Article 1
The High Contracting Parties agree that the present Treaty shall supersede the aforementioned Convention of April 19, 1850.
Article 2
It is agreed that the canal may be constructed under the auspices of the Government of the United States, either directly at its own cost, or by gift or loan of money to individuals or corporations, or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present Treaty, the said Government 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.
Article 3
The United States adopts, as the basis of the neutralisation of such ship canal, the following Rules, substantially as embodied in the Convention of Constantinople, signed October 29, 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.
2. The canal shall never be blockaded, nor shall any right of war be exercised or any act of hostility be committed within it. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect[325] it against lawlessness and disorder.
[325] This does not mean that the United States have a right permanently to fortify the canal. Such a right has likewise been deduced from article 23 of the Hay-Varilla Treaty of November 18, 1903, which runs:—"If it should become necessary at any time to employ armed forces for the safety or 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 in its discretion, to use its police and its land and naval forces or to establish fortifications for these purposes." However, it would seem that by this article 23 only temporary fortifications are contemplated. On the other hand, if read by itself, article 3 of the Hay-Varilla Treaty, according to which the Republic of Panama grants to the United States all the rights, power, and authority which the United States would possess and exercise if she were the sovereign of the territory concerned, could be quoted as indirectly empowering the United States to fortify the Panama Canal permanently. But the question is whether article 3 must not be interpreted in connection with article 23. The fact that article 23 stipulates expressly the power of the United States temporarily to establish fortifications would seem to indicate that it was intended to exclude permanent fortifications. The question of the fortification of the Panama Canal is discussed by Hains (contra) and Davis (pro) in A.J. III. (1909), pp. 354-394 and pp. 885-908, and by Olney, Wambough, and Kennedy in A.J. V. (1911), pp. 298, 615, 620.
3. Vessels of war of a belligerent shall not revictual nor take any stores in the canal except so far as may be strictly necessary; and the transit of such vessels through the canal shall be effected with the least possible delay in accordance with the regulations in force, and with only such intermission as may result from the necessities of the service.