officials with whom I came in contact, many objections were made to participation in the Panama-Pacific Exposition on the ground of prohibitions in the tariff law which were objectionable, in relation to the cost of transportation, etc., but I did not hear, during my stay there of five or six months, and being in close contact with officials and with the prominent men of Germany, a single objection with reference to this toll question, that either Germany or Austria felt sore because our country, with reference to its coastwise trade, had enacted a law that our merchant marine should be free of the payment of tolls.

Senator WALSH. You undoubtedly came in contact with eminent lawyers in continental Europe during your trips?

Mr. SUTRO. I did; very prominent ones.

Senator WALSH. Did you have any opportunity to ascertain what view they took of the matter?

Mr. SUTRO. I think the fact that we discussed every possible phase of the question-I delivered lectures in all the large cities of Germany, and the question was never asked me by any of the men who attended or the men that had, so to speak, patronized these public functions, such men as Prof. Lampshert, for example, the great historian; such men as the vice president of the German Parliament, Mr. Paashe; members of the Parliament itself, like the Secretary of the State Department, and I may say even during a conversation with the prime minister, Von Baum Bechmann Höllwig, of Germany, that not a single word was said about this toll question, and I think that is a negative acquiescence in the state of affairs as it now exists.

Senator BRANDEGEE. What subject were you lecturing upon? Mr. SUTRO. I went over to try to interest the owners of the large industries in taking part in the Panama Exposition in San Francisco, the celebration of the completion of the Panama Canal, and necessarily all these questions arose.

Senator BRANDEGEE. This was not obnoxious?

Mr. SUTRO. Not at all. I will say, for example, that in explaining the determination of the German Government not to take part officially in the Panama Exposition the question was not mooted a single time that the discrimination in the tolls in favor of our domestic trade would stand in the way or that they felt that was an unfair discrimination against them.

Senator BRANDEGEE. Was the question of the exemption of tolls of our coastwise shipping raised in any way whatever, or alluded to! Mr. SUTRO. Not alluded to at all. But I say it was only a negative position. Every other question that you could possibly think of was raised, every possible objection.

Senator BRANDEGEE. Every question you mean about the treaty

About its construction?

Mr. SUTRO. Well, about everything connected with the Panama Canal. For instance, there was, you know, in the tariff law a discrimination in favor of American ships carrying imports that was abolished by Congress, and indirectly the question did come up. Senator WALSH. Did they urge that as one reason which induced them to refrain from participating?

Mr. SUTRO. Yes; they had urged that; but that was abolished, you know.

I only wanted to express one thought, and that is all I have to say. It seems to me that the committee might take into consideration also what is coastwise trade.

There are only three countries in America, unless I am mistaken, namely, Canada, the United States, and Mexico, that abut on the two oceans. I do not believe that any country in South America abuts on both oceans. We are the owners of this canal, without going into the question of whether it is a modified ownership or an absolute ownership. We are certainly the owners of the canal and the owners of that territory. Now, is it not the policy of nations in general; is it not a proper policy if there is a doubt about the right of a nation that abuts on two oceans, such as our country does, to take advantage of the fact-unless there is something distinctly and positively against it to the contrary-to take advantage of the fact in favor of its own shipping?

What is coastwise trade? Coastwise trade would be for a ship to sail from any port on the Atlantic coast of the United States, through the Panama Canal, to our Pacific coast. As I understand it, if the ship should discharge a cargo in Mexico or in any country in South America, that would be foreign trade. That would be directly against the provisions of that treaty, if our ships should not be subject to the tolls that other nations are.

I may say that what I say here I got almost entirely from listening to the discussion to-day, because I arrived from Europe a few weeks ago and have had no opportunity to study the question as I should like to do, and I was only informed late yesterday that I would be desired to come here and say a few words.

Looking at it from my point of view, is there anything immoral or unconstitutional to be charged to any country, or to be charged to our country, that we take advantage of the position in which we find ourselves to further the growth and the prosperity of our own merchant marine in its coastwise trade?

Senator BRANDEGEE. Supposing the two partners to the treaties differed about the right to make the exemption, do you think it would be fair for one party to assume to decide the question itself?

