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was called forth by the attempt then being made by the allied powers (Great Britain, Germany and Italy) to collect certain claims against Venezuela by forcible means, Señor Drago stated at the outset that he would leave out of account those claims arising from damages suffered by subjects of the claimant nations during revolutions and wars but would confine himself to some considerations with reference to the forcible collection of the public debt suggested by the events that have taken place.

In respect to loans to a foreign state, he argued that the lending capitalist always takes into account the resources of the country, the kind or degree of credit and security offered, and makes his terms more or less onerous accordingly. He knows that he is dealing with a sovereignty, 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.

This argument he based upon the theory of the freedom and independence of states which lies at the basis of the modern system of international law.

In support of this contention, Señor Drago quotes Alexander Hamilton, who said:

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. They confer no right of action contrary to the sovereign will.

He also cites the eleventh amendment to the Constitution of the United States, which provides that the judicial power of the United States shall not be construed to extend to any suit in law or equity commenced or prosecuted against one of the United States by citizens of another state, or by citizens or subjects of any foreign state.

Señor Drago admitted that the payment of its public debt (the amount of which may be determined by tribunals of the country or by arbitration) is absolutely binding on the nation; but he maintained that it (the nation) has a 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.

He explains that this is in nowise a defense for bad faith, disorder, and deliberate and voluntary insolvency. It is merely intended to preserve the dignity of the public international entity which may not thus be dragged into war with detriment to those high ends which determine the existence and liberty of nations.

Declaring that the Argentine people were alarmed lest the action of the allied powers in Venezuela “would establish a precedent dangerous to the security and peace of the nations of this part of America” (for “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;" a "situation" which "seems obviously at variance with the Monroe Doctrine”), and pointing to the danger lest European nations make use of "financial intervention" as a pretext for conquest, this far-sighted Argentine statesman suggests that the United States adopt or recognize the principle that the public debt [of an American state) can not occasion armed intervention, nor even the actual occupation of the territory of American nations by a European power. 12

In his message of December 5, 1905, President Roosevelt pronounced himself with his wonted vigor in favor of the Drago Doctrine. After calling the attention of Congress to the embarrassment that might be caused to our government by the assertion by foreign nations of the right to collect by force of arms contract debts due by American republics to citizens of the collecting nation, and to the danger that the process of compulsory collection might result in the permanent occupation of territory, he said:

12 For the text of the Drago Note, See House Doc. of 58th Congress, 2d session (1903-04), pp. 1-5.

In a memorandum sent to Señor Mérou in reply to this communication, Secretary Hay discreetly expressed neither assent to nor dissent from the propositions set forth by Señor Drago, but he quoted two passages from recent messages by President Roosevelt to indicate the general position of the government of the United States: "The President declared in his message to Congress of December 3, 1901, that by the Monroe Doctrine we do not guarantee any state against punishment if it misconducts itself, provided that punishment does not take the form of the acquisition of territory by any non-American state;” and “in harmony with the foregoing language, the President announced in his message of December 2, 1902: No independent nation in America need have the slightest fear of aggression from the United States. It behooves each one to maintain order within its own borders and to discharge its just obligations to foreigners. When this is done they can rest assured that, be they strong or weak, they have nothing to dread from outside interference.'" Secretary Hay closed this communication with a declaration in favor of arbitration in such cases.

Our own government has always refused to enforce such contractual obligations on behalf of its citizen by an appeal to arms. It is much to be wished that all foreign governments would take the same view.

A comparison between the views of Calvo and Drago as above expressed will show that they differ in two very important respects. The Drago Doctrine is much narrower in scope than that of Calvo. Señor Drago merely denounces armed interyention as a legitimate or lawful means of collecting public debts, whereas Calvo denies the right to employ force in the pursuit of all private claims of a pecuniary nature. Indeed, Calvo advances a step beyond this position. He absolutely denies that a government is responsible by way of indemnity for any losses or injuries sustained by foreigners in time of internal troubles, civil war, or for injuries resulting from mob violence (provided the government is not at fault) on the grounds that the admission of such a principle of responsibility would "establish an unjustifiable inequality between nationals and foreigners” and would undermine the independence of weaker states. He does not even admit that the ordinary channels of diplomacy are open to claimants in such cases.

In general, private claims of a pecuniary nature against Latin American states may be classified as follows: 1, Claims arising from acts of violence or oppression, such as cruel treatment, false imprisonment expulsion or mob violence; 2, those based on losses sustained during civil war or insurrection; 3, those based upon contract, consisting for the most part of claims of bondholders and investors whose investments have been guaranteed by the defaulting government.13

13 So, e.g., the claims of Great Britain and Germany against Venezuela in 1902-03 were divided into three categories: 1, Those based upon the false imprisonment and bad treatment of British subjects and the seizure of British vessels; 2, losses of British and German subjects sustained during recent civil wars and revolutions; and 3, the claims of creditors, including not only ordinary bondholders but also a number of Britons and Germans whose investments had been guaranteed by the Venezuelan government. Also see an article by the writer, entitled The Venezuelan Affair in the Light of International Law in the American Law Register (May, 1903), vol. 42, n. s., pp. 250 ff.

