There is a further answer, too, which is made to the contention of the United States on this same point. You will remember that by Rule 1 of Article III of the Treaty the charges of traffic are to be just and equitable, and that is construed by both parties to mean that the tolls must bear a fair relation to any expenditure on the Canal. It is obvious that if any class of vessels is exempted from tolls other vessels which do not share in that exemption must pay more, since that cost must be divided among them alone. This objection is of weight.
There is one further argument to which I must call your attention. It is sought to defend the exemption of United States vessels on the ground that it is in substance a mere subsidy to shipping; that there is nothing to prevent the United States or Great Britain or any other nation from granting bounties to their ships going through the Panama Canal, and that it is only a matter of form whether a bounty be given by exemption or by refund, or by direct gift, or in any other way. But does not this argument go too far? It goes to this, that the most distinct provision in a treaty for equal treatment would mean nothing at all; because exemption could be given to national ships without any breach of those provisions; in fact that such a stipulation could never be worth the cost of the ink used in committing it to paper. This can hardly be the right view. The policy of the Treaty is that the shipping of the two parties is to receive equal treatment; it follows that both or neither must have exemption. The extent to which the parties may go in order to assist their commerce by subsidies out of their own funds is another matter, and must largely depend on the particular circumstances of the grant. But this much is clear, that if tolls are charged at all they must be charged and paid on all ships under the Treaty. And this is the more certain because as
