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 the two Powers, after the signing of the Convention, were free to obtain a treaty for exclusive treatment from New Granada, or a grant from the Government of that country of sovereign powers over the Panama Canal unfettered by this arrangement.

I have now dealt with the Clayton-Bulwer Treaty of 1850 sufficiently as I hope to enable you to understand the purport of it, and the extent of the obligations by which the parties to it intended to bind themselves. In short, the object was to provide that neither Power should have a predominant interest in the new waterway wherever it was made, but that it should be available for the commerce of the two Powers.

The Canal project was not proceeded with on the signing of the 1850 Treaty, but about 1880 the matter was taken up in France, and a French Company was formed to construct a canal by way of Panama, and there was talk of a European guarantee. The United States Government were opposed to this proposal, and in a dispatch of June 24 in that year Mr. Elaine sets out their views upon the question of policy involved at some length. Lord Granville in his reply (November 10) confines himself to stating that the position, as between Great Britain and the United States, is controlled by the Treaty of 1850. Mr. Elaine's further letter of November 19 is instructive. He lays stress on the great strategetic [sic] importance of the Canal to the United States, and claims that they ought to have the control of it. For this reason he asks for a modification of the Clayton-Bulwer Treaty, which he says, as it stands, 'practically concedes to Great Britain the control of whatever Canal may be constructed,' because with her naval forces she could