before have arisen as to construction of contracts in which good honest people have been on both sides. Now that presents to me a very significant and useful example with respect to arbitration. A good many people are saying, "Don't arbitrate because you are going to lose. This is our canal, and while England is making a point of it, England would not fight about it, and, therefore, why give up when you are not likely to get an arbitration that will be satisfactory to you and your view of the construction?" Even if this were correct as to probability of result, which I need not, and do not admit, that is just the time when I am in favour of an arbitration. I mean that I have not gone about the country urging arbitration for the purpose of using that as a platform subject to attract the attention and approval of the audience. I hope I was more conscientious in advocating what I did advocate through the country on that head, and when I said to them that we never would have an arbitration that would be effective until we entered into an obligation that brought us into arbitration when we did not think we would win. That is the time that tests your faith in that method of settlement. Now I am willing, and indeed I would be ashamed not to be willing, to arbitrate any question with Great Britain in the construction of a treaty when we reach the exact issue which there is between the two nations. There need not be any public doubt on that subject so far as this administration is concerned. When there is a difference that cannot be reconciled by a negotiation and adjustment, then we are entirely willing to submit it to a impartial tribuna!. I am hopeful that we may get it either to settlement or to submission before the Administration, in which I have the honour to be a dissolving view, shall cease; but it may not be because these international negotiations move slowly. But I am glad to take this opportunity in this presence to say that if the time comes, there will be no doubt about what I will do in respect to the submission of that question, as far as my power goes, to an impartial tribunal for its settlement, if that is necessary.

A STEP TOWARD INTERNATIONAL PEACE.

I said that I rose with regret, and I have explained to you why. I rise also with pleasure because it is a great pleasure to believe that associations like this continue the

feeling in favour of peace, and that, after all, though the defeat of those treaties in the Senate was a great disappointment, the making of them and the agitation with respect to them was a step toward the goal which we all hope to reach. My own idea was that if we could make tho.e treaties, they would form the basis for a treaty with every other nation and the United States, and then between other nations than the United States, and finally, by interlocking and intertwining all the treaties, we might easily then come to the settlement of all international questions by a Court of arbitration, a permanent, well-established Court of arbitration, whose powers would be enforced by the agreement of all nations, and into which any nation might come as a complainant and bring in any other nation as a defendant and compel that defendant nation to answer to the complaint under the rules of law established for international purposes, and under the rules of law which would necessarily, with such a Court grow into an international code that would embrace all the higher moral rules of Christian civilization. Now that is the ideal that I had. It is the ideal that I still cherish, and while we received a body blow in taking away our power to enter into such an obligation for an arbitral Court by the view of these constitutional lawyers who would limit the power of the Senate to contract for the future because it might diminish their own power in the future, nevertheless, we may hope that as time goes on those views will be modified. We may hope that the cause of peace may command more votes than it seems to have done in the past. It is not perhaps a question for political discussion in the sense of being a party question. It is one that is bound to grow and quietly establish itself, and perhaps that influence will work even upon that rockribbed body, the Senate of the United States.

SHOULD THE PANAMA CANAL TOLLS CONTROVERSY BE ARBITRATED? ́

The diplomatic controversy between Great Britain and the United States respecting the legality of the remission of Panama Canal tolls to American vessels engaged in our coastwise trade, resolves itself into two main questions: (1) Does the phrase "of all nations" contained in Article III of the Hay-Pauncefote Treaty include the United States, or does it mean all nations other than the United States? (2) Is the remission of such tolls a "discrimination against any such nation" in the sense of the treaty?

OUR LEGAL OBLIGATIONS IN THE PREMISES.

Article III, Rule 1, of the Hay-Pauncefote Treaty of 1901 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."

Article I of the Convention concerning Arbitration between the United States and Great Britain, signed April 4th, 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 a legal obligation. It is a solemn compact between two great nations, 1 and is as binding in law as are valid contracts between private individuals or corporations. It should be especially noted that it binds us to refer to The Hague Tribunal differences of a legal nature, and particularly those relating to the interpretation of treaties, which

have not been settled by diplomacy, unless such differences affect the vital interests, independence, or honor of either State or concern the interests of third parties.

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A treaty,' says Plumley, umpire, in the case of the heirs of Jean Maninat (French-Venezuelan Commission of 1902, Ralston's Report, 44, 73), is a solemn compact between nations. It possesses in ordinary the same essential qualities as a contract between individuals, enhanced by the weightier quality of the parties, and by the greater magnitude of the subject matter. To be valid, it imports a mutual assent, and in order that there may be such a mutual assent there must be a similar understanding of the several matters involved. It can never be what one party understands, but it always must be what both parties understand to be the matters agreed upon and what in fact was the agreement of the parties concerning the matters now in dispute.' Cited by Ralston, International Arbitral Law and Procedure, p. 4.

It will not be seriously maintained that the existing controversy falls within the scope of any of the exceptions above named to the application of the treaty. Certainly the difference is not one which affects the vital interests, the independence, or the honor of either State, as these terms are usually understood. Such a contention would be too absurd for serious argument. It may seem at first thought as though the interests of third parties were involved in the settlement of this dispute. But a little reflection will lead to the conviction that the difference is one which does not concern the interests of other States. Their interests may be affected (as, indeed, is often the case when there are treaties between two States), but they are not directly concerned in the dispute itself, which is solely between Great Britain and the United States.

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 in the matter of the Panama tolls by refusing to renew the Convention upon its expiration in May, 1913. Even supposing that 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 thus been demonstrated that the United States is legally bound to arbitrate the dispute with Great Britain re

specting the legality of the remission of the Panama Canal tolls to American vessels engaged in the coastwise traffic. What are our moral obligations in the premises

OUR MORAL OBLIGATIONS IN THE PREMISES.

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 Northeastern Fishery Question (the latter involving an interpretation of Article I of the Treaty of 1898). As a keen student and practitioner of international law 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 honour of the State is involved, or even its most vital interests."2

Hyde, in 2 Proceedings of the Second National Peace Congress (1909), p. 232.

For a very complete account of the arbitrations to which the United States had been a party up to 1898, see Moore's monumental History and Digest of International Arbitration, in 5 vols.

See also Darby's International Tribunals (4th ed., 1904), for a brief digest of modern arbitrations. Out of 228 instances of "formal" arbitrations occurring between 1794 and 1901. cited by Darby, the United States was a party in 68 cases, Great Britain in 81, France in 28, Prussia or Germany in 17, and Russia in 8.

THE UNITED STATES AT THE FIRST HAGUE CONFERENCE.

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