Norwich bulletin., 1913-01-24
Reply Sent to
 Great Britain
SECRETARY KNOX ANSWERS
 BRITISH PROTEST.
NO DISCRIMINATION
Claims Sir Edward Grey Admits Right of United States to Grant Subsidies "A Special Commission Suggested.


 Washington, Jan 23-Secretary Knox's reply to the British protest against the exemption of American coastWiSe shipping from Panama canal tolls assures the British government that dom estic coastwise trade will not be permitted to extend operations into foreign competitive fields and that in creased tolls will not be laid on foreign American ships. If Great Britain Is not satisfied on these points, America proposes a special commission of ad- justment.
 Protest Was Premature.
 Secretary Knox begins his note. which was delivered to the British foreign office through MT. Laughlin, the American charge at London, by the flat statement that he cannot agree with the British interpretation of the canal treaties. so far as they limit the freedom of action of America or in fringe British treaty rights Pointing out that the Grey note was issued without consideration of the presi- dents toll proclamation the secretary states that Sir Edward deals chiefly with the possibilities of what the pres ident might do under the canal act, whereas the proclamation has entirely changed the situation
 The First Objection.
 Taking up the three objections made by the British government Secretary knox inst discusses that which ap- plies to the exemption from tolls of the government vessels of Panama. This he declares to be great and complete surprise to the United States, which always had asserted without challenge that the status of the coun- tries immediately concerned by reason of their political relation to the terri tory in which the canal Vas to be con structed was different from that of all other countries He does not believe therefore that the British government All question.
 The Second Objection.
 In regard to & second British oosec- tion, that the Panama. canal act might be thought to confer upon the preSi- dent the power to disorfxn21a4a In the use of the canal in favor of all ships belonging to the United States and it's citizens, even in the foreign trade by granting them reduced to1ass the note quotes from the memorandum attached to the canal act by the president when it was signed, as follows:
 Tt is therefore unnecessary to dis cuss the policy of such discrimination until the question nay arsss In the exercise of the presidents discretion
 Question Has Not Yet AFisen-
 As no question has yet arisen on this point, which, in the words of the ex- isting arbitration treaty, EEE may not have been possible to settle by d1plo- macy" the note hoEds that the sug- A fore passing from that stage of the question, Secretary Knox emphat1cally dtsclains entertaining any doubt aS to the right to exempt American waEshaps and other government vessels from tolls. as they Are a part of the govern ment's protective system, and 1t Is not understood that Great Britain chal- lengeS the right of the United States to protect the canal or to require an explanation of what relation the move ment of 8 particular vessel through the canal has to its protection.
 Not a Discrimination.
 Thus clearing away all non-reIevart objections, the note proceeds to dis cuss the British assertion that the ex- emption of United States coastwtse vessels from tolls is a discrimination against British vessels Mir. Knox re- calls Sir Edward Grey's admission of the right of the United States to grant subsidies to it's shipping generally or to any particular branches, and all though .this is "a form of subsidy to exempt the coastwise shipping from tolls, he regards it as objectionable, as throwing an unfair share of the burden of up-keep in the canal on for eign shipping.
 Possession of Power Not Cause of
 Action.
 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-Paunce- fote treaty in it's aspect as rule of municipal law. That, he says, would only become 8 just ground for com plaint in the event that the power was used against British shipping. 'It Is the improper exercise of this power and not it's possession" which alone can give rise to an international cause of action, remarks the secretary.
 Only when complaint is made by Great Britain that British vessels ac- trlaT1y have been subjected to unequal treatment or uneqUftable tolls, Secre- taf-y Knox asserts, can the question be raised whether the United States is bound by the Hay -Paunoefote treaty to collect tolls from American vessels, and whether British vessels are entt- tied to equal treatment.