Mr. SUTRO. Not entirely. I think, though, if there is a strong contention about the matter and the views are practically equally balanced, as they seem to me to be here from what I have read of it in the short time I have been back from Europe, that lawyers of international reputation are on both sides, and that at the same time the treaty apparently has been interpreted by every country in the world in whose favor it may be claimed to have been enacted between the two high contracting parties; that they have not raised any objection to it, that apparently construes the treaty as entirely in favor of the contention that has been made here, that our coastwise shipping should be exempt from tolls. It seems to me that in the light of those views and those opinions we have a right, morally and conscientiously, to interpret the instrument in our favor.

Senator BRANDEGEE. Are you aware of the views entertained by the Governments of South America as to the Hay-Pauncefote treaty? Mr. SUTRO. No; I can not say anything about that.

Senator BRANDEGEE. What do you mean by every country in the world?

Mr. SUTRO. I mean every country in the world-that no country in the world has taken the view that the British Government has taken.

Senator WALSH. Formally, you mean?

Mr. SUTRO. Formally. Why should they not? I want to say this to you. Germany is, next to England, the greatest exporter to this country in the world, I think, as far as I am informed; and why should not Germany protest and try to take advantage of the same contention that England is making?

Senator BRANDEGEE. I do not know. Maybe they would rather see England not get what she is claiming than to get it themselves. But, assuming that the two parties to the treaty do differ about its construction, would you advise us to go ahead and persist in our own construction of it, irrespective of what the other party claims ?

Mr. SUTRO. I think I would as an American, and I think that, as an American citizen, I would leave it to England to propose whatever she may desire to propose to harmonize the conflicting views, if she thinks best.

Senator BRANDEGEE. Suppose England had proposed to arbitrate it; would you advise us to accept that proposition?

Mr. SUTRO. I do not think I would until I had firmly taken my position in favor of my own country, and I might conclude to arbitrate it afterwards, if England would not be satisfied with that construction.

Mr. BRANDEGEE. Suppose the matter is in dispute now and both parties do formally persist in their construction of it. What would you advise about it? That we should go ahead and insist on ours being the correct one-decide our own case in our own favor?

Mr. SUTRO. I should have to consider that much more fully than I am able to answer now. I certainly would not do one thing. I would not accede to the demand of a foreign government, whether England or any other country-it happens to be England here-to interpret the instrument in the way that England desires it to be interpreted.

Senator BRANDEGEE. Supposing you thought you had a perfect right to exempt the coastwise shipping if you wanted to, but you did not think it was good economic policy to do it, and there was a bill pending to repeal the statute which you thought was wrong, would you be deterred from voting to repeal the statute which you thought was wrong because Great Britain also thought it was wrong?

Mr. SUTRO. I think if great economic questions were involved-I presume the question that you refer to is that it would be an indirect subsidy

Senator BRANDEGEE. Never mind the particular ground. Suppose you thought it was wrong to exempt our coastwise shipping-bad policy; suppose you did not believe it was the best Government policy to tax all the people for the upkeep of the canal and give free passage to our vessels; suppose you thought that policy was wrong, or you did not believe in it as a governmental policy, and it was a statute now, and there was a bill here to repeal that statute. What would you do about it?

Mr. SUTRO. You mean, Senator-you do not mean wrong in the

ethical sense?

Senator BRANDEGEE. No; I said as a governmental policy-a wrong economic policy.

Mr. SUTRO. That would be something I certainly would take into consideration.

Senator BRANDEGEE. Would you consider that, if you were a Member of Congress and wanted to do right, if you could find out what the right was?

Mr. SUTRO. Yes; I would, Senator.

Senator BRANDEGEE. If there was a chance of repealing the statute that you did not believe in, would you think that we had seriously compromised our national honor if we should repeal the statute that we did not believe in, at the same time accompanying the repeal with the declaration that we did not intend to make any admissions whatever about our rights under the treaty, but decided to relegate the parties to the treaty to the same position they occupied before you passed the statute?

Mr. SUTRO. That would be a political question. If it were an economic question of advantage to my country, then I certainly might be inclined to favor the repeal. I should want to have very strong economic reasons for taking that position.

Senator BRANDEGEE. Supposing you were in my position, if I may get advice from a gentleman of such scholarship as you appear to have. Supposing you had believed from the beginning that it was an unwise economic policy and had so voted, would you change your vote because the President and the British Government happened to agree with you?

Mr. SUTRO. No; I do not think I would.

Senator BRANDEGEE. I thank you very much for your moral support. I had not the slightest idea of doing it, no matter how you answered.

Mr. SUTRO. I might add that even if the British Government was in favor of the measure, and also the President of the United Statesbecause the President of the United States may be mistaken as well as anybody--I would oppose

Senator BRANDEGEE. As Mr. Cockran says, he certainly has been mistaken one time or the other?

