THE BOND ISSUES
I
The sales of United States bonds in the years 1894, 1895, and 1896 for the purpose of replenishing the stock of gold in the public Treasury have been greatly misunderstood by many honest people, and often deliberately misrepresented.My conviction that a love of fairness still abides with the masses of our people has encouraged me to give a history of these transactions for the benefit of those who are uninformed or have been misled concerning them. In undertaking this task I shall attempt to avoid unprofitable and tiresome explanation; but I shall, nevertheless, indulge in the recital of details to such an extent as may appear necessary to an easy understanding of the matter in hand. I desire, above all things, to treat the subject in such a way that none who read my 122narrative will be confused by the use of obscure or technical language.
The Government’s gold reserve, as it is usually known, originated under the provision of an act of Congress passed January 14, 1875, entitled, “An Act to provide for the resumption of specie payments.” This law contemplated the redemption in gold and the retirement of the currency obligations legally known as United States notes, but commonly called greenbacks; and it provided that such notes in excess of $300,000,000 should be redeemed and retired prior to January 1, 1879, and that after that date all the remainder of such notes should be likewise redeemed and canceled. This law further provided that “to enable the Secretary of the Treasury to prepare and provide for such redemption” he should have the authority “to issue, sell and dispose of” bonds of the United States which were therein particularly specified. Of course this authority was given to the Secretary of the Treasury in order that, by the sale of Government bonds, he could accumulate a sufficient gold fund or reserve to meet the demands of the gold redemption provided for, and accomplish the ultimate retirement of all the United States notes in circulation.
In compliance with this act, the sum of about 123$92,000,000 in gold was realized by the sale of bonds, and about $41,000,000, in addition, was obtained from surplus revenue; and thereupon the contemplated redemption was entered upon. But after the retirement and cancelation of only about $30,000,000 of these notes, and on the thirty-first day of May, 1878, this process was interrupted by the passage of an act forbidding their further retirement or cancelation, and providing that any such notes thereafter redeemed should not be canceled or destroyed, but should be “reissued and paid out again and kept in circulation.” At the time this act was passed the United States notes uncanceled and still outstanding amounted to $346,681,016. It will be observed that though the actual retirement of these notes was prohibited, their redemption in gold was still continued, coupled with the condition that, though thus redeemed, they should be still kept on foot and again put in circulation as a continuing and never-ending obligation of the Government, calling for payment in gold—not once alone, but as often as their reissue permitted, and without the least regard to prior so-called redemptions. It will be also observed that this prohibition of cancelation intervened seven months prior to January 1, 1879, the date when the general and unrestricted 124redemption and retirement of all these outstanding notes was, under the terms of the act of 1875, to commence. At the time when their further cancelation was thus terminated there remained of the gold which had been provided as a reserve for their redemption about $103,000,000. This is the fund which has since then been called the “gold reserve.”
In point of fact, this reserve was thereafter made up of all the net gold held by the Government; and its amount at any particular date was ascertained by deducting from the entire stock of gold in the Treasury the amounts covered by outstanding gold certificates, which instruments resemble a bank’s certificate of deposit, and are issued by the Secretary of the Treasury to those making with the Government specific deposits of gold, to be returned to the holders of the certificates on demand. Of course the gold thus held for certificate-holders is not available for the redemption of United States notes.
In the year 1882 a law was passed by Congress which provided that the Secretary of the Treasury should suspend the issue of these gold certificates “whenever the amount of gold coin and gold bullion in the Treasury, reserved for the redemption of United States notes, falls below 125$100,000,000.” Whatever may have been the actual relationship between gold certificates representing gold deposited for their redemption, and the gold kept on hand for the redemption of United States notes, the provision of law just quoted seems to have been accepted as a statutory recognition of the fact that our gold reserve for note redemption should have for its lowest limit this sum of $100,000,000. It is a singular circumstance that until very lately, when this reserve was increased and fixed at $150,000,000, no Act of Congress actually provided, or in any way expressly stated, what the limits of this gold reserve for redemption purposes should be; and it is no less singular that this provision in the law of 1882 fixed its lowest safe limit as perfectly and authoritatively in the understanding of our people as it could have been done by a distinct legislative requirement. At the time this reserve was created, as well as when the actual cancelation of United States notes after redemption was prohibited, it evidently was thought by those directing our nation’s financial affairs that the sum of $100,000,000 in net gold actually in hand, especially with such additions as might naturally be expected to reach the fund by way of surplus revenue receipts, 126or otherwise, would constitute a sufficient gold reserve to redeem such of these notes still left outstanding as might be presented, and that the assurance of their gold redemption when presented would keep them largely in circulation. This scheme seemed for a time to be abundantly vindicated by the people’s contentment with the sufficiency of the redemption reserve, and by their willingness to keep in circulating use these United States notes as currency more convenient than gold itself.
Another most important condition of mind among the people, however, grew out of, or at least accompanied, their acceptance of the redemptive sufficiency of the gold reserve as constituted. The popular belief became deep-seated and apparently immovable that the reduction of this gold reserve to an amount less than $100,000,000 would, in some way, cause a disastrous situation, and perhaps justify an apprehension concerning our nation’s financial soundness. Thus a gold reserve containing at all times at least $100,000,000 came to be regarded by the people with a sort of sentimental solicitude, which, whatever else may be said of it, was certainly something to be reckoned with in making our national financial calculations.
That the plans thus set on foot for the so-called 127redemption of the United States notes outstanding promised to be adequate and effective is seen in the fact that the gold reserve, starting at the end of June, 1878, with about $103,500,000, never afterward fell as low as $100,000,000 until April, 1893, and that sometimes in its fluctuations during this interval of twenty-five years it amounted to upward of $200,000,000. Under conditions then existing popular confidence was well established, the reserve satisfactorily endured the strain of all redemption demands, and United States notes were kept well in circulation as money.
In an evil hour, however, a legislative concession was made to a mischievous and persistent demand for the free and unlimited coinage of silver. This concession was first exhibited in an act of Congress passed in 1878, directing the expenditure of not less than $2,000,000 nor more than $4,000,000 each month by the Secretary of the Treasury in the purchase of silver bullion, and the coinage of such bullion into silver dollars. Though this act is not in itself so intimately related to my subject as to require detailed explanation, it was the forerunner of another law of Congress which had much to do with creating the financial conditions that necessitated 128the issuance of Government bonds for the reinforcement of the gold reserve.
This law was passed in 1890, and superseded the provision of the law of 1878 directing the purchase and coinage of silver. In lieu of these provisions the Secretary of the Treasury was thereby directed to purchase silver bullion from time to time in each month to the aggregate amount of 4,500,000 ounces, or as much as might be offered, at the market price, not to exceed, however, a limit therein fixed. It was further provided that there should be issued, in payment of such purchases of silver bullion, Treasury notes of the United States in denominations not less than one dollar nor more than $1000; that such notes should be redeemable in coin, and should “be a legal tender in payment of all debts, public and private, except where otherwise expressly stipulated in the contract, and should be receivable for customs, taxes and all public dues”; and that when they were redeemed or paid into the Treasury they might be reissued. The Secretary of the Treasury was directed to coin into silver dollars in each month until the first day of July, 1891, 2,000,000 ounces of the silver so purchased, and thereafter so much as might be necessary to provide for the redemption of the notes issued in payment 129for the silver from time to time purchased under the act.
I have recited these provisions by way of leading up to the proposition that, under the law of 1890, the burden upon the gold reserve was tremendously enlarged. It will be readily seen that it forced larger monthly purchases of silver than were required under the prior act, and that, instead of providing for silver dollars, which as coins, or certificates of deposit representing such coins, should circulate as silver currency, unredeemable in gold as was done under the act of 1878, it directed that in payment of such purchases a new obligation of the Government, redeemable in coin, should be issued and added to our circulating medium.
It is, however, only when we examine the specific provision for the redemption of these notes that we discover in its full extent the harmful relationship of this new device to the integrity of the gold reserve. At its outset the redemption clause of the act courageously and manfully gave to the Secretary of the Treasury the authority to redeem such notes in gold or silver at his discretion; but in its ending it fell down a pitiful victim of the silver craze. The entire clause is in these words: “That upon demand of the holder of any of the Treasury 130notes herein provided for, the Secretary of the Treasury shall, under such regulations as he may provide, redeem such notes in gold or silver coin at his discretion, it being the established policy of the United States to maintain the two metals at a parity with each other upon the present legal ratio, or such ratio as may be provided by law.”
According to the legal ratio then existing, which has never been changed, the average intrinsic gold value of a silver dollar as compared with a gold dollar was, during the year 1891, about seventy-six cents, during 1892 a trifle more than sixty-seven cents, and during 1893 about sixty cents.
It is hardly necessary to say that the assertion in the act of “the established policy of the United States to maintain the two metals at a parity” had the effect of transferring the discretion of determining whether these Treasury notes should be redeemed in gold or silver, from the Secretary of the Treasury to the holder of the notes. Manifestly, in the face of this assertion of the Government’s intention, a demand for gold redemption on the part of the holders of such notes could not be refused, and the acceptance of silver dollars insisted upon, without either subjecting to doubt the good 131faith and honest intention of the Government’s professions, or creating a suspicion of our country’s solvency. The parity between the two metals could not be maintained, but, on the contrary, would be distinctly denied, if the Secretary of the Treasury persisted in redeeming these notes, against the will of the holders, in dollars of silver instead of gold.
Therefore it came to pass that the Treasury notes issued for the purchase of silver under the law of 1890 took their place by the side of the United States notes, commonly called greenbacks, as demands against our very moderate and shifting gold reserve.
It should have been plainly apparent to all who had eyes to see that the monetary scheme, thus additionally burdened, was adequate and safe only in smooth financial weather, and was miserably calculated to resist any disturbances in public confidence, or the rough waves of business emergencies. The proof of this was quickly forthcoming.
The new Treasury notes made their first appearance as part of our money circulation in August, 1890; and at the close of that month the gold reserve amounted to $185,837,581. During the next month it fell off about $38,000,000, reducing the amount on the last day of September 132to nearly $148,000,000; and with a few slight spasmodic rallies it continued to decrease until the sale of bonds for its replenishment.
In the latter part of 1892 and the first months of 1893, these Treasury notes having, in the meantime, very greatly multiplied, the withdrawals of gold from the Treasury through the redemption of these as well as the United States notes strikingly increased; and the fact that by far the larger part of the gold so withdrawn was shipped abroad plainly showed that foreign investors in American securities had grave apprehensions as to our ability to continue to redeem all these notes in gold and thus maintain the integrity and soundness of our financial condition.
I succeeded Mr. Harrison in the Presidency on the fourth day of March, 1893; and on the seventh of that month Mr. Carlisle became Secretary of the Treasury. The gold reserve on that day amounted to $100,982,410—only $982,410 in excess of the sum that had come to be generally regarded as indicating the danger line. The retiring Secretary of the Treasury, appreciating the importance of preventing the fall of the reserve below this limit, had just before his retirement directed the preparation of plates for the engraving of bonds so that 133he might by their sale obtain gold to reinforce the fund. I have heard him say within the last few years that he expected before the close of his term to resort to bond sales for the purpose of such reinforcement, unless prevented at the last moment by the President’s disapproval. Of course it is but natural that any one directing the affairs of the Treasury Department should be anxious to avoid such an expedient; and Secretary Foster avoided it, and barely saved the reserve from falling below the $100,000,000 mark during his term, by effecting arrangements, in January and February, 1893, with certain bankers in New York, by which he obtained from them in exchange for United States notes, or on other considerations, something over $8,000,000 in gold, which enabled him to escape the sale of bonds in aid of the reserve.
With the gold reserve lower than it had ever been since its creation in 1878, and showing an excess of less than $1,000,000 above the supposed limit of disaster, and with the demand for gold redemption of Government currency obligations giving no sign of abatement, the prospect that greeted the new administration was certainly not reassuring. In our effort to meet the emergency without an issue of bonds Secretary 134Carlisle immediately applied to banks in different localities for an exchange with the Government of a portion of their holdings of gold coin for other forms of currency. This effort was so far successful that on the 25th of March the gold reserve amounted to over $107,000,000, notwithstanding the fact that considerable withdrawals had been made in the interval. The slight betterment thus secured proved, however, to be only temporary; for under the stress of continued and augmented withdrawals, the gold reserve, on the twenty-second day of April, 1893, for the first time since its establishment, was reduced below the $100,000,000 limit—amounting on that day to about $97,000,000.
Though this fall below the minimum theretofore always maintained was not followed by any sudden and distinctly new disaster, it had the effect of accelerating withdrawals of gold. It became apparent that there had intervened a growing apprehension among the masses of our own people concerning the Government’s competency to continue gold redemption, with the result that a greatly increased proportion of the amount withdrawn from the gold reserve, instead of going abroad to satisfy the claims of foreigners or as a basis of commercial exchange, 135was hoarded by our citizens at home as a precaution against possible financial distress. In the meantime, nearly the entire gold receipts in payment of customs and other revenue charges had ceased. To meet this situation strenuous efforts were made by the Secretary of the Treasury to improve the condition by resorting again to the plan of exchanging for gold other forms of currency, with some success, while in the month of August, 1893, gold revenue receipts were temporarily considerably stimulated. Thus a fleeting gleam of hope was given to the dark surroundings.
In these troublous times those charged with the administration of the Government’s financial affairs could not fail to recognize in the law of 1890, directing the monthly purchase of silver and the issuance in payment therefor of Treasury notes in effect redeemable in gold, a prolific cause of our financial trouble. Accordingly, a special session of Congress was called to meet on the seventh day of August, 1893, to repeal this law, and thus terminate the creation of further demands upon our already overburdened and feeble gold reserve. The repealing act was quite promptly passed in the House of Representatives on the twenty-eighth day of August; but, on account of vexatious 136opposition in the Senate, the repeal was not finally effected until the first day of November, 1893, and then only after there had been added to the act an inopportune repetition of the statement concerning the Government’s intention to maintain the parity of both gold and silver coins. 137
II
The effect of this repeal in its immediate results failed to quiet the fear of impending evil now thoroughly aroused; nor were all the efforts thus far made to augment the gold reserve effective as against the constant process of its depletion.On the seventeenth day of January, 1894, the Government was confronted by a disquieting emergency. The gold reserve had fallen to less than $70,000,000, notwithstanding the most diligent efforts to maintain it in sounder condition. Against this slender fund gold demands amounting to not less than $450,000,000 in United States notes and Treasury notes were in actual circulation, and others amounting to about $50,000,000, in addition, were temporarily held in the Treasury subject to reissue—the entire volume, by peremptory requirement of law, remaining uncanceled even after repeated redemption; nor was there any promise of a cessation of the abnormal and exhausting drain of gold then fully under way. Another factor 138in the situation, most perplexing and dangerous, was the distrust, which was growing enormously, regarding the wisdom and stability of our scheme of finance. As a result of these conditions there loomed in sight the menace of the destruction of our gold reserve, the repudiation of our gold obligations, the humiliating fall of our nation’s finances to a silver basis, and the degradation of our Government’s high standing in the respect of the civilized world.
There was absolutely but one way to avert national calamity and our country’s disgrace; and this way was adopted when, on the seventeenth day of January, 1894, the Secretary of the Treasury issued a notice that bids in gold would be received until the first day of February following for $50,000,000 in bonds of the United States, redeemable in coin at the pleasure of the Government after ten years from the date of their issue, and bearing interest at the rate of five per cent. per annum. It was further stated in the notice that no bid would be considered that did not offer a premium on said bonds of a fraction more than seventeen per cent., which would secure to the purchaser an investment yielding three per cent. per annum.
It should here be mentioned that the only Government bonds which could be sold in the 139manner and for the purpose contemplated were such as were authorized and described in a law passed in 1870, and which were designated in the law of 1875 providing for the redemption of United States notes as the kind of bonds which the Secretary of the Treasury was permitted to sell to enable him “to prepare and provide for” such redemption. The issues of bonds thus authorized were of three descriptions: one payable at the pleasure of the Government after ten years from their date, and bearing interest at the rate of five per cent.; one so made payable after fifteen years from their date, bearing four and a half per cent. interest; and one in like manner made payable after thirty years from their date, bearing interest at the rate of four per cent. The five per cent. bonds were specified in the Secretary’s offer of sale because on account of their high rate of interest they would command a greater premium, and therefore a larger return of gold, and for the further reason that the option of the Government regarding their payment could be earlier exercised.
The withdrawals of gold did not cease with the offer to sell bonds for the replenishment of the reserve, and on the day before the date limited for the opening of bids the fund had decreased 140to less than $66,000,000. In the meantime, the perplexity of the situation, already intense, was made more so by the fact that the bids for bonds under the offer of the Secretary came in so slowly that a few days before the 1st of February, when the bids were to be opened, there were plain indications that the contemplated sale would fail unless prompt and energetic measures were taken to avoid such a perilous result.
Thereupon the Secretary of the Treasury invited to a conference, in the city of New York, a number of bankers and presidents of moneyed institutions, which resulted in so arousing their patriotism, as well as their solicitude for the protection of the interests they represented, that they effectively exerted themselves, barely in time to prevent a disastrous failure of the sale. The proceeds of this sale, received from numerous bidders large and small, aggregated $58,660,917.63 in gold, which so increased the reserve that on the sixth day of March, 1894, it amounted to $107,440,802.
It was hoped that this measure of restoration and this exhibition of the nation’s ability to protect its financial integrity would allay apprehension and restore confidence to such an extent as to render further bond sales unnecessary. 141It was soon discovered, however, that the complications of our ill condition were so deep-seated and stubborn that the treatment resorted to was only a palliative instead of a cure.
On the last day of May, 1894, less than three months after its reinforcement, as mentioned, the gold reserve had been again so depleted by withdrawals that it amounted to only $78,693,267. An almost uninterrupted downward tendency followed, notwithstanding constant efforts on the part of the Government to check the fall, until, on the fourteenth day of November, 1894, the fund had fallen to $61,878,374. In the meantime, the inclination of our timid citizens to take gold from the reserve for hoarding “had grown by what it fed on,” while large shipments abroad to meet foreign indebtedness or for profit still continued and increased in amount.
