The Anglo-German Blockade of Venezuela 1902-03

I lived for several years in Maracaibo, Venezuela’s second city, which today was a population of 1.3 million. It lies at the western side of the short waterway that leads from Lake Maracaibo – the largest lake in South America – to the Caribbean Sea. It was founded, quite surprisingly, by German settlers in 1529 and was initially known as New Nurnberg. Attacks by local tribes led to its abandonment but it was re-founded by the Spanish in 1574. It was to be the target on several occasions of attacks by buccaneers, including by the notorious Henry Morgan in 1669, followed by an equally devastating assault by the French buccaneer de Gramont nine years later. A century and a half later the Battle of Lake Maracaibo in 1823, in which Spanish naval forces clashed with those of   pro-independence republicans, resulted in a Spanish defeat which, after their routing on land in the Battle of Carabobo two years earlier, marked the end of Spanish power on the South American continent.

Battle of Carabobo, by Martin Tovat y Tovar
In 1821 Colombian/Venezuela forces rout the Spanish

Given the importance of Maracaibo, and its location which controlled passage into the 100-mile long lake, and access to the lands beyond, it was inevitable that measures would be taken to defend the waterway. The most appropriate place for a fortification that would dominate the approach channel at its narrowest point was on the island of San Carlos, 20 miles north of the present city. Here, in 1623, the Spanish built a large limestone fort on the then favoured “star” pattern”.  Just how impressive this structure was – and is – can be seen from the image below lifted off Google Earth (if one goes to the location detailed on the image many photographs can be seen of it as it is today). It is big – from one star point to that diagonally opposite is about 120 yards. Having expended what must have been a fortune in its construction, it is surprising that it was not manned or armed effectively enough by the Spanish to hold back the buccaneer attacks later in the same century.

Fort San Carlos, as seen on Google Earth (to which full acknowledgement)

Let’s now look forward in time and widen our focus. A common occurrence in the 19th and early 20th Century was that what are now described as “developing countries” demonstrated a marked addiction to borrowing vast sums from European lenders without any realistic chance of ever repaying them. Given the instability, and usually the primitive economies, of these debtor nations, and the serious risk of non-repayment, the terms under which the loans were granted usually involved very high rates of interest. It was not uncommon for the interest of the early years of the loan to be deducted directly when originally granting it, such that the actual sum coming into the coffers of the recipient government were significantly lower than the loan’s face-value. Egypt, the Ottoman Empire and numerous Latin American countries fell into this trap and in many cases failure to sustain repayments resulted in foreign intervention. Egypt’s inability to sustain payments led to the need to sell its shares in its most important asset, the Suez Canal, to Britain in 1875. Mexico’s indebtedness to France led to massive French military intervention in the 1860s, the installation of a puppet “emperor” and a brutal war that impoverished the country still further. And Venezuela’s debt-addiction was to trigger an international naval blockade in 1902 which was to have much longer term strategic implications for the Western Hemisphere.

By  the end of the 19th Century. Venezuela had been an independent nation for three-quarters of a century, but its history had been a miserable sequence of vicious civil wars and rule by dictators. One of the most unpleasant of these latter was José Cipriano Castro (1858–1924), much of whose life was involved in fermenting and participating in political upheaval. Driven out of Venezuela in 1892, he lived in neighbouring Colombia for the next seven years, amassing a fortune in illegal cattle-trading and recruiting a private army.  In 1899 he returned  to Venezuela and his army swept him to power. His rule was characterised by ruthless suppression of frequent rebellions, murder or exile of opponents and his own extravagant living. The US Secretary of State Elihu Root described Castro as “a crazy brute”, an evaluation that does not appear inaccurate.

Given Castro’s record, one is not surprised that he would be in no hurry to settle foreign debts or award compensation for foreign interests damaged in recent civil wars. Some of the loans were “enforced” ones, levied on foreign investors in wartime and other debts were associated with seizure of foreign assets. Castro, faced with an empty treasury, solved his debt problem by simply refusing to pay up. Britain was owed most of a $15 million loan from 1881, later defaulted on, and Germany was incensed by the seizure of a railway owned by the Krupp industrial combine. Italy had lesser claims.

The American view: Britain and Germany plucking the Venezuelan goose

Germany and Britain pushed until early 1902 for an amicable settlement, the Germans in particular urging arbitration by the newly established International Court in The Hague. Castro wasn’t interested. In five months in 1902 Britain sent Castro seventeen notes about its concerns but none was replied to. Castro had built his defiance on an assumption that he could be sheltered by the United States’ Monroe Doctrine. Originating from 1823, this stated that further efforts by European nations to colonize land, or interfere with states in North or South America ,would be viewed as acts of aggression, requiring U.S. intervention.

