Omaha daily bee., 1920-12-20
Harding to
Seek New
Canal Pact
Will Attempt to Reach Under.
standing With Great Britain
Regarding Free Passage
Through Waterway.
Details Of Plan Secret
By ARTHUR SEARS HENNING.
Chicago Tribune Omaha Isee Leased Wire,

Chicago Tribune-Omaha Bee Leased Wire.
Washington, Dee. l9.--Ip address
ing himself to his announced project
oil cxerpting American ships from
the payment of Panama canal tolls,
Mr.. Harding, it was disclosed,
intends to seek new understanding
with Great Britain removing the pro-
vision of the Hay-Pauncefotc treaty
prohibitory of such discrimination.
Il think ! know way to reach
such an understanding with Great
Britain" Senator Harding said to
one of the republican leaders when
he was in Washington last week.
Mr.. Harding did not go into de-
tails and there is much curiosity con-
tcrning the plan he contemplates
bringing to bear upon Great Britain
to ind,le thpt nation TO consent to
change in the treaty under which
thc United States agreed to construct
tie Panama canal.
Exemption Repealed.
The Hsy-Paunce.otee treaty pro-
sides that: -
1.-The canal shall be free and open,
in time OF war as in tinei OF peace.
TO the vessels of commerce and OF
war of ali nations, OH terms OF en-
fire equality, SO that there shall be
no discrimination against any nation
ar its citizens or subjects in respect
III the conditions or changes OF traf-
iic or otherwise"
When congress in 1912 included
III the Panama canal act, an exemp-
ton Of American coastwise shipping
from the payment of tolls Great
Britain protested that this was vlo-
lation of the treaty provision. The
exemption was defended by the Taft
administration as not repugnant TO
TIE treaty, but i'll 1914 President Will
son found himself in such need OF
British support i'll American compli-
cations with Japan and Mexico that
lie repudiated his party platform pro-
nouncement fayoring free tolls and
caused congress to repeal the provi-
sion of the canal act.
Authorities Diragree.
Senator Root and other authorities
OIL international law contended that
the exemption OF even coastwise
shipping was a violation of the
treaty. Defenders of the exemption
argued that it was no discrimination
s. gainst foreign shipping because
foreign vessels are excluded from the
American coastwise, trade and there
fore do not compete with American
coastwise ships.
This latter argument, however, will
rot hold in regard to the exemption
cf American ships in overseas trade,
as proposed by the republican plat
form, which says:
I'VE recommend that all ships en-
Gagged in coastwise trade, and all
vessels Of the American merchant
marine shall pass through the Pana-
ma canal without payment of tolls"
In view OF the British protest
against the exemption Of coastwlse
shipping, one can easily imagine the
onnosition .of England and other ma
ticns to the exemption Of all Amer
lean ships. 1t would be an UNUSUAL
consideration which would induce
Great Britain to consent to- a revision
of the treaty SO as to permit the dis
elimination.
In this connection it is pointed out
that Canada has maintained the Wei.
land canal toll free, and that exemp-
ton of american ships from pay
nnt of Panama tolls might engender
retallatory measures, such as the ex-
action of tolls from American ships
passing through the Welland canal
and the prospective St. Lawrence
waterway.
The coastal states are strongly III
iayor..s OF the Panant exemption,
while business and agricultural inter-
csts in the interior are opposed to it
on the ground that it would consti-
tuteJa subsidy to American ships and
a discrimination in favor of eompet-
ing seaboard producers. Unless
freight rates were reduced proper
tionate1y, the Chicago manufacturer
could not lay his product down IN
nc Pacific states SO cheaply, for ex-
ataple, as could the New York man-
;;facturer shipping by all water.
There is strong sentiment in con-
gress. however. for the exemption.
and little dissent among the repub-
iicans from the party platform pro-
iouncement. Even among mid
western senator's and representatives
it is doubtful that there is majority