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by paying a sum of 33,000,000 bolivars in the certificates of a five per cent loan contracted by it to the amount of 50,000,000 bolivars. The interest and the amortization of this loan had not been regularly paid since 1898, and consequently in 1902 the company had claims amounting to 7,500,000 bolivars. Another claim to the amount of 820,000 bolivars was owed to German contractors for the construction of a slaughter-house at Caracas. And lastly were the claims of German settlers in Venezuela because of forced leaves and the confiscation of property during 5 the revolution. The other countries had claims against Venezuela of a similiar nature. The exact amount of the claims was indeterminate, and many of them were without basis and were pure cases of fraud. Soon after he became president, the foreign powers began to demand of Castro the settlement of the claims of their nationals against Venezuela. The country was unable to meet its obligation and so President Castro stalled for time. On January 24, 1901 he issued a decree establishing a commission of Venezuelans to hear and decide all claims against the government. The decree stated that all claims originating before the presidency of Castro were to be ignored, and that any diplomatic protest from the decision of the commission was precluded. claims were to be paid with the bonds of a new revolutionary

The

4

A bolivar was equal to about 20 cents.

loan, and the creditors were given 90 days in which to present their claims to the commission. Germany, the United States,

Italy, Great Britain, Spain and Holland objected to the decrees, but Venezuela insisted foreigners should not be treated differently than Venezuelan subjects. Consequently the claims were considered as coming within the scope of the internal

6

affairs of the State. Germany, however, insisted that the claims should be settled through the regular diplomatic channels. She insisted that the final determination of the sums to be paid, the mode of payment, and the settlement of claims dating from a period prior to May 23, 1899, the date fixed in decree of January 24, should be settled by agreement between the Venezuelan government and the Imperial legation. On April 25, Great Britain agreed to the decree with certain reservations. Minister Haggard in his note to the

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Venezuelan Government said, "His Majesty's Government reserves the right to object to any claim on the part of Venezuela at any future time to having released itself, by its own decree, from responsibility to Great Britain as to the injustice or damages caused to British subjects, for which Venezuela would

6 Foreign Relations, 1903. p. 419.

7

Venezuelan Arbitration of 1903 including Protocols, Personel and rules of commissions, Opinions, and Summary of Awards, with Appendix Containing the Venequelan Yellow Book of 1903, Bowens Pamphlet entitled "Venezuelan Protocols and Preferential Question" Hagen Decision with History of Recent Venezuelan Revolutions. in

be bound to give indemnization either by reason of the law of 8 nations in general or by virtue of the provisions of treaties.

In reply to the contention of the foreign powers R. Lopez Baralt, minister of internal affairs in charge of the correspondence of foreign relations said that, "to legislate for the natives only, and leave open for foreigners the application of a special law, enforced through the intervention of representatives from other countries, would expose countries whose destiny is to grow from immigration to degenerate into mere settlements lacking the essential quality of political states, a position they hold in the international concert." It is easy for an American to sympathize with Senor Baraets' contentions, but one would add that it is necessary for the government to settle all causes of complaint.

During the spring of 1901 the Commission appointed by the Venezuelan Government to examine and pass upon claims for

damages arising from the Revolution which placed General Castro in power heard 725 native and foreign claims for the amount of 16, 438, 034.73 bolivars. 212 of these claims amounting to 3,676,202.12 bolivars were accepted and of this amount 1,223, 200 bolivars was recognized as just. Of the 212 claims allowed 55 were foreign and 38 of these were Italian. The preponderance

of Italian claims is explained by a clause in the Italian Treaty