The Secretary of State to Minister Bowen.

No. 242.]

Sir: I have to acknowledge the receipt of your No. 385, of the 5th ultimo, in regard to the pending negotiations between the United States and Venezuela.

In reply I have to say that the Department approves your opinion that we should not make a general arbitration treaty with Venezuela until all pending questions between the two governments have been settled in conformity with the Department’s instructions heretofore given. In the light of President Castro’s statement to you, contained in the note of the minister of foreign affairs of February 2, “the very fact of submitting to an arbiter the decision as to whether a question is diplomatic or not would be not only a proof that it was not, but even prejudicial to the exact investigation of the questions by the chancelleries that are to discuss them.” This language of the President completely demonstrates the futility of proposing or discussing the formation of an arbitration treaty for the purpose of deciding the question whether a case is diplomatic or not. In short, the language quoted shows the inability of this government to accede to any arbitration of the question proposed. Taking the Bermudez Asphalt Company case as an example, if the question were submitted to a tribunal to decide whether or not the case is diplomatic, it would involve the presentation before an international tribunal of many details in connection with prosecutions instituted against the Bermudez Company which this government would wish to be spared the necessity of presenting. Incidents such as have characterized the successive prosecutions of the Bermudez Company were fully considered by the Department of State before it determined whether or not the government ought to intervene with the Venezuelan Government for the protection of the company. Once its decision to intervene is taken and an arbitration arranged, the case then goes to the tribunal on its merits, and it would be very inconvenient, since it might lead to recriminations creating resentments if the intervening government had to show the many serious charges and proofs adduced that the Executive had overawed the courts and by removals and imprisonments of judges and of attorneys and by interposing other obstacles to the due and impartial administration of justice had thus finally convinced the intervening government of the propriety and necessity of its action. Expositions and discussions of this nature would not conduce to the maintenance of that mutual respect and friendship which should continue in spite of serious controversies between differing governments.

The revision of the Olcott award could not have the serious consequences supposed in the note of the minister addressed to you on February 2. The protocol for the revision of that award would be so drawn that the action of the reviewing tribunal would have no effect on the previous protocol and awards. It would have the effect, however, and this the Department asks, that the tribunal might fairly and fully reconsider the whole case and render to Mr. Olcott that justice which appears to have been denied by the award given under the previous protocol.

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The attitude of the Venezuelan Government toward the Government of the United States and toward the interests of its citizens who have suffered so grave and frequent wrongs arbitrarily committed by the Government of Venezuela require that justice should now be fully done, once for all. If the Government of Venezuela finally declines to consent to an impartial arbitration, insuring the rendition of complete justice to these injured parties, the Government of the United States may be regretfully compelled to take such measures as it may find necessary to effect complete redress without resort to arbitration. The Government of the United States stands committed to the principle of impartial arbitration, which can do injustice to nobody, and if its moderate request is peremptorily refused it will be at liberty to consider, if it is compelled to resort to more vigorous measures, whether those measures shall include complete indemnification, not only for the citizens aggrieved, but for any expenses of the Government of the United States which may attend their execution.

You are at liberty to furnish a copy of this instruction to the minister of foreign affairs.

I am, etc.,

John Hay.