THE TWO VENEZUELAN EPISODES
As a result of Blaine's unsuccessful attempt to force Great Britain to
relinquish her rights under the Clayton-Bulwer treaty the Monroe
Doctrine had fallen somewhat into disrepute when in 1895 it was suddenly
revived in a striking and sensational way by President Cleveland's
intervention in the Venezuelan boundary controversy. The dispute between
Great Britain and Venezuela in regard to the boundary line between the
latter and British Guiana was of long standing. In 1814, by treaty with
the Netherlands, Great Britain acquired "the establishments of Demerara,
Essequibo, and Berbice," now known as British Guiana. From that time on
the boundary line between British Guiana and Venezuela was a matter of
dispute. Venezuela always claimed the line of the Essequibo river.
In 1840, Sir Robert Schomburgk, acting under the instructions of the
British government, established a line some distance to the west of the
Essequibo river and marked it by monuments on the face of the country.
Venezuela at once protested. The British government explained that the
line was only tentative and the monuments set up by Schomburgk were
removed.
Various other lines were from time to time claimed by Great Britain,
each one extending the frontier of British Guiana farther and farther to
the west. The _British Colonial Office List_, a government publication,
in the issue for 1885, put the area of British Guiana at about 76,000
square miles. In the issue of the same list for 1886 the same statement
occurs in reference to British Guiana with the change of area to "about
109,000 square miles." Here was a gain of 33,000 square miles without
any statement whatever in explanation of how this additional territory
had been acquired.
After the failure of repeated efforts on the part of Venezuela to secure
an adjustment with England, she finally came to the conclusion in 1882
that the only course open to her was arbitration of the controversy. She
persistently urged arbitration, but Great Britain refused to submit to
arbitration any but a comparatively small part of the territory in
dispute. In 1887 Venezuela suspended diplomatic relations with Great
Britain, protesting "before her British majesty's government, before all
civilized nations, and before the world in general, against the acts of
spoliation committed to her detriment by the government of Great
Britain, which she at no time and on no account will recognize as
capable of altering in the least the rights which she has inherited from
Spain and respecting which she will ever be willing to submit to the
decision of a third power."
After repeated efforts to promote the reestablishment of diplomatic
relations between Venezuela and Great Britain and after repeated offers
of its good offices for the purpose of bringing about an adjustment of
the controversy, President Cleveland finally determined to intervene in
a more positive manner with a view to forcing, if need be, a settlement
of the controversy. This resolution on the part of the American
executive, with a full statement of its views on the general principles
involved in the dispute, was forwarded to Mr. Bayard for transmission to
the British government in Mr. Olney's dispatch of July 20, 1895.[244]
After reviewing the history of the controversy Mr. Olney stated in the
following concise form what he considered the important features of the
situation as it then existed:
1. The title to territory of indefinite but confessedly very
large extent is in dispute between Great Britain on the one
hand and the South American republic of Venezuela on the
other.
2. The disparity in the strength of the claimants is such
that Venezuela can hope to establish her claim only through
peaceful methods--through an agreement with her adversary
either upon the subject itself or upon an arbitration.
3. The controversy, with varying claims on the part of Great
Britain, has existed for more than half a century, during
which period many earnest and persistent efforts of
Venezuela to establish a boundary by agreement have proved
unsuccessful.
4. The futility of the endeavor to obtain a conventional
line being recognized, Venezuela for a quarter of a century
has asked and striven for arbitration.
5. Great Britain, however, has always and continuously
refused to arbitrate, except upon the condition of a
renunciation of a large part of the Venezuelan claim and of
a concession to herself of a large share of the territory in
controversy.
6. By the frequent interposition of its good offices at the
instance of Venezuela, by constantly urging and promoting
the restoration of diplomatic relations between the two
countries, by pressing for arbitration of the disputed
boundary, by offering to act as arbitrator, by expressing
its grave concern whenever new alleged instances of British
aggression upon Venezuelan territory have been brought to
its notice, the government of the United States has made it
clear to Great Britain and to the world that the controversy
is one in which both its honor and its interests are
involved and the continuance of which it cannot regard with
indifference.
The greater part of the dispatch was taken up with a discussion of the
bearing of the Monroe Doctrine upon the case and the most striking
feature of it was that the Monroe Doctrine was appealed to by name. Mr.
Olney's statement of the Monroe Doctrine is worthy of the most careful
consideration as it was the fullest and most definite official
construction of its meaning and scope that had been given to the world.
