Mr. Dodge to Mr. Hay.

No. 2161.]

Sir: I have the honor to acknowledge the receipt on the 6th instant of your cable instruction.

[Page 419]

Referring to my dispatch No. 2154 of the 3d instant, I have the honor to report that in the course of a general conversation at the usual diplomatic reception at the foreign office yesterday, Doctor von Muehlberg, who received instead of Baron von Richthofen, spoke of the events in Venezuela, saying substantially that negotiations were now pending between the British and German Governments, but that nothing had so far been decided as to what form any armed intervention would take. Germany had presented her claims in her ultimatum and had offered to refer to a mixed commission all those of the correctness of which she had not already assured herself. No satisfactory answer had been received to this offer. Doctor von Muehlberg made no mention of Messrs. Seligman & Co.’s efforts to make an arrangement to effect a settlement of the Venezuelan debts, and upon my referring to the rumors current in the newspapers, he said that he knew nothing of these efforts except what he had read in the newspapers. I did not mention your instruction which was “for my information in case inquiry was made of me by anyone in interest.” No one has made as yet any inquiry of me regarding this matter.

On the overleaf is also a clipping from the London Times of the 9th instant, giving in translation the material part of a memorandum presented by the Imperial chancellor to the Reichstag on the 8th instant on the subject of Germany’s claim against Venezuela.

I have, etc.,

H. Percival Dodge.
[Inclosure.]

Clipping from the London Times.

ultimatum to venezuela.

Owing to t.he evasive attitude of General Castro, President of Venezuela, the British and German Governments presented formal ultimatums at Caracas at 3 o’clock yesterday afternoon. If the demands of the two Governments are not satisfied, joint military action will immediately be undertaken.

The notes are identical in form, only the demands being different.

A memorandum by the Imperial chancellor on the subject of Germany’s claims against Venezuela was presented to the Reichstag to-day. It says:

“Venezuela, by her treatment of German representations, has given the Imperial Government cause for serious complaint. The questions at issue relate to demands from Germans living in Venezuela, and claims of German contractors on account of the nonfulfillment by the Venezuelan Government of obligations entered into by contract. During the last civil war the Germans settled in Venezuela had, up to 1900 suffered, through forced loans, the seizure of cattle, and the pillage of their houses and estates, a loss of about 1,700,000 bolivars, and during the last civil war that amount has been increased by about 3,000,000 bolivars. As the result of numerous applications the Venezuelan Government, on January 24, 1901, issued a decree by which a commission consisting solely of Venezuelan officials was to decide upon all claims. That decree appeared to be unsatisfactory because, in the first place, all claims originating before the presidency of Señor Castro were ignored; in the second place, any diplomatic protest was precluded; and in the third place, payments were only to be made with bonds of a new revolutionary loan, which in the light of previous experiences, would evidently be almost worthless. After every attempt on the part of the minister resident at Caracas to get the decree altered on those three points had failed, the minister declared plainly that the Imperial Government now felt compelled to refuse to recognize the decree altogether.

“Similar declarations were made by Great Britain, the United States, Italy, Spain, and the Netherlands. But, as Venezuela insisted that foreigners could not be treated differently from Venezuelan subjects and that the claims must be considered as coming within the scope of internal affairs, the Imperial Government examined the German claims itself, and, so far as they appeared well founded, made the Venezuelan [Page 420] Government responsible for them. Venezuela thereupon held out the prospects of a satisfastory solution through Congress, but the latter simply again took up the same unsatisfactory decree. Venezuela declined further discussion, maintaining that the settlement of foreign war claims by diplomatic means was out of the question. That is not in accordance with international law.

“Consequently, as the whole attitude of the Venezuelan Government up to the present indicates only an endeavor to deny foreign claims the settlement that is due to them according to international law, and as, moreover, in the last civil war Germans have been treated by the Venezuelan Government troops with especial violence, which if it remains unpunished might give rise to the impression that Germans in Venezuela are to be left unprotected to the mercy of foreign tyranny, the Imperial chargé d’affaires at Caracas on December 7 handed to the Venezuelan Government an ultimatum demanding the immediate payment of the war claims up to 1900, and a satisfactory statement regarding the fixing and guaranteeing of the amount of the claims arising out of the recent civil war. At the same time the claims of German firms for the building of a slaughterhouse at Caracas and those of the German Great Venezuelan Railway Company for the guaranteed interests due to them are to be settled. It was finally stated in the ultimatum that should a satisfactory reply not be immediately forthcoming the Imperial Government would, to its regret, be compelled itself to take measures for the satisfaction of the German claims.”