Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-24

eminent intended to propose arbitration
of this question.
that the Panama canal act might be
thought to confer upon the President the
power to discriminate 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 re-
duced tOlS-the note quotes from the
memorandum attached to the canal act
by the President when it was signed, as
follows:
at is not. therefore, necessary to dis
cuss the policy of such discrimination I'm
til the question may arise in the exercise
of the Presidents discretion
AS no question yet has arisen on this
point, which in the words of the exist
ing arbitration treaty. lit may not have
been possible to settle by diplomacy"
the note holds that the suggestion of ar
bitration Is premature.
Question of Exemption.
Before passing from that stage Of the
question. Secretary Knox emphatically
disclaims entertaining any doubt as to
the right to exempt American warships
and other government vessels from tolls.
as they are part of the government
protective system, and it is not under
stood that Great. Britain challenges the
right of the United States to protect the
canal, or to require an explanation OF
WudI I6IdtlOn the movement Oh a pdTtlCu-
lar vessel through the canal has to it's
| protection.
Thus clearing away all non-relavent
objections. the note proceeds to discuss
the British assertion that the exemption
Of United States cOastwise vessels from
tolls is a discrimination against British
vessels. Mr.. Knox recalls 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 although this is "a form
| of subsidy" to exempt the coastwise
| shipping from tolls, he regards it as OBJ
| jectionable. as throwing an unfair share
| of the burden of upkeep in the canal on
| foreign shipping.
The Secretary points out that the Brit
| ish do not claim the right to participate
| In American cOastwise trade, but object
| to the exemption of that trade from tolls
because they may adversely affect British
rights to equal treatment in the payment
of tolls or to just and equitable tolls. He
also recalls the British objection that
coastwise trade cannot be circumscribed
upon it will not affect vessels engaged in
the foreign trade. Thus cargo intended
| for an American port beyond the canal
and shipped on board foreign ship
cheaply through the operation of the pro-
posed exemption by being landed at
United States port before reaching the
canal and then sent on as coastwise
tTdue, 10 Tile uetTlIncnL Oh foreign SnlpS
in direct trade.
Admission of Right.
/ Taking this statement in connection
with one by Mr.. Innes on the same point,
to the effect that perhaps no objection
could be taken to the exemption If linn
tied to bona fde coastwise traffic. Secre-
tarye Knox declares this to be admission
OF the American right to exempt Its YES
sells in the coastwise trade from tolls.
AS to this" says the Secretary. lit is
sufficient to say that obviously the United
States is not to be denied the power to
remit tolls to it's own coastwise trade be-
cause of suspicion Of possibility that
the regulations yet to be framed may not
restrict this exemption to bona fide
coastwise traffic.
The Secretary dismisses another Brit
ish contention that there is nothing in
the United States law to prevent any
American vessel from combining foreign
commerce with coastwise trade. to the
detriment of foreign shipping, which he
declares depends upon future conditions
and facts not yet ascertained, arbitration
of which would be premature.
Question of Tolls.
Taking up Sir Edward Grey's objection
that the canal act would enable tolls to
be fixed which would not be just and
cQultdDlo, the 0oCTctdTy, again Calling at
tention to the fact that this statement
was made without knowledge of the Pres
idens toll proclamation, remarks that
this again is based upon a mere contin-
gency; that there is no claim that the
tolls. as now actually fixed. are not "just
and equitable
Without admitting that the burden of
proof rests upon the United States to
show that all traffic has not been reck-
oned with in fixing the tolls, and that
a
tary Knox welcomes the opportunity of
informing the British government that
such is the case. and that in adopting
the rate of $1.25 per ton Prof. Emory
shipping in his calculations, quoting from
his report, in which it is shown that
Prof. Johnson calculates the tonnage
passing through the canal in 1915 as COM
posed Of American coastwise shipping,
1.OOO.OO tons; American foreign shipping,
10000 tons. and foreign shipping. $3.50
coo tons. 1t was on this estimate that the
President fixed the tolls.
Requirement Not Exceeded.
eff as a matter of fact Secretary
Knox declares 1.-The tolls now fixed (of
| which Sir Edward Grey seems unaware)
| do not exceed this requirement Interest
| on the capital expended and the cost of
| operating and the maintaining the canal,
and as heretofore pointed out there is no
! claim that they do. 1t is not apparent I'M
F., der Sir Edward Grey's contention how
Great Britain could be receiving unjust
and inequitable treatment if the United
| States favors it's coastwise vessels by not
collecting their share of the tolls neces-
| sary to meet the requirements There is
| very clear distinction between an
omission to take into account the coast
| wise tolls in order to determine just
and equitable rate, which is as far as this
| objection goes. and the remission of such
foil ar hofr wi 1,0f,
| 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
| subsidy 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.
I'm the same way the loss will fall on
| the United States If the tolls fixed by
| the Presidents proclamation on all YES
| sells represent less than the fair value
| of the service rendered, which must
necessarily be the case for many years.