The five members of the committee who signed the minority report parted company with their colleagues because of a firm conviction that to tax interstate commerce at the Panama Canal would be an unwarranted departure from a long-established policy and would deny to the American people the full and complete benefits to which an investment of $400,000,000 clearly entitles them. [Applause.]

To my mind this is the most important and far-reaching question that has come before Congress in a generation. The naked issue that confronts this House is whether the Panama Canal is to be run in the interest of the taxpayers and consumers of the United States or in the interest of the transcontinental railroads that have always opposed the canal and would now destroy its beneficial use to the American people. [Applause.]

In my judgment, Mr. Chairman, it would mean political suicide for any party or any individual who votes to make this great canal, built at such tremendous expense, less than a free and unfettered competitor of railroad transportation. [Applause.]

If we could have a referendum on this question of a free waterway to interstate commerce, absolutely divorced from railroad influences, nine-tenths of the American people would vote "Yes" and the railroads would vote "No." The canal should not only be a free waterway for our domestic commerce, but no railroad-owned or railroad-controlled boat engaged in interstate commerce should be permitted to poke its nose into the locks. [Applause.]

I repudiate the specious plea that this great question should await a future solution. The time to play fair with the American people is now. Let us not do the wrong thing to-day and trust to a future Congress to right the wrong. [Applause.]

It is said that by the Hay-Pauncefote treaty we have bartered away to a foreign government our constitutional power over interstate commerce through the canal. On that proposition I refuse to run up the white flag of surrender. I deny that the control of our domestic affairs has been transferred from Washington to the Court of St. James. [Applause.]

If we are going to allow the English press to construe the Hay-Pauncefote treaty for us and permit the railroads to dominate the canal, we might better have sunk our four hundred millions of dollars in the bottom of the sea.

I hope this House will meet the issue squarely and serve notice upon the railroads and their Wall Street allies that they must keep their hands off the Panama Canal. [Applause.]

For the first time in American history it is proposed to erect a tollgate in the path of interstate trade. I believe that if this House does its duty it will apply the torch to section 5 of this bill and burn it up. Let the conflagration be so complete that a like proposal will never find its way to the floor of this House. [Applause.]

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The reasons which actuated the majority of the Committee on Interstate and Foreign Commerce to recommend tolls upon our coastwise trade at the Panama Canal are found in the report that accompanied this bill. Therein we are informed that free tolls to our domestic merchant marine would be a subsidy" to the shipowner, because it would take money from the American people and give it to a small special interest. This would be a strange doctrine, Mr. Chairman, to be embraced by this House, a majority of whose Members profess the faith of their Democratic fathers and proclaim their unfaltering devotion to our ancient institutions.

I hold in my hand a volume containing the laws enacted at the first session of the First Congress under the Constitution. This volume is gray and musty with age, but within its ancient covers are reflected, in my opinion, more wisdom on the subject of our merchant marine and the development of American commerce than is contained in all the propositions that have been advanced in Congress during the intervening years. The first act found in this volume is an act to regulate the time and manner of administering certain oaths-an unimportant measure. The second act, introduced by James Madison, approved July 4, 1789, is an act for levying duties on goods, wares, and merchandise imported into the United States.

This act aimed to raise revenue for the support of the Government, protect our infant industries, and encourage the upbuilding of our merchant marine. This latter purpose was accomplished by providing for a discount of 10 per cent of the tariff duties upon imports into this country in ships built and owned by

American citizens. Not satisfied with this, Congress provided in the same act for special discrimination in favor of American vessels in the trade of the Far East. It provided that if tea was imported in American ships direct from India and China, it paid a duty of 6 cents a pound for Bohea, 10 cents for Souchong, 20 cents for Hyson, and 12 cents for all other green varieties. If, however, tea was imported in a foreign ship, it paid a duty of 15 cents for Bohea, 21 cents for Souchong, 45 cents for Hyson, and 27 cents for other varieties. The effect of this discrimination in favor of our own shipping will be understood when it is stated that on a cargo of 100,000 pounds of assorted teas an American ship sailing from China or India would pay duties of $10,980, while a foreign ship would pay $27,800 for a like cargo.

The effect of this law upon American shipping was instantaneous. The report of the American Institute of the city of New York stated in 1828 that "so complete has been this security that your committee believes that there has not been a single pound of tea imported since the passage of the law in question which has not been imported in an American bottom." (Marvin's American Merchant Marine, p. 41):

Between 1789 and 1828 Congress passed numerous laws intended to protect and encourage American shipbuilding. Under these wise and salutary measures our merchant marine grew rapidly. On December 31, 1789, our total shipping registered for the foreign trade was only 123,893 tons.. It had increased to 346,254 tons in 1790 and to 576,733 tons in 1796.

