No. 595.
Mr. Baker to Mr. Frelinghuysen.

No. 711.]

Sir: Referring to my dispatches, ail relative to or having a bearing on the suspension of monthly payments by this Government, and to your dispatch numbered 219, respecting the same subject, I have to say that on the 4th instant I again drew the attention of Mr. Seijas to the subject in question, by asking him what his Government was going to do or had concluded in relation to your note to Mr. Camacho. He said he would communicate to me that day what he had written to Mr. Camacho, and which the latter had not received. Accordingly, late in the evening of the 4th instant, I received a note from Mr. Seijas, [Page 922] of that date, inclosing a copy of his note to Mr. Camacho, of date 5th of May, in response to your note to the latter, of date 17th of April, respecting the suspension of monthly payments. I inclose herewith * * * a copy of Mr. Seijas’note to Mr. Camacho, together with a translation.

* * * * * * *

I am, &c.

[Inclosure 1 in No. 711.—Translation.]

Mr. Seijas to Mr. Camacho.

Sir: By the copy of a communication from Mr. Frelinghuysen addressed to you on the 17th of April, a date subsequent to that of the last notes from the United States legation, the President has been informed that the Washington Government does not accept the suspension of payments to the United States, and asks that they may be resumed, as a means of facilitating, for the executive, the action contemplated by the joint resolution of Congress.

The first reason alleged is that the treaties made being in force until they are superseded by others, any act of Venezuela that is designed to set aside the obligations contracted by her must be regarded as a violation of existing stipulations, and as premature. In this, however, there is a notable error. Venezuela does not in any wise disavow, nay, she is quite ready to execute the convention of 1866. The convention is one thing and the awards of the commission created by it another. These were fraudulent, as has been shown by various reports submitted to and approved by the American Congress, and especially by the joint resolution of March 3. In consequence it has been ordered that they be reviewed by a new commission. The executive understands, then, that things have returned to the status in which they were before the impeached decisions were rendered. The convention per se created no pecuniary obligations; these grew out of it and out of the awards of the tribunal by it established. As they have been annulled, the cause of the obligation of Venezuela to the United States no longer exists. Since 1870 this Government has asserted that the awards of the commission were fraudulent; it has never paid otherwise than under protest, and without consenting to the distribution of the funds among the holders of the certificates; it had afterwards kept the monthly payments on deposit, and although by force of urgency it agreed to pay them, it was always under the protest that it did not admit the validity of the concessions made, and because it was alleged that its refusal might have an unfavorable effect upon its efforts to convince the United States Government of the nullity of the decisions. Up to the 28th of February last $534,286.83,* or 2,137,147.32 bolivars, had been paid, a much larger sum than was stated by Mr. Culver as the total amount of the claims in 1864; and as some of those admitted in 1868 were entirely unjust, and others greatly exaggerated, while there is no room to suppose that the new commission will admit them, for that would be to repeat the fraud committed by the former commission which has occasioned the condemnation of its labors, the President believes that the payments made will suffice to cover, and that they may even exceed, the amount to be awarded by the new tribunal, if it is an enlightened and upright one.

The second reason is that many claimants, whose awards have been recognized as just by this Government, have been for years deprived of their just dues, owing to the fact that this Government has inpugued the good faith of some other awards.

It is true that the original remonstrance of Venezuela was confined to the awards made by Commissioner Talmage and approved by the arbitrator, but the illustrious American has, since 1871, very properly corrected this remonstrance, and has extended it to every one of the so-called decisions. The ground of his action may be seen in the note of this ministry to Mr. Russell, dated October 6, 1876, and in the memorandum of the 16th of the same month, to which I refer. I will only quote one paragraph of it, which recapitulates the objections of Venezuela:

“On the other, if the awards made by the two commissioners are examined, most of them will be found to be as corrupt as were those approved by the third. Most weighty matters treated with the greatest levity; laws of the Republic disregarded; principles of the law of nations trampled upon; important previous discussions set aside; antecedents established by the Anglo-American Union ignored or voluntarily forgotten; a claim awarded which had already been paid; indemnities fixed arbitrarily; [Page 923] such are the characteristics of these awards. The gravity of the charge is greatly increased when if is considered that Mr. Talmage shared in their proceeds, either directly or through the medium of his partner, Mr. W. P. Murray, secretary of the legation, who was presented to the Government in that capacity, and who once even had charge of it while Mr. Pruyn was on a visit to St. Thomas. It would even he highly inconsistent for the corrupt action of Mr. Talmage to be admitted, and at the same time for any of his acts to be recognized as valid, since he therefrom derived benefit for himself and for the other members of the league which had been formed against the treasury of Venezuela.”