In these circumstances the inexorable alternative presented itself of again selling Government bonds for the replenishment of its redemption gold, or assuming the tremendous risk of neglecting the safety and permanence of every interest dependent upon the soundness of our national finances. An obedient regard for official duty made the right path exceedingly plain. 142
On the day last mentioned a public proposal was issued inviting bids in gold for the purchase of additional five per cent. bonds to the amount of $50,000,000. Numerous bids were received under this proposal, one of which, for “all or none” of the bonds, tendered on behalf of thirty-three banking institutions and financiers in the city of New York, being considerably more advantageous to the Government than all other bids, was accepted, and the entire amount was awarded to these parties. This resulted in adding to the reserve the sum of $58,538,500.
The president at that time of the United States Trust Company, one of the strongest and largest financial institutions in the country, rendered most useful and patriotic service in making both this and the previous offer of bonds successful; and his company was a prominent purchaser on both occasions. He afterward testified under oath that the accepted bid for “all or none,” in which his company was a large participant, proved unprofitable to the bidders.
The payment of gold into the Treasury on account of this sale of bonds was not entirely completed until after the 1st of December, 1894. Then followed a time of bitter disappointment 143and miserable depression, greater than any that had before darkened the struggles of the Executive branch of the Government to save our nation’s financial integrity.
The addition made to the gold reserve by this completed transaction seemed to be of no substantial benefit, if, on the contrary, it did not actually stimulate the disquieting factors of the situation. In December, 1894, during which month $58,538,500 in gold, realized from this second sale of bonds, was fully paid in and added to the reserve, the withdrawals from the fund amounted to nearly $32,000,000; and this was followed in the next month, or during January, 1895, by a further depletion in the sum of more than $45,000,000.
In view of the crisis which these suddenly increased withdrawals seemed to portend, the aid of Congress was earnestly invoked in a special presidential message to that body, dated on the 28th of January, 1895, in which the gravity and embarrassment of the situation were set forth in the following terms:
The real trouble which confronts us consists in a lack of confidence, widespread and constantly increasing, in the continuing ability or disposition of the Government to pay its obligations in gold. This lack of confidence grows to some extent out of the 144palpable and apparent embarrassment attending the efforts of the Government under existing laws to procure gold, and to a greater extent out of the impossibility of either keeping it in the Treasury or canceling obligations by its expenditure after it is obtained....After giving a history of the bond issues already made to replenish the reserve, and of their results, it was further stated:
The most dangerous and irritating feature of the situation, however, remains to be mentioned. It is found in the means by which the Treasury is despoiled of the gold thus obtained (by the sale of bonds) without canceling a single Government obligation, and solely for the benefit of those who find profit in shipping it abroad, or whose fears induce them to hoard it at home. We have outstanding about $500,000,000 of currency notes of the Government for which gold may be demanded, and, curiously enough, the law requires that when presented, and, in fact, redeemed and paid in gold, they shall be reissued. Thus the same notes may do duty many times in drawing gold from the Treasury; nor can the process be averted so long as private parties, for profit or otherwise, see an advantage in repeating the operation. More than $300,000,000 of these notes have been redeemed in gold, and, notwithstanding such redemption, they are still outstanding.
The financial events of the past year suggest facts and conditions which should certainly arrest attention. More than $172,000,000 in gold have been 145drawn out of the Treasury during the year for the purpose of shipment abroad or hoarding at home.Following a reference to existing differences of opinion in regard to the extent to which silver should be coined or used in our currency, and the irrelevancy of such differences to the matter in hand, the message continued:
While nearly $103,000,000 was drawn out during the first ten months of the year, a sum aggregating more than two-thirds of that amount, being about $69,000,000, was drawn out during the following two months, thus indicating a marked acceleration of the depleting process with the lapse of time.
While I am not unfriendly to silver, and while I desire to see it recognized to such an extent as is consistent with financial safety and the preservation of national honor and credit, I am not willing to see gold entirely banished from our currency and finances. To avert such a consequence I believe thorough and radical remedial legislation should be promptly passed. I therefore beg the Congress to give the subject immediate attention.After recommending the passage of a law authorizing the issue of long-term bonds, bearing a low rate of interest, to be used for the maintenance of an adequate gold reserve and in exchange for outstanding United States notes and Treasury notes for the purpose of their cancelation, and after giving details of the proposed 146scheme, the message concluded as follows:
In conclusion, I desire to frankly confess my reluctance to issue more bonds in present circumstances and with no better results than have lately followed that course. I cannot, however, refrain from adding to an assurance of my anxiety to co-operate with the present Congress in any reasonable measure of relief, an expression of my determination to leave nothing undone which furnishes a hope for improving the situation, or checking a suspicion of our disinclination or disability to meet, with the strictest honor, every national obligation.This appeal to Congress for legislative aid was absolutely fruitless.
On the eighth day of February, 1895, those who, under the mandate of Executive duty, were striving, thus unaided, to avert the perils of the situation, could count in the gold reserve only the frightfully low sum of $41,340,181; and it must be remembered that this was only two months after the proceeds of the second sale of bonds had been added to the fund. In point of fact, the withdrawals of gold during the short period mentioned had exceeded by more than $18,000,000 the amount of such proceeds; and several million dollars more had been demanded, some of which, though actually taken 147out, was unexpectedly, and on account of the transaction now to be detailed, returned to the Treasury.
This sudden fall in the reserve, and the apparent certainty of the continuance of its rapid depletion, seemed to justify the fear that before another bond sale by means of public notice and popular subscription could be perfected the gold reserve might be entirely exhausted; nor could we keep out of mind the apprehension that in consequence of repeated dispositions of bonds, with worse instead of better financial conditions impending, further sales by popular subscription might fail of success, except upon terms that would give the appearance of impaired national credit.
Notwithstanding all this, no other way seemed to be open to us than another public offer of bonds; and it was determined to move in that direction immediately.
In anticipation of this action it was important to obtain certain information and suggestions touching the feeling and disposition of those actively prominent in financial and business circles.
I think it may here be frankly confessed that it never occurred to any of us to consult, in this emergency, farmers, doctors, lawyers, shoe-makers, 148or even statesmen. We could not escape the belief that the prospect of obtaining what we needed might be somewhat improved by making application to those whose business and surroundings qualified them to intelligently respond.
Therefore, on the evening of the seventh day of February, 1895, an interview was held at the White House with Mr. J. P. Morgan of New York; and I propose to give the details of that interview as gathered from a recollection which I do not believe can be at fault. Secretary Carlisle was present nearly or quite all the time, Attorney-General Olney was there a portion of the time, and Mr. Morgan and a young man from his office and myself all the time. At the outset Mr. Morgan was inclined to complain of the treatment he had received from Treasury officials in the repudiation of an arrangement which he thought he had been encouraged to perfect in connection with the disposal of another issue of bonds. I said to Mr. Morgan, whatever there might be in all this, another offer of bonds for popular subscription open to all bidders had been determined upon, and that there were two questions I wanted to ask him which he ought to be able to answer: one was whether the bonds to be so offered would 149probably be taken at a good price on short notice; and the other was whether, in case there should be imminent danger of the disappearance of what remained of the gold reserve, during the time that must elapse between published notice and the opening of bids, a sufficient amount of gold could be temporarily obtained from financial institutions in the city of New York to bridge over the difficulty and save the reserve until the Government could realize upon the sale of its bonds. Mr. Morgan replied that he had no doubt bonds could be again sold on popular subscription at some price, but he could not say what the price would be; and to the second inquiry his answer was that, in his opinion, such an advance of gold as might be required could be accomplished if the gold could be kept in this country, but that there might be reluctance to making such an advance if it was to be immediately withdrawn for shipment abroad, leaving our financial condition substantially unimproved. After a little further discussion of the situation he suddenly asked me why we did not buy $100,000,000 in gold at a fixed price and pay for it in bonds, under Section 3700 of the Revised Statutes. This was a proposition entirely new to me. I turned to the Statutes and read the section he had mentioned. 150Secretary Carlisle confirmed me in the opinion that this law abundantly authorized such a transaction, and agreed that it might be expedient if favorable terms could be made. The section of the Statutes referred to reads as follows:
Section 3700. The Secretary of the Treasury may purchase coin with any of the bonds or notes of the United States authorized by law, at such rates and upon such terms as he may deem most advantageous to the public interest.Mr. Morgan strongly urged that, if we proceeded under this law, the amount of gold purchased should not be less than $100,000,000; but he was at once informed that in no event would more bonds be then issued than would be sufficient to provide for adding to the reserve, about $60,000,000, the amount necessary to raise the fund to $100,000,000.
Not many months afterward I became convinced that on this point Mr. Morgan made a wise suggestion; and I have always since regretted that it was not adopted. 151
III
It can hardly be necessary to state that any plan which would protect from immediate withdrawal the gold we might add to our reserve could not fail to be of extreme value. Such of these withdrawals as were made for hoarding gold could be prevented only by a restoration of confidence among those of our people who had grown suspicious of the Government’s financial ability; but the considerable drain from the reserve for the purchase of the very bonds to be sold for its reinforcement, and the much larger drain made by those who profited by the shipment of gold abroad, could be, measurably at least, directly arrested. Thus to the extent that foreign gold might be brought here and used for the purchase of bonds, the use for that purpose of such as was held by our own people or as was already in the reserve subject to their withdrawal would not only be decreased, but the current of the passage of gold would be changed and would flow toward us instead of away from us, making the prospect of 152profit in gold exportation less alluring. An influx of gold from abroad would also have a tendency to decrease the sentimental estimate of its desirability which its unrelieved scarcity was apt to create in timid minds. It was especially plain that so far as withdrawals from our reserve for speculative shipment abroad were concerned, they could be discouraged by the efforts of those whose financial connections in other countries enabled them to sell gold exchange on foreign money centers at a price which would make the actual transportation of the coin itself unprofitable.The position of Mr. Morgan and the other parties in interest whom he represented was such in the business world that they were abundantly able, not only to furnish the gold we needed, but to protect us in the manner indicated against its immediate loss. Their willingness to undertake both these services was developed during the discussion of the plan proposed; and after careful consideration of every detail until a late hour of the night, an agreement was made by which J. P. Morgan & Co. of New York, for themselves and for J. S. Morgan& Co. of London; and August Belmont & Co. of New York, for themselves and for N. M. Rothschild & Son of London, were to sell and 153deliver to the Government 3,500,000 ounces of standard gold coin of the United States, to be paid for in bonds bearing annual interest at the rate of four per cent. per annum, and payable at the pleasure of the Government after thirty years from their date, such bonds to be issued and delivered from time to time as the gold coin to be furnished was deposited by said parties in the subtreasuries or other legal depositories of the United States. At least one half of the coin so delivered was to be obtained in Europe, and shipped from there in amounts not less than 300,000 ounces per month, at the expense and risk of the parties furnishing the same; and so far as it was in their power they were to “exert all financial influence and make all legitimate efforts to protect the Treasury of the United States against the withdrawals of gold pending the complete performance of the contract.”
Four per cent. bonds were selected for use in this transaction instead of ten-year bonds bearing five per cent. interest, because their maturity was extended to thirty years, thus offering a more permanent and inviting investment, and for the further reason that $100,000,000 of shorter five per cent. bonds had already been issued, and it was, therefore, deemed desirable 154to postpone these further bond obligations of the Government to a later date. The price agreed upon for the gold coin to be delivered was such that the bonds given in payment therefor would yield to the investor an annual income of three and three fourths per cent.
It has already been stated that the only bonds which could be utilized in our efforts to maintain our gold reserve were those described in a law passed as early as 1870, and made available for our uses by an act passed in 1875. The terms of these bonds were ill suited to later ideas of investment, and they were made payable in coin and not specifically in gold. Nothing at any time induced the exchange of gold for these coin bonds, except a reliance upon such a measure of good faith on the part of the Government, and honesty on the part of the people, as would assure their payment in gold coin and not in depreciated silver.
It was exceedingly fortunate that, at the time this agreement was under consideration, certain political movements calculated to undermine this reliance upon the Government’s continued financial integrity were not in sight; but it was, nevertheless, very apparent that the difficulties of the situation would be greatly lessened if, in safeguarding our reserve, bonds could be used 155payable by their terms in gold, and bearing a rate of interest not exceeding three per cent. Accordingly, at the instance of Secretary Carlisle, a bill had been introduced in the House of Representatives, some time before the Morgan-Belmont agreement was entered upon, which authorized the issue of bonds of that description. A few hours before the agreement was consummated this sane and sensible legislation was brought to a vote in the House and rejected.
When, in our interview with Mr. Morgan, the price for the gold to be furnished was considered, he gave reasons which we could not well answer in support of the terms finally agreed upon; but he said that the parties offering to furnish the gold would be glad to accept at par three per cent. bonds, payable by their terms in gold instead of in coin, in case their issue could be authorized. He expressed not only a willingness but a strong desire that a substitution might be made of such bonds in lieu of those already selected, and readily agreed to allow us time to procure the necessary legislation for that purpose. He explained, however, that only a short time could be stipulated for such a substitution, because in order to carry out successfully the agreement contemplated, the bonds 156must be offered in advance to investors both here and abroad, and that after numerous subscriptions had been received from outside parties the form and condition of the securities could not be changed; and he added that, but for this, there would be no objection to the concession of all the time desired. It was finally agreed that ten days should be allowed us to secure from Congress the legislation necessary to permit the desired substitution of bonds. A simple calculation demonstrated that by such a substitution the Government would save on account of interest more than $16,000,000 before the maturity of the bonds. It was further stipulated on the part of the Government that if the Secretary of the Treasury should desire to sell any further bonds on or before October 1, 1895, they should first be offered to the parties then represented by Mr. Morgan. This stipulation did not become operative.
When our conference terminated it was understood that Secretary Carlisle and Attorney-General Olney should act for the Government at a meeting between the parties early the following day, at which the agreement we had made was to be reduced to writing; and thereupon I prepared a message which was submitted to the Congress at the opening of its session on the 157following day, in which the details of our agreement were set forth and the amount which would be saved to the Government by the substitution of three per cent. gold bonds was plainly stated; but having no memorandum of the agreement before me, in my haste I carelessly omitted to mention the efforts agreed on by Mr. Morgan and his associates to prevent gold shipments. The next morning a contract embodying our agreement was drawn and signed, and a copy at once given to the chairman of the Ways and Means Committee of the House, so that the delay of a demand for its inspection might be avoided. A bill was also immediately introduced again giving authority to issue three per cent. bonds, payable by their terms in gold, to be substituted in place of the four per cent. bonds as provided in the contract—to the end that $16,000,000 might be saved to the Government, and the public welfare in every way subserved.
The object of this message was twofold. It was deemed important, considering the critical condition of our gold reserve, that the public should be speedily informed of the steps taken for its protection; and in addition, though previous efforts to obtain helpful legislation had resulted in discouragement, it was hoped that 158when the saving by the Government of $16,000,000 was seen to depend on the action of Congress there might be a response that would accord with patriotic public duty.
Quite in keeping with the congressional habit prevailing at that time, the needed legislation was refused, and this money was not saved.
The contract was thereupon carried out as originally made. In its execution four per cent. bonds were delivered amounting to $62,315,400, and the sum of $65,116,244.62 in gold received as their price. The last deposit in completion of the contract was made in June, 1895, but additional gold was obtained from the contracting parties in exchange for United States notes and Treasury notes until in September, 1895, when the entire amount of gold received from them under the contract and through such exchanges had amounted to more than $81,000,000. The terms of the agreement were so well carried out, not only in the matter of furnishing gold, but in procuring it from abroad and protecting the reserve from withdrawals, that during its continuance the operation of the “endless chain” which had theretofore drained our gold was interrupted. No gold was, during that period, taken from the Treasury to be used in the purchase of bonds, as had previously 159been the case, nor was any withdrawn for shipment abroad.
It became manifest, however, soon after this contract was fully performed, that our financial ailments had reached a stage so nearly chronic that their cure by any treatment within Executive reach might well be considered a matter of anxious doubt. In the latter months of the year 1895 a scarcity of foreign exchange and its high rate, the termination of the safeguards of the Morgan-Belmont contract, and, as a result, the renewal of opportunity profitably to withdraw gold for export with a newly stimulated popular apprehension, and perhaps other disturbing incidents, brought about a recurrence of serious depletions of gold from the reserve.
In the annual Executive message sent to Congress on the second day of December, 1895, the situation of our finances and currency was set forth in detail, and another earnest plea was made for remedial legislative action. After mentioning the immediately satisfactory results of the contract for the purchase of gold, the message continued:
Though the contract mentioned stayed for a time the tide of gold withdrawals, its good results could not be permanent. Recent withdrawals have reduced the reserve from $107,571,230 on the eighth 160day of July, 1895, to $79,333,966. How long it will remain large enough to render its increase unnecessary is only a matter of conjecture, though quite large withdrawals for shipment in the immediate future are predicted in well-informed quarters. About $16,000,000 has been withdrawn during the month of November.The prediction of further withdrawals mentioned in this message was so fully verified that eighteen days after its transmission, and on the twentieth day of December, 1895, another Executive communication was sent to Congress, in contemplation of its holiday recess, in which, after referring to the details contained in the former message, it was stated:
The contingency then feared has reached us, and the withdrawals of gold since the communication referred to, and others that appear inevitable, threaten such a depletion in our Government’s gold reserve as brings us face to face with the necessity of further action for its protection. This condition is intensified by the prevalence in certain quarters of sudden and unusual apprehension and timidity in business circles.Perhaps it should not have been expected that members of Congress would permit troublesome thoughts of the Government’s financial difficulties to disturb the pleasant anticipations of their holiday recess; at any rate, these difficulties and the appeal of the President for at least some manifestation of a disposition to aid in their remedy were completely ignored.
