The New Zealand Times. SATURDAY, JULY 20, 1912. THE PANAMA CANAL

New Zealand Times, Volume XXXVI, Issue 8178, 20 July 1912, Page 4

The New Zealand Times. SATURDAY, JULY 20, 1912. THE PANAMA CANAL

A conference of the Senate’s representative’s committees practically decided to shelve the Panama Canal Bill until next session, thus relieving Congress from an embarrassing situation.—American cable nows.

Though the nature of the representations made by the British Government to the United States regarding the provisions of the Panama Canal Bill has not been announced, enough has emerged from the spirited controversy of tho past week to show that protest against tho Bill is based mainly upon the proposal to penalise all vessels other than those on tho American shipping register. Tho aim of the measure is to secure for these vessels complete immunity from payment of canal tolls or, in the alternative, a subsidy from the Government equal to the amount of such charges levied upon vessels passing through tho canal. The obvious effect of this would he to make the Panama Canal a private, waterway for American shipowners, for exemption from tolls would clearly put them in a position which the owners of other nations could hardly hope to compete against. The special interests in the United States that would benefit by an arrangement of this kind are many and their rapacity such that we can expect to hear of the Bill now under discussion receiving powerful support. The opportunity it gives for spread-eagleism is one not to be missed This we have been reminded of by the extracts from one or two of the sensational newspapers included in our cable news during the last few days. But though the forces behind such a Bill must necessarily be powerful it will have been noticed that both Mr Elihu Root, who was Mr Roosevelt’s Secretary of State, and Mr P. C. Knox, the Secretary of State, are both strenuously opposed to the step proposed by the Bill before Congress. • • • • *

Mr Knox holds that the exemption of American shipping from payment of tolls would be an infraction of the Hay-Pauncefote Convention which secured to all vessels the right to • use the canal. _ Mr Root argues that the discrimination sought to be made in favour of American shipping is unjustifiable, and declares that it the point were referred to the Hague Tribunal an order would in all probability be made for refund of money obtained by shipowners. There is, of course, no doubt that Congress is at liberty to subsidise American shipping, but the Eoint of Britain’s protest appears to e the great distinction that exists between such a general subsidy and one calculated upon the use vessels may make of an international waterway. There is just a possibility that this Bill_ has not been brought forward to achieve the object nominally aimed at but to support a general campaign for additional grants to American shipping from public funds. If the canal wore used only, by American ships which cither paid no tolls at all or collected an equivaent amount in cash it seems difficult to understand how the United States Government could recompense itself for the colossal outlay envolved in completing, maintaining and operating the canal. Only by the great "cut” being "for use on equal terms by vessels of all nations” can the revenue he obtained to meet these charges.

Assuming, however, that there is a serious campaign in favour of looting the taxpayer to the extent suggested there is no shadow of doubt that this could only he done hy a shameless disregard of treaty obligations. As far hack as 1849, when America first gave her consent to the projected canal, an understanding was given that was maintained through all subsequent ne-

gotiations for territorial rights and for neutralisation of the canal zone. “We,” said the American Minister to Franco in an interview with Lord Palmerston, “regard the highway as naturally belonging to all mankind, and for that reason will never consent to sec it fall under the exclusive control of any other commercial power.” That has been the policy from then until now, and to it the United States is unquestionably bound. By solemn treaty based upon this understanding that the canal would be for the “use on equal terms of the vessels of all nations” the United States obtained from the Republic of Panama possession of a strip of country five miles wide on each side of the canal route and within this zone exercises complete authority. This treaty was made with the acquiescence of other nations, but would have been resisted by them all had there not been a clear understanding in regard to the neutralisation of the .acquired territory and the international character of tho highway for shipping. • • • • •

It can hardly bo suspected that any Government at Washington would dare to violate the Convention which preceded America undertaking construction of the canal. Such an act suggests conduct much too gross te bo believed possible, but the question involved is one of such great importance that the future course of the Bill will be watched with great interest. The latest information, that the Bill has been for the present “shelved,” may mean, of course, that the demonstiation made hv Mr Knox and Mr Root has shown the “interests” concerned the desirableness of not pressing foruard with proposals that would, to start with, cause serious trouble between Congress and the Government. Indeed we aro disposed to think it very probable that tho word “shelved” may in this case he taken as a synonym for “dropped.” Yet the matter is one of great importance to this part of tho world and we trust the Government will see its way to co-operating with the Federal Ministry of Australia in the suggested representations _to the British authorities. The opening of the Panama Canal —President Taft has said that the first vessel is to pass through in July next year —will make great changes in the trade of the Pacific. It is questionable, perhaps, how far its opening will affect New Zealand commerce, though we ourselves are inclined to believe that the results will in a few years be seen in an almost complete revolution of our mail and passenger routes to Europe and the inauguration of important trade relations with the States on the Atlantic seaboard.