The Acting Secretary of State to Minister Bowen.

No. 232, confidential.]

Sir: Referring to your cablegram dated January 7, 1905, in connection with the suggested payment of 5,000,000 bolivars annually on the claims of the various creditor nations, the Department would like to know how far short Venezuela has come of compliance with the protocols in the matter of the payment of said claims.

[Page 1016]

In the protocols it was agreed that 30 per cent of the revenues of the ports of Puerto Cabello and La Guayra should be applied to the payment of the claims in question, and in the course of the negotiations the Venezuelan plenipotentiary stated the estimated amount which that 30 per cent should yield. In the light of the estimate thus given the protocols were agreed upon. You will accordingly ascertain and report to the Department the amount which has been paid over from month to month and from year to year by the Venezuelan Government on the claims for the creditor states; the total award made by the mixed commissions to Great Britain, Germany, and Italy, respectively, and what amounts have been turned over by the Venezuelan Government and applied toward the payment of those claims, so as to enable the Department to determine how long a time, judging from past experience, will be required to extinguish the claims of the three blockading powers.

You will also report to the Department as to the facts, whether or not the Venezuelan Government has, in good faith, collected, accounted for, and paid over a full 30 per cent of all the revenues of the two ports of La Guayra and Puerto Cabello, and whether or not any considerable portion of those revenues has been diverted from the two ports named in the protocol by the creation of a new port or ports of entry.

You will also report any other facts and conditions which would seem to justify the United States Government in requesting the Venezuelan Government to put United States officials in charge of the custom-houses of the two ports in order to enable the United States to insure the payment and satisfaction, in good faith, by the Venezuelan Government of the obligation which it assumed toward the United States and the other creditor states in the settlement of the controversy by the aid of the United States Government between Venezuela and the blockading powers.

I am, etc.,

Francis B. Loomis.