thought it essential that in any case a special arrangement should be made for the settlement of the first rank claims. As to these, Germany would expect to be paid in cash, if our first rank claims were to be met by cash payment. If we accepted a security they would accept a securityal so, which might take the shape of a first call upon the assigned customs revenues.

Nr. 12937. GROSSBRITANNIEN. Der Minister des Ausw. an den Botschafter in Washington. Die Blockademächte bestehen auf ihrer Vorzugsbehandlung.

Foreign Office, January 28, 1903

(Telegraphic.) || With reference to your telegrams of the 27th instant, His Majesty's Government cannot admit that pledges given by Mr. Bowen to the Powers which are not engaged in the blockade are binding on this country, and His Majesty's Government cannot accept a settlement which would force them to place their claims on the same footing with those of the non-blockading Powers. || It should not be difficult to make a separate arrangement with the blockading Powers by which annual instalments would be a guaranteed to them, secured on a part of the customs revenues of the two ports sufficient to extinguish their claims. Those claims amount to about 900 000 l., and I would suggest that six years would be reasonable period for payment. The Venezuelan Government would not be prevented by this plan from making, with the other Powers, simultaneous arrangements by which their claims for compensation would be satisfied. You should discuss the matter with your German and Italian colleagues.

Nr. 12938. GROSSBRITANNIEN. Derselbe an Denselben. Empfiehlt die Frage eventuell dem Haager Schiedsgericht vorzulegen.

Foreign Office, January 30, 1903. (Telegraphic.) || With reference to my telegram of the 28th instant, and to your Excellency's telegram of the 29th instant, I have to recall that on the 27th ultimo the United States' Chargé d'Affaires told me that the President was glad to be able to inform the Governments of Great Britain, Germany, Italy, and Venezuela that they had all in principle agreed to the proposal to refer the questions pending to the Arbitration Tribunal at the Hague. Although unable himself to act as Arbitrator, the President was good enough to say that he would gladly hold him

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self at the disposition of the Powers concerned if he could be of any further service in arranging the preliminaries of such a reference. The President of Venezuela subsequently commissioned Mr. Bowen to proceed to Washington with a view of coming to an arrangement either for an immediate settlement of the claims, or for concerting preliminaries for their submission to the arbitration of the Tribunal at the Hague. || There appears to be no doubt that the blockade could have been raised within a very few hours if Mr. Bowen had expressed a preference for the second of the above alternatives. The preliminary conditions on which Great Britain and Germany had insisted had been agreed to by President Castro, including those relative to the claims of the first line, i. e., claims arising, for the most part, out of overt acts of spoliation and violence, of which, during recent years, British subjects and Germans have been the victims. His Majesty's Government were ready to accept in full settlement of the British share of these claims the sum of 5500 7. in cash, while Germany would accept a similar amount in cash, on condition of receiving priority as regards the sum of about 61 000 l., the balance of the German claims. Consequently, in addition to the conditions already agreed upon, only an immediate cash payment of 110007. and prior security for 61 000l. was required to make possible an immediate appeal to the Tribunal at the Hague and the termination at the same time of the blockade. Mr. Bowen, however, preferred to make an attempt to bring about a direct settlement. His Majesty's Government have no desire to minimize the weight of his reasons for this, but the result has been that a state of affairs has unfortunately been prolonged which it was the earnest wish of His Majesty's Government to terminate. || It seems that Mr. Bowen has not thought it possible come to any arrangement which would not place on precisely the same footing all the Powers who have claims for compensation from Venezuela. This is, in the opinion of His Majesty's Government, quite at variance with international practice and with principles of equity, and, except at the instance of some competent Tribunal of Arbitration, they could not assent to it. It must be remembered that neither the President of the United States in his communications with His Majesty's Government, nor any of the blockading Powers, nor, so far as I am aware, President Castro, have ever put forward a proposal of this nature. || The preferential treatment for which the blockading Powers have asked is not, it must be further remembered, one by which either the resources at the disposal of the Venezuelan Government for the payment of the external debt would be exhausted, or by which the so-called,,Diplomatic debt", which amounts

to only 5,2 per cent. of the total customs revenue of Venezuela, would be inferfered with. The other Powers will, without doubt, under the arrangements proposed by the blockading Powers, be in a much more favourable position than they ever were before, and that, too, without incurring any of the trouble or expense involved in the naval operations which have been undertaken. || His Majesty's Government are of opinion, in these circumstances, that the method by which hostilities may be most expeditiously terminated would be by the reference of the question in dispute to the Tribunal at the Hague, subject to the conditions already mentioned, unless, indeed, the President of the United States, in the interests of a prompt settlement, were to consent to decide the only point which seems to be an obstacle to the Powers immediately interested arriving at a complete agreement. It is unnecessary to say that His Majesty's Government, in the event of the President consenting to adopt this course, would, with feelings of the utmost gratification, accept his good offices. In the event of the President being unable to do so, His Majesty's Government hope that he will give his assistance, in accordance with the offer quoted above, with a view to arrange the preliminaries for a reference to the Tribunal at the Hague, and thus enable the Powers to put an end to the blockade at once. I have communicated to the German and Italian Ambassadors here the substance of this telegram, and you may inform your German and Italian colleagues of the purport of these instructions.

