{"id":198,"date":"2015-08-21T18:07:01","date_gmt":"2015-08-21T18:07:01","guid":{"rendered":"https:\/\/courses.candelalearning.com\/ushistory2os2xmaster\/?post_type=chapter&#038;p=198"},"modified":"2022-09-13T23:33:10","modified_gmt":"2022-09-13T23:33:10","slug":"tafts-dollar-diplomacy","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-ushistory2\/chapter\/tafts-dollar-diplomacy\/","title":{"raw":"Taft\u2019s \u201cDollar Diplomacy\u201d","rendered":"Taft\u2019s \u201cDollar Diplomacy\u201d"},"content":{"raw":"<div class=\"bcc-box bcc-highlight\">\r\n<h3>Learning Objectives<\/h3>\r\n<ul>\r\n \t<li>Explain how William Howard Taft's \"dollar diplomacy\" used American economic power to protect the nation\u2019s interests in its new empire<\/li>\r\n<\/ul>\r\n<\/div>\r\n<p id=\"fs-idm6046480\">When William Howard Taft became president in 1909, he chose to adapt Roosevelt\u2019s foreign policy to one that reflected American economic power at the time. In what became known as <strong>dollar diplomacy<\/strong>, Taft announced his decision to \u201csubstitute dollars for bullets\u201d in an effort to use foreign policy to secure markets and opportunities for American businessmen. Not unlike Roosevelt\u2019s threat of force, Taft used the threat of American economic pressure to coerce countries into agreements that would benefit the United States.<\/p>\r\n\r\n<figure id=\"CNX_History_22_04_Dollar\">\r\n\r\n[caption id=\"\" align=\"alignright\" width=\"260\"]<img src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/884\/2015\/08\/23203019\/CNX_History_22_04_Dollar.jpg\" alt=\"A photograph of William Howard Taft is shown.\" width=\"260\" height=\"347\" data-media-type=\"image\/jpeg\" \/> <strong>Figure 1<\/strong>. Although William Howard Taft was Theodore Roosevelt\u2019s hand-picked successor to the presidency, he was less inclined to use Roosevelt\u2019s \u201cbig stick,\u201d choosing instead to use the economic might of the United States to influence foreign affairs.[\/caption]<\/figure>\r\n<p id=\"fs-idm116307840\">Of key interest to Taft was the debt that several Central American nations still owed to various European countries. Fearing that the debt holders might leverage the monies owed to enable military intervention in the Western Hemisphere, Taft moved quickly to pay off these debts with U.S. dollars. Of course, this made the Central American countries indebted to the United States, a situation that not all nations wanted. When a Central American nation resisted this arrangement, however, Taft responded with military force to achieve the objective. This occurred in Nicaragua when the country refused to accept American loans to pay off its debt to Great Britain. Taft sent a warship with marines to the region to pressure the government to agree. Similarly, when Mexico considered the idea of allowing a Japanese corporation to gain significant land and economic advantages in its country, Taft urged Congress to pass the Lodge Corollary, an addendum to the Roosevelt Corollary, stating that no foreign corporation\u2014other than American ones\u2014could obtain strategic lands in the Western Hemisphere.<\/p>\r\n<p id=\"fs-idm23195088\">In Asia, Taft\u2019s policies also followed those of Theodore Roosevelt. Even before becoming president, Taft had played an important role in the Philippines, and as president, he fought to make sure Filipino farmers could sell their goods tax-free in the United States.\u00a0He attempted to bolster China\u2019s ability to withstand Japanese interference and thereby maintain a balance of power in the region. Initially, he experienced tremendous success in working with the Chinese government to further develop the railroad industry in that country through arranging international financing. However, efforts to expand the Open Door policy deeper into Manchuria met with resistance from Russia and Japan, exposing the limits of the American government\u2019s influence and knowledge about the intricacies of diplomacy. As a result, he reorganized the U.S. State Department to create geographical divisions (such as the Far East Division, the Latin American Division, etc.) in order to develop greater foreign policy expertise in each area.