No. 726.
Mr. Baker to Mr. Evarts.

No. 287.]

Sir: I inclose herewith: 1st. A copy and translation of a note, of date 9th ultimo, and received on the 10th ultimo from the minister ad interim of exterior relations, purporting to renew a former proposal of a convention with the United States, by which the latter may receive and distribute the payments made by Venezuela to the creditor governments on account of diplomatic reclamations, “with the understanding that there will be delivered not only the sum of 80,000 bolivars, to which the monthly quotas now amount, or 960,000 bolivars per annum, but up to a maximum of 1,040,000 bolivars annually.”

2d. A copy and translation of a note, of date 9th ultimo, and received on the 10th ultimo from the minister ad interim of exterior relations, indicating the embarrassment of this government in consequence of the attitude of the French and English Governments, growing out of the action of this government in making the new apportionment which is prescribed by the resolution of the 17th of May last, a copy and translation of which was sent as annex No. 4 to my dispatch No. 237; and soliciting the good offices of the United States in the premises.

3d. A copy of my note to the minister, of date 14th ultimo, requesting “a statement showing for each of the seven fiscal years from 1873 to 1880 the amount of the product of the thirteen per cent, of the forty unities set apart for foreign reclamations, as also the amount of said product distributed, and the amount of said product not distributed, for each of said seven fiscal years.”

4th. A copy and translation of a note from the minister, of date 18th ultimo, inclosing a statement bearing date the 19th ultimo, in response to my request. This note and its inclosure were received on the 19th ultimo.

5th. A copy and translation of said statement.

6th. A copy of my note to the minister, of date 21st ultimo, suggesting to the Government of Venezuela the terms of a proposal, to the desirable end of furnishing a basis upon which it might be hoped that the Government of the United States might regard itself as justified in using its good offices in behalf of that Government.

7th. A copy and translation of a note from the minister, of date 24th ultimo, in response to my last mentioned note, and in which the Government of Venezuela does not appropriate my suggestion.

8th. A copy of my note to the minister, of date 1st instant, indicating that I would by the earliest opportunity and in a proper manner bring the subjects of this correspondence to the knowledge and consideration of my government.

On the afternoon of the 9th ultimo, before receiving the first and second of the preceding notes, I had an interview with the President, of [Page 1192] his own seeking, in which two subjects were spoken of—the matter of renewed proposal to the Government of the United States to receive and distribute to the creditor governments the payments made by Venezuela on account of diplomatic reclamations, and the matter of the embarrassment of the Government of Venezuela on account of the attitude of the Governments of France and England.

In regard to the first-named subject, the President expressed or suggested a desire that I would recommend the proposal to the Government of the United States. I referred to our national principle of nonintervention in the affairs of other nations; recurred, in general phrase, to the tout ensemble of the matter, and indicated that I thought the Government of the United States would be reluctant, would be indisposed to accept the proposal, and that, thinking so, it would not be right in me to leave any impression that I would recommend it; and that, taking a practical view, and desiring to place matters on a practical basis, I thought the proceeding in that direction would prove to be futile.

The President expressed his approbation of the general principle of the United “States not to intervene in the affairs of other nations, but indicated that he thought this proposal did not infringe that principle, I indicating that in view of the tout ensemble of the matter I adhered to my opinion; and as to the suggestion which was presented, that more would be paid in the event the United States Government accepted the proposal, I stated that I did not see the reason for this distinction. Whereupon I understood the President to say something about the comparative facility of getting deficits provided for by the Congress if the United States were to receive and distribute the payments.

As affecting the second-named subject, being asked to the effect of whether I had any suggestion of my own to make, I said, in substance, that if Venezuela was embarrassed, and would propose to do what, under her circumstances, the Government of the United States shall regard as fair, I had no doubt that it would be the duty of the Government of the United States to give her its good offices if necessary, and that I believed it would do so, adding that, in due regard to other friendly nations, I thought in such case that it would not be necessary; and saying that what I had said about the duty of the Government of the United States to give its good offices was based on the hypothesis that Venezuela should proffer to do what the Government of the United States should regard as fair, the President indicating that he so understood me.

