from justice from the Republic, charged with misdemeanor, in lieu of a provision in the treaty of extradition covering misdemeanors.

The judicial system consists of a supreme court of three judges and three courts of first instance in the three judicial districts into which the Zone is divided. Each member of the supreme court sits as a judge in a court of first instance, and appeals are taken from his decrees to the supreme court in back. General Davis was opposed to the appointment of more than one judge on the ground that the business to be done was not enough to justify the paying of three judges. I concur with him in the view that the business now is not sufficient to occupy the three judges as they ought to be occupied, but it seems necessary to have an appellate tribunal and not to submit the important civil and criminal cases which arise to the decision of one judge, especially when in the courts of first instance there can be no intervention of a jury.

Objection has been made that under this system a citizen of the United States charged with crime in the Zone would be tried by a court sitting under the authority of the United States for his life or liberty and convicted without a jury. I submit that the power to do this has been upheld by the supreme court in the Philippines in a case of a citizen of the United States there convicted of a felony by the sentence of the court sitting without a jury. The Canal Zone is certainly no more a part of the United States proper than are the Philippines. It is impossible to distinguish the two cases. It would be utterly impracticable to have a jury trial in the Canal Zone. The people are not used to such a method of trial, and the establishment of the system would make it a farce. There would be few, if any, Americans resident in the Zone to make up a jury, except Government employees, and the natives are entirely unfitted to fill a panel. An American citizen who goes to the Zone must know that if he is charged with an offense he can not have a jury trial.

With deference to the suggestion which has been made here, I venture to point out that, were the Zone to be put under a military government, or to be constituted a military reservation, the only method of trial would be by court-martial, which is not supposed to be any less summary than the trial before civil judges. The constitution of the court is, I think, fortunate. Señor F. Mutis Duran is a citizen of the Republic of Panama, one of the leading lawyers of the Republic, who speaks English and is an authority on civil law. Objection is made to him that he is not a citizen of the United States. There is no law which requires that he should be, and in a jurisdiction of such anomalous character as that which the United States exercises in the midst of another people, in the belly of another country, so to speak, a jurisdiction in which many citizens of the Republic of Panama will be greatly interested, it seems just and fair that upon a court of three, one Panamanian should be appointed. Of the other two judges, Judge Gudger was consul-general in Panama for a number of years, and speaks English and Spanish and is quite familiar with the customs and laws of the Isthmus. The third judge, Judge Collins, was for two terms a judge of the superior court of Chicago and resigned to go into practice. The court is an excellent one.

The failure of Congress to continue the operation of the Act of April 28, 1904, deprived the President of the power to appoint a legislature for the Zone, but the Government went right on. On the

expiration of the Fifty-eighth Congress, I telegraphed General Davis as follows:

DAVIS, Panama:

WASHINGTON, March 6, 1905.

The government of the Canal Zone will continue to be administered pursuant to the laws of the United States in force in that territory, the Executive orders heretofore issued and the laws of the Canal Zone enacted by the Isthmian Canal Commission during the period the Commission was authorized by act of Congress approved April 28, 1904, to exercise the powers of legislation. The government of the Canal Zone was established, the powers of the several branches defined, and official duties distributed by legitimate exercise of lawful authority duly conferred by Congress. It is therefore a government de jure and defacto.

It seems to me, gentlemen, that there is no reason to be found in the operation of the present government of the Zone to justify the adoption of a different system. It would be quite sufficient if the act of April 28, 1904, were reenacted so as to give an opportunity for legislation and if there were added to the act two provisions which Congress alone can supply. The first is that of appeal in a limited class of cases from the supreme court of the Zone to the Supreme Court of the United States, and the other is that permission should be given to the President to direct that suits may be brought by the United States to test the validity of land titles claimed by it, and that by permission of the President suits may be brought by others claiming an interest in land against the United States to determine title. By this short act I think that Congress will furnish all the governmental power to the President that may be needed to govern the Zone properly. I deprecate the enactment of a law, elaborate in its provisions, which would prove to be inelastic and quite unadapted to the government of so small a district as that of the Zone.

THE HAY-VARILLA TREATY AND THE POLITICAL RELATIONS BETWEEN THE UNITED STATES AND THE REPUBLIC OF PANAMA, AND THE NECESSITY AND REASONS FOR THE ISSUING OF THE EXECUTIVE ORDER OF DECEMBER 3, WITH ITS MODIFICATIONS, AS A MODUS VIVENDI.

