trade, in which there is at present but little foreign competition. The concession, however, is of little value.

The historical student of the future will find it a little difficult to understand how a British Government possessed of any foresight could have consented to replace the Clayton-Bulwer Treaty by so wholly inadequate a substitute as the Hay-Pauncefote Treaty. Let us recall the terms of the two documents. The Clayton-Bulwer Treaty, which was signed by Mr John M. Clayton, Secretary of State, and Sir Henry Lytton Bulwer, bore date April 19, 1850. By its terms neither of the contracting parties (the United States and Great Britain) should ever obtain or maintain for itself any exclusive control over the said ship-canal,' or 'erect or maintain any fortifications commanding the same or in the vicinity thereof, or occupy or colonise or assume or exercise any dominion over . . . any part of Central America'; and each party was to have the use of the canal upon equal terms, and, jointly with the other, guarantee its neutrality. Thus, this Treaty clearly provided, as it was intended to do, against any discrimination in the matter of advantages between the nations using the canal.

As is well known, these safeguards for British LatinAmerican trade were recklessly thrown aside at the solicitation of the United States Government under the Presidency of Mr McKinley; and Mr John Hay and Lord (then Sir Julian) Pauncefote were permitted, in November 1901, to frame a new and wholly different convention, the Hay-Pauncefote Treaty, which superseded the earlier instrument. In this Treaty, all the features deemed objectionable by the United States were eliminated, without however any real compensation being offered to or demanded by Great Britain; and the construction of the canal under American auspices was authorised, either directly at its own cost or through such corporate or other organisations as it might elect to employ. But, in consideration of the surrender by Great Britain of her rights under the Clayton-Bulwer Treaty, viz. those of joint construction and control-so it was expressly stated by Mr Hay-the principle of common and equal rights of user was upheld in the words, so often quoted, of Art. 3, which stipulates that

'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 . . . in respect of the conditions or charges of traffic or otherwise.'

The matter of fortification was not specifically referred to in the Hay-Pauncefote Treaty; but that the right to fortify the canal was not contemplated by the negotiators may be inferred from the fact that the only approach to it is contained in the stipulation that the United States might maintain such military police along the canal as might be necessary to protect it against lawlessness or disorder. Two years later, however, the Hay-BunauVarilla Treaty, made with the Republic of Panama, gave the United States the right to establish fortifications' for the protection of the canal. It is hardly necessary to observe that a treaty with Panama could not abrogate or alter provisions of the existing treaty with Great Britain; nevertheless the United States, ignoring what, if not an explicit undertaking, may at least be regarded as an implicit understanding, proceeded to fortify the canal. She has now expended the sum of $2,000,000 upon preliminary marine fortifications, and has equipped them with guns of 14-inch calibre and the heaviest types of sea-coast mortars in pits. Against this action Great Britain-probably because no direct prohibition of fortifications was contained in the Treaty-appears to have raised no protest. On the other hand, the stipulation providing that all nations should have the use of the canal on equal terms has been violated by the imposition of a minimum toll of $1.25 (= 5s.) per registered ton upon every foreign vessel using the waterway, while its own ships at all events those engaged in coastwise traffic, that is practically the whole of the commercial marine of the United States-are to pass through entirely free.

Mr Taft's attitude towards the Treaty and its due observance has been as remarkable as it has been objectionable, for not only has he supported the policy of repudiation, but he has, as a lawyer rather than an unbiased official, attempted to defend it. Even in the final stages of the discussion of the Panama Bill, Mr Taft endeavoured to nullify the clause restoring to foreign vessels the rights which were threatened, by tacking-on an amendment

which, adopted on August 17, leaves the whole question of tolls open to doubt, and dependent not upon the Hague tribunal, which was established especially for the solution of such questions as a disputed interpretation of treaties, but upon the decisions of the United States Courts.

Notwithstanding the earnest efforts made by the President's best advisers, and in spite of the undiminished hostility of the most reputable press of the United States, the Senate finally adopted the Bill, by 47 votes to 15, on August 9; and on the 24th, President Taft attached his signature to a document which smirches his fair reputation as a statesman, and, if upheld, will cast reproach upon the good name of a great people.

The complete absence of any attempt to justify the violation of the Treaty upon moral grounds at least relieves President Taft and his advisers from any charge of hypocrisy; the language employed was as simple as it is unmistakable. We may recall the words employed by Mr Meyer, Secretary of the United States Navy, in his annual report (issued in the month of December last), to the effect that the history of all times, including the present, shows the futility and danger of trusting to the good will or fair dealing, or even to the most solemnly binding treaties, between nations.' On the point at issue the President, nearly a year ago, showed his hand.

