ding to their
vessels tolls levied upon them for the use of the Canal. If foreign
States, but not the United States, had a right to do this--so the
President argues--the irresistible conclusion would be that the United
States, although she owns, controls, and has paid for the construction
of the Canal, is restricted by the Hay-Pauncefote Treaty from aiding
her own commerce in a way open to all other nations. Since the rules of
the Hay-Pauncefote Treaty did not provide, as a condition for the
privilege of the use of the Canal upon equal terms with other nations,
that other nations desiring to build up a particular trade, involving
the use of the Canal, should neither directly agree to pay the tolls
nor refund to their vessels tolls levied, it is evident that the
Hay-Pauncefote Treaty does not affect the right of the United States to
refund tolls to her vessels, unless it is claimed that rules ensuring
all nations against discrimination would authorise the United States to
require that no foreign nation should grant to its shipping larger
subsidies or more liberal inducements to use the Canal than were
granted by any other nation.

II.

It cannot be denied that at the first glance the arguments of the
United States appear to be somewhat convincing. On further
consideration, however, one is struck by the fact that the whole
argumentation starts from, and is based upon, an absolutely wrong
presupposition, namely, that the United States is not in any way
restricted by the Hay-Pauncefote Treaty with regard to the Panama
Canal, but has granted to foreign nations the use of the Canal under a
conditional most-favoured-nation clause.

This presupposition in no way agrees with the historical facts. When
the conclusion of the Hay-Pauncefote Treaty was under consideration, in
1901, the United States had not made the Canal, indeed did not own the
territory through which the Canal has now been made; nor was the United
States at that time absolutely unfettered with regard to the projected
Canal, for she was bound by the stipulations of the Clayton-Bulwer
Treaty of 1850. Under this treaty she was bound by more onerous
conditions with regard to a future Panama Canal than she is now under
the Hay-Pauncefote Treaty. Since she did not own the Canal territory
and had not made the Canal at the time when she agreed with Great
Britain upon the Hay-Pauncefote Treaty, she ought not to maintain that
she granted to foreign nations the p