The Venezuelan crisis of 1902–1903 was a naval blockade imposed against Venezuela by Great Britain, Germany, and Italy from December 1902 to February 1903, after President Cipriano Castro refused to pay foreign debts and damages suffered by European citizens in recent Venezuelan civil wars. Castro assumed that the American Monroe Doctrine would see Washington intervene to prevent European military intervention. However, at the time, United States president Theodore Roosevelt and his State Department saw the doctrine as applying only to European seizure of territory, rather than intervention per se. With prior promises that no such seizure would occur, the U.S. was officially neutral and allowed the action to go ahead without objection. The blockade saw Venezuela's small navy quickly disabled, but Castro refused to give in, and instead agreed in principle to submit some of the claims to international arbitration, which he had previously rejected. Germany initially objected to this, arguing that some claims should be accepted by Venezuela without arbitration.
Years later, Roosevelt claimed he forced the Germans to back down by sending his own larger fleet to Venezuela and threatening war if the Germans landed. However, he made no preparations for war against a major power, nor did he alert the Senate or officials at the State, War, and Navy Departments.
With Castro failing to back down, U.S. pressure and increasingly negative British and American press reaction to the affair, the blockading nations agreed to a compromise, but maintained the blockade during negotiations over the details. This led to the signing of an agreement on 13 February 1903 which saw the blockade lifted, and Venezuela commit 30% of its customs duties to settling claims.
When the Permanent Court of Arbitration in The Hague subsequently awarded preferential treatment to the blockading powers against the claims of other nations, the U.S. feared this would encourage future European intervention. The episode contributed to the development of the Roosevelt Corollary to the Monroe Doctrine, asserting a right of the United States to intervene to stabilize 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.
Background
At the turn of the 20th century, German traders dominated Venezuela's import/export sector and informal banking system. Most of these, however, had little influence in Berlin; rather it was German industrialists and bankers, including those associated with building railroads, who had connections and influence. The revolutionary turmoil of the last decade of the 19th century in Venezuela saw these suffer, and send "a stream of complaints and entreaties for protection" to Berlin. Matters were particularly bad during the Venezuelan Civil War of 1892 which had brought Joaquín Crespo to power, which saw six months of anarchy with no effective government, but the Civil War of 1898 again saw forced loans and the taking of houses and property.
Importantly, in 1893, the French, Spanish, Belgian and German envoys in Caracas had collectively agreed that joint action was the best route for settling claims from 1892's civil war, although this had not been necessary in that event because reparations related to that conflict were paid out.
Prior to the Civil War of 1898, while German investment in Venezuela was substantially less than in countries such as Argentina or Brazil, Krupp's Great Venezuela Railway Company was valued at 60 million marks, and was "individually one of the more valuable German South American ventures"; and despite a renegotiation of the concession terms in 1896, Venezuelan payments were irregular after 1897 and stopped in August 1901. Additionally the signing of the Paris award that decided the boundary issue with British Guiana on 3 October 1899 there were insurrectional movements during Ignacio Andrade's administrative management and serious economic difficulties were experienced - motivated by the international drop in the price of coffee, that represented more than 80% of Venezuela's exports. In addition, Cipriano Castro, one of a succession of Venezuelan caudillos (military strongmen) to seize the Presidency, halted payment on foreign debts after seizing Caracas in October 1899. Britain had similar grievances, and was owed the bulk of the nearly $15 million of debt Venezuela had incurred in 1881 and then defaulted on.
In July 1901, Germany urged Venezuela in friendly terms to pursue international arbitration via the Permanent Court of Arbitration in The Hague. Between February and June 1902 the British representative in Venezuela sent Castro 17 notes about the British government's concerns, but did not receive a reply to any of them. Castro assumed that the Monroe Doctrine would see the U.S. intervene to prevent European military intervention. However, U.S. President Theodore Roosevelt saw the Doctrine as applying to European seizure of territory, rather than intervention per se. In July 1901, as Vice-President, Roosevelt said that "if any South American country misbehaves toward any European country, let the European country spank it", and reiterated that view to Congress as President on 3 December 1901.
Preparations
It remains in dispute how the Anglo-German cooperation on Venezuela came about, with varying opinions as to the source of the initiative. In mid-1901, with the distraction of the Boxer Rebellion gone, German Chancellor Bernhard von Bülow decided to respond to the German concerns in Venezuela with some form of military intervention, and discussed with the German navy the feasibility of a blockade. Admiral Otto von Diederichs was keen, and recommended occupying Caracas if a blockade failed. However, disagreements within the German government over whether a blockade should be pacific (permitting neutral ships to pass) or martial (enabling them to be seized) caused delays, and in any case the German Emperor, Kaiser Wilhelm II, was unconvinced regarding military action. Nonetheless, in late 1901 a renewed demand for reparations was backed up by a show of naval strength, with SMS Vineta and Falke sent to the Venezuelan coast. In January 1902 the Kaiser declared a delay to any blockade due to the outbreak of Libertadora revolution in Venezuela (led by financier Manuel Antonio Matos) which raised the possibility of a more amenable government than of Cipriano Castro.
Complicating matters were rumours "rampant in the United States and in England" that Germany wanted Margarita Island as a South American naval base; however a May 1900 visit by the German cruiser SMS Vineta had concluded it was unsuitable for these purposes, and the German navy had become more conscious of how vulnerable such far-flung bases would be. In late 1901, the British Foreign Office became concerned that Britain would look bad if it failed to defend its citizens' interests while Germany took care of theirs, and began sounding out the Germans about a possible common action, initially receiving a negative response. By early 1902, British and German financiers were working together to pressure their respective governments into action. The Italians, who had begun to suspect the existence of plans to enforce debts, also sought to be involved, but Berlin refused. Their participation was agreed to by the British "after Rome had shrewdly pointed out that it could repay the favor in Somalia". The Italians quickly sent the armoured cruiser Carlo Alberto and the protected cruisers Giovanni Bausan and Elba toward the Venezuela coast.
