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 trouble themselves to employ exact language, but it is clear from a perusal of Article VIII of the earlier Treaty, which has been already before you, that the neutralization referred to is the common use on equal terms, or, in other words, the condition that neither Power is to be able to discriminate against the other. There is no reference in Article VIII to war or to neutrality in the sense in which that term is employed in relation to war, the Article refers only to protection and to user by all nations on equal terms. Then we come to the direct provision contained in the first Rule of Article III, that the Canal is to be free and open to the vessels of all nations on terms of entire equality with no discrimination. The words are not ambiguous or vague, there is no exception or qualification to them, and there seems no reason why they should not be construed in their ordinary sense. If it had been intended to abandon the principle of equality which had governed the relations between the two countries from the outset, one would have expected to find at this place some express exemption of the vessels of the United States. But there is none.

So far I have stated to you considerations which go to show that the construction contended for by Great Britain is the correct one. But a contrary view is taken by eminent statesmen and lawyers in America whose opinion on such matters must command attention and respect. I must now endeavour to put before you the arguments by which their view is supported, and this can best be done by examining the Memorandum submitted to the Senate by Mr. Taft on August 24, 1912. To this Memorandum Sir E. Grey has made a reasoned reply, and we have not yet seen the answer of the United States to his argument; to that extent therefore we must withhold our judgement for the present, but the