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The Ambassador in Great Britain ( Harvey ) to President Harding 86

Dear Mr. President: I fear there is no escape from the conclusion that nothing can be accomplished in the immediate future with respect to an adjustment of the Panama Canal Tolls matter that would be acceptable to both countries. This is what has happened:

I took up the subject with Lord Curzon at what seemed to be the most opportune moment. … I prefaced my statement by saying that I had no proposition to submit and was merely groping for a solution and would greatly appreciate his assistance. With that object in view, I should like to speak to him with the utmost frankness regarding the situation in the United States in a wholly personal and unofficial way. He responded most cordially to the effect that our relations had become such that he should feel hurt if I did not approach every subject in that spirit. Thereupon, I laid the situation before him, pointing out that the whole matter was that of the interpretation of a treaty,86a regarding which our most prominent international lawyers differed. Mr. Root holding one view and Senator Knox and Mr. Sutherland the opposite. Mr. Hughes, to my knowledge, had never expressed an opinion upon the subject. Personally, in the contest in the Senate in 1913 I had upheld the contention of President Wilson and Mr. Root but recently, as the result of careful study, I had been greatly impressed by the arguments of Senator Knox. For the immediate purpose I did not consider it necessary to consider the merits of the case from a technical viewpoint, but I had all of the documents bearing upon the matter and should be ready to do so at any time. The immediate problem was, to my mind, purely practical. The Republican Platform, [Page 128] in response to public demand, had committed the party in power to exemption of American coastwise traffic from tolls, the President during his campaign had specifically approved this principle, and a Bill sponsored by Senators Knox and Borah, designed to fulfill this pledge, was pending in Congress. It would have passed and become a law already, but for the reluctant consent of those Senators to let me undertake to resolve the matter through diplomatic negotiation.

This, I remarked, was how it then stood. I had no plan when I left America, but had given the subject a great deal of thought and had a tentative suggestion to put before him for his consideration, which might or might not prove acceptable, but might tend, at least, to a development from which a solution might be evolved. I had not submitted it to my Government, because it was simply the result of groping, and I felt the need of his greater experience in putting it into concrete form if he should feel that it might in any way prove to be feasible. In other words, I should like him to regard the attempt as a little enterprise of our own until we could determine whether it possessed the elements of practicability. If we could reach an understanding along the line which I had in mind, or along any line which might suggest itself to him, I thought that we could reasonably assume that we were rendering a real service in eliminating at least one of the causes of irritation between our two countries. He responded that nothing could be more gratifying to him than to co-operate in such an endeavour.

Thereupon I outlined my tentative suggestion. Recalling that the chief contention of the British Government had been that exemption of tolls upon our coastwise traffic would result in unfair discrimination against Canada, I wondered whether, if the Treaty were so modified, or amended, as to put Canada upon the same basis as the United States with respect to its coastwise traffic, the British objection might not be overcome. I pointed out that from the American point of view this would be a distinct concession, for which Canada should be grateful to both countries, thus inculcating a spirit of helpfulness which would surely tend to enhance friendliness all around. I noted further that in the event of the passage of the Bill, which would surely transpire when it came to a vote, Canada would be deprived of a privilege which, ultimately, might prove of great value. I noted, further, that such an arrangement would not change in the least the basis of equality of toll charges on foreign trade as between the two countries. That was, for example, to say that the charges upon cargos from New York and Liverpool consigned to Japanese, Chinese and other Pacific ports would continue to be identical as at present. I amplified [Page 129] the argument in minor respects, but these constituted the major points.

Lord Curzon manifested the keenest interest and promised his sympathetic consideration, while he should familiarize himself with the conditions which were not fresh in his mind. There the matter was left. At the expiration of ten days or two weeks Lord Curzon brought up the subject, saying that it was most disagreeable to him to have to inform me that he feared nothing could be done about the matter. He had talked over the suggestion with the members of the Imperial Conference most informally, and Mr. Meighen87 had said promptly that Canada’s devotion to the Empire was such that she would not accept any differentiation in her favor as against the United Kingdom or the other Dominions. Consequently, the Conference had agreed unanimously that no proposal, or even suggestion, tending to relieve the situation could be entertained. I tried patiently to explain that no such differentiation was involved, inasmuch as Canada was the only portion of the Empire engaged in purely coastwise traffic, but the attempt was futile. …

. . . . . . . . . . . . . .

Needless to say, the passage of the Bill on the eve of the Conference88 would be most unfortunate. Could it not be averted without impairing in any degree our rights, upon the ground that the Government is not in a position at the present time to sacrifice two or three million dollars a year, which it derives from the Panama Tolls? It would not be advantageous to have it announced that action is postponed further because of the effect it might have upon the Conference, since doing that might give rise to harmful discussion. The ideal thing to my mind, would be to induce Borah to let the business rest and slip by without publicity.

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With best regards [etc.]

George Harvey
  1. Received in the State Department from the White House on Oct. 11.
  2. Signed Nov. 18, 1901, between the United States and Great Britain, John Hay and Lord Pauncefote being plenipotentiaries; for text, see Foreign Relations, 1901, pp. 243246.
  3. Rt. Hon. Arthur Meighen, Canadian Prime Minister and Secretary of State for External Affairs.
  4. The Conference on the Limitation of Armament, Washington, 1921–1922.