II. The claim of the United States that she has granted the use of the Panama Canal under a conditional most-favoured-nation clause, pp. 11-14--The United States has never possessed the power of refusing to grant the use of the Panama Canal to vessels of foreign nations on terms of entire equality, p. 15--Such use is the condition under which Great Britain consented to the substitution of the Hay-Pauncefote Treaty for the Clayton-Bulwer Treaty, p. 16. III. If the use of the Panama Canal by vessels of foreign nations were derived from most-favoured-nation treatment, the United States would not be bound to submit to the rules of Article III, Nos. 2-6, of the Hay-Pauncefote Treaty, p. 17--The Panama Canal would then lose its neutral character and would be in danger of eventually being made the theatre of war, p. 18--But it is the intention of the Hay-Pauncefote Treaty permanently to neutralise the Panama Canal, p. 18--The three objects of the neutralisation of an Inter Oceanic Canal, pp. 19-20--Is the United States, under the Hay-Pauncefote Treaty, subjected to more onerous conditions than Turkey and Egypt are under the Suez Canal Treaty?, pp. 20-22. IV. Six reasons for the untenability of the American interpretation of Article III, No. 1, of the Hay-Pauncefote Treaty, p. 23--The stipulation of Article VIII of the Clayton-Bulwer Treaty, p. 23--The motive for, and the condition of, the substitution of the Hay-Pauncefote Treaty for the Clayton-Bulwer Treaty, p. 24--The rules of the Suez Canal Treaty which serve as the basis of the neutralisation of the Panama Canal, p. 25--Literal meaning of the words "all nations," p. 26--Importance of Article IV of the Hay-Pauncefote Treaty, p. 26--The various contingencies contemplated by Article II of the same treaty, p. 27. V. The American contention that the exemption of American coasting trade vessels from the payment of canal tolls does not discriminate against foreign vessels, p. 29--Every vessel shall bear a proportionate part of the cost of the Panama Canal, p. 30--Meaning of the term "coasting trade" as upheld by the United States, pp. 30-33--Coasting trade vessels of the United States can trade with Mexican and South American ports, p. 33--Any special favour to a particular nation involves discrimination against other nations, p. 34. VI. Is the United States prevented from refunding to her vessels the tolls levied upon them for use in the Panama Canal?, pp. 34-35--Difference of such refunding from exempting the vessels concerned from the payment of tolls, p. 35. VII. Prominent members of the Senate and many American newspapers condemn the special privileges granted to American vessels by the Panama Canal Act, p. 36--The defeated Bard Amendment of 1900, p. 37.