Times had changed however. The current US President, Theodore Roosevelt had said in 1901 that “if any South American country misbehaves toward any European country, let the European country spank it.” The writing was on the wall for Castro, even if he did not want to see it.

In June 1902 the Venezuelan government seized a British ship suspected of aiding yet another rebel group. This proved the last straw for Britain. The Germans were already outraged by continuing abuse of its citizens and investments and in mid-August it agreed with Britain, and subsequently with Italy, to initiate a naval blockade should an ultimatum to pay up be ignored. It was indeed ignored and operations commenced in December 1902.

SMS Panther, Falke and Vineta (l. to r.) in the Caribbean – painting by  Willy Stöwer

Such actions were almost routine for the Royal Navy’s far-flung forces  but for the recently-created Imperial German Navy – which Kaiser Wilhelm II regarded as his personal darling – this was a golden opportunity to show off its power and efficiency far from home waters. Britain deployed a cruiser, HMS Charybdis and a sloop, HMS Alert, as well as other ships, and the Germans dispatched a larger force, the cruisers SMS Falke, Gazelle and Vineta, and the gunboat SMS Panther.

SMS Gazelle – part of the German blockading squadron

The four small vessels – two gunboats, and a converted yacht and a converted tug – which constituted the Venezuelan Navy were in no position to offer opposition and were captured in two days. Two were in such poor condition that the Germans sank them rather than tow them away.

British naval personnel taking possession of Venezuelan vessels

A British merchant ship was interned by the Venezuelans  and the British and Germans responded by shelling fortifications at Puerto Cabello, Venezuela’s principal port. 200 British and German residents were taken into custody by Castro’s government and the possibility of landing British and German forces to rescue them began to be talked of. Things were hotting up!

SMS Panther, built for overseas service, main armament 2 X 4″

In the United States President Roosevelt was now beginning to rethink favouring European nations dishing out “spankings” in his own back yard. This was possibly not least due to the fact that Germany appeared to have an ambition to establish a naval base in the Caribbean (a foretaste of the Russians in Cuba!) and had already evaluated the Venezuelan island of Margarita as a possibility. It was time to reassert the Monroe Doctrine. Arbitration was again brought on the agenda and years later, in 1916, Roosevelt was to claim that that Germany’s later acquiescence to arbitration came from his threat to attack the German ships in Venezuelan waters with the United States Fleet. It appears however that no documentary evidence has been found to support this claim.

SMS Vineta, main armament 2 X 8.3″ and 8 X 5.9″ 

The blockade continued into 1903 however and on January 17^th the German Falke and Panther chased a merchant schooner that had evaded the blockade and was heading for Maracaibo. The way led past Fort San Carlos, through narrows flanked with sandbanks and shoals, and the Germans followed, the Panther leading. The fort opened fire with an 80mm Krupp canon – ironically a German weapon and the Panther, according to her captain, found it difficult to return fire effectively due to the problems of manoeuvring in unfamiliar but shallow and narrow waters. Fire was however exchanged for half an hour, during which the Panther was hit several times and sustained considerable damage. Smarting, but realising that discretion was the better part of valour, the Germans retreated.

Four days later the Germans were back, this time with the more heavily-armed SMS Vineta to support the Panther. A long range bombardment commenced and lasted eight hours, at the end of which Fort San Carlos was silenced and 25 civilian deaths reported in the nearby town. The Germans then withdrew.

The attack on Fort San Carlos and, even more, the civilian losses, lost sympathy for Germany in Britain and the United States on the grounds of the action being disproportionate. (The Royal Navy had been instructed not to take part in further shore bombardments after that on Puerto Cabello). Castro was however now ready to accept arbitration and this took place in Washington, with American support. In February 1903 agreement was reached between Britain, Germany, Italy and Venezuela on what would nowadays be called “restructuring” of Venezuela’s debts and the blockade was lifted.  These countries were not however the only ones with claims against Venezuela  and another seven, including the United States, objected to the preferential payment terms extended to them. The result was agreement to resubmit the issue to the International Court of Arbitration in the Hague.

The outcome of this second arbitration was to uphold the terms of the first, a decision which the United States found distasteful, but still had to live with. Roosevelt’s response was to come in his 1904 message to Congress. It came to the known as “The Roosevelt Corollary to the Monroe Doctrine.” This asserted a right of the United States to intervene to “stabilise” the economic affairs of small states in the Caribbean and Central America if they were unable to pay their international debts, in order to preclude European intervention to do so. The thinking behind the Corollary was to underlie United States military occupations in, Mexico (Vera Cruz), Nicaragua, Haiti and The Dominican Republic in the coming decades and it not fanciful to see it reflected in the Cuban Missile Crisis in 1962.

Unpaid foreign debts and the desire of the Imperial German Navy to flex its muscles were to have major long-term consequences.

Britannia’s Gamble