in case of war between the parties, be exempt from blockade, detention, or capture, for a distance from the entrances to the canal to be afterwards agreed upon. [This was two years later fixed at twenty-five miles.]

Art. V. The two Governments undertake to protect the canal from interruption or seizure, and to guarantee its neutrality: this guarantee to be conditional on the proper regulation of the canal by the company making and managing it. Art. VI. All friendly nations shall be invited to enter into stipulations with the contracting parties similar to those by which the latter have bound themselves; and the parties to the present Convention agree to make treaties with the Central American States for the purpose of carrying into effect the design of the Convention. [In consequence of this article there are treaties in force to-day which would apparently require to be modified before the Hay-Pauncefote Treaty, as amended by the Senate, could become operative.] Art. VIII. The same protection shall be extended to any other communication across the isthmus connecting North and South America, whether made by canal or railway, provided that the traffic charges are equitable, and that there is no attempt to discriminate against the ships or commerce of any country.

Unfortunately the treaty was not free from ambiguity. Before ratifications had been exchanged, Sir H. Bulwer was instructed by the British Government to announce formally to the American Secretary that the engagements of the Convention (i.e. under the first head) were not understood to apply 'to Her Majesty's settlement at Honduras or its dependencies,' the Bay Islands. To Bulwer's note Clayton replied that neither of the negotiators contemplated the inclusion of the British settlement of Honduras, commonly called British Honduras, as distinguished from the State of Honduras, nor the small islands in the neighbourhood of that settlement, which may be known as its dependencies.' But apparently, in communicating the substance of Sir Henry Bulwer's note to the Senate, Mr Clayton omitted to state Great Britain's reservation of her claim to the islands, so that when the full extent of the reservation became known, the Americans believed that their representative had been outwitted, and were very sore in consequence.

Another cause of misunderstanding was the Mosquito protectorate claimed by Great Britain. In the despatch

to which reference has already been made, Mr Laurence had objected to that claim, and also to the British occupation of Greytown. He maintained that in order to give full confidence to the capitalists of Europe and America, neither the United States nor Great Britain should exercise any political power over the Indians, or any of the States of Central America.

"The occupation of Greytown,' he said, ' and the attempt to establish a protected independence in Mosquito, throw at once obstacles in the way, excite jealousies, and destroy confidence, without which capital can never flow into this channel.'

In the course of the negotiations the Americans were very urgent that the protectorate should be surrendered, and the Mosquito territory incorporated in the State of Nicaragua on such terms as to the rights of the Indians as should commend themselves to the British Government. They asserted that the governing council was composed entirely of Englishmen, and that, therefore, to maintain the claim would look like an attempt on the part of Great Britain to evade her obligations under the treaty. Lord Palmerston refused to yield the point, though he promised that no advantage detrimental to the United States should be taken by this country of her position; and, in order that there should not be any subsequent question with regard to this matter, some words were added to the original draft at the instigation of Sir Henry Bulwer. The United States, however, continued to press for the abolition of the protectorate, on the ground that such a control must, from the nature of things, be an absolute submission of these Indians to the British Government, as in fact it has ever been'; and that it was therefore necessarily opposed to the spirit of the treaty. Lord Clarendon met the complaint by pointing out that, since the actual language of the document recognised the possibility of protection, the intention of the contracting parties obviously was 'not to prohibit or abolish, but to limit and restrict such protectorate.' Nevertheless, in order to ease relations which were becoming somewhat strained, Great Britain entered into agreements by which she ceded the Bay Islands to Honduras in 1859, and the Mosquito coast to Nicaragua in 1860, the latter State undertaking not to interfere with the internal affairs of the Indians. The treaty of 1860

was supplemented by another two years later; and the privileges reserved to the Mosquitos were the subject of an arbitration between this country and Nicaragua in 1881, when the present Emperor of Austria acted as arbitrator.

