The Birmingham age-herald., 1913-01-24

hndpaHOfGQ TO tOiiddAt ohiAHHi 49,
trials and all matters relating thereto
,......,,.......s.s..... ............s.......s.'s..
framed may not restrict this exemption
10 bona fide eoastwise traffic.
The answer to this objection, therefore,
apart from any question of treaty inter-
pretation is that 1t rests on conjecture
as TO what may happen, rather thah
upon facts, and does not present a ques-
ton for submission to arbitration as
has not as vet passed beyond the stage
where Ii can properly De deai' "ita W
diplomatic discussion.
sIt will be remembered that only CUES
tions which it may not be possible 10
settle by diplomacy are required ny our
arbitration treaties to be referred TO arm
tration," Mr.. Knox continues
The secretary dismissed in the same
Vav another British contention that there
is nothing IN the United states law u
nreyent any American vessel from COM
hinine foreign commerce with coastNise
t3ade TO the detriplent of foreign Snip
ming. which he declares depends upon lu-
ture conditions and facts not yet aseef-
tanned arbitration of which would be
premature.
Takes Up Grey's Objection
Taking m Sir 1;dward Grey's objee-
tton that the canal act would enable
tolls to be fixed which would not be
inst and equitable, the secretary, again
calling attention TO the fact that TINS
statement was made without kho"i-
edge of the Presidents toll proclaiha
ton, remarks that this again Is paseu
upon a mere contingency that there Is
no claim that the tolls, as now actuaiiy
fixed, are not lust and equitable.
Without admitting that the burden OF
proof rests upon the United states 10
show that all traffic has not been reek-
oned with in fixing upon the tolls anu
that consequently they are equllaple'
Secretary Knox welcomes the opinion
of Informing the British government
that such is the case and that in adopt
ing the rate of $1.s5 per ton Proi. hin-
orv johnson included American coast
wis shipping in his calculations, quot
ing from his report, in which IL Is
shown that Professor Johnson calcu-
lates the tonnage passing through lhe
canal in 1915 as composed of American
shipping l,000,ooo tons
American foreign shipping, 72O,ooo tons,
and foreign shipping, S,7So,ooo tons. II
was on this estimate that the President
fixed the tolls.
.If as matter of fact Secretary
Knox declares, ethe tolls now fixed eol
which Sir Edward Grey seems una
ware) do not exceed this requirement
Interest on the capital expended and
the cost of operating and maintaining
the canal), and as heretofore pointed
out there Is no claim that they do' IL
is not apparent under Sir Edward
Crews contention how Great Britain
could be receiving unjust and ineqnlt-
able treatment If the United States IA
WIS its coastwise shipping vessels, but
not collecting their share of tolls nee
essary to meet the requirement. There
Is. a very clear distinction between an
omission to take into account the
coastwise tolls In order to determine
a just and equitable rate, which is as
far as this objection goes and the re-
mission of such tolls or their collec-
tion coupled with their repayment in
the form of subsidy. The exemption
of the coastwise trade from tolls, or
the refunding of tolls collected from
the coastwise trade is merely sub
sidy granted by The United States to
that trade and the loss resulting from
not collecting or from refunding those
tolls will fall solely upon the United
States. In the same way the loss VIII
fall on the United States IL the tolls
on all vessels represent less than the
fair value of the service rendered
which must necessarily be the asesfor
many years; and the United States will
therefore be in the position of subsi-
dizing or aiding not merely its own
coastwise vessels but foreign vessels
as we'll"
Power to Violate Treaty
Summarizing the British objections
and commenting upon them. Secretary
Knox does not deny that Congress has
the power, through the President. to
violate the terms of the Hay-Pauncefote
treaty in its aspect as a rule of munic-
ipal law That, he says. would only be-
come just ground for complaint in
the event that the power was used
against British shipping.
'It is the improper exercise of this
power and not its possessions which
alone can give rise to an international
cause of action" remarks the secre-
tary
Only when the complaint Is made by
Great Britain that British vessels ac-
tually have been subjected to unequal
treatment or inequitable tolls. Secretary
Knox asserts, can the question be
raised whether the United States Is
bound by the Hay-Pauneefote treaty to
collect tolls from American vessels and
whether British vessels are entitled to
equal treatment. Therefore. the Secre-
tary holds that IL is not now necessary
to discuss questions of facts which have
not yet arisen.
The American note concludes as fol-
lows:
''It is recognized by this government.
that the situation developed by the pres
ent discussion may require an examina-
tion by Great Britain into the facts
above set forth as to the basis upon