In the discussion of the matter at Washington, the fact has been elicited that Murray was attorney for claims awarded to the amount of $$51,000, and Whiton, Talmage’s agent in New York, to the amount of $352,000; the sum of $50,000 only was not represented, by one or the other. And as the Committee of Foreign Affairs of the House of Representatives says in its last report: “The treaty with Venezuela provides for the appointment of a commission to consider the claims of American citizens against Venezuela. There has not been the commission which the treaty required. The alleged commission was a conspiracy; its proceedings were tainted with fraud. That fraud affects them all. It was corrupt from head to foot, and there is no method known to the committee by which the fraudulent part may be separated from the honest part, and any portion shown to be sound and entire. Falsus in uno, falsus in omnibus.

“It is a principle not only of unwritten law, but of universal jurisprudence, that fraud vitiates every act, public or private.”

If the minister refers to the classification of claims made in 1880, it will be sufficient for me to remind him of the circumstances of the case in order to satisfy the argument. Mr. Evarts had, suggested to Mr. Pile, when the case was transmitted by Congress to the executive, that Venezuela should divide the claims into categories, as a means of arriving at an adjustment of them between the two Governments, without the necessity of returning the case to Congress. But, without awaiting the answer of Venezuela, his excellency the President, in a message dated March 29, 1880, again laid the matter before the Senate. It is therein stated that this Republic has not yet specified the awards which it considered just and those which it considered unjust in such a way as to put an end to any ulterior complaint, if it should be attempted to make a discrimination in the payment of dividends.

Moreover, with that message is transmitted a communication from the minister of Venezuela, Mr. Dalla Costa, in which he says, under date of November 20, 1879: “Taking this view of the case, the classified list referred to by Mr. Pile, the attorney of Venezuela, in his final statement before yon, and in the correspondence of this legation of subsequent date, would necessarily take the form of a distinct and authorized proposal for the final adjustment of the whole matter—as well with regard to the sums which my Government would be disposed to admit to be justly due to the claimants as to the times of payment.”

I must also say, that although my Government is disposed to heed the indications of the honorable Secretary of State, comprised in the interlocutory observations made by the attorney of Venezuela on the 19th of July, 1879—to present a final list of claims considered just, and of sums due for claims considered excessive, and to agree to the payment of those amounts as soon as the Government of Venezuela shall have been recognized—yet it thinks that all the claims of the mixed commission ought to be reviewed by a new one, honest and competent, and it repeats its request, so many times made, for this mode of adjustment, &c.

What the President of the United States then recommended to Congress was that a judicial investigation should be instituted by a competent commission, with adequate authority to determine which were the awards whose payment was not to be insisted on, and which were those whose payment was to be required.

Consequently, as the proposal of Venezuela, which was made at the suggestion of Mr. Evarts, and which included all the claims, was not waited for or attended to, it is clear that it remained without any value, especially in the absence of the condition of its conducing to the termination of the dispute between the two Governments without further legislative action.

Mr. Frelinghuysen adds that the payments hitherto made by Venezuela do not suffice to cover even the moderate interest agreed upon.

I have already said that the payments made up to the 28th of February last amount to $534,286.83, or 2, 137,147.32 bolivars. But in order to be able to calculate whether this covers the amount of the interest of the debt, it is-necessary to know what that debt is. This is not yet known, nor can it be, until the new commission shall have decided it. The assertion presupposes the validity of the awards which have been declared null and void—an entirely untenable hypothesis.

This Government believes, on the contrary, that the payments made amount to more than will be found just.

The Secretary affirms that in the adjustment it is necessary to recognize the right of the claimants to receive both the principal and interest of the awards which may hereafter be found just, reckoning from the date of the original awards.