In June 1902, Castro seized a British ship, The Queen, on suspicion of aiding rebels, in another phase of the Venezuelan civil war. This, together with Castro's failure to engage with the British through diplomatic channels, tilted the balance in London in favor of action, with or without German cooperation. By July 1902, the German government was ready to return to the possibility of joint action, with Matos' insurrection having led to further abuses against German citizens and their property, including by government forces. In mid-August, Britain and Germany agreed in principle to go ahead with a blockade later in the year. In September, after the Haitian rebel ship Crête-à-Pierrot hijacked a German ship and seized weapons destined for the Haitian government, Germany sent the gunboat SMS Panther to Haiti.
Panther soon found the ship and declared that it would sink it, after which the rebel Admiral Hammerton Killick, after evacuating the crew, blew up his ship and himself with it, assisted by fire from Panther. There were concerns about how the United States would view the action in the context of the Monroe Doctrine, but despite its legal advice describing the sinking as "illegal and excessive", the State Department endorsed the action, and The New York Times declared that "Germany was quite within her rights in doing a little housecleaning on her own account". Similarly, the British acquisition of the island of Patos, in the mouth of the Orinoco between Venezuela and the British dependency of Trinidad and Tobago, seemed to cause no concern in Washington, even though as a territorial claim it "skirted dangerously close to challenging the Monroe Doctrine". On 2 November, after the heavy defeat of the Revolution in the siege of La Victoria, the vast network of armies and its extraordinary power were weakened, being a wound that could not be recovered. After that international capital decided to move from opposing operations to direct intervention, and in this way they began to strangle the national economy.
On 11 November, during Kaiser Wilhelm's visit to his uncle King Edward VII at Sandringham House, an "iron-clad" agreement was signed, albeit leaving key details unresolved beyond the first step of seizing Venezuela's gunboats. The agreement specified that matters with Venezuela should be resolved to the satisfaction of both countries, precluding the possibility of Venezuela making a deal with just one. The agreement was motivated not least by German fears that Britain might withdraw from action and leave Germany exposed to U.S. anger. The British press reaction to the deal was highly negative, with the Daily Mail declaring that Britain was now "bound by a pledge to follow Germany in any wild enterprise which the German government may think it proper to undertake". In the course of 1902 the U.S. received various indications from Britain, Germany, and Italy of an intention to take action, with the U.S. declaring that as long as no territorial acquisition were made, it would not oppose any action. The British minister in Venezuela emphasized the need for secrecy about the plans, saying that he thought the U.S. minister would leak warning to Castro, which would give Castro the opportunity to hide Venezuela's gunboats up the Orinoco River.
On 7 December 1902, both London and Berlin issued ultimatums to Venezuela, even though there was still disagreement about whether to impose a pacific blockade (as the Germans wanted) or a war blockade (as the British wanted). Germany ultimately agreed to a war blockade, and after receiving no reply to their ultimatums, an unofficial naval blockade was imposed on 9 December with SMS Panther, SMS Falke, SMS Gazelle and SMS Vineta as major Kaiserliche Marine warships in Caribbean Sea. On 11 December, Italy offered its own ultimatum, which Venezuela also rejected. Venezuela maintained that its national laws were final, and said "the so-named foreign debt ought not to be and never had been a matter of discussion beyond the legal guaranties found in the law of Venezuela on the public debt".
Blockade
The German naval contingent (numbering four, compared to British eight) followed the British lead in operational terms. On 11 December 1902, Gazelle boarded the old gunboat Restaurador in the port of Guanta. The gunboat was towed at anchor and put into service by the German Captain-Lieutenant Titus Türk with crew members of Gazelle as SMS Restaurador. The ship returned to Venezuela on 23 February 1903; after extensive repairs she was in much better condition than on capture.
The British ships of the Particular Service Squadron under Commodore Robert A.J. Montgomerie included the flagship HMS Ariadne, the sloop HMS Alert and the protected cruiser HMS Charybdis. An Italian naval contingent arrived in support of the blockade on 16 December. The blockaders captured four Venezuelan warships, with the Venezuelan navy providing little challenge. Virtually all its ships were captured within two days. The Germans, lacking the capacity to tow them to Curaçao, simply sank two Venezuelan ships that proved unseaworthy. On land, Castro arrested over 200 British and German residents of Caracas, prompting the allies to deploy soldiers to evacuate their citizens. The U.S. ambassador Herbert W. Bowen negotiated the release of all foreign nationals.
On 13 December, after a British merchant vessel had been boarded and its crew briefly arrested, the British demanded an apology, and failing to receive it, launched a bombardment of Venezuelan forts at Puerto Cabello, assisted by the German SMS Vineta. The same day, London and Berlin received from Washington a request forwarded from Castro to submit the dispute to arbitration, which neither power relished, because of concerns over enforceability of any settlement. In addition, Castro's offer initially covered only claims arising from the 1898 civil war, and made no mention of other claims. Germany believed that these claims should not be subject to arbitration, but London was more willing to agree, accepting arbitration in principle, and suggested a compromise. The threat of arbitration made London move to the next stage in order to negotiate from a position of strength, and 20 December was set for the beginning of the official blockade. As a result of a combination of communications issues and practical delays, the British notice of an official blockade was published on 20 December, but the German blockade of Puerto Cabello was only effected on 22 December, and on Maracaibo on 24 December.