It is of the greatest advantage to the United States Government in the pursuit of its object on the Isthmus to have the good will and cooperation of the people and Government of Panama. By the logic of the situation we find ourselves and our work in the midst of these people, and it would certainly much increase the great burdens we have, at all events, if we have to encounter the hostility of the people of the Isthmus and the passive resistance or lack of sympathy of the Government.

I do not mean for a moment to indicate that the United States can not take care of itself and suppress by force all obstruction and interferences with its work, but I think it must be conceded that it is greatly better that we live on the most amicable terms with the people of the Isthmus, provided we do not yield to them any rights necessary to us in carrying out our great enterprise.

The people of the Isthmus are vitally interested in the question of how far they may be permitted to trade with the people whom we introduce into the Zone for the purpose of building the canal. They are vitally interested in the rates which we charge upon the Panama Railroad Company and the accommodations which we furnish. They are vitally interested in the order which we preserve in the Zone. They

are not so vitally interested in the precautions which we take against yellow fever, for the reason that they are generally immune from that disease; and whether they are vitally interested in sanitary measures taken against other diseases or not, most of the people are quite lacking in sympathy with rigid rules of sanitation which it is absolutely necessary for the Government of the United States to maintain and enforce, not only in the Zone itself, but in the contiguous territory, and especially in Colon and Panama. It is of importance, therefore, that we should obtain from the Panamanian Government not only the right to prescribe health ordinances which must be enforced in Panama and Colon, and other important towns which may be infected, but also that we should be given an opportunity to supervise the enforcement of these ordinances, because in Spanish-speaking countries it is not the form of the law or its declarations which are defective, but it is its administration. As I shall show a little further on, we have secured, by the good will of the Panamanian Government, an opportunity to take over from the beginning the enforcement of the health regulations in every town from which it is likely that danger or disease may come, though the treaty granted only the right to enforce health regulations after the Panamanians had failed.

There are many other matters constantly arising between the American representative on the Isthmus and the Panamanian authorities. calling for adjustment. We are living in the same house and family with them, so to speak, and if we do not get on in a friendly way it will be uncomfortable for both.

The attitude of the Panama people and Government, after the ratification of the Hay-Varilla treaty, was exceedingly cordial, and this continued until an unfortunate mistake in our policy in respect to the customs law of the Zone. When General Davis, who went to the Isthmus on the 17th of May, came to deal with President Amador and his cabinet in respect to the many matters it was necessary to adjust, he found no difficulty whatever in their acquiescing in his suggestions. Under the act of April 28, 1902, the President was directed to take possession of the Canal Zone. The Canal Zone was defined in the treaty to be 10 miles wide, extending to a distance of 5 miles on each side of the center line of the route of the canal to be constructed. The route of the canal was not fixed, except so far as it could be inferred by reference to the axis of the canal as laid out by the French. Again, the cities of Panama and Colon, and the harbors adjacent to such cities, were excluded from the grant, although they necessarily came within the zone thus described. The boundaries of these two cities never in their history were surveyed or fixed by law, nor was there any means of determining what were the harbors adjacent to these two cities. So indefinite was this description of the Zone that the execution of the Congressional direction to the President to take possession was impossible without friction and conflict with the Panama authorities, unless the Federal Executive, by himself or agent, made some adjustment or provisional agreement with them. Accordingly, General Davis did, on the 22d of June, make a provisional agreement of delimitation with the authorities of Panama, a copy of which is shown in the record, in the report of General Davis, on page 2300, et seq.

About this same time General Davis had recommended to the Commission the adoption on the Isthmus of a system of customs taxation, with rates approximating those of the Panamanian Government. Í

attach a copy of General Davis's dispatch (marked Exhibit 3) recom mending a form of customs law, fixing the Dingley rates on certain articles, but fixing the Panamanian rates on others. The Commission presented the recommendation to me, and I, in turn, carried it to the President and the cabinet. For lack of information, and in the necessity for action, which General Davis emphasized, it was thought safer to extend the tariff laws of the United States as a whole to the Zone, and to make the Zone a part of the United States, in such a way that goods might be imported into it from any port in the United States free of duty, but that all goods and merchandise brought into the Zone from any foreign country, including the Republic of Panama, should pay the rates under the Dingley Act. General Davis was directed on June 24 to promulgate an order to this effect. The order contained two clauses looking to negotiation for the adjustment of tariff matters with the Panamanian authorities which should prevent friction. These two sections were not included in the order when it was published by General Davis, but were submitted to the President and cabinet of Panama for the purpose of bringing about the suitable negotiations.

