If it should become necessary at any time to employ armed forces for the safety and protection of the canal, or of the ships that make use of the same, or the railways and auxiliary works, the United States shall have the right, at all times and in its discretion, to use its police and its land and naval forces or to establish fortifications for these purposes.
But the most important provision of all related to the question of the charges and other conditions of traffic through the canal. The meaning of the section seems plain enough, though it became a subject of rather acute controversy:—
The canal shall be free and open to the vessels of commerce and 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 and charges of traffic, or otherwise. Such conditions and charges of traffic shall be just and equitable.
This provision is reaffirmed in Article XVIII. of the Hay-Bunau-Varilla Treaty. There is no doubt that the British government regarded this promise of equal treatment as some compensation for the surrender of those rights of joint construction and control which Great Britain enjoyed under the Clayton-Bulwer Treaty. In fact, Mr. Hay, in a memorandum he sent to the Senate Committee on Foreign Relations, described the treaty as a sort of contract between Great Britain and the United States by which the former gave up those rights just mentioned in return for the "rules and principles" included in the new treaty, the chief among these being, of course, the provision about equality of treatment for all nations.
It was, therefore, a surprise when the United States government decided that the expression "all nations" did not include the United States themselves, and that it was quite open to them to give preferential treatment to their "coastwise" traffic. Under the term "coastwise" the United States include the sea-traffic not only between ports along a continuous coast, but between such points as San Francisco or Washington and the Philippine Islands. As a matter of fact, an amendment proposed by Mr. Burd in the Senate, reserving to the United States the right of favouring its "coastwise" traffic, had been defeated, when the new treaty was under discussion.
But, leaving these controversial questions, the most important thing for us to notice is that the Panama Canal has what is known as an "international status." It is not quite the sole and absolute property of the United States in the sense in which the Kiel Canal belongs to Germany, the Corinth Canal to Greece, and the Amsterdam or North Sea Canal to the Netherlands. Its status is governed by treaties which impose certain obligations and restrictions upon the United States and lay down certain rules of administration. It was intended at first to make the status of the Panama and the Suez Canal identical. But there are considerable differences. The "neutrality" of the Suez Canal is guaranteed by all the Powers of Europe, that of the Panama Canal by two only, England and the United States, and it is safeguarded and maintained by the United States alone. Then the Suez Canal is and must remain unfortified, while the Panama Canal will be strongly fortified by the United States.
The reader may wonder what precisely is meant by the word "neutral" as applied to the new waterway. The position will be as nearly as possible that indicated by Dr. Vaughan Cornish in the following passage:—
If there be a war in which the United States is not a party, the canal will be used by belligerents in exactly the same way as was the Suez Canal—for example, in the Russo-Japanese War—and the government of the United States has pledged itself to see that such neutrality is preserved. But if there be a war in which the United States is a party, the circumstances of fortification and operation by the United States in fact render it impossible for the other belligerent to use the canal, and are intended to have that effect. This being so, the United States is preparing to defend the canal from attack. Thus it is important to the proper understanding of the undertaking on which the United States government has embarked that we should clearly realize that the canal is only neutral in a restricted sense.[4]
As a matter of fact the status of the Panama Canal lies somewhere between neutralization and American control. The Hay-Pauncefote Treaty also lays down the rules which are to be observed by the ships of war of a belligerent using the canal and the waters adjacent to the canal—that is, within three marine miles of either end. They are similar to those in force at Suez, and need not be repeated here.