of the enterprise inaugurated by M. de Lesseps to remain an essentially private one." (See the Treaty regulations of the United States and Colombia," by John H. Latané, Ph. D., Annals of the American Academy of Political Science, 1903.) The failure of the French company in 1888 permanently defeated the efforts of M. de Lesseps, and the hope that the canal would be built was again deferred.

On November 18, 1901, the Hay-Pauncefote treaty was concluded. It recites the desire of the United States and Great Britain to facilitate the construction of a ship canal "by whatever route may be considered expedient" and to remove the objections arising from the Clayton-Bulwer treaty without impairing the "general principle of neutralization established in article 8 of that convention." The first article of the treaty provided that it should supersede the ClaytonBulwer treaty. The second article provides "that the canal may be constructed under the auspices of the Government of the United States," either at its own cost or by gift or loan of money to individuals or corporations or through subscription to or to purchase of stock and shares. This article also provides that the United States "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."

The third article of the Hay-Pauncefote treaty deals with the neutralization of the canal, and in its first subdivision provides that "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 shall be just and equitable."

Article 4 of the treaty provides "that no change of territorial sovereignty or of international relations of the country or countries traversed by the beforementioned canal shall affect the general principle of neutralization or the obligation of the high contracting parties to the present treaty." This clause was evidently inserted to guard against the treaty's being impaired by changes in the South American Republics, but it did not contemplate the possibility of the United States acquiring the territory through which the canal is to be pierced. A study of the treaty in connection with the convention of Constantinople and with a full understanding of the circumstances under which the treaty was made shows clearly that the acquisition of the canal territory by the United States was not foreseen by either of the contracting parties. It should be noted that nothing contained in the treaty imposes any prohibition upon either of the contracting parties from purchasing territory to be traversed by the proposed canal.

On January 20, 1902, President Roosevelt sent to Congress a message recom mending the construction of the canal at Panama. His message proposed the purchase of the French rights for $40,000,000. Congress acted upon this suggestion and appropriated $170,000,000, and directed the President, if the consent of Colombia could not be obtained, to have the canal constructed by the Nicaragua route at a cost not to exceed $180,000,000. The Hay-Herran treaty between the United States and Colombia was then negotiated, by which Colombia was to grant the desired privilege in return for $10,000,000 and an annual rental of $250,000. The terms of this proposed treaty had been agreed upon between the accredited representatives of the United States and Colombia, and the Senate of the United States on March 17, 1903, ratified the proposed treaty. The Colombian Government, however, sought to repudiate the promise of its representative, and indicated that it would ratify the treaty if it was paid $25,000,000. When the United States refused to yield to this demand Colombia concluded that it could not "constitutionally" comply with its promise to ratify the treaty. That the alleged constitutional objection was a mere pretense is evident from the fact that it could have been overcome by a payment of $15,000,000 more than the United States had agreed to pay and Colombia to accept. The action of Colombia in causing the proposed treaty to fail of ratification incensed and embittered the people of the State of Panama, whose interests would have been greatly promoted by the construction of the canal. The attitude of Colombia served to intensify the spirit of revolt among the people of Panama, who for many years had been treated unjustly by the Colombian Government. This last act of Colombia showed such a total disregard of the interests of the people of Panama and was instigated by motives

so sordid and odious that the State of Panama seceded from Colombia and established a provisional government. Within a short time the United States, Great Britain, and France recognized the independence of the new Republic of Panama.

