vessels and much of that of the United States and other countries, besides. This brings us to a comparison of the shipping of the two countries.

So much of the energy and capital of Great Britain has gone into the ocean-carrying trade that she does about half the shipping business of the world. In 1911, 4,969 British vessels passed through the Suez Canal, carrying sixty-three per cent of the 18,000,000 net tons for that year, which was about the average of the British percentage for the four years preceding. Great Britain pays more than half the tolls on the Suez Canal, and, in view of her external trade in imports and exports and the number and tonnage of her merchant vessels, it is not improbable that she will pay more than half the tolls on the Panama Canal, or a very large proportion, for many generations to

come.

In 1900, when negotiations for the Hay-Pauncefote Treaty were in progress, Great Britain had 7,903 seagoing steamers of 12,149,090 gross tonnage, while the United States had 690 seagoing steamers of 878,564 gross tonnage; that is, Great Britain had more than eleven seagoing steamers to our one and more than fifteen times our tonnage. In 1910, the United States had 1,073 seagoing steamers of 1,641,919 gross tons, and Great Britain had 9,837 seagoing steamers of 18,059,037 gross tons, or more than nine times as many seagoing steamers as the United States, with nearly twelve times the tonnage.

In those ten years, however, notwithstanding the enormous increase of ships and tonnage in Great Britain, the proportionate increase in such vessels had been greater in the United States. Two years later (in 1912), Great Britain had 10,014 seagoing steamers with 19,202,770 gross tons, and the United States had 1,171 such vessels with 1,797,029 gross tons-about the same proportion as in 1900. The increase of United States vessels and tonnage in the Lakes in those twelve years was very great, but, nevertheless, the combined tonnage of United States vessels on the sea and the Lakes was less than one-fourth of the tonnage of Great Britain on the sea alone. German sea-steamers and tonnage increased greatly from 1900 to 1912, but at the latter date was less than a quarter of Great Britain's. Germany's sea tonnage last year (4,276,191 gross tons) was more than double that of the United States and somewhat greater than the combined sea and Lake tonnage of the United States.

In 1900 nearly half of all the seagoing steamers in the world were

British, the figures being for all the world, 15,898, of which 7,903, or just about half, were British. The tonnage of seagoing steamers for all the world in 1900 was 22,369,358 gross tons, of which 12,149,090, or about one million more than half, was British. This proportion, notwithstanding the enormous increase of seagoing steamships and tonnage of other countries, has been pretty nearly maintained, so that in 1912 (last year), of a total tonnage of 40,518,177 gross tons, carried by seagoing steamers, nearly a half (19,202,770 tons) was British.

The canal will not only shorten the distance between the United States and the west coast of South America, but also between that coast and Great Britain.

The Spanish-American republics have always had, deep down, a friendly feeling for Great Britain because of her sympathy in their struggle for independence. Canning, without an ally, warned the Holy Alliance against any attempt at the resubjugation of the Spanish colonies, and suggested a concerted warning on the part of the United States, which shortly afterwards took form in President Monroe's celebrated declaration. "The British Legion," composed of volunteers, some of whom had fought at Waterloo, performed such deeds of devotion and valor in the service of Spanish-America that Bolivar hailed them, after they had saved his army from rout, and won the decisive victory of the war of independence, at Carabobo, as the saviors of his country; while the Republic of Chile owed its liberation from Spain largely to the prodigies of valor and skill of that dauntless sailor, Lord Cochrane, who did at sea for the Chilean patriots what another countryman of his, Paul Jones, had done in an earlier generation for the American patriots in their struggle with their mother country for independence and the right to govern themselves.

In 1911, Chile's imports from Great Britain amounted to $32,356,420 and from the United States $15,491,846; Chile's exports to Great Britain were $21,684,390, and to the United States, $20,164,848; Peru's imports from Great Britain, in 1911, were $7,456,960, and from the United States, $5,522,459; Peru's exports to Great Britain were $15,753,315, and to the United States, $10,124,069; Bolivia's imports from Great Britain, in 1911, were $1,690,315, and from the United States, $991,525; Bolivia's exports to Great Britain were $7,931,885, and to the United States, $9,884. The trade of the United States and Great Britain with Ecuador, in 1911, was about equal.

The commercial interests of Great Britain and the other maritime Powers being as extensive as they are in the united oceans, why not return to the original idea of dedicating the connecting water-way to the peaceful commerce of the world, under the guarantee of its permanent neutrality by the United States and all the nations using the Isthmian Canal, in recognition of the freedom of the seas, the gospel of commerce and the solidarity of mankind?

But, in any event, if we cannot agree with Great Britain on the true meaning and intent of the Hay-Pauncefote Treaty, let us rid ourselves of the unworthy fear that impartial arbitrators cannot be found a fear which our own experience with international arbitration does not justify-and submit our differences to this peaceful method of settlement, as we have bound ourselves by treaty to do.

