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years such works are to revert to the cities of Colon and Panama respectively.

The Republic of Panama agrees that the cities of Colon and Panama shall comply in perpetuity with the sanitary ordinances made by the United States, and in case of their failure the United States is granted the right to enforce the same. And there is granted to the United States the right to maintain order in the cities and adjoining territory, if Panama is not able to maintain such order.

Panama further grants to the United States all rights that she may be entitled to in the property of the new Panama Canal Company, and the Panama Railroad Company as a result of the transfer of sovereignty from Colombia to Panama.

It is also agreed that the ports of entrance of the canal and the waters thereof and the towns of Panama and Colon shall be free for all time from custom tolls, tonnage and other dues or charges or taxes upon any vessel using the canal or belonging to the United States and used about the canal, except tolls for use of the canal; and except charges imposed by Panama upon goods destined for consumption by the rest of Panama and upon vessels that do not cross the canal. Panama agrees that she will not impose any tax on the canal, railroad, works and vessels employed in the service of the canal. And there shall not be imposed any contributions upon the officers and employes in the service of the canal and railroad.

The United States agrees not to charge for dispatches over any telegraph or telephone company against officials of Panama, more than is charged against its own officials.

A restraining provision is: that the canal and entrances thereto shall be neutral in perpetuity and shall

be operated on the terms provided for by Section 1, Article 3, of, and in conformity with, the treaty entered into by the United States and Great Britain on November 18, 1901. This is a regulation in the most vital part of the grant.

The main object of the charter was to permit us to construct and operate a public canal, but it is nowhere directly stated that tolls could be charged for the use of the canal. It was left to be implied from ownership. We could not operate the works as a public charity, for the world, but would be obliged to exact compensatory tolls.

Panama is to have the right to transport over the canal its vessels, troops and munitions of war without paying charges of any kind; also over the railway for the transport of persons in the service of the new Republic. This is evidently a part of the consideration for the grants of the treaty. For by Article 14 the United States was to pay $10,000,000 to Panama and a sum of $250,000 annually so long as the canal continued; and it is provided in said Article that the stated sums were to be in addition to all other benefits coming to Panama under the convention. Free transportation was "one of the benefits coming to Panama." Did not Panama hereby pay these tolls in advance?

Panama also further granted to America all rights to future earnings under the concessions to Lucien N. B. Wyse, now held by the new Panama Canal Company; and all pecuniary rights accruing thereunder as well in the canal as in the railroad. And it was declared that said rights and property were to be free from any present or reversionary interest in Panama, and that the title of the United States upon the completion of the prospective purchase from the Panama Canal Company shall be absolute so far as concerns

Panama, saving always "the rights of the Republic specifically secured under this treaty."

Our country was given explicit power to employ armed force for the protection of the canal and the ships which use the same; and also to establish fortifications for these purposes. And for further protection the Republic of Panama was to sell or release to the United States necessary lands for naval or coaling stations on the Pacific coast and on the Caribbean coast.

These are the main points of the canal charter grant, and, like all similar documents, it is not so clear but what disputes may arise as to the proper meaning of some of the provisions. In less than one year after the ratification of this treaty Panama filed a protest against the actions of our country under it. Mr. Taft then Secretary of War, visited Panama and conceded largely what was demanded. The dispute mostly grew out of the action of our country in collecting certain custom duties near Panama and Colon. Panama claimed that the treaty gave to it this right and not to America. This was conceded to Panama. Long and involved treaties are liable at any time to bring on contention and diplomatic controversy.

The Panama treaty is strong in our favor because Bunau-Varilla signed for Panama and he wanted it liberal enough to cause the United States to go on and buy the existing rights of the French Company. Still his work was subject to revision when the home government sat in judgment on its ratification. It was ratified at Panama, December 2, 1903.

We are safely in charge of the canal under this most valuable treaty and no doubt we shall observe it in word and spirit.



The French Company desiring to realize something out of an unprofitable unfinished enterprise were most anxious to unload the burden upon some individuals or nation who were able to complete the canal. After their effort and failure those desiring to invest in isthmian projects were decidedly scarce. The whole list of purchasers was represented by unit; it was one-and this was the United States. The French company had either to go forward and finish the canal or forfeit all or make haste and sell to the one customer.

No wonder Bunau-Varilla was so wrought up over Panama's secession and the making of the Panama treaty. It was the last and only chance and the situation necessarily brought on desperation.

The American Canal Commission had negotiations with the French company many months prior to the Panama Revolution and told the new Panama canal people that they could not recommend a purchase for more than $40,000,000. This brought from Paris January 4, 1902, a definite offer to sell all for the above named sum. The commission then changed its report in favor of Panama and the purchase of the French rights and property.

In June, 1902, Congress passed what is known as the Spooner act, by which the President was authorized to acquire for and on behalf of the United States at a cost of $40,000,000 all of the property and franchises of the New Panama Canal Company, on the isthmus of Panama, and all maps, plans, records on the isthmus

and in Paris, including not less than 68,863 shares of the stock of the Panama railroad, owned by or held for the use of the canal company, provided that a satisfactory title could be obtained for all of such property. The President was authorized to secure from Colombia exclusive and perpetual control of a strip of land not less than six miles wide and extending from the Caribbean Sea to the Pacific Ocean and the right to the waters thereon generally for canal purposes.

That when the President has secured the right of way from Colombia and a satisfactory title to the French property and rights, he is to pay to the New Panama Canal Company for this property the sum of $40,000,000, and to Colombia such sums as he has agreed to with her. He is then to excavate a ship canal using as far as possible the unfinished French work. The canal to be a lock canal, if deemed advisable.

If he failed in getting the rights at Panama then he was to secure property at Nicaragua, if possible, and build the canal there.

He succeeded in buying the French rights and the Panama route was adopted. The complications at Paris consumed a vast amount of time and the conveyance of the French rights could not be had until May 4, 1904. At this date the French stockholders received the purchase money; and now with the incomplete canal in our hands and with the grant and charter from Panama, the Americans were able to proceed with the great enterprise.

Some preliminary work was done by the canal commissioners immediately after May 9, 1904; and on June 1, 1904, John F. Wallace of Chicago was appointed chief engineer of the canal project. He took hold of the work with vigor, but difficulties arising which never have been fully understood by the public, Mr. Wallace on

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