On November 18, 1903, M. Bunau-Varilla, the accredited representative of Panama, and Secretary Hay signed the treaty of Panama, which was duly ratified. This treaty grants the United States in perpetuity a zone of land and land under water for the construction, maintenance, operation, sanitation, and protection of the canal of the width of 10 miles, beginning in the Caribbean Sea and extending to and across the Isthmus of Panama into the Pacific Ocean, with the exception of the cities of Panama and Colon. Certain other incidental territory and islands are also granted. The treaty grants the United States "all the rights, power, and authority" within the zone mentioned "which the United States would possess and exercise if it were the sovereign of the territory within which the said lands and waters are located, to the entire exclusion of the Republic of Panama of any such sovereign rights, power, and authority." Article 5 of this treaty grants to the United States in perpetuity a monopoly for the construction, maintenance, and operation of any system of communication, by means of canal or railway, across its territory between the Caribbean Sea and the Pacific Ocean. In return for this grant the United States guarantees to maintain the independence of the Republic of Panama and to pay Panama $10,000,000, and from nine years after the date of the treaty to make an annual payment of $250,000 during the life of the treaty. The eighteenth article of this treaty provides that “ the canal, when constructed, and the entrances thereto, shall be neutral in perpetuity, and shall be opened upon the terms provided for by section 1 of article 3 of and in conformity with all the stipulations of the treaty entered into by the Governments of the United States and Great Britain on November 18, 1901." In considering this provision of the Panama treaty, it is to be borne in mind that it is binding only upon the parties to it. That treaty prescribes and defines the correlative rights and duties of the United States and of the Republic of Panama. It does not enlarge the rights of Great Britain in reference to the canal. Great Britain was not a party to the Hay-Varilla treaty, and any obligation that was imposed upon the United States under it is due solely to the Republic of Panama, and is subject to any change that may be effected by mutual consent of the contracting parties. This historical outline makes clear the steps which the United States has taken and the difficulties which it has finally overcome. The territory through which the canal is being constructed is subject solely to the sovereignty of the United States. Now that the United States has done everything requisite and necessary to make the canal available for use and has pledged itself to preserve to the commerce of the world the right to use it upon fair and reasonable terms, Great Britain comes forward to enter its protest against the exemption of American coastwise trade, with which, under existing laws, foreign nations can not compete.

The British Protest.

The Panama Canal act, providing for the government of the Canal Zone and exempting coastwise trade from tolls, was enacted after a careful and scientific inquiry by Congress into the conditions affecting the Panama Canal. On December 9, 1912, Ambassador Bryce filed with the Secretary of State of the United States a protest against certain provisions of the Panama Canal act. The protest was signed for the British Government by Sir Edward Grey. The protest is based on the contention that the provisions of the Panama Canal act contravene the provisions of the Hay-Pauncefote treaty. The particulars in which this act is claimed to be in conflict with the treaty are: (1) The provisions of section 5 of the act, which confer upon the President, within certain defined limits, the right to fix the tolls, but provide that no tolls are to be levied upon ships engaged in the coastwise trade of the United States. There is also an exemption made pursuant to article 19 of the Panama treaty, according to which the Republic of Panama has the right to transport over the canal its vessels and its troops and munitions of war without paying charges of any kind. If the United States should yield to this part of the British protest it would be necessary for it to act in violation of its treaty with the Republic of Panama. It is claimed that these provisions, first, are in conflict with the rule established in article 8 of the Clayton-Bulwer treaty of equal treatment for British and United States ships; and, second, would enable tolls to be fixed

which would not be just and equitable and would therefore not comply with rule 1 of article 3 of the Hay-Pauncefote treaty. (2) The provisions of section 11 of the act, which prohibit a railway company subject to the interstate-commerce act of 1887 from having any interest in vessels which operate through the canal, and that part of the same section which provides that a vessel permitted to engage in coastwise or foreign trade of the United States shall not be permitted to use the canal if its owner is guilty of violating the Sherman Antitrust Act.

Both of these claims rest upon the assumption that the events which have occurred since the ratification of the Hay-Pauncefote treaty can have no effect upon the validity of that treaty. In reference to the claim based on section 11 of the act, the protest makes no argument, but calls attention to the fact that if the provisions of that section are to be deemed applicable to British ships, the British Government reserves the right to amplify its protest after further study of the question involved. The reasons which impelled Congress to enact section 1 of the act are obvious. By these provisions it was sought to prevent monopoly of transportation in the canal and thus to keep the canal open to the free competition of the commerce of the world. Experience has taught the lesson that when the same company controls the means of transportation by land and sea competition is rendered impossible.

President Taft, in an effort to place upon the Hay-Pauncefote treaty a construction which would make it adaptable to the changed conditions which have resulted since the acquisition of the Canal Zone by the United States, treated the words " all nations," used in subdivision 1 of article 3 of the Hay-Pauncefote treaty, as excluding the United States. The British protest refuses to accept this construction, and, referring to the argument of President Taft, announces plainly that "His Majesty's Government believe this statement of the case to be wholly at variance with the real question. They consider that by the Clayton-Bulwer treaty the United States has surrendered the right to construct the canal, and that by the Hay-Pauncefote treaty it recovered that right, upon the footing that the canal should be open to British and United States vessels upon equal terms." Great Britain, therefore, having explicitly refused to be bound by any construction of the treaty which recognizes and makes allowance for the changed conditions which have resulted, since the adoption of the treaty, squarely presents to the United States the alternative of adopting an American canal policy or an Anglo-American canal policy. Under the Clayton-Bulwer treaty Great Britain claimed to be a partner in the canal enterprise with the United States. Under the British protest, transmitted by Sir Edward Grey, Great Britain still claims all the benefits of a partnership, although all the burdens of the enterprise are, under the Hay-Pauncefote treaty, to be borne solely by the United States. The importance of the protest consists, not in the fact that it relates to tolls, but in the fact that it carries with it the assertion that the Hay-Pauncefote treaty exists with the same force and effect today that it possessed before the United States became the sovereign over the territory through which the canal is being constructed. If this claim be admitted and the words "all nations," as used in subdivision 1 of article 3 of the Hay-Pauncefote treaty, are to be regarded as including the United States, then the following consequences result:

