The passage of this Act and the affixing of his signature thereto by the President has raised such diversity of opinion both at home and abroad as to whether it is or is not in conflict with the Hay-Pauncefote Treaty, that it becomes proper to review this subject from an impartial and unprejudiced point of view, entirely aside from any question of nationality or politics.

The provision of the Hay-Pauncefote Treaty involved is one of the rules adopted by the United States as the basis of the neutralisation of the canal, and is as follows:

"1. 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, or its citizens or subjects, in respect of the conditions or charges of traffic or otherwise. Such conditions and charges of traffic shall be just and equitable."

It is a well-recognized principle that, like other contracts, treaties are to be read in the light of the conditions and circumstances existing at the time they were entered into, with a view to effecting the objects and purposes of the States thereby contracting. It becomes necessary, therefore, to ascertain what were the conditions and circumstances existing at the time when the Hay-Pauncefote Treaty was concluded.

The Hay-Pauncefote Treaty, in mentioning vessels of commerce of all nations, never contemplated such an eventuality as the United States becoming the owner of the land covered by the waters of the canal, and exercising sole and sovereign power thereover, and consequently it cannot be held by any just construction to apply to conditions and circumstances so completely beyond the intention and design of the treaty. At that time the possibility of the United States constructing an Isthmian canal through its own territory was never contemplated. No such contingency was thought of; it was too remote even for the mind of the most imaginative conces

sionaire of an inter-oceanic waterway. The situation regarding the building of any canal was full of complications and almost superhuman difficulties, while the rights to construct an inter-ocean canal by the various routes were covered by a confused net-work of concessions (to say nothing of treaties) giving individuals and companies vested rights that could not be disregarded. The contracting parties to the HayPauncefote Treaty had in mind the construction of a canal. under the auspices of the United States, which means nothing more than under its influence, patronage, care and protection. The building of a canal through the Isthmus of Panama was then as far from completion as it was when the first French Company failed after expending some 100,000,000 dollars in the work, while the advocates of the Nicaragua Canal were as confident as ever that their route was the only feasible one. So little did anyone think of the United States actually acquiring the Panama Canal zone or building the canal on its own account, that even when the representatives of the new French Company and the Nicaragua Company appeared before the Senate Investigating Committee, they expressly declared they had all the money needed and were not seeking financial aid from the Government.

Such briefly were some of the conditions and circumstances existing when the Hay-Pauncefote Treaty was concluded, but they were not the same as those existing in August 1912, when the Panama Canal Bill was passed by Congress. A revolution not only of a State but in the entire situation and phase of an inter-ocean canal had taken place, and instead of an indifferent onlooker or guardian of neutrality the United States had become itself the indisputable owner and sovereign of the soil through which this great waterway is being built at a cost of over eighty millions sterling, and not by capital subscribed in Europe but by funds provided by the United States alone; not

private funds, but public money derived by public taxation for public purposes.

Having referred to the existing conditions and circumstances as they were in 1901 and 1912, we will now consider the terms of the Hay-Pauncefote Treaty regarding "vessels of commerce and of war of all nations."

The provision of the treaty referred to means that there shall be no discrimination by the United States against any one foreign nation, or its citizens or subjects, in favor of any other foreign nation, or its citizens or subjects, in respect of the conditions of or charges for traffic or otherwise. "On terms of entire equality" refers to the equality extended to all nations other than the United States; that is to say, it is prohibitive of the United States favoring one foreign nation as against another. Its purpose was to provide that vessels of commerce of all nations foreign to the United States should enjoy the same equality among themselves; but this is quite another thing from saying that vessels of commerce of foreign nations shall enjoy the same equality as the vessels of commerce of the United States, and that the Federal Government cannot, without infringing the terms of the treaty, extend the free use of the canal even to its own vessels engaged in the coastwise trade. What else does the expression "there shall be no discrimination against any such nation" mean? It means that no attempt should be made by the Federal Government to promote the interests of one foreign power to the detriment or exclusion of another; that all foreign nations should stand together equal and alike in the use of the canal.

"On terms of entire equality" was intended to prevent the United States discriminating in favour of one foreign nation against another foreign nation. The Federal Government was laying down its own rules, not for the regulation of its own ships of war and of commerce, but for the ships of war and of commerce of the stranger beyond its ports, and

it unhesitatingly declared that the canal that might be built under its auspices should be free and open to them on terms of entire equality. No advantage should be obtained by one foreign nation over another foreign nation; there should be no favouritism, no special benefit or privilege extended to one that should not be open alike to all foreign nations. This is what the provision means and nothing more. It would require the interpolation of terms not contained in the treaty itself to sustain any other construction.

There is no invidious discrimination against any one foreign nation under the Panama Canal Act. All foreign nations engaged in the same commerce-overseas tradeare treated alike; are subject to the same restrictions and are entitled to the same privileges under similar conditions. On general principles treaties as well as legislation discriminating against some and favoring others are objectionable : but treaties and legislation which in carrying out a public purpose are limited in their application (if within the sphere of their operation they affect alike all persons or objects. similarly situated) are not unjust discrimination.

Specific regulations of one kind of commerce which may be necessary for its protection can never be the just ground of complaint because like regulations are not imposed upon commerce of a different kind. The discriminations which are open to objection are those where persons engaged in the same commerce and plying their trade under the same conditions enjoy different privileges. It is only then that the discrimination can be said to impair that equal right which all can claim to whom it is accorded by law.

There is no evasion of the rule of equality where all foreign vessels are subjected to the same duties and liability under similar circumstances.

The treaty could never have been intended to prevent the Federal Government from arranging and regulating its domestic or coastwise commerce, and in the use and enjoy

ment of its own property as it saw fit. No such restriction could have been in view in adopting "as the basis of neutralization" a rule that the canal should be free and open to the vessels of commerce and of war of all nations on terms of entire equality. It would be absurd for the United States to solemnly declare that its own vessels of war might openly and freely navigate its own land-locked water-ways and enjoy the privileges that belong to the nation as a sovereign power in the use of its own territory. The use of the words "vessels of war" shows plainly that the word vessels as used referred only and exclusively to those of all nations other than those of the United States, and that the word nations was restricted to foreign nations, that is to say, nations foreign to the United States. What the opponents of the Canal Act seek to accomplish is to add to this phrase after the word "equality" the words "with its own," so that it would read "on terms of entire equality with its own." But that is precisely what was not contemplated and what was never within the minds. of the contracting parties. The United States was not adopting a rule for the use of its own canal-its own enterprise and work achieved at the cost of its own national treasure-but was simply laying down a rule for the equal treatment alike of all foreign vessels in a shipcanal that might be built beyond its territory but under its supervision and direction. That is to say, it was not laying down rules to regulate its own conduct in the beneficial use and enjoyment of its own property, or abandoning what one day might belong to the nation just as much as Porto Rico or the Philippines. No such relinquishment by the Federal Government was ever within the contemplation of those who negotiated the treaty.

It is inconceivable that the United States, when it agreed in the treaty that the canal should be free and open to the vessels of commerce of all nations, intended