The real and sensible cure for our recurring troubles can only be effected by a complete change in our financial scheme. Pending that, the Executive branch of the Government will not relax its efforts nor abandon its determination to use every means within its reach to maintain before the world American 161credit, nor will there be any hesitation in exhibiting its confidence in the resources of our country and the constant patriotism of our people.
In view, however, of the peculiar situation now confronting us, I have ventured to herein express the earnest hope that the Congress, in default of the inauguration of a better system of finance, will not take a recess from its labors before it has, by legislative enactment or declaration, done something, not only to remind those apprehensive among our own people that the resources of this Government and a scrupulous regard for honest dealing afford a sure guarantee of unquestioned safety and soundness, but to reassure the world that with these factors, and the patriotism of our citizens, the ability and determination of our nation to meet in any circumstances every obligation it incurs do not admit of question.
On the sixth day of January, 1896, the gold reserve having fallen to $61,251,710, its immediate repair became imperative. Though our resort to the expedient of purchasing gold with bonds under contract had been productive 162of very satisfactory results, it by no means indicated our abandonment of the policy of inviting offerings of gold by public advertisement. It was rather an exceptional departure from that policy, made necessary by the dangerously low state of the reserve on account of extensive and sudden depletions, and the peril attending any delay in replenishing it. We had not lost faith in the loyalty and patriotism of the people, nor did we doubt their willingness to respond to an appeal from their Government in any emergency. We also confidently believed that if the bonds issued for the purpose of increasing our stock of gold were widely distributed among our people, self-interest as well as patriotism would stimulate the solicitude of the masses of our citizens for the welfare of the nation. No reason for discouragement had been found in public offerings for bonds, so far as obtaining a needed supply of gold and a fair price for our bonds were concerned. The failure of their wide distribution among the people when so disposed of seemed to be largely owing to the fact that the bonds themselves were so antiquated in form, and bore so high a rate of interest, that it was difficult for an ordinary person to make the rather confusing computation of premium and other factors necessary to 163a safe and intelligent bid. In a transaction of this sort, where the smallest fraction of a cent may determine the success of an offer, those accustomed to the niceties of financial calculations are apt to hold the field to the exclusion of many who, unaided, dare not trust themselves in the haze of such intricacies. If Congress had provided for the issuance of bonds bearing a low rate of interest, which could have been offered to the public at par, I am convinced that the plain people of the land would more generally have become purchasers. Another difficulty that had to some extent prevented a more common participation by the people in prior public sales arose, it was thought, from their lack of notice of the pendency of such sales, and want of information as to the advantages of the investment offered, and the procedure necessary to present their bids in proper form.
In view of the fact that the gold then in the reserve amounted to $20,000,000 more than it contained eleven months earlier, when the Morgan-Belmont contract was made, and because, for that reason, more time could be allowed for its replenishment, there was no hesitation in deciding upon a return to our original plan of offering bonds in exchange for gold by public subscription. 164
Having determined upon a return to this method, it was deemed wise, upon consideration of all the circumstances, to make some modification of prior action in such cases. Instead of short-term five per cent. bonds, the longer-term bonds bearing four per cent. interest were substituted, as, on the whole, the best we could offer for popular subscription. Since two offerings of $50,000,000 each had proved to be of only very temporary benefit, it was determined to double the amount and offer $100,000,000 for subscription. Nearly a month was to be given instead of a shorter time, as theretofore, between the date of notice of the offer and the opening of the bids; and extraordinary efforts were to be made to give the most thorough publicity to the offerings—to the end that we might stimulate in every possible way the desire of the masses of our people to invest in the bonds. Especial information and aid were to be furnished for the guidance of those inclined to subscribe; and successful bidders were to be allowed to pay for the bonds awarded to them in instalments. The lowest denomination of the bonds was to be fifty dollars, and the larger ones were to be in multiples of that sum. In point of fact, it was resolved that nothing should be left undone which would in any way 165promote the success of this additional and increased offer of bond subscription to the public.
Accordingly, on the sixth day of January, 1896, a circular bearing that date was issued, giving notice that proposals would be received until the fifth day of February following for gold coin purchases of $100,000,000 of the four per cent. bonds of the United States, upon the terms above mentioned. These circulars were extensively published in the newspapers throughout the country. Copies, together with a letter of instruction to bidders, containing, among other things, a computation showing the income the bonds would yield to the investor upon their purchase at prices therein specified, and accompanied by blanks for subscription, were sent to the postmasters in every State and Territory with directions that they should be conspicuously displayed in their offices. The Comptroller of the Currency prepared and sent to all national banks a circular letter, urging them to call the attention of their patrons to the desirability of obtaining the bonds as an investment, and to aid in stimulating subscriptions; and with this was forwarded a complete set of papers similar to those sent to the postmasters. These papers 166were also sent to other banks and financial institutions and to bankers in all parts of the country, and, in addition, notice was given that they could be obtained upon application to the Treasury Department or any of the subtreasuries of the United States. Soon afterward, in view of the large amount of the bonds offered, and as a precaution against an undue strain upon the general money market, as well as to permit the greatest possible opportunity for subscription, the terms of the original offer of the Secretary of the Treasury were modified by reducing in amount the instalments of the purchase price and extending the time for their payment.
On an examination of the bids at the expiration of the time limited for their presentation, it was found that 4635 bids had been received, after rejecting six which were palpably not genuine or not made in good faith. The bidders were scattered through forty-seven of our States and Territories, and the aggregate amount represented by their bids was $526,970,000. The number of accepted bids upon which bonds were awarded was only 828, and of these ten were forfeited after acceptance, on account of non-payment of the first instalment of the purchase price. Several of the bids accepted 167were for a single fifty-dollar bond, and they varied in amount from that to one bid made by J. P. Morgan & Co. and several associates for the entire issue of $100,000,000, for which they offered 110.6877 on the dollar. To all the other 827 accepted bidders who offered even the smallest fraction of a farthing more than this the full number of bonds for which they bid were awarded.
The aggregate of the bonds awarded to these bidders, excluding the Morgan bid, amounted to $62,321,150. The remainder of the entire offering, including more than $4,700,000 of the awards which became forfeited for non-payment as above mentioned, were awarded to Mr. Morgan and his associates, their bid being the highest next to those on which bonds had been awarded in full, as already stated.
The aggregate of the prices received for these bonds represented, by reason of the premiums paid, an income to the investor of a trifle less than three and four tenths per cent.
As a result of this large sale of bonds, the gold reserve, which, on the last day of January, 1896, amounted to less than $50,000,000, was so increased that at the end of February, in spite of withdrawals in the meantime, it stood at nearly $124,000,000. 168
It will be observed that, notwithstanding all the efforts made to distribute this issue of bonds among the people, but 827 bids out of 4641 were entitled to awards as being above the Morgan bid; and that more than one third of all the bonds sold were awarded on the single bid of Mr. Morgan and his associates.
The price received on this public sale was apparently somewhat better for the Government than that secured by the Morgan-Belmont contract; but their agreement required of them such labor, risk, and expense as perhaps entitled them to a favorable bargain. In any event, the advantages the Government derived from this contract were certainly very valuable and should not be overlooked. On every sale of bonds by public offering, not excluding that just mentioned, large amounts of gold were withdrawn from the Treasury and used in paying for the bonds offered. In the execution of the contract of February, 1895, no gold was withdrawn for the purchase of the bonds, and the reserve received the full benefit of the transaction. Each sale by public advertisement made prior to the time of the contract had been so quickly followed by extensive and wasting withdrawals of gold from the reserve, that scarcely a breathing-time was allowed 169before we were again overtaken by the necessity for its reinforcement. Even after the notice given for the last sale on the eighth day of January, 1896, and between that date and the 1st of June following, these withdrawals amounted to more than $73,000,000, while during the six months or more of the existence of the Morgan-Belmont contract the withdrawals of gold for export were entirely prevented and a season of financial quiet and peace was secured.
Whatever may be the comparative merits of the two plans for maintaining our gold reserve, both of them when utilized were abundantly and clearly justified.
Whether from fatigue of malign conditions or other causes, ever since the last large sale of bonds was made the gold reserve has been so free from depletion that its condition has caused no alarm.
Two hundred and sixty-two millions of dollars in bonds were issued on its account during the critical time covered by this narrative; but the credit and fair fame of our nation were saved.
I have attempted to give a detailed history of the crime charged against an administration which “issued bonds of the Government in 170time of peace.” Without shame and without repentance, I confess my share of the guilt; and I refuse to shield my accomplices in this crime who, with me, held high places in that administration. And though Mr. Morgan and Mr. Belmont and scores of other bankers and financiers who were accessories in these transactions may be steeped in destructive propensities, and may be constantly busy in sinful schemes, I shall always recall with satisfaction and self-congratulation my association with them at a time when our country sorely needed their aid. 171
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173
THE VENEZUELAN BOUNDARY CONTROVERSY
I
There is no better illustration of the truth that nations and individuals are affected in the same manner by like causes than is often furnished by the beginning, progress, and results of a national boundary dispute. We all know that among individuals, when neighbors have entered upon a quarrel concerning their division-line or the location of a line fence, they will litigate until all account of cost and all regard for the merits of the contention give place to a ruthless and all-dominating determination, by fair means or foul, to win; and if fisticuffs and forcible possession are resorted to, the big, strong neighbor rejoices in his strength as he mauls and disfigures his small and weak antagonist.It will be found that nations behave in like fashion. One or the other of two national 174neighbors claims that their dividing-line should be defined or rectified in a certain manner. If this is questioned, a season of diplomatic untruthfulness and finesse sometimes intervenes for the sake of appearances. Developments soon follow, however, that expose a grim determination behind fine phrases of diplomacy; and in the end the weaker nation frequently awakens to the fact that it must either accede to an ultimatum dictated by its stronger adversary, or look in the face of war and a spoliation of its territory; and if such a stage is reached, superior strength and fighting ability, instead of suggesting magnanimity, are graspingly used to enforce extreme demands if not to consummate extensive conquest or complete subjugation.
I propose to call attention to one of these unhappy national boundary disputes, between the kingdom of Great Britain and the South American republic of Venezuela, involving the boundary-line separating Venezuela from the English colony of British Guiana, which adjoins Venezuela on the east.
Venezuela, once a Spanish possession, declared her independence in 1810, and a few years afterward united with two other of Spain’s revolted colonies in forming the old 175Colombian federal union, which was recognized by the United States in 1822. In 1836 this union was dissolved and Venezuela became again a separate and independent republic, being promptly recognized as such by our Government and by other powers. Spain, however, halted in her recognition until 1845, when she quite superfluously ceded to Venezuela by treaty the territory which as an independent republic she had actually owned and possessed since 1810. But neither in this treaty nor in any other mention of the area of the republic were its boundaries described with more definiteness than as being “the same as those which marked the ancient viceroyalty and captaincy-general of New Granada and Venezuela in the year 1810.”
England derived title to the colony of Guiana from Holland in 1814, by a treaty in which the territory was described as “the Cape of Good Hope and the establishments of Demerara, Essequibo, and Berbice.” No boundaries of those settlements or “establishments” were given in the treaty, nor does it appear that any such boundaries had ever been particularly defined.
It is quite apparent that the limits of these adjoining countries thus lacking any mention of definite metes and bounds, were in need of 176extraneous assistance before they could be exactly fixed, and that their proper location was quite likely to lead to serious disagreement. In such circumstances threatening complications can frequently be avoided if the adjoining neighbors agree upon a divisional line promptly, and before their demands are stimulated and their tenacity increased by a real or fancied advance in the value of the possessions to be divided, or other incidents have intervened to render it more difficult to make concessions.
I shall not attempt to sketch the facts and arguments that bear upon the exact merits of this boundary controversy between Great Britain and Venezuela. They have been thoroughly examined by an arbitral tribunal to which the entire difficulty was referred, and by whose determination the boundary between the two countries has been fixed—perhaps in strict accord with justice, but at all events finally and irrevocably. Inasmuch, however, as our own country became in a sense involved in the controversy, or at least deeply concerned in its settlement, I have thought there might be interest in an explanation of the manner and the processes by which the interposition of the United States Government was brought about. I must 177not be expected to exclude from mention every circumstance that may relate to the merits of the dispute as between the parties primarily concerned; but so far as I make use of such circumstances I intend to do so only in aid and simplification of the explanation I have undertaken.
This dispute began in 1841. On October 5 of that year the Venezuelan minister to Great Britain, in a note to Lord Aberdeen, Principal Secretary of State for Foreign Affairs, after reminding the secretary that a proposal made by Venezuela on the 28th of January, 1841, for joint action in the matter of fixing a divisional boundary, still awaited the acceptance of Great Britain, wrote as follows:
The Honorable Earl of Aberdeen may now judge of the surprise of the Government of Venezuela upon learning that in the territory of the Republic a sentry-box has been erected upon which the British flag has been raised. The Venezuelan Government is in ignorance of the origin and purport of these proceedings, and hopes that they may receive some satisfactory explanation of this action. In the meantime the undersigned, in compliance with the instructions communicated to him, urges upon the Honorable Earl of Aberdeen the necessity of entering into a treaty of boundaries as a previous step to the fixation of limits, and begs to ask for an answer to the above-mentioned communication of January 28.178
Lord Aberdeen, in his reply, dated October 21, 1841, makes the following statement:
Her Majesty’s Government has received from the Governor of British Guiana, Mr. Schomburgk’s report of his proceedings in execution of the commission with which he has been charged. That report states that Mr. Schomburgk set out from Demerara in April last and was on his return to the Essequibo River at the end of June. It appears that Mr. Schomburgk planted boundary posts at certain points of the country which he has surveyed, and that he was fully aware that the demarcation so made was merely a preliminary measure, open to further discussion between the Governments of Great Britain and Venezuela. But it does not appear that Mr. Schomburgk left behind him any guard-house, sentry-box, or other building having the British flag.In a communication dated the 18th of November, 1841, the Venezuelan minister, after again complaining of the acts of Schomburgk and alleging that he “has planted at a point on 179the mouth of the Orinoco several posts bearing Her Majesty’s initials, and raised at the same place, with a show of armed forces, the British flag, and also performed several other acts of dominion and government,” refers to the great dissatisfaction aroused in Venezuela by what he calls “this undeserved offense,” and adds: “The undersigned therefore has no doubts but that he will obtain from Her Majesty’s Government a reparation for the wrong done to the dignity of the Republic, and that those signs which have so unpleasantly shaken public confidence will be ordered removed.”
With respect to the proposal of the Venezuelan Government that the Governments of Great Britain and Venezuela should conclude a treaty as a preliminary step to the demarcation of the boundaries between British Guiana and Venezuela, the undersigned begs leave to observe that it appears to him that if it should be necessary to make a treaty upon the subject of the boundaries in question, such a measure should follow rather than precede the operation of the survey.
No early response having been made to this communication, another was addressed to Lord Aberdeen, dated December 8, 1841, in which the representative of Venezuela refers to his previous unanswered note and to a recent order received from his government, which he says directs him “to insist not only upon the conclusion of a treaty fixing the boundaries between Venezuela and British Guiana, but also, and this very particularly, to insist upon the removal of the signs set up, contrary to all rights, by the surveyor R. H. Schomburgk in Barima and in other points of the Venezuelan territory”; and he continues: “In his afore-mentioned communication of the 18th of last 180month, the undersigned has already informed the Honorable Earl of Aberdeen of the dissatisfaction prevailing among the Venezuelans on this account, and now adds that this dissatisfaction, far from diminishing, grows stronger—as is but natural—as time goes on and no reparation of the wrongs is made.”
These two notes of the Venezuelan minister were answered on the eleventh day of December, 1841. In his reply Lord Aberdeen says:
The undersigned begs leave to refer to his note of the 21st of October last, in which he explained that the proceeding of Mr. Schomburgk in planting boundary posts at certain points of the country which he has surveyed was merely a preliminary measure open to future discussion between the two Governments, and that it would be premature to make a boundary treaty before the survey will be completed. The undersigned has only further to state that much unnecessary inconvenience would result from the removal of the posts fixed by Mr. Schomburgk, as they will afford the only tangible means by which Her Majesty’s Government can be prepared to discuss the question of the boundaries with the Government of Venezuela. These posts were erected for that express purpose, and not, as the Venezuelan Government appears to apprehend, as indications of dominion and empire on the part of Great Britain.In a reply to this note, after referring to the explanation of the purpose of these posts or 181signs which Lord Aberdeen had given, it was said, in further urging their removal: “The undersigned regrets to be obliged to again insist upon this point; but the damages sustained by Venezuela on account of the permanence of said signs are so serious that he hopes in view of those facts that the trouble resulting from their removal may not appear useless.” The minister followed this insistence with such earnest argument that on the thirty-first day of January, 1842, nearly four months after the matter was first agitated, Lord Aberdeen informed the Venezuelan minister that instructions would be sent to the governor of British Guiana directing him to remove the posts which had been placed by Mr. Schomburgk near the Orinoco. He, however, accompanied this assurance with the distinct declaration “that although, in order to put an end to the misapprehension which appears to prevail in Venezuela with regard to the object of Mr. Schomburgk’s survey, the undersigned has consented to comply with the renewed representation of the Minister upon this affair, Her Majesty’s Government must not be understood to abandon any portion of the rights of Great Britain over the territory which was formerly held by the Dutch in Guiana.” 182
It should be here stated that the work which Schomburgk performed at the instance of the British Government consisted not only in placing monuments of some sort at the mouth of the Orinoco River, upon territory claimed by Venezuela, but also in locating from such monuments a complete dividing-line running far inland and annexing to British Guiana on the west a large region which Venezuela also claimed. This line, as originally located or as afterward still further extended to the west, came to be called “the Schomburgk line.”
The Orinoco River, flowing eastward to the sea, is a very broad and deep waterway, which, with its affluents, would in any event, and however the bounds of Venezuela might be limited, traverse a very extensive portion of that country’s area; and its control and free navigation are immensely important factors in the progress and prosperity of the republic. Substantially at the mouth of the Orinoco, and on its south side, two quite large rivers, the Barima and the Amacuro, flow into the sea. The region adjacent to the mouth of those rivers has, sometimes at least, been called Barima; and it was here that the posts or signs complained of by Venezuela were placed.
