Mr. Tower to Mr. Hay.

No. 21.]

Sir: I have the honor to acknowledge the receipt, on the 10th of January, at night, of your dispatch announcing that Mr. Bowen intended to leave Caracas for Washington upon the following day, and expressing his anxiety that the blockade of Venezuelan ports should be raised at the earliest moment possible, by reason of the growing scarcity of provisions likely to produce general distress.

In compliance with your instructions contained in that dispatch, I brought the subject to the attention of Baron Richthofen, imperial secretary of state for foreign affairs, in a personal interview with him at the German foreign office. Baron Richthofen answered that the subject of the blockade would be referred to in a definite reply which the German Government will probably make to President Castro within a few days. But he alluded with considerable earnestness to the fact that although President Castro has declared that he accepts in principle the terms offered him by the powers, he has not as yet announced his acceptance of the condition precedent, namely, the payment [Page 437] or the securing the payment of the German claims, assessed at $325,000, upon which I have heretofore had the honor to report to you.

This preliminary condition is held strongly by the German Government as a condition sine qua own to arbitration, and in replying to your dispatch I said, in view of this: “I have reason to believe that no progress can be made until Venezuela accepts specifically the preliminary conditions.”

I have, etc.,

Charlemagne Tower.