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.
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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.
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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
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Cipriano Castro - "a crazy brute" |
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.
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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.
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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.
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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. 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!
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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 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.
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SMS Vineta, main armament 2 X 8.3" and 8 X 5.9" |
The blockade continued into 1903 however and on January 17th
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.
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Fort San carlos under attack - French illustration |
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 or the Imperial German
Navy to flex its muscles were to have major long-term consequences!