Big Power Pressure on Venezuela (Part 2)

Yoshie Furuhashi furuhashi.1 at osu.edu
Mon Dec 16 03:15:22 MST 2002


Kelvin Singh, "Big Power Pressure on Venezuela during the Presidency
of Cipriano Castro," _Revista/Review Interamericana_, 29.1-4 (1999)

...[I]n undertaking the blockade, the allies played into American
hands. A demonstration of military aggression against a
Circum-Caribbean state by one or more European states had always
provided an opportunity for American diplomats to wring out transit
and other rights from the beleaguered state. This had happened in
Colombia in 1848, which had conceded transit rights to United States
citizens in Panama against the background of British encroachments in
Central America; Nicaragua had done the same the following year;
while Guzmán Blanco in desperation at British encroachments in the
Guyana region in the mid-1880s, had sought to cultivate American
support by granting monopoly concessions to American interests in the
Orinoco basin.32 The British, if not the Germans, because of their
novice status in the Caribbean, might have been expected to learn
from this historical experience the risk of throwing Caribbean states
more firmly into the orbit of Monroism, but evidently they did not.
The allied coercion of Venezuela, reaching the highest pitch of
intensity with the German bombardment and destruction of the
Venezuelan fort of San Carlos, precipitated the signing in Washington
by the Colombian negotiator of the inequitable Panama Canal zone
treaty, which the Colombian Congress would later regret and vainly
try to reverse. As for Castro, though the majority of Venezuelans
rallied to his memorable war cry "La planta insolente del extranjero
ha profanado el suelo sagrado de la Patria,"33 he knew that while he
could wear the allied enemies out in a land war, they were supreme at
sea, especially after they had seized or destroyed several Venezuelan
gunboats without any declaration of war. Castro also knew that with
the local insurgents not yet fully suppressed, and with the nearly
total dependence of his government on the customs revenues of the two
main ports of La Guayra and Puerto Cabello, he had to lean on the
Americans for intercession with the blockading powers and for a
negotiated settlement.

The story of how the American minister at Caracas, Herbert Bowen, was
assigned the role of negotiator by Castro, with the consent of the
government of the United States, is well known and the details of the
negotiations need not be repeated. The end result was that by
February 13, 1903, the first of two series of protocols were signed
at Washington with the blockading powers under which a partial cash
payment by Venezuela for "first line" diplomatic claims would be
made, "second line" diplomatic claims would be resolved in the now
time-honoured tradition of "mixed commissions" with provision for a
neutral umpire if the commissioners were deadlocked, and for the
vexed question of preferential treatment for the blockading nations
over all other foreign claimants to be decided by the Hague Tribunal.
The following year that tribunal decided in favour of the
blockaders.34 As far as foreign capitalist interests were concerned
-- in which American interests were now becoming vitally involved --
it was once more a triumph for the advanced industrial states since
the attempt by Castro to have these claims first assessed in
Venezuelan courts before reference to international tribunals was at
least temporarily defeated. It is an indication of the exploitative
nature of the claims business, that once negotiations for a
settlement had begun nearly every western investor country put in its
claim, and some of the claims were enormously inflated. To give some
examples: The United States, posing as the friend of Venezuela, put
in the largest claim of all, amounting in round figures to Bs
81,410,952, of which only Bs 2,269,543 were recognised by the mixed
commission; Italy claimed Bs 39,844,259, of which only Bs 2,975,906
were recognised; Belgium claimed Bs 14,921,805, of which Bs 1,898,643
were recognised. Germany's claim was relatively modest -- Bs
7,376,685 -- of which 2,091,906 were recognised. English claims
faired best of all: Bs 14,743,572-of which Bs 9,401,267 were
recognised. Altogether foreign claims on Venezuela's hard-pressed
revenues amounted in round figures to Bs 186,558,150 of which a small
fraction -- Bs 35,575,154 -- were eventually recognised by the mixed
commissions of 1904.35 This seeming fair play was no doubt meant to
legitimize the precedence of international tribunals over Latin
American national tribunals, but the gross discrepancy in the amount
of the claims and what was eventually recognised also reveals the
utter lack of scruple employed by the northern states as a pressure
tactic against Latin American states at the time.

The Anglo/German blockade of the Venezuelan ports, we have argued,
played into the hands of the Americans....[T]he United States now had
the justification needed for the Roosevelt Corollary to the Monroe
Doctrine. The preference shown for the claims of the blockading
nations also represented a de facto rejection of the Drago Doctrine
38 by the Hague Tribunal, though in 1907, when the claims of the
blockaders were virtually paid out by the Castro regime, the Hague
Tribunal modified its position on the use of force to collect debts.

