The Birmingham age-herald., 1913-01-24
Assures England Domestic
Trade Will Not Extend
Into Foreign Com
petitiye Fields
THE COMMUNICATION
REDUCES NUMBER OF
POINTS NOW AT ISSUJ
If Proposed Course Proves Unaccepi
BILE to British Government, the
Whole Controversy May Be
Referred TO Special Com
mission of Inquiry

Washington. January 2s.-secretary
i<nox's reply TO the British protest
against the exemption of American coast
wise shipping from Panama canal tolls
assured the British government that do
riestic coastwise trade will not be per-
mitted to extend operation into foreign
competitive fields, ard that increased tolls
viii not be laid on foreign shipping to
balance the remission to American ships
Ii Great Britain is not satisfied on these :
points America proposes special eom-4
rission of adjustment.
The communication is devoted to the
purpose OF reducing TO the smallest point
and number the issues upon which the
two governments failed to agree, and as
to these-only two-it is contended that
they are entirely susceptible OF ADJUST
nent by diplomatic means. and without
recourse to arbitration.
II this course should not prove accept
able to the British government II Is sug-
gested that the whole controversy be re-
felred to a special commission of inquiry,
provision for which was made in the un-
ratified Knox-Bryce general arbitration
t: eaty That convention was approved by
he Senate with an amendment which cur
tnled the power of the special eommis-
son of inquiry To mere Investigation and
report and refused to permit the COM
rasslon to bind the country to course
of arbitration.
| Because of the amendment, Presidel
Taft has so far declined TO consummaI
the treaty by exchanging ratification
with the British government.
Exchange of Ratifications
To meet the needs OF THIS present isst
Secretary Knox now offers 10 give H.
to the treaty by an immediate exchans
of ratidcations. which would insure IN
existence of general arbitration treat
between America ana Great Britain after
re lapse of the existing Hay -Pauncefote
! 1, ,eaty June next. As an alternative the
Secretary is willing that commission
| be created for the special purpose of as
eertaining the facts in regard to the el-
| iect upon British shipping of the Pan
anna canal tolls account and the Presi-
dents proclamation liking the tolls.
Much of the Secretarys argument rests
! upon his contention that Sir Edward
Greys protest, being made In advance of
the issue of the Presidents proclamation
fixing the tolls, is entirely inapplicable to
he controversy in its present state. and
that as a matter of fact the British con-
tention rests upon apprehension OF things
that may happen IN the future to the in
jury OF British shipping which, in all
probability, never Will occur.
Dsagrees With British View =,
Secretary Knox begins his note, which
was delivered to the British foreign Of
tico through MIR Laughlin, the American
charge at London, BY the nat statement
that he cannot agree with the British in
/ 4 tf,.t. f.ffh ha al n
as they limit the freedom OF action of
America or infringe British treaty rights.
Pointing out that the Grey note was Is
sued without consideration of the Presi-
dents toll proclamation. the Secretary
states that Sir Edward deals chiefly with
the possibilities of what the President
might do under the canal act, whereas
the proclamation has entirely changed
tho situation.
Taking up the three objections made
by the British government. Secretary
Knox first discusses that which applies
to the exemption from tolls of the gov
ernment vessels of Panama This he de-
elares to be a great and complete sur
prise 10 the United States, which al
ways had asserted without challenge,
that the status of the countries imme-
diately concerned by reason of their po-
litical relation to the territory and the
canal was to be constructed, was diff
ferent from that of all other countries.
He does not believe therefore that the
British government intended to pro-
pose arbitration of this question.
In regard to second British objec-
tion, that the Panama canal act might
be thought to confer upon the Presl-
dent the power to discriminate in the
use of the canal in favor of ali ships
belonging to the United states and its
citizens, even in the foreign trade, by
granting them reduced tolls, the note
quotes from the memorandum attached
! (Continued on Page Scven)