When Cipriano Castro descended from the Venezuelan Andean state of Tachira in May, 1899, and through a combination of military and negotiating skills won access five months later to the presidential chair in Miraflores palace, Caracas, he was assuming the executive power of his country in the midst of its most profound political and economic crisis. The country had been riven during the previous forty years by almost continuous civil war or insurgency, which made its survival as an integrated federal state seem almost miraculous.1 This condition was not peculiar to Venezuela, since nearly every other Spanish American republic suffered a similar fate for prolonged periods in the course of the nineteenth century, leading to the negative stereotyping of the Latin American peoples as uncivilised and unprogressive by European, North American, and even Latin American intellectuals, diplomats, publicists and propagandists. The country was also, like so many of its Latin American counterparts, weighed down by a heavy external debt burden imposed on a narrow fiscal base, consisting almost exclusively of the customs duties collected at its two main ports of La Guayra and Puerto Cabello. Added to its external debt burden was the accumulation of what were referred to internationally as "diplomatic claims," which were claims for financial compensation made by foreign residents and company agents through their national diplomats for alleged injury suffered by the claimants to their persons or property in the course of the numerous insurgencies or civil wars, or for alleged illegal seizure of, or damage to, foreign trading or fishing vessels operating in Venezuelan waters. Soon after Castro came to power a new class of diplomatic claim would be added -- that for alleged breach of contractual arrangements with private foreign companies -- mostly monopolies -- operating in Venezuela.2 These claims were distinct from those of foreign bondholders, who had long-standing debts due them by the Venezuelan government, but which did not occasion diplomatic intervention except in cases of prolonged default on interest payments and refusal by the Venezuelan government to raise new loans to repay older ones, which was hardly ever the case since, as in so many other Latin American countries, the raising of foreign loans was an easy road to quick enrichment by incumbent and often short-lived administrations.3
It was the diplomatic claims which had become a major justification for coercion employed against successive Venezuelan administrations by Great Britain since the mid-nineteenth century, setting precedents which were later to be emulated by France, the Netherlands, Germany, Italy and the United States of America. Such coercion sometimes took the form of naval demonstrations by foreign war vessels, the threatened bombardment or occupation of the key Venezuelan port towns,4 or in extreme cases, as Cipriano Castro was soon to experience, the naval blockade by one or more foreign fleets of the most strategic points of the Venezuelan coast. The existence of British, Dutch and French colonies, especially Trinidad, Curaçao and Martinique served as convenient points of rendezvous and supply of coal and war materiel for such fleets. The preferred course of coercion by these foreign powers, however, was the destabilization of Venezuelan administrations by the granting of asylum in the island colonies to Venezuelan insurgents and assisting them in the acquisition of gunboats, arms and ammunition for their armed incursions into Venezuelan territory.5
We cannot, however, fully comprehend the dynamics of the historical situation in which Cipriano Castro was quickly immersed without an appreciation of the specific interests of these powers in Venezuela in the context of an impending tectonic shift in the global balance of forces which was threatening the British imperial hegemon, whose global empire was now coming under challenge from the United States in the western hemisphere, from France and Germany in Africa and from Russia, France, Germany and Japan in the Far East. It was in this context that British diplomacy, as indeed that of the other major imperialist and aspirant imperialist players, became a game of global checkmate in which strife-torn and economically weak Venezuela would become another pawn....
