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the blockade, and prevent the case from going to The Hague. Germany's plan was blocked by the British Government, which had become so disgusted with the alliance that it urged the immediate acceptance of the protocols regardless of Germany's demand. The arrangement was concluded by giving to Germany, whose claims were less valid than those of England and Italy, a cash payment of the demanded $340,000, while the other two nations accepted $27,500 each. While Germany was insisting on her proposition, the German ambassador made public the statement that " nowhere was the Monroe doctrine more respected or more highly regarded as a peacemaker for the Western Hemisphere than in Germany."

IV

Germany's conduct was regarded at home with satisfaction. Popular sentiment found expression in the press's derision at England's discomfiture and its boasting of the power of "the mailed fist.” An undercurrent of feeling, however, ran strongly in the other direction. Elsewhere Germany's action was regarded, to quote the apt simile of Dr. Albert Shaw, as that "of the greedy, spoiled, quarrelsome boy at the boarding school table who demands the largest and hottest potato and insists upon being served first - his better-bred and higherspirited comrades looking on with anger and undisguised contempt." France and the United States were commended for having behaved with good manners and common sense. They kept the good will of Venezuela and of the whole world, while the allied Powers won a large measure of opprobrium on both sides of the Atlantic. The attitude and conduct of England in the affair were severely criticised at home, as well as abroad. The feeling prevailed that if England had any serious grievance against Venezuela she should have acted alone, and considered the substantial good will of the American people. In no point did England score or benefit.

V

The last step in the Venezuela negotiations was taken on May 7, when the protocol for referring the question of preferential treatment to The Hague Tribunal was signed by Mr. Bowen and the Ambassadors of the allied Powers. The agreement provided that the Czar of Russia should appoint from the members of the permanent court of The Hague three arbitrators to settle the question. It was notable

that the proceedings were to be conducted in the English language. Any nation having claims against Venezuela was permitted to join as a party in the arbitration provided by this agreement. In arranging these matters, Minister Bowen's "shirt-sleeves diplomacy" caused

considerable irritation.

The conventional European diplomats were justly shocked at his rude and informal way of doing things. The unallied Powers complained that Mr. Bowen named Mr. Wayne MacVeagh to plead their cause at The Hague without even consulting them, not that they objected to Mr. MacVeagh, but they questioned Mr. Bowen's right to choose their agent. The allied Powers were offended because in publishing the diplomatic correspondence Mr. Bowen went beyond the customary rule of letting the documents speak for themselves, and appended his own explanations in footnotes which were deemed insulting in tone by some of the European diplomats and were of so unwarranted a nature that Mr. Hay very promptly disclaimed any responsibility for their publication.

The directness of Mr. Bowen's methods, backed by President Castro's sturdy resistance, doubtless saved Venezuela the payment of many million dollars of unjust or doubtful foreign claims. The claims of the Powers, as formally presented in September, stood as follows: United States, $10,900,000; Great Britain, $2,500,000; France, $16,040,000; Italy, $9,300,000; Germany, $1,417,300; Belgium, $3,003,000; Spain, $1,600,000; Mexico, $500,000; Holland, $1,048,451; Sweden, $200,000. The question to be decided at The Hague was not the adjustment of these claims, but the order in which they should be paid. Most of them were adjudicated by mixed commissions, sitting at Caracas, with umpires appointed by the President of the United States. The big claims were whittled down to comparatively small amounts. Germany was awarded only $384,000, England, $120,000, and France and the United States something over $500,000 each. On September 10 the Venezuelan and Belgian arbitrators and the Dutch umpire decided that the Belgian company that owned the Caracas waterworks was entitled to collect the sum of $2,000,000 from Venezuela.

VI

In October M. Muravieff, President of The Hague Tribunal, called together the three arbitrators constituting the special court to consider

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the question of the priority of claims. Mr. MacVeagh pleaded on behalf of Venezuela and the peaceful creditors that the blockading Powers had committed acts of war in support of private financial interests, that there was no precedent for war on such grounds, and that the bellicose Powers ought not to be rewarded by preferential treatment in the payment of claims. The court then adjourned to resume its sittings on November 4. When the representatives of the Powers interested proceeded to state their respective cases, Sir Robert Finlay, speaking for Great Britain, contended that if all claims ranked equally, the payment would take so long that the allotted thirty per cent of revenues would not be a sufficient guarantee to the blockading Powers. Similar arguments were presented for Germany and Italy. The tribunal closed its sittings on November 13, with the promise to announce its decision in February of the following year.

VII

Unquestionably the method of settling the Venezuelan imbroglio proved the value of the leadership of the United States in matters pertaining to the Western Hemisphere. In the course of the proceedings certain precedents of undeniable importance were established. Central and South American States in their dealings with foreign creditors could no longer claim shelter under the Monroe doctrine to avoid the consequences of repudiation and neglect; nor could European investors, on the other hand, hope to have questionable transactions made safe and solid through the offices of their home governments as debt collectors. Naval expeditions, "pacific blockades," bombardments, and other ridiculous and expensive forms of bullying were shown to be ineffective means of settling pressing questions. The Hague Tribunal was recognized as the sanest and safest instrument for determining certain principles of international law for the benefit of all governments. The achievement of persuading three European Powers to give up blockading and resort to arbitration, and the reassertion of the Monroe Doctrine, united to give the United States a greater prestige among nations than it had ever before enjoyed, and to pave the way for peaceful conditions under which to prosecute its greatest national enterprise, the construction of the Panama Canal.

CHAPTER III

THE TREND OF NATIONAL ENERGIES

Projects for the control or the extension of great waterways and highways, expeditions with a view to acquiring territory or making treaties, marked the trend of national energies in 1903. Promptness to recognize and to seize points of advantage were shown in the United States making a revolution the opportunity for securing control of the interoceanic canal route; in Russia's taking an ell for every inch that had been given her in Manchuria and Korea; in Germany's eagerness to push the Bagdad railway; in Britain's "punitive expedition" to Tibet at the very moment Russia seemed to have established a footing there; in France's hovering on the border of Morocco to render timely assistance to the Sultan if the rebellion against him should offer occasion for it.

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The Panama Coup d'Etat

Panama was the great event of the year 1903. The Panama revolution, and the opportunity it afforded the United States to make terms under which to continue work on the Isthmian Canal, was a development no less startling than important. From August 12, when the Colombian Senate rejected the Hay-Herran Canal treaty, to November 3, when the revolution on the Isthmus broke out, the Government had been playing a waiting game, but the promptness with which the Administration acted after the latter date showed that it was neither idle nor indifferent. There were, indeed, many people in the United States who thought that promptness such as that with which the Washington Government acted argued a guilty fore-knowledge of the revolution and preparation to profit by it. Panama declared its independence of Colombia November 3; on the 6th President Roosevelt recognized the de facto Government of Panama; on the 20th the full text of a new canal treaty, this time with the Republic of Panama, was made public.