<\/p>\r\n<p id=\"fs-idm75310464\">Taft\u2019s policies, although not as militarily aggressive as those of his predecessors, did create difficulties for the United States, both during his presidency and in the future. Taft did send troops into Nicaragua in 1912 following a rebellion that threatened to end debt repayment to the United States; U.S. marines were intermittently deployed to the country for the next twenty years. Central America\u2019s indebtedness would create economic concerns for decades to come, as well as foster nationalist movements in countries resentful of America\u2019s interference. In Asia, Taft\u2019s efforts to mediate between China and Japan served only to heighten tensions between Japan and the United States. Furthermore, it did not succeed in creating a balance of power, as Japan\u2019s reaction was to further consolidate its own power and reach throughout the region.<\/p>\r\n<p id=\"fs-idm104181424\">As Taft\u2019s presidency came to a close in 1913, the United States was firmly entrenched on its path towards empire. The world perceived the United States as the predominant power of the Western Hemisphere\u2014a perception that few nations would challenge until the Soviet Union in the 1945-1991 Cold War era. Likewise, the United States had clearly marked its interests in Asia, although it was still searching for how to most efficiently defend them.<\/p>\r\n<p id=\"fs-idp289872160\">The playing field would change one year later in 1914 when the United States witnessed the unfolding of World War I, or \u201cthe Great War.\u201d A new president built on the diplomacy practiced by Taft but charted a new course in regards to Europe\u2014marking a significant break from precedent.\u00a0Despite Woodrow Wilson\u2019s best efforts to the contrary, the United States would be drawn into the conflict and subsequently attempt to reshape the world order as a result.<\/p>\r\n\r\n<div class=\"textbox examples\">\r\n<h3>Watch It<\/h3>\r\nThis video explains Taft's dollar diplomacy and why it proved to be ineffective.\r\n\r\nhttps:\/\/www.youtube.com\/watch?v=79sxHMSJSYQ\r\n\r\nYou can view the\u00a0<a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/US+history+II\/HeresWhyPresidentTaftsDollarDiplomacyWasaFail.html\" target=\"_blank\" rel=\"noopener\">transcript for \u201cHere's Why President Taft's Dollar Diplomacy Was a Failure | History\u201d here (opens in new window)<\/a>.\r\n\r\n<\/div>\r\n<div class=\"textbox tryit\">\r\n<h3>Try It<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/dc9898ae-355f-458f-a4e5-0078de1f8036\r\n\r\n<\/div>\r\n<div class=\"bcc-box bcc-info\">\r\n<h3>Review Question<\/h3>\r\n<section>What problems did Taft\u2019s foreign policy create for the United States?\u00a0<\/section><section>[reveal-answer q=\"555876\"]Show Answer[\/reveal-answer]\r\n[hidden-answer a=\"555876\"]Taft\u2019s policies created some troubles that were immediate and others that would not bear fruit until decades later. The tremendous debts in Central America created years of economic instability there and fostered nationalist movements driven by resentment of America\u2019s interference in the region. In Asia, Taft\u2019s efforts at China-Japan mediation heightened tensions between Japan and the United States\u2014tensions that would explode, ultimately, with the outbreak of World War II\u2014and spurred Japan to consolidate its power throughout the region.[\/hidden-answer]<\/section><\/div>\r\n<div class=\"textbox learning-objectives\">\r\n<h3>Glossary<\/h3>\r\n<strong>dollar diplomacy: <\/strong>President Taft\u2019s strategy of using American economic power to push for favorable foreign policy agreements\r\n\r\n<\/div>","rendered":"<div class=\"bcc-box bcc-highlight\">\n<h3>Learning Objectives<\/h3>\n<ul>\n<li>Explain how William Howard Taft&#8217;s &#8220;dollar diplomacy&#8221; used American economic power to protect the nation\u2019s interests in its new empire<\/li>\n<\/ul>\n<\/div>\n<p id=\"fs-idm6046480\">When William Howard Taft became president in 1909, he chose to adapt Roosevelt\u2019s foreign policy to one that reflected American economic power at the time. In what became known as <strong>dollar diplomacy<\/strong>, Taft announced his decision to \u201csubstitute dollars for bullets\u201d in an effort to use foreign policy to secure markets and opportunities for American businessmen. Not unlike Roosevelt\u2019s threat of force, Taft used the threat of American economic pressure to coerce countries into agreements that would benefit the United States.