and the preservation of its neutrality, the Government of the Republic of Panama will sell or lease to the United States land adequate and necessary for naval or coaling stations on the Pacific coast and on the western Caribbean coast of the Republic at certain points to be agreed upon with the President of the United States."

APPENDIX K

CANAL LEGISLATION AND HAY-PAUNCEFOTE TREATY

AFTER much discussion and delay, the long-debated Panama bill was passed by both houses of Congress, in the last days of August, 1912, and became a law, with the President's signature. The act deals with three subjects: the conditions under which the canal may be used by vessels of commerce and war; the provisions according to which the territory of the canal will be defended against enemies, protected from disease, and civilly governed; and the administrative authority under which these three subjects will be dealt with.

The bill, as passed, places the responsibility for the administration of the canal and of the Canal Zone upon the President, and also provides that the chief resident authority shall rest, not with a commission as at present, but upon a single administrative officer, a civilian under ordinary circumstances, an officer of the army in time of war. The most important provisions of the bill, or those which have been most widely discussed, deal with the question of tolls. The bill, as it passed the Senate, in the first instance, provided that free passage of the canal should be accorded, not only to all vessels engaged in American coastwise trade, but also to all American vessels engaged in foreign trade "if the owners agree that such vessels may be taken in time of war or other public emergencies upon payment of their fair value."

After protracted debate and discussion the Senate was induced to retire from its position exempting American deep-sea vessels. The bill, as passed, however, retains the provision excepting from

payment of tolls vessels engaged exclusively in the coastwise trade of the United States. There is much opposition to the bill in railway circles, both in Canada and in the United States; those who argue in favour of the bill, however, claim that the imposition of tolls would help to strengthen the present monopoly of continental railways. To overthrow this alleged monopoly the canal is forbidden to vessels owned and run by the railroad companies.

It is generally believed that Great Britain will formally protest against several of the regulations which the bill contains, especially the provision exempting American coastwise vessels from tolls, as violating the agreement reached in the Hay-Pauncefote Treaty. It is further stated in London, semiofficially, that should the protest fail of its purpose the British government will endeavour to have the question submitted to the Hague Court, under the arbitration treaty between the two countries.

After the passage of the Panama Bill, President Taft sent to Congress a message recommending that the legislative branch of the government pass a resolution supplementary to the bill declaring that nothing in it shall be deemed a violation of the Treaty and authorising any alien who thinks he is discriminated against to bring suit in the United States courts. Congress adjourned without acting upon this suggestion.

Perhaps the most important provision of the Panama canal bill is the one which admits foreign-built ships in foreign trade to American registry when they are owned by Americans. This is a great step towards freedom of trade, and one which can hardly fail to restore the American flag to the high seas.

The Hay-Pauncefote Treaty, negotiated to supersede the Clayton-Bulwer Treaty of 1850, was ratified and proclaimed in February, 1902. The objections of the British government to the canal bill are supposed to be based upon the following provisions of this treaty:

Article III. "The canal shall be free and open to the vessels of commerce and of war of all nations observing these rules [those embodied in the Convention of Constantinople, 1888, for free navigation of the Suez Canal] 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.

2. "The canal shall never be blockaded nor shall any right of war nor any act of hostility be committed within it. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder.

Article IV. "It is agreed that no change of territorial sovereignty, or of the international relations of the country or countries traversed by the aforementioned canal, shall affect the general principles of neutralisation, or the obligation of the High Contracting Parties under the present treaty."

From the preceding it is clear that our lease or purchase of the Canal Zone from the Republic of Panama was foreseen, and that such rights of sovereignty as we then acquired are impaired by the Hay-Pauncefote Treaty, and are subject to its provisions. In fact, there seem to have been foresight and forethought everywhere upon the question except in Washington.

APPENDIX L

OUR POLICY IN CENTRAL AMERICA

THE policy of the United States in its relations with our revolution-ridden neighbours in Central America, and in the American Mediterranean, is perhaps more clearly defined than ever before in a note of Hon. Huntington Wilson to Minister Weitzel at Managua, which was published in Washington on September 18, 1912.

Mr. Weitzel was directed to present this instruction officially to the Nicaraguan Government and unofficially to the

revolutionists in that country, and to make it public as an authorised declaration of policy.

America's purpose, the instruction declares, is to foster true constitutional government and free elections, and to this end strong moral support will be given to established governments against revolutions based upon the selfish designs of would-be despots, and not upon any principle or popular demand. Force will be used, if necessary, in maintaining free communications with and to protect American ministries and legations. This policy has already been adopted in Santo Domingo, Panama, and Honduras.

"The policy of the Government of the United States in the present Nicaraguan disturbances is to take the necessary measures for an adequate legation guard at Managua, to keep open communication, and to protect American life and property.

"In discountenancing Zelaya, whose régime of barbarity and corruption was ended by the Nicaraguan nation after a bloody war, the Government of the United States opposed not only the individual, but the system, and this Government could not countenance any movement to restore the same destructive régime.

"The Government of the United States will, therefore, discountenance any revival of Zelayaism, and will lend its strong moral support to the cause of legally constituted good government for the benefit of the people of Nicaragua, whom it has long sought to aid in their just aspiration toward peace and prosperity under constitutional and orderly government.

"Under the Washington conventions, the United States has a moral mandate to exert its influence for the preservation of the general peace of Central America, which is seriously menaced by the present uprising, and to this end, in the strict enforcement of the Washington conventions and the loyal support of their aims and purposes, all the Central American republics will find means of valuable co-operation.

"When the American Minister called upon the Government

of Nicaragua to protect American life and property, the Minister for Foreign Affairs replied that the Government troops must be used to put down the rebellion, adding: 'In consequence, my government desires that the Government of the United States guarantee with its forces security for the property of American citizens in Nicaragua, and that they extend this protection to all the inhabitants of the republic.'

"In this situation the policy of the Government of the United States will be to protect the life and property of its citizens in the manner indicated, and meanwhile to contribute its influence in all appropriate ways to the restoration of lawful and orderly government in order that Nicaragua may resume its programme of reforms unhampered by the vicious elements who would restore the methods of Zelaya."

The communication closed with a denunciation of General Mena, leader of the present insurrection, whose revolt is declared to have been in flagrant violation of promises, without even the pretence of contending for a principle, and "in origin one of the most inexcusable in the annals of Central America."

Criticism of, and opposition to, this line of policy will not be wanting in Central America or elsewhere. Never before has it been made quite so plain that no government can survive in the five republics between Mexico and Panama without the approval and the, at least moral, support of the administration in Washington.