordinance which Great Britain is desired to accept. It would follow, were His Majesty's Government to agree to such an arrangement, that while the United States would have a treaty right to in- terfere with the canal in time of war, or apprehended war, and while other powers could with a clear conscience disregard any of the restrictions imposed by the convention. Great Britain alone, in spite of her enormous possessions on the American continent, in spite of the extent of her Australasian colonies and her interests in the East, would be absolutely precluded from resorting to any such action, or from taking measures to secure her interests in and near the canal. I request that your excellency will explain to the Secretary of State the reasons, as set forth in this dispatch, why His Majesty's Government feel unable to accept the convention in the shape presented to them by the American ambassador, and why they prefer, as matters stand at present, to retain unmodified the provisions of the Clayton-Bulwer Treaty. His Majesty's Government have, throughout these negotia- tions, given evidence of their earnest desire to meet the views of the United States. They would on this occasion have been ready to consider in a friendly spirit any amendments of the convention, not inconsistent with the principles accepted by both Governments, which the Government of the United States might have desired to propose, and they would sin- cerely regret a failure to come to an amicable understand- ing in regard to this important subject. Your lordship is authorized to read this dispatch to the Sec- retary o'f State and to leave a copy in his hands. I am, etc., Lansdowne. 154 Negotiations of Treaty [Inclosure in No. 2.] Articles I and VT of convention between Her Majesty and the United States of America relative to the establishment of a communication by ship canal between the Atlantic and Pa- cific Oceans, signed at Washington, April 19, 1850 : ARTICLE I The Governments of Great Britain and the United States hereby declare that neither the one nor the other will ever ob- tain or maintain for itself any exclusive control over the said ship canal; agreeing that neither will ever erect or main- tain any fortifications commanding the same, or in the vicin- ity thereof, or occupy, or fortify, or colonize, or assume or exercise any dominion over Nicaragua, Costa Rica, the Mos- quito Coast, or any part of Central America; nor will either make use of any protection which either affords, or may af- ford, or any alliance which either has, or may have, to or with any State or people, for the purpose of erecting or main- taining any such fortifications, or of occupying, fortifying, or colonizing Nicaragua, Costa Rica, the Mosquito Coast, or any part of Central America, or of assuming or exercising domin- ion over the sarne. Nor will Great Britain or the United States take advantage of any intimacy, or use any alliance, connection, or influence that either may possess with any State or Government through whose territory the said canal may pass for the purpose of acquiring or holding, directly or in- directly, for the subjects or citizens of the one, any Tights or advantages in regard to commerce or navigation through the said canal, which shall not be. offered, on the same terms, to the subjects or citizens of the other. ARTICLE VI The contracting parties in this convention engage to invite every State with which both or either have friendly inter- course to enter into stipulations with them similar to those which they have entered into with each other to the end that Negotiations of Treaty 155 all other States may share in the honor and advantage of hav- ing contributed to a work of such general interest and im- portance as the canal herein contemplated ; and the contracting parties likewise agree that each shall enter into treaty stipu- lations, with such of the Central American States as they may deem advisable, for the purpose of more effectually carrying out the great design of this convention, namely, that of con- structing and maintaining the said canal as a ship communi- cation between the two oceans for the benefit of mankind, on equal terms to all, and of protecting the same; and they also agree that the good offices of either shall be employed, when requested by the other, in aiding and assisting the negotiation of such treaty stipulations; and should any differences arise as to right or property over the territory through which the said canal shgll pass between the States or Governments of Central America, and such differences should in any way im- pede or obstruct the execution of the said canal, the Govern- ments of Great Britain and the United States will use their good offices to settle such differences in the manner best suited to promote the interests of the said canal, and to strengthen the bonds of friendship and alliance which exist between the contracting parties. Correspondence Eespecting the Treaty Signed at Wash- ington November 18, 1901, Relative to the Establish- ment OF A Communication by Ship Canal between the Atlantic and Pacific Oceans. [Printed in British Blue Book. "United States, 1902, No. 1."] No. 1. Lord Pauncefote to the Marquis of Lansdowne, Washington, April 23, 1901. Mt Lord : Since the rejection by His Majesty's Government of the amendments introduced by