Mr. STRAUS. I am sure that you gentlemen of the Senate are the best authority on that subject.

Senator SIMMONS. I am just asking you if that is your construction?

Mr. STRAUS. That is my understanding of it.

Senator BRANDEGEE. Mr. Straus, I understood you to say that you were almost tempted to say, right or wrong, you would repeal this Sims bill. I do not suppose that you mean you think it would be a wrong thing to do to repeal this exemption?

Mr. STRAUS. I certainly do not.

Senator BRANDEGEE. But that you mean whether we are right or wrong, or whoever is right or wrong, in the interpretation of the treaty, that as you have expressed it this whole question is a mess of pottage, and you consider it not a great important matter, and that therefore, for the sake of peace and good will, and maintaining our standing with foreign nations, you would repeal this exemption?

Mr. STRAUS. You have stated my ideas correctly, Senator. Senator BRANDEGEE. Let me ask you this: You are only interested in this movement for maintaniing our international position

Mr. STRAUS. Yes; that is correct. I am one of the trustees of the Carnegie Peace Foundation.

Senator BRANDEGEE. I know; and as such I presume you are interested in our reputation throughout the world?

Mr. STRAUS. Not any more so than I would otherwise be. Senator BRANDEGEE. I know that; but you are irrespective of the fact that you are a member of the Carnegie Peace Foundation

Mr. STRAUS. Yes, certainly; besides being a member of the Carnegie Peace Foundation, I am also a member of the Permanent Court of Arbitration at The Hague.

Senator BRANDEGEE. In addition to those positions you are a gentleman familiar with the commerce of this country, and have been the Secretary of the Department of Commerce and Labor?

Mr. STRAUS. I have.

Senator BRANDEGEE. You state that you do not think this exemption from tolls of our domestic shipping would be of any public benefit, as I understood you in your testimony?

Mr. STRAUS. I do not think so; but I do not want to be considered as an expert upon that subject.

Senator BRANDEGEE. You have had some experience, have you not?

Mr. STRAUS. I have; but I have not had a business experience that would justify me to appear before you in the light of an expert upon this subject.

Senator BRANDEGEE. You have been a merchant, have you not? Mr. STRAUS. Well, off and on--a little bit.

Senator BRANDEGEE. There have been and there will be, if I am correctly informed, gentlemen before us from various business organizations in the country who will claim and have claimed that this is of great public importance, because it has an important relation upon the question of the regulation of the transcontinental railroad rates, and that this exemption of our coast wise shipping through the canal will tend to cheapen transportation rates between the two coasts, and will result to the benefit of the ultimate consumer, so far as prices are concerned in the markets. Have you any opinion about that?

Mr. STRAUS. I have an opinion about that.

Senator BRANDEGEE. Do you care to state it?

Mr. STRAUS. But it is not an expert opinion. I do not believe it will effect anything whatever. It will simply give to the coast wise shipping from a million and a half dollars to two million dollars annually. That is my belief, and I think that million and a half dollars or two million dollars will be taken out of the pockets of all the people and placed in the pockets of the coastwise shipping. That I believe will be nine-tenths of the effect of it.

Senator THOMAS. Mr. Straus, if it be true that 92 and a fraction per cent of all of this coastwise shipping is monopolistic, and therefore within the inhibition of the Panama Canal tolls act, the amount which you mention would be very seriously diminished, would it not? Mr. STRAUS. If that be true-I know nothing about that. Senator THOMAS. That is the testimony.

Mr. STRAUS. I know nothing about that. It will not take long to develop some other independent, or apparently independent, coastwise ships.

Senator THOMAS. I think your qualification is very pertinent. Senator SIMMONS. Mr. Secretary, you were a member of President Roosevelt's cabinet?

Mr. STRAUS. Yes.

Senator SIMMONS. And you were also minister to Turkey?

Mr. STRAUS. I was three times a diplomatic representative of the United States in Turkey. First, minister, and under the past administration I was ambassador to Turkey.

Senator SIMMONS. You say that your residence abroad has given you opportunities to know something about the sentiment of European countries upon this question?

Mr. STRAUS. Yes.

Senator SIMMONS. You say you are also a member of the Carnegie Peace Foundation?

Mr. STRAUS. I am also a member of the board of trustees of the Carnegie Peace Foundation.

Senator SIMMONS. Does the fact of your membership on that board have anything to do with the views as expressed here to-day? Mr. STRAUS. Absolutely not.

