Sir Julian Pauncefote to Mr. Olney.

Sir: In the course of our last interview at the Department of State, on the 1st instant, I had the honor to lay before you verbally, on behalf of my Government, certain proposals for the settlement of the Venezuelan boundary question which I had been instructed by the Marquis of Salisbury to submit to your Government, acting as the friend of Venezuela.

It may be convenient, for future reference, that you should be furnished with the precise terms of those proposals and with an exact statement of the grounds on which they are based.

I venture, therefore, to inclose a copy of the dispatch addressed to me by Lord Salisbury on the subject, which, I trust, will facilitate your consideration of the proposals of my Government.

I have, etc.,

Julian Pauncefote.
[Inclosure.]

Lord Salisbury to Sir Julian Pauncefote.

No. 130.]

Sir: I sent you in a dispatch under date of the 18th instant some observations upon Mr. Olney’s communication to you with regard to the subject of general arbitration.

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As it is possible, however, that we shall not see our way to surmount the difficulties which still separate the views of the two Governments in regard to the larger and more general question, I propose in this dispatch to convey to you proposals for the settlement of the Venezuelan dispute, which I should be glad if you would submit to the Government of the United States, acting as the friend of Venezuela in this matter. From the first our objection has been to subject to the decision of an arbiter, who, in the last resort, must, of necessity, be a foreigner, the rights of British colonists who have settled in the territory which they had every ground for believing to be British, and whose careers would be broken, and their fortunes possibly ruined, by a decision that the territory on which they have settled was subject to the Venezuelan Republic. At the same time we are very conscious that the dispute between ourselves and the Republic of Venezuela affects a very large portion of land which is not under settlement, and which could be disposed of without any injustice to any portion of the colonial population. We are very willing that the territory which is comprised within this definition should be subjected to the results of an arbitration, even though some portion of it should be found to fall within the Schomburgk line. With that end in view, we propose the following basis of settlement of the Venezuelan boundary dispute:

A commission to be created by agreement between Great Britain and the United States, consisting of four members, namely, two British subjects and two citizens of the United States; the above commission to investigate and to report upon the facts which affect the rights of the United Netherlands and of Spain, respectively, at the date of the acquisition of British Guiana by Great Britain.

This commission will only examine into questions of fact, without reference to the inferences that may be founded on them; but the finding of a majority of the commission upon those questions shall be binding upon both Governments.

Upon the report of the above commission being issued, the two Governments of Great Britain and Venezuela, respectively, shall endeavor to agree to a boundary line upon the basis of such report. Failing agreement, the report, and every other matter concerning this controversy on which either Government desire to insist, shall be submitted to a tribunal of three, one nominated by Great Britain, the other by Venezuela, and the third by the two so nominated; which tribunal shall fix the boundary line upon the basis of such report, and the line so fixed shall be binding upon Great Britain and Venezuela. Provided, always, that in fixing such line the tribunal shall not have power to include as the territory of Venezuela any territory which was bona fide occupied by subjects of Great Britain on the 1st of January, 1887, or as the territory of Great Britain any territory bona fide occupied by Venezuelans at the same date.

In respect to any territory with which, by this provision, the tribunal is precluded from dealing, the tribunal may submit to the two Powers any recommendations which seem to it calculated to satisfy the equitable rights of the parties, and the two Powers will take such recommendations into their consideration.

It will be evident from this proposal that we are prepared to accept the finding of a commission voting as three to one upon all the facts which are involved in the question of Dutch and Spanish rights at the time of the cession of Guiana to Great Britain. We are also prepared to accept the decision of an arbitral tribunal with regard to the ownership of all portions of the disputed territory which are not under settlement by British subjects or Venezuelan citizens. If the decision of the [Page 249] commission shall affect any territory which is so settled, it will be in the power of either Government to decline to accept the decision so arrived at, so far as it affects the territory alleged to be settled. But I need not point out to you that even upon that question, although the decision of the arbitral tribunal will not have a final effect, it will, unless it be manifestly unfair, offer a presumption, against which the protesting Government will practically find it difficult to contend.