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ADDRESS OF MR. AMOS S. HERSHEY, Professor of Political Science and International Law in Indiana University.

I find myself in a somewhat embarrassing situation. I fear that my answer to the question under discussion will take you over ground with which you are already familiar, so that you may feel that I have contributed nothing of novelty or essential importance to the discussion.

My reply in brief is this: Unless Congress sees fit to repeal that portion of the Panama Canal Act which exempts coastwise traffic from the payment of tolls, the United States is under an undoubted international obligation to enter into an agreement with Great Britain to arbitrate the controversy.

It may be that the United States is under the alternative international obligation of repealing the section of the Panama Canal Act referred to above, in accordance with Rule 1 of Article III of the Hay-Pauncefote Treaty, which provides:

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 of the conditions or charges of traffic, or otherwise. Such conditions and charges of traffic shall be just and equitable.

In respect to the proper interpretation of this rule, I am unfortunately in the position of a judge who has been so favorably (in some cases unfavorably) impressed with the arguments on both sides that he finds it difficult to render a decision. Besides, this question was so fully and ably treated yesterday that I feel certain I shall be readily excused from a further discussion.

However this may be, there is one international obligation resting upon the United States in the premises which scarcely admits of a reasonable doubt. This obligation is both legal and moral.

Article I of the convention between Great Britain and the United States, signed April 4, 1908, declares:


Differences which may arise of a legal nature or relating to the interpretation of treaties existing between the two contracting parties and which it may not have been possible to settle by diplomacy, shall be referred to the Permanent Court of Arbitration established at The Hague by the Convention of the 29th of July, 1899, provided, nevertheless, that they do not affect the vital interests, the independence, or the honor of the two contracting states, and do not concern the interests of third parties.

This treaty constitutes an undoubted legal obligation. It is a solemn compact between two great nations, and is as binding in law as are valid contracts between private individuals or corporations.

It cannot be successfully maintained that the Panama Canal tolls controversy falls within the scope of any of the above-named exceptions to the application of the Anglo-American arbitration treaty. Certainly the difference is not one affecting the "independence" or the "honor" of either state. Such a contention would be too absurd for serious argument. Nor will it be very seriously maintained that the difference is one affecting our "vital interests," whatever meaning may be given to this somewhat vague and apparently indefinable phrase. The phrase "vital interests" of course refers to questions of a farreaching political, economic, or social nature. It might be justly held to apply to great issues involving considerations of such a national policy as the Monroe Doctrine or to fundamental economic and racial issues, such as were involved in the causes which led to the AngloBoer, Spanish-American, and Russo-Japanese Wars. But no proper construction of the phrase could possibly render it applicable to a question of exempting from tolls our coastwise trade.

Upon a first and superficial glance, it may seem as though this Panama tolls controversy falls under another exception to the application of the Anglo-American arbitration treaty. It may appear to be a difference which "concerns the interests of third parties." But a little reflection will lead to the conclusion that, while the interests of third states are doubtless affected in the sense that they may enjoy certain advantages or suffer certain losses in consequence of a decision favorable or unfavorable to Great Britain (as the case may be), their interests or rights are not directly concerned in the dispute itself. They are not parties to the suit.

Inasmuch as the arbitration treaty in question was only concluded for a period of five years from date of the exchange of ratifications,

it has been suggested that the United States may avoid her obligations, if any, to Great Britain by refusing to renew the convention upon its expiration in June, 1913. Even supposing the United States Government were willing to fly in the face of public sentiment and attempt to evade the issue in this disgraceful manner, it would probably be in vain; for the controversy would be regarded as having arisen prior to the expiration of the treaty, and the United States has agreed to arbitrate existing differences, i. e., existing under the treaty, or while the treaty was still in force.

It has also been suggested that the Hay-Pauncefote Treaty is void or voidable on the ground that there has been a vital change of conditions since the treaty was made, the clause rebus sic stantibus being an implied condition in all treaties. This view, which assumes that a mere change in title-deed or transfer of territory constitutes a vital change of circumstances, appears to me trivial and therefore unworthy of serious refutation. Besides, this contingency was expressly provided for in Article IV of the treaty, which declares:

It is agreed that no change of territorial sovereignty or of the international relations of the country or countries traversed by the before-mentioned canal shall affect the general principle of neutralization or the obligation of the high contracting parties under the present treaty.