<\/p>\n<figure id=\"CNX_History_22_04_Dollar\">\n<div style=\"width: 270px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/884\/2015\/08\/23203019\/CNX_History_22_04_Dollar.jpg\" alt=\"A photograph of William Howard Taft is shown.\" width=\"260\" height=\"347\" data-media-type=\"image\/jpeg\" \/><\/p>\n<p class=\"wp-caption-text\"><strong>Figure 1<\/strong>. Although William Howard Taft was Theodore Roosevelt\u2019s hand-picked successor to the presidency, he was less inclined to use Roosevelt\u2019s \u201cbig stick,\u201d choosing instead to use the economic might of the United States to influence foreign affairs.<\/p>\n<\/div>\n<\/figure>\n<p id=\"fs-idm116307840\">Of key interest to Taft was the debt that several Central American nations still owed to various European countries. Fearing that the debt holders might leverage the monies owed to enable military intervention in the Western Hemisphere, Taft moved quickly to pay off these debts with U.S. dollars. Of course, this made the Central American countries indebted to the United States, a situation that not all nations wanted. When a Central American nation resisted this arrangement, however, Taft responded with military force to achieve the objective. This occurred in Nicaragua when the country refused to accept American loans to pay off its debt to Great Britain. Taft sent a warship with marines to the region to pressure the government to agree. Similarly, when Mexico considered the idea of allowing a Japanese corporation to gain significant land and economic advantages in its country, Taft urged Congress to pass the Lodge Corollary, an addendum to the Roosevelt Corollary, stating that no foreign corporation\u2014other than American ones\u2014could obtain strategic lands in the Western Hemisphere.<\/p>\n<p id=\"fs-idm23195088\">In Asia, Taft\u2019s policies also followed those of Theodore Roosevelt. Even before becoming president, Taft had played an important role in the Philippines, and as president, he fought to make sure Filipino farmers could sell their goods tax-free in the United States.\u00a0He attempted to bolster China\u2019s ability to withstand Japanese interference and thereby maintain a balance of power in the region. Initially, he experienced tremendous success in working with the Chinese government to further develop the railroad industry in that country through arranging international financing. However, efforts to expand the Open Door policy deeper into Manchuria met with resistance from Russia and Japan, exposing the limits of the American government\u2019s influence and knowledge about the intricacies of diplomacy. As a result, he reorganized the U.S. State Department to create geographical divisions (such as the Far East Division, the Latin American Division, etc.) in order to develop greater foreign policy expertise in each area.<\/p>\n<p id=\"fs-idm75310464\">Taft\u2019s policies, although not as militarily aggressive as those of his predecessors, did create difficulties for the United States, both during his presidency and in the future. Taft did send troops into Nicaragua in 1912 following a rebellion that threatened to end debt repayment to the United States; U.S. marines were intermittently deployed to the country for the next twenty years. Central America\u2019s indebtedness would create economic concerns for decades to come, as well as foster nationalist movements in countries resentful of America\u2019s interference. In Asia, Taft\u2019s efforts to mediate between China and Japan served only to heighten tensions between Japan and the United States. Furthermore, it did not succeed in creating a balance of power, as Japan\u2019s reaction was to further consolidate its own power and reach throughout the region.<\/p>\n<p id=\"fs-idm104181424\">As Taft\u2019s presidency came to a close in 1913, the United States was firmly entrenched on its path towards empire. The world perceived the United States as the predominant power of the Western Hemisphere\u2014a perception that few nations would challenge until the Soviet Union in the 1945-1991 Cold War era. Likewise, the United States had clearly marked its interests in Asia, although it was still searching for how to most efficiently defend them.