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therefor to the Venezuelan Government, to submit to the Arbitral Tribunal | Commission) indicated by Articles III and IV the claims which may have been the subject of a Venezuelan sentence [sic] against which it considers that it ought to raise objections founded in law and equity.


In case of lack of a direct agreement no definite sentence or decision shall have been rendered within a period of fifteen months after proper judicial proceedings have been taken, and if such delay be not attributable exclusively to the plaintiff, the Arbitral Commission shall take cognizance of the claims which shall not have been adjudged within sil, period.


Within the three months following the total expiration of the periods indicated in the preceding articles, each of the two Governments shall designate an arbiter, if there be neeil therefor, and the two arbiters thus named shall by common accord choose an umpire.

In case of disagreement, the designation of the umpire shall be trusted to a third power designated in common accord by the two Governments. If such accord be not obtainable, each of the two Governments shall designate a different power, and the selection of the umpire shall be made in concert by the powers thus designated.

The French arbiter and the Venezuelan arbiter shall meet in Caracas immediately after their designation and shall examine the claims in the cases provided for in Articles II and III.

Such of these claims of which [sic] a friendly settlement can not be made by the two arbiters within a period of twelve months from their first meeting, shall be submitted by them to the umpire, who shall decide without appeal.

The periods for the presentation of documents and supporting proofs shall be fixed by the arbiters, who shall also establish the other formalities of the proceeding (procedure).


Each of the Governments shall pay the salary of its arbiter and the expenses attending his mission; the two Governments shall pay each one-half the salary of the umpire and the general and common expenses of the proceeding.


The indemnities which shall be accorded to the claimants shall be delivered to the French Government in French gold or in equivalent money of Venezuela, within il period which shall in no case exceed one year, counting from the last arrangement, sentence or decision.

VIII The Venezuelan Government confirms its preexisting obligations in that which concerns the French Diplomatic Debt. It confirms likewise the declaration annexed to the Protocol of February 19, 1902.


The present Protocol shall be ratified by the competent powers and the ratifications shall be exchanged at Caracas as soon as possible and at latest by June 15, 1913.


The text of the present Protocol shall be drawn up in two copies, one FrenchSpanish and the other Spanish-French, and in case of dispute the French text shall be authoritative.

In faith whereof the respective plenipotentiaries have signed the present Protocol in two copies, one Spanish-French, the other French-Spanish, and have thereto affixed their seals at Caracas February elerenth, nineteen buudred and thirteen.

(No signatures to this inclosure.)

File No. 731,551/57.

The French Ambassador to the Secretary of State.

I Translation.)


Washington, May 6, 1913. MR. SECRETARY OF STATE: I took pains to keep my Government informed of the instructions your excellency was pleased to send, on my request, to the Representative of the United States at Caracas to recommend to the Government of Venezuela the ratification of the protocol for the resumption of diplomatic relations between France and Venezuela.

In reply, the Minister for Foreign Affairs of the Republic desires me to thank the Federal Government for this continuance of its good oslices in Venezuela. At the same time Mr. Pichon instructs me to say to your excellency how much the French Government appreciated the adherence of the United States to the attitude adopted jointly with France in Venezuela for the past ten years. Be pleased [etc.]


File No. 731.51/58.

*The American Minister to the Secretary of State.

[Telegram— Paraphrase.]


Caracas, May 14, 1913. The protocol was ratified by the Congress May 13.

The Minister for Foreign Affairs requests the further friendly offices of the Government of the United States with the French Government to assist in securing settlements with French claimants out of court as favorable as justice will allow.


File No. 731.51/58.

The Secretary of State to the American Minister.



Washington, May 21, 1913. The Department has communicated to the French Embassy the substance of your May 14. Now that France has a Legation at Curacas, our good offices can scarcely continue beyond the point already reached.





File No. 8111. 812/355.

The Secretary of State to the American Chargé d'Affaires. No. 1833.]


Washington, January 17, 1913. Sir: I enclose a copy of an instruction from Sir Edward Grey to Ilis Britannic Majesty's Ambassador at Washington, dated November 14, 1912, a copy of which was handed to me by the Ambassador on the 9th ultimo, in which certain provisions in the Panama Canal Act of August 21th last are discussed in their relation to the Hay-Pauncefote Treaty of November 18, 1901; and I also enclose a copy of the note 3 addressed to me on July 8, 1912 by Mr. A. Mitchell Innes, His Britannic Majesty's Chargé d'Affaires, stating the objections which his Government entertained to the legislation relating to the Panama Canal, which was then under discussion in Congress. A copy of the President's proclamation of November 13, 1912, fixing the canal tolls, is also enclosed.

Sir Edward Grey's communication, after setting forth the several grounds upon which the British Government believe the provisions of the Act are inconsistent with the stipulations of the Hay-Pauncefote Treaty, states the readiness of his Government " to submit the question to arbitration if the Government of the United States would prefer to take this course" rather than " to take such steps as would remove the objections to the Act which His Majesty's Government have stated." It therefore becomes necessary for this Government to examine these objections in order to ascertain exactly in what respects

his Act is regarded by the British Government as inconsistent with the provisions of that treaty, and also to explain the view of this Gov. ernment upon the questions thus presented, and to consider the advisability at this time of submitting any of these questions to arbitration.

It may be stated at the outset that this Government does not agree with the interpretation placed by Sir Edward Grey upon the HayPauncefote Treaty, or upon the Clayton-Bulwer Treaty, but for reasons which will appear hereinbelow it is not deemed necessary at present to amplify or reiterate the views of this Government upon the meaning of those treaties.