[Page 924]

This point will be considered and determined when it is discussed in the negotiation which has been begun; it appears, however, at a glance, that Venezuela was entitled, as a matter of strict right, to claim the return of all the sums paid, now that the titles of the debt, or the awards, have fallen to the ground. However, the President agrees that they may be retained on account of the future award of the new mixed tribunal. To pay the principal and interest of the amount of the awards which may be found just from the date of the original decision would be to attribute to that decision a value which it does not possess, inasmuch as it has been declared void. As regards Venezuela, and this by no fault of hers, but by that of the corrupt commission, things have returned to the status in which they were when the convention of April 25, 1866, had just been ratified and she was about to execute it. That convention the Republic is ready to observe with all strictness, with no difference, save the substitution of Washington for Caracas as the place where the commissioners and the arbitrator are to meet. Thus no charge can be made against this Government as violating any of its agreements.

The Secretary observes that the negotiation authorized by the joint resolution has not yet been proposed to Venezuela; that that resolution has not been officially communicated to the Government of Venezuela, and that until the President acts conformably to it, it will continue to be a purely domestic matter, embodying the result of a consultation between the executive and legislative branches of the United States Government.

This country protested, since 1870, to the Executive at Washington, against the awards of the Mixed Commission of 1867–’68, and that officer has several times referred the matter either to the Senate or the House of Representatives.

This Government has had nothing whatever to do with these communications. It remembers the doctrines laid down by divers Secretaries of State and Presidents Of the latter Jackson writes:

“Discussions between the several Departments of our Government belong to ourselves, and for anything said in them our public servants are responsible to none but their own constituents, or to each other. If, in the course of their consultations, erroneous facts are asserted, or improper inferences drawn, they need in order to correct them, however they may be informed of their error, nothing but their love of justice and what is due to their own character; but they cannot be questioned on the subject as a matter of right by a foreign power. When our discussions terminate in acts, our responsibility to foreign powers begins, not as individuals, but as a nation.

The reference of the case to Congress by the Executive having terminated in an act, that is to say, in the resolution of the 3d of March, and the President having signed it without any objection, this Government believes that it was binding upon the United States. It has but suspended, not absolutely revoked, the decision which, on the 17th of May, 1880, ordered the payment of the monthly quota of 19,691.25 Bolivars to the American Legation.

To this must be added that you yourself wrote to the Secretary of State on Monday, March 26, expressing a desire to see him, and to reach an understanding concerning the execution of the public resolution of Congress respecting the claims against Venezuela. You had a conference with that officer, and he caused to be read to you the report of the section on the execution of what had been resolved upon. He told you that nothing was decided; that that was a memorandum in which all that could be said in favor of the United States was said, and requested you to state your opinions. You answered that what was stated by the maker of the report was not what Congress had ordered; that as to opening negotiations at Caracas, that would be losing time, since you had not only the necessary powers and instructions, but had labored unceasingly for two years to secure the appointment of a new mixed commission, &c., &c. The minister desired to take some time to think and to inform you. That conference was, beyond dispute, a beginning of negotiation, and the assent of the Secretary to the existence of the resolution was a virtual communication of it. It is, moreover, positively stated in his note to which I am now replying that Congress has passed said act. In one way or another, therefore, Venezuela has been notitied of it.

The Congress of this country has promulgated laws without communicating them to foreign governments, and those governments have not considered it indispensable that they should be notified of them in order to consider them as being in force, and to protest against their provisions.

Finally, the measure of suspension was not adopted without having previously been brought to the knowledge of the United States minister at Caracas, who was requested to express his views concerning it. He confines himself to saying that it was not proper for him to express an opinion on the subject, but that it appeared to him desirable that the matter should be settled at Washington between the two Governments. Thus it is that all due consideration has been shown to the United States.

Moreover, the President does not intend to fail in any of his engagements. He has simply ordered that the monthly quota assigned for the payment of the United States [Page 925] debt be deposited at Caracas instead of at Washington. He has considered that he had a right to take this step ever since the question of corruption in the awards was submitted to the United States Government.

By means of the foregoing and of whatever else may occur to you, you will be pleased to reply to the Secretary of State of the United States, whose note you may perhaps already have answered.

I am, &c.,

  1. Pesos sencillos are here meant, each of the value of 4 bolivars, or 4 francs.