The liability of a government for acts of violence and oppression must depend upon the circumstances of each case. A state is of course directly responsible for acts of its agents and must bear the full consequences of any violation of the laws of nations committed by these. Such acts should be promptly disavowed and, if of sufficient importance, their authors punished and reparation made. 15

In ordinary times a state is also indirectly responsible for the orderly conduct of all those residing or domiciled within its territory and subject to its jurisdiction, and is bound, not indeed to prevent all acts of violence against foreigners, but to furnish the same degree and kind of protection and, generally speaking, provide the same means of redress or measure of justice that is granted to its own nationals.16

In attempting to secure redress or justice, foreigners must in the first instance have recourse to the local or territorial tribunals of the district in which they are domiciled, or, as Vattelu? puts it, to the “judge of the place.” Judicial remedies should, as a rule, be exhausted before resorting to diplomatic interposition for means of obtaining redress.18 But this rule does not apply in case of a gross or palpable denial of justice, where local remedies are wanting or insufficient, where judicial action is waived, where the act complained of is in itself in violation of international law, or where there is undue discrimination against foreigners on the part of the authorities.19

14 This responsibility is to states rather than to indviduals. The individual, as such, has neither rights nor duties in international law other than those belonging to him as a citizen or subject to an international entity. On the theory of International Responsibility of States for Injuries Suffered by Foreigners, see two recent articles by M. Anzilotti in the Revue Générale de Droit International Public for 1906, pp. 5-29 and 285–309.

16 This does not apply to the judicial functionaries who are more or less independent of the executive in all modern well-regulated states. “All therefore that can be expected of a government in the case of wrongs inflicted by the courts is that compensation shall be made, and if the wrong has been caused by an imperfection in the law of such kind as to prevent a foreigner from getting equal justice with a native of the country, that a recurrence of the wrong shall be presented by legislation.” (Hall, Treatise (3d ed.) $65, p. 214.)

16 This is the general rule, but it is not, as we shall see, wholly without exception. 11 Bk. II, ch. 8., $103; cf. Bk. II, ch. 6, $$ 72 and 73. 18 Moore, Digest of International Law, vi, $987. Wharton, ii, $241.

10 For examples of such exceptions, see Moore, $8913-914, 986–993, 1021, and Wharton, $$230 and 242.

It does not apply to countries of imperfect civilization, or to cases in which prior proceedings show gross perversion of justice.20

The question of the liability of a state for injuries to the persons or property of foreigners resulting from mob violence is one in which the people and government of the United States as well as those of Latin America, should be deeply interested. Whether due to the intensity of feeling engendered by race and labor problems or to a lax enforcement of the law resulting from cumbrous and antiquated legal methods, the American custom of lynching for certain crimes and under certain conditions shows little sign of abatement and is not likely to disappear until the causes which lead to it are removed.

The rule which has generally been verbally maintained by American statesmen seems first to have been laid down by Daniel Webster in connection with the riots at New Orleans, and Key West in 1851, which resulted from the summary execution of a number of American filibusters in Cuba. While admitting that the Spanish consul (whose office had been attacked and furniture destroyed)21 was entitled to indemnity, Mr. Webster maintained that those Spanish subjects who had been injured in person or property (there seems to have been no one killed) were not entitled to compensation, inasmuch as “many American citizens suffered equal losses from the same cause," and foreigners are merely entitled to such protection as is afforded to our own citizens. * * * These private individuals, subjects of Her Catholic Majesty, coming voluntarily to reside in the United States, have certainly no cause of complaint, if they are protected by the same law and the same administration of law, as native born citizens of this country.”

As a mark of courtesy and out of respect to the magnanimity of the queen of Spain (in liberating American prisoners), Congress nevertheless granted compensation to Spanish subjects as well as to the Spanish consul for losses sustained during these riots.

History has repeated itself in the case of a number of claims made by foreigners for injuries resulting from mob violence in the United

20 Mr. Evarts, Secretary of State, to Mr. Marsh. Wharton's Digest, iii, p. 695.

21 The archives of the consulate had also been thrown into the street, the portrait of the queen of Spain defaced, and the Spanish flag torn to pieces.

32 Wharton's Digest, ii. $226, p. 601; cf. Moore, vi, $1023, pp. 812–813.

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