<\/p>\n<p id=\"fs-idp289872160\">The playing field would change one year later in 1914 when the United States witnessed the unfolding of World War I, or \u201cthe Great War.\u201d A new president built on the diplomacy practiced by Taft but charted a new course in regards to Europe\u2014marking a significant break from precedent.\u00a0Despite Woodrow Wilson\u2019s best efforts to the contrary, the United States would be drawn into the conflict and subsequently attempt to reshape the world order as a result.<\/p>\n<div class=\"textbox examples\">\n<h3>Watch It<\/h3>\n<p>This video explains Taft&#8217;s dollar diplomacy and why it proved to be ineffective.<\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"Here&#39;s Why President Taft&#39;s Dollar Diplomacy Was a Failure | History\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/79sxHMSJSYQ?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>You can view the\u00a0<a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/US+history+II\/HeresWhyPresidentTaftsDollarDiplomacyWasaFail.html\" target=\"_blank\" rel=\"noopener\">transcript for \u201cHere&#8217;s Why President Taft&#8217;s Dollar Diplomacy Was a Failure | History\u201d here (opens in new window)<\/a>.<\/p>\n<\/div>\n<div class=\"textbox tryit\">\n<h3>Try It<\/h3>\n<p>\t<iframe id=\"assessment_practice_dc9898ae-355f-458f-a4e5-0078de1f8036\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/dc9898ae-355f-458f-a4e5-0078de1f8036?iframe_resize_id=assessment_practice_id_dc9898ae-355f-458f-a4e5-0078de1f8036\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<div class=\"bcc-box bcc-info\">\n<h3>Review Question<\/h3>\n<section>What problems did Taft\u2019s foreign policy create for the United States?\u00a0<\/section>\n<section>\n<div class=\"qa-wrapper\" style=\"display: block\"><span class=\"show-answer collapsed\" style=\"cursor: pointer\" data-target=\"q555876\">Show Answer<\/span><\/p>\n<div id=\"q555876\" class=\"hidden-answer\" style=\"display: none\">Taft\u2019s policies created some troubles that were immediate and others that would not bear fruit until decades later. The tremendous debts in Central America created years of economic instability there and fostered nationalist movements driven by resentment of America\u2019s interference in the region. In Asia, Taft\u2019s efforts at China-Japan mediation heightened tensions between Japan and the United States\u2014tensions that would explode, ultimately, with the outbreak of World War II\u2014and spurred Japan to consolidate its power throughout the region.<\/div>\n<\/div>\n<\/section>\n<\/div>\n<div class=\"textbox learning-objectives\">\n<h3>Glossary<\/h3>\n<p><strong>dollar diplomacy: <\/strong>President Taft\u2019s strategy of using American economic power to push for favorable foreign policy agreements<\/p>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-198\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Modification, adaptation, and original content. <strong>Authored by<\/strong>: Zeb Larson for Lumen Learning. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>US History. <strong>Provided by<\/strong>: OpenStax. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/openstaxcollege.org\/textbooks\/us-history\">http:\/\/openstaxcollege.org\/textbooks\/us-history<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em>. <strong>License Terms<\/strong>: Access for free at https:\/\/openstax.org\/books\/us-history\/pages\/1-introduction<\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>Here&#039;s Why President Taft&#039;s Dollar Diplomacy Was a Failure. <strong>Provided by<\/strong>: History. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=79sxHMSJSYQ\">https:\/\/www.youtube.com\/watch?v=79sxHMSJSYQ<\/a>. <strong>License<\/strong>: <em>Other<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":19,"menu_order":11,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"US History\",\"author\":\"\",\"organization\":\"OpenStax\",\"url\":\"http:\/\/openstaxcollege.org\/textbooks\/us-history\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"Access for free at https:\/\/openstax.org\/books\/us-history\/pages\/1-introduction\"},{\"type\":\"original\",\"description\":\"Modification, adaptation, and original content\",\"author\":\"Zeb Larson for Lumen Learning\",\"organization\":\"Lumen 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