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ambassador is instructed to propose the signature of a protocol embodying all the points agreed upon, and reference of priority of claims question to The Hague, unless the President of the United States will pass upon it:)

Sir Michael llerbert to Mr. Hay.

No. 29.]

BRITISH EMBASSY,

Washington, February 6, 1903. Sir: On December 27 last the United States chargé d'affaires in London informed the Marquis of Lansdowne that the President of the United States had great pleasure in announcing to the Governments of Great Britain, Germany, Italy, and Venezuela that all of them had accepted in principle the proposal to refer all pending questions between them to The Hague tribunal.

The President, although unable to act as arbitrator himself, was good enough to state that if he could be of any further service in arranging the preliminaries of such a reference he would be glad to hold himself at the disposition of the powers concerned.

Mr. Bowen was subsequently commissioned by President Castro to proceed to Washington in order to arrange either the immediate settlement of the claims of the three powers or the preliminaries for submitting them to arbitration by The Hague tribunal.

Had Mr. Bowen expressed any preference for the second of these alternatives there seems no doubt that the blockade would have been raised in a few days. President Castro had agreed to the preliminary conditions insisted on by the blockading powers, including those having reference to the immediate settlement of the claims of the first rank, i. e., claims arising for the most part out of overt acts of violence and spoliation committed on the subjects of the blockading powers during the last few years.

For reasons, however, the weight of which His Majesty's Government do not desire to minimize, Mr. Bowen preferred to attempt a direct settlement, with the result that questions of considerable difficulty have been raised and a condition of things which His Majesty's Government earnestly desired to terminate has been unfortunately prolonged. Mr. Bowen has apparently felt himself precluded from coming to any arrangement which would not place all the powers claiming compensation from Venezuela upon precisely the same footing.

This seems to His Majesty's Government to be a course quite opposed both to principles of equity and to international practice. They could not assent to it except at the instance of some competent umpire or arbitration tribunal.

It must be remembered that no proposal of the kind was made until Mr. Bowen's arrival in Washington; that neither the President of the United States in his communications with His Majesty's Government nor any of the blockading powers, nor, so far as His Majesty's Government are aware, President Castro, had ever suggested making the neutral powers party to the controversy between the blockading powers and Venezuela. It must further be borne in mind that the preferential treatment for which the blockading powers have asked is not one which either exhausts the resources at the disposal of Venezuela for the payment of her external debt, or which interferes with what is known as the “ diplomatic debt,” a charge amounting to only 5.2 per cent on the total customs revenue of Venezuela. There can be no doubt that the neutral powers will be in a far better position under the proposals made by the blockading powers than they have ever been before, and this without any of the cost and trouble necessarily incidental to naval operations.

Under these circumstances it seems to His Majesty's Government that the most expeditious mode of terminating the hostilities would be to embody the conditions already accepted by Mr. Bowen on behalf of the Government of Venezuela, including those for the settlement of the first rank of claims, in a protocol to be signed at Washington, and to refer the proposal made by him for the identic treatment of all the creditor powers to The Hague tribunal, unless, indeed, the President of the United States would be prepared, in the interest of a speedy settlement, to decide the single point which appears to stand in the way of a complete agreement between the blockading powers and Venezuela

Should the President consent to adopt this suggestion the following questions would have to be adjudicated upon by him:

1. Whether the three powers are not entitled to a separate settlement, provided this settlement leaves an adequate margin for the payment of claims of the other powers, having regard to the resources of Venezuela.

2. If the answer to the first question is in the affirmative, then what are the terms of payment which would leave such adequate margin?

3. If the answer to the first question is in the negative, then is it not equitable that some compensation should be made by Venezuela to the three powers for the expense which they have incurred in connection with the blockade?

It is, perhaps, unnecessary for me to state, in conclusion, that His Majesty's Government would accept the good offices of the President of the United States with feelings of the greatest gratification. I have, etc.,

MICHAEL H. HERBERT.

Mr. Ilay to Sir Michael II. Herbert.

No. 66.]

DEPARTMENT OF STATE,

Washington, February 6, 1903. EXCELLENCY: I have the honor to acknowledge receipt of your note of the 6th of February, which I have submitted to the President. He charges me to say that, although he appreciates fully the honor done him by this renewed offer from the British, the German, and the Italian Governments to act as arbitrator between those Governments and that of Venezuela, yet in the present situation, considering that his services in that capacity would not substantially expedite the conclusion of the pending negotiation, he sees no reason for changing the view he has hitherto held, that in such a case the high court of The Hague,

which was created by the principal civilized powers for precisely such emergencies, is preferable to any individual chief of state.

He requests me, therefore, in expressing his conviction that it would not be best for him to accept the honorable service you have suggested, to express also his grateful appreciation of your confidence. I am, etc.,

John HAY.

Mr. White to Mr. Ilay.

LON

No. 1052.]

AMERICAN EMBASSY,

London, February 10, 1903. SIR: * * * - I have visited the foreign office daily and have had interviews on each occasion with Lord Lansdowne or Mr. Villiers, sometimes with both, in order to keep in close touch with the situation and in the hope of being able to telegraph you that the signature of the protocols might be very shortly expected, but I am unfortunately not yet in a position to do so.

It would seem, however, that Great Britain has arrived at a settlement with Mr. Bowen, who, I understand, is prepared to sign the protocols forwarded to the British ambassador at Washington for that purpose, but that the demands of Germany for preferential treatment of her first rank claims bar the way to a signature by the tbree blockading powers of the protocols and to the consequent raising of the blockade.

There can be no doubt that this Government is exceedingly anxious to reach a settlement and to raise the blockade, especially before the opening of Parliament on the 17th, and that they are making every effort to induce the other two blockading powers to sign the protocols. I have, etc.,

HENRY WHITE.

