The Panama Canal Conflict between Great Britain and the United States of America | Page 4

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 privilege of using her
Canal under a conditional most-favoured-nation clause, she herself
remaining unfettered with regard to the conditions under which she
could allow her own vessels the use of the Canal. The historical facts
are five in number:--
Firstly, in 1850, Great Britain and the United States, by the
Clayton-Bulwer Treaty, agreed that neither of them would ever obtain
or maintain for herself any exclusive control over a future Panama
Canal, or fortify it, or occupy or colonise any part of Central America;
that the Canal should be neutralised, should be open to the vessels of all
nations under conditions of equality; and so forth.
Secondly, in 1901, the two parties to the Clayton-Bulwer Treaty agreed
to substitute for it the Hay-Pauncefote Treaty, Article II of which
expressly stipulates inter alia that the Canal may be constructed under
the auspices of the Government of the United States and that the said
Government, subject to the provisions of Articles III and IV, shall have
the exclusive right of providing for the regulation and management of
the Canal.
Thirdly, the parties agreed--see the preamble of the Hay-Pauncefote
Treaty--that the general principle of the neutralisation of the Canal as
established by the Clayton-Bulwer Treaty should not be impaired, and
that, therefore, the United States--see Article III of the Hay-Pauncefote
Treaty--agrees to adopt as the basis of the neutralisation of the Canal
certain rules, substantially the same as those embodied in the Suez
Canal Convention of 1888, and amongst these a rule concerning the use
of the Canal by vessels of all nations on terms of entire equality

without discrimination against any such nation, or their citizens or
subjects, in respect of the conditions or charges of traffic, or otherwise,
such conditions and charges to be just and equitable.
Fourthly, the parties agreed--see Article IV of the Hay-Pauncefote
Treaty--that no change of the territorial sovereignty or of the
international relations of the country or countries traversed by the
future Canal should affect the general principle of the neutralisation or
the obligation of the parties under the Hay-Pauncefote Treaty.
Fifthly, when, in 1903, the United States by the Hay-Varilla Treaty,
acquired from the Republic of Panama the strip of territory necessary
for the construction, administration, and protection of the Canal, she
acquired sovereign rights over this territory and the future Canal
subject to the antecedent restrictions imposed upon her by the
Hay-Pauncefote Treaty, for Article IV of the latter stipulates expressly
that no change of territorial sovereignty over the territory concerned
shall affect the neutralisation or obligation of the parties under the
treaty.
These are the unshakable historical facts. The United States did not first
become the sovereign of the Canal territory and make the Canal, and
afterwards grant to foreign nations the privilege of using the Canal
under certain conditions. No, she has never possessed the power of
refusing to grant the use of the Canal to vessels of foreign nations on
terms of entire equality, should she ever make the Canal. Free
navigation through the Canal for vessels of all nations on terms of
entire equality, provided these nations were ready to recognise the
neutrality of the Canal, was stipulated by the Clayton-Bulwer Treaty,
and this stipulation was essentially upheld by the Hay-Pauncefote
Treaty, and it was not until two years after the conclusion of the
Hay-Pauncefote Treaty that the United States acquired sovereign rights
over the Canal territory and made preparations for the construction of
the Canal. For this reason the contention of the United States that she
has granted to foreign nations the use of the Canal under certain
conditions and that such grant includes a conditional
most-favoured-nation treatment, is absolutely baseless and out of place.

She has not granted anything, the free use of the Canal by vessels of all
nations having been the condition under which Great Britain consented
to the abrogation of the Clayton-Bulwer Treaty and to the stipulation of
Article II of the Hay-Pauncefote Treaty according to which--in
contradistinction to Article I of the Clayton-Bulwer Treaty--the United
States is allowed to have a canal constructed under her auspices.

III.
If the assertion of the United States that she herself is entirely
unfettered in the use of the Canal, and that the conditions imposed upon
foreign vessels in return for the privilege of using the Canal involve a
most-favoured-nation treatment, were correct, the United States would
not be bound to submit to the rules laid down by Article III, Nos. 2-6,
of the Hay-Pauncefote Treaty. She could, therefore, if she were a
belligerent, commit acts of hostility in the Canal