the construction, maintenance, operation, sanitation, and protection of the said enterprise. The Republic of Panama further grants in like manner to the United States in perpetuity all islands within the limits of the zone above described and in addition thereto the group of small islands in the Bay of Panama, named Perico, Naos, Culebra and Flamenco. Article III The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said Article II which the United States would possess and exercise if it were the sovereign of the territory within which the said lands and waters are located to the entire exclusion of the exercise of the Republic of Panama of any such sovereign rights, power or authority. Article IV As rights subsidiary to the above grants the Republic of Panama grants in perpetuity to the United States the rights to use the rivers, streams, lakes and other bodies of water within its limits for navigation, the supply of water or water-power or other purposes, so far as the use of said rivers, streams, lakes and bodies of water and the waters thereof may be necessary and convenient for the construction, maintenance, operation, sanitation, and protection of the said canal. Article V The Republic of Panama grants to the United States in perpetuity a monopoly for the construction, maintenance and operation of any system of communication by means of canal or railroad across its territory between the Caribbean Sea and the Pacific Ocean. Article IX The United States agrees that the ports at either entrance of the canal and the waters thereof, and the Republic of Panama agrees that the towns of Panama and Colon shall be free for all time so that there shall not be imposed or collected custom house tolls, tonnage, anchorage, lighthouse, wharf, pilot, or quarantine dues or any other charges or taxes of any kind upon any vessel using or passing through the canal or belonging to or employed by the United States, directly or indirectly in connection with the construction, maintenance, operation. sanitation and protection of the main canal, or auxiliary works. or upon the cargo, officers, crew, or passengers of any such vessels, except such tolls and charges as may be imposed by the United States for the use of the canal and other works, and except tolls and charges imposed by the Republic of Panama upon merchandise destined to be introduced for the consump tion of the rest of the Republic of Panama, and upon vessels touching at the ports of Colon and Panama and which do not cross the canal. The Government of the Republic of Panama shall have the right to establish in such ports and in the towns of Panama and Colon such houses and guards as it may deem necessary to collect duties on importations destined to other portions of Panama and to prevent contraband trade. The United States shall have the right to make use of the towns and harbours of Panama and Colon as places of anchorage, and for making repairs, for loading, unloading, depositing, or transshipping cargoes either in transit or destined for the service of the canal and for other works pertaining to the canal. Article X The Republic of Panama agrees that there shall not be imposed any taxes, national, municipal, departmental, or of any other class, upon the canal, the railways and auxiliary works, tugs and other vessels employed in the service of the canal, store houses, work-shops, offices, quarters for labourers, factories of all kinds, warehouses, wharves, machinery and other works, property, and effects appertaining to the canal or railroad and auxiliary works, or their officers or employees situated within the cities of Panama and Colon, and that there shall not be imposed contributions or charges of a personal character of any kind upon officers, employees, labourers, and other individuals in the service of the canal and railroad and auxiliary works. Article XIV As the price of compensation for the rights, powers and privileges granted in this Convention by the Republic of Panama to the United States, the government of the United States agrees to pay to the Republic of Panama the sum of ten million dollars ($10,000,000) in gold coin of the United States on the exchange of the ratification of this Convention, and also an annual payment during the life of this Convention of two hundred and fifty thousand dollars ($250,000) in like gold coin, beginning nine years after the date aforesaid. The provisions of this article shall be in addition to all other benefits assured to the Republic of Panama under this Convention. But no delay or difference of opinion under this article or any other provisions of this treaty shall affect or interrupt the full operation and effect of this Convention in all other respects. Article XVIII The canal, when constructed, and the entrances thereto shall be neutral in perpetuity, and shall be opened upon the terms provided for by Section I of Article III of, and in conformity with all the stipulations of, the treaty entered into by the Government of the United States and Great Britain on November 18, 1901. (See page 84.) Article XIX 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. The exemption is to be extended to the auxiliary railway for the transportation of persons in the service of the Republic of Panama, or of the police force charged with the preservation of public order outside of said zone, as well as to their baggage, munitions of war and supplies. Article XXIII If it should become necessary at any time to employ armed forces for the safety or protection of the canal, or of the ships that make use of the same, or the railways and auxiliary works, then the United States shall have the right, at all times and in its discretion, to use its police and its land and naval forces or to establish fortifications for these purposes. Article XXV For the better performance of the engagements of this Convention and to the end of the efficient protection of the canal and the preservation of its neutrality, the Government of the Republic of Panama will sell or lease to the United States lands adequate and necessary for naval or coaling stations on the Pacific coast and on the western Caribbean coast of the Republic at certain points to be agreed upon with the President of the United States. (Supplement of the American Journal of International Law, April, 1909, pp. 130–139.) 24. Extract from the Panama Canal Act, 1912, of the Section 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 coast-wise trade of the United States. NOTE. Great Britain maintained that the exemption from tolls thus granted to vessels engaged in the coast-wise trade of the United States was a violation of that paragraph of Article III of the Hay-Pauncefote Treaty of 1901 which stipulates that the Canal shall be open to the vessels "of all nations . . . on terms of entire equality," and forbids discrim ination "in respect of the conditions or charges of traffic" (see page 84). It is contended in reply that "all nations" means all nations other than the United States. In order to settle the dispute it was suggested that (1) the last sentence of section 5 of the Panama Canal Act should be repealed, and (2) the question should be referred to Arbitration. In default of one or the other a new difficulty would have arisen to disturb the friendship of Great Britain and the United States just at the time when the old controversies had been laid to rest by a series of masterly negotiations and equitable adjustments. This unhappy consummation was prevented when in 1914 Congress repealed the last sentence of the above section at the instance of President Wilson. 25. Treaty of 1914 between the United States The United States of America and the Republic of Colombia being desirous to remove all the misunderstandings growing out of the political events in Panama in November, 1903; to restore the cordial friendship that formerly characterized the relations between the two countries, and also to define and regulate their rights and interests in respect of the interoceanic Canal which the Government of the United States is constructing across the Isthmus of Panama, have resolved for this purpose to conclude a Treaty and have accordingly appointed as their Plenipotentiaries: (Here follows a list of names.) Who, after communicating to each other their respective full powers, which were found to be in due and proper form, have agreed upon the following: Article I The Government of the United States of America, wishing to put at rest all controversies and differences with the Republic of Colombia arising out of the events from which the present situation on the Isthmus of Panama resulted, express, in its own name and in the name of the people of the United States, sincere regret that anything should have occurred to interrupt or to mar the relations of cordial friendship that had so long subsisted between the two nations. The Government of the Republic of Colombia, in its own name and in the name of the Colombian people, accepts this |