Having already some unofficial information as to the product of the thirteen per cent, of the forty unities set apart for foreign reclamations, it appeared to me, on receiving the next day the first two of the preceding notes, that they did not present a proper basis for the Government of the United States to proceed upon. Therefore, after due reflection, I addressed to the minister my note of the 14th ultimo, with the view of getting the proper official information upon which to base a judgment in the premises.

It appears from the statement sent me by the minister, with his note of the 18th ultimo, that during the seven and a half fiscal years ending June 30, 1880, 578,208.64 venezolanos of the fund set apart for foreign reclamations has not been applied to its legal object; and it results from that statement that the average annual product of that fund for the seven fiscal years from 1873 to 1880 has been 230,659.23 venezolanos; and, that the average monthly product of the same fund for the same period has been 19,221.60 venezolanos.

[Page 1193]

Upon the preceding statement, furnished by the government itself, it appeared to me that an equitable view would be that Venezuela should, for the future, pay the entire fund set apart by her own law for foreign reclamations; and if her financial condition allowed, that she should pay, in addition to this and by reasonable installments, the amount (578,208.64 venezolanos) which has been received of this fund but not applied to its legal object. But in view of her financial condition, thinking that this latter requirement might be oppressive, I concluded that the least that could be insisted on, injustice to friendly nations who are complaining, would be the full payment in future of the entire fund set apart for foreign reclamations, especially as I am not advised that this would exceed the reasonable ability of the government; and my note to the minister of the 21st ultimo is in pursuance of this view. I therein suggest monthly payments, on the present provisional basis of distribution, of 95,000 bolivars, equaling 19,000 venezolanos, and which is 221.60 venezolanos less than the average monthly product of the fund for the last seven fiscal years; and suggest semi-annual payments on like basis of distribution of all excess of the fund which may accumulate over and above all the monthly payments of 95,000 bolivars each; and suggest that the suggested proposal be provisional in its character; that it go into effect from and after its acceptance by the governments concerned; and that it be entirely independent of whether the Government of the United States may consent, or may not consent; to receive and distribute the payments, as proposed by the Government of Venezuela.

It will be kept in view that the amount at present being paid is 80,000 bolivars, or 16,000 venezolanos, per month.

I personally took the last-mentioned note to the minister, and, on delivering it, said to him, that I had attentively considered the matter in the light of all its bearings in my reach, and that my opinion was that Venezuela, if in condition to do so, ought, in the future, to pay the entire fund set apart by law for foreign reclamations, and besides to pay by installments the 578,208.64 venezolanos of this fund which had not been applied to its legal object; but, thinking that this last might, in her existing circumstances, be oppressive to Venezuela, I had concluded to suggest the provisional proposal stated in my note, which looked to the full payment in future of the entire fund set apart by law for foreign reclamations; and that this was the most moderate proposal which I could recommend to the acceptance of my government.

I also explained to him, from the basis of the statement he had sent me, the ground of my opinion respecting the amount of the suggested monthly payment; indicated to him that I understood that under the suggestion of my note the said amount of 578,208.64 venezolanos would be left in abeyance; and that I thought that in any proposal to our government to receive and distribute the payments there should be no contingent difference as to the amount proffered to be paid, nor any consideration but that springing from the interchange of friendly feeling on account of the performance of good offices. The minister heard, but made no important statement.

I draw attention to the following part of the minister’s note of the 24th ultimo, in reply to the suggestion embodied in my note of the 21st ultimo:

To pay in this respect 95,000 bolivars monthly, instead of the 80,000 which are being paid, would be to exceed the estimate, for which the government is not authorized; and to offer to pay the excess, if there should be such, would be to promise its application to an object distinct from public instruction and improvements (el fomento), to which it is destined.

