He now resorted to a more cunning ruse. The people of Venezuela owed considerable sums to merchants and bankers in Germany, England, and Italy, and the creditors could recover neither their capital nor the interest on it. The Kaiser bethought him self of the simple plan of making a naval demonstration against the Venezuelans if they did not pay up; he would send his troops ashore, occupy the chief harbors, and take in the customs. To disguise his ulterior motive, he persuaded England and Italy to join him in collecting their bill against Venezuela. So warships of the three nations appeared off the Venezuelan coast, and for some time they maintained what they called "A peaceful blockade." After a while Secretary Hay pointed out that there could be no such thing as a peaceful blockade; that a blockade was, by its very nature, an act of war; accordingly the blockaders declared a state of belligerency between themselves and Venezuela, and Germany threatened to bombard the seacoast towns unless the debt was settled without further delay. President Roosevelt had no illusions as to what bombardment and occupation by German troops would mean. If a regiment or two of Germans once went into garrison at Caracas or Porto Cabello, the Kaiser would secure the foothold he craved on the American Coast within striking distance of the projected Canal, and Venezuela, unable to ward off his aggression, would certainly be helpless to drive him out. Mr. Roosevelt allowed Mr. Herbert W. Bowen, the American Minister to Venezuela, to serve as Special Commissioner for Venezuela in conducting her negotiations with. Germany. He, himself, however, took the matter into his own hands at Washington. Having sounded England and Italy, and learned that they were willing to arbitrate, and knowing also that neither of them schemed to take territorial payment for their bills, he directed his diplomatic attack straight at the Kaiser. When the German Ambassador, Dr. von Holleben, one of the pompous and ponderous professorial sort of German officials, was calling on him at the White House, the President told him to warn the Kaiser that unless he consented, within a given time--about ten days--to arbitrate the Venezuelan dispute, the American fleet under Admiral Dewey would appear off the Venezuelan coast and defend it from any attack which the German Squadron might attempt to make. Holleben displayed consternation; he protested that since his Imperial Master had refused to arbitrate, there could be no arbitration. His Imperial Master could not change his Imperial Mind, and the dutiful servant asked the President whether he realized what such a demand meant. The President replied calmly that he knew it meant war. A week passed, but brought no reply from Berlin; then Holleben called again at the White House on some unimportant matters; as he turned to go the President inquired, "Have you heard from Berlin?" "No," said Holleben. "Of course His Imperial