22.5 Taft’s “Dollar Diplomacy”

Dollar Diplomacy

President Taft’s foreign policy that aimed to use economic power, rather than military force, to influence other nations by securing markets and investments for American businesses.

William Howard Taft (1857-1930)

The 27th U.S. president who prioritized economic influence over military intervention in foreign policy, implementing "dollar diplomacy."

Nicaragua Intervention (1911)

Taft sent U.S. Marines to pressure the Nicaraguan government into accepting American loans to pay off its debt to Great Britain.

Lodge Corollary (1912)

An addition to the Roosevelt Corollary that prohibited foreign corporations, especially Japanese businesses, from acquiring strategic land in the Western Hemisphere.

Roosevelt Corollary (1904)

An extension of the Monroe Doctrine stating that the U.S. could intervene in Latin American countries to maintain stability and keep out European influence.

Open Door Policy

A U.S. foreign policy that promoted equal trade opportunities in China; Taft attempted to extend it but faced resistance from Russia and Japan.

Manchurian Railroad Diplomacy

Taft's unsuccessful effort to expand U.S. economic influence in China by arranging international financing for railroad development, which was blocked by Japan and Russia.

U.S. State Department Reorganization (Early 20th Century)

Taft restructured the State Department into geographical divisions (Far East Division, Latin American Division, etc.) to improve foreign policy expertise.

Japanese Expansion in Asia

Despite Taft’s attempts to counterbalance Japan’s influence in China, Japan continued to consolidate its power in the region, increasing tensions with the U.S.

Central American Debt Crisis

Taft's policy of paying off European debts for Central American nations made them financially dependent on the U.S., leading to long-term economic and political instability.

American Empire (Early 20th Century)

The U.S. solidified its dominance in the Western Hemisphere and its interests in Asia, setting the stage for future conflicts and diplomatic challenges.

World War I (1914-1918)

A global war that began shortly after Taft’s presidency; his successor, Woodrow Wilson, attempted a different diplomatic approach but ultimately led the U.S. into the conflict.