[Page 1194]

On the morning of the 25th ultimo I casually met the minister, who stated to me that all the other excesses, as well as that in connection with the fund for foreign reclamations, were applied to public instruction and improvements (el fomento); and I understood him to speak vaguely and uncertainly of some law which gave these excesses that destination, but which he had not yet found. I indicated a wish that he would find and show me the law, and upon subsequently calling on him in relation to the business, I understood him to express himself to the effect that he did not think there was such a law, but that it was a practice of the President to give the excesses in question the destination stated. The estimate budget or appropriation for the fiscal year 1880–’81 includes 1,040,000 bolivars for foreign reclamations, whilst the actual annual sum which is being applied on this account by monthly payments is 960,000 bolivars; and, in reply to a question upon the point, the minister informed me that it is the excess of the fund above the latter, and not above the former, amount which is applied to public instruction and improvements (el fomento).

The formula “thirteen per cent, of the forty unities of the customhouse revenue” means thirteen per cent, of forty per cent, of this revenue, which, in simpler terms, equals five and two-tenths per cent, thereof; and it is the product, distribution, and remainders of this five and two-tenths per cent, which is stated in Annex No. 5 hereto.

Although our government is not complaining of Venezuela in the premises, but is applied to by her for its good offices in regard to the complaints of other friendly nations, it has appeared to me that upright dealing and public justice require that its action should look not alone to Venezuela, but to these other friendly nations as well; and that the exercise of its mediation should be based upon such proffer of action by Venezuela as it may judge to be fair under her circumstances; and you will have seen that I distinctly suggested this idea to the President in the interview with him to which I have alluded.

If our government should take the view that Venezuela ought to pay, in the future, the entire product of “the thirteen per cent., of the forty unities of the custom-house revenue,” and that, to this end, monthly and residuary payments ought to be made which look to the application of the whole of this fund to its legally indicated object, I presume that no insuperable difficulty would be found in the matter of exceeding the estimate, or in the matter of the practice of applying the excess of this fund to other objects, inasmuch as the proper readjustments would be in execution of what I understand to be a standing law of the country; and this is the view which I recommend to your acceptance.

If the Governments of France and England, or either of them, should, by possibility, assume the ground that the position of our government in the premises is in any wise weakened by the attitude of the pending questions between it and the Government of Venezuela, growing out of the awards of the mixed commission, it appears to me that the completely sufficient answer would be, that the results of the treaty convention between the United States and Venezuela are absolutely conclusive as to all other nations, however they may be changed or modified inter partes.

I am, &c.,

JEHU BAKER.
[Page 1195]
[Inclosure 1 in No. 287.—Translation.]

Mr. Saavedra to Mr. Baker.

In the year 1872 Venezuela proposed, and discussed with the legation of the United States of North America at Caracas, a convention by which they might lend their good offices to Venezuela on account of the pecuniary diplomatic reclamations, receiving from this government, in order to distribute among the creditor governments, the product of the part of the receipts applied annually to the amortization of this debt, by means of bases which had not then arrived at perfection.

The undersigned, minister ad interim of exterior relations, executes the order of his government in communicating to the most excellent minister of the United States, with the request that he will deign to notify it to his, that the illustrious American, President of Venezuela, renews the proposal of said convention, with the understanding (en la inteligencia) that there will be delivered not only the sum of 80,000 bolivars, to which the monthly quotas now amount, or 960,000 bolivars per annum, but up to a maximum of 1,040,000 bolivars annually; and that General William A. Pile is authorized to celebrate the convention on the part of the republic ad referendum, to which effect he carries circumstantial and precise instructions, and has knowledge of all the details relative to the fiscal state of the republic. The regulation being made in the terms indicated, it may be clothed with the proper formalities.

The President of the republic cherishes the hope that the most excellent Mr. Baker will vouchsafe to favor the idea and recommend it to the Government of Washington, with his merited influence, since its acceptance will tend to avoid European complications in America, as without doubt the great republic desires, and has manifested various times.

The undersigned renews, &c.,

PEDRO I. SAAVEDRA.
[Inclosure 2 in No. 287.—Translation.]

Mr. Saavedra to Mr. Baker.

The undersigned, minister ad interim of exterior relations of the United States of Venezuela, has received an order from the illustrious American, President of the Republic, to address the most excellent minister resident of the United States of North America, with the object which he proceeds to expound succinctly.

