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Señor Luis M. Drago, Minister of Foreign Relations of the Argentine Republic, to Señor Martin García Mérou, Minister of the Argentine Republic to the United States.

[Transmitted to the Department of State by the Argentine Minister.]




Buenos Aires, December 29, 1902. MR. MINISTER: I have received your excellency's telegram of the 20th instant concerning the events that have lately taken place between the Government of the Republic of Venezuela and the Governments of Great Britain and Germany. According to your excellency's information the origin of the disagreement is, in part, the damages suffered by subjects of the claimant nations during the revolutions and wars that have recently occurred within the borders of the Republic mentioned, and in part also the fact that certain payments on the external debt of the nation have not been met at the proper time.

Leaving out of consideration the first class of claims the adequate adjustment of which it would be necessary to consult the laws of the several countries, this Government has deemed it expedient to transmit to your excellency some considerations with reference to the forcible collection of the public debt suggested by the events that have taken place.

At the outset it is to be noted in this connection 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 and weighed before making any loan, the terms being made more or less onerous in accordance with the precise data concerning them which bankers always have on record. In the first place the lender knows that he is entering into a contract with a sovereign entity, and it is an inherent qualification of all sovereignty that no proceedings for the execution of a judgment may be instituted or carried out against it, since this manner of collection. would compromise its very existence and cause the independence and freedom of action of the respective government to disappear.

FR 1903


"See, also, page 788.


Among the fundamental principles of public international law which humanity has consecrated, one of the most precious is that which decrees that all states, whatever be the force at their disposal, are entities in law, perfectly equal one to another, and mutually entitled by virtue thereof to the same consideratien and respect.

The acknowledgment of the debt, the payment of it in its entirety, can and must be made by the nation without diminution of its inherent rights as a sovereign entity, but the summary and immediate collection at a given moment, by means of force, would occasion nothing less than the ruin of the weakest nations, and the absorption of their governments, together with all the functions inherent in them, by the mighty of the earth. The principles proclaimed on this continent of America are otherwise. Contracts between a nation and private individuals are obligatory according to the conscience of the sovereign, and may not be the object of compelling force," said the illustrious Hamilton. "They confer no right of action contrary to the sovereign will."

The United States has gone very far in this direction. The eleventh amendment to its Constitution provided in effect, with the unanimous assent of the people, that the judicial power of the nation should not be extended to any suit in law or equity prosecuted against one of the United States by citizens of another State, or by citizens or subjects of any foreign State. The Argentine Government has made its provinces indictable, and has even adopted the principle that the nation itself may be brought to trial before the supreme court on contracts which it enters into with individuals.

What has not been established, what could in no wise be admitted, is that, once the amount for which it may be indebted has been determined by legal judgment, it should be deprived of the right to choose the manner and the time of payment, in which it has as much interest as the creditor himself, or more, since its credit and its national honor are involved therein.

This is in no wise a defense for bad faith, disorder, and deliberate and voluntary insolvency. It is intended merely to preserve the dig nity of the public international entity which may not thus be dragged into war with detriment to those high ends which determine the exist ence and liberty of nations.

The fact that collection can not be accomplished by means of violence does not, on the other hand, render valueless the acknowledgment of the public debt, the definite obligation of paying it.

The State continues to exist in its capacity as such, and sooner or later the gloomy situations are cleared up, resources increase, common aspirations of equity and justice prevail, and the most neglected promises are kept.

The decision, then, which declares the obligation to pay a debt, whether it be given by the tribunals of the country or by those of international arbitration, which manifest the abiding zeal for justice as the basis of the political relations of nations, constitutes an indisputable title which can not be compared to the uncertain right of one whose claims are not recognized and who sees himself driven to appeal to force in order that they may be satisfied.

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 alarmed at the knowledge

that the failure of Venezuela to meet the payments 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 shores. 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 the suppression or subordination of the governments of the countries on which it is imposed.

Such a situation seems obviously at variance with the principles many times proclaimed by the nations of America, and particularly with the Monroe doctrine, sustained and defended with so much zeal on all occasions by the United States, a doctrine to which the Argentine Republic has heretofore solemnly adhered.