Cipriano Castro, however, proved in many respects to be the most nationalist of the Venezuelan presidents so far encountered by foreign powers in Venezuela. He intended to be the restorer of Venezuelan unity and pride, and very quickly decided to deal with the perennial diplomatic claims with which foreign diplomats harassed nearly every Venezuelan administration. Since most western historians who have written on this period of Venezuelan history seem to accept without reservation the view that Castro was simply a notorious dictator who was unwilling to meet his legal obligations to foreigners, we must at this point comment on the nature of these claims. Undoubtedly some of the claims were legitimate, but in the second half of the nineteenth century they were increasingly used in a cynical fashion by foreign diplomats and consular agents both to fill their own pockets and to apply pressure on an incumbent administration. As one of the writers on this subject, Miriam Hood, herself of Venezuelan ancestry, has taken the view that in contrast to the diplomatic claims of other foreign powers, British claims were "clean," it is worth referring to an interesting dispatch in 1865 from Richard Edwards, the successor to Doveton Orme as British Minister in Caracas. Bombarded by claims of "British subjects" for compensation from the Venezuelan government for alleged injury to persons and property in the course of civil strife, Edwards conducted an investigation lasting several months into some of these claims and concluded it was a "matter of speculation" encompassing both "persons without principles" and the British legation in Caracas. It involved the following: a Venezuelan gets a foreign resident to claim he is the proprietor of a property; the foreign resident then goes to the British legation claiming to have suffered losses or damages caused by government or insurgent troops; he is advised by the British legation to make his financial claim as high as possible; appropriate witnesses are found; and the claimant is then asked by the legation to accept fifty per cent since the Venezuelan government is so exacting! If the claimant demurs, a little more is offered him and the necessary documents are drawn up, with a florid diplomatic Note being sent to the Venezuelan Minister for Foreign Affairs beginning: "The UndersignedŠ." Edwards proceeded to give several specific examples of shady deals and concluded that "the natural consequence of such a system was to bring great discredit upon the English name."15 But by the end of the century the situation had not improved and even the anglophile, Miriam Hood, cites a later British Minister, W.H.D. Haggard, as confessing that a member of the British legation was involved in a swindle with two Venezuelan ministers to the tune of one million francs. Later in 1905 the American Minister to Caracas, Herbert Bowen, would expose the involvement of his predecessor, Francis Loomis, in shady financial dealings.16
The diplomatic claims, especially in the context of the penury of the Venezuelan exchequer, became a matter of great concern to Castro, as it had been to Guzmán Blanco. In February, 1873, Guzmán Blanco had sought to bring some order into the claims business by issuing a decree outlining procedures to be adopted by both Venezuelans and foreigners for the presentation of claims against the Venezuelan government before the Venezuelan High Federal Court. Article 8 of the decree prescribed penalties (fine or imprisonment) for presenting exaggerated claims.17 But strong resistance from the United States and other foreign governments and the subsequent prolonged period of civil strife made the decree a dead letter. Cipriano Castro on January 24, 1901, declared Guzmán Blanco's decree to be in force. Effectively, the enforcement of the decree would mean that diplomats could no longer intervene on behalf of claimants, who henceforth would have to seek redress on an equal basis with Venezuelans in local courts, as advocated by the Argentine jurist, Carlos Calvo (the so-called Calvo Doctrine).18
Every major power regarded the law as a threat to the interests of their nationals, the more so as Castro also began to address the issue of monopoly claims by foreign companies which had been granted, or more often, had bought out concessions in Venezuela from the individuals who were the original concessionaires. Among these companies was the New York and Bermudez Company, to which had been transferred a concession granted by the Venezuelan government in 1883 to an American, Horatio R. Hamilton, to exploit the forest resources and asphalt in the Venezuelan state of Bermúdez. Following a series of corporate manoevres, the New York and Bermudez Company became a subsidiary of the Asphalt Company of America, which in turn was absorbed in 1900 by the National Asphalt Company, also American based. The issue became further complicated when in May 1900 two other Americans, C.M. Warner and P.R. Quinlan, both of New York, purchased a property in the State of Bermúdez known as "La Felicidad," which led to litigation with the New York and Bermudez Company, the latter claiming that "La Felicidad" was within its