Greenland: The USA already bought an island once – How fear of Germany drove the USA to buy the Virgin Islands

America's dark secret: How the "President of Freedom" bought an entire colony – without asking the people

In March 1917, $25 million in solid gold coins changed hands – one of the most expensive land purchases in American history. But what at first glance appeared to be a simple expansion of US territory was in reality a nervous game of chess between the great powers in the midst of World War I.

It wasn't about idyllic beaches or economic profit, because the Danish colony had long been a financial wreck after the end of slavery. It was about sheer terror: the US fear of German U-boats at the Panama Canal and an intercepted secret telegram forced Washington to act.

This historical retrospective reveals how President Woodrow Wilson—the great preacher of national self-determination—betrayed his own ideals to secure a strategic stronghold. Learn why Denmark wanted to rid itself of its Caribbean “black pearl,” how a secret land swap settled Greenland’s ownership forever, and why the inhabitants of what are now the Virgin Islands still live in a legal no-man’s-land—as US citizens who cannot elect their own president. This is the story of a transaction in which gold was traded for geopolitics, and democracy was left by the wayside.

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The empire intervenes – when profits fail to materialize

On March 31, 1917, an exchange took place that altered the political map of the Caribbean. The United States acquired the former Danish colony of Danish West Indies for 25 million dollars in gold coins, renamed it the Virgin Islands, and incorporated it into its system of governance as an external territory without full rights. What at first glance appears to be a purely commercial transaction was, in reality, a move of classic great power politics. This move combined economic decline with military necessity and exposed the ideological promises of US President Woodrow Wilson in an almost grotesque manner.

The purchase price of $25 million represented approximately 3.5 percent of the 1916 U.S. federal budget—a considerable sum for the territory, and significantly more than the $5 million the U.S. had offered in 1902. This enormous price increase was no accident, but rather a reflection of a completely changed global political landscape, in which the United States was driven less by profit-oriented goals and more by fear.

Denmark had long wanted to free itself from its Caribbean possessions. The colonies, which had brought Danish merchants and plantation owners enormous profits since the 17th century, were economically drained. The reason for this collapse lay not in a lack of exploitation, but in the elimination of the basis of this exploitation: slavery.

The economic crisis of the sugar empire

The system upon which the wealth of the Virgin Islands rested was primitive yet brutally efficient. Danish merchants—including wealthy patriarchs like Heinrich Carl von Schimmelmann, who enslaved nearly a thousand people on his plantations on St. Thomas and St. Croix—imported masses of enslaved Africans to produce sugarcane, indigo, and other products. Sugar cultivation was incredibly profitable, but also incredibly bloody. The plantation owners constantly needed a fresh supply of labor because mortality rates were catastrophically high due to the tropical climate, brutal exploitation, and various diseases. Flensburg, then still under Danish rule, grew into a major port city whose merchants amassed enormous fortunes through rum, sugar, and human misery.

In 1792, Denmark became the first European colonial power to ban the transatlantic slave trade—a seeming sign of moral superiority that, in reality, appears cruelly ironic. The ban didn't come into effect until 1803, but slavery itself continued on the islands. In the eleven years between the passage of the law and its implementation, Danish slave traders had time to abduct as many people as possible from Africa. Afterward, Denmark relied on slavery to renew itself through "natural reproduction"—a testament to the cynical treatment of entire generations as mere human material.

But the pressure on the slavery systems of the Caribbean was constantly growing. The British had freed their slaves in 1833, and France followed suit in 1848. The anti-slavery movement was also growing in Denmark itself. Governor Peter von Scholten, a rare example of a colonial official with human compassion, implemented a series of reforms: in 1843, the enslaved were given Saturdays off, and in 1847, the Danish government announced the gradual abolition of slavery by 1859. But the enslaved people, the "Crucians" of St. Croix—as the inhabitants called themselves—did not wait. On July 2, 1848, some eight thousand people rose up against their fate, surrounded Fort Frederik in Frederiksted, and threatened to set the town ablaze. Von Scholten, under extreme pressure and unable to obtain orders from Copenhagen, called out to them: "Now you are free, you are hereby emancipated!" The price of this freedom was immediately felt: The plantation owners lost their assets overnight, without any prospect of compensation.

