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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 Canalis 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.

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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.

“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:

“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 a propos:

“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 McKinley 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."

CHAPTER III

The Financial Aspects of Tolls-Exemption

In the proper consideration of this aspect of the question, we must determine what traffic through the canal is exempt from payment of tolls under existing treaties. The public vessels of the United States through the canal are exempt from the payment of tolls by understanding with Great Britain. Article XIX of the treaty with Panama states: “The Government of the Republic of Panama shall have the right to transport over the canal its vessels and its troops and munitions of war in such vessels at all times without paying charges of any kind.” Great Britain has conceded the right of the United States to enter into a treaty with Colombia exempting their public vessels from the payment of tolls, if thereby it will get a clear title to the Canal Zone. No other traffic through the canal is exempt from payment of tolls through treaty stipulation. None can be made exempt by legal enactment.

The Panama Canal act provides:

SECT. 5. "That the President is hereby authorized to prescribe and from time to time change the tolls that shall be levied by the Government of the United States for the use of the Panama Canal: Provided, That no tolls, when prescribed as above, shall be changed, unless six months' notice thereof shall have been given by the

President by proclamation. No tolls shall be levied upon vessels engaged in the coastwise trade of the United States.

"Tolls may be based upon gross or net registered tonnage, displacement tonnage, or otherwise, and may be based on one form of tonnage for warships and another for ships of commerce. The rate of tolls may be lower upon vessels in ballast than upon vessels carrying passengers or cargo. When based upon net registered tonnage for ships of commerce, the tolls shall not exceed one dollar and twenty-five cents per net registered ton, nor be less, other than for vessels of the United States and its citizens, than the estimated proportionate cost of the actual maintenance and operation of the canal. If the tolls shall not be based upon net registered tonnage, they shall not exceed the equivalent of one dollar and twentyfive cents per net registered ton as nearly as the same may be determined, nor be less than the equivalent of seventyfive cents per net registered ton. The toll for each passenger shall not be more than one dollar and fifty cents. The President is authorized to make and from time to time to amend regulations governing the operation of the Panama Canal, and the passage and control of vessels through the same or any part thereof, including the locks and approaches thereto, and all rules and regulations affecting pilots and pilotage in the canal or the approaches thereto through the adjacent waters."

The foregoing is construed by Senator Root as follows:

“The President is authorized to impose tolls not

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