Module 2 – William Taft (1909-1913)

Introduction
Was a republican.
Served as:
 Philippines’ Governor General.
 Federal Judge
 Secretary of War
Defeated William Bryan.

Foreign Policy

Dollar Diplomacy
Policy to achieve political objectives using economic means – Dollar Diplomacy.
Reasons Dollar Diplomacy:
 More freedom to American businessmen.
 To earn more profits from debtor countries.
 Serve America’s strategic and financial interests.
 Promote order and peace in the Caribbean.
 To increase American investment in South and Central America, The
Caribbean and Far East.

Taft administration believed that American dollar alone could help American
financers. He thought that the US military was a tool of economic diplomacy.
However, the real intention was to extend American influence in the foreign
countries and attain rapid economic development.

The Economic Imperialism

Dollar Diplomacy encouraged American capitalists to invest in foreign countries.
Taft believed that American dollar could help maintain power in the Far East.
It would safeguard his ‘open door policy’ and territorial integrity with China.
By toeing the line of European Financers, dollar diplomacy attempted to increase
American economic imperialism, but due to bad implementation, the policy failed
miserably.
Taft used government officials to promote American goods – industrial and military
hardware, overseas.

Implementation of Dollar Diplomacy

Tactless and uncivilized implementation of the Policy:
1. If a weak nation did not support American cause, then there would be internal
conflicts with American aid.
2. American to be freely utilized to topple any established government.
3. A revolutionary government would be recognized only by the granting more
economic concessions to American financers.
4. A dictator to remain power as long as he protects American interests.
5. Sometimes force was used to threaten inhabitants. US navy already ready to
attack enemies.
6. American army stationed in a few countries to protect American citizens.
7. No country could get aid from European nations as that would violate Monroe
Doctrine.

Causes for the Failure

1. Latin American countries opposed intervention.
2. Political motives of Taft’s Dollar Diplomacy and Roosie’s Big Stick Policy
remain the same.
3. Only tried to safeguard the interests of American financers and completely
ignored other nations,
4. Russia and Japan opposed open door policy as it curtailed their economic
freedom.
5. The Policy supported various Latin American dictators against democratic
ideals.
6. Once the countries realized the real intention behind American economic
intervention (American economic imperialism) they began to oppose it.

Intervention in the Caribbean

Caribbean was in chaos all the time. So, the US intervened frequently.
This time it was Nicaragua in 1909.
Nicaragua’s President, Jose Zelaya wanted to construct a canal across the country
with the help of a few foreign powers.
Since the canal was against US’ strategic interests, it induced amed rebels against
Zelaya, and overthrew him.
The new government was set up and recognized only when it agreed to give more
concessions to American financers.
1911 – American bankers took charge of the country’s finances. People revolted.
1912 – revolution was crushed by the American Mariners and took over the country
for the next twenty years.
Americans rulers decided the government – parties friendly to the US interests were
placed in power.
It never experienced free elections. American influence became a commonplace in its
domestic politics.
Taft administration was allowed to establish naval based in Great Corn and Little
Corn.

Honduras was unable to clear its debts – American financers took charge of the
Country’s finances.
Latin America was practically forced to purchase the US ships.

The Chinese Consortium

American businessmen had strategic and business interests in China.
Believed in increasing American influence by investing more capital in the Far East.
Knox, US State Secretary under Taft, persuaded American financers to join a
consortium with Belgian, French and other European bankers in the construction of
Hukuang Railroad in China.
To fight competiton, American businessmen tried purchasing existing railroads from
Japan and Russia.
Then Taft tried to offer a huge loan to China by inviting to purchase these railroads.
Policy failed miserably.

Evaluation
Taft’s foreign policy for the US was highly unsuccessful.
United States trade with China actually declined under Taft.
Taft further worsened Latin America’s wrath for the US, over the Panama issue and
The Dominican Republic crisis.
Pan American Conference – due deteriorating relations between the US and other
nations.
The aim was to curtail the US intervention and influence.
When Taft wanted to intervene in revolutionary-torn Mexico and the Congress stiffly
opposed.

(check for the failure of dollar diplomacy)