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The German–Spanish Treaty of 1899 was a treaty between the German Empire and Spain, with the latter selling the remainder of its Pacific Ocean islands to Germany for 25 million pesetas or respectively 17 million Marks.

Precedents

Discovered by the occidentals in 1526, the Spanish explorer Toribio Alonso de Salazar called them "Carolinas" after the emperor Carlos I of Spain, also known as Charles V of the Holy Roman Empire. The Portuguese explorer Diego da Rocha also named them the Sequeira Islands in 1527. Though early Spanish navigators in the area (from 1543) called them the Nuevas Filipinas ("New Philippines"), Admiral Francisco Lazeano named them the Carolinas after the Spanish King Charles II in 1686.

Some few Western travellers subsequently visited the islands, but an early visit of missionaries (1732) resulted in one of several murderous attacks on the newcomers; and only in 1875 did Spain, claiming the group, make some attempt to assert her rights.

The Caroline Islands were subsequently placed under the Spanish East Indies, administered from the Philippines. Germany, which had occupied Yap, disputed the Spanish claim, even sending the gunboat Iltis, and the matter went to the arbitration of Pope Leo XIII in 1885. He decided in favor of Spain, but gave Germany free trading rights. The Spanish did not occupy any island formally until 1886.

After its defeat in the Spanish–American War and the Treaty of Paris where it lost the Philippines and Guam to the United States, Spain had in its possession about 6000 islands left in the Pacific. The islands however were extremely small, sparsely populated, and not very productive and they had become ungovernable after the loss of the administrative center Manila and undefendable after the entire loss of two Spanish fleets in 1898. Spain therefore found the islands ungovernable and undefendable and the only solution to this was to sell it to a country which would take charge of them and in this sense, Germany pressured the Spanish government to facilitate the sale of the islands.

The Caroline Islands, the Mariana Islands and Palau were included in the treaty. With this treaty, signed on February 12, 1899, Spanish Prime Minister Francisco Silvela put an end to the Spanish East Indies.

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