From 1909 to 1913, President William Howard Taft and
Secretary of State Philander C. Knox followed a foreign
policy characterized as "dollar diplomacy."
William Howard Taft
Taft shared the view held by Knox, a corporate lawyer who had founded the giant
conglomerate U.S. Steel, that the goal of diplomacy was to create stability and
order abroad that would best promote American commercial interests. Knox felt
that not only was the goal of diplomacy to improve financial opportunities, but
also to use private capital to further U.S. interests overseas. "Dollar
diplomacy" was evident in extensive U.S. interventions in the Caribbean and
Central America, especially in measures undertaken to safeguard American
financial interests in the region. In China, Knox secured the entry of an
American banking conglomerate, headed by J.P. Morgan, into a European-financed
consortium financing the construction of a railway from Huguang to Canton. In
spite of successes, "dollar diplomacy" failed to counteract economic instability
and the tide of revolution in places like Mexico, the Dominican Republic,
Nicaragua, and China.
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