The United States must impose the same rate of tolls upon its merchant ships, war ships, or Government vessels that it does upon those of foreign nations; it can never blockade the canal or exercise any right of war in it, even if it is itself a belligerent, and the representatives of the United States at Panama must open the locks and escort a hostile fleet through the canal; if the United States becomes a belligerent it shall not revictual or take stores in the canal, except when strictly necessary; it shall not embark or disembark troops or munitions of war in the canal territory, and its own war vessels shall not remain in the waters adjacent to the canal within the 3-mile limit for longer than 24 hours at any one time; and it can not use the plant and surroundings of the canal for any hostile purpose.

In short, if the United States should become a belligerent, it could not use its own canal for naval and military purposes, and the canal would be of no more strategic value to it than it would be to its enemy. (Judge Seabury is, of course, stating these conclusions as a reducto ad absurdum. The reply to this argument, made by those who advocate the maintenance of the HayPauncefote treaty, is that in time of war all treaties will be abrogated, but the

whole trend of Judge Seabury's argument is that the treaty was abrogated when the United States acquired the canal territory.-The Editors.)

Indeed, in time of war, if the provisions of the Hay-Pauncefote treaty are to govern, our seacoast would be more liable to attack than it was before the canal was built. Before the canal was built the isolation of our seaboard furnished comparative protection from foreign attack. The existence of the canal will make our coast thousands of miles nearer to the shores of a foreign enemy. If the canal shall be available to us for naval and military purposes, this danger will be obviated. If it is not to be available for these purposes, then we have increased the danger of our position rather than increased our safety. One has only to read the provisions of the six subdivisions of article 3 of the Hay-Pauncefote treaty to see at a glance that if one of these subdivisions is binding upon us all are binding. The same obligation which would require us to levy equal tolls, as provided by subdivision 1, would compel us to refrain from blockading the canal or from utilizing the canal for any military or naval purpose in the manner prohibited by the other subdivisions of article 3. The British protest does not specifically claim that all of these provisions of the Hay-Pauncefote treaty were applicable at present, but it attacks a comparatively unimportant regulation of Congress upon a ground which asserts the binding effect of that treaty. The British protest makes no renunciation of rights under the treaty. It does, however, recognize that, as a result of events subsequent to the treaty, the United States has "become the practical sovereign of the canal," and that all the provisions of the treaty are not to be deemed of the same force that they possessed when the treaty was concluded. The significance of this remarkable part of the British protest will be commented upon below. For the present it is necessary only to note that even the British Government recognizes that a change in the status existing at the time the treaty was made has taken place and that it is impossible to claim that the legal effect of the treaty has not been changed.

The State of Things Which Was the Basis of the Hay-Pauncefote Treaty has Changed, and that Treaty is Now Voidable at the Option of the United States.

It is a rule of international law, recognized among nations and publicists, that all treaties are concluded upon the tacit condition rebus sic stantibus. If vital changes affecting the subject matter of a treaty take place, so that it can not fairly be said that the parties contracted in reference to the changed conditions, the treaty is by implication abrogated. In other words, if the parties to a treaty contract on the basis that a certain condition or fact exists, and subsequently the condition or fact in reference to which the treaty is made is changed, the treaty is extinguished, and one of the parties to it can not in good faith hold the other bound to perform all or any of its terms. The fundamental fact in reference to which the Hay-Pauncefote treaty was made was that the canal was to be constructed in territory alien to the United States. The HayPauncefote treaty did not even definitely decide upon the Panama route, but provided for the construction of a ship canal to connect the Atlantic and Pacific Oceans "by whatever route may be considered expedient." The treaty contemplated merely that the canal should be constructed “under the auspices of the United States, not in the territory of the United States. That the United States did not contemplate the actual acquisition of the territory in which the canal was to be constructed is conclusively evidenced by the fact that the Senate ratified the treaty with Colombia, which merely provided for constructing the canal "under the auspices" of the United States, and did not contemplate the cession of territory to the United States. The failure of Colombia to fulfill the promise of its accredited representative, the bitterness and spirit of revolt which that refusal engendered among the people of the State of Panama, led to the revolution which resulted in the secession of Panama from Colombia. The United States having been betrayed by Colombia, President Roosevelt, with characteristic genius, took the action which resulted in the United States securing the grant from Panama. Under that grant the Canal Zone became part of the territory of the United States and subject to its sovereignty, and the United States from that time on possessed the same exclusive rights over it that it possessed in reference to any other territory which it acquired by cession or conquest.