For Venezuela, the claims payments, though drastically reduced,
represented an annual remittance to the blockading powers of thirty
percent of revenues from the two principal ports engaged in external
trade, La Guayra and Puerto Cabello. In addition, in June, 1905, the
Castro administration was required to sign a new agreement
consolidating the external debt due to British bondholders and the
debt due to the Diskonto Gesellschaft of Berlin, both inherited from
previous administrations, amounting to Bs 132,049,925, which had to
be serviced by twenty five percent of the ordinary revenues of all
ports. This meant that the charges on the income of the two major
ports of La Guayra and Puerto Cabello amounted to fifty five percent
of their annual revenues -- "this, in a country whose port revenues
amounted on the average to 90% of all fiscal collections; a country
whose treasury was in a permanent state of penury and which in that
epoch had no possibility of tapping other sources of fiscal
income."39 That Castro paid out the debts to the blockaders within
the stipulated period is testimony to his strong commitment to legal
obligations and the capacity of the Venezuelan masses to endure
deprivation.

It was that very commitment to legality, as well as his national
fervour and outrage, that brought him into headlong conflict with
American and French interests after 1904. He received information in
early 1904 that the New York and Bermudez Company, before the
Venezuelan Supreme Court had rendered its decision in favour of the
company, had helped to finance the destructive Revolución Libertadora
led by Matos. In 1905, he also received information which implicated
in the same insurgency the French Cable Company, which had a monopoly
over cable communications between Venezuela and Europe. He also had
ample evidence that the British and Dutch colonies of Trinidad and
Curaçao had once again played an important facilitating role in the
costly insurgency. Castro was determined to reverse the tradition
whereby Venezuela always had to pay compensation for alleged injury
to foreigners and their property in Venezuela, while those foreign
interests which fomented death and destruction in Venezuela received
no punitive sanction. He retaliated by first suing on July 20 th ,
1904, through his Attorney General, the New York and Bermudez Company
for damages for the non-fulfillment of the terms of its contract and
applied to the Primary Court of Claims of the Federal Court and Court
of Cassation for the cancellation of the company's concession. He
also applied, as was permissible under Venezuelan law, for a Receiver
to take charge of the company's assets pending the outcome of the
litigation. The suit was granted, and a commission was appointed by
the court to assess damages to be paid by the company. It assessed
damages at Bs 1,500,000 or approximately $300,000. Castro followed
this by another suit in September, 1904, through the Attorney
General, this one against the company for having fomented and aided
the Matos rebellion. That suit finally heard in August, 1907, after
much diplomatic protest and threats from Washington, resulted in the
company being fined Bs 25,000,000, equivalent to $5,000,000. As O.E.
Thurber, who gave in 1907 what was perhaps the most thoroughly
documented account of the diplomatic impasse between the United
States and Venezuela, argued, if a foreign corporation operating in
the United States had been caught promoting riot and insurrection
against the United States Government, the principals would probably
have been hung if apprehended, the property of the offending
corporation would have been confiscated, and the universal verdict
would have been one of approval: "Can any one conceive that another
nation would have the temerity or insolence to call us to account for
our action, or for the means adopted to bring the criminals to
justice?"40

But as Castro himself had recognised, in the international relations
conducted by the western powers, it was strength, not principle or
consistency of conduct, that mattered. When he received news of the
success of the first suit, the immediate response of the same
American Minister, Herbert Bowen, who had negotiated the Washington
Protocols with the blockading powers, was immediately to request an
American battle fleet to seize the customs houses at La Guayra and
Puerto Cabello if the company's embargoed property was not returned
within twenty four hours. The Venezuelan foreign minister responded
by pointing out that his government was following due legal process,
that the company was free to appeal to the Venezuelan courts, that
Bowen was tarnishing the name of a Venezuelan nation and threatening
its sovereignty, against which the Venezuelan government had to
protest. The Venezuelan government on January 6, 1905, in the face of
a mounting campaign of hostility by the State Department and sections
of the American press, offered to sign an arbitration treaty with the
United States under which all issues which "legally acquired a
diplomatic character" and which the two governments could not settle
by mutual consent would be settled. The United States government
agreed in principle, but wanted the Venezuelan government to suspend
all legal proceedings against the New York and Bermudez Company and
to restore its control over its properties, pending the decision of
an arbitration tribunal. However, the Venezuelan government took the
view that in international law a case pending in a national court is
not a diplomatic question and can only become such after the court
had rendered its final decision in such a way and in such terms as to
constitute an injustice.41 The United States government, like most of
the other strong powers, refused to recognise this Venezuelan
insistence on what was now being called the "Calvo Doctrine."
Instead, it adopted the big power tactic of invoking more diplomatic
claims,42 sending some warships for naval manoevres, but not
proceeding to blockade any port, since Latin American countries were
already becoming alienated from the United States. Moreover, in the
years 1905 to 1907, the United States government was preoccupied with
the Russo-Japanese war and the Morocco conflict.