Mr. White to Mr. Ilay.
[Telegram.- Paraphrase.]
EMBASSY OF THE UNITED STATES,

London, February 14, 1903. (Mr. White reports that he has just been informed at the foreign office that orders have been cabled this date to raise the blockade of Venezuelan ports.)

Mr. White to Mr. Hay. No. 1058.]

AMERICAN EMBASSY,

London, February 14, 1903. SIR: * * *

It is with great satisfaction that I have just heard, through the foreign office, of the signature at Washington yesterday of the protocols, which, as you will infer from your previous knowledge of the state of public feeling in this country with regard to the Venezuelan difficulty, and particularly to the agreement to cooperate with Germany, will cause as much pleasure and relief from anxiety to the Government and people of this country as to our own.

In view of the close of what I hope will turn out to be the only critical period of the controversy, I deem it proper to emphasize the great regard which has been shown throughout by His Majesty's Government, not only for the Monroe doctrine, which Mr. Balfour truly said last night “has no enemies in this country," but also for the views and wishes of our Government and for the feelings of our people. . I have had occasion to visit the foreign office nearly every day and Lord Lansdowne's private residence, frequently out of foreign office hours, since the Venezuelan question became acute early in December, either to carry out instructions received from you, or to ascertain, with a view to keeping you properly informed at as early a date as practicable, the condition of the negotiations, and I have always found every readiness and even desire on the part of Lord Lansdowne and bis subordinates to give me the fullest information as to the instructions sent to Sir Michael Herbert, and as to the communications between this Government and those of the other two cooperating powers.

Just before closing this dispatch I have had the further satisfaction of ascertaining from the foreign office that orders have been cabled to the commander of His Majesty's naval forces in Venezuelan waters to raise the blockade. I have, etc.,

HENRY WHITE.

Mr. Choate to Mr. llay.

No. 1066.]

AMERICAN EMBASSY,

London, February 19, 1903. Sir: I have the honor to inclose herewith copies of an extract from the London Gazette of the 17th instant, which I have received from the foreign office, containing a notification announcing that the blockade of the ports of La Guay ra, Carenero, Guanta, Cumana, Carupano, and the mouths of the Orinoco, by a British naval force, which was established on the 20th of December, 1902, has been raised' from midnight, 14th-15th February. I have, etc.,

JOSEPH H. CHOATE.

[Inclosure.]
[Extract from the London Gazette of Tuesday, February 17, 1903.]

FOREIGN OFFICE, February 17, 1903. It is hereby notified that the Marquis of Lansdowne, K. G., His Majesty's principal secretary of state for foreign affairs, has received, through the lords commissioners of the admiralty, a telegraphic dispatch from Vice-Admiral Sir Archibald Douglas, commander in chief on the North America and West Indies station, announcing that he has issued a notification to the effect that the blockade of the ports of La Guayra, Carenero, Guanta, Cumana, Carupano, and the mouths of the Orinoco, by a British naval force, established on the 20th of December, 1902 (of which notice was given in the London Gazette of that date), is raised from midnight, 14th-15th February.

NOTE.—Continuation of this correspondence and negotiations at The Hague will appear in the volume of Foreign Relations for 1904.

PROTOCOL OF AGREEMENT BETWEEN VENEZUELA AND GREAT BRITAIN-TO WHICH THE UNITED STATES AND OTHER POWERS ARE PARTIES-RESPECTING THE REFERENCE OF THE QUESTION OF THE PREFERENTIAL TREATMENT OF CLAIMS TO THE TRIBUNAL AT THE HAGUE.

Signed at Washington May 7, 1903.

Whereas Protocols have been signed between Venezuela on the one hand, and Great Britain, Germany, Italy, United States of America, France, Spain, Belgium, the Netherlands, Sweden and Norway, and Mexico, on the other hand, containing certain conditions agreed upon for the settlement of claims against the Venezuelan Government;

And whereas certain further questions arising out of the action taken by the Governments of Great Britain, Germany and Italy, in connection with the settlement of their claims, have not proved to be susceptible of settlement by ordinary diplomatic methods;

And whereas the Powers interested are resolved to determine these questions by reference to arbitration in accordance with the provisions of the Convention for the Pacific Settlement of International Disputes, signed at The Hague on the 29th July, 1899;

The Governments of Venezuela and Great Britain have, with a view to carry out that Resolution, authorized their Representatives, that is to say:

For Venezuela, Mr. Herbert W. Bowen, duly authorized thereto by the Government of Venezuela, and for Great Britain His Excellency Sir Michael Henry Herbert G. C. M. G., C. B., His Britannic Majesty's Ambassador Extraordinary and Plenipotentiary to the United States of America, to conclude the following Agreement.

ARTICLE I. .

The question as to whether or not Great Britain, Germany and Italy are entitled to preferential or separate treatment in the payment of their claims against Venezuela shall be submitted for final decision to the Tribunal at The Hague.

Venezuela having agreed to set aside thirty per cent of the Cus. toms Revenues of La Guaira and Puerto Cabello for the payment of the claims of all nations against Venezuela the Tribunal at the Hague shall decide how the said revenues shall be divided between the Blockading Powers on the one hand and the other Creditor Powers on the other hand, and its decision shall be final.

If preferential or separate treatment is not given to the Blockading Powers, the Tribunal shall decide how tbe said revenues shall be distributed among all the Creditor Powers, and the Parties hereto agree that the Tribunal in that case shall consider, in connection with the payment of the claims out of the 30 per cent, any preference or pledges of revenue enjoyed by any of the Creditor Powers and shall accordingly decide the question of distribution so that no Power shall obtain preferential treatment, and its decision shall be final.

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