In 1898, working under new conditions which gave American diplomacy largely in creased importance, Secretary John Hay, re turning from a year's useful experience as Am bassador at London, undertook to achieve a new settlement of Anglo-American disputes in line with the settlements of 1794, 1815-18, 1842 and 1871. Favored by friendly relations which made particularly delicate the question of neu trality during the Boer War, he found that the chief obstacles were the American decision for an interoceanic canal strictly under American control and the British necessity of deferring largely to Canada in the various disputes be tween Canada and the United States.
To secure agreement on the Americo-Cana dian questions (12 in number) an international joint high commission was appointed in 1898. It entered into friendly discussions, practically reached an agreement on several subjects, made little progress on others (including reciprocity) and finally split and suffered shipwreck on the Alaskan boundary, on which the Canadian commissioners demanded a settlement before they would enter into any agreement on other questions as planned. However, only five of the 12 questions remain to be settled and most of the existing agreements on the five are not unsatisfactory. The most exciting ques tion, that of the Alaska boundary, which sud denly became acute in 1898 as a result of the discovery of gold on Yukon, and was tempo rarily adjusted by a modus vivendi in 1899, was successfully submitted to arbitration in 1903 before a mixed commission of six and without an umpire. Fishing difficulties be tween the United States and Canada were set tled by an Anglo-American treaty of 1908 pro viding for a permanent international fisheries commission. The century-old dispute regard ing the Newfoundland fisheries, whose settle ment was attempted in 1902 by the Hay-Bond draft treaty which was defeated by American fishery interests in the American Senate in 1904 (followed by Newfoundland retaliatory legis lation, 1905-06, imposing irritating port regula tions to distress American fishermen) was tem porarily quieted by an annual Anglo-American modus vivendi and finally settled (under treaty of 1909) by a tribunal composed of the mem bers of the Hague Permanent Court of Arbi tration. Although the decision (in 1910) was mainly in favor of Newfoundland, its recom mendation pointed the way by which a satisfac tory agreement between the United States and Great Britain was reached. Sources of future
dispute were lessened by a waterways treaty of 1909 which provided for the establishment of an international joint commission to exercise jurisdiction in cases involving the use, obstruc tion or diversion of boundary waters, with au thority to inquire and report concerning other matters of difference along the frontier or to decide such questions as may be referred to it. A small remaining international boundary con troversy concerning a small island and some fishing grounds in Passamaquoddy Bay was referred by agreement of 1911 to arbitration by a commission which after considering the trivial nature of the dispute decided to split the difference. The question of trade relations reached a crisis in the Canadian rejection of the reciprocity agreement of 1911, but a better understanding followed the passage of the American tariff of 1913 which accomplished some of the objects previously attempted by reciprocity.
To meet the new conditions required by the American decision in favor of the construction of an interoceanic canal by the American government under American control, Secretary Hay in 1900 negotiated with Sir Julian Paunce f ote a new treaty which, like the Clayton Bulwer Treaty, was based on the principle of international neutralization and international guarantee. In consequence of amendments by the American Senate, he negotiated (in 1901) the Hay-Pauncefote Treaty which pro vided for the abrogation of the Clayton Bulwer Treaty of 1850, forbade blockade of the canal, permitted the United States to main tain necessary military police along the route, and declared the freedom of the canal to all vessels of all nations observing the rules prescribed for its use, subject only to equitable conditions and charges of traffic. The pro vision as to the charges on traffic became a subject of controversy after 1912 when Con gress, with a view to decreasing the cost of transcontinental freight, exempted vessels en gaged in the coast-to-coast trade. Great Britain protested that the discrimination was in violation of treaty provision, and finally it was repealed by Congress on recommendation of President Wilson in 1914 without prejudice to American rights in the interpretation of the meaning of the treaty.