New Britain herald., 1927-09-12
MAY BUILD CANAL
 ACROSS NICARAGUA
Panama Presents Details Of US.
 Dispute to League
300 MILLION FOR PROJECT
League Intervention as We'll as Growing Inadequacy Of Present Waterway May Occasion Congress sicnal Action,

Washington. Sept. 12 UP)-Re- ports of increased Panama canal traffic stimulated official interest today in the proposal for an Ameri- can built canal across Nicara qua, under the exclusive United States treaty rights.
 It was believed the Panama canal would not be adequate to this country's future strategic and commercial needs. The reported challenge by the Panaman delegate to the league of nations against this governments rights over the canal also aroused interest.
 A movement is developing here to urge congress in the next ses- sicn to authorize work on the pro- ject.
 Cabled reports to the war depart ment said 50S commercial ship transits occurred through the Pan- anna canal during August, the highest number on record. Many predicted the Panama canal would reach its present capacity within two or three years, when the hours or operation can be extended to in crease capacity one-third.
 Estimates of the cost of the new canal range from $500, ,oO0, ,0OO to o,o0o,000 or from twice to three times that of the Panama canal. All factions in political-divi- dend Nicaragua favor the canal. it was said.
 There has never been any dispute between this government and the government of Panama as to the sovereignty of the Panama canal zone, it was said on the authority of Secretary Kellogg. and there is no question about the sovereignty of the United States over the zone. The department spokesman said the league Of nations has nothing what ever to do with American control or the zone and that he did not know what could be the basis for the statement attributed to Eusebio Morales, Panama finance minister and league delegate.
 According to the department. thls government obtained full au- thority and control over the Pan anna canal zone by the treaty of 1903. The Panama assembly las. summer failed to ratify the 1926 treaty, following charges that it h. trlnged sovereign rights of the re- public i'll distinction 10 the canal. but the Panama government has not yet made representations 10 change the unratified treaty. The provisions of the treaty objected 10 would automatically place Panama in state Of war whenever the United States is a belligerent and extend American control of aviation and radio in the republic).
 The chief dispute in the formal negotiations of the 1926 treaty turned on Panama's desire to elimi- nate the American government con- mlssary in the canal zone, which allegedly injured Panama's con- mercial interests.
 In unofficial circles. 1t was as-' stunned that Morales statement be- fore the league was based upon the conviction that the 1903 treaty grants the United States full con- trol over the canal zone with re- gard to defense and sanitation, but not commercial rights.
 Morales was reported as saying the issue of sovereignty over the canal zone was such a major issue Of dispute between the two govern ments that the question might be submitted for arbitration to an h. ternational court. The state depart ment's informal declaration today was interpreted as meaning this
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