the Senate in the Inter- oeeanie Canal Convention of the 5th of February, 1900, Mr. Hay has been engaged in framing a new draft, which, as I 156 Negotiations of Treaty- understand, he has drawn up after consultation with promi- nent Senators, and which he trusts will be acceptable to His Majesty's Government. Mr. Hay has handed me a copy of the draft, which I have the honor to forward herewith for your lordship's considera- tion. I have, etc., Paunckfotb. [Inclosare in No. 1.] Dfaft of convention relative to the construction of an inter- oceanic canal. The United States of America and His Majesty the King of the United Kingdom of Great Britain and Ireland, Em- peror of India, being desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans, and to that end to remove any objection which may arise out of the convention of the 19th April, 1850, commonly called the Clayton-Bnlwer Treaty, to the construction of such canal un- der the auspices of the Government of the United States, without impairing the "general principle" of neutralization established in Article VIII of that convention, have for that purpose appointed as their plenipotentiaries : The President of the United States, John Hay, Secretary of State of the United States of America; And His Majesty the King of Great Britain and Ireland, Emperor of India, the Right Honorable Lord Pauncefote, G. C. B., G. C. M. G., His Majesty's ambassador extraor- dinary and plenipotentiary to the United States; Who, having communicated to each other their full powers, which were found to be in due and proper form, have agreed upon the following articles: AETICLE I The high contracting parties agree that the present con- vention shall supersede the aforementioned convention of the 19th April, 1850. Negotiations of Treaty 157 ARTICLE II It is agreed that the canal may be constructed under the auspices of the Government of the United States, either di- rectly at its own cost, or by gift or loan of money to individ- uals or corporations, or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present convention, the said Government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and manage- ment of the canal. ARTICLE ni The United States adopts, as the basis of the neutralization of said ship canal, the following rules, substantially as em- bodied in the convention of Constantinople, signed the 28th October, 1888, for the free navigation of the Suez Canal; that is to say: 1. The canal shall be free and open to the vessels of com- merce and of war of all nations, on terms of entire equality, so that there shall be no discrimination against any nation, or its citizens or subjects, in respect of the conditions or charges of trafftc, or otherwise. 2. The canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed within it. The United States, however, shall be at liberty to main- tain such military police along the canal as may be necessary to protect it against lawlessness and disorder. 3. Vessels of war of a belligerent shall not revictual nor take any stores in the canal except so far as may be strictly necessary; and the transit of such vessels through the canal shall be effected with the least possible delay in accordance with the regulations in force, and with only such intermission as may result from the necessities of the service. Prizes shall be in all respects subject to the same rules as vessels of war of the belligerents. 4. No belligerent shall embark or disembark troops, muni- 158 Negotiations of Treaty tions of war, or warlike materials in the canal except in case of accidental hinderance of the transit, and in such case the transit shall be resumed with all possible dispatch. 5. The provisions of this article shall apply to waters adja- cent to the canal within 3 marine miles of either end. Vessels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time except in case of dis- tress, and in such case shall depart as soon as possible; but a vessel of war of one belligerent shall not depart within twenty- four hours from the departure of a vessel of war of the other belligerent. 6. The plant, establishments, buildings, and all works neces- sary to the construction, maintenance, and operation of the canal shall be deemed to be part thereof, for the purpose of this convention, and in time of war as in time of peace shall enjoy complete immunity from attack or injury by belligerents and from acts calculated to impair their usefulness as part of the canal. ABTICIiE IV The present convention shall be ratified by the President of the United States, by and with the advice and consent of the Senate thereof, and by His Britannic Majesty; aijd the rati- fications shall be exchanged at Washington or at London at the earliest possible time within months from the date hereof. In faith whereof the respective plenipotentiaries have signed this convention, and thereunto affixed their seals. Done, in duplicate, at Washington the day of > in the year of our Lord one thousand nine hundred and one. No. 2. The Marquis of Lansdowne to Mr. Lowther. Foreign Office, August 3, 1901. Sir: The draft convention dealing with the question of the Negotiations of Treaty 159 interoceanie canal, forwarded in Lord Pauncefote's dispatch of the 25th April, has been most carefully examined. I inclose, for your infomjation, the accompanying copy of a