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[Inclosure No. 1.]

Draft of convention relative to the construction of an interoceanic canal.

The United States of America and His Majesty the King of the United Kingdom of Great Britain and Ireland, Emperor of India, being desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans, and to that end to remove any objection which may arise out of the convention of the 19th April, 1850, commonly called the Clayton-Bulwer treaty, to the construction of such canal under the auspices of the Government of the United States, without impairing the "general principle" of neutralization established in Article VIII of that convention, have for that purpose appointed as their plenipotentiaries:

The President of the United States, John Hay, Secretary of State of the United States of America;

And His Majesty the King of Great Britain and Ireland, Emperor of India, the Right Honorable Lord Pauncefote, G. C. B., G. C. M. G., His Majesty's ambassador extraordinary and plenipotentiary to the United States;

Who, having communicated to each other their full powers, which were found to be in due and proper form, have agreed upon the following articles:

ARTICLE I.

The high contracting parties agree that the present convention shall supersede the aforementioned convention of the 19th of April, 1850.

ARTICLE II.

It is agreed that the canal may be constructed under the auspices of the Government of the United States, either directly at its own cost or by gift or loan of money to individuals or corporations, or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present convention, the said Government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and management of the canal.

ARTICLE III.

The United States adopts as the basis of the neutralization of said ship canal the following rules, substantially as embodied in the convention of Constantinople, signed the 28th October, 1888, for the free navigation of the Suez Canal; that is to say:

1. The canal shall be free and open to the vessels of commerce and of war of all nations on terms of entire equality, so that there shall be no discrimination against any nation or its citizens or subjects in respect of the conditions or charges of traffic or otherwise.

2. The canal shall never be blockaded. nor shall any right of war be exercised nor any act of hostility be committed within it. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder.

3. Vessels of war of a belligerent shall not revictual nor take any stores in the canal except so far as may be strictly necessary; and the transit of such vessels through the canal shall be effected with the least possible delay in accordance with the regulations in force and with only such intermission as may result from the necessities of the service.

Prizes shall be in all respects subject to the same rules as vessels of war of the belligerents.

4. No belligerent shall embark or disembark troops, munitions of war, or warlike materials in the canal except in case of accidental hinderance of the transit, and in such case the transit shall be resumed with all possible dispatch.

5. The provisions of this article shall apply to waters adjacent to the canal within 3 marine miles of either end. Vessels of war of a belligerent shall not remain in such water longer than twenty-four hours at any one time except in case of distress, and in such case shall depart as soon as possible; but a vessel of war of one belligerent shall not depart within twenty-four hours from the departure of a vessel of war of the other belligerent.

6. The plant, establishments, buildings, and all works necessary to the construction, maintenance, and operation of the canal shall be deemed to be part thereof, for the purpose of this convention, and in time of war as in time of peace shall enjoy complete immunity from attack or injury by belligerents and from acts calculated to impair their usefulness as part of the canal.

ARTICLE IV.

The present convention shall be ratified by the President of the United States, by and with the advice and consent of the Senate thereof, and by His Britannic Majesty; and the ratifications shall be exchanged at Washington or at London at the earliest possible time within - months from the date hereof.

In faith whereof the respective plenipotentiaries have signed this convention, and thereunto affixed their seals. Done, in duplicate, at Washington the

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year of our Lord one thousand nine hundred and one.

Mr. Hay to Mr. Choate.

[Extract from a private, personal letter not of record.]

Private and personal.]

DEPARTMENT OF STATE,
Washington, April 27, 1901.

MY DEAR MR. CHOATE: I seize an instant in my last hurried day before starting West with the President to send you the inclosed. project for a convention between the United States and Great Britain, to take the place of the extinct Hay-Pauncefote treaty, so called.1

I have drawn this up with very great care, after serious and extended conversations with Lord Pauncefote and with leading Mem

1 See printed ante, Lord Pauncefote to Marquis Lansdowne, Apr. 25, 1901.

bers of the Senate. You will see, by a careful perusal of it and
comparison with the extinct treaty, that it contains substantially all
that was asked for in the amended treaty, but in a form which, I hope,
will not be objectionable to the British Government. The provision
superseding the Clayton-Bulwer treaty is, as you see, contained in
a special article instead of being introduced in a parenthesis. In
Article III you will notice that the United States "adopts" the rules
of neutralization instead of making it a joint guaranty in company
with England. The seventh section of Article III is left out entirely,
and the provision for the military police of the canal is transferred
to section 2. The question of fortification is thus passed sub silentio.
I hope it will not be considered important enough for the British
Government to take exceptions to this omission. In this new redac-
tion the Davis amendment disappears, as you see, entirely. By
eliminating the words "in peace as well as in war." in the first section
of Article III, and by the omission of the seventh section it has been
thought by many Senators that the necessity for the Davis amend-
ment has disappeared. The third section, omitted by the Senate, is
also omitted in this new draft. If we release Great Britain from the
obligation of the joint guaranty there is no reason why the rest of
the world should not be released in like manner, and the United
States assume alone the duty of guaranteeing the neutrality of the
canal. Nobody loses by it except ourselves.

In the hurry of my departure I am unable to enter into any elaborate explanation of the provisions of this treaty. When Mr. White returns he can tell you somewhat at length the considerations which have entered into its composition.

As to this new project, I have sent it for your own private consideration. You are not instructed to bring it before the foreign office until further advised, but as Lord Pauncefote is sending a copy to Lord Lansdowne about this time it is possible that his lordship may refer to the matter in conversation with you. In that case I should be obliged if you would say what you can in advocacy of its adoption, precisely on the line of your clear and strong argument in favor of the Senate amendments. But I think altogether probable that Lord Lansdowne may not refer to the subject until the arrival of Lord Pauncefote, who now expects to sail for England about the 5th of June. When he arrives I hope you will converse freely with him in regard to the matter. He and I are entirely in agreement as to the leading principles to be observed in making such a treaty, and also in regard to the peculiar necessities of the political situation in Washington, which, of course, you understand but which neither Lord Lansdowne nor any European public official can possibly understand who has not lived in America.