The coast from the mouth of the Orinoco 183River slopes or drops to the east and south; and some distance from that river’s mouth, in the directions mentioned, the Essequibo, a large river flowing for a long distance from the south, empties into the sea.
After the correspondence I have mentioned, which resulted in the removal of the so-called initial monuments of the Schomburgk line from the Barima region, there seems to have been less activity in the boundary discussion until January 31, 1844, when the Venezuelan minister to England again addressed Lord Aberdeen on the subject. He referred to the erection of the Schomburgk monuments and the complaints of Venezuela on that account, and stated that since the removal of those monuments he had not ceased to urge Lord Aberdeen “to commence without delay negotiations for a treaty fixing definitely the boundary-line that shall divide the two countries.” He adds the following very sensible statement: “Although it was undoubtedly the duty of the one who promoted this question to take the first step toward the negotiation of the treaty, the undersigned being well aware that other important matters claim the attention of Her Majesty’s Government, and as he ought not to wait indefinitely, hastens to propose an agreement 184which, if left for a later date, may be difficult to conclude.” It is disappointing to observe that the good sense exhibited in this statement did not hold out to the end of the minister’s communication. After a labored presentation of historical incidents, beginning with the discovery of the American continent, he concludes by putting forward the Essequibo River as the proper boundary-line between the two countries. This was a proposition of such extreme pretensions that the Venezuelan representative knew, or ought to have known, it would not be considered for a moment by the Government of Great Britain; and it seems to me that a diplomatic error was made when, failing to apprehend the fact that the exigencies of the situation called for a show of concession, the Venezuelan minister, instead of intimating a disposition to negotiate, gave Great Britain an opportunity to be first in making proposals apparently calculated to meet the needs of conciliation and compromise.
Thus two months after the receipt of this communication,—on the thirtieth day of March, 1844,—Lord Aberdeen sent his reply. After combating the allegations contained in the letter of the Venezuelan representative, he remarked that if he were inclined to act upon the 185spirit of that letter, it was evident that he ought to claim on behalf of Great Britain, as the rightful successor to Holland, all the coast from the Orinoco to the Essequibo. Then follows this significant declaration:
But the undersigned believes that the negotiations would not be free from difficulties if claims that cannot be sustained are presented, and shall not therefore follow Señor Fortique’s example, but state here the concessions that Great Britain is disposed to make of her rights, prompted by a friendly consideration for Venezuela and by her desire to avoid all cause of serious controversies between the two countries. Being convinced that the most important object for the interests of Venezuela is the exclusive possession of the Orinoco, Her Majesty’s Government is ready to yield to the Republic of Venezuela a portion of the coast sufficient to insure her the free control of the mouth of this her principal river, and to prevent its being under the control of any foreign power.Lord Aberdeen further declared that, “with this end in view, and being persuaded that a concession of the greatest importance has been made to Venezuela,” he would consent on behalf of Great Britain to a boundary which he particularly defined, and in general terms may be described as beginning in the mouth of the Moroco River, which is on the coast southeast of the mouth of the Orinoco River and about 186two thirds of the distance between that point and the Essequibo River, said boundary running inland from that point until it included in its course considerably more territory than was embraced within the original Schomburgk line, though it excluded the region embraced within that line adjacent to the Barima and Amacuro rivers and the mouth of the Orinoco.
This boundary, as proposed by Lord Aberdeen, was not satisfactory to Venezuela; and soon after its submission her diplomatic representative died. This interruption was quickly followed by a long period of distressing internal strifes and revolutions, which so distracted and disturbed her government that for more than thirty years she was not in condition to renew negotiations for an adjustment of her territorial limits.
During all this time Great Britain seemed not especially unwilling to allow these negotiations to remain in abeyance.
This interval was not, however, entirely devoid of boundary incidents. In 1850 great excitement and indignation were aroused among the Venezuelans by a rumor that Great Britain intended to take possession of Venezuelan Guiana, a province adjoining British Guiana on the west, and a part of the territory claimed by 187Venezuela; and the feeling thus engendered became so extreme, both among the people and on the part of the government of the republic, that all remaining friendliness between the two countries was seriously menaced. Demonstrations indicating that Venezuela was determined to repel the rumored movement as an invasion of her rights, were met by instructions given by Great Britain to the commander of her Majesty’s naval forces in the West Indies as to the course he was to pursue if the Venezuelan forces should construct fortifications within the territory in dispute. At the same time, Mr. Balford Hinton Wilson, England’s representative at Caracas, in a note addressed to the Minister of Foreign Affairs for Venezuela, indignantly characterized these disquieting rumors of Great Britain’s intention to occupy the lands mentioned, as mischievous, and maliciously false; but he also declared that, on the other hand, her Majesty’s Government would not see with indifference the aggressions of Venezuela upon the disputed territory.
This note contained, in addition, a rather impressive pronouncement in these words:
The Venezuelan Government, in justice to Great Britain, cannot mistrust for a moment the sincerity of the formal declaration, which is now made in the 188name and by the express order of Her Majesty’s Government, that Great Britain has no intention to occupy or encroach upon the territory in dispute; therefore the Venezuelan Government, in an equal spirit of good faith and friendship, cannot refuse to make a similar declaration to Her Majesty’s Government, namely, that Venezuela herself has no intention to occupy or encroach upon the territory in dispute.The Minister of Foreign Affairs for Venezuela responded to this communication in the following terms:
The undersigned has been instructed by His Excellency the President of the Republic to give the following answer: The Government never could be persuaded that Great Britain, in contempt of the negotiation opened on the subject and the alleged rights in the question of limits pending between the two countries, would want to use force in order to occupy the land that each side claims—much less after Mr. Wilson’s repeated assurance, which the Executive Power believes to have been most sincere, that those imputations had no foundation whatever, being, on the contrary, quite the reverse of the truth. Fully confident of this, and fortified by the protest embodied in the note referred to, the Government has no difficulty in declaring, as they do declare, that Venezuela has no intention of occupying or encroaching upon any portion of the territory the possession of which is in controversy; neither will she look with indifference on a contrary proceeding on the part of Great Britain.189
In furtherance of these declarations the English Government stipulated that it would not “order or sanction such occupations or encroachments on the part of the British authorities”; and Venezuela agreed on her part to “instruct the authorities of Venezuelan Guiana to refrain from taking any step which might clash with the engagement hereby made by the Government.”
I suspect there was some justification on each side for the accusations afterward interchanged between the parties that this understanding or agreement, in its strict letter and spirit, had not been scrupulously observed.
As we now pass from this incident to a date more than twenty-five years afterward, when attempts to negotiate for a settlement of the boundary controversy were resumed, it may be profitable, before going further, to glance at some of the conditions existing at the time of such resumption. 190
II
In 1876—thirty-two years after the discontinuance of efforts on the part of Great Britain and Venezuela to fix by agreement a line which should divide their possessions—Venezuela was confronted, upon the renewal of negotiations for that purpose, by the following conditions:The claim by her, of a divisional line, founded upon her conception of strict right, which her powerful opponent had insisted could not in any way be plausibly supported, and which therefore she would in no event accept.
An indefiniteness in the limits claimed by Great Britain—so great that, of two boundary-lines indicated or suggested by her, one had been plainly declared to be “merely a preliminary measure open to future discussion between the Governments of Great Britain and Venezuela,” while the other was distinctly claimed to be based not on any acknowledgment of the republic’s rights, but simply upon generous concessions and a “desire to avoid all 191cause of serious controversies between the two countries.”
A controversy growing out of this situation impossible of friendly settlement except by such arrangement and accommodation as would satisfy Great Britain, or by a submission of the dispute to arbitration.
A constant danger of such an extension of British settlements in the disputed territory as would necessarily complicate the situation and furnish a convenient pretext for the refusal of any concession respecting the lands containing such settlements.
A continual profession on the part of Great Britain of her present readiness to make benevolent concessions and of her willingness to co-operate in a speedy adjustment, while at the same time neither reducing her pretensions, nor attempting in a conspicuous manner to hasten negotiations to a conclusion.
A tremendous disparity in power and strength between Venezuela and her adversary, which gave her no hope of defending her territory or preventing its annexation to the possessions of Great Britain in case the extremity of force or war was reached.
The renewed negotiations began with a communication dated November 14, 1876, addressed 192by the Minister of Foreign Affairs for Venezuela to Lord Derby, then Great Britain’s principal Secretary of State. In this communication the efforts made between the years 1841 and 1844 to establish by agreement a divisional line between the two countries, and their interruption, were referred to, and the earnest desire was expressed that negotiations for that purpose might at once be resumed. The minister suggested no other line than the Essequibo River, but in conclusion declared that the President of Venezuela was led to “hope that the solution of this question, already for so many years delayed, will be a work of very speedy and cordial agreement.”
On the same day that this note was written to Lord Derby, one was also written by the same Venezuelan official to Mr. Fish, then our Secretary of State. After speaking of the United States as “the most powerful and the oldest of the Republics of the new continent, and called on to lend to others its powerful moral support in disputes with European nations,” the minister directs attention to the boundary controversy between Venezuela and Great Britain and the great necessity of bringing it to a speedy termination. He concludes as follows: “But whatever may be the result of the new steps of 193the Government, it has desired that the American Government might at once take cognizance of them, convinced, as it is, that it will give the subject its kind consideration and take an interest in having due justice done to Venezuela.” A memorandum was inclosed with the note, setting forth the claims of Venezuela touching the boundary location.
This appears to be the first communication addressed to our Government on the subject of a controversy in which we afterward became very seriously concerned.
A short time after the date of these communications, a Venezuelan envoy to Great Britain was appointed; and, on the thirteenth day of February, 1877, he addressed to Lord Derby a note in which, after asserting the right of Venezuela to insist upon the boundary previously claimed by her, he declared the willingness of his government “to settle this long-pending question in the most amicable manner,” and suggested either the acceptance of a boundary-line such as would result from a presentation by both parties of Spanish and Dutch titles, maps, documents, and proofs existing before the advent in South America of either Venezuela or British Guiana, or the adoption of “a conventional line fixed by mutual accord 194between the Governments of Venezuela and Great Britain after a careful and friendly consideration of the case, keeping in view the documents presented by both sides, solely with the object of reconciling their mutual interests, and to fix a boundary as equitable as possible.” The suggestion is made that the adoption of a divisional line is important “to prevent the occurrence of serious differences in the future, particularly as Guiana is attracting the general attention of the world on account of the immense riches which are daily being discovered there.”
Let us here note that this renewal by Venezuela of her efforts to settle her boundary-line was accompanied by two new features. These, though in themselves entirely independent, became so related to each other, and in their subsequent combination and development they so imperiously affected our Government, that their coincident appearance at this particular stage of the controversy may well strike us as significant. One of these features was the abandonment by Venezuela of her insistence upon a line representing her extreme claims, and which England would not in any contingency accept, thus clearing the field for possible arbitration; and the other was her earnest appeal 195to us for our friendly aid. Neither should we fail to notice the new and important reference of the Venezuelan envoy to the immense riches being discovered in the disputed territory. Gold beneath soil in controversy does not always hasten the adjustment of uncertain or disputed boundary-lines.
On the twenty-fourth day of March, 1877, Lord Derby informed the Venezuelan envoy that the governor of British Guiana was shortly expected in London, and that he was anxious to await his arrival before taking any steps in the boundary discussion.
After waiting for more than two years for a further answer from the English Government, the Venezuelan representative in London, on the 19th of May, 1879, addressed a note on the subject to Lord Salisbury, who, in the meantime, had succeeded Lord Derby. In this note reference was made to the communication sent to Lord Derby in 1877, to the desire expressed by him to await the arrival of the governor of British Guiana before making reply, and to the fact that the communication mentioned still remained unanswered; and on behalf of Venezuela her representative repeated the alternative proposition made by him in February, 1877, in these words: “The boundary treaty 196may be based either on the acceptance of the line of strict right as shown by the records, documents, and other authoritative proofs which each party may exhibit, or on the acceptance at once by both Governments of a frontier of accommodation which shall satisfy the respective interests of the two countries”; and he concluded his note as follows:
If Her Britannic Majesty’s Government should prefer the frontier of accommodation or convenience, then it would be desirable that it should vouchsafe to make a proposition of an arrangement, on the understanding that, in order to obviate future difficulties and to give Great Britain the fullest proof of the consideration and friendship which Venezuela professes for her, my Government would not hesitate to accept a demarcation that should satisfy as far as possible the interests of the Republic.Now, at the date of this communication England’s most extreme claims were indicated 197either by the Schomburgk line or by the line which Lord Aberdeen suggested in 1844 as a concession. These were indeed the only lines which Great Britain had thus far presented. When in such circumstances, and with these lines distinctly in mind, the envoy of Venezuela offered to abandon for his country her most extreme claims, and asked that Great Britain should “vouchsafe to make a proposition of an arrangement” upon the basis of a “frontier of accommodation or convenience,” what answer had he a right to expect? Most assuredly he had a right to expect that if Great Britain should prefer to proceed upon the theory of “accommodation or convenience,” she would respond by offering such a reduction of the claims she had already made as would indicate a degree of concession or “accommodation” on her part that should entitle her to expect similar concession from Venezuela.
At all events, my Lord, something will have to be done to prevent this question from pending any longer.
Thirty-eight years ago my Government wrote urging Her Majesty’s Government to have the Boundary Treaty concluded, and now this affair is in the same position as in 1841, without any settlement; meanwhile Guiana has become of more importance than it was then, by reason of the large deposits of gold which have been and still are met with in that region.
What was the answer actually made? After a delay of nearly eight months, on the tenth day of January, 1880, Lord Salisbury replied that her Majesty’s Government were of the opinion that to argue the matter on the ground of strict right would involve so many intricate questions that it would be very unlikely to lead to a satisfactory solution of the question, and they would 198therefore prefer the alternative “of endeavoring to come to an agreement as to the acceptance by the two Governments of a frontier of accommodation which shall satisfy the respective interests of the two countries.”
He then gives a most startling statement of the English Government’s claim, by specifying boundaries which overlap the Schomburgk line and every other line that had been thought of or dreamed of before, declaring that such claim is justified “by virtue of ancient treaties with the aboriginal tribes and of subsequent cessions from Holland.” He sets against this claim, or “on the other hand,” as he says, the fact that the President of Venezuela, in a message dated February 20, 1877, “put forward a claim on the part of Venezuela to the river Essequibo as the boundary to which the Republic was entitled”—thereby giving prejudicial importance to a claim of boundary made by the President of Venezuela three years before, notwithstanding his Lordship was answering a communication in which Venezuela’s present diplomatic representative distinctly proposed “a frontier of accommodation.” His declaration, therefore, that the boundary which was thus put forward by the President of Venezuela would involve “the surrender of a province now inhabited 199by forty thousand British subjects,” seems quite irrelevant, because such a boundary was not then under consideration; and in passing it may occur to us that the great delay in settling the boundaries between the two countries had given abundant opportunity for such inhabitation as Lord Salisbury suggests. His Lordship having thus built up a contention in which he puts on one side a line which for the sake of pacific accommodation Venezuela no longer proposes to insist upon, and on the other a line for Great Britain so grotesquely extreme as to appear fanciful, soberly observes:
The difference, therefore, between these two claims is so great that it is clear that, in order to arrive at a satisfactory arrangement, each party must be prepared to make considerable concessions to the other; and although the claim of Venezuela to the Essequibo River boundary could not under any circumstances be entertained, I beg leave to assure you that Her Majesty’s Government are anxious to meet the Venezuelan Government in a spirit of conciliation, and would be willing, in the event of a renewal of negotiations for a general settlement of boundaries, to waive a portion of what they consider to be their strict right, if Venezuela is really disposed to make corresponding concessions on her part.And ignoring entirely the humbly respectful request of the Venezuelan minister that Great 200Britain would “vouchsafe to make a proposition of an arrangement,” his Lordship thus concludes his communication: “Her Majesty’s Government will therefore be glad to receive, and will undertake to consider in the most friendly spirit, any proposal that the Venezuelan Government may think fit to make for the establishment of a boundary satisfactory to both nations.”
This is diplomacy—of a certain sort. It is a deep and mysterious science; and we probably cannot do better than to confess our inability to understand its intricacies and sinuosities; but at this point we can hardly keep out of mind the methods of the shrewd, sharp trader who demands exorbitant terms, and at the same time invites negotiation, looking for a result abundantly profitable in the large range for dicker which he has created.
An answer was made to Lord Salisbury’s note on the twelfth day of April, 1880, in which the Venezuelan envoy stated in direct terms that he had received specific instructions from his government for the arrangement of the difficulty, by abandoning the ground of strict right and “concurring in the adoption for both countries of a frontier mutually convenient, and reconciling in the best possible manner their 201respective interests—each party having to make concessions to the other for the purpose of attaining such an important result.”
It will be remembered that in 1844, when this boundary question was under discussion, Lord Aberdeen proposed a line beginning in the mouth of the Moroco River, being a point on the coast south and east of the mouth of the Orinoco, thus giving to Venezuela the control of that river, but running inland in such a manner as to include, in the whole, little if any less area than that included in the Schomburgk line; and it will also be recalled that this line was not then acceptable to Venezuela. It appears, however, that the delays and incidents of thirty-six years had impressed upon the government of the republic the serious disadvantages of her situation in contention with Great Britain; for we find in this reply of the Venezuelan envoy the inquiry “whether Her Britannic Majesty’s Government is disposed now, as it was in 1844, to accept the mouth of the river Moroco as the frontier at the coast.” To this Lord Salisbury promptly responded that the attorney-general for the colony of British Guiana was shortly expected in England, and that her Majesty’s Government would prefer to postpone the boundary discussion until his arrival. 202
This was followed by a silence of five months, with no word or sign from England’s Foreign Office; and in the meantime Earl Granville had succeeded Lord Salisbury as Secretary of State for Foreign Affairs. After waiting thus long, the representative of Venezuela, on the 23d of September, 1880, reminded Lord Granville that in the preceding April his immediate predecessor had informed him that the arrival of the attorney-general of British Guiana was awaited before deciding the question of boundaries between the two Guianas; and as he had not, after the lapse of five months, been honored with a communication on the subject, he was bound to suppose that the attorney-general had not accomplished his voyage, in which case it was useless longer to wait for him. He further reminded his Lordship that on the 24th of March, 1877, Lord Derby, then in charge of British foreign affairs, also desired to postpone the consideration of the question until the arrival in London of the governor of British Guiana, who was then expected, but who apparently never came. He then proceeds as follows:
Consequently it is best not to go on waiting either for the Governor or for the Attorney-General of the Colony, but to decide these questions ourselves, considering 203that my Government is now engaged in preparing the official map of the Republic and wishes of course to mark out the boundaries on the East.On the twelfth day of February, 1881, Lord Granville, replying to Venezuela’s two notes dated April 12 and September 23, 1880, informed her representative, without explanation, that her Majesty’s Government would not accept the mouth of the Moroco as the divisional boundary on the coast.
