The first Hay-Pauncefote Treaty was signed on February 5, 1900, and provided for joint British and American protection for any trans-Panama canal, but allowed for the United States to build and operate such a canal on its own. The United States Senate was dissatisfied with the wording and amended the treaty to explicitly supersede the Clayton-Bulwer Treaty. Britain objected and negotiations were resumed.
Agreement was reached in 1901 after Theodore Roosevelt had succeeded the slain William McKinley. Signed on November 18, 1901, the second Hay-Pauncefote Treaty contained the following points, which were approved by both nations:
The U.S. was authorized to construct and manage a Central American canal
The U.S. was to guarantee the neutrality of the canal and was authorized to fortify the area, if necessary
The canal was to be open to all nations; rates were to be fair and equal.
Article 1 of the Hay-Pauncefote Treaty declared that it superseded the earlier Clayton-Bulwer agreement. Article 2 provided that a canal could be built under the auspices of the United States, which would have the rights attendant on its ownership, including the right to operate and manage the canal. Article 3 required that the canal be open to the ships of all nations for rates that would be fair and equitable.
Fortifications were not expolicitly covered, but the British conceded that the nature of the canal treaty meant that the United States would have the right to build military defenses.