Having demonstrated, as I think, that the obligation to arbitrate the Panama Canal tolls controversy is a legal one, it remains to show that it constitutes a moral obligation as well. In so doing I shall take the liberty of drawing still more largely than I have hitherto done upon a pamphlet of mine recently published by the American Association for International Conciliation.

The United States has been the consistent champion of international arbitration ever since this ancient practice was revived in modern times by the Jay Treaty of 1794. Among the many arbitrations to which this country has been a party, might be indicated various important boundary disputes, the Alabama Claims and Bering Sea controversies, and the Northwestern Fishery question (the latter involving an interpretation of Article I of the Treaty of 1898). As Professor Hyde has well said:

The experience of the United States affords abundant evidence of the fact that if an international controversy is of a legal character, it is capable of adjustment by arbitration whether the claims involved are national or private; whether the issue is one of fact or of law; whether the difference is one concerning the ownership of land or the control of water; whether the honor of the state is involved, or even its most vital interests.1

At the First Hague Conference of 1899 the United States was particularly active in urging arbitration and assisting in the creation of the so-called Permanent Court of Arbitration at The Hague. Our government subscribed to the following declaration contained in the arbitration convention adopted at The Hague:

In questions of a legal nature, and especially in the interpretation or application of international conventions, arbitration is recognized by the signatory Powers as the most effective, and at the same time the most equitable means of settling disputes, which diplomacy has failed to settle.

At the Second Hague Conference in 1907 the United States was one of the most vigorous advocates of a scheme for obligatory arbitration, and the American delegation proposed a project for a Court of Arbitral Justice which, if adopted, would have transformed the Hague Tribunal, or so-called Court of Permanent Arbitration created in 1899, into a real permanent High Court of International Justice, or Supreme Court of the Nations. Both schemes failed of adoption, but the contracting Powers represented at The Hague declared themselves "unanimous:" (1) In admitting the principle of obligatory arbitration; (2) In declaring that certain disputes, in particular those relating to the interpretation and application of the provisions of international agreements, may be submitted to obligatory arbitration without restriction. It is to be hoped that a convention providing for the establishment of a system of real international justice will be agreed upon at the Third Hague Peace Conference.

However, authorities on international law may differ in their views as to the possible scope of arbitration as applied to the settlement of international disputes, there appears to be a consensus of opinion

1Hyde, in 2 Proceedings of the Second National Peace Congress (1909),

p. 232.

among them that interpretation of treaties is a proper subject for judicial determination. The rules for such interpretation are derived from general jurisprudence, and there is general agreement among the authorities as to the more important of these rules.

The method of interpretation consists in finding out the connection made by the parties to an agreement between the terms of their contract and the objects to which it is to be applied. This involves two steps. One is to ascertain what has been called the "standard of interpretation"; that is, the sense in which the various terms are employed. The other is to learn what are the sources of interpretation; that is, to find out where one may turn for evidence of that sense."2

The main purpose of interpretation is to determine the real intentions of the parties. To this end diplomatic correspondence, or interchange and expression of views leading up to the final negotiation and ratification of the treaty, would be all important. For instance, the fact that an amendment was lost in the Senate providing that the United States should reserve the right to determine in respect to charges in favor of our own citizens, would not be decisive in itself. All the circumstances leading up to this vote would have to be taken into account. Besides, there are many other conditions surrounding the case, which would have to be considered, such, for example, as the bearing of the Clayton-Bulwer Treaty upon the Hay-Pauncefote Treaty, more particularly whether the latter treaty was the main consideration for the abrogation of the former, as, indeed, appears to have been the case.

It has been maintained that there are practical difficulties in the way of a just and impartial arbitration of this question, arising either from defects inherent in the arbitral system or from the alleged impossibility of finding judges who do not belong to interested nations.

It may be admitted that so-called courts or commissions of arbitration too often, in the past, have sought a solution of the controversy submitted to them by way of compromise, rather than through the application of legal principles to the case in hand. But in the administration of international justice during recent years great progress has been made in the direction of substituting better methods, higher

2Hyde, in 3 American Journal of Int. Law (1910), p. 46.

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