In Sir Edward Grey's communication, after explaining in detail the views taken by his Government as to the proper interpretation of

I ('ontinued from For. Rel. 1912. pp. 467-489. The two papers here printed comprise all the formal correspondence on the subject during 1913.

For. Rol. 1912, p. 481.
sld.. p. 409.
• Id., p. 489.

the Hay-Pauncefote Treaty, “so as to indicate the limitations which ” His Majesty's Government “ consider it imposes upon the freedom of action of the United States," he proceeds to indicate the points in which the Canal Act infringes what he holds to be Great Britain's treaty rights.

It is obvious from the whole tenor of Sir Edward Grey's corniunication that in writing it he could not have taken cognizance of the President's proclamation fixing the canal tolls. Indeed, a comparison of the dates of the proclamation and the note, which are dated respectively November 13th and November 14th last, shows that the proclamation could hardly have been received in London in time for consideration in the note. Throughout his discussion of the subject, Sir Edward Grey deals chiefly with the possibilities of what the President might do under the Act, which in itself does not prescribe the tolls, but inerely authorizes the President to do so; and nowhere does the note indicate that Sir Edward Grey was aware of what the President actually had done in issuing this proclamation. The proclamation, therefore, has entirely changed the situation which is discussed by Sir Edward Grey, and the diplomatic discussion, which his note now makes inevitable, must rest upon the bases as they exist at present, and not upon the hypothesis formed by the British Government at the time this note was written.

Sir Edward Grey presents the question of conflict between the Act and the Treaty in the following language: 2

It remains to consider whether the Panama Canal Act, in its present form, conflicts with the treaty rights to which His Majesty's Government maintain they are entitled.

l'nder section 5 of the Act the President is given, within certain defined limits, the right to fix the tolls, but no tolls are to be levied upon ships engaged in the coastwise trade of the United States, and the tolls, when based upon net registered tonnage for ships of commerce, are not to exceed 1 dollar 25 c. per net registered ton, nor be less, other than for ressels of the United States and its citizens, than the estimated proportionate cost of the actual maintenance and operation of the Canal. There is also an exception for the exemptions granted by article 19 of the Convention with Panama of 1903.

The effect of these provisions is that vessels engaged in the coastwise trade will contribute nothing to the upkeep of the Canal. Similarly vessels belonging to the Government of the Republic of Panama will, in pursuance of the treaty of 1903, contribute nothing to the upkeep of the Canal. Again, in the cases where tolls are levied, tbe tolls in the case of ships belonging to the United States and its citizens may be fixed at a lower rate than in the case of foreign ships, and may be less than the estimated proportionate cost of the actual maintenance and operation of the Capal.

These provisions (1) clearly conflict with the rule embodied in the principle established in article 8 of the Clayton-Bulwer Treaty of equal treatment for British and United States ships, and (2) would enable tolls to be fixed which would not be just and equitable, and would therefore not comply with rule 1 of article 3 of the Hay-Pauncefote Treaty.

From this it appears that three objections are made to the provisions of the Act: first, that no tolls are to be levied upon ships engaged in the coastwise trade of the United States; second, that a discretion appears to be given to the President to discriminate in fixing tolls in favor of ships belonging to the United States and its citizens as against foreign ships; and third, that an exemption has been given to the vessels of the Republic of Panama under Article 19 of the Convention with Panama of 1903. .

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Considered in the reverse order of their statement, the third objection, coming at this time, is a great and complete surprise to this Government. The exemption under that article applies only to the government vessels of Panama, and was part of the agreement with Panama under which the canal was built. The Convention containing the exemption was ratified in 1904, and since then to the present time no claim has been made by Great Britain that it conflicted with British rights. The United States has always asserted the principle that the status of the countries immediately concerned by reason of their political relation to the territory in which the canal was to be constructed was different from that of all other countries. The Hay-Herran Treaty with Colombia of 1903 also provided that the war vessels of that country were to be given free passage. It has always been supposed by this Government that Great Britain recognized the propriety of the exemptions made in both of those treaties. It is not believed, therefore, that the British Government intend to be understood as proposing arbitration upon the question of whether or not this provision of the Act, which in accordance with our treaty with Panama exempts from tolls the government vessels of Panama, is in conflict with the provision of the Hay-Pauncefote Treaty.

Considering the second objection based upon the discretion thought to be conferred upon the President to discriminate in favor of ships belonging to the United States and its citizens, it is sufficient, in view of the fact that the President's proclamation fixing the tolls was silent on the subject, to quote the language used by the President in the memorandum attached to the Act at the time of signature, in which he says:

It is not, therefore, necessary to discuss the policy of such discrimination until the question may arise in the exercise of the President's discretion.

On this point no question has as yet arisen which, in the words of the existing arbitration treaty between the United States and Great Britain," it may not have been possible to settle by diplomacy," and until then any suggestion of arbitration may well be regarded as premature.

It is not believed, however, that in the objection now under consideration Great Britain intends to question the right of the United States to exempt from the payment of tolls its vessels of war and other vessels engaged in the service of this Government. Great Britain does not challenge the right of the United States to protect the canal. United States vessels of war and those employed in government service are a part of our protective system. By the HayPauncefote Treaty: we assume the sole responsibility for its neutralization. It is inconceivable that this Government should be required

we alone must protect. The movement of United States vessels in executing governmental policies of protection are not susceptible of explanation or differentiation. The United States could not be called upon to explain what relation the movement of a particular vessel through the canal has to its protection. The Britisli objection, therefore, is understood as having no relation to the use of the canal by vessels in the service of the United States Government.

11d., p. 478.

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