UNITED STATES OF AMERICA. (THE ISTHMIAN CANAL.) 



655 



year the Treasury had ruled that Russian sugar 

 received no bounty, direct or indirect, but on 

 reexamining the question on receiving protests 

 from the sugar manufacturers, which were sup- 

 ported by the diplomatic representatives of sev- 

 eral European states whose sugar was subjected 

 to the countervailing duty, the Treasury reversed 

 its former decision. The Russian differential tar- 

 iff on the American manufactures selected went 

 into force on Feb. 27. The Italian excise regula- 

 tions were likewise held by the Treasury Depart- 

 ment to afford an indirect bounty, and custom- 

 house officers were ordered to collect the differ- 

 ential duties on Italian sugar if imports arrived, 

 which would be refunded if the courts decided 

 that there was no bounty. The Russian Govern- 

 ment offered to cancel all the increased duties on 

 American iron and steel fabrics if the Secretary 

 of the Treasury would cancel the duty on Russian 

 sugar. The Russian Government having, under the 

 treaty of 1832, accorded to the United States for 

 five years most-favored-nation treatment, was de- 

 sirous of concluding a permanent reciprocity agree- 

 ment. A controversy had arisen over petroleum 

 previous to the dispute regarding sugar bounties. 

 The Isthmian Canal. The treaty signed by 

 Mr. Hay and Lord Pauncefote on Feb. 5, 1900, 

 regarding the projected interoceanic canal was 

 amended by the United States Senate by inserting 

 a declaration that the Clayton-Bulwer treaty was 

 superseded and one that none of the stipulations 

 applied to measures which the United States 

 might find necessary to take for securing by its 

 own forces the defense of the United States and 

 the maintenance of public order, and by excis- 

 ing the article which provided for bringing the 

 treaty to the notice of other powers and inviting 

 their adherence. The British Government regard- 

 ed the treaty as supplementary to the Clayton- 

 Bulwer convention of 1850 providing for the joint 

 protection of any isthmian canal that might be 

 constructed by the United States and Great Brit- 

 ain. A modification of that convention was re- 

 garded as necessary by the United States Govern- 

 ment in view of its undertaking the construction 

 of the Nicaragua Canal, for which a concession 

 had been obtained from the Government of Nic- 

 aragua, and which was not likely to be executed 

 by private enterprise. By the Clayton-Bulwer 

 treaty the United States and Great Britain agreed 

 that neither would occupy, or fortify, or colonize, 

 or assume or exercise any domain over any part 

 of Central America, nor attain any of these ob- 

 jects by protection afforded to or alliance with 

 any state or people of Central America. The 

 amendment of the Senate giving the right to take 

 any measures to secure the defense of the United 

 States was copied from a similar provision in 

 the Suez Canal convention which allows the Sul- 

 tan of Turkey and the Khedive of Egypt, on 

 notifying the signatory powers, to take any neces- 

 sary measure for securing by their own forces 

 the defense of Egypt and the maintenance of pub- 

 lic order and allows the Ottoman Government to 

 take measures to insure by its own forces the 

 defense of its other possessions on the eastern 

 coast of the Red Sea. The British Government 

 rejected the amendments of the Senate and re- 

 fused to accept the treaty as amended on the 

 ground that the amendments' were inconsistent 

 with the principle of neutrality which both gov- 

 ernments had accepted, by which the canal would 

 remain free and unimpeded in peace and in war 

 to the commerce and navies of the world. Nego- 

 tiations were resumed, and on Nov. 18, 1901, Mr. 

 Hay and the British minister signed at Wash- 

 ington a second treaty, as follows: 



" I. The high contracting parties a#ree that the 

 present treaty shall supersede the aforementioned 

 (Clayton-Bulwer) convention of April 1'J, 1850. 



" II. It is agreed that the canal may he; con- 

 structed under the auspices of the <>io\ eminent 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 pur- 

 chase of stock or shares, and. that, subject to the 

 provisions of the present treaty, the said Govern- 

 ment shall have and enjoy all the rights incident 

 to such construction, as well as the exclusive 

 right of providing for the regulation and manage- 

 ment of the canal. 



" III. The United States adopts, as the basis of 

 the neutralization of such ship-canal the follow- 

 ing rules substantially as embodied in the con- 

 vention of Constantinople, signed Oct. 28, 1888, 

 for the free navigation of the Suez Canal; that 

 is to say: 



" First, the canal shall be free and open to the 

 vessels of commerce and of war of all nations 

 observing these rules, on terms of entire equality, 

 so that there shall be no discrimination against 

 any such nation or its citizens or subjects in re- 

 spect of the conditions or charges of traffic, or 

 otherwise. Such conditions and charges of traffic 

 shall be just and equitable. 



" Second, 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 lawless- 

 ness and disorder. 



" Third, 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 tran- 

 sit of such vessels through the canal shall be 

 effected with the least possible delay in accord- 

 ance with the regulations in force, and with only 

 such intermission as may result from the necessi- 

 ties of the service. 



" Prizes shall be in all respects subject to the 

 same rules as vessels of war of the belligerents. 



" Fourth, no belligerent shall embark or disem- 

 bark troops, munitions of war, or warlike mate- 

 rials in the canal except in case of accidental 

 hindrance of the transit, and in such case the tran- 

 sit shall be resumed with all possible despatch. 



" Fifth, the provisions of this article shall apply 

 to waters adjacent to the canal, within three ma- 

 rine miles of either end. Vessels of war of a 

 belligerent shall not remain in such waters 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 bel- 

 ligerent shall not depart within twenty-four hours 

 from the departure of a vessel of war of the 

 other belligerent. 



" Sixth, the plant, establishments, buildings, 

 and all works necessary to the construction, 

 maintenance, and operation of the canal shall 

 be deemed to be parts thereof for the purposes 

 of this treaty, and in time of war, as in time of 

 peace, shall enjoy complete immunity from at- 

 tack or injury by belligerents, and from acts cal- 

 culated to impair their usefulness as part of the 

 canal. 



" IV. It is agreed that no change of territorial 

 sovereignty or of international relations of the 

 country or countries traversed by the before- 

 mentioned canal shall affect the general principle 

 of neutralization or the obligation of the high 

 contracting parties under the present treaty. 



" V. The present treaty shall be ratified by the 

 President of the United States by and with the 