In my despatch of the 12th of April last, I informed your Excellency [Excellency’s predecessor?] that as a basis of a friendly demarcation my Government was disposed to accept the mouth of the River Moroco as the frontier on the coast. If Her Britannic Majesty’s Government should accept this point of departure, it would be very easy to determine the general course of the frontier, either by means of notes or in verbal conferences, as your Excellency might prefer.
A few days afterward, in an answer to this refusal, Venezuela’s representative mentioned the extreme claims of the two countries and the fact that it had been agreed between the parties that steps should be taken to settle upon a frontier of accommodation; that in pursuance thereof he had proposed as the point of departure for such a frontier the mouth of the Moroco River, which was in agreement thus far with the proposition made by Lord Aberdeen on 204behalf of Great Britain in 1844; and pertinently added: “Thus thirty-seven years ago Her Britannic Majesty’s Government spontaneously proposed the mouth of the Moroco River as the limit on the coast, a limit which your Excellency does not accept now, for you are pleased to tell me so in the note which I have the honor of answering.” He thereupon suggests another boundary, beginning on the coast at a point one mile north of the mouth of the Moroco River and thence extending inland in such manner as to constitute a large concession on the part of Venezuela, but falling very far short of meeting the claims of Great Britain. He declares, however, that this demarcation “is the maximum of all concessions which in this matter the Government of Venezuela can grant by way of friendly arrangement.”
Apparently anticipating, as he well might, that the boundary he proposed would fail of acceptance, he suggests that in such case the two governments would have no alternative but to determine the frontier by strict right, and that on this basis they would find it impossible to arrive at an agreement. Therefore he declares that he has received instructions from his government to urge upon Great Britain the 205submission of the question to an arbitrator, to be chosen by both parties, to whose award both governments should submit.
In this proposal of arbitration by Venezuela we find an approach to a new phase of the controversy. At first, the two countries had stood at arm’s-length, each asserting strict right of boundary, only to be met by obstinate and unyielding resistance. Next, the field of mutual concession and accommodation had been traversed, with no result except damaging and dangerous delay. And now, after forty years of delusive hope, the time seemed at hand when the feebler contestant must contemplate ignominious submission to dictatorial exaction, or forcible resistance, futile and distressing, unless honorable rest and justice could be found in arbitration—the refuge which civilization has builded among the nations of the earth for the protection of the weak against the strong, and the citadel from which the ministries of peace issue their decrees against the havoc and barbarism of war.
The reply of Lord Granville to the communication of the envoy of Venezuela proposing an alternative of arbitration was delayed for seven months; and when, in September, 1881, it was received, it contained a rejection of the boundary 206offered by Venezuela and a proposal of a new line apparently lacking almost every feature of concession; and, singularly enough, there was not in this reply the slightest allusion to Venezuela’s request for arbitration.
I do not find that this communication of Great Britain was ever specifically answered, though an answer was often requested. No further steps appear to have been taken until September 7, 1883, when Lord Granville instructed the British minister to Venezuela to invite the serious attention of the Venezuelan Government to the questions pending between the two countries, with a view to their early settlement. These questions are specified as relating to the boundary, to certain differential duties imposed on imports from British colonies, and to the claims of British creditors of the republic. His Lordship declared in those instructions that as a preliminary to entering upon negotiations it was indispensable that an answer should be given to the pending proposal which had been made by her Majesty’s Government in regard to the boundary.
The representations made to the Government of Venezuela by the British minister, in obedience to those instructions, elicited a reply, in which a provision of the Venezuelan constitution 207was cited prohibiting the alienation or cession of any part of the territory of the republic; and it was suggested that, inasmuch as the Essequibo line seemed abundantly supported as the true boundary of Venezuela, a concession beyond that line by treaty would be obnoxious to this constitutional prohibition, whereas any reduction of territory brought about by a decree of an arbitral tribunal would obviate the difficulty. Therefore the urgent necessity was submitted for the selection of an arbitrator, “who, freely and unanimously chosen by the two Governments, would judge and pronounce a sentence of a definitive character.”
The representative of her Majesty’s Government, in a response dated February 29, 1884, commented upon the new difficulty introduced by the statement concerning the prohibition contained in the constitution of the republic, and expressed a fear that if arbitration was agreed to, the same prohibition might be invoked as an excuse for not abiding by an award unfavorable to Venezuela; and it was declared that if, on the other hand, the arbitrator should decide in favor of the Venezuelan Government to the full extent of their claim, “a large and important territory which has 208for a long period been inhabited and occupied by Her Majesty’s subjects and treated as a part of the Colony of British Guiana would be severed from the Queen’s dominions.” This declaration is immediately followed by a conclusion in these words:
For the above-mentioned reasons, therefore, the circumstances of the case do not appear to Her Majesty’s Government to be such as to render arbitration applicable for a solution of the difficulty; and I have accordingly to request you, in making this known to the Venezuelan Government, to express to them the hope of Her Majesty’s Government that some other means may be devised for bringing this long-standing matter to an issue satisfactory to both powers.Let us pause here for a moment’s examination of the surprising refusal of Great Britain to submit this difficulty to arbitration, and the more surprising reasons presented for its justification. The refusal was surprising because the controversy had reached such a stage that arbitration was evidently the only means by which it could be settled consistently with harmonious relations between the two countries.
It was on this ground that Venezuela proposed arbitration; and she strongly urged it on the further ground that inasmuch as the prohibition of her constitution prevented the relinquishment, 209by treaty or voluntary act, of any part of the territory which her people and their government claimed to be indubitably Venezuelan, such a relinquishment would present no difficulties if it was in obedience to a decree of a tribunal to which the question of ownership had been mutually submitted.
In giving her reasons for rejecting arbitration Great Britain says in effect: The plan you urge for the utter and complete elimination of this constitutional prohibition—for its expurgation and destruction so far as it is related to the pending dispute—is objectionable, because we fear the prohibition thus eliminated, expunged, and destroyed will still be used as a pretext for disobedience to an award which, for the express purpose of avoiding this constitutional restraint, you have invited.
The remaining objection interposed by Great Britain to the arbitration requested by Venezuela is based upon the fear that an award might be made in favor of the Venezuelan claim, in which case “a large and important territory which has for a long period been inhabited and occupied by Her Majesty’s subjects and treated as a part of the Colony of British Guiana would be severed from the Queen’s dominions.” 210
It first occurs to us that a contention may well be suspected of weakness when its supporters are unwilling to subject it to the test of impartial arbitration. Certain inquiries are also pertinent in this connection. Who were the British subjects who had long occupied the territory that might through arbitration be severed from the Queen’s dominions? How many of them began this occupancy during the more than forty years that the territory had been steadily and notoriously disputed? Did they enter upon this territory with knowledge of the dispute and against the warning of the government to which they owed allegiance, or were they encouraged and invited to such entry by agencies of that government who had full notice of the uncertainty of the British title? In one case, being themselves in the wrong, they were entitled to no consideration; in the other, the question of loss and indemnification should rest between them and their government, which had impliedly guaranteed them against disturbance. In any event, neither case presented a reason why Great Britain should take or possess the lands of Venezuela; nor did either case furnish an excuse for denying to Venezuela a fair and impartial adjudication of her disputed rights. By whom had this territory “been 211treated as a part of the Colony of British Guiana”? Surely not by Venezuela. On the contrary, she had persistently claimed it as her own, and had “treated” it as her own as far as she could and dared. England alone had treated it as a part of British Guiana; her immense power had enabled her to do this; and her decrees in her own favor as against her weak adversary undoubtedly promised greater advantages than arbitration could possibly assure. 212
III
The Secretary of State of Venezuela, soon after this refusal of Great Britain to submit the boundary dispute to arbitration, in a despatch dated the second day of April, 1884, still urged that method of settlement, citing precedents and presenting arguments in its favor; and in conclusion he asked the minister of the English Government at Caracas “to have the goodness to think out and suggest any acceptable course for attaining a solution of the difficulty.” This was followed, a few days afterward, by another communication from the Venezuelan Secretary of State, repeating his urgent request for arbitration. From this communication it may not be amiss to make the following quotation:Venezuela and Great Britain possess the same rights in the question under discussion. If the Republic should yield up any part of her pretensions, she would recognize the superior right of Great Britain, would violate the above-quoted article of the Constitution, and draw down the censure of her 213fellow-citizens. But when both nations, putting aside their independence of action in deference to peace and good friendship, create by mutual consent a Tribunal which may decide in the controversy, the same is able to pass sentence that one of the two parties or both of them have been mistaken in their opinions concerning the extent of their territory. Thus the case would not be in opposition to the Constitution of the Republic, there being no alienation of that which shall have been determined not to be her property.On the tenth day of June, 1884, arbitration was again refused in a curt note from Lord Granville, declaring that “Her Majesty’s Government adhere to their objection to arbitration as a mode of dealing with this question.”
About this time complaints and protests of the most vigorous character, based upon alleged breaches of the agreement of 1850 concerning the non-occupation of the disputed territory broke out on both sides of the controversy, and accusations of aggression and occupation were constantly made. I shall not attempt to follow them, as in detail they are not among the incidents which I consider especially relevant to the presentation of my theme.
On the thirteenth day of December, 1884, Venezuela, in reply to a proposition of the British Government that the boundary question and 214certain other differences should be settled simultaneously, suggested, in view of the unwillingness of Great Britain to submit the boundary dispute to arbitration, that it should be presented for decision to a court of law, the members of which should be chosen by the parties respectively.
The British Government promptly declined this proposition, and stated that they were not prepared to depart from the arrangement made in 1877 to decide the question by adopting a conventional boundary fixed by mutual accord between the two governments. This was in the face of the efforts which had been made along that line and found utterly fruitless.
Immediately following the last-mentioned proposition by Venezuela for the presentation of the difficulty to a court of law mutually chosen, negotiations were entered upon for the conclusion of a treaty between Great Britain and Venezuela, which should quiet a difference pending between the two countries relating to differential duties and which should also dispose of other unsettled questions. In a draft of such a treaty submitted by Venezuela there was inserted an article providing for arbitration in case of all differences which could not 215be adjusted by friendly negotiation. To this article Great Britain suggested an amendment, making such arbitration applicable only to matters arising out of the interpretation or execution of the treaty itself, and especially excluding those emanating from any other source; but on further representation by Venezuela, Lord Granville, in behalf of the Government of Great Britain, expressly agreed with Venezuela that the treaty article relating to arbitration should be unrestricted in its operation. This diplomatic agreement was in explicit terms, her Majesty’s Government agreeing “that the undertaking to refer differences to arbitration shall include all differences which may arise between the High Contracting Parties, and not those only which arise on the interpretation of the Treaty.”
This occurred on the fifteenth day of May, 1885. Whatever Lord Granville may have intended by the language used, the Government of Venezuela certainly understood his agreement to include the pending boundary dispute as among the questions that should be submitted to arbitration; and all other matters which the treaty should embrace seemed so easy of adjustment that its early completion, embodying a stipulation for the final arbitration of the 216boundary controversy, was confidently and gladly anticipated by the republic.
The high hopes and joyful anticipations of Venezuela born of this apparently favorable situation were, however, but short-lived.
On the twenty-seventh day of July, 1885, Lord Salisbury, who in the meantime had succeeded the Earl of Granville in Great Britain’s Foreign Office, in a note to Venezuela’s envoy, declared: “Her Majesty’s Government are unable to concur in the assent given by their predecessors in office to the general arbitration article proposed by Venezuela, and they are unable to agree to the inclusion in it of matters other than those arising out of the interpretation or alleged violation of this particular treaty.”
No assertion of the irrevocability of the agreement which Venezuela had made with his predecessor, and no plea or argument of any kind, availed to save the enlarged terms of this arbitration clause from Lord Salisbury’s destructive insistence.
On the twentieth day of June, 1886, Lord Rosebery suggested for Great Britain, and as a solution of the difficulty, that the territory within two certain lines which had been already proposed as boundaries should be equally divided between the contestants, either by arbitration 217or the determination of a mixed commission.
This was declined by Venezuela on the twenty-ninth day of July, 1886, upon the same grounds that led to the declination of prior proposals that apparently involved an absolute cession of a part of her territory; and she still insisted upon an arbitration embracing the entire disputed territory as the only feasible method of adjustment.
This declination on the part of Venezuela of Lord Rosebery’s proposition terminated the second attempt in point of time, to settle this vexed question. In the meantime the aggressive conduct which for some time the officials of both countries had exhibited in and near the contested region had grown in distinctness and significance, until Great Britain had openly and with notorious assertion of ownership taken possession of a valuable part of the territory in dispute. On the 26th of October, 1886, an official document was published in the London “Gazette” giving notice that no grants of land made by the Government of Venezuela in the territory claimed by Great Britain would be admitted or recognized by her Majesty; and this more significant statement was added: “A map showing the boundary between British 218Guiana and Venezuela claimed by Her Majesty’s Government can be seen in the library of the Colonial Office, Downing Street, or at the Office of the Government Secretary, Georgetown, British Guiana.” The boundary here spoken of, as shown on the map to which attention is directed, follows the Schomburgk line. Protests and demands in abundance on the part of Venezuela followed, which were utterly disregarded, until, on the thirty-first day of January, 1887, the Venezuelan Secretary of State distinctly demanded of Great Britain the evacuation of the disputed territory which she was occupying in violation of prior agreement and the rights of the republic, and gave formal notice that unless such evacuation should be completed, and accompanied by acceptance of arbitration as a means of deciding the pending frontier dispute, by the twentieth day of February, 1887, diplomatic relations between the two countries would on that day cease.
These demands were absolutely unheeded; and thereupon, when the twentieth day of February arrived, Venezuela exhibited a long list of specific charges of aggression and wrongdoing against Great Britain, and made the following statement and final protest: 219
In consequence, Venezuela, not deeming it fitting to continue friendly relations with a state which thus injures her, suspends them from to-day.Notwithstanding all this, three years afterward, and on the tenth day of January, 1890, an agent of Venezuela, appointed for that purpose, addressed a note to Lord Salisbury, still in charge of Great Britain’s foreign relations, expressing the desire of Venezuela to renew diplomatic relations with Great Britain, and requesting an interview to that end.
And she protests before the Government of Her Britannic Majesty, before all civilized nations, before the whole world, against the acts of spoliation which the Government of Great Britain has committed to her detriment, and which she will never on any consideration recognize as capable of altering in the slightest degree the rights which she has acquired from Spain, and respecting which she will be always ready to submit to a third power, as the only way to a solution compatible with her constitutional principles.
A short time thereafter the Government of Great Britain expressed its satisfaction that a renewal of diplomatic relations was in prospect, and presented to the representative of Venezuela “a statement of the conditions which Her Majesty’s Government considered necessary for a satisfactory settlement of the questions pending between the two countries.” 220
As the first of these conditions it was declared that “Her Majesty’s Government could not accept as satisfactory any arrangement which did not admit the British title to the territory comprised within the line laid down by Sir R. Schomburgk in 1841; but they would be willing to refer to arbitration the claims of Great Britain to certain territory to the west of that line.”
Naturally enough, this statement was received by Venezuela with great disappointment and surprise. Her representative promptly replied that his government could not accept any single point of the arbitrary and capricious line laid down by Sir R. Schomburgk in 1841, which had been declared null and void even by the Government of her Majesty; and that it was not possible for Venezuela to accept arbitration in respect to territory west of that line. He further expressed his regret that the conditions then demanded by Lord Salisbury were more unfavorable to Venezuela than the proposals made to the former agent of the republic prior to the suspension of diplomatic relations.
On the 19th of March, 1890, the British Government reiterated its position more in detail. Its refusal to admit any question as to Great Britain’s title to any of the territory within the 221Schomburgk line was emphatically repeated, and the British claim was defined to extend beyond any pretension which I believe had ever been previously made except by Lord Salisbury himself in 1880. A map was presented indicating this extreme claim, the Schomburgk line, and a certain part of the territory between the boundary of this extreme claim on the west and the Schomburgk line, which Great Britain proposed to submit to arbitration, abandoning all claim to the remainder of the territory between these last-named two lines. This scheme, if adopted, would give to England absolutely and without question the large territory between British Guiana’s conceded western boundary and the Schomburgk line, with an opportunity to lay claim before a board of arbitration for extensive additional territory beyond the Schomburgk line.
This is pitiful. The Schomburgk line, which was declared by the British Government, at the time it was made, to be “merely a preliminary measure, open to further discussion between the Governments of Great Britain and Venezuela,” and which had been since largely extended in some mysterious way, is now declared to be a line so well established, so infallible, and so sacred that only the territory that England exorbitantly 222claims beyond that line is enough in dispute to be submitted to impartial arbitration. The trader is again in evidence. On this basis England could abundantly afford to lose entirely in the arbitration she at length conceded.