The CHAIRMAN. The printed program will be resumed later, and in the meantime, a paper by Mr. Chandler P. Anderson, recent Counsellor for the Department of State, will be read on the issues based upon the diplomatic correspondence.

THE ISSUES BETWEEN THE UNITED STATES AND GREAT BRITAIN IN REGARD TO PANAMA CANAL TOLLS, AS RAISED IN THE RECENT DIPLOMATIC CORRESPONDENCE.

ADDRESS OF HON. CHANDLER P. ANDERSON, formerly Counsellor for the Department of State.

It has seemed desirable to the committee in charge of the program for this meeting of the Society that, as a preliminary to the discussion of the Panama Canal tolls questions which are included in the program, a brief outline should be presented showing the exact issues between the two governments in that controversy as raised in the diplomatic correspondence, and the arguments which have been advanced on both sides in support of their respective contentions. It is for this purpose, rather than for the purpose of weighing the value of these arguments, that this paper has been prepared.

Before taking up the issues which have been raised in the diplomatic correspondence, it is important to have in mind the following

considerations:

Inasmuch as the United States and Great Britain are the only parties to the Hay-Pauncefote Treaty of November 18, 1901, Great Britain alone of all nations is entitled to question the course adopted by the United States under that treaty, but even Great Britain is not entitled under the terms of the treaty to question the course adopted by the United States toward other nations with reference to the use of the canal so long as that course involves no discrimination against Great Britain. Great Britain has no authority under the treaty or otherwise to speak for other nations on the subject of the canal tolls, and is not concerned with the attitude of the United States toward other nations in dealing with this matter except as Great Britain's own interests are affected thereby. The attitude of the United States toward other nations will unquestionably be that best adapted for securing their observance of the rules adopted by the United States for the use of the canal, the purpose of which rules is to carry out the traditional policy of the United States for the neutralization of the canal. In this connection, however, it is of interest to note that there is nothing in the treaty which would prevent the United States from granting equal treatment to any other nation even if that nation does not observe the rules, the observance of which would ensure equal treatment. Moreover, it is open for the United States to make with any other nation any arrangement which is mutually agreeable on the subject, and the only interest of Great Britain therein is that there shall be no discrimination against British interests.

It is clear from these considerations that any discussion between Great Britain and the United States on the subject of canal tolls must be limited to the question of discrimination against British vessels, and it will be found upon examining the diplomatic correspondence that this limitation has been recognized by Great Britain.

There has apparently been considerable confusion in the widespread discussion about canal tolls which has been going on for the past eight months in this country as to the exact contentions of both governments and the real question at issue between them. A large part of this discussion has been directed to the question of whether the United States is not at liberty under the treaty to do what it pleases in regard to the payment of tolls by its own vessels in its own canal. As a matter of fact, this contention is not made by Great Britain, and there is nothing in the treaty which would justify any such contention. The United States is clearly entitled to exempt its

own vessels, either of war or of commerce, whether engaged in the coastwise or foreign trade, from the payment of any tolls, and likewise it is entitled to refund tolls exacted from those vessels. The question at issue is not whether that can be done, but whether the United States, having exempted its own vessels from the payment of tolls, is at liberty under the treaty to exact tolls from British vessels so long as Great Britain observes the rules adopted by the United States in the treaty.

That issue is not one which should arouse bad feeling or justify the charge of bad faith on either side, for it involves at most only a question of pecuniary damages, and does not present a situation under which the United States would gain any advantage by postponing its settlement until after the canal is opened. If it should finally appear that under the treaty the United States was not entitled to impose tolls upon British vessels when United States vessels are not subjected to the same treatment, Great Britain would have a claim against the United States for the amount of the tolls improperly paid by British vessels. Clearly, therefore, it is not a case where an immediate settlement is necessary in order to prevent an irreparable injury, for there can be no irreparable injury in enforcing a law when the damages can be measured by the payment of money improperly collected. Obviously it would be more convenient for the United States to have this question determined before the canal is opened and before tolls are collected, which would have to be refunded. if this question should be decided against the United States; but even if it should be so decided, either before or after the canal is opened, in either case it would remain for the United States alone to determine whether equality of treatment should be secured by imposing equal tolls upon American vessels or by exempting British vessels equally with the American vessels from the payment of tolls.

The fundamental question underlying this controversy is whether or not the rules adopted by the United States under Article III of the Hay-Pauncefote Treaty "as the basis of the neutralization of the canal" were intended to apply to the United States as well as to other nations.

If these rules are understood as not applying to the United States, then their adoption by the United States is nothing more than a declaration of policy to the effect that the United States will so regulate. and manage the canal, under the authority reserved in Article II, as to