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PANAMA CANAL AND AMERICAN COMMERCE. 77 
that Canal which will never touch the United States and in some instances may 
even deprive us of trade which would have been ours, had there been no canal. 
The direct trade between Europe and the west coast of South America through 
the Canal means nothing gained and perhaps something lost commercially to the 
people of the United States. As an incident to the development of our means of 
domestic transportation between the Atlantic and Pacific coasts and to doubling 
our Navy, we are giving to foreign nations an’ exceptional opportunity for the 
transit of their warships and the development of their own trade with one another. 
This trade, foreign to us in every respect, could not expect and doubtless never 
entertained the notion that it should not make reasonable recognition in the only 
form possible of the opportunities opened to it by the United States. 
It may be contended that the coastwise trade of the United States from our 
Atlantic to Pacific ports should be exempt from tolls. The coastwise trade is 
confined to American vessels, and we may find it difficult to carry conviction with 
the argument that such an exemption would be anything else than a discrimination 
based on the flag. Our treaties usually carry an article exempting the coasting 
trade from their provisions. Thus Article XIII of our treaty of 1911 with Japan 
provides :— 
“Article XIII. The coasting trade of the High Contracting Parties is excepted 
from the provisions of the present Treaty and shall be regulated according to the 
laws of the United States and Japan, respectively.”’ 
The Panama Canal treaties might perhaps have contained such an exception 
but the fact remains that they do not, and the exception cannot readily be read 
into them. If such an exemption could be made now, it would give American 
shipping in that trade no advantage over the provision made for it in the Frye 
Bill. The Treasury of the United States is not relieved of the cost of maintaining 
annually our great system of river and harbor improvements because the navigation 
is untaxed. The use of the Canal to its fullest capacity, necessary to produce 
revenue, probably could not be secured, if the cost of operation were assessed, under 
modified treaties, solely against foreign vessels in the foreign trade of the United 
States and of other nations. In that event a share of the burden of maintenance 
would still fall upon the Treasury of the United States. It is immaterial as a tax 
problem whether money be appropriated directly from the Treasury of the United 
States to pay the tolls upon American ships and the money thus appropriated be 
used to maintain the Canal, or whether the money be appropriated directly for 
Canal maintenance. 
Whether American shipbuilding shall take new life from the Panama Canal 
or whether its very existence shall be threatened will depend upon the policy, to be 
fixed at the coming session of Congress. If contrary to our general policy commerce 
between the States shall be taxed in peace and it shall be determined to put directly 
and alone upon American merchant shipping the entire toll contributions of the 
