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Britain into the facts above set forth as to the basis upon which the tolls fixed by the President's proclamation have been computed, and also into the regulations and restrictions circumscribing the coastwise trade of the United States, as well as into other facts bearing upon the situation, with the view of determining whether or not, as a matter of fact, under present conditions there is any ground for claiming that the act and proclamation actually subject British vessels to inequality of treatment or to unjust and inequitable tolls. If it should be found as a result of such an examination on the part of Great Britain that a difference of opinion exists between the two Governments on any of the important questions of fact involved in this discussion, then a situation will have arisen which, in the opinion of this Government, could with advantage be dealt with by referring the controversy to a commission of inquiry for examination and report in the manner provided for in the unratified arbitration treaty of August 3, 1911, between the United States and Great Britain.

The necessity for inquiring into questions of fact in their relation to controversies under diplomatic discussion was contemplated by both parties in negotiating that treaty, which provides for the institution, as occasion arises, of a joint high commission of inquiry, to which, upon the request of either party, might be referred for impartial and conscientious investigation any controversy between them, the commission being authorized upon such reference "to examine into and report upon the particular questions or matters referred to it, for the purpose of facilitating the solution of disputes by elucidating the facts, and to define the issues presented by such questions, and also to include in its report such recommendations and conclusions as may be appropriate."

This proposal might be carried out, should occasion arise for adopting it, either under a special agreement or under the unratified arbitration treaty above mentioned, if Great Britain is prepared to join in ratifying that treaty, which the United States is prepared to do. You will take an early opportunity to read this dispatch to Sir Edward Grey; and if he should so desire, you will leave a copy of it with him.

I am, etc.,

P. C. KNOX.

[Inclosure.]

[Panama Canal toll rates.]

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA.

A PROCLAMATION.

I, William Howard Taft, President of the United States of America, by virtue of the power and authority vested in me by the Act of Congress, approved August twenty-fourth, nineteen hundred and twelve, to provide for the opening, maintenance, protection and operation of the Panama Canal and the sanitation and government of the Canal Zone, do hereby prescribe and proclaim the following rates of toll to be paid by vessels using the Panama Canal:

1. On merchant vessels carrying passengers or cargo one dollar and twenty cents ($1.20) per net vessel ton-each one hundred (100) cubic feet-of actual earning capacity.

2. On vessels in ballast without passengers or cargo forty (40) per cent less than the rate of tolls for vessels with passengers or cargo.

3. Upon naval vessels, other than transports, colliers, hospital ships and supply ships, fifty (50) cents per displacement ton.

4. Upon army and navy transports, colliers, hospital ships and supply ships one dollar and twenty cents ($1.20) per net ton, the vessels to be measured by the same rules as are employed in determining the net tonnage of merchant vessels.

The Secretary of War will prepare and prescribe such rules for the measurement of vessels and such regulations as may be necessary and proper to carry this proclamation into full force and effect.

In witness whereof, I have hereunto set my hand and caused the seal of the United States to be affixed.

Done at the City of Washington this thirteenth day of November in the year of our Lord one thousand nine hundred and twelve and of the independence of the United States the one hundred an thirtyseventh.

[SEAL.]

By the President:

WM. H. TAFT.

P. C. KNOX,

Secretary of State.

The British Ambassador to the Secretary of State.

BRITISH EMBASSY, Washington, February 27, 1913.

SIR: His Majesty's Government are unable before the administration leaves office to reply fully to the arguments contained in your dispatch of the 17th ultimo to the United States chargé d'affaires at London regarding the difference of opinion that has arisen between our two Governments as to the interpretation of the HayPauncefote treaty, but they desire me in the meantime to offer the following observations with regard to the argument that no case has yet arisen calling for any submission to arbitration of the points in difference between His Majesty's Government and that of the United States on the interpretation of the Hay-Pauncefote treaty, because no actual injury has as yet resulted to any British interest and all that has been done so far is to pass an act of Congress under which action held by His Majesty's Government to be prejudicial to British interests might be taken.

From this view His Majesty's Government feel bound to express their dissent. They conceive that international law or usage does not support the doctrine that the passing of a statute in contravention of a treaty right affords no ground of complaint for the infrac tion of that right, and that the nation which holds that its treaty rights have been so infringed or brought into question by a denial that they exist, must, before protesting and seeking a means of determining the point at issue, wait until some further action violating those rights in a concrete instance has been taken, which in the present instance would, according to your argument, seem to mean, until tolls have been actually levied upon British vessels from which vessels owned by citizens of the United States have been exempted. The terms of the proclamation issued by the President fixing the canal tolls, and the particular method which your note sets forth as having been adopted by him, in his discretion, on a given occasion

for determining on what basis they should be fixed do not appear to His Majesty's Government to affect the general issue as to the meaning of the Hay-Pauncefote treaty which they have raised. In their view the act of Congress, when it declared that no tolls should be levied on ships engaged in the coasting trade of the United States and when, in further directing the President to fix those tolls within certain limits, it distinguished between vessels of the citizens of the United States and other vessels, was in itself and apart from any action which may be taken under it, inconsistent with the provisions of the Hay-Pauncefote treaty for equality of treatment between the vessels of all nations. The exemption referred to appears to His Majesty's Government to conflict with the express words of rule 1 of article 3 of the Hay-Pauncefote treaty, and the act gave the President no power to modify or discontinue the exemption.

