Heligoland is a tiny island some 30 miles away from Schleswig Holstein and Lowern Saxony in the North Sea. Historically it had been claimed by the Danes - although the 2,000 people who lived on the red sandstone cliffs were generally answerable to noone but themselves. The tiny island could not provide much of a living, but the seas around it meant that the islanders could survive in such an inhospitable place.
It was really the Napoleonic Wars that saw this island annexed by the British. The Danes had been forced to join Napoleon's Continental System which was designed to enforce a trading embargo and blockade against Britain. The admiralty, in the days after Trafalgar, were keen to acquire the rock to help facilitate smuggling to the ports on the Continent. The tiny Danish garrison could do little to resist when a flotilla of Royal Navy ships arrived and so surrendered without firing a shot. The only seback for the British was when one of the ships (a bomb-ketch named HMS Explosion) broke free from its moorings and ran aground on nearby Sandy Island. The islanders helped the sailors salvage what they could and it was to be Explosions foremast that provided the flagpole with which to claim the island for the British.
The island was certainly useful to the Royal Navy for the remainder of the Napoleonic Wars, but its continued ownership after the war was by no means guaranteed. Heligoland would find itself trussed up as a bargaining chip with other Danish and Scandanavian territories. Britain was keen to keep the tiny island but returned other Danish islands and saw that Norway was entrusted to Sweden in what was known as the Treaty of Kiel. This would be the constitutional basis for British ownership for the next 76 years.
The fact that it would eventually be traded to the Germans rather than to the original Danish owners is a complicated lesson in European politics in the Nineteenth Century. Basically, German nationalism under the guidance of the Prussians in particular would rise throughout the century. The Schleswig-Holstein question was a particularly thorny issue between Denmark and Prussia that twice led to war with Prussia ultimately being victorious. Germany itself was created at the Treaty of Paris in 1871.
The island took on a growing strategic importance for the Germans with the construction of the Kiel canal linking the Baltic Sea to the North Sea. It was realised by the Germans that Heligoland might play the role of a base or a plug to stop the use of the canal by warships. Kaiser Wilhelm II was particularly bellicose in his calls for the islands accession into the newly united Germany.
The British, under Salisbury, were willing to consider a trade for the island with an elaborate deal to increase Britain's influence and control in Central and Eastern Africa. Basically, Britain was to receive primacy in Uganda, Kenya, and Zanzibar in return for the small island. Queen Victoria herself was less than impressed with the trade and did attempt to scupper it. However, Salisbury managed to convince her of the merits of the deal and persevered in seeing it through. The Heligolanders were not consulted over who should be their overlords and on the 9th August, 1890, the Union Jack was taken down. The following day the Kaiser arrived on the island and claimed it for Germany. The island was duly militarised and turned into a German naval and then later a submarine base.
At the time, the British were extremely happy with the trade, but with hindsight it would have been a useful base to monitor the German fleets - although the admiralty were convinced that it was probably too isolated from Britain and too close to Germany to actually defend. Significantly, the first naval skirmish of the First World War was very close to the island and the biggest Battle of Jutland was not that far away from the islands. In the Second World War, the British would launch a thousand bomber raid on the island to destroy the military infrastructure of the island.
The islands would actually return to British control on two separate occasions. At the end of both World Wars, the British became responsible for its administration. The British oversaw the dismantlement of the German fortifications from 1920 to 1922 as part of the Treaty of Versailles terms. After the Second World War, the islands were administered as part of the North German occupation zone allocated to the British from 1945 to 1952. The islanders were evacuated and it was used as a testing ground for the British military until it was handed back to the Germans.