I have carefully examined the debates in Congress that preceded the passage of the act of 1789, and have found no intimation or suggestion that a reduction of 10 per cent in duties on goods carried in American vessels would take money from the pockets of the people and give it to a special interest. The Members of that Congress knew that a tax collected at the customhouse would be borne by the consumer, and that a lower duty in favor of goods carried in American ships would relieve the consumer and at the same time encourage the upbuilding of our merchant marine. Give us more "subsidies" that leave money in the pockets of the people and at the same time develop American industries.

The third act passed by the First Congress, approved July 20, 1789, was an act imposing duties on tonnage. It provided that on all ships built within the United States and belonging wholly to a citizen or citizens thereof a tonnage duty of 6 cents per ton should be levied. It provided that all ships thereafter built in the United States, belonging wholly or in part to subjects of foreign powers, should pay a duty of 30 cents per ton, and that all other ships should pay duties at the rate of 50 cents per ton. It also provided that no ship built within the United States and belonging to a citizen or citizens thereof should, while employed in our coasting trade, pay tonnage duties more than once in any year. At the present time no tonnage duties are imposed upon vessels engaged in our coastwise trade. This policy of encouraging our merchant marine culminated in 1817 in a law that prohibited foreign vessels from engaging in our coastwise trade. It was, however, the legislation of 1789 that laid the foundation of our long-continued policy of preserving our domestic trade to American vessels, and this policy, supported by our ablest statesmen in all parties, has given the United States the greatest domestic merchant marine on the globe. Under the stimulus of this early legislation the tonnage of our coastwise shipping increased from 68.607 tons in 1789 to 245,295 tons in 1800. It reached the one-million mark in 1838, and has continued its rapid growth up to the present time. In 1911 the tonnage of our coastwise trade reached the splendid volume of 6,720,313 tons.

In the Fifty-eighth Congress the Democratic minority, while opposing a direct subsidy from the Treasury to American ships, favored a return to the ancient system of discriminatory duties as best calculated to restore our merchant marine. I quote the following from the report of the minority members of the Merchant Marine Commission, presented in 1905:

A return to the discriminating duty policy appears to be generally favored, as shown by the hearings of the Merchant Marine Commission at the most important ports on the Atlantic, Pacific, and Gulf coasts, and on the Great Lakes. This was the policy of the fathers of the Republic, under which our shipping interests were so marvelously developed in our early history. Under this policy merchant ships flying the American flag were seen in every important port of the civilized world, and, under its fostering care, our ships carried more than three-fourths of our exports and imports. (Rept. 4136, pt. 2, 58th Cong., 3d sess.)

This was the voice of Democracy, speaking through its chosen Representa tives, in the Fifty-eighth Congress. What will be its position now, when, for

the first time in American history, it is proposed to hold up at a tollgate an American vessel engaged in interstate trade and exact from it the same tribute we demand from a foreign vessel flying a foreign flag?

My Republican friends, how are you going to vote on this proposition? This is not a partisan question. Two Republicans and three Democrats signed the minority report, advocating no tolls on American ships engaged in interstate commerce. Are you gentlemen, who in the past have advocated direct subsidies from the Treasury in order to encourage our merchant marine, going to vote against this preference to American shipping? I sincerely hope not.

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I desire now to discuss the claim that the Hay-Pauncefote treaty prevents the United States from favoring American vessels engaged in interstate commerce. The preamble of the Hay-Pauncefote treaty recites that it is

desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans by whatever route may be considered expedient, and to that end to remove any objection which may arise out of the convention of the 19th of 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' neutralization established in article 8 of that convention.

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For a proper understanding of what was meant by the words "general principle" of neutralization mentioned in the preamble of the treaty, it will be necessary to refer briefly to the Clayton-Bulwer treaty and the circumstances that surrounded its ratification. The discovery of gold in California emphasized the desirability of constructing a transisthmian canal to connect the Atlantic and Pacific Oceans. The route most generally considered at that time was via San Juan River and Lake Nicaragua. In 1849 a treaty was entered into by the United States and Nicaragua whereby the Government of the latter conceded to an American company the right to build a canal from San Juan, on the Caribbean Sea, through the San Juan River and Lake Nicaragua to the Pacific. Two obstacles, however, stood in the way of this company's successful prosecution of the undertaking. One was the British pretensions in Nicaragua, and particularly to the so-called Mosquito coast, over which Great Britain claimed to exercise a protectorate, and the other was the lack of the necessary capital in this country.

