No. 733.
Mr. Baker to Mr. Blaine.

No. 370.]

Sir: Referring to my Nos. 237, 287, 361, and 363, I have to say that I have, late this evening (between 5 and 6 p.m.), received a mass of matter from the minister of exterior relations bearing upon the difficulty with France, which it is in every sense impossible to send textually by the next mail, which leaves to-morrow morning.

The French chargé has asked and got his passport, upon the denial of this government of his ultimatum, the resumption of the quota of 1873, &c., which he had demanded.

During the last few days I have indicated to this government, through official and semi-official conversations, the adherence to my already formed opinion that it ought to pay the full amount of the 13 per cent, of the 40 unities of its custom-house revenue, as a provisional measure; that under the existing condition of the country this is all that ought to be required by the creditor governments, and that the money thus paid should be divided pro rata among the creditor governments. The last note I received this evening proposes (conditionally, as I understand it) to pay the full amount of the 13 per cent, of the 40 unities. I hastily translate from this note:

In effect, the government proposes to the creditor governments, in place of the 80,000 bolivars which is now expended in the payment of the monthly quotas, the entire product, whatever it may be, of the thirteen per cent, of the forty unities of the rent, applied by the law of the 30th of November 1872, to foreign claims previously recognized. But, as the excess which may be each year above the probable estimate of the fund cannot be known but at the end of the year, it will be then when it may be paid. It is all the time understood that the Cabinet of Washington will, on the occasion, lend its good offices to Venezuela, and that it may be it solely which intervenes in the reception of the fund.

Thus it will be seen that this new proposition, which I think should be unconditioned, appears to be submitted subject to the understanding that the money shall be received and distributed by the Government of the United States. In conversation with Mr. Seijas, previous to the reception of the note from which I have translated, I informed him quite clearly and positively of my objection to this condition, and indicated to him that it might defeat the proposal. In the form in which it is presented I positively decline to recommend it, thinking, as I do, that the proposition should be presented in an unconditional form, with [Page 1207] no regard whatever to whether the Government of the United States may agree or not agree to receive and distribute the money among the creditor governments.

The substance of my opinion is—

That Venezuela ought to pay (without the annexed condition that the Government of the United States receive and distribute it) the full product of the fund set apart by her own law for the foreign claims, to which this fund is dedicated; that is, the entire amount of 13 per cent, of forty unities of her custom-house revenue, and that in her existing condition neither all nor any of the creditor governments ought to exact more for this purpose.
That the money thus paid should be distributed pro rata among the creditor governments.
That with regard to the present attitude and demands of the French Government, the Government of the United States should promptly and firmly exert its influence to harmonize Venezuela and France on the basis of the two preceding views, which, I think, will not be found seriously objected to by any other of the creditor nations aside from France, and these, besides the United States, are England, Denmark, Holland, Spain, and Germany.

The position of our country as head and natural friend of the American republics makes it proper for it to speak on the present occasion; and its interest in the subject-matter of dispute supplies it with a solid practical warrant for so doing.

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I am, &c.,