We took the Canal Zone under the principle of international eminent domain. That obligates the United States to manage the canal as a public utility. This precludes free transportation. Exemption of the public vessels of the Republic of Panama from the payment of tolls is merely commuted rent for leasehold rights. Exemption of the public vessels of the United States is in consideration of service in connection with protection and maintenance. Other traffic through the canal must receive the same treatment. The owner is entitled to collect in revenue an amount sufficient to cover operating expenses, interest, reserves and sinking fund. The United States need not be out a cent for the canal if it will apply business methods in its management. This puts the United States in a unique position to operate and manage the canal "for the benefit of mankind on equal terms to all" and thereby justify the manner in which it secured leasehold rights to the Canal Zone.

The United States has expended hundreds of millions of dollars in coast and harbor improvements to develop and promote commerce. There is no direct return to the national treasury for the expenditures incurred. The entire benefit is indirect-increased national prosperity.

Contrast this situation with the one presented by the Panama Canal. The expenditures incurred for the latter are to be amortized through charges to revenue from tolls and all operating expenses are similarly to be charged to revenue. The cost to the United States, in the long run, need not be anything. It need not cost the United States treasury a cent if the government will apply gray matter in the management of the canal.

The indirect commercial benefits to the United States will be real and substantial. Note the following from the Evening Post (New York):

"The curtailing of distances between our Atlantic and Pacific coasts our coastwise trade-is so much larger than the saving in mileage from Europe or Africa to the west coast of the American continent that even with equal tolls our own shipping draws much the larger gain from the Canal. Tolls exemption would tend to emphasize the advantage by throwing the cost of canal maintenance on the traffic that profits least.

"For the Panama Canal- to be a success and of real value to this country it must prove an economical route for coast-to-coast trade as well as a cheap route for trade between the eastern coast of the United States and the western coast of South America.

"For such trade the Panama Canal favors the American shipper by over 55 per cent. If this country cannot benefit with such a handicap, the Panama Canal must be a failure so far as the United States is concerned."

The United States has been granted a canal monopoly in perpetuity by Panama in the territory over which it is sovereign. The Nicaragua treaty submitted to the United States Senate for ratification secures the right to construct the Nicaragua canal on payment of $3,000,000. It is already suggested that we secure similar right to the Atrato route. In short, the United States aims at a transportation monopoly across the Isthmus connecting North and South America. Therefore, it is

obligated to adopt the public utility principle in its management; that is, "for the benefit of mankind on equal terms to all."

The annual capacity of the Panama Canal is 80,000000 tons. Its maximum capacity will not be reached in decades. Only nine per cent of the operating revenue was needed to defray operating expenses by the Suez Maritime Canal Company in 1911. This shows that there will be opportunity for exorbitant profits in the management of the Panama Canal after the liability is extinguished through a sinking fund. Therefore it is important that the Hay-Pauncefote treaty be continued unimpaired and that it should be given the meaning intended by John Hay.

Great Britain was given to understand and did understand that the shipping of her subjects (nationals) through the canal in the matter of charges and conditions would receive the same treatment as the shipping of citizens (nationals) of the United States. Thereto "we have pledged our faith as a nation, and that is the beginning and the end of all argument.

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"Our sole concern relates to our own honor, and that must be preserved inviolate. That it would be sullied in our own eyes and before the world we firmly believe a careful study of all phases of the subject * cannot fail to convince every honest mind. To all good citizens, then, we say, unhesitatingly:

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"Remember the admonition of Washington to ‘observe good faith and justice toward all nations' and stand by President Wilson in his courageous determination to

'redeem every obligation without quibble or hesitation'; stand by him, not necessarily because he is President, but because he is right."-Harvey.

The following newspaper clipping is apropos:

"The question for Congress to consider is, can we afford to make our policy as changeable as the figures of a kaleidoscope whenever it happens to suit our own interests? When we have throughout our entire history proclaimed to the world a policy founded on neutrality and equality, can we sanction any measure which favors equality when it helps us and utterly ignore and repudiate it when it may not prove to our interest?"

We will close this chapter with the following excerpts from Senator Root's memorable speeches in favor of the repeal of the tolls-exemption clause of the Panama Canal act:

"It is no petty question with England about tolls. This is a question whether the United States, put on its honor with the world, is going to make good the public declarations that reach back beyond our lives, whether the honor and good faith of the United States is as good as its bond, whether acute and subtle reasoning is to be applied to the terms of a treaty with England to destroy the just expectations of the world upon more than half a century of American professions, upon which we give no contract right, and there is no security but honor and good faith.

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"I knew something about this treaty. I knew what John Hay thought. I sat next him in the Cabinet of President Mc Kinley while it was negotiated, and of President

Roosevelt when it was signed. I was called in with Senator Spooner to help in the framing of the Panama treaty which makes obedience to this Hay-Pauncefote treaty a part of the stipulations under which we get our title. I negotiated the treaty with Colombia for the settlement and the removal of the cloud upon the title to the Isthmus of Panama and carried on the negotiations with England under which she gave her assent to the privileges that were given to Colombia in that treaty. I have had to have a full conception of what this treaty meant for now nearly thirteen years. I know what Mr. Hay felt and what he thought, and, I speak for all the forbears that went before me in America and for all that shall come after me, for the honor and credit of our country, and for that alone. If we do not guard it, who shall?

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"Our democracy has assumed a great duty and asserts a mighty power. I have hoped that all diplomacy would be made better, purer, nobler, placed on a higher plane because America was a democracy. I believe it has been; I believe that during all our history the right-thinking, the peace-loving, the justice-loving people of America have sweetened and ennobled and elevated the intercourse of nations with each other; and I believe that now is a great opportunity for another step forward in that beneficent and noble purpose for civilization that goes far beyond and rises far above the mere question of tolls or a mere question with England. It is the conduct of our Nation in conformity with the highest principles of ethics and the highest dictates of that religion which aims to make the men of all the races of the earth brothers in the end."