Dollar Diplomacy

Dollar Diplomacy is a term used to describe the effort of the U.S., mostly during President Taft’s administration, to increase its foreign policy by guaranteeing loans made to foreign countries.

This practice was started with President Theodore Roosevelt by stating that it was the duty of the U.S. to intervene if any nation in the western world was monetarily or politically unstable and was subject to European control.

President Taft continued this idea where Roosevelt left off. Taft used dollar diplomacy as a means to the protect the Panama Canal, invade and assert financial control over Nicaragua, pump money into Haiti and Honduras in order to keep out foreign funds, and to establish U.S. business interests in the Philippines. Dollar diplomacy was not always peaceful and served not only to further the interests of the U.S. but to also prevent economic growth of other world powers. (Jones et al., 2008)

Taft was not scared to use military force to ensure U.S. business interests. This was seen most predominantly in Latin America. The revolution in Honduras and Nicaragua could have threatened the United States. Taft sent troops there to protect U.S. property and citizens. Taft is also noted for not interfering with the Chinese and Mexican revolutions. (Jones et al., 2008)

Reference

Image Retrieved July, 2009 from http://www.state.gov/r/pa/ho/time/ip/16324.htm (n.d.)

Jones, J., Wood, P., Borstelmann, T., May, E. and Ruiz, V. (2008). Created Equal, A Social and
Political History of the United States (brief 2nd ed.), N.Y., Pearson Longman