Mr. Russell to Mr. Hay.

No. 212.]

Sir: I have the honor to report that the Spanish minister here, who was umpire for the Mexican claims, has given an award in favor of the Mexican claimants for £102,400. The award was for £17,955, with interest at the rate of 6 per cent for seventy-five years. The press has been so violent and abusive at this decision that the Spanish minister has notified the Venezuelan Government that he intends to leave Caracas, and has turned the legation over to the secretary, who will take charge as chargé d’affaires ad interim.

I translate from one of the local papers in giving a history of this claim:

In the year 1824 the Government of Gran Colombia secured in London, through its representative there, Mr. Zea, a loan of £2,500,000. In the month of May, 1826, the fourth quota of this loan was due, and Colombia was ready to meet it with funds it had deposited with the firm of Goldschmidt & Co., but this house having failed in February of the same year (1826), Mr. Hurtado, then minister of Colombia in London, found himself without funds to meet the payment due, and applied to Mr. Vicente Rocafuerte, Mexican minister, and asked him for a loan of £63,000 of the funds which Mexico had on deposit with a banking firm of London. Mr. Rocafuerte, mindful of the close ties of friendship which united the two countries, lent Mr. Hurtado the £63,000 for eighteen months without interest.

In the year 1830, when Gran Colombia was dissolved, the £63,000 had not yet been paid, and in the year 1834 the Republics of New Granada, Ecuador, and Venezuela made an arrangement for dividing among themselves proportionately the debts of the extinct Gran Colombia, and of the Mexican debt, £63,000, 28½ units were allotted to Venezuela, which amounted to £17,955; this is the origin of the debt of Venezuela to Mexico, which debt the Mexican Government afterwards sold to the mercantile firm of Martinez del Rio Hermanos.

Martinez del Rio Hermanos are the present claimants, and purchased the debt in question in 1856.

Venezuela claims counter credits against this debt, the largest sum being for $194,000, expenses for a squadron which Colombia assembled [Page 866] at Cartagena and lent to Mexico to aid in the taking of San Juan d’Ulloa in 1825. Venezuela claims several other counter credits, reducing the debt to $30,000, and this was the amount awarded by the supreme court in Caracas last May, which the claimants would not accept and carried the case to the mixed commission.

The Spanish minister here accepted the position as umpire for the Mexican claims and also for the claims of Sweden and Norway.

* * * * * * * *

I have, etc.,

William W. Russell.