I have no hesitation in saying that this order of June 24, 1904, putting into effect the Dingley tariff in the Zone, was a mistake, and until matters were subsequently adjusted in December following, it led to passive resistance by Panama to the making or carrying out of any agreement between the United States and the Panamanian authorities necessary in the progress of our work.

Doctor Amador was President of the Republic. He was the head of the Conservative party. Pablo Arosemena was vice-president and the head of the Liberal party. In the era of good feeling between all parties succeeding the revolution they were elected on the same ticket. The parties soon divided again when the patronage came to be distributed. The moment the people understood the effect of the introduction of the Dingley tariff between the Zone and the Republic, they resented the act as an indication of a desire on the part of the United States to grab the land of the Zone for its commercial purposes, and to exclude all Panamanians from the profitable business which they had expected to do with the people of the Zone, gathered there by the United States for the great work. The opposition party-the Liberal party was quick to seize upon this as a ground for attacking the conservative administration on the theory that the Government had yielded to the United States and had sacrificed the interests of the Republic. The attitude of the Liberal party, of course, reacted upon the course of the conservative administration, and both parties were at once driven into hostility to any proposition of the United States looking to the operation of its governmental control over the Zone at those many points where it came in close contact with the jurisdiction of the Republic.

Another source or irritation, which, but for the primary source, would not have constituted any cause of bad feeling, was the introduction of the American postal system into the Zone and the use of domestic postage for letters between the Zone and the United States.

Senator MORGAN. Mr. Secretary, has that order, putting in force the Dingley tariff, ever been revoked by the President?

Secretary TAFT. Yes, sir. The Republic needed all its postal revenue to sustain its post-offices, but the adoption of the 2-cent rate for letters between the Zone and the United States was alleged to deprive

it of considerable revenue which it otherwise would have received from mail carried by it to the United States for the reason that its postage rate to the United States was 5 cents-that of the Universal Postal Union. Cristobal, the town at the northern end of the canal in the Zone, is really a part of Colon, while Ancon, the town at the Pacific end of the canal, is really a part of Panama. Everyone who wished to write a letter to the United States from Colon or Panama would step across the street and purchase United States stamps in Cristobal or Ancon and mail his letters for 2 cents apiece instead of paying 5 cents to the Panamanian Government.

Again, the opening of the ports of the United States at the termini of the canal, Cristobal and Ancon, promised to deprive the officials of Panama of revenue derived from vessels which might arrive in their port, and this was made the subject of fierce discussion. It was contended that for the United States to open independent ports next door to Colon and Panama was to destroy their importance and their business and greatly to diminish the dignity of the Republic and to affect her honor.

Letters from General Davis, from Judge Magoon, who was on the Isthmus, and from many other persons, gave the President and me much concern as to the conditions prevailing there. The correspondence between Minister Obaldia and Mr. Hay on this subject is shown in the record, in the report of General Davis, on pages 2334, 2352, and 2378. About this time Mr. William Nelson Cromwell, who was acting as counsel for the Panamanian minister, Mr. Obaldia, visited the President and confirmed the President's previously formed opinion that the situation on the Isthmus was not what it ought to be politically, and that something ought to be done to remove the conviction of the Panamanian people and government that the United States had gone into the Isthmus to build a rival state or colony rather than a canal. He referred Mr. Cromwell to me, and after a conversation I went to the President and suggested that a personal visit to the Isthmus might assist in smoothing out the trouble.

This was in October, and the President accordingly wrote me a letter, which will be found on page 2394 of the evidence before this committee. The letter directed me to visit the Isthmus with those persons whom I might wish to take with me, and expressed the most friendly feelings toward the people of Panama, and assured them that they were wrong in supposing that we intended to exercise any powers in the Zone and Isthmus except those we deemed necessary and convenient in constructing and maintaining the canal. The publication of the letter brought appreciative expressions of pleasure from the Panamanian minister at Washington and from the President of the Republic. A short time thereafter, at an interview between Mr. Obaldia and Mr. Hay, at which I was present, Mr. Hay renewed the expression of good will contained in the President's letter, but assured Mr. Obaldia that it was not intended thereby to concede that what we had done was in any way beyond our rights, as was clearly shown in Mr. Hay's letter of October 24, then just delivered.

Matters were then allowed to remain in the state in which they were, the Panamanian Government still declining to put in force the delimitation agreement, still protesting against the opening of the independent ports by the United States at the mouths of the canal, and still complaining of the postal arrangements. I ought to say that