That, of course, would shift the onus of declaring war onto the Germans - who probably wouldn't.
Ironically, it could actually lead him into difficulties with Britain, who in international law could refuse to recognise the change of flag. So if a confiscated German ship, now flying the Stars and Stripes, is intercepted by a British warship, there could well be an incident.
The idea I was getting at was that even if TR could not get a declaration of war out of Congress, he might by executive action do something to put Germany in a position where it would either declare war or do something (e.g., an earlier resort to unlimited submarine warfare) which would make a declaration of war by Congress politically feasible. This of course assumes that Germany will be foolhardy enough to let itself be provoked, but I don't see why it's implausible to see Kaiser Bill being foolhardy...