concession. The matter was scheduled to be heard before the district court of Cumaná, when news reached Castro that the New York and Bermudez Company's manager, whose operational headquarters were in Port of Spain, Trinidad, had arrived at Cumaná aboard a steamer with $10,000 in gold, with the intention of influencing the three judges in the district court. Castro responded by ordering the dismissal of the court and the transfer of the case to the High Federal Court in Caracas. The latter eventually rendered its decision on January 28, 1904, in favour of the New York and Bermudez Company, following which the company's managing director, Robert K. Wright, immediately congratulated Castro on the "triumph of justice" and begged for an audience with the Venezuelan president so that he could "salute" him personally.19
But by that time Venezuela had just emerged from its gravest crisis, an orchestrated, multi-pronged insurgency lasting one and a half years and known as "La Revolución Libertador," followed almost immediately by an Anglo-German blockade of Venezuelan ports. Unknown to Castro at the time, the New York and Bermudez Company, fearful that the litigation in the High Federal Court would be adverse to its interests, helped finance the insurgency in which British and French interests were also implicated, as was the Colombian government, then in the throes of its own civil war which it thought was being fomented by Castro. The insurgency was led by the reputedly richest man in Venezuela, Antonio Matos, a banker and son-in-law of former president Antonio Guzmán Blanco. Matos and a group of other bankers had been humiliated by being temporarily imprisoned and publicly paraded by Castro shortly after the latter captured the presidency. The alleged reason for this dastardly act by Castro was that the bankers refused to extend a loan to help bail out his financially strapped administration.20 Matos shortly afterwards headed for Europe, commissioned in Aberdeen a war vessel named the "Ban Righ," hired a British captain and crew, and flying the British flag, made for Antwerp, where arms and ammunition were received, much of it coming from France through a special Paris agent.21 It was the most powerful and best armed insurgency prepared abroad against an incumbent Venezuelan administration. Finance came via bank transfers from New York organized by agents of the New York and Bermudez Company. Leaving Antwerp on November 23, 1901, the Ban Righ sailed for the Caribbean, arriving at Martinique on 22nd December, 1901. At Martinique the British crew was paid off, though a few elected to stay with the vessel in the service of Matos. Venezuelan revolutionaries were then taken on board and ownership of the vessel, renamed "Libertador," was formerly transferred to the Colombian government. From January, 1901, Matos and the revolutionaries on board made a series of forays along the Venezuelan coast, depositing arms and ammunition at strategic points to be picked up by revolutionary contingents coming from the west, north and east of the country.22 While in Venezuelan waters it flew the Venezuelan flag, but sometimes entered into naval battles with Venezuelan government gunboats, which frequently trailed her. The nearby British colony of Trinidad provided a safe anchorage for the vessel, whenever it needed to re-supply its stock of provisions and ammunition. In March, 1902, suffering partial damage in a skirmish with a Venezuelan government gunboat, it anchored at the Port of Spain harbour for several months. It still had on board over five thousand rifles and large quantities of ammunition, while more munitions remained stored in a Port of Spain warehouse.23 There could hardly be any doubt about the complicity of the colonial authorities in Trinidad and the British Minister in Caracas, W.H.D. Haggard, in the attempted revolution, the principal objective being to detach from effective central control the Venezuelan state of Guyana, whose Orinoco port city of Ciudad Bolívar was the major entrepot between Port of Spain and the gold districts of the Yuruari region in Venezuela.24 The establishment by the Trinidad authorities in August, 1902, of a guard station on the disputed island of Patos, less than three miles off the northeastern coast of Venezuela, and known to be a haven for smugglers and insurgents, occurred in the context of this prolonged multi-pronged insurgency.25
Castro, showing his characteristic grit and determination and ably assisted by Andino loyalists like Juan Vicente Gomez, was able by November, 1902, to break the back of this "Revolución Libertadora." But it was also just at this time that the British government had invited to Sandringham the German Kaiser, Wilhelm II, following which the "iron-clad" agreement was concluded between the British and German governments for a blockade of Venezuela ports in order to enforce their diplomatic claims.26