What followed was economic collapse. Sugar production, the islands' only profitable industry, crumbled. The liberated workers, now formally free, found themselves in even more miserable conditions. Labor and mobility laws bound them to the plantations with meager wages. A law passed in 1849 allowed workers to change jobs only once a year, on October 1st—a system that enshrined unfreedom under a new name. The islands became an economic no-man's-land: officially liberated, but structurally trapped in poverty.

Denmark viewed its West Indies possessions as nothing more than a burden. In 1867, the Americans first offered money—seven million dollars for the two larger islands of Saint Thomas and Saint John. The Danish Senate refused, partly out of national pride, partly out of doubt about future profits. In 1902, the Americans tried again, this time for only five million dollars. Once more, the Danish Senate refused. In both cases, the Danes wanted at least to be able to consult the population—a right to self-determination that they were willing to grant their own colonial subjects, but which Washington vehemently rejected.

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World War I as the trigger

The global political situation changed dramatically with the outbreak of the First World War. The USA, still neutral under Woodrow Wilson, feared German hegemony in the Caribbean. This fear was not unfounded. Since the 1880s, Berlin had been considering how to utilize the Danish West Indies as a strategic base. The German Empire had developed a remarkable strategy: it could occupy Denmark and thus control the valuable Caribbean islands, threatening American naval supremacy and, in particular, jeopardizing the security of the recently opened Panama Canal.

The Panama Canal was the strategic centerpiece of these considerations. Opened in 1914, it drastically shortened the sea route between the Atlantic and Pacific Oceans, making the United States a global naval power. But such a power was vulnerable: any hostile control over the Caribbean could block this vital shipping route. The United States, whose entire security strategy rested on dominance of the Western Hemisphere (the Monroe Doctrine of 1823), could not afford to take this risk.

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This fear was confirmed by an incident the British leaked to the Americans. On January 19, 1917, Arthur Zimmermann, the German State Secretary of the Foreign Office, sent an encrypted telegram to the German ambassador in Mexico. British intelligence intercepted and decrypted the message. The telegram was politically explosive: Germany offered Mexico an alliance and promised that after the war, Mexico could regain the territories it had lost to the United States in 1848 – Texas, Arizona, New Mexico, and California.

The release of this telegram a few weeks later was crucial to America's entry into the war. But before this drama unfolded, Wilson and his Secretary of State, Robert Lansing, had already decided to put pressure on Denmark. They feared that if Germany occupied Denmark, it might seize the Virgin Islands. Lansing even threatened a military invasion of the islands if Denmark did not sell. The Danes were not only lured with money but effectively blackmailed.

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The negotiations: Double standards as diplomacy

Denmark set conditions for the sale. The islands' population, predominantly Black—descendants of enslaved Africans—was to be asked whether they wanted to become American citizens. Furthermore, duty-free trade was to be guaranteed. America refused to agree to these conditions. Lansing objected, pressured the Danes, and Copenhagen relented. Denmark abandoned its conditions and sold the islands to a country that wouldn't even ask the population for their opinion.

Ironically, this happened at the very moment when Woodrow Wilson was delivering the great speeches that would make him immortal. On January 8, 1918, less than a year after the purchase of the Virgin Islands, Wilson presented his famous Fourteen Points program for a post-World War I peace. Point 5 called for a fair settlement of all colonial issues, based on the principle that the interests of the affected populations must be given equal weight to the claims of the government. The right of peoples to self-determination became Wilson's most important slogan.

But the man who wrote these words was the same president who, just a few months earlier, had ignored the inhabitants of the Virgin Islands. This blatant contradiction was so striking that critics like Lenin argued that Wilson's right to self-determination was merely a propaganda tool of Western power, not a genuine principle.

