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other sea may not be interrupted or embarrassed in any future time while this treaty exists; and, in any consequence, the United States also guarantees, in the same manner, the rights of sovereignty and property which New Granada has and possesses over said territory." It was contended on behalf of Colombia that the United States when it prevented the suppression of the Panama revolution acted in violation of the stipulation in this treaty that it should guarantee the rights of sovereignty and property which New Granada possesses over the said territory" and "the perfect neutrality" of the Isthmus. In defense of the policy pursued by the United States, it was asserted that Colombia had lost or forfeited its sovereignty and property, and that the supreme obligation of the United States under the treaty was to secure uninterrupted transit across the Isthmus.

How Independence Was Declared

At the time this public statement was made by Secretary Hay, he was probably unaware that the revolution, although it may have represented the sentiments of all or a large majority of the people of the Isthmus, was nevertheless engineered and precipitated without their knowledge or consent. When the revolution was initiated by the arrest of the Colombian generals, Tobar and Amaya, and Governor Obaldia in the city of Panama; only the people of that city knew what had occurred or what was to be expected. Colon was in ignorance of the secession of the Isthmus until the following day. The people of the other five provinces of Panama were let into the secret gradually. The actual declaration of independence was issued by members of the City Council of Panama. In other words, the members of the municipal government of a city which contained only 25,000 out of the 250,000 people of the Isthmus, took upon themselves the responsibility for separating the entire Department of Panama from the Mother Country. That there was no opposition whatever to this step when the people were advised that it had been taken, can, in view of what is known of the origin of the revolution, be construed to mean only that the leaders of it had formed a correct opinion of the desires of the people; it cannot be construed to mean that the people had in any way been consulted before their allegiance was transferred from the Republic of Colombia to the Republic of Panama.

It may be added that separation from the parent state was no new experience for Panama. The territory comprised in the Isthmus of Panama was a part of Spain's South American colonies up to the year 1821. In November of that year, the inhabitants declared their in dependence and entered the Republic of Colombia, which then embraced the dominions which Spain had called the Viceroyalty of New Granada, the Dominion of Venezuela, and the Presidency of Quito. The Republic of Colombia was dissolved in 1831, breaking up into three states Venezuela, Ecuador, and New Granada. The system of centralized government was maintained in the constitution of New Granada, adopted in 1832, the system including within its scope the Isthmus of Panama. Eight years later, in 1840, Panama and Veragua proclaimed their independence of New Granada and formed a sovereign state, by the constitution of which it became part of the fundamental law of the "State of the Isthmus that it should never again be incorporated under the central Government of the Republic of New Granada. This secession was overcome by force, but fourteen years later the Congress of New Granada passed a law creating the State of Panama as an autonomous entity with the right of selfgovernment. The central Government, however, was not long in undermining the organization thus established and finally succeeded in erecting a federal system which obtained for twenty-three years, Panama enjoying during this period local self-government, if not independence. The civil war of 1885 marked the reëstablishment of unfettered central government, with its capital Bogotá, which prevailed up to the date of the revolution of 1903.

Successive Stages in the Canal Project

The situation which confronted the United States Government at this juncture can only be understood if one bears in mind the successive steps by which the agreement embodied in the rejected treaty with Colombia had been reached. The Canal Commission, appointed by President McKinley and headed by Admiral Walker, had reported in favor of the Nicaragua route, largely, as it subsequently developed, on account of the extravagant price demanded by the French canal company for its rights and property. The Commission in the same report had stated that in its judgment the work done by the French company, its

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plans, equipment, etc., were not worth more than $40,000,000, although the company had been demanding about three times this sum for its property. Immediately upon the appearance of the report, the French company, influenced by the fact that it saw every prospect that the United States would turn to the Nicaragua route and leave the Panama project strictly alone, sent agents to Washington with instructions to accept $40,000,000, if that was all that could be obtained. The whole subject was again referred to the Walker Commission, which promptly reversed itself, and recommended the Panama route.

In the meantime the House of Representatives had passed, by an almost unanimous vote, a bill adopting the Nicaragua route and making an appropriation for beginning work on it. The Senate, on the other hand, influenced by the changed Walker report, passed a compromise bill, framed by Mr. Spooner, which was agreed to by the House, and became a law by the President's signature on June 28, 1902. This measure was entitled " An Act to Provide for the Construction of a Canal Connecting the Waters of the Atlantic and Pacific Oceans." The powers it conferred upon the President were of the most sweeping character. He was authorized to acquire the assets of the new Panama Canal Company of France for a sum not to exceed $40,000,000; he was at the same time empowered to secure perpetual control of a strip across the Isthmus of Panama not less than six miles wide, including the ports of Colon on the Atlantic side and Panama on the Pacific side. The act also carried an appropriation of $40,000,000 for the French company, and the President was authorized to pay Colombia such a sum as was necessary to secure the desired concessions. In addition to these provisions, the act required the President, if he should not be able to carry through the necessary arrangements with the French. company and with Colombia, " within a reasonable time and upon reasonable terms," to obtain from Nicaragua and Costa Rica the right to construct a canal by the Nicaragua route.

III

Acting under this authorization, the Attorney-General of the United States was instructed by the President to inquire into the title of the new Panama Canal Company. The Attorney-General's report was to the effect that the company was in a position to confer a good title upon the purchaser of its property, and that the President would be justified