rivilege of using _her_ Canal
under a conditional most-favoured-nation clause, she herself remaining
unfettered with regard to the conditions under which she could allow
her own vessels the use of the Canal. The historical facts are five in
number:--

Firstly, in 1850, Great Britain and the United States, by the
Clayton-Bulwer Treaty, agreed that neither of them would ever obtain or
maintain for herself any exclusive control over a future Panama Canal,
or fortify it, or occupy or colonise any part of Central America; that
the Canal should be neutralised, should be open to the vessels of all
nations under conditions of equality; and so forth.

Secondly, in 1901, the two parties to the Clayton-Bulwer Treaty agreed
to substitute for it the Hay-Pauncefote Treaty, Article II of which
expressly stipulates _inter alia_ that the Canal may be constructed
under the auspices of the Government of the United States and that the
said Government, _subject to the provisions of Articles III and IV_,
shall have the exclusive right of providing for the regulation and
management of the Canal.

Thirdly, the parties agreed--see the preamble of the Hay-Pauncefote
Treaty--that the general principle of the neutralisation of the Canal
as established by the Clayton-Bulwer Treaty should not be impaired, and
that, therefore, the United States--see Article III of the
Hay-Pauncefote Treaty--agrees to adopt as the basis of the
neutralisation of the Canal certain rules, substantially the same as
those embodied in the Suez Canal Convention of 1888, and amongst these
a rule concerning the use of the Canal by vessels of all nations on
terms of entire equality without discrimination against any such
nation, or their citizens or subjects, in respect of the conditions or
charges of traffic, or otherwise, such conditions and charges to be
just and equitable.

Fourthly, the parties agreed--see Article IV of the Hay-Pauncefote
Treaty--that no change of the territorial sovereignty or of the
international relations of the country or countries traversed by the
future Canal should affect the general principle of the neutralisation
or the obligation of the parties under the Hay-Pauncefote Treaty.

Fifthly, when, in 1903, the United States by the Hay-Varilla Treaty,
acquired from the Republic of Panama the strip of territory necessary
for the construction, administration, and protection of the Canal, she
acquired sovereign rights over this territory and the fut