Sir Michael Herbert to Mr. Hay.
Washington, February 6, 1903.
Sir: On December 27 last the United States chargé d’affaires in London informed the Marquis of Lansdowne that the President of the United States had great pleasure in announcing to the Governments of Great Britain, Germany, Italy, and Venezuela that all of them had accepted in principle the proposal to refer all pending questions between them to The Hague tribunal.
The President, although unable to act as arbitrator himself, was good enough to state that if he could be of any further service in arranging the preliminaries of such a reference he would be glad to hold himself at the disposition of the powers concerned.
Mr. Bowen was subsequently commissioned by President Castro to proceed to Washington in order to arrange either the immediate settlement of the claims of the three powers or the preliminaries for submitting them to arbitration by The Hague tribunal.
Had Mr. Bowen expressed any preference for the second of these alternatives there seems no doubt that the blockade would have been raised in a few days. President Castro had agreed to the preliminary conditions insisted on by the blockading powers, including those having reference to the immediate settlement of the claims of the first rank, i. e., claims arising for the most part out of overt acts of violence and spoliation committed on the subjects of the blockading powers during the last few years.
For reasons, however, the weight of which His Majesty’s Government do not desire to minimize, Mr. Bowen preferred to attempt a direct settlement, with the result that questions of considerable difficulty have been raised and a condition of things which His Majesty’s Government earnestly desired to terminate has been unfortunately prolonged. Mr. Bowen has apparently felt himself precluded from coming to any arrangement which would not place all the powers claiming compensation from Venezuela upon precisely the same footing.
This seems to His Majesty’s Government to be a course quite opposed both to principles of equity and to international practice. They could not assent to it except at the instance of some competent umpire or arbitration tribunal.
It must be remembered that no proposal of the kind was made until Mr. Bowen’s arrival in Washington; that neither the President of the United States in his communications with His Majesty’s Government nor any of the blockading powers, nor, so far as His Majesty’s Government are aware, President Castro, had ever suggested making the neutral powers party to the controversy between the blockading powers and Venezuela. It must further be borne in mind that the preferential [Page 474] treatment, for which the blockading powers have asked is not one which either exhausts the resources at the disposal of Venezuela for the payment of her external debt, or which interferes with what is known as the “diplomatic debt,” a charge amounting to only 5.2 per cent on the total customs revenue of Venezuela. There can be no doubt that the neutral powers will be in a far better position under the proposals made by the blockading powers than they have ever been before, and this without any of the cost and trouble necessarily incidental to naval operations.
Under these circumstances it seems to His Majesty’s Government that the most expeditious mode of terminating the hostilities would be to embody the conditions already accepted by Mr. Bowen on behalf of the Government of Venezuela, including those for the settlement of the first rank of claims, in a protocol to be signed at Washington, and to refer the proposal made by him for the identic treatment of all the creditor powers to The Hague tribunal, unless, indeed, the President of the United States would be prepared, in the interest of a speedy settlement, to decide the single point which appears to stand in the way of a complete agreement between the blockading powers and Venezuela.
Should the President consent to adopt this suggestion the following questions would have to be adjudicated upon by him:
- 1.
- Whether the three powers are not entitled to a separate settlement, provided this settlement leaves an adequate margin for the payment of claims of the other powers, having regard to the resources of Venezuela.
- 2.
- If the answer to the first question is in the affirmative, then what are the terms of payment which would leave such adequate margin?
- 3.
- If the answer to the first question is in the negative, then is it not equitable that some compensation should be made by Venezuela to the three powers for the expense which they have incurred in connection with the blockade?
It is, perhaps, unnecessary for me to state, in conclusion, that His Majesty’s Government would accept the good offices of the President of the United States with feelings of the greatest gratification.
I have, etc.,