It would serve no useful purpose to dwell upon the claims and counterclaims with reference to British pretensions in Nicaragua, Costa Rica, and the Mosquito Coast. It will suffice to say that they were deemed by this Government of such importance that in 1849 Mr. Clayton, Secretary of State, entered into negotiations with the British Government that resulted in the ratification of the Clayton-Bulwer treaty in 1850. By this treaty the two Governments engaged to cooperate in guaranteeing the neutrality of a ship canal, to be open to the world and common to all nations. This convention contemplated that the canal should be built by a private corporation, and declared that neither the Governments of Great Britain nor the United States would ever obtain or maintain any exclusive control over the canal; that neither would erect or maintain any fortifications commanding the same or occupy, fortify, or colonize, or assume or exercise any dominion over Nicaragua, Costa Rica, and the Mosquito Coast, or any part of Central America. By this treaty the two Governments assumed a joint protectorate over the canal and the private corporation which, it was expected, would undertake the work. By article 7 of the Clayton-Bulwer treaty they determined that they would give their support and encouragement to such persons or company as might first offer to commence the canal with the necessary capital and the consent of the local authorities. This undoubtedly had reference to the American company which had already obtained its concession from the Government of Nicaragua. At this time, however, two other routes had been suggested-one through the Mexican Province of Tehuantepec and the other through the Isthmus of Panama. For this reason alone another article was added to the treaty. This was article 8, the "general principle " of which, under the Hay-Pauncefote treaty, it is our duty not to impair.

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For the purpose of this controversy it would avail nothing to follow this celebrated treaty on its troublous journey from 1850 to 1902, when it was abrogated and superseded by the Hay-Pauncefote treaty. To-day not a vestige of the conditions that surrounded the making of the Clayton-Bulwer treaty remains. All hope of constructing the canal by private individuals or corporations was long ago abandoned. Great Britain claims no protectorate, sovereignty, or dominion

of any kind over the Isthmus of Panama. The canal is being built on territory that belongs to the United States in perpetuity, by virtue of a treaty with the Republic of Panama. No questions exist involving the integrity of the Monroe doctrine.

By the Hay-Pauncefote treaty Great Britain has voluntarily withdrawn her protection of the canal to which she obligated herself in the former treaty. The Panama Canal is a distinctly American enterprise, and the United States is its sole owner, builder, and protector. What, then, is the " general principle' of neutralization established by article 8 of the Clayton-Bulwer treaty mentioned in the preamble of the Hay-Pauncefote treaty?

Strictly speaking, the term "neutralization," when applied to a canal, refers to a condition under which the canal would be closed to the ships of war of belligerents. The term, however, has come to be used in a broader sense than this, so as to include an arrangement whereby protection is sought to be guaranteed against hostile attack or hostile interruption, while the same freedom of use is sought to be assured in war as in peace. No doubt, however, the leading motive of agreements of neutralization is to secure exemption from hostile attack and a corresponding prohibition of distinctive hostile use. When by article 9 of the treaty of Vienna provision was made for the "neutrality of the Free Town of Cracow and its territory," it was declared in the same breath: "No armed force shall be introduced upon any pretense whatever." When by article 11 of the treaty of Paris the Black Sea was "neutralized," the maintenance of armaments upon it was forbidden. In the neutralization of Luxemburg it was stipulated that the city of Luxemburg should no longer be treated as a federal fortress. By a treaty between Austria, France, Great Britain, Prussia, and Russia, signed at London November 14, 1863, the Ionian Isles were united to Greece and were neutralized.

Article 3 of the treaty declares that

as a necessary consequence of the neutrality to be thus enjoyed by the United States of the Ionian Islands the fortifications constructed in the island of Corfu and in its immediate dependencies, having no longer any object, shall be demolished.

The treaties of March 30, 1856, November 2, 1865, and March 13, 1871, having effected the neutralization of the lower Danube and of the works constructed in aid of its navigation, the treaty of Berlin of July 13, 1878, provided that— all the fortresses and fortifications existing on the course of the river from the Iron Gates to its mouths should be razed and no new ones erected.

The Argentine Republic and Chile by their treaty of July 23, 1881, declare:

The Straits of Magellan are neutralized forever, and their free navigation is guar anteed to the flags of all nations. To insure this neutrality and freedom it is agreed that no fortifications or military defenses which might interfere therewith shall be erected. (Moore's International Law Digest, vol. 3, p. 267.)