And yet Venezuela was not absolutely discouraged. Soon after the receipt of Great Britain’s last depressing communication, she appointed still another agent who was to try his hand with England in the field of diplomacy. On the twenty-fourth day of June, 1890, this new representative replied to the above proposal made to his predecessor by her Majesty’s Government, and expressed the great regret of Venezuela that its recent proposals for a settlement of the boundary difficulty by arbitration affecting all the disputed territory had been peremptorily declined. He also declared that the emphatic statement contained in Great Britain’s last communication in reference to this question created for his government “difficulties not formerly contemplated,” and thereupon formally declined on behalf of Venezuela the consideration of the proposals contained in said communication. This statement of discouraging conditions was, however, supplemented by a somewhat new suggestion to the effect that a preliminary agreement should be 223made containing a declaration on the part of the Government of Venezuela that the river Essequibo, its banks, and the lands covering it belong exclusively to British Guiana, and a declaration on the part of her Majesty’s Government that the Orinoco River, its banks, and the lands covering it belong exclusively to Venezuela, and providing that a mixed commission of two chief engineers and their staffs should be appointed to make, within one year, careful maps and charts of the region to the west and northwest of the Essequibo River, toward the Orinoco, in order to determine officially the exact course of its rivers and streams, and the precise position of its mountains and hills, and all other details that would permit both countries to have reliable official knowledge of the territory which was actually in dispute, enabling them to determine with a mutual feeling of friendship and good will a boundary with perfect knowledge of the case; but in the event that a determination should not be thus reached, the final decision of the boundary question should be submitted to two arbitrators, one selected by each government, and a third chosen by the other two, to act as umpire in case of disagreement, who, in view of the original titles and documents presented, should fix a boundary-line 224which, being in accordance with the respective rights and titles, should have the advantage as far as possible of constituting a natural boundary; and that, pending such determination, both governments should remove or withdraw all posts and other indications and signs of possession or dominion on said territory, and refrain from exercising any jurisdiction within the disputed region.
On the 24th of July, 1890, Lord Salisbury declined to accept these suggestions of the Venezuelan representative, and declared: “Her Majesty’s Government have more than once explained that they cannot consent to submit to arbitration what they regard as their indisputable title to districts in the possession of the British Colony.”
Is it uncharitable to see in this reference to “possession” a hint of the industrious manner in which Great Britain had attempted to improve her position by permitting colonization, and by other acts of possession, during the half-century since the boundary dispute began?
Efforts to settle this controversy seem to have languished after this rebuff until March, 1893, when still another agent was appointed by Venezuela for the purpose of reëstablishing diplomatic relations with Great Britain, and 225settling, if possible, the boundary trouble and such other differences as might be pending between the two countries. As a means to that end, this agent, on the twenty-sixth day of May, 1893, presented a memorandum to the British Government containing suggestions for such settlement. The suggestion relating to the adjustment of the boundary question rested upon the idea of arbitration and did not materially differ from that made by this agent’s immediate predecessor in 1890, except as to the status quo, pending final adjustment, which it was proposed should be the same as that existing after the agreement of non-interference in the disputed territory made by the two governments in 1850.
The plan thus suggested was declined by the Government of Great Britain, because, in the first place, it involved an arbitration, “which had been repeatedly declined by Her Majesty’s Government,” and, further, because it was, in the language of the British reply, “quite impossible that they should consent to revert to the status quo of 1850 and evacuate what has for some years constituted an integral portion of British Guiana.”
A further communication from the agent of Venezuela, offering additional arguments in 226support of his suggestions, brought forth a reply informing him that the contents of his note did not “appear to Her Majesty’s Government to afford any opening for arriving at an understanding on this question which they could accept.”
Six months afterward, on the twenty-ninth day of September, 1893, a final communication was addressed by the representative of Venezuela to the British Government, reviewing the situation and the course of past efforts to arrive at a settlement, and concluding with the words:
I must now declare in the most solemn manner, and in the name of the Government of Venezuela, that it is with the greatest regret that that Government sees itself forced to leave the situation produced in the disputed territory by the acts of recent years unsettled, and subject to the serious disturbances which acts of force cannot but produce; and to declare that Venezuela will never consent to proceedings of that nature being accepted as title-deeds to justify the arbitrary occupation of territory which is within its jurisdiction.Here closed a period in this dispute, fifty-two years in duration, vexed with agitation, and perturbed by irritating and repeated failures to reach a peaceful adjustment. Instead 227of progress in the direction of a settlement of their boundaries, the results of their action were increased obstacles to fair discussion, intensified feelings of injury, extended assertion of title, ruthless appropriation of the territory in controversy, and an unhealed breach in diplomatic relations. 228
IV
I have thus far dealt with this dispute as one in which Great Britain and Venezuela, the parties primarily concerned, were sole participants. We have now, however, reached a stage in the affair which requires a recital of other facts which led up to the active and positive interference of our own Government in the controversy. In discussing this branch of our topic it will be necessary not only to deal with circumstances following those already narrated, but to retrace our steps sufficiently to exhibit among other things the appeals and representations made to the Government of the United States by Venezuela, while she was still attempting to arrive at an adjustment with Great Britain.I have already referred to the first communication made to us by Venezuela on the subject. This, it will be remembered, was in 1876, when she sought to resume negotiations with Great Britain, after an interruption of thirty-two years. I have also called attention to the fact 229that coincident with this communication Venezuela presented to Great Britain a willingness to relax her insistence upon her extreme boundary claim, based upon alleged right, and suggested that a conventional line might be fixed by mutual concession.
Venezuela’s first appeal to us for support and aid amounted to little more than a vague and indefinite request for countenance and sympathy in her efforts to settle her differences with her contestant, with an expression of a desire that we would take cognizance of her new steps in that direction. I do not find that any reply was made to this communication.
Five years afterward, in 1881, the Venezuelan minister in Washington presented to Mr. Evarts, then our Secretary of State, information he had received that British vessels had made their appearance in the mouth of the Orinoco River with materials to build a telegraph-line, and had begun to erect poles for that purpose at Barima: and he referred to the immense importance to his country of the Orinoco; to the efforts of his government to adjust her difficulty with Great Britain, and to the delays interposed; and finally expressed his confident belief that the United States would not 230view with indifference what was being done in a matter of such capital importance.
Mr. Evarts promptly replied, and informed the Venezuelan representative that “in view of the deep interest which the Government of the United States takes in all transactions tending to attempted encroachments of foreign powers upon the territory of any of the republics of this continent, this Government could not look with indifference to the forcible acquisition of such territory by England, if the mission of the vessels now at the mouth of the Orinoco should be found to be for that end.”
Again, on the thirtieth day of November, 1881, our minister to Venezuela reported to Mr. Blaine, who had succeeded Mr. Evarts as Secretary of State, an interview with the President of Venezuela at his request, in which the subject of the boundary dispute was discussed. Our minister represented that the question was spoken of by the President as being of essential importance and a source of great anxiety to him, involving a large and fertile territory between the Essequibo and Orinoco, and probably the control of the mouth and a considerable portion of the latter river; and he alleged that the policy of Great Britain, in the treatment of this question, had been delay—the interval 231being utilized by gradually but steadily extending her interest and authority into the disputed territory; and “that, though the rights of Venezuela were clear and indisputable, he questioned her ability, unaided by some friendly nation, to maintain them.”
In July, 1882, Mr. Frelinghuysen, successor to Mr. Blaine, sent to our representative at Venezuela a despatch to be communicated to the government of the republic, in which he stated that, if Venezuela desired it, the United States would propose to the Government of Great Britain that the boundary question be submitted to the arbitrament of a third power.
It will be remembered that a proposition for arbitration had been made by Venezuela to Great Britain in February, 1881, and that Great Britain had refused to accede to it.
In July, 1884, Mr. Frelinghuysen sent a confidential despatch to Mr. Lowell, our minister to Great Britain, informing him that Guzman Blanco, ex-President of Venezuela, who had recently been accredited as a special envoy from his country to Great Britain, had called on him relative to the objects of his mission, in respect of which he desired to obtain the good offices of this Government, and that doubtless he would seek to confer with Mr. 232Lowell in London. He further informed Mr. Lowell that he had told the Venezuelan envoy that, “in view of our interest in all that touches the independent life of the Republics of the American Continent, the United States could not be indifferent to anything that might impair their normal self-control”; that “the moral position of the United States in these matters was well known through the enunciation of the Monroe Doctrine,” though formal action in the direction of applying that doctrine to a speculative case affecting Venezuela seemed to him to be inopportune, and therefore he could not advise Venezuela to arouse a discussion of that point. He instructed our minister to show proper consideration to the Venezuelan envoy, and to “take proper occasion to let Lord Granville know that we are not without concern as to whatever may affect the interest of a sister Republic of the American Continent and its position in the family of nations.”
In July, 1885, the Venezuelan minister to the United States addressed a communication to Secretary of State Bayard, setting forth the correspondence which had already taken place between our Government and that of Venezuela touching the boundary dispute, and referring 233to the serious condition existing on account of the renewed aggressions of Great Britain.
Mr. Bayard thereupon sent a despatch on the subject to Mr. Phelps, our diplomatic representative to England, in which, after stating that the Venezuelan Government had never definitely declared what course she desired us to pursue, but, on the contrary, had expressed a desire to be guided by our counsel, he said: “The good offices of this Government have been tendered to Venezuela to suggest to Great Britain the submission of the boundary dispute to arbitration; but when shown that such action on our part would exclude us from acting as arbitrator, Venezuela ceased to press the matter in that direction”; and the next day after writing this despatch Mr. Bayard informed the Venezuelan minister that the President of the United States could not entertain a request to act as umpire in any dispute unless it should come concurrently from both contestants.
In December, 1886, our minister to Venezuela addressed a despatch to Mr. Bayard, in which he reported that matters looked very angry and threatening in Venezuela on account of fresh aggressions on the part of Great Britain in the disputed territory; and he expressed the fear that an open rupture might 234occur between the two countries. He inclosed a statement made by the Venezuelan Minister of Foreign Affairs, containing a list of grievances, followed by this declaration: “Venezuela, listening to the advice of the United States, has endeavored several times to obtain that the difference should be submitted to the award of a third power.... But such efforts have proven fruitless, and the possibility of that result, the only one prescribed by our constitution, being arrived at, becomes more and more remote from day to day. Great Britain has been constant in her clandestine advances upon the Venezuelan territory, not taking into consideration either the rights or the complaints of this Republic.” And he adds the following declaration: “Under such circumstances the Government has but two courses left open: either to employ force in order to recover places from which force has ejected the Republic, since its amicable representations on the subject have failed to secure redress, or to present a solemn protest to the Government of the United States against so great an abuse, which is an evident declaration of war—a provocative aggression.”
Thereupon, and on the twentieth day of December, 1886, a despatch was sent by Mr. Bayard 235to Mr. Phelps, in which the secretary comments on the fact that at no time theretofore had the good offices of our Government been actually tendered to avert a rupture between Great Britain and Venezuela, and that our inaction in this regard seemed to be due to the reluctance of Venezuela to have the Government of the United States take any steps having relation to the action of the British Government which might, in appearance even, prejudice the resort to our arbitration or mediation which Venezuela desired; but that the intelligence now received warranted him in tendering the good offices of the United States to promote an amicable settlement of the difficulty between the two countries, and offering our arbitration if acceptable to both countries—as he supposed the dispute turned upon simple and readily ascertainable historical facts.
Additional complaints against Great Britain on account of further trespasses on Venezuelan territory were contained in a note from the Venezuelan minister to Mr. Bayard, dated January 4, 1887. I shall quote only the following passage:
My Government has tried all possible means to induce that of London to accept arbitration, as advised by the United States; this, however, has resulted 236in nothing but fresh attempts against the integrity of the territory by the colonial authorities of Demerara. It remains to be seen how long my Government will find it possible to exercise forbearance transcending the limits of its positive official duty.Pursuant to his instructions from Mr. Bayard, our minister to Great Britain formally tendered to the English Government, on the eighth day of February, 1887, the good offices of the United States to promote an amicable settlement of the pending controversy, and offered our arbitration, if acceptable to both parties.
A few days afterward Lord Salisbury, on behalf of Great Britain, replied that the attitude which had been taken by the President of the Venezuelan republic precluded her Majesty’s Government from submitting the question at that time to the arbitration of any third power.
The fact that Lord Salisbury had declined our offer of mediation and arbitration, was promptly conveyed to the government of Venezuela; and thereupon, on the fourth day of May, 1887, her minister at Washington addressed another note to our Secretary of State indicating much depression on account of the failure of all efforts up to that time made to induce Great Britain to agree to a settlement 237of the controversy by arbitration, and expressing the utmost gratitude for the steps taken by our Government in aid of those efforts. He also referred to the desire his government once entertained that, in case arbitration could be attained, the United States might be selected as arbitrator, and to the fact that this desire had been relinquished because the maintenance of impartiality essential in an arbitrator would “seriously impair the efficiency of action which for the furtherance of the common interests of America, and in obedience to the doctrine of the immortal Monroe, should possess all the vitality that the alarming circumstances demand”; and he begged the secretary to instruct our representative in London “to insist, in the name of the United States Government, upon the necessity of submitting the boundary question between Venezuela and British Guiana to arbitration.”
I have heretofore refrained from stating in detail the quite numerous instances of quarrel and collision that occurred in and near the disputed territory, with increasing frequency, during this controversy. One of these, however, I think should be here mentioned. It seems that in 1883 two vessels belonging to English subjects were seized and their crews taken into 238custody by Venezuelan officials in the disputed region, for alleged violations of the laws of Venezuela within her jurisdiction, and that English officials had assumed, without any judicial determination and without any notice to Venezuela, to assess damages against her on account of such seizure and arrests, in an amount which, with interest, amounted in 1887 to about forty thousand dollars. On the seventh day of October in that year, the governor of Trinidad, an English island near the mouth of the Orinoco, in a letter to the Minister of Foreign Affairs for Venezuela, declared that her Majesty’s Government could not permit such injuries to remain unredressed, or their representations to be disregarded any longer, and thereupon it was demanded that the money claimed, with interest, be paid within seven days from the delivery of said letter. The letter concluded as follows:
Failing compliance with the above demands Her Majesty’s Government will be reluctantly compelled to instruct the Commander of Her Majesty’s naval forces in the West Indies to take such measures as he may deem necessary to obtain that reparation which has been vainly sought for by friendly means; and in case of so doing they will hold the Venezuelan Government responsible for any consequences that may arise.239
Venezuela did not fail to appreciate and frankly acknowledge that, in her defenseless condition, there was no escape from the payment of the sum which England, as a judge in its own cause, had decreed against her. The President of the republic, however, in a prompt reply to the governor’s note, characterized its terms as “offensive to the dignity of the nation and to the equality which, according to the principles of the rights of nations, all countries enjoy without any regard to their strength or weakness.” Thereupon he sought the good offices of our minister to Venezuela in an effort to procure a withdrawal of the objectionable communication. This was attempted in a note sent by the American minister to the governor of Trinidad, in which he said:
I hope your Excellency will permit me to suggest, as a mutual friend of both parties, the suspension or withdrawal of your note of the 7th instant, so that negotiations may at once be opened for the immediate and final settlement of the afore-mentioned claims without further resort to unpleasant measures. From representations made to me, I am satisfied that if the note of the 7th instant is withdrawn temporarily even, Venezuela will do in the premises that which will prove satisfactory to your Government.240
A few days after this note was sent, a reply was received in which the governor of Trinidad courteously expressed his thanks to our minister for his good offices, and informed him that, as the Government of Venezuela regarded his note of October 7 “as offensive, and appeared desirous of at last settling this long-pending question in a friendly spirit,” he promptly telegraphed to her Majesty’s Government asking permission to withdraw that note and substitute a less forcible one for it; and that he had just been informed by his home government in reply that this arrangement could not be sanctioned.
Our minister reported this transaction to his home government at Washington on the fourth day of November, 1887, and stated that the money demanded by Great Britain had been paid by Venezuela under protest.
Venezuela may have been altogether at fault in the transaction out of which this demand arose; the amount which England exacted may not have been unreasonable; and the method of its assessment, though not the most considerate possible, has support in precedent; and even the threat of a naval force may sometimes be justified in enforcing unheeded demands. I have not adverted to this incident for the purpose 241of inviting judgment on any of its phases, but only to call attention to the fact that it was allowed to culminate with seemingly studied accompaniments of ruthlessness and irritation, at a time when a boundary question was pending between the two nations, when the weaker contestant was importuning the stronger for arbitration, and when a desire for reconciliation and peace in presence of strained relations should have counseled considerateness and magnanimity—all this in haughty disregard of the solicitous and expressed desire of the Government of the United States to induce a peaceful adjustment of the boundary dispute, and in curt denial of our request that this especially disturbing incident should be relieved of its most exasperating features.
In the trial of causes before our courts, evidence is frequently introduced to show the animus or intent of litigating parties.