He said:
That America is in no part open to colonization, though the
proposition was not universally admitted at the time of its
first enunciation, has long been universally conceded. We
are now concerned, therefore, only with that other practical
application of the Monroe Doctrine the disregard of which by
an European power is to be deemed an act of unfriendliness
towards the United States. The precise scope and limitations
of this rule cannot be too clearly apprehended. It does not
establish any general protectorate by the United States over
other American states. It does not relieve any American
state from its obligations as fixed by international law,
nor prevent any European power directly interested from
enforcing such obligations or from inflicting merited
punishment for the breach of them. It does not contemplate
any interference in the internal affairs of any American
state or in the relations between it and other American
states. It does not justify any attempt on our part to
change the established form of government of any American
state or to prevent the people of such state from altering
that form according to their own will and pleasure. The
rule in question has but a single purpose and object. It is
that no European power or combination of European powers
shall forcibly deprive an American state of the right and
power of self-government and of shaping for itself its own
political fortunes and destinies.
Lord Salisbury's reply to Mr. Olney was given in two dispatches of the
same date, November 26, 1895, the one devoted to a discussion of the
Monroe Doctrine, the other to a discussion of the rights of the
controversy as between Great Britain and Venezuela. In the first
dispatch Lord Salisbury argued that Mr. Olney's views went far beyond
the scope of the Monroe Doctrine, that no attempt at colonization was
being made, and that no political system was being imposed upon any
state of South America. He also denied that the Monroe Doctrine was a
part of international law, since it had not received the consent of
other nations, and he utterly repudiated Mr. Olney's principle that
"American questions are for American discussion."
In the second dispatch of the same date Lord Salisbury enters fully into
the rights of the controversy between Great Britain and Venezuela,
controverting the arguments of the earlier part of Mr. Olney's dispatch,
which he characterizes as _ex parte_.
In view of the very positive character of Mr. Olney's dispatch and of
the assertion that the honor and interests of the United States were
concerned, the refusal of Great Britain to arbitrate placed the
relations of the two countries in a very critical position. The American
executive, however, had intervened for the purpose of settling the
controversy, peaceably if possible, forcibly if need be, and President
Cleveland did not now shrink from the logic of events. In a message to
Congress, December 17, 1895,[245] he laid before that body Mr. Olney's
dispatch of July 20, together with Lord Salisbury's reply. He not only
reaffirmed the soundness of the Monroe Doctrine and its application to
the case in question, but claimed for that principle of American
diplomacy a place in the code of international law.
In regard to the applicability of the Monroe Doctrine to the Venezuelan
boundary dispute Mr. Cleveland declared:
If a European power by an extension of its boundaries takes
possession of the territory of one of our neighboring
republics against its will and in derogation of its rights,
it is difficult to see why to that extent such European
power does not thereby attempt to extend its system of
government to that portion of this continent which is thus
taken. This is the precise action which President Monroe
declared to be "dangerous to our peace and safety," and it
can make no difference whether the European system is
extended by an advance of frontier or otherwise.
In regard to the right of the United States to demand the observance of
this principle by other nations, Mr. Cleveland said:
Practically the principle for which we contend has peculiar,
if not exclusive, relation to the United States. It may not
have been admitted in so many words to the code of
international law, but since in international councils every
nation is entitled to the rights belonging to it, if the
enforcement of the Monroe Doctrine is something we may
justly claim, it has its place in the code of international
law as certainly and as securely as if it were specifically
mentioned; and when the United States is a suitor before the
high tribunal that administers international law the
question to be determined is whether or not we present
claims which the justice of that code of law can find to be
right and valid. The Monroe Doctrine finds its recognition
in those principles of international law which are based
upon the theory that every nation shall have its rights
protected and its just claims enforced.
Mr. Cleveland concluded that the dispute had reached such a stage as to
make it incumbent upon the United States to take measures to determine
with sufficient certainty for its justification what was the true
divisional line between the republic of Venezuela and British Guiana. He
therefore recommended that Congress make an appropriation for the
expenses of a commission, to be appointed by the executive, which should
make the necessary investigations and report upon the matter with the
least possible delay. "When such report is made and accepted," he
continued, "it will, in my opinion, be the duty of the United States to
resist by every means in its power, as a willful aggression upon its
rights and interests, the appropriation by Great Britain of any lands or
the exercise of governmental jurisdiction over any territory which after
investigation we have determined of right belongs to Venezuela." "In
making these recommendations," he added, "I am fully alive to the
responsibility incurred and keenly realize all the consequences that may
follow."