memorandum explaining the views of His Majesty's Govern- ment, which I have authorized Lord Pauncefote, should he think proper, to communicate to Mr. Hay. His Majesty's Government have approached the considera- tion of this important question with a sincere desire to facili- tate the progress of the great enterprise in which both Govern- ments take such interest. They feel confident that the United States Government will give them credit for the friendly spirit in which Mr. Hay's proposals have been examined and that they will recognize that if it has been deemed necessary to suggest amendments at one or two points it has been because they are considered requisite for the purpose of bringing about the, conclusion of a treaty which shall be accepted as equitable and satisfactory by the public of both countries. I am, etc., Lansdowne. [Inclosure 1 in No. 2.] [Memorandum.] In the dispatch which I addressed to Lord Pauncefote on the '22d February last, and which was communicated to Mr. Hay on the 11th March, I explained the reasons for which His Majesty's Government were unable to accept the amendments introduced by the Senate of the United States into the con- vention, signed at Washington in February, 1900, relative to the construction of an interoceanie canal. The amendments were three in number, namely: 1. The insertion in Article II, after the reference to Article VIII of the Olayton-Bulwer convention, of the words "which con- vention is hereby superseded." 2. The addition of a new paragraph after section 5 of Article II in the following terms : "It is agreed, however, that none of the immediately foregoing conditions and stipulations in sections numbered 1, 2, 3, 4, and 5 of this article shall apply to measures which the United States may find it necessary to take for securing by its own forces the 160 Negotiations of Treaty defense of the United States and the maintenance of public order." 3. The excision of Article III, which provides that "the high contracting parties will, immediately upon the exchange of the ratifications of this convention, bring it to the notice of the other powers and invite them to adhere to it." 2. The objections entertained by His Majesty's Government may be briefly stated as follows: (1) The Clayton-Bulwer convention being an international compact of unquestionable validity could not be abrogated or modified save with the consent of both parties to the contract. No attempt had, however, been made to ascertain the views of Her Late Majesty's Government. The convention dealt with several matters for which no provision had been made in the convention of February, 1900, and if the former were wholly abrogated both powers would, except in the vicinity of the canal, recover entire freedom of action in Central America, a change which might be of substantial importance. (2) The reservation to the United States of the right to take any measures which it might find necessary to secure by its own forces the defense of the United States appeared to His Majesty's Government to involve a distinct departure from the principle of neutralization which until then had found accept- ance with both Governments, and which both were, imder the convention of 1900, bound to uphold. Moreover, if the amendment were added, the obligation to respect the neutrality of the canal in all circumstances would, so far as Great Britain was concerned, remain in force; the obligation of the United States, on the other hand, would be essentially modified. The result would be a one-sided arrangement, under which Great Britain would be debarred from any warlike action in or around the canal, while the United States would be able to resort to such action even in time of peace to whatever extent they might deem necessary to secure their own safety. (3) The omission of the article inviting the adherence of other powers plaeed this country in a position of marked dis- advantage compared with other powers; while the United States would have a treaty right to interfere with the canal in Negotiations of Treaty 16r time of war, or apprehended war, and while other powers could with a clear conscience disregard any of the restrictions imposed by the convention of 1900, Great Britain alone would be absolutely precluded from resorting to any such action or from taking measures to secure her interests in and near the canal. For these reasons His Majesty's Government preferred, as matters stood, to retain unmodified the provisions of the Clay- ton-Bulwer convention. They had, however, throughout the negotiations given evidence of their earnest desire to meet the views of the United States, and would smeerely regret a fail- ure to come to an amicable understanding in regard to this important subject. 