Very sincerly, yours,

JOHN HAY.

[Extracts from a private letter not of record; original not in Department of State.]

Mr. Choate to Col. Hay, June 24, 1991.

You must not think, from hearing nothing from me thus far, that the canal business is being neglected. On Lord Pauncefote's

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arrival, I asked for an interview and put myself at his service, telling him that you had written me that he was fully possessed of your views, and that you wished me to talk the matter fully over with him. But he said, sensibly enough, that perhaps it would be better not to go into the matter with me until he had discussed it with his own people-and I have reason to think that he has ever since been so engaged. I know that he has gone over it with the lord chancellor, upon whose advice on legal construction Lord Lansdowne naturally relies, and with Lord Lansdowne himself, and I believe that it has been once at least considered by the cabinet. Lord Lansdowne told me week before last that he and Lord Pauncefote both would be ready to talk with me about it in a few days, from which I infer that Lord Pauncefote's reticence was not self-imposed. He also intimated, or at least I so understood him, that they were preparing a new draft as a counter proposition, which probably accounts for the delay. If they do, I hope any change will be all in the direction of general expressions, avoiding detailed phraseology over which Senators may dispute. Would not an ideal treaty under all the circumstances be in three articles? (1) Abrogating the ClaytonBulwer treaty; (2) providing that the canal should be wholly American in building, ownership, and control; (3) that it should be absolutely neutral, and free and open to the ships of all nations on equal terms? Under such a treaty, would not all questions about war settle themselves, or rather could any such questions arise?

Meanwhile, I have been carefully considering your project for a convention, and I understand from the elimination of the words "in time of war as in time of peace," in the first section of Article III, and from Mr. White's recollection of your views, that this project of treaty is not intended to apply to a state of war between the United States and Great Britain; that such a war, while it lasted, would have upon this treaty the usual effect of war upon treaties, and suspend its operation as between us and the enemy. So that during its continuance the canal and the waters adjacent within the 3-mile limit would not as between us and Great Britain be neutral ground. Practically this would be so. The treaty no longer stipulating for the neutrality of the canal in time of war, we should certainly close it in that event against her ships of war, whenever we found it necessary for our safety and interest to do so, and we should not permit a hostile British fleet to go through to destroy San Francisco. Suppose the two hostile fleets to rendezvous in the neighborhood of the canal, as upon the outbreak of war they would be likely to do. Each would certainly do its best to destroy the other wherever it could be found, whether within or without the 3-mile limit, and I understand your purpose to be that this treaty shall not in that case stand in the way; that in case of war, notwithstanding the elision of the Davis amendment, each of the contracting parties is left free to defend itself whenever and wherever, as best it can-or as Lord Lansdowne put it in a desultory talk we had, "In case we got into a war with you we both fall back on our reserved rights." Perhaps in the course of further consideration this idea may be a little more clearly expressed, and not left so much to inference, and I should not wonder if Great Britain her

self should suggest some such thing. In this view or cor.struction the word "belligerent " wherever used in Article III would not include the United States and Great Britain when engaged in war with each other. Nor would the first clause of section 2 of that article, "That the canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed within it," or (sec. 5) "in waters adjacent to the canal within 3 marine miles of either end," apply to either of the combatants in such a war. At first blush this first clause of section 2 might be seized upon by a Senator, not committed to the exact phraseology of the "project" and desirous of defeating it, as stipulating that even in time of war with Great Britain we would not blockade the canal to prevent a British ship of war from going through, or exercise any right of war or commit any act of hostility within the 3-mile limit, but I assume that your answer would be that considering there are rules of neutrality and that nothing belonging to one combatant can be neutral as to the other combatant while engaged in actual war unless so expressly agreed, and so settled by the established rules of international law and considering that the words "in time of war as well as in time of peace" have been studiously omitted, the suggestion of the Senator was not well founded.

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Assuming this to be the correct view of the purpose of the "project"—perhaps the sixth clause of Article IV, clause 6, providing expressly that "in time of war as in time of peace" the canal, plant, etc., shall enjoy complete immunity from attack or injury by belligerents, it may be regarded as an exception, and be intended to secure such immunity at all events as against everybody in war and in peace-but as it seems to be limited to immunity from "belligerents, I should like, if universal immunity was intended, to have it made a little more clear. Considering the retention in this "project" of the references to the Suez Canal treaty and to the eighth clause of the Clayton-Bulwer treaty, there is some chance for dispute in the Senate about any construction that may be put upon particular phrases of it, and I am very glad to infer from your letter that the Senate or the necessary two-thirds, are prepared to accept it if it should prove acceptable to Great Britain. What Mr. White understood to be your construction of the "project" conforms to the idea of Mr. Lodge, who has been here, that no treaty could pass the Senate which would permit a war ship of Great Britain to use the canal in time of war between us and that power. He appeared not to have seen the text of your "project," and so I did not feel at liberty to show it to him. He called on Lord Lansdowne at the latter's request, and lunched with Mr. Balfour in company with Lord L. The latter expressed himself to me as much pleased with the interview and with the Senator, and I believe that Mr. Lodge gave him the senatorial view. very straight. Perhaps, if I have not correctly apprehended your view as to the intended construction and effect of this "project" you will at once set me right. If they propose a new draft as a counterproject, as I am now expecting, this may not be important, but at any rate I would like to have your views a little more fully and precisely.

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