The reply of Senator Knox, the American Secretary of State,
to Sir Edward Grey's Note on the Panama Canal was issued on Thursday night. It disagrees with the British interpretation of the Hay-Pauncefote Treaty, and declares in effect that the British Government have no cause of complaint against the Act exempting American vessels engaged in the coastwise trade from the tolls on the Panama Canal. Finally, the despatch refuses to admit that there is any obligation upon the United States to agree to arbitration. We cannot, on the present occasion, restate the British case, but we must protest against the manner in which the British suggestion for arbitration is met by a Government which professes to be specially anxious to support the cause of arbitration. Surely if two Powers differ on the interpretation of a written document, the reasonable and the civilized way of deciding which interpretation is the true one is to appoint an arbitrator, and let him, when he has heard the arguments, decide which interpretation is correct. But this the American Government refuses to do. Happily this refusal is not endorsed by the American people. There are abundant signs that they do not agree on it.
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