That legation knows that on the 17th of May last a new apportionment was made among the creditor governments of the funds of the thirteen per cent, destined to the payment of the diplomatic reclamations. Till then the distribution accorded on the 29th of July, 1873, had governed, which had a provisional character, whilst the respective credits were definitely liquidated, in order to fix the exact bases of the pro rata. The United States and Spain complained against this distribution, founding themselves in that it was not proportional to the amount of the respective credits. To remedy the inequality was the purpose of the determination of the 17th of May. That being communicated to the foreign diplomatic agents, those of France and Great Britain protested against it; and although the groundlessness of that step was demonstrated to them, they have excused themselves from entering into discussion. As disputes exist concerning the payment of interest, which in some cases has never been approved by the Congress, and in others has not even been stipulated, the government believed that if it took the base of the recognized capitals the unobjectionable (intachable) proportion would result. Thus it was done; but such good reasons have not been heeded.

The plenipotentiary of Venezuela at Paris and London has ventilated the matter with the Governments of France and Great Britain. Not only have these not accepted the said resolution, but they have exacted the fulfillment of the primitive conventions; which, if done, would leave the republic incapacitated to satisfy the other diplomatic conventions on credits of the same origin as those of these nations, and even to fulfill the necessities of its existence and improvements.

Finally M. Freycinet, minister of foreign affairs of France, called that of Venezuela to a conference, and in it manifested to him that his government did not mix itself in the interior combinations of this country, but that it could not accept a less quota than that assigned in 1873, and that such resolution was definitive; that if this was not acceded to, it would see itself in the condition (enel caso) to proceed in another manner, since, on the contrary, its position would be unsustainable before the chambers. Its chargé d’affaires has repeated the same words here, and has been made to know that Venezuela maintains the resolution of the 17th of May.

Although the government can hardly imagine that for a question of more or less monthly pecuniary quota the friendly relations of France should be disturbed, particularly when there exists there, and is becoming more and more established, the republican [Page 1196] form, preferred in America, it believes it proper to solicit the good offices of the United States to the end of preventing consequences which may present themselves.

The President of the Republic hopes that the President of the United States will vouchsafe to receive this solicitude with the interest which, to him, the fate of the Spanish-American Republics merits, and take a step whose good exit will assure his high influence and the consideration which he so justly enjoys in both worlds.

The undersigned improves the occasion, &c.,

PEDRO I. SAAVEDRA.
[Inclosure 3 in No. 287.]

Mr. Baker to Mr. Saavedra.

Mr. Minister: Referring to your excellency’s two polite notes to myself, both of date of the 9th instant, I have the honor to respectfully request your excellency to furnish me with a statement showing for each of the seven fiscal years from 1873 to 1880 the amount of the product of the 13 per cent, of the forty unities set apart for foreign reclamations, as also the amount of said product distributed, and the amount of said product not distributed, for each of said seven fiscal years.

Desiring this statement for the official information of myself and of my government, I with pleasure renew to your excellency the assurances of my high consideration.

JEHU BAKER.
[Inclosure 4 in No. 287.—Translation.]

Mr. Saavedra to Mr. Baker.

Mr. Minister: In satisfaction of the official letter of your excellency of the 14th of this month, I have the honor to inclose here a statement which expresses as is desired, and year by year, from 1873 to the 30th of June last, inclusive, the product of the thirteen unities applied to the payment of diplomatic credits, and the sum distributed among them, with an expression of the remainders.

I renew, &c.,

PEDRO I. SAAVEDRA.
[Inclosure 5 in No. 287.—Translation.]

Products of the 13per cent, for diplomatic conventions, their distribution and remainders, for the economic years from the 1st of July to the 30th of June, beginning in the second six months of 1872 to 1873, and extending to the 30th of June, 1880.

From— Product. Distribution. Remainder.
Venezolanos. Venezolanos. Venezolanos.
1872 to 1873 100,130.00 100,000.00 130.00
1873 to 1874 235,501.04 151,644.00 83,857.04
1874 to 1875 208,739.65 139,784.00 68,955.65
1875 to 1876 281,064.56 246,708.00 34,356.56
1876 to 1877 219,341.22 182,400.00 36,941.22
1877 to 1878 273,977.38 188,000.00 85,977.38
1878 to 1879 154,376.36 32,000.00 122,376.36
1879 to 1880 241,614.43 96,000.00 145,614.43
1,714,744.64 1,136,536.00 578,208.64

résumé in bolivars.

