that there shall be no discrimination against any such nation, or its citizens or subjects, in respect of the conditions or charges of traffic or otherwise. Such conditions and charges of traffic shall be just and equitable. The reading of these articles, with the words italicized by the present writer, makes it evident that there shall not be any discrimination in favor of any country or person, even in favor of that country which constructs and owns the canal, but which of its own volition yields any claim for preference. There can be, however, as I propose farther on, discrimination as to certain kinds of navigation provided that within that kind of navigation there shall be no national or individual discrimination. There exists within the laws of the United States, as within the statutes of several other maritime countries, two kinds of classification of trade under which its vessels are placed, known as the coasting or coastwise trade and foreign commerce or trade. With us as with several other countries the trade known in French as "cabotage" and with us as the coasting trade, is reserved to vessels flying the flag of the nation whose coasts are concerned. Foreign trade is of course opened to vessels of all flags and all nations. It is my belief that this discrimination of coastwise, as distinguished from foreign, trade should alone distinguish between the tolls or charges for traffic in the management of the Panama Canal. In order, however, to comply strictly with the terms of the Hay-Pauncefote treaty the charges under each classification should, though differing as to class, be the same to all vessels of all nations engaged in the same class of commerce. To make this just and effective, it would follow that our navigation laws should be changed so that foreign vessels be allowed to enter into our coastwise trade between the Atlantic and Pacific coasts, by the way of the canal, and to carry the matter still farther in its impartiality, that merchants and ship owners of the United States be allowed to purchase foreign vessels and place them under the American flag under the same conditions and privileges as if they were vessels built in the shipyards of the United States. Following these rules there would be no danger as to the railways of the United States controlling the coastwise trade of the United States, via the Isthmus of Panama, as they do now, and there would be no danger of the withholding of capital for the construction and management of steamers for this coastwise trade as has been already threatened. The trade would be opened to the world and be beyond the control of any money, railway or shipping trust. There is a natural division in the coasting trade of the United States, one portion only being necessarily changed in status, by the creation of a minimum toll, by the admission of foreign vessels and finally by a removal of a prohibition of purchase and transfer to the American flag of vessels built outside of the United States. This portion should be known as the coastwise trade of the United States via the Panama Canal. It would include such trade from the Atlantic and Gulf ports of the United States to the Pacific ports of the United States, not only those to continental ports, like those of California, Oregon, Washington and Alaska, but to the insular possessions of Hawaii and the Philippines as well as the smaller insular ports like Guam and Tutuila. This coastal trade very similar to what is known in French as the "Grand Cabotage " is now restricted by law to American vessels. The other coastal trade known in French as the "Petit Cabotage" could still be reserved to vessels that are American built and be confined to stretches of one coast alone on each side; that is, from ports at such points as Portland, Maine, and Galveston and New Orleans and New York on the Atlantic side, and ports on the Pacific side from San Diego to the ports of Puget Sound and Alaska as extremes. Upon the latter coastal trade, or petit cabotage, the present rules of coast trade would apply while the coastwise trade via the Panama Canal would be made so free and open that the world's shipping could enter so as to break down any railway control or monopoly. There is another feature to be observed in connection with the coastwise trade of the United States via the Panama Canal. If it should have the present restrictions, the same restrictions that are now applied so far as shipping is concerned, it would be a trade denied to other nations in time of peace and hence under the theory and practice of some nations it would place the neutrals which might be disposed, or secured, to engage in it, in time of war, to capture, by a powerful naval belligerent, under what is known as the Rule of War of 1756, and hence this trade would cease to exist. Great Britain and Germany with more powerful navies than our own could command the neighboring seas and hence bring this trade to a standstill. But as a trade open to other nations in time of peace, neutral shipping would be free from capture under that rule in war time