3. Mr. Hay, rightly apprehending that His Majesty's Gov- ernment did not intend to preclude all further attempt at negotiation, has endeavored to find means by which to reconcile such divergences of view as exist between the two Govern- ments, and has communicated a further draft of a treaty for the consideration of His Majesty's Government. Following the order of the Senate amendments, the conven- tion now proposed^ — (1) Provides by a separate article that the Clayton-Bul- wer Convention shall be superseded. (2) The paragraph inserted by the Senate after section 5 of Article II is omitted. (3) The article inviting other powers to adhere is omitted. There are three other points to which attention must be directed : (a) The words "in time of war as in time of peace" are omitted in rule 1. (6) The draft contains no stipulation against the acquisi- tion of sovereignty over the Isthmus or over the strip of ter- ritory through which the canal is intended to pass. There was no stipulation of this kind in the Hay-Pauncefote con- vention; but,- by the surviving portion of Article I of the Clayton-Bulwer convention, the two Governments agreed that 162 Negotiations of Treaty neither would ever "occupy, or fortify, or colonize, or assume, or exercise any dominion over Nicaragua, Costa Rica, the Mosquito coast, or any part of Central America," nor attain any of the foregoing objects by protection offered to, or al- liance with, any State or people of Central America. (c) While the amendment reserving to the United States the right of providing for the defense of tbe canal is no longer pressed for, the first portion of rule 7, providing that "no fortifications shall be erected commanding the canal or the waters adjacent," has been omitted. The latter portion of the rule has been incorporated in rule 2 of the new draft, and makes provision for military police to protect the canal against lawlessness and disorder. ^r. I fully recognize the friendly spirit which has prompted Mr. Hay in making further proposals for the settlement of the question, and while in no way abandoning the position which His Majesty's Government assumed in rejecting the Senate amendments, or admitting that the dispatch of the 22d Tebruary was other than a well-founded, moderate, and rea- sonable statement of the British case, I have examined the draft treaty with every wish to arrive at a conclusion which shall facilitate the construction of an interoceanic canal by the United States without involving on the part of His Majesty's Government any departure from the principles for which they have throughout contended. 5. In form the new draft differs from the convention of 1900, under which the high contracting parties, after agree- ing that the canal might be constructed by the United States, undertook to adopt certain rules as the basis upon which the canal was to be neutralized. In the new draft the United States intimate their readiness "to adopt" somewhat similar rules as the basis of the neutralization of the canal. It would appear to follow that the whole responsibility for upholding these rules, and thereby maintaining the neutrality of the canal, would henceforward be assumed by the Government of the United States. The change of form is an important Negotiations of Treaty 163 one; but in view of the fact that the whole cost of the con- struction of the canal is to be borne by that Government, which is also to be charged with such measures as may be nec- essary to protect it against lawlessness and disoijder, His Maj- esty's Government are not likely to object to it. 6. The proposal to abrogate the Clajrton-Bulwer convention is not, I think, inadmissible if it can be shown that sufficient provision is made in the new treaty for such portions of the convention as ought, in the interests of this country, to re- main in force. This aspect of the case must be considered in connection with the provisions of Article I of the Clayton- Bulwer convention which have already been quoted, and Arti- cle VIII referred to in the preamble of the new treaty. Thus, in view of the permanent character of the treaty to be concluded and of the "general principle" reaffirmed thereby as a perpetual obligation, the high contracting par- ties should agree that no change of sovereignty or other change of circumstances in the territory through which the canal is intended to pass shall affect such "general principle" or release the high contracting parties, or either of them, from their obligations xmder the treaty, and that the rules adopted as the basis of neutralization shall govern, so far as possible, all interoceanic communications across the isthmus. I would therefore propose an additional article in the fol- lowing terms, on the acceptance of which His Majesty's. Gov- ernment would probably be prepared to withdraw their ob- jections to the formal abrogation of the Clayton-Bulwer con- vention : In view of the permanent character of this treaty, whereby the general principle established by Article VIII of the CHayton-Bulwer convention is reaffirmed, the high contracting parties hereby de- clare and agree that the rules laid down in the last preceding ar- ticle shall, so far as they may be applicable, govern all inter- oceanic communications across the isthmus which connects North and South America, and that no change of territorial sovereignty, or other change of circumstances, shall affect such general principle or the obligations of the high contracting parties under the present treaty- 164 Negotiations of Treaty 7. The various points connected with the defense of the canal may conveniently be considered together. In the pres- ent draft the Senate amendment has been dropped, which left the United States at liberty to apply such measures as might be found "necessary to take for securing by its own forces the defense of the United States." On the other hand, the words "in' time of war as in time of