Pope Leo XIII, as mediator, proposes Spanish sovereignty over the Carolines with German trade and settlement rights.

What happened

Bismarck had proposed the Pope as mediator, not as a judge. The Pope’s proposal affirmed Spanish sovereignty over the Carolines and Palau but required Spain to set up a regular administration with enough force to keep order, and it guaranteed Germany full freedom of trade, navigation, fishing and farming there.

Why it matters

The duty to govern led Spain to set up its first posts in the islands, on Yap in 1886 and Pohnpei in 1887.