Mr. SUTRO. I would oppose the repeal, notwithstanding those views.

Senator BRISTOW. I have a letter from Mr. Wharton Barker, of Philadelphia, which he asks me to present to the committee.

Senator BRANDEGEE. May I be allowed to inquire the tenor and purport of it?

Senator BRISTOW. It is a statement from Mr. Barker quoting from Dr. Nicholas Murray Butler some declarations of his which Mr. Barker thinks demonstrates that the position which is taken by this repeal measure is wrong. It is on the side of the law as it stands. Senator BRANDEGEE. I have no objection to it.

The CHAIRMAN. There being no objection, the letter will be inserted. in the record.

(The letter is as follows:)

The Panama Canal situation developed into one of grave concern when President Woodrow Wilson made an imperative demand upon the Congress of the United States for repeal of the clause of the tolls act that established free tolls for ships of the United

States trading between ports of the United States. The solution of this situation depends upon the answers made to several vital questions:

1. What are the rights of the United States within the borders of the nation? They are sovereign.

2. What obligations are imposed upon the United States by the Hay-Pauncefote treaty when tolls upon canals constructed within territorial boundaries of the nation are discussed in and fixed by the Congress of the United States, even though the territorial boundaries of the nation did not include the territory upon which the canal has been built at the time the treaty was made?

Dr. Nicholas Murray Butler has answered this question:

"It is established law in this country that a treaty made between the United States and a foreign nation is subject to such acts as Congress may subsequently pass for its modification or abrogation. It is not even necessary to discuss with the other party to the international contract what it thinks of the proposed action of the Congress of the United States. This means that a treaty made by one constitutional agency may be modified or abrogated by another constitutional agency, which is quite distinct from the treaty making power. This * doctrine has been laid down by the most eminent judges in the land * * *. The highest courts have held, therefore, that, while a treaty and an act of Congress are both binding upon the courts, the one which is later in point of time takes precedence in respect to authority. Whether a treaty has been violated by our domestic legislation so as to be the proper action of complaint by a foreign Government is held not to be a judicial question. To the courts it is simply a case of conflicting laws. the later modifying or superseding the earlier **

The whole contention of Great Britain is that the Hay-Pauncefote treaty gave equal rights to British subjects and to citizens of the United States, and, of course, this contention can not be conceded.

England makes a territorial claim when she declares that the Hay-Pauncefote treaty not only encumbers the Panama Isthmus territory of the United States with equal rights of use by all other nations, but impresses upon it a servitude by which the United States loses the free use of its own canal for its own vessels, a claim England sought to establish in the general arbitration treaty of 1897, rejected by the Senate of the United States.

No sober and fair-minded person will attempt to controvert the conclusions reached, and so the President's demand for repeal of the free tolls clause should be rejected by the Congress of the United States as it has already been rejected by public opinion. WHARTON BArker.

APRIL 22, 1914.

The CHAIRMAN. I have a letter from Mr. Samuel H. Barker, of Philadelphia, who presents some views regarding the economic aspects of this question, and I should like to have the clerk read this, if there is no objection.

(The clerk read as follows:)

Hon. JAMES A. O'GORMAN,

Chairman Committee on Oceanic Canals,

THE NORTH AMERICAN,
Philadelphia, April 18, 1914.

United States Senate, Washington, D. C.

DEAR SIR: Economic aspects of the Panama Canal situation now bulk largest in importance. They are not ephemeral, but for time to come. What President Wilson demands, will, if agreed to, humiliate the American people before the world. Serious enough is his proposition on that score. But it strikes deeper than sentiment. He proposes surrender of a national right without just call.

More than that, the undertaking which President Wilson would have the American people assume in the management of the Panama Canal would rob them of any fruits from the huge project which they, and they alone, have carried through with an expenditure of $375,000,000. Worse still, it would make of that isthmian waterway something hugely to benefit foreigners at the cost and to the injury of Americans.

Before such a use should be made of the Panama Canal, we, as a nation, could better afford to destroy our epoch making work before it shall go into service. That would be an abomination. It will be a crime upon our children and our children's shildren if we shall now, at the behest or demand of any man, any interests, any nation, yield our right to benefit to the fullest extent from the operation of the Panama Canal.

It is to the economic sides of the proposition which attention has not been sufficiently directed. The legal and the treaty aspects of the problem need offer no