Senator SIMMONS. You have referred to this treaty as a contract between Great Britain and the United States. Do you happen to know not only the views of Great Britain, but the general views of European countries, upon the question of whether this exemption violates the terms of that contract?

Mr. STRAUS. I know the sentiment of the leading papers abroad which have been quoted in these debates, and I know further from my own knowledge when I was in Europe last fall in talking to various people of importance the view that is entertained abroad upon this subject, especially by publicists and by men in high positions. Senator SIMMONS. That view, you say, is quite general that the exemption does violate the treaty?

Mr. STRAUS. That view, so far as I have been able to ascertain it, is quite general that we are giving a narrow and technical construction to an international treaty, and that practically we are violating

its terms.

Senator SIMMONS. I believe you referred to the fact that there is a wide division of sentiment in this country in reference to that subject, some contending it violates and some contending it does not. I think you said that the American officials who participated in the negotiation of this treaty, generally, as you understood, agreed that the exemption did violate the treaty?

Mr. STRAUS. I did say that.

The CHAIRMAN. Is that the opinion of ex-President Roosevelt? Mr. STRAUS. I have not spoken to President Roosevelt personally upon this subject, but what I understand his opinion to be is that the exemption provision of the Panama act does not violate the treaty, but that it is our duty, as it affects the interpretation of a treaty, to arbitrate it. I think that is correct, is it not?

Senator SIMMONS. Your understanding is that Mr. Hay had that view?

Mr. STRAUS. I have no personal knowledge of that except as it has been expressed by those who had a more intimate knowledge, and I take it that must have been his opinion, for the reasons that I have already stated.

Senator SIMMONS. You are familiar with the opinions of Mr. Choate, who personally negotiated the treaty with Lord Pauncefote, as the representative of Mr. Hay, the Secretary of State?

Mr. STRAUS. I am familiar with it.

Senator SIMMONS. And his opinion also concurs in the view expressed?

Mr. STRAUS. His opinion, as expressed in his public speeches, and in a letter which he addressed to a Senator on this matter, was very specific on that subject.

Senator SIMMONS. Mr. Henry White, whom we had before us yesterday, who was actively connected with the negotiations, entertains the same view, does he not?

Mr. STRAUS. I understand that is the case.

Senator SIMMONS. Is it not your understanding that the present Secretary of State, Mr. Bryan, entertains the same view?

Mr. STRAUS. I know nothing about his opinion upon this subject except as I have read it in the paper, and as expressed publicly. But I understand, however, that his opinion is the same.

Senator SIMMONS. You understand that the President of the United States has expressed a like view?

Mr. STRAUS. Very emphatically, I should say.

Senator SIMMONS. So that we have this situation, that there is practically unanimity in the countries of Europe, who are interested in this question, that the exemption does viclate the treaty. And on this side we have the Secretary of State at the time the treaty was negotiated, who was one of the signatories to the treaty, the Ameri an ambassador to Great Britain, who was actively engaged in the negotiations with the secretary of the foreign offie of Great Britain. and the secretary of the legation, the present Secretary of State of this country, whose business it is to conduct our foreign relations with the President, and the President of the United States, all agreeing to that construction pla ed upon the treaty by the nations of the earth. Now, Mr. Straus, of course I take it you would agree that this country has the right if it wants to- of course, it has the power to place its own construction upon the treaty?

Mr. STRAUS. It has the power.

Senator SIMMONS. And Great Britain has the right and has the power to place its own construction upon the treaty?

Mr. STRAUS. Yes.

Senator SIMMONS. If each nation should insist upon placing its own construction upon the treaty and should refuse to in any way yield, that would inevitably bring about armed conflict, would it not?

Mr. STRAUS. It would bring about a disruption of international relations and an absolute lack of reliance upon international obligations.

Senator SIMMONS. I understand that in this condition of things you say that Great Britain, being a party to this contract, and the United States being a party to this contract, Great Britain insisting that we passed an act that violates it, and the officials of our Government charged with our foreign affairs agreeing that the act does violate it, in these conditions you say that we ought to repeal that act, in your judgment?

Mr. STRAUS. For the reasons, Senator, that you have stated and other reasons that I have endeavored to make clear in my statement. Senator SIMMONS. Then I assume you would insist that if we do not repeal that act we ought surely to consent to an arbitration of the question?