The publication of this message and the accompanying dispatches created
the greatest excitement both in the United States and in England, and
called forth the severest criticism of the President's course.
The main grounds of this criticism were the contentions:
(1) That the Monroe Doctrine was not a part of international law and
therefore its observance as such could not be urged upon other nations.
(2) That it was not even an established principle of American diplomacy,
since the original declaration was merely a protest against apprehended
aggression on the part of a combination of European powers which had
long since ceased to threaten this continent.
(3) That even granting that the Monroe Doctrine was a declaration of
American policy, it was merely a policy and imposed no obligation on the
government to enforce it except where our interests were directly
concerned.
(4) That the occupation of a few thousand acres of uninhabited territory
by Great Britain, even if it did rightfully belong to Venezuela, was not
a matter that affected the interests of the United States one way or the
other or that threatened the permanence or stability of American
institutions.
(5) That granting the wisdom and correctness of the President's
position, the language of his message and of Mr. Olney's dispatch was
indiscreet at best and unnecessarily offensive to British pride.
It may be well to consider these objections in detail. In regard to the
first point it may be said that neither President Cleveland nor Mr.
Olney asserted or maintained that the Monroe Doctrine was a part of
international law by virtue of its assertion by President Monroe and
succeeding presidents. The position they took was that the Monroe
Doctrine was an American statement of a well recognized principle of
international law, viz., the right of a state to intervene in a
controversy between other states, when it deems its own interests
threatened. Mr. Cleveland declared: "The Monroe Doctrine finds its
recognition in those principles of international law which are based
upon the theory that every nation shall have its rights protected and
its just claims enforced." Mr. Olney's analysis of the doctrine was
clearer and more specific. He said: "That there are circumstances under
which a nation may justly intervene in a controversy to which two or
more other nations are the direct and immediate parties is an admitted
canon of international law." After discussing the general principle of
intervention, he adds: "We are concerned at this time, however, not so
much with the general rule as with a form of it which is peculiarly and
distinctively American."[246]
In answer to the second objection it is only necessary to refer to
accepted works on public law and to the official correspondence of the
state department to show that the Monroe Doctrine had for three-quarters
of a century been the cardinal principle of American diplomacy.[247]
The third point, namely as to the expediency of enforcing the Monroe
Doctrine in all cases of European aggression on this continent, raises
an important question. If, however, the Monroe Doctrine is a wise
principle and one which it is our interest to maintain, it is right that
it should be asserted on every occasion of its violation. The force of
precedent is so great that in the present state of international law,
it would be dangerous to do otherwise.
In the fourth place while it was perfectly true that the occupation of
the disputed territory by Great Britain could not in itself conceivably
endanger the peace and integrity of the United States, yet as the open
violation of a principle upon which we had laid so much stress we could
not in honor and dignity have overlooked it.
As to the tone of Mr. Olney's dispatch and of Mr. Cleveland's message,
it must be acknowledged that while the positions assumed were in the
main correct, the language was in some cases unfortunate, either from
vagueness or generalization. Thus Mr. Olney's statement, that "3,000
miles of intervening ocean make any permanent political union between a
European and an American state unnatural and inexpedient,"--whatever he
may have meant by it--appears in view of Great Britain's connection with
Canada, to have been both untrue and calculated to give offense.
Likewise Mr. Cleveland's reference to "the high tribunal that
administers international law" was too rhetorical a figure for a state
paper.
It has, indeed, been suggested that President Cleveland and Mr. Olney
deliberately undertook to play a bluff game in order to browbeat the
British government. In any case, it should be remembered that the test
of a diplomatic move is its success, and judged from this standpoint Mr.
Cleveland's Venezuelan policy was vindicated by the results. The British
government at once adopted the most friendly attitude and placed
valuable information in its archives at the disposal of the
commissioners appointed by President Cleveland to determine the true
boundary line. On November 12, 1896, before the final report of this
commission was made, a complete accord was reached between Great Britain
and the United States by which the terms of a treaty to be ratified by
Great Britain and Venezuela were agreed on, the provisions of which
embraced a full arbitration of the whole controversy. Lord Salisbury's
sudden change of front has been the subject of much interesting
speculation. How far he was influenced by the South African situation
has never been revealed, but it undoubtedly had its effect. President
Cleveland's message was sent to Congress December 17. Before the end of
the month came Dr. Jameson's raid into the Transvaal, and on the 3rd of
January the German Kaiser sent his famous telegram to Paul Kruger. The
attention of England was thus diverted from America to Germany, and Lord
Salisbury doubtless thought it prudent to avoid a rupture with the
United States in order to be free to deal with the situation in South
Africa.
