VENEZUELA. 



829 



A blockade of the coast of Venezuela was de- 

 clared on Dec. 20. The Germans blockaded the 

 ports from La Guayra to the Colombian frontier, 

 the British the strip of coast eastward to the 

 frontier of Demerara. The American merchant 

 steamer Caracas, which had started on a voyage 

 to La Guayra, was permitted to enter the port, 

 but before half the cargo was discharged the 

 German naval authorities on Dec. 23 compelled 

 her to leave. On the same day the British, Ger- 

 man, and Italian Cabinets, to which the Venez- 

 uelan proposal to arbitrate had been transmitted 

 from Washington with an offer of the good offices 

 of the United States, accepted arbitration in prin- 

 ciple. The powers consented to arbitration of 

 their claims by The Hague tribunal, subject to 

 certain conditions which it was first necessary to 

 discuss. When the proposal was first made 

 through Minister Bowen the British and German 

 governments at the suggestion of Germany of- 

 fered to submit the whole dispute to the arbi- 

 tration of the President of the United States. 

 President Roosevelt was urged by them to under- 

 take the task, but on Dec. 27 he definitively de- 

 clined and suggested the International Court of 

 Arbitration at The Hague as the proper tribunal. 

 The American minister to Venezuela, who left 

 Caracas on Jan. 11, 1903, and arrived in Wash- 

 ington on Jan. 20, conducted the negotiations 

 with Count Quadt, the German charge d'affaires 

 at Washington, Sir Michael Herbert, the British 

 ambassador, and Signor Mayor des Planches, the 

 Italian ambassador. Baron Speck von Sternburg 

 soon arrived to take charge of the German nego- 

 tiations. The claims for which guarantees were 

 demanded amounted to 31,600,000 francs. The 

 German claims were 8,750,000 francs, the English 

 22,500,000 francs. The blockading fleets landed 

 men and seized the custom-houses at Carupano, 

 Cumana, Guanta, La Guayra, and Puerto Cabello. 

 A large number of merchant vessels belonging to 

 Venezuelans and of cargoes destined for Venez- 

 uela were seized by the blockading squadrons, 

 and the captured ships were moored at Margarita 

 island. Italy sent a second ship and undertook 

 the blockade of the coast of Tucacas and Coro. 

 Mr. Bowen, after his arrival in Washington, sug- 

 gested that the details connected with the claims 

 be settled directly by him as the plenipotentiary 

 of the Venezuelan Government, an office he was 

 authorized by the State Department to assume 

 for that purpose, and the British, German, and 

 Italian representatives at Washington. This pro- 

 posal was promptly accepted by the three powers. 

 The chief conditions made by the allied govern- 

 ments were cash payments of their claims of the 

 fifst line and adequate guarantees for the set- 

 tlement of the others. Mr. Bowen proposed that 

 all countries having claims against Venezuela 

 should have share in the proceeds of the customs 

 duties, which have been the chief source of reve- 

 nue for the Venezuelan Government, and hence 

 were the only satisfactory guarantee Venezuela 

 could offer. President Castro offered to pledge a 

 sufficient proportion of the customs receipts on 

 condition that all the foreign claims should share 

 pro rata. In satisfaction of the demands of im- 

 mediate cash compensation for acts of violence 

 he offered to raise a certain sum of money cover- 

 ing a part of the claims. Germany, supported at 

 first by England, demanded that the cash claims 

 should be paid out of the receipts of the custom- 

 houses at La Guayra and Puerto Cabello before any 

 other debts. Italy supported Germany through- 

 out. To give claims asserted by force a priority 

 over those settled by diplomacy Mr. Bowen con- 

 tended would encourage warlike action in the col- 



lection of claims. The British minister, who had 

 taken umbrage at the suggestion of Minister 

 Bowen that this would mean a continuance of the 

 Anglo-German alliance for six years, was disposed 

 to yield this point. Objections were made on be- 

 half of France, who contended that her claims 

 were already settled and payment arranged for. 

 Mr. Bowen's proposal was that 30 per cent, of the 

 customs revenues of the ports of La Guayra and 

 Puerto Cabello be set apart as a fund for the 

 liquidation of claims made by all foreign govern- 

 ments against the Government of Venezuela. 

 This was separate from and in addition to a fund 

 of 13 per cent, of the customs revenue of all the 

 ports to be applied to the payment of the prior 

 claims of France and some other nations which 

 antedated the Castro administration and had 

 been adjudicated and arranged previously. The 

 proposal contemplated the supervision of the cus- 

 toms administration by officials appointed by Bel- 

 gium, a neutral power having no navy, which 

 had a large aggregate of pecuniary claims. Other 

 creditor nations, besides Belgium, France, Eng- 

 land, Germany, and Italy, are Spain, Norway, Swe- 

 den, Netherlands, and the United States. When 

 the representatives of the three powers insisted 

 that the 30 per cent., or a part of it, be applied 

 to the payment of their cash demands before the 

 claims of other powers were paid Mr. Bowen pro- 

 posed to refer the question of their preferential 

 treatment to The Hague Court of Arbitration. 

 The ambassadors suggested arbitration by Pres- 

 ident Roosevelt, who again declined to act. The 

 claims for which the 13 per cent, of the customs 

 duties was reserved amount to 70,000,000 francs. 

 No payments to these creditors had been made 

 for a year. France filed additional claims 

 amounting to 65,000,000 francs, and Belgians 

 claimed 55,000,000 francs. Venezuela offered to 

 pay each of the blockading powers as an evi- 

 dence of good faith $27,500 on the day when the 

 blockade is raised. Great Britain was willing to 

 accept the final offer, and to let the question of 

 preference be decided by The Hague tribunal, but 

 Germany and Italy still held out for a percentage 

 of the customs revenue to be reserved for the sat- 

 isfaction of their original cash demands, amount- 

 ing to $340,000 and $360,000 respectively. Eng- 

 land and Italy finally agreed to accept a cash 

 payment of 5,500 each. The German Cabinet 

 insisted on $340,000, which Mr. Bowen conceded 

 under protest. The protocols provide that the 

 blockade shall be lifted immediately. Venezuela 

 shall set aside 30 per cent, of the customs of the 

 two ports for the payment of claims to all coun- 

 tries, which money shall accumulate till the 

 court of The Hague decides the question of prefer- 

 ential treatment and until all claims have been 

 adjudicated, when pro rata payments shall begin 

 and continue monthly. If Venezuela defaults in the 

 payment of one instalment Belgium shall adminis- 

 ter the customs at the two ports until all claims 

 as adjusted by mixed tribunals shall be satisfied. 

 Renewal of the Rebellion. The blockade, 

 which cut off President Castro's revenue and pre- 

 vented his getting supplies of ammunition, \\;is 

 the opportunity of the revolutionists, who still 

 maintained a small army in the field under Gen. 

 Rolando and held the Tuy valley. Gen. Matos 

 despatched a new expedition from Curasao to 

 the Goajira peninsula. Gen. Manuel Antonio Ma- 

 tos had already expended $2,000.000 in arming, 

 feeding, and paying the army of 10.000 men that 

 took the field in the summer. He had distin- 

 guished himself by bringing the Government out 

 of financial crises as Minister of Finance under 

 President Crespo and President Andrade, and he 