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Among the principles which the memorable message of December 2, 1823, enunciates, there are two great declarations which particularly refer to these republics, viz, "The American continents are henceforth not to be considered as subjects for colonization by any European powers," and with the governments whose independence we have acknowledged, we could not view any interposition for the purpose of oppressing them or controlling in any other manner their destiny by any European power in any other light than as the manifestation of an unfriendly disposition toward the United States."

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The right to forbid new colonial dominions within the limits of this continent has been many times admitted by the public men of England. To her sympathy is due, it may be said, the great success which the Monroe doctrine achieved immediately on its publication. But in very recent times there has been observed a marked tendency among the publicists and in the various expressions of European opinion to call attention to these countries as a suitable field for future territorial expansion. Thinkers of the highest order have pointed out the desirability of turning in this direction the great efforts which the principal powers of Europe have exerted for the conquest of sterile regions with trying climates and in remote regions of the earth. The European writers are already many who point to the territory of South America, with its great riches, its sunny sky, and its climate propitious for all products, as, of necessity, the stage on which the great powers, who have their arms and implements of conquest already prepared, are to struggle for the supremacy in the course of this century.

The human tendency to expansion, thus inflamed by the suggestions of public opinion and the press, may, at any moment, take an agressive direction, even against the will of the present governing classes. And it will not be denied that the simplest way to the setting aside and easy ejectment of the rightful authorities by European governments is just this way of financial interventions as might be shown by many examples. We in no wise pretend that the South American nations are, from any point of view, exempt from the responsibilities of all sorts which violations of international law impose on civilized peoples. We do not nor can we pretend that these countries occupy an exceptional position in their relations with European powers, which have the indubitable right to protect their subjects as completely as

in any other part of the world against the persecutions and injustices of which they may be the victims. The only principle which the Argentine Republic maintains and which it would, with great satisfaction, see adopted, in view of the events in Venezuela, by a nation that enjoys such great authority and prestige as does the United States, is the principle, already accepted, that there can be no territorial expansion in America on the part of Europe, nor any oppression of the peoples of this continent, because an unfortunate financial situation may compel some one of them to postpone the fulfillment of its promises. In a word, the principle which she would like to see recognized is: that the public debt can not occasion armed intervention nor even the actual occupation of the territory of American nations by a European power.

The loss of prestige and credit experienced by States which fail to satisfy the rightful claims of their lawful creditors brings with it difficulties of such magnitude as to render it unnecessary for foreign intervention to aggravate with its oppression the temporary misfor tunes of insolvency.

The Argentine Government could cite its own example to demonstrate the needlessness of armed intervention in these cases.

The payment of the English debt of 1824 was spontaneously resumed by her after an interruption of thirty years, occasioned by the anarchy and the disturbances which seriously affected the country during this period, and all the back payments and all the interest payments were scrupulously made without any steps to this end having been taken by the creditors.

Later on a series of financial happenings and reverses completely beyond the control of her authorities compelled her for the moment to suspend the payment of the foreign debt. She had, however, the firm and fixed intention of resuming the payments as soon as circumstances should permit, and she did so actually some time afterwards, at the cost of great sacrifices, but of her own free will and without the interference or the threats of any foreign power. And it has been because of her perfectly scrupulous, regular, and honest proceedings, because of her high sentiment of equity and justice so fully demonstrated, that the difficulties undergone, instead of diminishing, have increased her credit in the markets of Europe. It may be affirmed with entire certainty that so flattering a result would not have been obtained had the creditors deemed it expedient to intervene with violence at the critical financial period, which was thus passed through successfully. We do not nor can we fear that such circumstances will be repeated.

At this time, then, no selfish feeling animates us, nor do we seek our own advantage in manifesting our desire that the public debt of States should not serve as a reason for an armed attack on such States. Quite as little do we harbor any sentiment of hostility with regard to the nations of Europe. On the contrary, we have maintained with all of them since our emancipation the most friendly relations, especially with England, to whom we have recently given the best proof of the confidence which her justice and equanimity inspire in us by intrusting to her decision the most important of our international questions, which she has just decided, fixing our limits with Chile after a controversy of more than seventy years.

We know that where England goes civilization accompanies her,

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