The Anglo-Venezuelan treaty provided that an arbitral tribunal should be
immediately appointed to determine the true boundary line between
Venezuela and British Guiana. This tribunal was to consist of two
members nominated by the judges of the Supreme Court of the United
States and two members nominated by the British Supreme Court of Justice
and of a fifth selected by the four persons so nominated, or in the
event of their failure to agree within three months of their
appointment, selected by the king of Sweden and Norway. The person so
selected was to be president of the tribunal, and it was expressly
stipulated that the persons nominated by the Supreme Court of the
United States and England respectively might be members of said courts.
Certain general rules were also laid down for the guidance of the
tribunal.[248]
A treaty embodying substantially these proposals was signed by the
British and Venezuelan representatives at Washington, February 2, 1897.
The decision of the tribunal which met in Paris gave a large part of the
disputed area to Great Britain and this occasioned further criticism of
President Cleveland's action in bringing the United States and England
to the verge of war on what was termed an academic issue. The award was
a matter of secondary importance. The principle for which the United
States contended was vindicated when Great Britain agreed to arbitrate.
It was a great triumph of American diplomacy to force Great Britain just
at this time to recognize in fact, if not in words, the Monroe Doctrine,
for it was not long before Germany showed a disposition to question that
principle of American policy, and the fact that we had upheld it against
England made it easier to deal with Germany.
The attention of Europe and America was drawn to Venezuela a second time
in 1902 when Germany made a carefully planned and determined effort to
test out the Monroe Doctrine and see whether we would fight for it. In
that year Germany, England, and Italy made a naval demonstration against
Venezuela for the purpose of forcing her to recognize the validity of
certain claims of their subjects which she had persistently refused to
settle. How England was led into the trap is still a mystery, but the
Kaiser thought that he had her thoroughly committed and that if she
once started in with him she could not turn against him. But he had
evidently not profited by the experience of Napoleon III in Mexico forty
years earlier under very similar circumstances.
In the case of Germany, though the facts were somewhat obscured, the
real purpose of the intervention was to collect claims which originated
in contract between German subjects and the government of Venezuela. One
claim was for the recovery of interest seven years in arrears on five
per cent. bonds, for which Venezuelan customs were pledged as security.
Another was for seven per cent. dividends guaranteed by the Venezuelan
government on the capital stock of a railroad built by German subjects
at a cost of nearly $20,000,000. There were still other claims amounting
to about $400,000 for forced loans and military requisitions.[249]
These claims were brought to the attention of the United States
government by the German ambassador on December 11, 1901. Their dubious
character, regarded from the standpoint of international law, led
Germany to make what purported to be a frank avowal of her intentions to
the United States, and to secure for her action the acquiescence of that
government. Her ambassador declared that the German government had "no
purpose or intention to make even the smallest acquisition of territory
on the South American continent or the islands adjacent." This
precaution was taken in order to prevent a subsequent assertion of the
Monroe Doctrine. In conclusion the German ambassador stated that his
government had decided to "ask the Venezuelan government to make a
declaration immediately, that it recognizes in principle the correctness
of these demands, and is willing to accept the decision of a mixed
commission, with the object of having them determined and assured in all
their details." At the same time the British government demanded a
settlement of claims for the destruction of property and for the
ill-treatment and imprisonment of British subjects in the recent civil
wars, as well as a settlement of the foreign debt.
On December 16, 1901, Mr. Hay replied to the German note, thanking the
German government for its voluntary and frank declaration, and stating
that he did not consider it necessary to discuss the claims in question;
but he called attention to the following reference to the Monroe
Doctrine in President Roosevelt's message of December 3, 1901:
This doctrine has nothing to do with the commercial
relations of any American power, save that it in truth
allows each of them to form such as it desires. In other
words, it is really a guarantee of the commercial
independence of the Americas. We do not ask under this
doctrine for any exclusive commercial dealings with any
other American state. We do not guarantee any state against
punishment if it misconducts itself, provided that
punishment does not take the form of the acquisition of
territory by any non-American power.