The hidden Greenland clause: Politics through side agreements

What is often overlooked is a crucial clause in the purchase agreement. In exchange for the Virgin Islands, the US recognized that Denmark should have sole sovereignty over Greenland—over the entire vast island. This was no small concession. The US had laid claim to parts of Greenland based on North Pole expeditions by Charles Francis Hall and Robert Peary. They relinquished these claims to ensure Denmark's agreement to the sale of the Caribbean islands. This was classic power politics: two island groups, two continents, two strategic objectives, one exchange. It was also insurance. Should Denmark one day be occupied by Germany, the American recognition of Danish rights over Greenland would help keep the island out of reach of German expansion after the war.

What was actually in the contract

• On August 4, 1916, in addition to the actual convention on the cession of the Danish West Indies, a supplementary declaration by US Secretary of State Robert Lansing was signed.
• The statement said that the US government would raise "no objections" if Denmark extended its political and economic interests to all of Greenland.
• This declaration was attached as an appendix or accompanying document to the West Indies Convention and was considered politically very important by contemporary observers as well as present-day historians, because it meant that the USA de facto recognized Danish sovereignty over all of Greenland.

The purchase of the island was linked to a formal US declaration that politically secured Denmark's claim to all of Greenland; this "Greenland clause" was therefore actually a kind of side agreement.

The USA promised not to object to the Danish expansion of political and economic interests to all of Greenland; legally, full international recognition remained a process until 1933.

The headline "Hidden Greenland Clause" is apt. While the US did politically secure Denmark's claim to all of Greenland in the context of the island purchase, this did not occur through a formal transfer of sovereign rights. Rather, it was a recognition of Danish interests coupled with a promise not to raise any objections.

The current status: The legacy of exclusion

Today, more than a century later, the status of the Virgin Islands reveals the true legacy of that purchase. Although some 105,000 people live on the islands—roughly 81 percent of them of African or Caribbean descent—they are American citizens without basic democratic rights. They cannot vote for the president. They have no voting representatives in Congress, only delegates with the right to speak. They can vote in party primaries, but their votes do not count in the actual presidential election. This is systematic political discrimination based on residency—a system the United States Constitution actually opposes.

Denmark, which once imposed conditions to protect this population, was unable to enforce anything. America, which under Wilson seemingly championed the right of peoples to self-determination, failed to grant the inhabitants of the Virgin Islands both genuine equality and a political voice. The 2024 American Civil Rights Report bitterly noted that the territories "have been forgotten by Congress, the President, and the Supreme Court and remain trapped in a time when non-white citizens and women were denied the right to vote and had no say in the laws that governed their daily lives.".

The economic consequences: From sugar colony to modern dependency

The economic development of the islands after 1917 reveals a pattern of continued exploitation under a new name. Sugar was history, but new structures of dependency replaced the old system. Today, the islands rely on imports of basic foodstuffs and energy. Tourism became the main source of income—often not through local initiatives, but through foreign investors and corporations that create jobs but siphon off the profits. A century later, the Virgin Islands' economy is not structurally independent, but dependent. This is not a sign of underdevelopment, but a characteristic of modern power politics: formal freedom coupled with continued economic control.

The historical pattern of great power politics

The US purchase of the Virgin Islands in 1917 was economically motivated (Denmark wanted to rid itself of the unprofitable colony), a security necessity (the Panama Canal had to be protected), a preventative measure (Germany was not to be allowed to gain a foothold in the Caribbean), and ideologically hypocritical (Wilson preached self-determination while denying it to his new subjects). It was also unprecedented for the burgeoning American ambition: the US not only bought land but also adopted an entire system of subjugation that persists to this day. Denmark had cast off its economic and moral burden. America assumed control, leaving the population in a state of limbo between citizenship and colonization. It is a chapter of history that illustrates how great powers displace their rivals by seizing opportune moments—and how solemn promises of freedom are quickly forgotten under the pressure of economic interests and political fear.

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