peace" are omitted from rule 1, and there is no stipulation, as originally in rule 7, pro- hibiting the erection of fortifications commanding the canal or the waters adjacent. I do not fail to observe the important difference between the question as now presented to us and the position which was created by the amendment adopted in the Senate. In my dispatch I pointed out the dangerous amhiguity of an instrument of which one clause permitted the adoption of defensive measures, while another prohibited the erection of fortifications. It is most important that no doubt should exist as to the intention of the contracting parties. As to this, I understand that by the omission of all reference to the matter of defense the United States Government desire to reserve the power of taking measures to protect the canal, at any time when the United States may be at war, from destruction or damage at the hands of an enemy or enemies. On the other hand, I conclude that, with the above exception, there is no intention to derogate from the principles of neu- trality laid down by the rules. As to the first of these propo- sitions I am not prepared to deny that contingencies may arise when, not only from a national point of view, but on behalf of the commercial interests of the whole world, it might be of supreme importance to the United States that they should be free to adopt measures for the defense of the canal at a moment when they were themselves engaged in hos- tilities. It is also to be borne in mind that, owing to the omission of the words under which this country became jointly bound to defend the neutrality of the canal, and the abrogation of Negotiations of Treaty 165 the Clayton-Bulwer treaty, the obligations of Great Britain would be materially diminished. This is a most important consideration. In my dispatch of the 22d February I dwelt upon the strong objection en- tertained by His Majesty's Government to any agreement under which, while the United States would have a treaty right to interfere with the canal in time of war, or appre- hended war. Great Britain alone, in spite of her vast pos- sessions on the American continent and the extent of her interests in the East, would be absolutely precluded from re- sorting to any such action, or from taking measures to secure her interests in and near the canal. The same exception could not be taken to an arrangement under which, supposing that the United States, as the power owning the canal and re- sponsible for the maintenance of its neutrality, should find it necessary to interfere temporarily with its free use by the shipping of another power, that power would thereupon at once and ipso facto become liberated from the necessity of observing the rules laid down in the new treaty. 8. The diflftculty raised by the absence of any provision for the adherence of other powers still remains. While in- different as to the form in which the point is met, I must emphatically renew the objections of His Majesty's Govern- ment to being bound by stringent rules of neutral conduct not equally binding upon other powers. I would therefore suggest the insertion in rule 1, after "all nations," of the words "which shall agree to observe these rules.'' This addi- tion will impose upon other powers the same self-denying ordinance as Great Britain is desired to accept, and will fur- nish an additional security for the neutrality of the ca- nal, which it will be the duty of the United States to main- tain. As matters of minor importance, I suggest the renewal of one of the stipulations of Article VIII of the Clayton-Bulwer convention by adding to rule 1 the words "such conditions and charges shall be just and equitable," and the adoption of 166 Negotiations of Treaty "treaty" in lieu of "convention" to designate the international agreement which the high contracting parties may conclude. Mr^ Hay's draft, with the proposed amendments shown in italics, is annexed. Lansdowne. AuGtrsT 3, 1901. [Inclosure 2 in No. 2.] Draft of treaty relative to the construction of an interoceanic canal. The United States of America and His Majesty, the King of the United Kingdom of Great Britain and Ireland, etc., being desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans, and to that end to remove any objection which may arise out of the conven- tion of the 19th April, 1850, commonly called the Clayton- Bulwer treaty, to the construction of such canal under the auspices of the Government of the United States, without impairing the "general principle" of neutralization estab- lished in Article VIII of that convention, have for that pur- pose appointed as their plenipotentiaries: The President of the United States, John Hay, Secretary of State of the United States of America; And His Majesty the King of Great Britain and Ireland, etc., the Eight Honorable Lord Pauneefote, G. C. B., G. C. M. G., His Majesty's ambassador extraordinary and plenipoten- tiary to the United States; Who, having communicated to each other their full pow- ers, which were found to be in due and proper form, have agreed upon the following articles: ARTICLE I The high contracting parties agree that the present treaty shall supersede the aforementioned convention of the 19th April, 1850. Negotiations of Treaty 167 ABTICIiE II It is agreed that the canal may be constructed under the