A year later, after fruitless negotiations, the German government
announced to the United States that it proposed, in conjunction with
Great Britain and Italy, to establish a pacific blockade of Venezuelan
harbors. The United States replied that it did not recognize a pacific
blockade which adversely affected the rights of third parties as a
valid proceeding. The powers then proposed to establish a "warlike
blockade," but "without any declaration of war." This device was
resorted to at the suggestion of the German government, in order to
avoid a formal declaration of war, which could not be made without the
consent of the Bundesrath. Meanwhile, Venezuela's gunboats had been
seized and her ports blockaded, acts which Mr. Balfour admitted on the
floor of the House of Commons constituted a state of war; and on
December 20 a formal blockade was announced in accordance with the law
of nations, which created a status of belligerency.[250]
The hostilities thus commenced were brought to a close by the diplomatic
intervention of the United States. Acting under instructions from
Washington, the American minister Herbert W. Bowen succeeded in
persuading Venezuela to recognize in principle the claims of the foreign
powers and to refer them to mixed commissions for the purpose of
determining the amounts.[251] Great Britain and Italy agreed to this
arrangement, but the German Kaiser remained for a time obdurate. What
followed Germany's refusal to arbitrate is described in Thayer's "Life
and Letters of John Hay" in the following words:
One day, when the crisis was at its height, [President
Roosevelt] summoned to the White House Dr. Holleben, the
German Ambassador, and told him that unless Germany
consented to arbitrate, the American squadron under Admiral
Dewey would be given orders, by noon ten days later, to
proceed to the Venezuelan coast and prevent any taking
possession of Venezuelan territory. Dr. Holleben began to
protest that his Imperial master, having once refused to
arbitrate, could not change his mind. The President said
that he was not arguing the question, because arguments had
already been gone over until no useful purpose would be
served by repeating them; he was simply giving information
which the Ambassador might think it important to transmit to
Berlin. A week passed in silence. Then Dr. Holleben again
called on the President, but said nothing of the Venezuelan
matter. When he rose to go, the President asked him about
it, and when he stated that he had received nothing from his
government, the President informed him in substance that, in
view of this fact, Admiral Dewey would be instructed to sail
a day earlier than the day he, the President, had originally
mentioned. Much perturbed, the Ambassador protested; the
President informed him that not a stroke of a pen had been
put on paper; that if the Emperor would agree to arbitrate,
he, the President, would heartily praise him for such
action, and would treat it as taken on German initiative;
but that within forty-eight hours there must be an offer to
arbitrate or Dewey would sail with the orders indicated.
Within thirty-six hours Dr. Holleben returned to the White
House and announced to President Roosevelt that a dispatch
had just come from Berlin, saying that the Kaiser would
arbitrate. Neither Admiral Dewey (who with an American fleet
was then manoeuvering in the West Indies) nor any one else
knew of the step that was to be taken; the naval authorities
were merely required to be in readiness, but were not told
what for.
On the announcement that Germany had consented to arbitrate,
the President publicly complimented the Kaiser on being so
stanch an advocate of arbitration. The humor of this was
probably relished more in the White House than in the Palace
at Berlin.[252]
The Holleben incident, as narrated for the first time by Thayer, was
immediately called in question. It will be noted that Thayer does not
in any way quote Hay in the matter, and in the three volumes of "Diaries
and Letters" of John Hay, privately printed by Mrs. Hay in 1908, there
is no reference of any kind to the incident. It is evident that Thayer
got his report of the interview directly from Roosevelt himself. It is
said on good authority that while Colonel Roosevelt had no documentary
evidence to support his statements at the time that he gave them to
Thayer, such evidence came to hand in an interesting way shortly after
the appearance of the book. Two German-Americans who had been intimate
friends of Holleben promptly wrote to Colonel Roosevelt protesting, not
against the facts as stated, but against the use that was made of them.
Both correspondents stated that they had been told of the interview at
the time by Holleben. Admiral Dewey confirmed the statement as to the
preparedness of the fleet in a letter dated May 23, 1916, which was
published four days later in the New York _Times_. In it he said:
I was at Culebra, Porto Rico, at the time in command of a
fleet consisting of over fifty ships, including every
battleship and every torpedo-boat we had, with orders from
Washington to hold the fleet in hand and be ready to move at
a moment's notice. Fortunately, however, the whole matter
was amicably adjusted and there was no need for action.
