Hay-Pauncefote Treaty, pp. 42-44.
IX. The Panama Canal conflict and the British-American Arbitration
Treaty, pp. 44-45--Does the term "interests" mean "advantages" or
"rights"?, p. 46--_Pacta tertiis nec nocent nec prosunt_, p. 47--The
exemption of the vessels of the Republic of Panama from payment of
tolls, pp. 48-50.
X. Why it must be expected that the Panama Canal conflict will be
settled by arbitration, pp. 51-52--Mr Thomas Willing Balch's letter
to the _New York Sun_, pp. 53-57.
I.
The Panama Canal conflict is due to the fact that the Governments of
Great Britain and the United States do not agree upon the
interpretation of Article III, No. 1, of the Hay-Pauncefote Treaty of
September 18, 1901, which stipulates as follows:--
"The Canal shall be free and open 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 such nation, or its citizens
or subjects, in respect of the conditions and charges of traffic,
or otherwise. Such conditions and charges of traffic shall be just
and equitable."
By Section 5 of the Panama Canal Act of August 24, 1912, the President
of the United States is authorised to prescribe, and from time to time
to change, the tolls to be levied upon vessels using the Panama Canal,
but the section orders that _no tolls whatever shall be levied upon
vessels engaged in the coasting trade of the United States_, and also
that, if the tolls to be charged should be based upon net registered
tonnage for ships of commerce, the tolls shall not exceed one dollar
and twenty-five cents per net registered ton nor be less, _for other
vessels than those of the United States or her citizens_, than the
estimated proportionate cost of the actual maintenance and operation of
the Canal[1].
[1] As regards the enactment of Section 5 of the Panama Canal Act
that the vessels of the Republic of Panama shall be entirely
exempt from the payment of tolls, see below IX, p. 48.
Now Great Britain asserts that since these enactments set forth in