The Washington herald., 1914-04-15
HIS WORDS BOMB
TO REPEALS FOES
Treaty Makers Never Consid-
cred Exemption, Says
Henry White.
GIVES HISTaRY 0E PACT
GIVES HISTORY OF PACT
Prof. Johnson Holds that Showing
Preference to American Ships Would
Be Commercial Blunder.

Henry White, former charge d'affaires
OF the American Embassy at London, was
the first witness before the Senate Com
mittee on Interoceanic Canals yesterday.
Mr. White held the embassy secretary
ship in 1893, when the initiatory move was
made by the United States toward gain
iEg the right to build the Panama Canal.
II was through Mr.. White that negotia-
tions were made with the government
headed by the Marquis OF Salisbury look
ing to the convention which brought
about the Hay-Pauncefote treaty as
substitute for the Clayton-Bulwer treaty
Of 1850.
Mr. White told the committee that when
the negotiations were opened the exemp-
ton of American ships from the payment
OF tolls was not even broached. He said
that after he had broached the subject to
Lord Salisbury, he cabled Secretary Hay
that he thought Great Britain would be
willing to abrogate the portions OF the
Clayton Bulwer treaty necessary to en-
able the United States to own the canal,
providing that the United States would
agree that all ships should so through
the canal on terms OF equality.
Not Considered Seriously.
Il received no instructions from the
United States TO ask for exemption of
coastwise ships" said Mr.. White. nor
was the idea embodied in the early dis
cussion that such a thing would be done"
Mr.. White was cross-examined by
Chairman O'Gorman on his own under
standing of when the suggestion OF ex-
emption was first introduced. He said:
According TO my own recollection, the
only serious consideration arose at the
time of the discussion OF the bill. which
later became the present law. L recall
that there was a movement which took
form in the barred amendment to the
HayPauncefote treaty, proposed in the
Senate by Senator Bard, of California,
but as that was promptly defeated. We
did not at that time look upon it as a
serious proposition at ALL"
Income Would Increase.
Prof Emery r. johnson followed Mr..
White. He explained his own relations
with the canal problem. He told OF his
membership in the original Panama Canal
Commission and nis later employment un-
der the Taft commission as the expert
economist to draw up a system OF tolls.
He told the committee the initial cost
of the Panama Canal-s375 ,000, 600
created a standing interest account OF
$11, $50, 900. To this should be added
the cost of sanitation of the canal, and
the local government 100000; the
a,
permanent annual charge OF $3.50, 900:
an amortization contribution OF sS.75O.-
600, and the cost of maintaining this
canal, S3,5OO,00o. This combination of
permanent annual charges, sggregat-
ing t19,250.oOO, Prof. Johnson Thought.
should be met by the income from the
operation of the canal. He said that
the present estimates indicated that
the incomes of the canal during the
n
average about *12, 900, 900.
In the first ten years of operation of
the canal, II is Prof Johnson's belief an
increase OF more than so per cent in the |
income of the canal would be created by |
the development of commerce. He said
that on the basis Of Sl.20 per net ton, the !
canal would he earning gross so. 100000 by |
1e25. The remission of tolls to American |
Coastwise ships would bring the average !
income down to less than Sl7OOO.OoO by !
the end of this period. He thought that
this disposed Of such argument as there |
was favorable to uniform tolls to produce ,
revenues sufficient to meet the necessity /
of a canal and keep the United States /
government from running behind on the
canal as a business proposition.
He Defends Repeal.
Senator O'Gorman called the attention
of the witness to the fact that no calcu-
lation had been made OF the cost of
of the military and naval
defenses Of the canal
Nor should there be-" replied Prof
The defense OF the canal is
chargeable in the army and
navy budget
It is estimated, according to Col. Goe-
thals, that the military and naval estab-
lishment in the zone will cost from
S, Co., coo to sIO0JO,OOO per annum. Senator
O'Gorman felt Col. Goethals had under
estimated this cost. II
Prof johnson said that from an ecC-
nomic standpoint it would be a mistake
to exempt American coastwise vessels. II
He said that steamship freight rates
were based upon the judgment of the
shippers as to what they would pay, and II
upon the Judgment of the ship owners
as to what they could get from the
shippers. He did not believe that the