In a speech delivered to several thousand Republican "Pilgrims" at
Oyster Bay, May 27, Colonel Roosevelt made the following interesting
comments on Dewey's letter:
Just today I was very glad to see published in the papers
the letter of Admiral Dewey describing an incident that
took place while I was President. When we were menaced with
trouble I acted up to my theory that the proper way of
handling international relations was by speaking softly and
carrying a big stick. And in that particular case Dewey and
the American fleet represented the big stick. I asked, on
behalf of the nation, the things to which we were entitled.
I was as courteous as possible. I not only acted with
justice, but with courtesy toward them. I put every
battleship and every torpedo-boat on the sea under the
American flag and Dewey, with instructions to hold himself
ready in entire preparedness to sail at a moment's notice.
That didn't mean that we were to have war. Dewey was the
greatest possible provocative of peace.[253]
After the agreement to arbitrate had been made, the situation was
further complicated by the demands of the blockading powers that the
sums ascertained by the mixed commissions to be due them should be paid
in full before anything was paid upon the claims of the peace powers.
Venezuela insisted that all her creditors should be treated alike. The
Kaiser, from what motives it is not quite clear, suggested that this
question should be referred to President Roosevelt, but as the United
States was an interested party, Secretary Hay did not think it would be
proper for the President to act, and it was finally agreed that the
demands for preferential treatment should be submitted to the Hague
Court.
During the summer of 1903 ten mixed commissions sat at Caracas to
adjudicate upon the claims of as many nations against Venezuela. These
commissions simply determined the amount of the claims in each case. The
awards of these commissions are very instructive, as they show the
injustice of resorting to measures of coercion for the collection of
pecuniary claims which have not been submitted to arbitration. Belgian
claimants demanded 14,921,805 bolivars and were awarded 10,898,643;
British claimants demanded 14,743,572 and were awarded 9,401,267; German
claimants demanded 7,376,685 and were awarded 2,091,908; Italian
claimants demanded 39,844,258 and were awarded 2,975,906; Spanish
claimants demanded 5,307,626 and were awarded 1,974,818; United States
claimants demanded 81,410,952 and were awarded 2,313,711.[254]
The decision of the Hague Court, which was rendered February 22, 1904,
held that the three allied powers were entitled to preferential
treatment; that Venezuela had recognized in principle the justice of
their claims while she had not recognized in principle the justice of
the claims of the pacific powers; that the neutral powers had profited
to some extent by the operations of the allies, and that their rights
remained for the future absolutely intact.[255] This decision, emanating
from a peace court, and indorsing the principle of armed coercion, was
received with no small degree of criticism.
During the discussions on the Venezuelan situation that took place in
Parliament in December, 1902, the members of the government repeatedly
repudiated the charge of the opposition that they were engaged in a
debt-collecting expedition, and tried to make it appear that they were
protecting the lives and liberties of British subjects. Lord Cranborne
declared:
I can frankly tell the House that it is not the claims of
the bondholders that bulk largest in the estimation of the
government. I do not believe the government would ever have
taken the strong measures to which they have been driven if
it had not been for the attacks by Venezuela upon the lives,
the liberty, and the property of British subjects.
During the same discussion, Mr. Norman said:
This idea of the British fleet being employed to collect the
debts of foreign bondholders is assuredly a mistaken one. It
was said by Wellington once that the British army did not
exist for the purpose of collecting certain debts. It is
still more true of the British fleet that it does not exist
for the purpose of collecting debts of bondholders. People
who lend money to South American republics know what the
security is and what they are likely to get in return, and
they ought not to have the British fleet at their backs.
To this Mr. Balfour, the prime minister, replied:
I do not deny--in fact, I freely admit--that bondholders may
occupy an international position which may require
international action; but I look upon such international
action with the gravest doubt and suspicion, and I doubt
whether we have in the past ever gone to war for the
bondholders, for those of our countrymen who have lent money
to a foreign government; and I confess that I should be very
sorry to see that made a practice in this country.