Castro acted against the French Cable Company in September 1905, by
raising its annual tax payment. When the company's manager refused to
pay the increased tax, he had him expelled and took the company to
court. The French government withdrew its minister, leaving their
consul general, Olivier Taigny, in charge of French interests. Taigny
protested against the Venezuelan government's action, rejecting the
allegation that the company had supported the Matos rebellion. Then
followed what Taigny would later call "an opera bouffe." Castro had
refused to send Taigny an invitation to his 1906 New Year's party for
foreign diplomats, on the ground that Taigny was a consular agent and
not a diplomat. When Taigny turned up anyway at the party, he was
studiously ignored by Castro. This immediately led to a furore, with
the French government, asserting that it had been subjected to a
diplomatic insult, called for a public apology from the Venezuelan
government, and when this was not forthcoming broke off diplomatic
relations. Castro, in the meantime, fully aware of the use of the
cables for coded messages to insurgents, cut the French cable link
from Caracas to Curaçao. Taigny, now without diplomatic status,
attempted to hand-retrieve French diplomatic mail on board the French
liner, the "Martinique," but was not permitted to debark by
Venezuelan customs security, and was thus effectively expelled from
Venezuela.43 This, of course, further embittered relations with
France, which now threatened a naval blockade with secret
encouragement from the United States, which, however, wished France
to act unilaterally. Entangled with Germany in the Morocco crisis,
the French government wisely refrained from playing the American
game, and simply settled, like the Americans, for a policy of
watchful waiting.

Castro's strategy for dealing with those two island bases of
insurgency, Trinidad and Curaçao, was to blockade the major
Venezuelan ports in times of insurgency, which only the powerful war
vessels of the western powers could break, and often did. Such
blockades had the effect of strangling legal trade between the
islands and Venezuela, which could be circumvented only by smuggling,
with the risk of contraband vessels falling victim to Venezuelan
gunboats. Moreover, Castro continued Guzmán Blanco's strategy of
making the Venezuela northern coastal ports direct ports of call for
ships engaged in the trans-Atlantic and North America trade.44 This
would cut off the lucrative middle man's profits from Trinidad and
Curaçao. Simultaneously, he strengthened port defenses, strengthened
his military and popular forces, especially in the outlying states,
and allocated a larger share of the budget to defense. He also dealt
ruthlessly with insurgents when they were caught, and could be
credited as the Venezuelan leader who effectively put an end to the
caudillaje, which had devastated the country over the previous half
century. By 1908, every externally sponsored attempt to dislodge him
from power had failed miserably. Detested by most resident diplomats
except the Germans, with whom he had developed a rapproachment,
Castro by mid-1908 could only evoke something akin to despair from
the British minister, Sir Vincent Corbett. Commenting on the signs of
another insurgency, he denounced Castro as ruthless in his response:
"On the other hand, it must be remembered that the President, despite
his low origin and imperfect education is a Man [his emphasis], and
as such a head and shoulders above his adversaries. In spite of the
universal detestation in which he is held, he may yet by sheer force
of character again defeat his enemies as he has done before."45

