The Taft Administration and Dollar Diplomacy

Taft was the handpicked successor to Roosevelt. He was an excellent administrator, but a disapointing president poor in public relations. He had a good domestic record, sucessfully busting monopolies, yet remaining a friend to big business. He was les successful at diplomacy. <He later became a very distinguished Supreme Court Justice>

Dollar Diplomacy

Initiated by Knox, a corporate lawyer, Secretary of State, and a forceful figure. He dominated a lot of foreign policy decision making.

Government Suport of American Buiness in foreign lands.

The government actively encouraged business to secure opportunities overseas. State department worked to negotiate useful trade agreements. Negotiate favorable deals and actively recruit businesses to make foreign investments.

Employment of the Dollar to Promote National Policies.

Used to create a friendly environment in foreign countries. Use economic influence to control political and military decisions of the country.

<Is this Imperialism? Taft insisted that imperialism required military force. This diplomacy, while powerful, allowed both sides to come to mutually agreeable decisions. Yet a neglect for the wellbeing of natives is a commonality between Dollar Diplomacy and economic imperialism.

Latin America: Nicaragua

Policy used to keep Nicaragua on the American side. Jose Zelaya was its dictator. He had a vision of creating a central american empire.

Taft secretly supported pro-US operations. People went there to help set up a coup, which was overcoe. Zelaya broke off dipomatic relations, then fled when he realized that the US would come after him again.

The US placed Diaz in control:

Failure of the Knox-Castrillo Convention (1911)

Gave the US authority to take over Nicaragua's customs office and to make Nicaragua a US protectorate. Not ratified by congress.

Receivorship for the Nicaraguan Customs by American Bankers

US Protectorate

Anti-American uprising. Put down by American marines, who remained to protect the customs office. When Woodrow Wilson was elected, he negotiated and established Nicaragua as a US protectorate.

East Asia: China

Banking Consortium

Neutralization of Manchurian Railway (failed attempt)

Opposed by Russians and Japanese. Started a series of secret military alliances that lasted until the Russian revolution.

Back.

Next.

Back to the Main Diplomatic History Page.