Perhaps strict decorum hardly permits us to adopt the following language, used by the Venezuelan minister when reporting to our Secretary of State the anticipated arrival of a British war-steamer to enforce the demand of Great Britain:
Such alarming news shows evidently that the Government of Her Britannic Majesty, encouraged 242by the impunity on which it has counted until now for the realization of its unjust designs with regard to Venezuela, far from procuring a pacific and satisfactory agreement on the different questions pending with the latter, is especially eager to complicate in order to render less possible every day that equitable solution which has been so fully the endeavor of my people.On the fifteenth day of February, 1888, the Venezuelan minister, in communicating to our Government information he had received touching a decree of the governor of Demerara denying the validity of a contract entered into by the Government of Venezuela for the construction of a railway between certain points in the territory claimed by Venezuela, commented on the affair as follows:
England has at last declared emphatically that her rights are without limit, and embrace whatever regions may be suggested to her by her insatiate thirst for conquest. She even goes so far as to deny the validity of railway grants comprised within territory where not even the wildest dream of fancy had ever conceived that the day would come when Venezuela’s right thereto could be disputed. The fact is that until now England has relied upon impunity. She beholds in us a weak and unfriended nation, and seeks to make the Venezuelan coast and territories the base of a conquest which, if circumstances are not altered, will have no other bounds than the dictates of her own will.243
V
Mr. Bayard, in a despatch transmitting this to our minister to England, says that our Government has heretofore acted upon the assumption that the boundary controversy between Great Britain and Venezuela was one based on historical facts, which without difficulty could be determined according to evidence, but that the British pretension now stated gives rise to grave disquietude, and creates the apprehension that their territorial claim does not follow historical traditions or evidence, but is apparently indefinite. He refers to the British Colonial Office list of previous years, and calls attention to the wide detour to the westward in the boundaries of British Guiana between the years 1877 and 1887, as shown in that record. He suggests that our minister “express anew to Lord Salisbury the great gratification it would afford our Government to see the Venezuelan dispute amicably and honorably settled by arbitration or otherwise,” and adds: “If indeed it should appear that there is no fixed 244limit to the British boundary claim, our good disposition to aid in a settlement might not only be defeated, but be obliged to give place to a feeling of grave concern.”It was about this time that the Venezuelan minister, in a note expressing his appreciation of our efforts to bring about a settlement of the dispute, made the following statement:
Disastrous and fatal consequences would ensue for the independence of South America if, under the pretext of a question of boundaries, Great Britain should succeed in consummating the usurpation of a third part of our territory, and therewith a river so important as the Orinoco. Under the pretext of a mere question of boundaries which began on the banks of the Essequibo, we now find ourselves on the verge of losing regions lying more than five degrees away from that river.On May 1, 1890, Mr. Blaine, Mr. Bayard’s successor as Secretary of State, instructed Mr. Robert T. Lincoln, our minister to England, “to use his good offices with Lord Salisbury to bring about the resumption of diplomatic intercourse between Great Britain and Venezuela as a preliminary step toward the settlement of the boundary dispute by arbitration.” He also requested him “to propose to Lord Salisbury, with a view to an accommodation, that an informal conference be had in Washington or in 245London of representatives of the three powers.” The secretary added: “In such conference the position of the United States is one solely of impartial friendship toward both litigants.”
In response to this instruction Mr. Lincoln had an interview with Lord Salisbury. On this occasion his Lordship said that her Majesty’s Government had not for some time been keen in attempts to settle the dispute, in view of their feeling of uncertainty as to the stability of the present Venezuelan Government and the frequency of revolutions in that quarter; but that he would take pleasure in considering our suggestion after consulting the Colonial Office, to which it would first have to be referred. Mr. Lincoln, in giving his impressions derived from the interview, says that “while Lord Salisbury did not intimate what would probably be the nature of his reply, there was certainly nothing unfavorable in his manner of receiving the suggestion”; and he follows this with these significant words: “If the matter had been entirely new and dissociated with its previous history, I should have felt from his tone that the idea of arbitration in some form, to put an end to the boundary dispute, was quite agreeable to him.” 246
On the 26th of May, 1890, Lord Salisbury addressed a note to Mr. Lincoln, in which his Lordship stated that her Majesty’s Government was at that moment in communication with the Venezuelan minister in Paris, who had been authorized to express the desire of his Government for the renewal of diplomatic relations, and to discuss the conditions on which it might be effected; that the terms on which her Majesty’s Government considered that a settlement of the question in issue between the two countries might be made, had been communicated to Venezuela’s representative; that his reply was still awaited, and that the British Government “would wish to have the opportunity of examining that reply, and ascertaining what prospect it would afford of an adjustment of existing differences, before considering the expediency of having recourse to the good offices of a third party.”
No mention was made, in this communication, nor at any time thereafter, so far as I can discover, of Mr. Blaine’s proposal of a conference among representatives of the three nations interested in an adjustment.
Lord Salisbury, in a despatch to the English representative at Washington, dated November 11, 1891, stated that our minister to 247England had, in conversation with him, renewed, on the part of our Government, the expression of a hope that the Government of Great Britain would refer the boundary dispute to arbitration; that his Lordship had expressed his willingness to submit to arbitration all the questions which seemed to his government to be fairly capable of being treated as questions of controversy; that the principal obstacle was the rupture of diplomatic relations caused by Venezuela’s act; and that before the Government of Great Britain could renew negotiations they must be satisfied that those relations were about to be resumed with a prospect of their continuance.
While our Government was endeavoring to influence Great Britain in the direction of fair and just arbitration, and receiving for our pains only barren assurances and procrastinating excuses, the appeals of Venezuela for help, stimulated by allegations of constantly increasing English pretensions, were incessantly ringing in our ears.
Without mentioning a number of these appeals, and passing over a period of more than two years, I shall next refer to a representation made by the Venezuelan minister at Washington on March 31, 1894, to Mr. Gresham, who 248was then our Secretary of State. In this communication the course of the controversy and the alleged unauthorized acts of England from the beginning to that date were rehearsed with circumstantial particularity. The conduct of Great Britain in refusing arbitration was again reprobated, and pointed reference was made to a principle which had been asserted by the United States, “that the nations of the American continent, after having acquired the liberty and independence which they enjoy and maintain, were not subject to colonization by any European power.” The minister further declared that “Venezuela has been ready to adhere to the conciliatory counsel of the United States that a conference, consisting of its own Representative and those of the two parties, should meet at Washington or London for the purpose of preparing an honorable reëstablishment of harmony between the litigants,” and that “Great Britain has disregarded the equitable proposition of the United States.”
On July 13, 1894, Mr. Gresham sent a despatch to Mr. Bayard, formerly Secretary of State, but then ambassador to England, inclosing the communication of the Venezuelan minister, calling particular attention to its contents, and at the same time briefly discussing the boundary dispute. In this despatch Mr. Gresham said: 249
The recourse to arbitration first proposed in 1881, having been supported by your predecessors, was in turn advocated by you, in a spirit of friendly regard for the two nations involved. In the meantime successive advances of British settlers in the region admittedly in dispute were followed by similar advances of British Colonial administration, contesting and supplanting Venezuelan claims to exercise authority therein.He adds: “Toward the end of 1887, the British territorial claim, which had, as it would seem, been silently increased by some twenty-three thousand square miles between 1885 and 1886, took another comprehensive sweep westward to embrace” a certain rich mining district. “Since then,” the secretary further states, “repeated efforts have been made by Venezuela as a directly interested party, and by the United States as the impartial friend of both countries, to bring about a resumption of diplomatic relations, which had been suspended in consequence of the dispute now under consideration.”
This despatch concludes as follows:
The President is inspired by a desire for a peaceable and honorable adjustment of the existing difficulties between an American state and a powerful transatlantic nation, and would be glad to see the reëstablishment of such diplomatic relations between them as would promote that end. I can discover but 250two equitable solutions to the present controversy. One is the arbitral determination of the rights of the disputants as the respective successors to the historical rights of Holland and Spain over the region in question. The other is to create a new boundary-line in accordance with the dictates of mutual expediency and consideration. The two Governments having so far been unable to agree on a conventional line, the consistent and conspicuous advocacy by the United States and England of the principle of arbitration, and their recourse thereto in settlement of important questions arising between them, makes such a mode of adjustment especially appropriate in the present instance; and this Government will gladly do what it can to further a determination in that sense.In another despatch to Mr. Bayard, dated December 1, 1894, Mr. Gresham says:
I cannot believe Her Majesty’s Government will maintain that the validity of their claim to territory long in dispute between the two countries shall be conceded as a condition precedent to the arbitration of the question whether Venezuela is entitled to other territory, which until a recent period was never in doubt. Our interest in the question has repeatedly been shown by our friendly efforts to further a settlement alike honorable to both countries, and the President is pleased to know that Venezuela will soon renew her efforts to bring about such an adjustment.Two days afterward, on December 3, 1894, the President’s annual message was sent to the 251Congress, containing the following reference to the controversy:
The boundary of British Guiana still remains in dispute between Great Britain and Venezuela. Believing that its early settlement on some just basis alike honorable to both parties is in the line of our established policy to remove from this hemisphere all causes of difference with powers beyond the sea, I shall renew the efforts heretofore made to bring about a restoration of diplomatic relations between the disputants and to induce a reference to arbitration—a resort which Great Britain so conspicuously favors in principle and respects in practice, and which is earnestly sought by her weaker adversary.On the twenty-second day of February, 1895, a joint resolution was passed by the Congress, earnestly recommending to both parties in interest the President’s suggestion “that Great Britain and Venezuela refer their dispute as to boundaries to friendly arbitration.”
A despatch dated February 23, 1895, from Great Britain’s Foreign Office to the English ambassador at Washington, stated that on the twenty-fifth day of January, 1895, our ambassador, Mr. Bayard, had, in an official interview, referred to the boundary controversy, and said “that his Government would gladly lend their good offices to bring about a settlement by means of an arbitration.” The despatch further 252stated that Mr. Bayard had thereupon been informed that her Majesty’s Government had expressed their willingness to submit the question, within certain limits, to arbitration, but could not agree to the more extensive reference on which the Venezuelan Government insisted; that Mr. Bayard called again on the twentieth day of February, when a memorandum was read to him concerning the situation and a map shown him of the territory in dispute; that at the same time he was informed that the Venezuelans had recently made an aggression upon the territory of English occupation, and, according to report, ill-treated some of the colonial police stationed there, and that it was the boundary defined by the Schomburgk line which had thus been violated in a marked manner by the Venezuelans.
This despatch concludes as follows:
On Mr. Bayard’s observing that the United States Government was anxious to do anything in their power to facilitate a settlement of the difficulty by arbitration, I reminded his Excellency that although Her Majesty’s Government were ready to go to arbitration as to a certain portion of the territory which I had pointed out to him, they could not consent to any departure from the Schomburgk line.It now became plainly apparent that a new stage had been reached in the progress of our 253intervention, and that the ominous happenings embraced within a few months had hastened the day when we were challenged to take our exact bearings, lest we should miss the course of honor and national duty. The more direct tone that had been given to our despatches concerning the dispute, our more insistent and emphatic suggestion of arbitration, the serious reference to the subject in the President’s message, the significant resolution passed by Congress earnestly recommending arbitration, all portended a growth of conviction on the part of our Government concerning this controversy, which gave birth to pronounced disappointment and anxiety when Great Britain, concurrently with these apprising incidents, repeated in direct and positive terms her refusal to submit to arbitration except on condition that a portion of the disputed territory which Venezuela had always claimed to be hers should at the outset be irrevocably conceded to England.
During a period of more than fourteen years our Government, assuming the character of a mutual and disinterested friend of both countries, had, with varying assiduity, tendered its good offices to bring about a pacific and amicable settlement of this boundary controversy, only to be repelled with more or less civility by 254Great Britain. We had seen her pretensions in the disputed regions widen and extend in such manner and upon such pretexts as seemed to constitute an actual or threatened violation of a doctrine which our nation long ago established, declaring that the American continents are not to be considered subjects for future colonization by any European power; and despite all this we had, nevertheless, hoped, during all these years, that arrangement and accommodation between the principal parties would justify us in keeping an invocation of that doctrine in the background of the discussion. Notwithstanding, however, all our efforts to avoid it, we could not be unmindful of the conditions which the progress of events had created, and whose meaning and whose exigencies inexorably confronted us. England had finally and unmistakably declared that all the territory embraced within the Schomburgk line was indisputably hers. Venezuela presented a claim to territory within the same limits, which could not be said to lack strong support. England had absolutely refused to permit Venezuela’s claim to be tested by arbitration; and Venezuela was utterly powerless to resist by force England’s self-pronounced decree of ownership. If this decree was not justified by the facts, and it 255should be enforced against the protest and insistence of Venezuela and should result in the possession and colonization of Venezuelan territory by Great Britain, it seemed quite plain that the American doctrine which denies to European powers the colonization of any part of the American continent would be violated.
If the ultimatum of Great Britain as to her claim of territory had appeared to us so thoroughly supported upon the facts as to admit of small doubt, we might have escaped the responsibility of insisting on an observance of the Monroe Doctrine in the premises, on our own account, and have still remained the disinterested friend of both countries, merely contenting ourselves with benevolent attempts to reconcile the disputants. We were, however, far from discovering such satisfactory support in the evidence within our reach. On the contrary, we believed that the effects of our acquiescence in Great Britain’s pretensions would amount to a failure to uphold and maintain a principle universally accepted by our Government and our people as vitally essential to our national integrity and welfare. The arbitration, for which Venezuela pleaded, would have adjudged the exact condition of the rival claims, would have forever silenced Venezuela’s complaints, 256and would have displaced by conclusive sentence our unwelcome doubts and suspicions; but this Great Britain had refused to Venezuela, and thus far had also denied to us.
Recreancy to a principle so fundamentally American as the Monroe Doctrine, on the part of those charged with the administration of our Government, was of course out of the question. Inasmuch, therefore, as all our efforts to avoid its assertion had miscarried, there was nothing left for us to do consistently with national honor but to take the place of Venezuela in the controversy, so far as that was necessary, in vindication of our American doctrine. Our mild and amiable proffers of good offices, and the hopes we indulged that at last they might be the means of securing to a weak sister republic peace and justice, and to ourselves immunity from sterner interposition, were not suited to the new emergency. In the advanced condition of the dispute, sympathy with Venezuela and solicitude for her distressed condition could no longer constitute the motive power of our conduct, but these were to give way to the duty and obligation of protecting our own national rights.
Mr. Gresham, who since the fourth day of March, 1893, had been our Secretary of State, 257died in the latter days of May, 1895. His love of justice, his sympathy with every cause that deserved sympathy, his fearless and disinterested patriotism, and his rare mental endowments, combined to make him a noble American and an able advocate of his country’s honor. To such a man every phase of the Venezuelan boundary dispute strongly appealed; and he had been conscientiously diligent in acquainting himself with its history and in considering the contingencies that might arise in its future development. Though his death was most lamentable, I have always considered it a providential circumstance that the Government then had among its Cabinet officers an exceptionally strong and able man, in every way especially qualified to fill the vacant place, and thoroughly familiar with the pending controversy—which seemed every day to bring us closer to momentous duty and responsibility.
Mr. Olney was appointed Secretary of State early in June, 1895; and promptly thereafter, at the suggestion of the President, he began, with characteristic energy and vigor, to make preparation for the decisive step which it seemed should no longer be delayed.
The seriousness of the business we had in hand was fully understood, and the difficulty or 258impossibility of retracing the step we contemplated was thoroughly appreciated. The absolute necessity of certainty concerning the facts which should underlie our action was, of course, perfectly apparent. Whatever our beliefs or convictions might be, as derived from the examination we had thus far given the case, and however strongly we might be persuaded that Great Britain’s pretensions could not be conceded consistently with our maintenance of the Monroe Doctrine, it would, nevertheless, have been manifestly improper and heedless on our part to find conclusively against Great Britain, before soliciting her again and in new circumstances to give us an opportunity to judge of the merits of her claims through the submission of them to arbitration.
It was determined, therefore, that a communication should be prepared for presentation to the British Government through our ambassador to England, detailing the progress and incidents of the controversy as we apprehended them, giving a thorough exposition of the origin of the Monroe Doctrine, and the reasons on which it was based, demonstrating our interest in the controversy because of its relation to that doctrine, and from our new standpoint 259and on our own account requesting Great Britain to join Venezuela in submitting to arbitration their contested claims to the entire territory in dispute.
This was accordingly done; and a despatch to this effect, dated July 20, 1895, was sent by Mr. Olney to her Majesty’s Government through Mr. Bayard, our ambassador.
The Monroe Doctrine may be abandoned; we may forfeit it by taking our lot with nations that expand by following un-American ways; we may outgrow it, as we seem to be outgrowing other things we once valued; or it may forever stand as a guaranty of protection and safety in our enjoyment of free institutions; but in no event will this American principle ever be better defined, better defended, or more bravely asserted than was done by Mr. Olney in this despatch.
After referring to the various incidents of the controversy, and stating the conditions then existing, it was declared:
The accuracy of the foregoing analysis of the existing status cannot, it is believed, be challenged. It shows that status to be such, that those charged with the interests of the United States are now forced to determine exactly what those interests are and what course of action they require. It compels them to decide 260to what extent, if any, the United States may and should intervene in a controversy between, and primarily concerning, only Great Britain and Venezuela, and to decide how far it is bound to see that the integrity of Venezuelan territory is not impaired by the pretensions of its powerful antagonist.After an exhaustive explanation and vindication of the Monroe Doctrine, and after asserting that aggressions by Great Britain on Venezuelan soil would fall within its purview, the despatch proceeded as follows:
While Venezuela charges such usurpation, Great Britain denies it; and the United States, until the merits are authoritatively ascertained, can take sides with neither. But while this is so,—while the United States may not, under existing circumstances at least, take upon itself to say which of the two parties is right and which is wrong,—it is certainly within its right to demand that the truth be ascertained. Being entitled to resent and resist any sequestration of Venezuelan soil by Great Britain, it is necessarily entitled to know whether such sequestration has occurred or is now going on.... It being clear, therefore, that the United States may legitimately insist upon the merits of the boundary question being determined, it is equally clear that there is but one feasible mode of determining them, viz., peaceful arbitration.The demand of Great Britain that her right to a portion of the disputed territory should be 261acknowledged as a condition of her consent to arbitration as to the remainder, was thus characterized:
It is not perceived how such an attitude can be defended, nor how it is reconcilable with that love of justice and fair play so eminently characteristic of the English race. It in effect deprives Venezuela of her free agency and puts her under virtual duress. Territory acquired by reason of it will be as much wrested from her by the strong hand as if occupied by British troops or covered by British fleets.The despatch, after directing the presentation to Lord Salisbury of the views it contained, concluded as follows:
They call for a definite decision upon the point whether Great Britain will consent or decline to submit the Venezuelan boundary question in its entirety to impartial arbitration. It is the earnest hope of the President that the conclusion will be on the side of arbitration, and that Great Britain will add one more to the conspicuous precedents she has already furnished in favor of that wise and just mode of settling international disputes. If he is to be disappointed in that hope, however,—a result not to be anticipated, and in his judgment calculated to greatly embarrass the future relations between this country and Great Britain,—it is his wish to be made acquainted with the fact at such early date as will enable him to lay the whole subject before Congress in his next annual message.262
VI
The reply of Great Britain to this communication consisted of two despatches addressed by Lord Salisbury to the British ambassador at Washington for submission to our Government. Though dated the twenty-sixth day of November, 1895, these despatches were not presented to our State Department until a number of days after the assemblage of the Congress in the following month. In one of these communications Lord Salisbury, in dealing with the Monroe Doctrine and the right or propriety of our appeal to it in the pending controversy, declared: “The dangers which were apprehended by President Monroe have no relation to the state of things in which we live at the present day.” He further declared:But the circumstances with which President Monroe was dealing and those to which the present American Government is addressing itself have very few features in common. Great Britain is imposing no “system” upon Venezuela and is not concerning herself in any way with the nature of the political institutions under which the Venezuelans may prefer 263to live. But the British Empire and the Republic of Venezuela are neighbors, and they have differed for some time past, and continue to differ, as to the line by which their dominions are separated. It is a controversy with which the United States have no apparent practical concern.... The disputed frontier of Venezuela has nothing to do with any of the questions dealt with by President Monroe.His Lordship, in commenting upon our position as developed in Mr. Olney’s despatch, defined it in these terms: “If any independent American state advances a demand for territory of which its neighbor claims to be the owner, and that neighbor is a colony of an European state, the United States have a right to insist that the European state shall submit the demand and its own impugned rights to arbitration.”
