Minister Bowen to the Secretary of State.
Caracas, January 6, 1905.
Sir: I have the honor to inclose herewith copies of notes exchanged with the minister of foreign affairs in regard to the payment of the claims of the foreign bondholders.
My note to him was purely personal and written in great haste, immediately after I had discovered that President Castro was entertaining a proposition to add 130,000,000 to the diplomatic debt.
The answer I received was so friendly in tone that I called at once upon the minister of foreign affairs, and suggested that he should submit to President Castro a plan for settling all pending questions with foreign nations. I outlined the plan (copy of which I inclose), and this morning he called on me and said that President Castro would authorize me to propose it to you.
This afternoon he brought me a letter (of which I inclose herewith a copy), and Which contains an unsatisfactory modification of my plan, inasmuch as it ignores the settlement of the claims of the European creditor nations. When I pointed out to the minister of foreign affairs that defect in the letter, he said: “My letter to you should be regarded as the first step.”
I then asked him whether President Castro intends to submit to arbitration all of his pending disputes, including the asphalt case. He answered: “Certainly.”[Page 1011]
I then intimated that no arrangement could possibly be satisfactory that ignored the right of the other creditor nations to have their claims also submitted to arbitration. He answered: “We shall, of course, have to take up that question when we hear that Washington desires it to be settled.”
I then agreed to send a cablegram to you in regard to what had been done. A copy of the cablegram I inclose herewith.
I have, etc.,