'I am very confident' (said Mr Taft) that the United States has the power to relieve from the payment of tolls any part of our shipping that Congress deems wise. We own the canal. It was our money that built it. We have the right to charge tolls for its use. These tolls must be the same to everyone; but, when we are dealing with our own ships, the practice of many Governments of subsidising their own merchant vessels is so well-established in general that a subsidy equal to the tolls, an equivalent remission of the tolls, cannot be held to be a discrimination in the use of the canal.'*

This argument advanced by Mr Taft, however, will

Special message upon departmental matters sent to Congress, December 21, 1911. Compare also the Presidential message which accompanied Mr Taft's signature of the Bill, in which he denies that the HayPauncefote Treaty deprives the United States of the right to pass its own commerce free or to remit tolls collected for the use of the canal' ('Times,' Aug. 26 and Sept. 4, 1912).

have convinced no one, least of all the arguer. It is well known that the United States has always set its face against the granting of subsidies to its merchant marine. Upon every occasion when a proposition to this effect has come up for discussion it has been rejected by Congress; and it would probably be so treated again. No doubt, should the Subsidy Bill become law-and its repeated introduction into the U.S. Congress year after year proves the growing tendency towards this form of protection-it would act as a serious menace to British shipping; but to such a measure we could raise no objection. United States merchant vessels, in fact, are so few in number that all but a very small percentage of the external commerce is conducted in foreign bottoms; and this in spite of the fact that, as the Americans know, when the carrying is left to foreign ships the tendency is to find foreign goods substituted for national ones. Measured by the total scheduled tonnage, the United States ranks second among the mercantile nations; but that tonnage is employed entirely in domestic trade.

Mr John Barrett, the Director-General of the PanAmerican Union, and formerly United States Minister to Colombia, expressed himself upon more than one occasion as opposed to the exemption of American ships from the operation of the canal tolls; he has said:

"The Panama Canal, to prove of the greatest practical usefulness to the United States, should be free to the shipping and commerce not only of the United States, but of the world. . . . It would end at once all doubts and discussions as to tolls and the grave problems of preferential treatment of the American vessels as they affect America's treaty obligations to other countries. If the United States would experience the largest benefits possible to its foreign commerce from the Panama Canal, it will make this interoceanic waterway as free to the ships of all nations as are the two oceans which it connects. The only valid reasons for charging tolls are, first, to pay the cost of operating the canal and interest on investment, and secondly, to protect the transcontinental railways from the competition of a free canal.'

This is no highly moral reasoning, but a sound commercial proposition, emanating from one of the shrewdest and most capable men in the United States to-day.

The President's desire to relieve and encourage

American shipping is easy to understand; and had he endeavoured to attain this end by means of subsidies or other forms of state-aid, the cost of which would fall on his own Government, other countries could have raised no legitimate objection. But the course which he has adopted relieves the United States at the expense of other nations; for it is obvious that, if the cost of making and working the canal is to be defrayed by the tolls levied, the exemption of American vessels enhances the liabilities of other nations using the canal. His professed object-that of aiding American shipping in competition with transcontinental railways-would have been equally well secured by the alternative method suggested, without any such discrimination between American and other vessels as is entailed by the Panama Act. The equality promised by the Hay-Pauncefote Treaty is not, as Mr Taft puts it, merely 'a conditional favoured-nation treatment,' but complete equality so far as tolls are concerned. He proceeds to argue in his Message (Times,' Sept. 4) that, if the clause touching equality of treatment be construed as debarring his Government from granting exemption to American ships, then the omission of any provision against the granting of subsidies would justify that Government in requiring that, in order to secure absolute equality, no such subsidies should be granted-which, as he says, is absurd; and therefore the clause cannot be so construed. But the argument is obviously invalid, because exemptions and subsidies differ fundamentally in the incidence of the cost entailed; and because, while the Treaty could, and did, bar a contracting party from granting exemptions-which, as the controlling Power, the United States would otherwise have been able to grant to prohibit subsidies would have been an encroachment on the sovereign rights of other Powers, not being parties to the Treaty. The Treaty might doubtless have provided that, if subsidies were granted, the tolls might be raised, but it did not do so; and, if such a provision were ever contemplated-which is improbable-there were good and obvious reasons against its insertion. In any case, the reference to subsidies is irrelevant to the point at issue.

In March of this year, when the House of Representatives Interstate Commerce Committee approved of the