I confess I should be greatly disappointed if I believed that the history I have attempted to give of this controversy did not easily and promptly suggest that this definition of our contention fails to take into account some of its most important and controlling features.
Speaking of arbitration as a method of terminating international differences, Lord Salisbury said:
It has proved itself valuable in many cases, but it is not free from defects which often operate as 264a serious drawback on its value. It is not always easy to find an arbitrator who is competent and who, at the same time, is wholly free from bias; and the task of insuring compliance with the award when it is made is not exempt from difficulty. It is a mode of settlement of which the value varies much according to the nature of the controversy to which it is applied and the character of the litigants who appeal to it. Whether in any particular case it is a suitable method of procedure is generally a delicate and difficult question. The only parties who are competent to decide that question are the two parties whose rival contentions are in issue. The claim of a third nation which is unaffected by the controversy to impose this particular procedure on either of the two others cannot be reasonably justified and has no foundation in the law of nations.Immediately following this statement his Lordship again touched upon the Monroe Doctrine for the purpose of specifically disclaiming its acceptance by her Majesty’s Government as a sound and valid principle. He says:
It must always be mentioned with respect, on account of the distinguished statesman to whom it is due and the great nation who have generally adopted it. But international law is founded on the general consent of nations; and no statesman, however eminent, and no nation, however powerful, are competent to insert into the code of international law a novel principle which was never recognized before, and which has not since been accepted by the Government of any other country. The United 265States have a right, like any other nation, to interpose in any controversy by which their own interests are affected; and they are the judge whether those interests are touched and in what measure they should be sustained. But their rights are in no way strengthened or extended by the fact that the controversy affects some territory which is called American.In concluding this despatch Lord Salisbury declared that her Majesty’s Government “fully concur with the view which President Monroe apparently entertained, that any disturbance of the existing territorial distribution in that hemisphere by any fresh acquisitions on the part of any European state would be a highly inexpedient change. But they are not prepared to admit that the recognition of that expediency is clothed with the sanction which belongs to a doctrine of international law. They are not prepared to admit that the interests of the United States are necessarily concerned in any frontier dispute which may arise between any two of the states who possess dominions in the Western Hemisphere; and still less can they accept the doctrine that the United States are entitled to claim that the process of arbitration shall be applied to any demand for the surrender of territory which one of those states may make against another.” 266
The other despatch of Lord Salisbury, which accompanied the one upon which I have commented, was mainly devoted to a statement of facts and evidence on Great Britain’s side in the boundary controversy; and in making such statement his Lordship in general terms designated the territory to which her Majesty’s Government was entitled as being embraced within the lines of the most extreme claim which she had at any time presented. He added:
A portion of that claim, however, they have always been willing to waive altogether; in regard to another portion they have been and continue to be perfectly ready to submit the question of their title to arbitration. As regards the rest, that which lies within the so-called Schomburgk line, they do not consider that the rights of Great Britain are open to question. Even within that line they have on various occasions offered to Venezuela considerable concessions as a matter of friendship and conciliation and for the purpose of securing an amicable settlement of the dispute. If, as time has gone on, the concessions thus offered have been withdrawn, this has been the necessary consequence of the gradual spread over the country of British settlements, which Her Majesty’s Government cannot in justice to the inhabitants offer to surrender to foreign rule.In conclusion his Lordship asserts that his Government has
repeatedly expressed their readiness to submit to arbitration the conflicting claims of Great Britain 267and Venezuela to large tracts of territory which from their auriferous nature are known to be of almost untold value. But they cannot consent to entertain, or to submit to the arbitration of another power or of foreign jurists however eminent, claims based on the extravagant pretensions of Spanish officials in the last century and involving the transfer of large numbers of British subjects, who have for many years enjoyed the settled rule of a British colony, to a nation of different race and language, whose political system is subject to frequent disturbance, and whose institutions as yet too often afford very inadequate protection to life and property.These despatches exhibit a refusal to admit such an interest in the controversy on our part as entitled us to insist upon an arbitration for the purpose of having the line between Great Britain and Venezuela established; a denial of such force or meaning to the Monroe Doctrine as made it worthy of the regard of Great Britain in the premises; and a fixed and continued determination on the part of her Majesty’s Government to reject arbitration as to any territory included within the extended Schomburgk line. They further indicate that the existence of gold within the disputed territory had not been overlooked; and they distinctly put forward the colonization and settlement by English subjects in such territory, during more than half a century of dispute, as creating a 268claim to dominion and sovereignty, if not strong enough to override all question of right and title, at least so clear and indisputable as to be properly considered as above and beyond the contingencies of arbitration.
If we had been obliged to accept Lord Salisbury’s estimate of the Monroe Doctrine, and his ideas of our interest, or rather want of interest, in the settlement of the boundary between Great Britain and Venezuela, his despatches would have certainly been very depressing. It would have been unpleasant for us to know that a doctrine which we had supposed for seventy years to be of great value and importance to us and our national safety was, after all, a mere plaything with which we might amuse ourselves; and that our efforts to enforce it were to be regarded by Great Britain and other European nations as meddlesome interferences with affairs in which we could have no legitimate concern.
The reply of the English Government to Mr. Olney’s despatch, whatever else it accomplished, seemed absolutely to destroy any hope we might have entertained that, in our changed position in the controversy and upon our independent solicitation, arbitration might be conceded to us. Since, therefore, Great Britain 269was unwilling, on any consideration, to coöperate with Venezuela in setting on foot an investigation of their contested claim, and since prudence and care dictated that any further steps we might take should be proved to be as fully justified as was practicable in the circumstances, there seemed to be no better way open to us than to inaugurate a careful independent investigation of the merits of the controversy, on our own motion, with a view of determining as accurately as possible, for our own guidance, where the divisional line between the two countries should be located.
Mr. Olney’s despatch and Lord Salisbury’s reply were submitted to the Congress on the seventeenth day of December, 1895, accompanied by a message from the President.
In this message the President, after stating Lord Salisbury’s positions touching the Monroe Doctrine, declared:
Without attempting extended argument in reply to these positions, it may not be amiss to suggest that the doctrine upon which we stand is strong and sound, because its enforcement is important to our peace and safety as a nation, and is essential to the integrity of our free institutions and the tranquil maintenance of our distinctive form of government. It was intended to apply to every stage of our national life, and cannot become obsolete while our 270Republic endures. If the balance of power is justly a cause for jealous anxiety among the governments of the Old World and a subject for our absolute non-interference, none the less is the observance of the Monroe Doctrine of vital concern to our people and their Government.Speaking of the claim made by Lord Salisbury that this doctrine had no place in international law, it was said in the message: “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.”
Referring to the request contained in Mr. Olney’s despatch that the entire boundary controversy be submitted to arbitration, the following language was used:
It will be seen from the correspondence herewith submitted that this proposition has been declined by the British Government upon grounds which in the circumstances seem to me to be far from satisfactory. It is deeply disappointing that such an appeal, actuated by the most friendly feelings toward both nations directly concerned, addressed to the sense of justice and to the magnanimity of one of the great powers of the world, and touching its relations to one comparatively weak and small, should have produced no better results.After recommending to the Congress an adequate appropriation to meet the expense of a commission which should make the suggested investigation and report thereon with the least possible delay, the President concluded his message as follows:
The course to be pursued by this Government in view of the present condition does not appear to 271admit of serious doubt. Having labored faithfully for many years to induce Great Britain to submit their dispute to impartial arbitration, and having been finally apprised of her refusal to do so, nothing remains but to accept the situation, to recognize its plain requirements, and deal with it accordingly. Great Britain’s present proposition has never thus far been regarded as admissible by Venezuela, though any adjustment of the boundary which that country may deem for her advantage and may enter into of her own free will cannot, of course, be objected to by the United States. Assuming, however, that the attitude of Venezuela will remain unchanged, the dispute has reached such a stage as to make it now incumbent upon the United States to take measures to determine with sufficient certainty for its justification what is the true divisional line between the Republic of Venezuela and British Guiana. The inquiry to that end should, of course, be conducted carefully and judicially; and due weight should be given to all available evidence, records, and facts in support of the claims of both parties.
When such report is made and accepted, it will, in my opinion, be the duty of the United States to resist by every means in its power, as a wilful aggression 272upon 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.The recommendations contained in this message were acted upon with such promptness and unanimity that on the twenty-first day of December, 1895, four days after they were submitted, a law was passed by the Congress authorizing the President to appoint a commission “to investigate and report upon the true divisional line between the Republic of Venezuela and British Guiana,” and making an ample appropriation to meet the expenses of its work.
In making these recommendations I am fully alive to the responsibility incurred, and keenly realize all the consequences that may follow.
I am, nevertheless, firm in my conviction that while it is a grievous thing to contemplate the two great English-speaking peoples of the world as being otherwise than friendly competitors in the onward march of civilization, and strenuous and worthy rivals in all the arts of peace, there is no calamity which a great nation can invite which equals that which follows a supine submission to wrong and injustice, and the consequent loss of national self-respect and honor, beneath which are shielded and defended a people’s safety and greatness.
On the first day of January, 1896, five of our 273most able and distinguished citizens were selected to constitute the commission; and they immediately entered upon their investigation. At the outset of their labors, and on the fifteenth day of January, 1896, the president of the commission suggested to Mr. Olney the expediency of calling the attention of the Governments of Great Britain and Venezuela to the appointment of the commission, adding: “It may be that they would see a way entirely consistent with their own sense of international propriety to give the Commission the aid that it is no doubt in their power to furnish in the way of documentary proof, historical narrative, unpublished archives, or the like.” This suggestion, on its presentation to the Government of Great Britain, was met by a most courteous and willing offer to supply to our commission every means of information touching the subject of their investigation which was within the reach of the English authorities; and at all times during the labors of the commission this offer was cheerfully fulfilled.
In the meantime, and as early as February, 1896, the question of submitting the Venezuelan boundary dispute to mutual arbitration was again agitated between the United States and Great Britain. 274
Our ambassador to England, in a note to Lord Salisbury, dated February 27, 1896, after speaking of such arbitration as seeming to be “almost unanimously desired by both the United States and Great Britain,” proposed, in pursuance of instructions from his Government, “an entrance forthwith upon negotiations at Washington to effect this purpose, and that Her Majesty’s Ambassador at Washington should be empowered to discuss the question at that capital with the Secretary of State.” He also requested that a definition should be given of “settlements” in the disputed territory which it was understood her Majesty’s Government desired should be excluded from the proposed submission to arbitration.
Lord Salisbury, in his reply to this note, dated March 3, 1896, said:
The communications which have already passed between Her Majesty’s Government and that of the United States have made you acquainted with the desire of Her Majesty’s Government to bring the difference between themselves and the Republic of Venezuela to an equitable settlement. They therefore readily concur in the suggestion that negotiations for this purpose should be opened at Washington without unnecessary delay. I have accordingly empowered Sir Julian Pauncefote to discuss the question either with the representative of Venezuela 275or with the Government of the United States acting as the friend of Venezuela.With this transfer of treaty negotiations to Washington, Mr. Olney and Sir Julian Pauncefote, the ambassador of Great Britain to this country, industriously addressed themselves to the subject. The insistence of Great Britain that her title to the territory within the Schomburgk line should not be questioned, was no longer placed by her in the way of submitting the rights of the parties in the entire disputed territory to arbitration. She still insisted, however, that English settlers long in the occupancy of any of the territory in controversy, supposing it to be under British dominion, should have their rights scrupulously considered. Any difference of view that arose from this proposition was adjusted without serious difficulty, by agreeing that adverse holding or prescription during a period of fifty years should make a good title, and that the arbitrators might deem exclusive political control of a district, as well as actual settlement, sufficient to constitute adverse holding or to make title by prescription.
On the 10th of November, 1896, Mr. Olney addressed a note to the president of the commission which had been appointed to investigate 276the boundary question on behalf of our Government, in which he said: “The United States and Great Britain are in entire accord as to the provisions of a proposed treaty between Great Britain and Venezuela. The treaty is so eminently just and fair as respects both parties—so thoroughly protects the rights and claims of Venezuela—that I cannot conceive of its not being approved by the Venezuelan President and Congress. It is thoroughly approved by the counsel of Venezuela here and by the Venezuelan Minister at this Capital.” In view of these conditions he suggested a suspension of the work of the commission.
The treaty was signed at Washington by the representatives of Great Britain and Venezuela on the second day of February, 1897. No part of the territory in dispute was reserved from the arbitration it created. It was distinctly made the duty of those appointed to carry out its provisions, “to determine the boundary-line between the Colony of British Guiana and the United States of Venezuela.”
The fact must not be overlooked that, notwithstanding this treaty was promoted and negotiated by the officers of our Government, the parties to it were Great Britain and Venezuela. 277This was a fortunate circumstance, inasmuch as the work accomplished was thus saved from the risk of customary disfigurement at the hands of the United States Senate.
The arbitrators began their labors in the city of Paris in January, 1899, and made their award on the third day of October in the same year.
The line they determined upon as the boundary-line between the two countries begins in the coast at a point considerably south and east of the mouth of the Orinoco River, thus giving to Venezuela the absolute control of that important waterway, and awarding to her valuable territory near it. Running inland, the line is so located as to give to Venezuela quite a considerable section of territory within the Schomburgk line. This results not only in the utter denial of Great Britain’s claim to any territory lying beyond the Schomburgk line, but also in the award to Venezuela of a part of the territory which for a long time England had claimed to be so clearly hers that she would not consent to submit it to arbitration.
Thus, we have made a laborious and patient journey through the incidents of a long dispute, to find at last a peaceful rest. As we 278look back over the road we have traversed, and view again the incidents we have passed on our way, some may be surprised that this controversy was so long chronic, and yet, in the end, yielded so easily to pronounced treatment. I know that occasionally some Americans of a certain sort, who were quite un-American when the difficulty was pending, have been very fond of lauding the extreme forbearance and kindness of England toward us in our so-called belligerent and ill-advised assertion of American principle. Those to whom this is a satisfaction are quite welcome to it.
My own surprise and disappointment have arisen more from the honest misunderstanding and the dishonest and insincere misrepresentation, on the part of many of our people, regarding the motives and purposes of the interference of the Government of the United States in this affair. Some conceited and doggedly mistaken critics have said that it was dreadful for us to invite war for the sake of a people unworthy of our consideration, and for the purpose of protecting their possession of land not worth possessing. It is certainly strange that any intelligent citizen, professing information on public affairs, could fail to see that when we aggressively interposed in this 279controversy it was because it was necessary in order to assert and vindicate a principle distinctively American, and in the maintenance of which the people and Government of the United States were profoundly concerned. It was because this principle was endangered, and because those charged with administrative responsibility would not abandon or neglect it, that our Government interposed to prevent any further colonization of American soil by a European nation. In these circumstances neither the character of the people claiming the soil as against Great Britain, nor the value of the lands in dispute, was of the least consequence to us; nor did it in the least concern us which of the two contestants had the best title to any part of the disputed territory, so long as England did not possess and colonize more than belonged to her—however much or however little that might be. But we needed proof of the limits of her rights in order to determine our duty in defense of our Monroe Doctrine; and we sought to obtain such proof, and to secure peace, through arbitration.
But those among us who most loudly reprehended and bewailed our vigorous assertion of the Monroe Doctrine were the timid ones who feared personal financial loss, or those engaged 280in speculation and stock-gambling, in buying much beyond their ability to pay, and generally in living by their wits. The patriotism of such people traverses exclusively the pocket nerve. They are willing to tolerate the Monroe Doctrine, or any other patriotic principle, so long as it does not interfere with their plans, and are just as willing to cast it off when it becomes troublesome.
But these things are as nothing when weighed against the sublime patriotism and devotion to their nation’s honor exhibited by the great mass of our countrymen—the plain people of the land. Though, in case of the last extremity, the chances and suffering of conflict would have fallen to their lot, nothing blinded them to the manner in which the integrity of their country was involved. Not for a single moment did their Government know the lack of their strong and stalwart support.
I hope there are but few of our fellow-citizens who, in retrospect, do not now acknowledge the good that has come to our nation through this episode in our history. It has established the Monroe Doctrine on lasting foundations before the eyes of the world; it has given us a better place in the respect and consideration of the people of all nations, and especially 281of Great Britain; it has again confirmed our confidence in the overwhelming prevalence among our citizens of disinterested devotion to American honor; and last, but by no means least, it has taught us where to look in the ranks of our countrymen for the best patriotism.
Transcriber's Note:
Page 101, ‘yourself, Walker, and marshal should confer’ changed to read ‘yourself, Walker, and the marshal should confer’Obvious printer errors corrected silently.
Inconsistent spelling and hyphenation are as in the original.
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