auspices of the Government of the United States, either di- rectly at its own cost, or by gift or loan of money to indi- viduals or corporations, or through subscription to or pur- chase of stock or shares, and that, subject to the provisions of the present treaty, the said Government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and man- agement of the canal. ARTICLE III The United States adopts, as the basis of the neutralization of said ship canal, the following rules, substantially as em- bodied in the convention of Constantinople, signed the 28th October, 1888, for the free navigation of the Suez Canal, that is to say: 1. The c^nal shall be free and open to the vessels of com- merce and of war of all nations which shall agree to observe these rules, on terms of entire equality, so that there shall be no discrimination against any nation so agreeing, or its citizens or subjects^ in respect of the conditions or charges of traflSc, or otherwise. Such conations a/nd charges of traffic shall be just and equitable. 2. The canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed within it. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder. 3. Vessels of war of a belligerent shall not revictual nor take any stores in the canal except so far as may be strictly necessary; and the transit of such vessels through the canal shall be effected with the least possible delay in accordance with the regulations in force, and with only such intermis- sion as may result from the necessities of the service. 168 Negotiations of Treaty- Prizes shall be in all respects subject to the same rules as vessels of war of the belligerents. 4. No belligerent shall embark or disembark troops, muni- tions of war, or warlike materials in the canal except in case of accidental hinderance of the transit, and in such case the transit shall be resumed with all possible dispatch. 5. The provisions of this article shall apply to waters ad- jacent to the canal within 3 marine miles, of either end. Ves- sels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time except in case of distress, and in such case shall depart as soon as possible; but a vessel of war of one belligerent shall not depart within twenty-four hours from the departure of a vessel of war of the other belligerent. 6. The plant, establishments, buildings, and all works nec- essary to the construction, maintenance, and operation of the canal shall be deemed to be part thereof for the purposes of this treaty, and An time of war, as in time of peace, shall enjoy complete immunity from attack or injury by belliger- ents and from acts calculated to impair their usefulness as part of the canal. ARTICLE III-A In view of the permanent character of this treaty whereby the general principle established by Article VIII of the Clay- ton-Bulwer convention is reaffirmed, the high contracting par- ties hereby declare and agree that the rules la/id down in the last preceding article shall, so far as they may be applicable, govern all interoceamc communications across the isthmus which connects North and South America, and that no change of territorial sovereignty, or other change of circumstances, shall affect such general principle or the obligations of the high contracting parties under the present treaty. ARTICLE rv The present treaty shall be ratified by the President of the United States, by and with the advice and consent of the Negotiations of Treaty 169 Senate thereof, and by His Britannic Majesty; and the rati- fications shall be exchanged at "Washington or at London at the earliest possible time within months from the date hereof. In faith whereof the respective plenipotentiaries have signed this treaty, and thereunto afOxed their seals. Done in duplicate at "Washington, the day of , in the year of our Lord one thousand nine hundred and one. No. 3. The Marquis of Lansdowne to Mr. Lowther. Foreign- Office, September 12, 1901. Sir: I have to inform you that I have learned from Lord Pauneefote that Mr. Hay has laid before the President the memorandum, a copy of which was forwarded to you in my dispatch of the 3d August. Mr. McKinley regarded, as did Mr. Hay, the consideration shown to the last proposals of the United States Government relative to the interoceanic canal treaty as in the highest de- gree friendly and reasonable. "With regard to the changes suggested by His Majesty's Government, Mr. Hay was apprehensive that the first amend- ment proposed to clause 1 of Article III would meet with op- position because of the strong objection entertained to invit- ing other powers to become contract parties to a treaty af- fecting the canal. If His Majesty's Government found it not convenient to accept the draft as it stood, they might perhaps consider favorably the substitution for the words "the canal shall be free and open to the vessels of commerce and of war of aU nations which shall agree to observe these rules" the words "the canal shall be free and open to the vessels of commerce and of war of all nations observing these rules," and instead of "any nation so agreeing" the words "any such nation." This, it seemed to Mr. Hay, would ac- complish the purpose aimed at by His Majesty's Govern- ment. 170 Negotiations of Treaty The second amendment in the same clause, providing that conditions and charges of traffic shall be just