The Hay-Pauncefote treaty was made on the understanding that the canal was to be constructed upon alien territory. For this reason the position of the United States relative to the canal was regarded as analogous to the position of Great Britain toward the Suez Canal. Assuming that the Hay-Pauncefote treaty provides for equal rights in the canal to Great Britain and the United States, although all the burdens of building and caring for it and policing it were to devolve upon the United States, the situation becomes radically dif ferent after the territory becomes subject to the sovereignty of the United States. Suppose, merely for the sake of argument, instead of acquiring the Canal Zone in Panama, the United States abandoned that project and constructed the canal from New Orleans to San Francisco, would it be contended that the canal was subject to the provisions of the Hay-Pauncefote treaty? In legal effect and in principle the supposed case and the real case are identical. The treaty was made on the assumption that the canal was to be built in alien territory. The condition in reference to which the treaty was made never arose; and instead of the canal being built in alien territory, it was built in territory of the United States.

The juridical status of the Panama Canal is that of an artifically constructed waterway, constructed wholly by the United States for commercial and strategic purposes, entirely through territory of the United States, the exclusive right of control over which is vested in the United States. The legal position of the United States and Great Britain in reference to the canal stands, when the case is reduced to its simplest terms, thus: A and B contract that A shall endeavor to obtain an easement over the land of C, and if A succeeds, the easement shall be used equally by A and B, but without any prohibition in the contract against either A or B acquiring the fee to C's land. Subsequently C grants in fee the property to A and his heirs. The judgment of the private law of civilized states in such a case holds that the contract between A and B is no longer of any legal force or effect.

The principle asserted above-that all treaties are concluded upon the tacit condition rebus sic stantibus, and that, where the state of things which was the basis of the treaty and one of its tacit conditions no longer exists, the treaty becomes voidable, and either party may notify the other that it regards the treaty as abrogated-is sustained by authority. The principle was clearly recognized by Vattel (Law of Nations, book 2, ch. 13, sec. 200) and by Grotius (The Rights of War and Peace, Ch. XVI, Sec. XXV, et seq.) and, so far as I have been able to discover, is denied by none. Mr. Hall, in his work on international law, points out that neither party to an international compact "can make its binding effect dependent at his will upon conditions other than those contemplated at the moment when the contract was entered into, and, on the other hand, a contract ceases to be binding so soon as anything which formed an implied condition of its obligatory force at the time of its conclusion is essentially altered." (Sec. 116.) Mr. Hannis Taylor says:

So unstable are the conditions of international existence, and so difficult is it to enforce a contract between States after the state of facts upon which it was founded has substantially changed, that all such agreements are necessarily made subject to the general understanding that they shall cease to be obligatory so soon as the conditions upon which they were executed are essentially altered. (Treatise on Internațional Public Law, sec. 394.)

Writing upon the same subject, Mr. Oppenheim says:

It is an almost universally recognized fact that vital changes of circumstances may be of such a kind as to justify a party in notifying an unnotifiable treaty. The vast majority of publicists, as well as all the Governments of the members of the family of nations, agree that all treaties are concluded under the tacit condition rebus sic stantibus. (Vol. 1, p. 550, sec. 539.)

That the circumstances have changed to such an extent that some of the provisions of the Hay-Pauncefote treaty are extinguished is impliedly conceded by Sir Edward Grey in the British protest. He says:

Now that the United States has become the practical sovereign of the canal His Majesty's Government do not question its title to exercise belligerent rights for its protection.

His statement suggests that if it had been contemplated that the United States was to acquire the territory through which the canal should be constructed clauses would have been inserted in the treaty which would have established the status of the United States as similar to that accorded Turkey and Egypt in reference to the Suez Canal. It is, of course, not improbable, if the