Products 8,573,723.20
Distribution 5,682,680.00
Balance 2,891,043.20
[Page 1197]
[Inclosure 6 in No. 287.]

Mr. Baker to Mr. Saavedra.

Mr. Minister: Referring to your excellency’s two notes to me, both of date the 9th instant, as also to your excellency’s note to me of date the 18th instant, together with its inclosed statement bearing date the 19th inst, I deem it proper to say that, to the desirable end of furnishing a basis upon which it may be hoped that the Government of the United States may regard itself justified in using its good offices in behalf of the Government of Venezuela, I respectfully suggest that the Government of Venezuela propose to pay, on the present provisional basis of distribution, to the several creditor nations, the sum of 95,000 bolivars per month on the diplomatic reclamations, and to pay in addition thereto, semi-annually, and on like basis of distribution, all excess of the entire product of the 13 per cent, of the 40 unities which may accumulate over and above all the monthly payments of 95,000 bolivars each; this proposal to be provisional in its character; to go into effect from and after its acceptance by the governments concerned, and to be entirely independent of whether the Government of the United States may consent or may not consent to receive and distribute the payments as proposed by the Government of Venezuela.

I with pleasure renew, &c.,

JEHU BAKER.
[Inclosure 7 in No. 287.—Translation.]

Mr. Saavedra to Mr. Baker.

The undersigned, minister ad interim of exterior relations, has the honor to respond to the indication contained in the communication of your excellency of date the 21st instant in the following terms:

The national government has applied the 13 per cent, of the forty unities of the custom-house revenue to the payment of the reclamations called diplomatic, and in making the distribution it has foreseen the case that the said revenue for supervening causes might not come up to the sum estimated. Thus it has reserved monthly a sum (cantidad) which might serve, in necessary case, to equalize the estimates. And this was the base of the first distribution, and also of the last, which the government of the republic cannot less than maintain before the foreign governments.

To pay in this respect 95,000 bolivars monthly, instead of the 80,000 which are being paid, would be to exceed the estimate, for which the government is not authorized; and to offer to pay the excess, if there should be such, would be to promise its application to an object distinct from public instruction and improvements (el fomento) to which it is destined.

This destination given to the overplus revenue is the result of the wisest foresight, since precisely that which guarantees peace in the republic, and with it the fulfillment of the compromises contracted is principally among us the investment of the largest sum possible in public works, which on the other hand contribute much to the augmentation of the revenue.

This is the rule which the government ought to observe; it fulfills it strictly; and acting thus it hopes with reason that, the case arrived, the United States will not deny its good offices.

For the rest, if it has offered to the Government of the United States to pay, through its intermediation, to the creditor governments (pagar por su intermedio á los Gobiernos acreedores), the total product of the 13 per cent, expressed in the estimate (presupuesto), that is to say, the sum of 1,040,000 bolivars instead of 960,000, thus giving away the sum (cantidad) which is now reserved, it has been with the object of facilitating the acceptance, even in exchange for exposing itself to having a deficit in the estimate (presupuesto). This proposition the Government of Venezuela will be prompt to maintain, and it cherishes the hope that the Government of Washington will find it reasonable, so much the more if your excellency deigns to recommend its acceptance, transmitting it with the appreciations which your enlightened judgment (criterio) may suggest.

The undersigned improves this occasion, &c.,

PEDRO I. SAAVEDRA.
[Page 1198]
[Inclosure 8 in No. 287.]

Mr. Baker to Mr. Saavedra.

Mr. Minister: Referring to your excellency’s two notes to me, both of date the 9th ultimo, to my note to your excellency of date the 14th ultimo, to your excellency’s note to me of date the 18th ultimo, together with its inclosure bearing date the 19th ultimo, to my note to your excellency of date the 21st ultimo, and to your excellency’s note to me of date the 24th ultimo, I have the honor to assure your excellency that I shall, by the earliest opportunity and in a proper manner, bring the subjects of this correspondence to the knowledge and consideration of my government.

I avail myself, &c.,

JEHU BAKER.