Against President Roosevelt's contention that the coercion of an
American state was not contrary to the Monroe Doctrine, provided that it
did "not take the form of acquisition of territory by any non-American
power," Signor Drago, Minister of Foreign Relations of the Argentine
Republic, vigorously protested in a note dated December 29, 1902.[256]
This note contained a restatement of the "Calvo doctrine," which takes
its name from a celebrated Argentine publicist. In his well-known book
on international law, Calvo contends that a state has no right to resort
to armed intervention for the purpose of collecting the private claims
of its citizens against another state. This doctrine, which has received
the indorsement of most of the Latin-American states, was applied to
public bonds in the note above referred to and is now usually known as
the "Drago doctrine." Signor Drago held, first, "that the capitalist who
lends his money to a foreign state always takes into account the
resources of the country and the probability, greater or less, that the
obligations contracted will be fulfilled without delay. All governments
thus enjoy different credit according to their degree of civilization
and culture, and their conduct in business transactions," and these
conditions are measured before making loans. Second, a fundamental
principle of international law is the entity and equality of all states.
Both the acknowledgment of the debt and the payment must be left to the
nation concerned "without diminution of its inherent rights as a
sovereign entity."
He said further:
As these are the sentiments of justice, loyalty, and honor
which animate the Argentine people and have always inspired
its policy, your excellency will understand that it has felt
alarm at the knowledge that the failure of Venezuela to meet
the payment of its public debt is given as one of the
determining causes of the capture of its fleet, the
bombardment of one of its ports and the establishment of a
rigorous blockade along its shores. If such proceedings were
to be definitely adopted they would establish a precedent
dangerous to the security and the peace of the nations of
this part of America. The collection of loans by military
means implies territorial occupation to make them effective,
and territorial occupation signifies a suppression or
subordination of the governments of the countries on which
it is imposed.
The doctrine so ably expounded by Dr. Drago attracted much attention
during the next few years and was given a place on the program of the
Third Pan American Conference held at Rio de Janeiro in July, 1906. Dr.
Drago had made his proposal as "a statement of policy" for the states of
the American continents to adopt. After full discussion the Rio
Conference decided to recommend to the governments represented "that
they consider the point of inviting the Second Peace Conference at The
Hague to consider the question of the compulsory collection of public
debts; and, in general, means tending to diminish between nations
conflicts having an exclusively pecuniary origin."[257]
As a result of this action the United States modified the regular
program prepared by Russia for the Second Hague Conference by reserving
the right to introduce the question of an "agreement to observe certain
limitations in the use of force in collecting public debts accruing from
contracts." General Horace Porter presented to The Hague Conference a
resolution providing that the use of force for the collection of
contract debts should not be permitted until the justice of the claim
and the amount of the debt should have been determined by arbitration. A
large number of reservations were introduced, but the following
resolutions were finally adopted by the votes of thirty-nine states,
with five states abstaining from voting:
The contracting powers agree not to have recourse to armed
force for the recovery of contract debts claimed from the
government of one country by the government of another
country as being due to its nationals.
This undertaking is, however, not applicable when the debtor
state refuses or neglects to reply to an offer of
arbitration, or, after accepting the offer, prevents any
"compromis" from being agreed on, or, after the arbitration,
fails to submit to the award.[258]
FOOTNOTES:
[244] For. Rel., 1895-96, Part I, p. 552.
[245] "Messages and Papers of the Presidents," Vol. IX, p. 655.
[246] Olney to Bayard, July 20, 1895.
[247] Moore's "Digest of Int. Law," Vol. VI, pp. 368-604, especially Mr.
Fish's Report on Relations with the Spanish-American Republics of July
14, 1870, pp. 429-431.
[248] Foreign Relations, 1896, p. 254.
[249] Foreign Relations, 1901, p. 193; 1903, p. 429.
[250] Foreign Relations, 1903, pp. 419, 454; Moore, "Digest of Int.
Law," Vol. VII. p. 140.
[251] Moore, "Digest of Int. Law," Vol. VI, p. 590.
[252] Thayer, "Life and Letters of John Hay," Vol. II, pp. 286-288.
[253] Washington _Post_, May 28, 1916.
[254] Venezuelan Arbitrations of 1903 (Sen. Doc. No. 316, Fifty-eighth
Cong., Second Sess.); Foreign Relations, 1904, p. 871.
[255] Foreign Relations, 1904, p. 506. For a full report of the case see
Sen. Doc. No. 119, Fifty-eighth Cong., Third Sess.
[256] Foreign Relations, 1903, p. 1.
[257] _Am. Journal of Int. Law_, Vol. II, p. 78.
[258] _Am. Journal of Int. Law_, Vol. II, Supplement, p. 82.