In their opinion the mere conferring by Congress of power to fix lower tolls on United States ships than on British ships amounts to a denial of the right of British shipping to equality of treatment, and is therefore inconsistent with the treaty, irrespective of the particular way in which such power has been so far actually exercised.

In stating thus briefly their view of the compatibility of the act of Congress with their treaty rights His Majesty's Government hold that the difference which exists between the two Governments is clearly one which falls within the meaning of Article I of the arbitration treaty of 1908.

As respects the suggestion contained in the last paragraph but one of your note under reply His Majesty's Government conceive that Article I of the treaty of 1908 so clearly meets the case that has now risen that it is sufficient to put its provisions in force in whatever manner the two Governments may find the most convenient. It is unnecessary to repeat that a reference to arbitration would be rendered superfluous if steps were taken by the United States Government to remove the objection entertained by His Majesty's Government to the act.

His Majesty's Government have not desired me to argue in this note that the view they take of the main issue the proper interpretation of the Hay-Pauncefote treaty-is the correct view, but only that a case for the determination of that issue has already arisen and now exists. They conceive that the interest of both countries requires that issue to be settled promptly before the opening of the canal, and by means which will leave no ground for regret or complaint. The avoidance of possible friction has been one of the main objects of those methods of arbitration of which the United States has been for so long a foremost and consistent advocate. His Majesty's Government think it more in accordance with the general arbitration treaty that the settlement desired should precede rather than follow the doing of any acts which could raise questions of actual damage suffered; and better also that when vessels begin to pass through the great waterway in whose construction all the world has been interested there should be left subsisting no cause of difference which could prevent any other nation from joining without reserve in the satisfaction the people of the United States will feel at the completion of a work of such grandeur and utility.

I have, etc.,

JAMES BRYCE.

CORRESPONDENCE SUBMITTED MAY 7, 1914.

REPORTED BY MR. HITCHCOCK.

IN THE SENATE OF THE UNITED STATES,
April 29, 1914.

Resolved, That the President is hereby requested, if not incompatible with the public interest, to cause to be transmitted to the Senate all papers, correspondence, messages, and dispatches in the Department of State, not heretofore communicated to Congress, having relation to certain tripartite agreements or conventions, concluded between the United States and the Republic of Panama, the United States and the Republic of Colombia, and the Republic of Colombia and the Republic of Panama, all dated the ninth day of January, nineteen hundred and nine, together with all correspondence relating to the Hay-Concha protocol not included in the House document six hundred and eleven, Fiftyseventh Congress, first session.

Attest:

JAMES M. BAKER, Secretary. 103

PART IV.

LETTERS OF TRANSMITTAL.

To the Senate of the United States:

In response to the resolution of the Senate of the 29th ultimo, calling for certain correspondence relating to the so-called tripartite conventions concluded in 1909 between the United States, Colombia, and Panama, and for correspondence not heretofore communicated relating to the "Hay-Concha protocol," I transmit herewith a report of the Secretary of State communicating the correspondence called for. WOODROW WILSON.

THE WHITE HOUSE,

Washington, May 7, 1914.

To the PRESIDENT:

The undersigned, Secretary of State, to whom was referred a resolution reported from the Committee on Foreign Relations and adopted April 29, 1914, by which the President was

requested, if not incompatible with the public interest, to cause to be transmitted to the Senate all papers, correspondence, messages, and dispatches in the Department of State, not heretofore communicated to Congress, having relation to certain tripartite agreements or conventions concluded between the United States and the Republic of Panama, the United States and the Republic of Colombia, and the Republic of Colombia and the Republic of Panama, all dated the ninth day of January, nineteen hundred and nine, together with all correspondence relating to the Hay-Concha proctocol, not included in House Document Numbered Six hundred and eleven, Fifty-seventh Congress, first session

has the honor to submit the following report:

The resolution calls for papers and correspondence under two heads, apparently distinct, but in fact relating to different stages of one and the same protracted negotiation, namely, that which culminated in the signature of the conventions, generally known as the tripartite treaties of 1909, between the United States, Colombia, and Panama.

The latter part of the resolution, relating as it does to correspondence earlier in point of time than the first part of the resolution, may be first considered. This correspondence is, in part, contained in House Document No. 611, Fifty-seventh Congress, first session, to which the resolution refers. It was appended to a letter addressed, under date of May 15, 1902, by the then Secretary of State, to the chairman of the Committee on Interstate and Foreign Com

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