Washington, December 11, 1901.
Against the Venezuelan Government there is a claim pending of the Berlin Company of Discount (Berliner Disconto Gesellschaft) on account of the nonperformance of engagements which the Venezuelan [Page 193]Government has undertaken in connection with the great Venezuelan Railway which has been built by the said Government. Those obligations amount for the time being to fully 6,000,000 bolivares (1 bolivar to be counted as 80 pfennige). The obligations continue to increase, as the interest for the values of the 5 per cent Venezuelan loan of the year 1896, which was emitted to the amount of 33,000,000 bolivares and which have been transmitted to the company as a guaranty for the payment of interest of the capital spent in building, has not been paid regularly since seven years, nor has the payment been made regularly to the sinking fund.
This behavior of the Venezuelan Government could, perhaps, to a certain degree be explained and be excused by the bad situation of the finances of the State; but our further reclamations against Venezuela, which date from the Venezuelan civil wars of the years 1898 until 1900, have taken during those last months a more serious character. Through those wars many German merchants living in Venezuela and many German landowners have been seriously damaged, as partly compulsory loans have been extorted from them, partly requisites of war which have been found in their possession, as especially the cattle necessary for the feeding of the troops have been taken from them without being paid for, partly their houses and grounds have been ransacked or devastated. The amount of these damages comes to fully 2,000,000 bolivares. This amount is to be divided between 35 claimants, who are partly poor people. Several of the damaged have lost nearly all their possessions, and through this their creditors who live in Germany have suffered likewise. Very likely these reclamations will be presently put before the Reichstag.
Evidently the Venezuelan Government, if we judge it after its behavior in the present, is not willing to fulfill its engagements in compensating these damages. After having first fixed a six-monthly term during which the Government refused to discuss any claims for compensation, the Government issued in January last a decree stating that a commission consisting solely of Venezuelan officials should decide about the claims, which the damaged would have to bring to their knowledge during three months. The proceedings as settled by this decree seem in three articles not to be acceptable. First of all, that all the claims for damage which came from the time before the 23d of May, 1899 (that means before the appointment of the present President of the Republic, Castro), should not be considered, while of course the government of Castro is, as all other governments, responsible for the deeds of its predecessors. Another article said that all diplomatic protestations against decisions of the commission should be excluded and only the appeal to the supreme Venezuelan court of justice should be admitted. The members of this court are entirely dependent on the Government and have frequently been simply dismissed by the President. Finally, the Government wanted to pay for the claims which should be recognized by the commission only with bonds of a newly to be emitted revolution debt, which would be, after the experiences made, up till present without any value.
The behavior of the Venezuelan Government must therefore be considered as a frivolous attempt to avoid just obligations. As was to be expected, several of the few German claims put before the commission have been simply rejected and others have been reduced in a decidedly malicious way. So, by example, a German cattle breeder, from whom [Page 194]fully 3,800 head of cattle, to the value of more than 600,000 bolivares, had been forcibly taken away, got only 15,000 bolivares adjudicated. But the Government has not paid for the claims recognized as just by the commission, but has told the damaged that a bill in their interest would be submitted to the next Congress.
The German Government has first tried to induce the Government of Caracas to change their decree in the mentioned three articles. After this expedient had been rejected, it has been by order of the Imperial Government firmly declared to the Venezuelan Government that we are forced under the present circumstances to refuse altogether our acknowledgment of the decree. Similar declarations have been delivered by the predominant majority of the other interested powers, especially of the United States of America, whose reclamations from the Venezuelan civil wars come to fully 1,000,000 bolivares. The Venezuelan Government claims against those declarations that it is not able to treat the foreigners in a different way from the Venezuelan citizens, and that the Government regarded, therefore, the settlement of the reclamations in question as an internal affair of the country in which no foreign power could meddle without injuring the sovereignty of the country. Another attempt to change the mind of the Government has been likewise unsuccessful. The Government has declared in its reply that it had to repel all diplomatic interference in this matter and that the claimants, as the term fixed in the decree had meanwhile passed, had to be exclusively referred to the supreme Venezuelan court of justice.
Under these circumstances the Imperial Government believes that further negotiations with Venezuela on the present base are hopeless. The Imperial Government proposes therefore to submit the reclamations in question, which have been carefully studied and have been considered as well founded, directly to the Venezuelan Government and to ask for their settlement. If the Venezuelan Government continues to decline as before, it would have to be considered what measures of coercion should be used against it.
But we consider it of importance to let first of all the Government of the United States know about our purposes so that we can prove that we have nothing else in view than to help those of our citizens who have suffered damages, and we shall first take into consideration only the claims of those German citizens who have suffered in the civil war.
We declare especially that under no circumstances do we consider in our proceedings the acquisition or the permanent occupation of Venezuelan territory. If the Venezuelan Government should force us to the application of measures of coercion, we should have to consider furthermore if at this occasion we should ask likewise for a greater security for the fulfillment of the claims of the Company of Discount of Berlin.
After the posing of an ultimatum, first of all the blockade of the more important Venezuelan harbors—that is, principally the harbors of La Guayra’a and Porto Cabello—would have to be considered as an appropriate measure of coercion, as the levying of duties for import and export being nearly the only source of income of Venezuela would in this way be made impossible. Likewise it would be difficult in this way to provide the country, which depends on the import of corn, with food. If this measure does not seem efficient, we would have to consider the temporary occupation on our part of different Venezuelan harbor places and the levying of duties in those places.