Mr. STRAUS. I do not see how we could escape consenting to arbitration.

Senator SIMMONS. Suppose we were to refuse both to repeal the provision and to arbitrate it, in that situation, with this division of opinion, what position would that put us in in the eyes of the civilized nations of the world?

Mr. STRAUS. I can not answer so well for other nations of the world, but I should think it would be a humiliation for us in our own estimation, and they would probably not understand this country which has stood forward for the last 100 years as the chief exponent of international justice and international arbitration, and having made two score of treaties that we would arbitrate just such questions, and yet when an actual concrete question came before us we threw all that over.

Senator SIMMONS. I wish to read to you an article from the ClaytonBulwer treaty, and ask you a question in regard to it. Article I of the Clayton-Bulwer treaty provides:

The Governments of the United States and Great Britain hereby declare that neither the one nor the other will ever obtain or maintain for itself any exclusive control over the said ship canal; agreeing that neither will ever erect or maintain any fortifications commanding the same or in the vicinity thereof, or occupy, or fortify, or colonize, or assume, or exercise any dominion over Nicaragua, Costa Rica, the Mosquito Coast, or any part of Central America; nor will either make use of any protection which either affords or may afford, or any alliance which either has or may have to or with any State or people, for the purpose of erecting or maintaining any such fortifications, or of occupying, fortifying, or colonizing Nicaragua, Costa Rica, the Mosquito Coast, or any part of Central America, or of assuming or exercising dominion over the same; nor will the United States or Great Britain take advantage of any intimacy, or use any alliance, connection, or influence that either may possess with any State or government through whose territory the said canal may pass, for the purpose of acquiring or holding, directly or indirectly, for the citizens or subjects of the one, any rights or advantages in regard to commerce or navigation through the said canal which shall not be offered on the same terms to the citizens or subjects of the other.

That treaty was made in 1850?

Mr. STRAUS. Yes.

Senator SIMMONS. It was a stipulation that neither Great Britain nor the United States should obtain or maintain for itself any exclusive control over the ship canal, or fortify it. Now when in 1901 we negotiated the Hay-Pauncefote treaty, and Great Britain surrendered its claims, or its rights under that treaty, and agreed that we might obtain exclusive control, and we might of ourselves construct this canal, and that we might fortify it, did you consider that a surrender by Great Britain to the United States, a humiliating surrender?

Mr. STRAUS. I do not think it was a humiliating surrender. I think it was a surrender of rights which she possessed under that treaty, and it was giving us a very good consideration for the bilateral part of the Hay-Pauncefote treaty.

Senator THOMAS. Upon the assumption, Mr. Secretary, that Great Britain constantly and almost consistently disregarded the greater part of the provisions of that treaty from 1850 up to the time of the Hay-Pauncefote treaty, do you think that she surrendered much?

Mr. STRAUS. I do think she did surrender considerable, and I think we were very glad to get that surrender, because not only the ClaytonBulwer treaty was negotiated at our initiative, but also the HayPauncefote treaty was negotiated at our initiative.

Senator SIMMONS. Is it not felt in this country by the President and the Secretary of Sta e and the administration that good faith and fair dealing, and the amity and peace of the nations, required that we should obtain from Great Britain a release from the rigid conditions of the treaty of 1850 before acquiring territory to build or begin the construction of the canal?

Mr. STRAUS. Of course, Senator, I can not give you what was felt by our officials. I can not do that, but I think the negotiations very clearly show what you said.

Senator SIMMONS. I asked you a question a little while ago with reference to the treaty with Panama. You had referred to section 1 of article 3 of the treaty with Great Britain-the Hay-Pauncefote treaty with Great Britain.

Mr. STRAUS. Yes.

Senator SIMMONS. That article to which you referred reads as follows:

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 to the conditions or charges of traffic or otherwise; such conditions or charges of traffic shall be just and equitable.

Now, I ask you if that same provision with regard to equality of treatment of vessels and of traffic was not contained also in our treaty with Panama? You said that you are not certain about that. Mr. STRAUS. I am not familiar; I have not before my mind the text of the treaty with Panama, so I am unable to say.

Senator SIMMONS. Let me read you article 18 of the treaty with Panama, the Hay-Bunau Varilla treaty, which is as follows:

The canal when constructed and the entrances thereto shall be neutral in perpetuity and shall be open upon terms provided by section 1 of article 3 and in con