The Anglo-German blockade of Venezuelan ports which began on December 9, 1902, and was lifted on February 14, 1903, has been discussed by several writers and we therefore need not detain ourselves on its details. We merely look at the points of significance. The local factor was the serious reverses Castro was beginning to inflict on the Matos-led insurgency. The hemispheric factor was that the United States was beginning to entrench itself in strategic areas of the Caribbean. It had imposed the Platt Amendment on Cuba, making it a virtual protectorate and an economic dependency of the United States; Puerto Rico was being made into a de facto colony and negotiations were proceeding with the beleaguered Colombian government for a treaty that would cede control of the French canal project in Panama to the United States. The fundamental question is, however, why did British government decide in December, 1902, to enter into an alliance with Germany when Britain had the naval capacity to blockade Venezuela's key ports unilaterally and when Theodore Roosevelt had made it publicly known in his December, 1901, presidential message that the United States government would not under the cover of the Monroe Doctrine object to "punishment" of a Latin American state if the latter "misconducts itself" provided that such punishment did not take the form of the acquisition of territory by a non-American power.27 Perhaps the answer to this question was provided by the Daily Telegraph when the Anglo-German alliance was coming under bitter opposition attacks in the British parliament and in the press both in Britain and in the United States. It was a classic statement of realpolitik on the global chessboard and therefore deserves an extended quotation:
Lord Salisbury, during his long tenure of the post of Foreign Secretary invariably acted upon the principle that politics -- especially international politics -- are matters of business and not of sentiment. If our foreign policy were dependent upon the veerings of the sympathies and antipathies of other European powers, it would indeed be as unstable as waterŠ Temporary or provisional combinations such as were necessitated two years ago in China, and today by common injuries in Venezuela, commit us to nothing when the joint object has been obtainedŠ The policy of watching every rival power as though it were a potential enemy is quite sound, but this does not involve, as the extreme anti-Germans seem to imagine, the adoption of a distinctly hostile or provocative attitude.28
Apart from economic stakes in Venezuela, Britain still had unsettled issues with the United States itself. These were the Alaska boundary dispute with Canada, the Newfoundland fisheries dispute and the Bering Strait fur seal dispute. The Americans had refused a formal alliance with Britain in the Far East, and while preaching the virtues of the "open door" in China, they were using their coastwise shipping laws to prevent an open door in the Philippines and Puerto Rico, while they were in the process of giving the United States privileged access to the Cuban market through a reciprocal commercial treaty. Britain had signed the Second Hay Pauncefote Treaty with the United States under the pressure of the Boer imbroglio. With the Boer War now concluded, and with arrangements in hand for Japan to checkmate the Russians in China and Korea by November, 1902, the British Foreign Office was at least temporarily free from diversions away from western hemispheric concerns. If inducing the Americans to take and keep the Philippines was intended to create a new element in the balance of power in the Far East and the Pacific, containing American expansiveness in the Western Hemisphere was still on the British agenda. The Germans, though much disliked because of their support for the Boers during the early phase of the struggle in South Africa, could be tempted into a joint demonstration of European power. They were not as yet a significant colonial power, were longing for an imperial place in the sun, and were prepared to acquire international prestige in association with Britain.29 The fact that neither power gave priority to the foreign debt, but to the diplomatic claims when they decided to put pressure jointly on the Castro administration -- in which they were later joined by Italy -- might have been partly influenced by the need to punish a "degenerate" Latin American "rogue" president,30 who had no naval power to match that of the advanced northern industrial nations, for resisting their diplomatic claims and insisting that his nation's courts must first judge these claims. But when it is considered that Castro made some effort to pay up to fifty per cent of the foreign debt out of his government's meagre revenues, had paid more than half the debt owed to the German railroad company, had arrived at an amicable settlement with the French on their debt claims and had withheld further debt servicing only after the Matos-led insurgency had begun, necessitating a large expenditure of the government's scarce revenues,31 we must conclude that the diplomatic claims were only part of a much larger objective behind the blockade of Venezuela's ports, and that it was intended to demonstrate to the Americans that Europeans could join forces to contain American expansion if need be....
[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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