Mr. Pruyn to Mr. Seward.

No. 19.]

Sir: I herewith forward to you inclosure No. 1, a translation of a communication from the government of Venezuela. Inclosure No. 2 contains a paper accompanying the said communication, and a translation of the same may be found in inclosure No. 3. I have no particular comment to offer on the above communications. I believe that the ten per cent, offered is considered very little indeed by the foreign representatives and foreign merchants generally. As a President and a new congress are about to be elected, I venture to suggest to the department the propriety of instructing this legation to try to have some measures taken by them (the President and congress) to expedite the payment of foreign liquidation claims, particularly those of citizens of the United States. The minister of foreign affairs has desired me to request my government to accept the ten per cent. arrangement, stating that, as soon as congress meets, the present government will request that body to take measures calculated to facilitate the payment of foreign claims. The minister of foreign affairs has also requested me to ask of my government that they should instruct the representative of the United States at Paris to induce (conjointly with the representative of England, Denmark, the Netherlands, Italy, and Spain, if possible) the government of France to accept the ten per cent. arrangement above mentioned. All of which is respectfully submitted.

I am, sir, very respectfully, your obedient servant,


Hon. William H. Seward, Secretary of State, Washington, D. C.


Señor Villegas to Mr. Pruyn.


The republic enters upon a new era. The nation, tired of seeing the most pressing necessities of all governments neglected, even those of its own existence and honor, showed itself discontented and distressed, clamored for the remedy, and her complaints not sufficing to obtain it, at last she rose up in arms and overthrew the rulers who had placed their will instead of the law. The reform of the public treasury is one of the principal objects of the triumphant revolution. It would not fulfill this part of its programme, it would not resuscitate credit without restoring its value to official speech, without paying the most profound respect to what is called public faith, without doing justice to all rights. Here is what the men charged provisionally with the general administration intend. As they proceed with perfect good faith, not pretending to undo to-morrow the work of to-day, they have devoted themselves to the study of the fiscal situation, and, after frequent and mutual consultation, have decided upon the plan contained in the basis annexed. It is what they are able to offer as the result of their investigations, and of their desire to discharge satisfactorily the duties that they have contracted. Scanty have been the receipts of the custom-houses, which constitute the only revenue of the union, and scanty will they continue to be; but such as they are, the executive will divide them integrally among those who may have a title to partake of them, in proportion to what corresponds to each one. If it were possible to satisfy them at once, nothing would afford greater pleasure. And to-day circumstances inevitably prescribe another course. The government delivers to its creditors what it has in order that they may go on paying themselves in a slow but sure way, [Page 960] without the fear of sudden and unexpected suspensions. The delay in the payments will become sufficiently compensated with the solution of the corresponding interest, as even great and opulent nations practice it, that, so long as they insure the interest on the capital loaned, do not think it important to provide for its redemption. It thinks that the principles of the strictest honesty prescribe such conduct as well to nations as to individuals; and that the creditors, in their equity, cannot but assent to the inclosed proposition. The government does not find itself in full and peaceable possession of the custom-houses, nor has the resistance terminated of the partisans of the fallen power. The expenses of the war are equally considerable and urgent. Nevertheless, even in the midst of their difficulties, the administration of the national interests turn their sight towards the conventions infringed, the foreign affairs neglected, bankruptcy, and want of confidence looked upon with indifference, and as if it were to form a permanent state; and as a consequence of all, the glorious name of Venezuela divested of the considerations which were once extended to it. To raise it up from this prostration, redeem its fame, insure the benevolence of friendly nations, this is the object aimed at. For so rational as just a purpose the co-operation and countenance of the contracting governments must be relied upon and they are relied upon, the which will not forget the crowd of old and new obligations that continue overwhelming the treasury, and winch, if they remained buried and completely forgotten, would justify him who should bring against the revolution the charge of its not having realized the principles that it inscribed upon its banner, which inflamed patriotism, and led it on to victory.

On the other part it is evident that the effects of moral sentiments, of upright intention, of probity and a sense of honor, are always deserving of support.

We cannot refrain from doing that which, causing us no detriment, redounds to the benefit of others. What shall be our duty when we are asked for a thing that, if it benefits another, consults equally our own interests?

Such is the plan proposed, the adoption of which will effect, to the end of redeeming the liabilities of the republic, what is impossible to reach by any other means.

It will be put into execution when the embarrassments referred to terminate. Witness of the events of the republic, and endowed with the knowledge and impartiality necessary to judge of them correctly, it is to be hoped that the incumbent of the legation of the United States will present to the view of his government a faithful picture of the situation, which must, doubtless, have much influence in the manner of entertaining the annexed basis.

The undersigned, minister of foreign affairs of the United States of Venezuela, avails himself of this opportunity to renew to Mr. Pruyn the assurance of his distinguished consideration.

Union and liberty.


Mr. Erastus C. Pruyn, Incumbent of the Legation of the United States.


Bases which are proposed:

First. The government of the republic, inspired with the desire of cultivating the most honorable and cordial relations with foreign governments, and the necessity of attending to international reclamations, already adjusted, or in the way of being so, that ascend to several millions of pesos, and after having taken into account that the ordinary revenues of the republic from imports cannot be calculated now for more than $4,000,000 per annum, and that the general arrangement of the treasury demands the equitable distribution of the national income, so that all the liabilities that weigh upon the treasury may be attended to as far as possible, at same time as the indispensable administrative service; believes it can only apply ten per cent. of said income for the reduction of international claims.

This assignment will produce at present about half a million of pesos per annum, but the preservation of peace would very shortly augment the figures. For the most urgent expenses of the public service sixty per cent. is required, with the remaining forty the different branches of the public debt are to be attended to.

As this can be graduated to $75,000,000, without including that arising from diplomatic conventions, and this latter will reach to $5,000,000, it is easy to comprehend the advantage that is conceded to it with respect to the other. It is proper, moreover, to bear in mind that in the thirty unities appropriated to the public debt of another character, foreigners will also have benefits, because some kinds of it belong to them entirely, and in the other they are interested for a large part.

Second. This basis being accepted by the foreign creditors, the government will proceed to settle and liquidate at once all reclamations pending, to the end that the [Page 961] mentioned fund of ten per cent. of the ordinary income from importations be applied, in the first place, to the payment of the interest of the whole debt, and in the second place, to its redemption, rated at so much per pound, until it becomes definitively paid off.

Third. For said appropriation of ten per cent. the government draws its orders for all the custom-houses to deliver it to the commissioners whom the creditors may designate, authorizing them to discount the notes at the current rate in each market.

Fourth. For the greater convenience of the creditors, and with the object that they may be able to put into circulation their respective titles, the government will ask the national congress for its authorization to issue titles of international public debt to the amount of claims; the interest and redemption of which should be paid in accordance with the preceding bases.