and this most important of trades would go on freely at all times. Thomas J. Lawrence (p. 668, Principles, etc., of International Law, 4th edition) says that: Great Britain backed by several important maritime powers still holds that if a belligerent throws open in time of war, to neutrals, a coasting or colonial trade which it confined to its own subjects in time of peace, its foe may treat all neutral merchantmen who take advantage of the permission as enemy vessels. Another group of powers, headed by the United States, holds strongly to the contrary opinion; and unless a settlement is soon reached, the question may become acute and dangerous in a great maritime war. Great Britain presented a memorandum in the London Naval Conference favoring the doctrine of the war of 1756 as to colonial and coasting trade but it met with opposition, especially from the United States, France and Holland, to the extent that the matter was left unsettled but alluded to in the 2d paragraph of Art. 57 of the Declaration of London, as follows: The case where a neutral vessel is engaged in a trade which is closed in time of peace, remains outside the scope of, and is in no wise affected by this rule. Hence each maritime power is at liberty to act as it pleases in war time and there is nothing to prevent any power from capturing neutral as well as enemy merchantmen, engaged in the coastwise trade via the Panama Canal so long, as is now the case, that foreign merchantmen are denied the right to enter that trade in time of peace. It may and probably will be urged that it is necessary to retain this coastwise trade via Panama Canal to build up a merchant marine for the United States. In answer it can be stated that for over fifty years this trade has been in the hands of American built merchantmen without having had any material results in the creation of an American merchant marine. In fact our mercantile marine plying on and off our coast has been mainly a subsidiary to our great railway systems, with freight charges so arranged as not to affect its land freight charges when it comes in competition therewith, and really either to feed the lines alone or to give them advantages over competing railway systems. It is this part railway, part water transportation that gives such a controlling situation in trans-continental trade to the Southern Pacific Railway, from New York to New Orleans or Galveston by water and the remaining portion by land in a climate and with a mileage which tends to much profit. With a minimum toll to all countries for the coastwise trade, with a competition beyond the reach of railway or railway bankers, and with an opportunity of securing the benefit of cheap construction outside of the United States and with the assurance of free transit in war time under neutral flags, this coastwise trade via the Panama Canal opens an opportunity for the development of our Pacific coast by water route which is beyond the possibility of attainment in cheapness, in time and in safety in any other way. Above all there would be no discrimination in tolls against any country or against any citizen or subject thereof. [COPYRIGHTED.] U. S. NAVAL INSTITUTE, ANNAPOLIS, MD. THE BAGDAD RAILWAY AND WHY IT IS OF By CAPTAIN ALBERT GLEAVES, U. S. Navy. The Bagdad Railway connecting Constantinople with the Persian Gulf when completed will stand a "brilliant second" on the list of achievements of the last fifty years, and to quote the North German Gazette (March 22d), "with proud joy we shall then be able to look upon a new monument of German work, German application and stubborn German enterprise." It may seem at first glance that the United States has but little interest in the Bagdad Railway, aside from that interest which every educated man must have in an enterprise of such magnitude. As a matter of fact, however, this country has a very definite and distinct concern in Germany's adventures in Asia Minor-the reason is not difficult to discover—a railroad from Constantinople to the Persian Gulf via Bagdad, under the control of one Power means not only monopoly of trade by that Power, but sooner or later colonization also. Now it is fairly certain that, as pointed out recently in the Spectator, at this moment Germany is not ready to undertake over-sea expansion; until her fleet can be released from her own coasts she cannot have distant colonies, for colonies must be protected, and in view of the political situation. in Europe, Germany has no ships to spare for that purpose. But while her colonization schemes must be held in abeyance for this reason, the tide of emigration is only checked temporarily. But when it flows again, it will be a matter of much interest to us whether it sets westward toward South America or eastward to Asia Minor. Its bearing on our navy strategy is apparent. The United States has two great principles to uphold, the policy of the Monroe Doctrine and the integrity of the Panama Canal. For nearly one hundred years the Monroe Doctrine has been the barrier to which those nations most concerned have been loath |