Nr. 12939. GROSSBRITANNIEN. - Der Minister des Ausw. an den Botschafter in Washington. Ansicht der englischen Regierung.

Foreign Office, February 1, 1903. (Telegraphic.) It is not the wish of His Majesty's Government to place any obstruction in the way of a reasonable arrangement between the Government of Venezuela and other Powers. At the same time, they consider it essential that priority should be given to the first rank of claims of the blockading Powers, and that provision should be made for the extinction, within a reasonable time, of the second rank of claims. || Subject to the fulfilment of these conditions, the terms which Venezuela may find herself able to offer to the other Powers are of no concern to His Majesty's Government, even if as advantageous as those obtained by the latter: but, except as the result of arbitration, they cannot assent to the doctrine that, in cases like the present, identic treatment should be

accorded to belligerents and non-belligerents. || An arrangement by which the claims of the blockading Powers should be extinguished in six or seven years would, we believe, leave it possible for a similar settlement to be made with the other Powers. Your Excellency should make a further attempt, in concert with your German and Italian colleagues, to arrive at a settlement such as I have indicated before acting on the instructions contained in my telegram of the 30th ultimo.

(Telegraphic.) || His Majesty's Government are hoping shortly to learn from your Excellency whether a settlement on the lines indicated in my telegram of yesterday is possible. || If not, they are prepared to entertain proposals in conformity with the policy laid down in my telegram of the 30th January. Procedure might be as follows: A Protocol would be drawn up for signature at Washington, embodying the conditions which Mr. Bowen has already accepted, including those for the settlement of the first-rank claims. || We should then reserve for adjudication by the President of the United States, or, failing that, by the Tribunal at the Hague, questions which arise out of the proposal for identic treatment of all the creditor Powers first made to us on the 25th ultimo.

Nr. 12941. GROSSBRITANNIEN. - Derselbe an Denselben. Wird Roosevelt ein Schiedsgericht übernehmen?

Foreign Office, February 3, 1903.

(Telegraphic.) || In the event of its proving impossible to arrive at a settlement of the nature described in my telegram of the 1st instant, the procedure which we contemplate is that you and your colleagues should ascertain whether the President of the United States would consent to arbitrate. Your proposals would then be made to Mr. Bowen in accordance with the President's reply.

Nr. 12942. GROSSBRITANNIEN. - Der Botschafter in Washington an den Minister des Ausw. Bowen lehnt die

Vorschläge ab und schlägt das Haager Schiedsgericht vor.

Washington, February 3, 1903. (February 4.) (Telegraphic.) || With reference to my telegram of yesterday, I have to state that late last night Mr. Bowen sent me a letter in which he stated that he could not accept our proposals, and suggested a reference to the Tribunal at the Hague of the question of priority. || I have asked Mr. Bowen if he had consulted the Representatives of the neutral Powers relative to our proposal of yesterday. In reply he stated that, as they held him to his promises of equal treatment, it would be useless to do so.

Nr. 12943. GROSSBRITANNIEN. - Derselbe an Denselben. Bowen macht neue Vorschläge.

Washington, February 4, 1903, (Telegraphic.) || To-day Mr. Bowen informed German Representative that he was willing to propose to the Powers that there should be no reference to the Hague but that they should receive the total of 30 per cent. of the customs for three months instead.

Nr. 12944. GROSSBRITANNIEN. Der Minister des Ausw. an den Botschafter in Washington. Antwort auf

das vorige.

Foreign Office, February 4, 1903.

(Telegraphic.) || With regard to the proposal contained in your telegram of to-day, I should be glad to learn, as early as possible, whether the sum which Mr. Bowen offers is meant to meet first-line claims or whether the intention is that separate provision should be made for them. As you are aware, the conditions laid down by Great Britain and Germany were unreservedly accepted by President Castro in his note received by Mr. Hay on the 8th ultimo. One of those conditions was that, in the case of first-line claims, compensation would be paid at once by the Venezuelan Government.