In 1880 Congress passed a resolution calling upon President Garfield to take steps to obtain the abrogation of the Clayton-Bulwer Treaty; and Mr Blaine, who was then Secretary of State, entered into correspondence with the British Foreign Office with a view to securing that object. He failed, however, as did also his successor, Mr Freylinghuysen, who was Secretary in President Arthur's administration. The latter, indeed, concluded another convention with Nicaragua on lines somewhat similar to those adopted in the treaty of 1849 between the same parties. Under the Freylinghuysen-Zevalla Treaty, Nicaragua was to cede to the United States a strip of territory, ten miles wide, for the site of the canal, and the United States in return were to make a loan to Nicaragua of four million dollars, and to engage to protect Nicaraguan territory against external aggression. But, mainly on the ground of the last provision, the treaty was thrown over when Mr Cleveland came into power in 1885. There was no farther correspondence between the British and United States Governments on the subject until two years ago. The negotiations then begun resulted in the Hay-Pauncefote Convention (signed February 5th, 1900), the terms of which are as follows:

Art. I. It is agreed that the canal may be constructed under the auspices of the Government of the United States, either directly at its own cost, or by gift or loan of money to individuals or corporations or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present Convention, said Government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and management of the canal.

Art. II. The High Contracting Parties, desiring to preserve and maintain the "general principle" of neutralisation established in Article VIII of the Clayton-Bulwer Treaty, adopt, as the basis of such neutralisation, the following rules, substantially as embodied in the Convention between Great Britain and certain other powers, signed at Constantinople,

29th October, 1888, for the free navigation of the Suez Maritime Canal, that is to say :

1. The canal shall be free and open, in time of war as in time of peace, to the vessels of commerce and of war of all nations, on terms of entire equality, so that there shall be no discrimination against any nation or its citizens or subjects in respect of the conditions or charges of traffic, or otherwise.

2. The canal shall never be blockaded, nor shall any right of war be exercised, nor any act of hostility committed within it.

3. Vessels of war of a belligerent shall not revictual or take any stores in the canal except so far as may be strictly necessary; and the transit of such vessels through the canal shall be effected with the least possible delay in accordance with the regulations in force, and with only such intermission as may result from the necessities of the service. Prizes shall be in all respects subject to the same rules as vessels of war of the belligerents.

4. No belligerent shall embark or disembark troops, munitions of war, or warlike materials in the canal except in case of accidental hindrance of the transit, and in such cases the transit shall be resumed with all possible despatch.

5. The provisions of this Article shall apply to waters adjacent to the canal within three marine miles of either end. Vessels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time except in case of distress, and in such case shall depart as soon as possible; but a vessel of war of one belligerent shall not depart within twenty-four hours from the departure of a vessel of war of the other belligerent.

6. The plant, establishment, buildings, and all works necessary to the construction, maintenance, and operation of the canal shall be deemed to be part thereof, for the purposes of this Convention, and in time of war as in time of peace shall enjoy complete immunity from attack or injury by belligerents and from acts calculated to impair their usefulness as part of the canal.

7. No fortifications shall be erected commanding the canal or the waters adjacent. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder.

Art. III. The High Contracting Parties will, immediately upon the exchange of the ratifications of this Convention, bring

it to the notice of other Powers and invite them to adhere to it.

It will be observed that this convention preserves and amplifies the neutrality clauses of the Clayton-Bulwer Convention, merely modifying the terms of that document (Art. I) as to the right of construction and control: the other clauses of the older treaty remain intact. To such an alteration this country could not well have taken objection, nor had it any disposition to do so. The treaty of 1850 contemplated the construction of the waterway by private enterprise; but fifty years of inactivity at Nicaragua and the failure of the Panama Canal Company seem to show that this stupendous task must be undertaken by a nation and not left to private effort, if it is to be completed within reasonable limits of time. In these circumstances it would have been an impracticable as well as a selfish policy to oppose a change needful to American interests, and not directly detrimental to our own.

But the amendments adopted by the United States Senate have considerably altered the state of the case. In the first place, the Clayton-Bulwer Convention is declared to be hereby [i.e. by the Hay-Pauncefote Treaty] superseded.' Secondly, the first five clauses of Art. II are declared to be of no effect in case the defence of the United States is in question. Thirdly, the invitation to other powers to become parties to the principles set forth in the treaties is cancelled. Several other amendments were proposed but rejected. By one of these the American Government was to be enabled to impose discriminating tolls in favour of American manufactures and shipping in certain cases; but such a principle was too obviously in conflict with the main purpose of the treaties and the general trend of public opinion to be accepted even by such a body as the American Senate.

Deferring for a moment the consideration of these amendments, let us consider the value of the canal in peace and in war to the United States and to Europe respectively. Commercially, the project will not, we fear, be an unmixed gain to the Old World. Indeed, it is probably not too much to say that Europe has more to fear from the mere existence of the projected waterway than from any conditions imposed upon its usage. We could