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contending parties; it provides a means of reconciling our interests and theirs without demanding an unconditional surrender on either side. But it does not do this without laying a very real burden on the United States." In other words, the Monroe Doctrine makes the United States a medium between the powers of Europe and South America.

We have even gone further than this, we have declared in the words of Secretary Olney, that the United States is “practically sovereign on this continent, and that its fiat is law upon the subject to which it confines its interposition.” Therefore European countries have the right to look to us to do that which we prevent them from doing. A curious result of this is that some of the American republics float loans in Europe, believing that the United States will not allow the governments of their European creditors forcibly to collect these loans.

Personally, I believe that it ought to be an adopted principle of international law that the armed intervention of creditor nations to collect bad debts on behalf of their bankers

and bondholders is forbidden.* If this principle were clearly understood and accepted, these bankers and underwriters would be far more particular to whom they loaned any great amount of money, and under what conditions. They would not be willing to take the risks which they now take, and many unfortunate financial tangles would never have a beginning. It is natural for a republic which has great undeveloped resources, muchoptimism, and a disregard of existing human handicaps, to desire to borrow large amounts of money in order to build expensive railroads and carry out desirable publicimprovements. It is equally natural that capitalists seeking good interest rates and secure investments should depend on the fact that if the debtor country attempts to default on its national loans, the government of the creditors will intervene with a strong arm. It is natural that the money should be forthcoming, even though a thorough, business-like, and scientific investigation of the possessions and

* The Second Hague Conference, in 1907, adopted a resolution favoring the limitation of the employment of force for the recovery of contract debts.

resources of the borrowing nation might show that the chances of her being able to pay interest, and eventually to return the capital, were highly problematical, and to be reckoned as very high risks.

Millions of dollars of such loans have been made in the past. It is perfectly evident that many of these loans cannot be repaid ; that the time is coming when the creditor nations will look to us as the policeman, or “elder brother,” of the western hemisphere, to see to it that the little boys pay for the candy and sweetmeats they have eaten.

The recent report of the British Corporation of Foreign Bondholders, which looks after the interests of foreign capitalists, shows that while Ecuador and Nicaragua are on the boundary line, Guatemala and Honduras are way over on the wrong side of the fence. In the words of the report: “Another year

of total default on its external debt has been carried to the discredit of the Guatemalan government. The act of Spoliation, by which the bondholders were arbitrarily robbed of the revenues specially assigned to them in consideration of the sacrifices to

which they were forced to submit, continues to stand as a shame and disgrace to the Republic. The Council have requested His Majesty's Government to take such steps as they may deem fit to demand the restitution to the bondholders of the security of which they have been deprived. . . . Honduras has succeeded in delaying the meeting of its foreign obligations for nearly forty years,

and there are no indications at present that the Government has become convinced of the necessity of putting an end to its longcontinued default, either by accepting the co-operation of American bankers in putting its finances in order, or by any other method."

It is currently reported that the British Foreign Office recently made urgent demands on Guatemala to take steps toward settling its constantly increasing national debt. It was reported in the English papers that Guatemala had appealed to Washington and the Monroe Doctrine. It appears to be impossible to find out exactly what happened. The worst of it is, the situation is bound to recur. Mexico has a large debt,

and, as is well known, local conditions have been growing steadily worse for the past two or three years. It is conceivable that the day may come when Mexico will default the interest on her bonds. The money is mostly owed abroad. Is it the duty of the United States to decide what the foreign bondholders may or may not do?

One cannot dodge the truth that the continuation of our support of this Doctrine implies that we will undertake to be responsible for the good behavior of all of the American nations.

The nature of this responsibility was more fully realized and more frankly expressed by President Roosevelt than by any of his predecessors. In a message to Congress in 1904, he said: “It is not true that the United States feels any land hunger or entertains any projects as regards other nations of the western hemisphere save such as are for their welfare. All that this country desires is to see the neighboring countries stable, orderly, and

prosperous. Any country whose people conduct themselves well can count upon our hearty friendship. If a nation shows that it

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