PANAMA CANAL AND AMERICAN COMMERCE. 73 
The Hay-Pauncefote treaty gave the United States the exclusive right to build, 
regulate and manage the Canal; it abrogated the prohibition against fortification, 
and while preserving the neutrality of the Canal it abrogated the joint protectorate. 
It provided, in short, for an American canal, with neutrality guaranteed, subject 
only to the principle which in substance every American Administration has always 
incorporated in all its treaties with foreign nations for the regulation of trade 
between us and them. ‘That principle was thus expressed in the first section of 
Article III of the Hay-Pauncefote treaty :— 
““t. 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 respect 
of the conditions or charges of traffic, or otherwise. Such conditions and charges 
of traffic shall be just and equitable.” 
If this Article shall prove to be a serious obstacle to American commercial 
navigation through the Panama Canal, if the Canal shall fail to enhance the 
maritime importance of the United States upon both oceans, and to stimulate the 
industries, which assemble through their representatives at the meetings of the 
Society of Naval Architects and Marine Engineers, then the Canal will*fail in 
purposes which many of our people believe to be of equal importance with the 
usefulness of the Canal for national defense. If the Article shall prove to be the 
undoing of the art of shipbuilding in this country even for a decade, the gravest 
national mistake has been made. Such a mistake was not made. 
The Article of the Hay-Pauncefote treaty corresponds generally with the provi- 
sions in the Convention of Constantinople, signed October 28, 1888, for the free navi- 
gation of the Suez Canal. The Suez Canal was built by a joint stock company, 
of which the British Government is the largest stockholder, and is operated primarily 
for the profit of the stockholders. In 1910 it paid them an annual dividend of 
30 per cent. after meeting all charges and providing ample reserve funds. It cost 
up to December 31, 1910, 656,178,271 francs. The Panama Canal is being con- 
structed by the people of the United States at a cost up to the probable date of 
opening of $375,000,000. It is not built as a source of cash dividends to the United 
States and is never expected to become such. 
Although the Canal is the property of the American people in the same sense 
in which the improved harbor of New York, the Mississippi and its jetties, and 
the “Soo” Canal are their property, it has been acquired differently and in some 
particulars must be differently administered. We had to acquire the right of way 
for the Canal from the Republic of Panama, and in return for the concession we 
agreed—to name only some of the conditions :— 
(a) To pay Panama $10,000,000 in gold coin on the date of the treaty’s 
ratification, February 26, 1904; 
(6) To pay Panama $250,000 ee beginning February 26, 1913; and 
(c) In Article XVIII:— 