Referring to the Clayton-Bulwer treaty, we find that by article 5 the contracting parties engaged to " protect it from interruption, seizure, or unjust confiscation" and to " guarantee the neutrality thereof so that the said canal may forever be open and free and the capital invested therein secure." It was, however, expressly understood that the guaranty of protection and security was given conditionally and might be withdrawn by both Governments or either Government if both or either of them should consider that the persons or company undertaking or managing the canal had established regulations concerning traffic contrary to the spirit and intention of the convention either by making unfair discriminations or by imposing oppressive exactons or unreasonable tolls. Construing articles 5 and 8 of the Clayton-Bulwer treaty together we can not escape the conclusion that the United States and Great Britain engaged to protect and guarantee the neutrality of the canal whichever route was finally selected, reserving to themselves, however, the right to withdraw that protection and guaranty if the private corporation operating the canal should discriminate against either. They also engaged that the canal should be open on equal terms to the citizens and subjects of every other nation which was willing to unite with the United States and Great Britain in their joint protection of the canal.

As heretofore observed, under the Hay-Pauncefote treaty there is no joint protectorate over the canal. Neither Great Britain nor any other nation is obligated to cooperate with the United States in protecting the canal, nor is the right of the citizens and subjects of any other nation to the equal use of

the canal conditioned upon any agreement by that nation to cooperate for its protection. By article 3 of the present treaty the canal is to be free and open without discrimination to the vessels of commerce and of war of all nations observing the rules which the United States has adopted as the basis for the neutralization of the canal.

The original draft of the Hay-Pauncefote treaty, as transmitted to the Senate by President McKinley, contained the following:

ART. 3. The high contracting parties will, immediately upon the exchange of the ratifications of this convention, bring it to the notice of the other powers and invite them to adhere to it.

In the final draft the words "the high contracting parties and the words "the United States" inserted.

were stricken out

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These negotiations seem to demonstrate clearly that Great Britain, recognizing the United States as the sovereign owner and sole protector of the canal and fully conceding our exclusive right to provide for its regulation and management, was contending only for equal treatment with other powers observing the rules adopted by the United States as the basis for the neutralization of the canal; and this, Mr. Chairman, in my opinion, based upon the investigation I have made of the question, is all there is to the "general principle of neutralization established in article 8 of the Clayton-Bulwer treaty, and which the United States agreed should not be impaired. Not by the wildest flight of the imagination can it be conceived that this "general principle" would be impaired by any preference the United States might see fit to give American vessels engaged in interstate commerce. Would anybody seriously contend that under this treaty Great Britain would not have the right to subsidize her own vessels using the canal or repay the tolls charged them for such use? On the contrary, would it not be the height of impertinence for this Government to attempt to dictate to Great Britain or any other nation the treatment they should accord their own shipping? The treatment that other nations may see fit to give their own vessels is none of our affair; and, for a better reason, it is no concern of any other nation what preference we give to our own vessels using a canal built, owned, and controlled by ourselves alone. We discharge our obligation to the world when we exact equal tolls and accord equal treatment to all nations, their citizens and subjects, that observe the rules the United States has laid down for the neutralization of the canal.

That portion of article 3 of the present treaty which it is claimed would be violated by passing our interstate commerce through the canal without the payment of tolls reads as follows:

The United States adopts as the basis of the neutralization of such ship canal the following rules, substantially as embodied in the convention of Constantinople, signed the 28th of 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 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."

The language of the subdivision just quoted shows plainly that the purpose was to prevent discrimination against any nation. Since 1817 no foreign vessel has been permitted to engage in our coastwise trade. This being so, any exemption Congress sees fit to make in favor of American vessels engaged in that trade would not and, in the very nature of things, could not be a discrimination against any nation, its citizens or subjects. In other words, no treatment that we may accord our own vessels could affect in any way, either for better or for worse, any foreign nation.

The United States having adopted as the basis of the neutralization of the Panama Canal the rules embodied in the convention of Constantinople for the free navigation of the Suez Canal, it may be proper to cousider for a moment the construction that the powers signatory to that convention have placed upon it. It should be understood that the Suez Canal was built by a private corporation through territory over which the Ottoman Empire exercised the attributes of sovereignty. While a portion of its stock is at present owned by the British Government through purchase from the Khedive of Egypt, the canal is operated by a private company. It has been the practice of some of the powers that signed the treaty of Constantinople to favor by