and equitable, was accepted by the President. Coming to article numbered III-A, which might be called Article IV, Mr. Hay pointed out that the preamble of the draft treaty retained the declaration that the general prin- ciple of neutralization established in Article VIII of the Clayton-Bulwer convention was not impaired. To reiterate this in still stronger language in a separate article, and to give to Article VIII of the Clayton-Bulwer convention what seemed a wider application than it originally had, would, Mr. Hay feared, not meet with acceptance. If, however, it seemed indispensable to His Majesty's Gov- ernment that an article providing for the contingency of a change in sovereignty should be inserted, he thought it might state that: It is agreed that no change of territorial sovereignty or of the international relations of the country traversed by the beforemen- tioned canal shall affect the general principle of neutralization or the obligation of the high contracting parties under the present treaty. Hiis would cover the point in a brief and simple way. In conclusion, Mr. Hay expressed his appreciation of the friendly and magnanimous spirit shown by His Majesty's Government in the treatment of this matter, and his hope that a solution would be attained which would enable the United States' Government to start at once upon the great enter- prise which so vitally concerned the whole world, and espe- cially Great Britain, as the first of commercial nations. I am, etc., Lansdovstne. No. 4. The Marquis of Lcmsdowne to Lord Pauncefote. Foreign Office, October 23, 1901. Mt Lord: I informed the United States charge d'affaires to-day that His Majesty's Government had given their careful Negotiations of Treaty 171 attention to the various amendments whieh had been sug- gested in the draft interoceanic canal treaty, communicated by Mr. Hay to your lordship on the 25th April last, and that I was now in a position to inform him officially of our views. Mr. Hay had suggested that in Article III, rule 1, we should substitute for the words "the canal shall be free and open to the vessels of .commerce and of war of all nations which shall agree to observe these rules," etc., the words "the canal shall be free and open to the vessels of commerce and of war of all nations observing these rules," and in the same clause, as a consequential amendment, to substitute for the words "any nation so agreeing" the words "any such nation." His Majesty's Government were prepared to accept this amendment, which seemed to us equally efficacious for the purpose which we had in view, namely, that of insuring that Great Britain should not be placed in a less advantageous po- sition than other powers, which they stopped short of con- ferring upon other nations a contractual right to the use of the canal. We were also prepared to accept, in lieu of Article III-A, the new Article IV proposed by Mr. Hay, which, with the ad- dition of the words "or countries" proposed in the course of the discussions here, runs as follows:, It is agreed that no change of territorial sovereignty or of the international relations of the country or countries traversed by the before-mentioned canal shall affect the general principle of neu- tralization or the obligation of the high contracting parties under the present treaty. I admitted that there was some force in the contention of Mr. Hay, which had been strongly supported in conversation with me by Mr. Choate, that Article III-A, as drafted by His Majesty's Government, gave to Article VIII of the Clayton- Bulwer treaty a wider application than it originally pos- sessed. In addition to those amendments, we proposed to add in the preamble, after the words "being desirous to facilitate 172 Negotiations of Treaty the construction of a ship canal to connect the Atlantic and Pacific Oceans," the words "by whatever route may be consid- ered expedient," and "such ship canal" for "said ship canal" in the first paragraph of Article III, words which, in our opinion, seemed to us desirable for the purpose of removing any doubt which might possibly exist as to the application of the treaty to any other interoceanic canals as well as that through Nicaragua. I handed to Mr. White a statement showing the draft as it originally stood and the amendments proposed on each side. I am, etc., Lansdowne. No. 5. Lord Pauncefote to the Marquis of La/nsdowne. Washington,' November 18, 1901. My Lord: I have the honor to transmit to your lordship herewith a copy of a communication from Mr. Hay, dated the 8th November, formally placing on record the President's approval of the various amendments made in the draft of the new interoceanic canal treaty in the course of the negoti- ations, and particularly set forth in your lordship's dispatch to me of the 23d October. I have, etc. Pauncepote. [Inclosure in No. 5.] Mr. Hay to Lord Pauncefote. Washington, November 8, 1901. Excellency: Upon your return to Washington, I had the honor to receive from you a copy of the instruction addressed to you on the 23d October last by the Marquis of Lansdowne, accepting and reducing to final shape the various amendments in the draft of an interoceanic canal treaty, as developed in the course of the negotiations lately conducted in London, through Mr. Choate, with yourself and Lord Lansdowne. First British