seen not to be correct, for the following reasons:

(1) According to Article III, No. 1, of the Hay-Pauncefote Treaty the
charges for the use of the Canal shall be just and equitable. This can
only mean that they shall not be higher than the cost of construction,
maintenance, and administration of the Canal requires, and that every
vessel which uses the Canal shall bear a proportionate part of such
cost. Now if all the American vessels engaged in the American coasting
trade were exempt from the payment of tolls, the proportionate part of
the cost to be borne by other vessels will be higher, and, therefore,
the exemption of American coasting trade vessels is a discrimination
against other vessels.

(2) The United States gives the term "coasting trade" a meaning of
unheard-of extent which entirely does away with the distinction between
the meaning of coasting trade and colonial trade hitherto kept up by
all other nations. I have shown in former publications--see the _Law
Quarterly Review_, Vol. XXIV (1908), p. 328, and my treatise on
International Law, 2nd edition (1912), Vol. I, Sec.579--that this attitude
of the United States is not admissible. But no one denies that any
State can exclude foreign vessels not only from its coasting trade, but
also from its colonial trade, as, for instance, France, by a law of
April 2, 1889, excluded foreign vessels from the trade between French
and Algerian ports. I will not, therefore, argue the subject again
here, but will only take into consideration the possibility that Great
Britain, and some other States, might follow the lead of America and
declare all the trade between the mother countries and ports of their
colonies to be coasting trade, and exclude foreign vessels therefrom.
Would the United States be ready then to exempt coasting trade vessels
of foreign States from the payment of Panama tolls in the same way that
she has exempted her own coasting trade vessels? If she would not--and
who doubts that she would not?--she would certainly discriminate in
favour of her own vessels against foreign vessels. Could not the
foreign States concerned make the same assertion that is now made by
the United States, viz. that, foreign vessels being excluded from their
coasting trade, the exemption of their own coasting trade vessels from
tolls did not comprise a discrimination against the vessels of other
nations? The coasting trade of Russia offers a practical example. By a
Ukase of 1897 R