Part 19 (1/2)

I was at Culebra, Porto Rico, at the time in command of a fleet consisting of over fifty s.h.i.+ps, including every battles.h.i.+p and every torpedo-boat we had, with orders from Was.h.i.+ngton to hold the fleet in hand and be ready to move at a moment's notice. Fortunately, however, the whole matter was amicably adjusted and there was no need for action.

In a speech delivered to several thousand Republican ”Pilgrims” at Oyster Bay, May 27, Colonel Roosevelt made the following interesting comments on Dewey's letter:

Just today I was very glad to see published in the papers the letter of Admiral Dewey describing an incident that took place while I was President. When we were menaced with trouble I acted up to my theory that the proper way of handling international relations was by speaking softly and carrying a big stick. And in that particular case Dewey and the American fleet represented the big stick. I asked, on behalf of the nation, the things to which we were ent.i.tled.

I was as courteous as possible. I not only acted with justice, but with courtesy toward them. I put every battles.h.i.+p and every torpedo-boat on the sea under the American flag and Dewey, with instructions to hold himself ready in entire preparedness to sail at a moment's notice.

That didn't mean that we were to have war. Dewey was the greatest possible provocative of peace.[253]

After the agreement to arbitrate had been made, the situation was further complicated by the demands of the blockading powers that the sums ascertained by the mixed commissions to be due them should be paid in full before anything was paid upon the claims of the peace powers.

Venezuela insisted that all her creditors should be treated alike. The Kaiser, from what motives it is not quite clear, suggested that this question should be referred to President Roosevelt, but as the United States was an interested party, Secretary Hay did not think it would be proper for the President to act, and it was finally agreed that the demands for preferential treatment should be submitted to the Hague Court.

During the summer of 1903 ten mixed commissions sat at Caracas to adjudicate upon the claims of as many nations against Venezuela. These commissions simply determined the amount of the claims in each case. The awards of these commissions are very instructive, as they show the injustice of resorting to measures of coercion for the collection of pecuniary claims which have not been submitted to arbitration. Belgian claimants demanded 14,921,805 bolivars and were awarded 10,898,643; British claimants demanded 14,743,572 and were awarded 9,401,267; German claimants demanded 7,376,685 and were awarded 2,091,908; Italian claimants demanded 39,844,258 and were awarded 2,975,906; Spanish claimants demanded 5,307,626 and were awarded 1,974,818; United States claimants demanded 81,410,952 and were awarded 2,313,711.[254]

The decision of the Hague Court, which was rendered February 22, 1904, held that the three allied powers were ent.i.tled to preferential treatment; that Venezuela had recognized in principle the justice of their claims while she had not recognized in principle the justice of the claims of the pacific powers; that the neutral powers had profited to some extent by the operations of the allies, and that their rights remained for the future absolutely intact.[255] This decision, emanating from a peace court, and indorsing the principle of armed coercion, was received with no small degree of criticism.

During the discussions on the Venezuelan situation that took place in Parliament in December, 1902, the members of the government repeatedly repudiated the charge of the opposition that they were engaged in a debt-collecting expedition, and tried to make it appear that they were protecting the lives and liberties of British subjects. Lord Cranborne declared:

I can frankly tell the House that it is not the claims of the bondholders that bulk largest in the estimation of the government. I do not believe the government would ever have taken the strong measures to which they have been driven if it had not been for the attacks by Venezuela upon the lives, the liberty, and the property of British subjects.

During the same discussion, Mr. Norman said:

This idea of the British fleet being employed to collect the debts of foreign bondholders is a.s.suredly a mistaken one. It was said by Wellington once that the British army did not exist for the purpose of collecting certain debts. It is still more true of the British fleet that it does not exist for the purpose of collecting debts of bondholders. People who lend money to South American republics know what the security is and what they are likely to get in return, and they ought not to have the British fleet at their backs.

To this Mr. Balfour, the prime minister, replied:

I do not deny--in fact, I freely admit--that bondholders may occupy an international position which may require international action; but I look upon such international action with the gravest doubt and suspicion, and I doubt whether we have in the past ever gone to war for the bondholders, for those of our countrymen who have lent money to a foreign government; and I confess that I should be very sorry to see that made a practice in this country.

Against President Roosevelt's contention that the coercion of an American state was not contrary to the Monroe Doctrine, provided that it did ”not take the form of acquisition of territory by any non-American power,” Signor Drago, Minister of Foreign Relations of the Argentine Republic, vigorously protested in a note dated December 29, 1902.[256]

This note contained a restatement of the ”Calvo doctrine,” which takes its name from a celebrated Argentine publicist. In his well-known book on international law, Calvo contends that a state has no right to resort to armed intervention for the purpose of collecting the private claims of its citizens against another state. This doctrine, which has received the indors.e.m.e.nt of most of the Latin-American states, was applied to public bonds in the note above referred to and is now usually known as the ”Drago doctrine.” Signor Drago held, first, ”that the capitalist who lends his money to a foreign state always takes into account the resources of the country and the probability, greater or less, that the obligations contracted will be fulfilled without delay. All governments thus enjoy different credit according to their degree of civilization and culture, and their conduct in business transactions,” and these conditions are measured before making loans. Second, a fundamental principle of international law is the ent.i.ty and equality of all states.

Both the acknowledgment of the debt and the payment must be left to the nation concerned ”without diminution of its inherent rights as a sovereign ent.i.ty.”

He said further:

As these are the sentiments of justice, loyalty, and honor which animate the Argentine people and have always inspired its policy, your excellency will understand that it has felt alarm at the knowledge that the failure of Venezuela to meet the payment of its public debt is given as one of the determining causes of the capture of its fleet, the bombardment of one of its ports and the establishment of a rigorous blockade along its sh.o.r.es. If such proceedings were to be definitely adopted they would establish a precedent dangerous to the security and the peace of the nations of this part of America. The collection of loans by military means implies territorial occupation to make them effective, and territorial occupation signifies a suppression or subordination of the governments of the countries on which it is imposed.

The doctrine so ably expounded by Dr. Drago attracted much attention during the next few years and was given a place on the program of the Third Pan American Conference held at Rio de Janeiro in July, 1906. Dr.

Drago had made his proposal as ”a statement of policy” for the states of the American continents to adopt. After full discussion the Rio Conference decided to recommend to the governments represented ”that they consider the point of inviting the Second Peace Conference at The Hague to consider the question of the compulsory collection of public debts; and, in general, means tending to diminish between nations conflicts having an exclusively pecuniary origin.”[257]

As a result of this action the United States modified the regular program prepared by Russia for the Second Hague Conference by reserving the right to introduce the question of an ”agreement to observe certain limitations in the use of force in collecting public debts accruing from contracts.” General Horace Porter presented to The Hague Conference a resolution providing that the use of force for the collection of contract debts should not be permitted until the justice of the claim and the amount of the debt should have been determined by arbitration. A large number of reservations were introduced, but the following resolutions were finally adopted by the votes of thirty-nine states, with five states abstaining from voting:

The contracting powers agree not to have recourse to armed force for the recovery of contract debts claimed from the government of one country by the government of another country as being due to its nationals.

This undertaking is, however, not applicable when the debtor state refuses or neglects to reply to an offer of arbitration, or, after accepting the offer, prevents any ”compromis” from being agreed on, or, after the arbitration, fails to submit to the award.[258]

FOOTNOTES:

[244] For. Rel., 1895-96, Part I, p. 552.