Protest 173 The treaty, being thus brought into a form representing a complete agreement on the part of the negotiators, has been submitted to the President, who approves of the conclusions reached, and directs me to proceed to the formal signature thereof. I have, accordingly, the pleasure to send you a clear copy of the text of the treaty, embodying the several modifications agreed upon. Upon being advised by you that this text cor- rectly represents your understanding of the agreement thus happily brought about, the treaty will be engrossed for sig- nature at such time as may be most convenient to you. I have, etc. John Hat. No. 6. Lord Pauncefote to the Marquis of Lansdowne. Washington, November 19, 1901. Mt Lord: I have the honor to report that, by appoint- ment with Mr. Hay, I yesterday went to the State Depart- ment, accompanied by Mr. Wyndham, and signed the new treaty for the construction of an interoeeanic canal. I have, etc. Pauncefote. No. 7. [Telegraphic] Lord Pauncefote to the Marquis of Lansdowne. Washington, December 16, 1901. Canal treaty ratified by 72 votes to 6 in Senate to-day. FIRST BRITISH PROTEST Charge d' Affaires Innes to the Secretary of State. British Embassy KiNEO, Maine. July 8, 1912. Sir: The attention of His Majesty's Government has been 174 First British Protest called to the various proposals that have from time to time been made for the purpose of relieving American ship- ping from the burden of the tolls to be levied on ves- sels passing through the Panama Canal, and these pro- posals together with the arguments that have been used to support them have been carefully considered with a view to the bearing on them of the provisions of the treaty between the United States and Great Britain of November 18th 1901. The proposals may be summed up as follows; — 1. To exempt all American .shipping from the tolls, 2. To refund to all American ships the tolls which they may have paid, 3. To exempt American ships engaged in the coastwise trade, 4. To repay the tolls to American ships engaged in the coastwise trade. The proposal to exempt all American shipping from the payment of the tolls, would, in the opinion of His Majesty's Government, involve an infraction of the treaty, nor is there, in their opinion, any difference in principle between charging tolls only to refund them and remitting tolls altogether. The result is the same in either case, and the adoption of the al- ternative method of refunding the tolls in preference to that of remitting them, while perhaps complying with the letter of the treaty, would still contravene its spirit. It has been argued that a refund of the tolls would merely be equivalent to a subsidy and that there is nothing in the Hay-Pauncefote treaty which limits the right of the United States to subsidize its shipping. It is true that there is noth- ing in that treaty to prevent the United States from subsidiz- ing its shipping and if it granted a subsidy His Majesty's Government' could not be in a position to complain. But there is a great distinction between a general subsidy, either to shipping at large or to shipping engaged in any given trade, and a subsidy calculated particularly with reference to the amount of user of the Canal by the subsidized lines or Second Britisli Protest 175 vessels. If such a subsidy were granted it would not, in the opinion of His Majesty's Government, be in accordance with the obligations of the Treaty. As to the proposal that exemption shall be given to vessels engaged in the coastwise trade, a more difficult question arises. If the trade should be so regulated as to make it certain that only bona-fide coastwise trafflc which is reserved for United States vessels would be benefited by this exemption, it may be that no objection could be taken. 'But it appears to my gov- ernment that it would be impossible to frame regulations which would prevent the exemption from resulting, in fact, in a preference to United States shipping and consequently in an infraction of the Treaty. I have the honor to be, With the highest consideration, Sir, Your most obedient, humble Servant, A. Mitchell Innes. SECOND BRITISH PROTEST The Secretary of State for Foreign Affairs of Great Britain to Ambassador Bryce. [Handed to the Secretary of State by the British Ambassador December 9, 1&12.] Foreign Office, November 14, 1912. Sir: Your Excellency will remember that on the 8th July, 1912, Mr. Mitchell Innes communicated to the Secretary of State the objections which His Majesty's Government enter- tained to the legislation relating to the Panama Canal, which was then under discussion in Congress, and that on the 27th August, after the passing of the Panama Canal Act and the issue of the President's memorandum on signing it, he in- formed Mr. Knox that when His Majesty's Government had had time to consider fully the Act and the memorandum a further communication would be made to him. 176 Second Britisli Protest Since that date the text of the Act and the memorandum of the President have received attentive consideration at the hands of His Majesty's Government. A careful study of the President's memorandum has convinced me that he has not fully appreciated the British point of view, and has misun- derstood Mr. Mitchell Innes' note of the 8th July. 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