Panama is at any rate entitled
to a claim to an equivalent of the exemption, namely, the refunding, on
the part of the United States, of tolls paid by vessels of the Republic
of Panama for the use of the Canal. Whether these vessels are exempt
from the payment of tolls or can demand to have them refunded, makes
very little difference to the Republic of Panama, although Article XIX
of the Hay-Varilla Treaty stipulates exemption from, and not the
refunding of, tolls.

But the case of the vessels of Panama is quite unique, for their
exemption from tolls was one of the conditions under which the Republic
of Panama ceded to the United States the Canal territory. Great Britain
and the United States being the only contracting parties to the
Hay-Pauncefote Treaty, and third States not having as yet either by
formal accession become parties to this treaty or acquired, by custom,
a claim to equal treatment of their vessels, there would seem to be
nothing to prevent Great Britain from consenting to the exemption of
the vessels of Panama, should she be disposed to do so.

X.

However this may be, the question as to whether the United States is by
the British-American Arbitration Treaty compelled to consent to have
the dispute concerning the interpretation of the Hay-Pauncefote Treaty
brought before the Permanent Court of Arbitration is of minor
importance. For, even if she be not compelled to do so, it must
nevertheless be expected that she will do so. If any dispute is, by its
very character, fit and destined to be settled by arbitration, it is
this dispute, which is clearly of a legal nature and at the same time
one which concerns the interpretation of treaties. Neither the
independence, nor the honour, nor any vital interest of the parties can
be said to be involved in the dispute.

Indeed it may be maintained that much more important than the dispute
itself is the question whether it will or will not be settled by
arbitration. Great Britain has already declared that if the dispute
cannot be settled by means of diplomacy, she will request arbitration.
The eyes of the whole world are directed upon the United States in
order to find out her resolution. Throughout her history, the United
States has been a champion of arbitration, and no other State has so
frequently offered to go, or consented to submit, to arbitration. It
was the United States who at the First, as well as the Second, Hague
Peace Conference led the pa