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its possessor to command the Mona Passage from the west. Since 1905, we stand in the relation of protector to the Dominican Republic. Still farther east off the coast of Porto Rico in the Leeward Islands lies the harbor of St. Thomas, belonging to Denmark, twice already near to annexation by the United States. The recently concluded treaty with Nicaragua contains clauses giving us naval rights farther to the south and west in Great Corn and Little Corn Islands off the east coast, near Bluefields and Pearl Lagoon. A naval base on the Gulf of Fonseca is also included which, though the port lies on the Pacific, strengthens our position in the easily accessible Caribbean. Finally, of course, there are the great fortifications erected at the Panama Canal itself around which all other naval projects of the United States in the Caribbean center. Key West, Guantanamo, Porto Rico and Colon already furnish bases of operation not to be matched by any other power in this region, bases whose total strength it seems not unlikely may be increased by adding to the list some at least among Mole St. Nicholas, Samana Bay, St. Thomas and the positions of advantage in Central America.
In view of our present and prospective position in West Indian waters, there seems little cause for alarm in the establishment of a naval base in Bermuda, a thousand miles north of Ponce and Guantanamo and about six hundred miles east of Cape Hatteras.
The adjustments in naval forces induced by the Panama Canal seem unlikely greatly to affect other than the Anglo-Saxon nations. Even those made by Great Britain are only incidental to the possession of far scattered colonies. For the United States alone is the opening of the Panama Canal an event of prime importance in the development of her naval policy in the American Mediterranean.
dents, Vol. VII, pp. 96 et seq. and 128 et seq., and documents cited by Foster, J. W., A Century of American Diplomacy, Boston, 1900, p. 419.
The effects of the new waterway on the economic and commercial interests of the Caribbean peoples are broader. For some it will mean prosperity because of the trade that comes to ports of call, for all it will bring an increased touch with the world's markets which may turn the colonies, so long dependent upon "subventions” and “grants-in-aid” from the home treasury, again into the position of self-supporting communities. The eighteenth century gave the West Indies an unexampled prosperity, the nineteenth brought them economic distress and revolution, perhaps the twentieth, through development of their resources and touch with world markets, may bring them the economic basis for a solid well-being.
CONCESSIONS AND THE MONROE DOCTRINE
Any wide view of American foreign policy cannot fail to take account of a fundamental modification of our attitude toward investments in the undeveloped countries of the New World. Until the past few years, the nationals of any country might make arrangements touching any subject they wished with the countries of Latin America. No diplomatic objection would be raised by the United States and the home country could be called upon to protect the incipient or vested rights of its subjects. If foreign money lenders sold bonds bearing usurious rates of interest, if through corrupt means they secured oppressive concessions, it was no concern of the United States. The Monroe Doctrine was considered purely a political announcement, one which demanded that the Governments of Europe should not take control of the territory of Latin-American republics, but which left the field of economic development open to free exploitation.
But of late years the attitude of the United States toward foreign investments in American countries has changed. The Monroe Doctrine has tended to become an economic policy as well as a political one. This, we in America have been either anxious to disguise or unwilling to recognize. It has been hard for us to realize that investment of European capital in a country may involve its economic absorption to such a degree that the foreign investments and those influences which stand back of them are, in fact, the country's government. The creditors of a weak country, too, may be so insistent in their demands for payment that they will, to paraphrase a clause of the Monroe Doctrine, oppress the country and control its destiny. If back of the foreign creditor or concessionaire stands a government ready to insist upon the observance of his rights, the economic interest may ripen into a political one. Delayed development, bad management, and bad faithany of these may bring a weak state into the power of a strong one whose citizens have invested heavily in industries subsidized by the government or public bonds or private exploitation enterprises.
The end of the Spanish-American War marked the first big step in the recent development of the economic side of the Monroe Doctrine. Cuba was to be given its freedom only under conditions which it was hoped would insure that it would remain free, conditions to which the Cubans themselves at first objected. Important among these clauses was the one which declared that Cuba should not contract a debt greater than her ability to pay, an engagement to that effect being inserted in a treaty with the United States. This was a provision of the famous Platt Amendment, one object of which was to make impossible the duplication, in Cuba, of the bad financial conditions with which every other independent Caribbean or Central American government is confronted.
The farsightedness of this policy soon had a demonstration. Certain European powers decided to force the Government of Venezuela to pay debts alleged to be due to their nationals, that is, they were about to take action which might transform economic claims into political ones.
The outcome of the Venezuelan blockade has already been discussed. The not altogether happy solution had, at least, the merit that, due to the stand taken by the United States Government, the economic claims against the republic had not been allowed to ripen into political rights.
From this time two phases of American foreign policy in relation to what may be called the economic side of the Monroe Doctrine developed. 1. In line with the protests made to the Department of State by the Argentine Minister of Foreign Affairs at the time of the Venezuelan troubles, the State Department sought the adoption of a general rule of international law which would regulate the conditions under which pecuniary claims might be collected, especially when those claims had the character of a public debt. The Rio Conference of 1906 was asked to consider the conditions under which, if at all, force could be used in the collection of such claims and the delegations from the American states championed before the Hague Conference in 1907 the rule to limit the freedom of action in the collection of public debts. The result was, the resolution passed with but few dissenting votes in 1907, stipulating that there shall be no collection of public debts by force unless the debtor first refuses an offer of arbitration or