Says Free Canal Won't Cut Rates.

New York Times 100 years ago today, July 23, 1912:
Subsidizing Our Shipping, Declares Senator Percy, Is Vain When Railroads Control.
OUR OBLIGATIONS SACRED
Mississippian's Strong Speech Against Bill Points to Democratic Drift Away from Measure.
Special to The New York Times.
    WASHINGTON, July 23.—The gradual drift of sentiment in the Senate away from the policy of free passage for American ships through the Panama Canal was strongly indicated to-day when Senator Leroy Percy, a conservative Democrat from Mississippi, declared that policy to be a disreputable attempt to violate a solemn contract.
    Mr. Percy referred repeatedly to the recent speech of Senator O'Gorman of New York, whose position he took as his text. His speech, following other casual expressions of fellow-Democrats, is taken to mean that many of that party will join the Republicans in enforcing adherence to our treaty obligations.
    Mr. Chamberlain of Oregon, a Democrat, whose constituency is largely interested in Pacific shipping; Mr. Cummins of Iowa, and Mr. Bristow of Kansas, insurgent Republicans, who have shown eagerness to repudiate the treaty, sharply questioned Mr. Percy, but his answers were equal to the emergency.
    The Mississippi Senator declared that the neutrality provisions of the Hay-Pauncefote treaty were identical with the neutrality provisions of the Clayton-Bulwer treaty, which held Great Britain and the United States equally responsible for its enforcement. Yet there was no thought then of those nations granting favors to themselves over the shipping of the rest of the world. Mr. Percy argued that it is no more right to-day for America to grant such favors to American shipping.
    "But if the Senator will permit me," said Mr. Chamberlain, interrupting, "the Clayton-Bulwer treaty on which his whole argument rests has been violated by Groat Britain ever since 1850, and this Government in many expressions showed that it considered the treaty obsolete if not abrogated."
    "I will say," said Mr. Percy, "that on the whole discussion one thing is certain, and that is that the United States did not consider the old treaty abrogated when it negotiated the present convention."
    The Senator from Mississippi then took up Mr. O'Gorman's speech. He said he passed by the New Yorker's impropriety in impugning the sincerity of the objections of a friendly power to proposed action by this Government and the impropriety of submitting our action to arbitration with a view to escaping from an undesirable treaty. No matter what decisions should arise from arbitration our obligations under the treaty would still remain unimpaired.

Putting Pride Above Responsibility.
    The Senator from Mississippi declared that when this Government undertook the Panama Canal project little interest was felt in the subject and absolutely no pride. Since that time, he said, as the great work neared its completion our pride and feeling of proprietorship had grown hand in hand. The present debate, however, suggested that perhaps our feeling of responsibility and obligation had not kept pace with out pride. But that pride, he predicted, would be turned to shame and reproach, if after submitting the case for arbitration, we should be reversed.
    "Our case," he said, "would be laughed, jeered, and hissed out of every peace court on the face of the earth."
    Referring to the estimates of the canal's prospective business, Mr. Percy said repudiation of the treaty might save a million dollars to American ships in a term of years, but when our cause is lost at The Hague it would mean a payment by us to foreign ships of $50,000,000 to $100,000,000, which would be equivalent to carrying the trade of the world through the canal free for five years or more.
    "If you say," he declared to questioners, "that the canal will merely bring the enemy nearer to our shores, I will answer, is there not consolation in the thought that it brings the enemy's shores nearer to us? In what war have we ever sought safety in remoteness from the enemy? And this canal would bring our shores on the Atlantic and the Pacific so near each other that we will no longer need a separate fleet for our protection in each ocean."
    Mr. Percy brought out a new phase of the economic aspects of the canal by declaring that no amount of subsidy to American coastwise steamers would enable them with the aid of the canal to perform the one great good that the American people are expecting of the waterway, that is, successful competition with the transcontinental railroads, and ultimate reduction in coast-to-coast freight rates. He declared that coastwise ships now offered no competition whatever to the railroads by which they were controlled, and they would give no more competition if they had free passage to the canal.

Way to Insure Competition.
    "The one hope," said Mr. Percy, "of achieving the competition for which the country is looking is by granting to foreign bottoms the right to trade from a port or ports in the Atlantic to a port or ports in the Pacific. These ships will then give us a real competition with our transcontinental railways. It may be true, as the Senator from New Hampshire, Mr. Gallinger, suggests, that such a provision will keep the American flag from ever passing through the Panama Canal. But that will impose no hardship upon American shipping that is not imposed upon it now. My plan, which I propose to embody in an amendment at the proper time, will leave American coastwise shipping intact without foreign competition on each coast. But through the canal it will give a real and important trade, which is bound to have a bearing to the American people on the freight rates which they must pay."
    The position of Senator Lodge, favoring American ships, has been carried from absurdity to absurdity by those who have followed his lead. The first stage was reached on Saturday, when Senator Smith of South Carolina argued from Mr. Lodge's statements that the Panama Canal controversy was not susceptible of arbitration because purely domestic. To-day Mr. Cummins declared that our position in favor of no tolls was impregnable and also not susceptible to arbitration, because in his opinion it would be impossible to obtain a disinterested tribunal. He declared, as Senator Lodge did on Saturday, that every nation in the world would be interested in declaring for the British side of the controversy.  Therefore, argued the Iowan, we are immune from arbitration.
    It is a fundamental principle of jurisprudence, declared Mr. Cummins, that a State, like an individual, must not hear its own cause. Every nation wants equality of tolls through the canal and every nation would support Great Britain. Who, then, will hear this cause? Manifestly no one, and we must decide it on its merits.

Canal Justified, Anyway.
    Mr. Percy replied that such a condition, if true, would not relieve us from treaty obligations. Furthermore, he said., there are many nations having no shipping in competition with the United States and those nations could properly act as judges. Even if we levied no tolls on the ships of any nation, said Mr. Percy, economically the canal might be justified. Ninety per cent. of our shipments travel in foreign bottoms, and the contention of no-toll Senators is that in the end tolls would he paid by the shippers. In that case, he argued, American shippers, through higher freight rates levied on them, would to a large extent pay the way of foreign ships through the canal.
    Mitchell Innes, British Charge' d'Affaires, visited the State Department to-day, but did not have the British note concerning canal tolls. No explanation has yet been given for the delay.