Yet the unexpected happened: by the end of the year Castro would be
out of power via a palace coup rather than an insurgency. We must now
conclude with a brief overview of how it happened. In April, 1908,
the United States Government, becoming increasingly frustrated by
Castro's intransigence on the issue of arbitrating the New York and
Bermudez issue and four others that were subsequently added,
attempted a naval intimidation of Castro by sending the warship
"Tacoma" to La Guayra, which, in the context of news of another
insurgency in the making, with Trinidad as a likely base of
operations for General Rolando, prompted Castro to make defensive
preparations once more. Early in the same month it was rumoured
abroad that there was an outbreak of bubonic plague in La Guayra, the
chief Venezuelan port. The Trinidad authorities began prohibiting
Venezuelan ships from landing goods and passengers at the Port of
Spain harbour.46 This measure would certainly have resulted in
Venezuelan ports having to depend on goods coming from Trinidad and
Curaçao and would have delivered a serious setback to Castro's
attempt to confine the Venezuelan coasting and external trade to
Venezuelan ports. On April 28, Castro retaliated against Trinidad by
passing a decree which quarantined La Guayra as a port of entry,
citing the very bubonic plague that the Trinidad government had cited
for its action. In early May the Curaçao authorities began to
quarantine Venezuelan vessels coming with clean bills of health from
other Venezuelan ports. Castro retaliated with a decree on May 14,
virtually prohibiting foreign vessels from conducting trade with
Venezuelan ports. In the same month of May an Amsterdam journal, the
Hou en Trou published a letter from the Dutch Minister in Caracas,
J.H. De Reuss, critical of the Castro administration. A month later,
sensing an impending crisis between Castro and the British and Dutch
interests, the Roosevelt administration decided to increase the
pressure on Castro by breaking off diplomatic relations (June 13,
1908). In July another Dutch journal, the Handelsblad, revealed De
Reuss' letter to the public, following which Castro handed De Reuss
his passport on the ground that his conduct was incompatible with his
diplomatic status. In the meantime mercantile interests in Curaçao
appealed to the queen of the Netherlands saying that Castro's decree
was ruining the trade of Curaçao and it was hinted that unless the
Dutch government took urgent action, Curaçao might invite the United
States to establish a protectorate over the island. The Roosevelt
administration made it known diplomatically to the Dutch that it
would have no objection to the Dutch mounting a naval blockade and
even temporarily taking control of the Venezuelan customs houses. The
stage was set for the final showdown.47 From August the Dutch began
sending their iron-clads for a demonstration before the main
Venezuelan ports and to prepare for the possible landing of troops.

The timing could not have been better. Castro was now suffering from
severe bouts of fever and exhaustion due to a bladder infection and
an intestinal ulcer. It was rumoured that he might die, unless he
undertook a delicate operation abroad. Leaving his Vice President,
Juan Vicente Gomez to deal with the Dutch blockade, Castro sailed for
Europe on the 23 rd of November, heading for a medical institution in
Germany to be operated on by one Dr. Israel. According to the British
Minister in The Hague, Lord Acton, the prevailing feeling there was
that "a fatal termination to the President's illness might afford a
solution to the difficulty"; while the British Foreign Minister, Lord
Landsdowne, minuted on December 7, "Dutch diplomacy has so far been
futile. The government probably long for Castro's death at the hands
of the Berlin surgeon."48

It was while Castro was being medically treated in Berlin that Juan
V. Gomez, in a move carefully orchestrated by Castro's local
opponents and foreign diplomats, carried out his palace coup on
December 19, 1908, and invited the United States government to
despatch warships to Venezuela, following which the Buchanan-Guinan
accords were worked out. The New York and Bermudez property would be
returned and the other American claims arbitrated.49 The Dutch failed
to obtain the general commercial agreement with Venezuela they had
hoped for. Once again a European aggression against Venezuela had
worked to the advantage of United States interests.

But Castro did not die from the surgeon's knife and once he had
sufficiently recuperated from the operation, he took ship and headed
back to the Caribbean in March 1909, confident that his popular
support among the masses, as distinct from the Venezuelan elite and
their foreign allies, was strong enough for him to recapture the
government and to deal with those who had betrayed him. Both Gomez
and his foreign allies evidently believed that as well. In a move
coordinated by the American government, the British and the Dutch
authorities debarred him from landing at either Trinidad or Curaçao.
On the 7th of April, 1909, he disembarked from the "S.S. Guadeloupe"
at Fort de France, Martinique, but after taking an early morning
stroll, he reported feeling unwell and his brother claimed that his
stitches were reopening; he remained in his bed for the rest of the
day in his underwear. In the meantime orders arrived from Paris that
he was not to be permitted to remain in Martinique or be allowed to
head for Venezuela. Three doctors testified that he was fit enough to
be embarked despite the protests of some civilians who had seen him.
He himself refused to get out of his bed. Gendarmes were summoned. At
around 8:45 p.m. they took him out in a stretcher clad only in his
underwear to the French liner "The Versailles" which had been delayed
for nearly three hours for the purpose."50

The first Caribbean Castro to challenge Western imperialism would
never again be allowed to set foot on his native land. He was
transported to France, disembarking at St. Nazaire on 24 th April,
1909. Despite his immediate proclamation that he was no longer
interested in regaining the Venezuelan presidency and wanted only
freedom to attend to his personal affairs and to grow lettuce like
Diocletian, after a period of physical recuperation he would make
several vain attempts to return to his native Venezuela before dying
in exile in Puerto Rico.51

[Endnotes omitted.  The full text of the article is available at
<http://www.sg.inter.edu/revista-ciscla/volume29/singh.pdf>.]
--
Yoshie

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