Eleanor Finch
William Howard Taft's Dollar Diplomacy was a foreign policy approach that aimed to use America's growing economic power as a tool to promote American business interests abroad, particularly in Latin America and East Asia. This policy encouraged American investors to invest in foreign markets, specifically in regions of strategic interest to the United States, such as the Far East and the Panama Canal region. Taft's predecessor, Theodore Roosevelt, laid the foundation for this approach by intervening in countries like the Dominican Republic, where US loans were exchanged for influence and control. Taft continued this strategy, focusing on Central America and Asia. However, Woodrow Wilson, who became president in 1913, had a different vision for US foreign policy. Within a week of taking office, Wilson removed governmental support for American businesses operating in the Caribbean and China, repudiating Dollar Diplomacy. Wilson's foreign policy, often called moral diplomacy, sought to reduce American intervention overseas and reverse the big stick policies of his predecessors.
| Characteristics | Values |
|---|---|
| Reaction to Dollar Diplomacy | Wilson was a critic of imperialism and his goal was to reverse Roosevelt's and Taft's policies. |
| Wilson's foreign policy was dubbed "moral diplomacy" and was based on morality. | |
| Wilson believed that the previous policies would breed dislike of the U.S. and sacrifice goodwill for short-term gain. | |
| Wilson's primary goal was to stabilize the Caribbean and Latin America with minimal American involvement. | |
| Wilson ended all support for Dollar Diplomacy upon becoming president. |
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What You'll Learn
Wilson's repudiation of Dollar Diplomacy
Woodrow Wilson, who succeeded William Howard Taft as US President, was a vocal critic of his predecessor's "dollar diplomacy". Wilson, an intense critic of imperialism, sought to reverse Roosevelt and Taft's "big stick" policies. He believed that the policies of his immediate predecessors had bred dislike of the US and often sacrificed goodwill for short-term gain.
Wilson's foreign policy vision was based on morality and has been dubbed "missionary diplomacy" or "moral diplomacy". He repudiated dollar diplomacy by removing governmental support for American businesses operating in the Caribbean and China. He also withdrew support for Taft's six-nation loan to China, causing the loan to collapse.
Wilson's goal was to stabilize the Caribbean and Latin America during the onset of World War I, with minimal American involvement. However, he faced pressure from imperialists and American industrialists, and ultimately intervened in Latin America more than any other president. He sent troops to Nicaragua, Haiti, and the Dominican Republic, ensuring a US military presence in the Caribbean and Central America for decades.
Despite Wilson's efforts to distance himself from dollar diplomacy, he continued to act vigorously to maintain US supremacy in Central America and the Caribbean. He also intervened in Latin American affairs more than any previous president, demonstrating the challenges of rejecting imperialist policies while also protecting American interests.
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Wilson's moral diplomacy
Woodrow Wilson's "moral diplomacy" was an attempt to redefine US foreign policy in moral terms, rather than the "selfish materialism" of his predecessors. Wilson, an intense critic of imperialism, believed that the US had a duty to spread democracy and liberty. This idea of "American exceptionalism" held that the US had a world mission to spread democracy and liberty, and that the country was itself exceptional, having emerged from a revolution with a unique ideology.
In practice, Wilson's moral diplomacy achieved mixed results. He frequently intervened in the affairs of other countries, especially in Latin America, to spread democracy. In 1913, he refused to recognise the authoritarian government of Victoriano Huerta in Mexico, instead supporting anti-Huerta forces in the north. In 1914, he ordered the occupation of the Mexican port of Veracruz after Mexican officials arrested several American sailors. In Haiti, he sent in American troops to force the Haitian legislature to choose his preferred candidate as president. Wilson also sent troops to Nicaragua, the Dominican Republic, and Cuba, and bought the Virgin Islands from Denmark for $25 million.
Wilson's actions ensured a continued US military presence in the Caribbean and Central America for decades. Ironically, despite his intentions to curb imperialism, Wilson intervened in Latin American affairs more than any other president. He also acted vigorously to maintain US supremacy in the region.
Wilson's vision for a "new diplomacy" was outlined in his "Fourteen Points" speech to Congress in 1918. He called for open covenants, territorial evacuations, the dismantling of the imperial order, and general disarmament. Wilson's ideas about collective security through US leadership in international organisations, like the League of Nations, appealed to the public. However, the US ultimately declined to join the League due to a commitment to defend any member that was attacked.
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Wilson's mixed results
Woodrow Wilson, who succeeded William Howard Taft as US president, was a vocal critic of his predecessor's "dollar diplomacy". Within a week of taking office, Wilson removed governmental support for American businesses operating in the Caribbean and China. He also immediately repealed the Panama Canal Tolls Act. Wilson's foreign policy, which was based on morality, has sometimes been called "missionary diplomacy" or "moral diplomacy".
Wilson's primary goal was to stabilise the Caribbean and Latin America during the onset of World War I, with minimal American involvement. He wanted to reverse Roosevelt's "big stick" policies and remove all elements of Taft's "dollar diplomacy". However, Wilson faced pressure from imperialists and American industrialists. Despite his intentions to limit US involvement in the region, he sent troops to Nicaragua, Haiti, and the Dominican Republic, which ensured a US military presence in the Caribbean and Central America for decades. Wilson also intervened in Latin American affairs more than any other president.
Wilson's policies also had consequences for China. American bankers withdrew their support for Taft's six-nation loan to China, causing the loan to collapse. This action, along with other US interventions in China, contributed to the widespread "Railway Protection Movement" revolt against foreign investment that overthrew the Chinese government.
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Wilson's intervention in Latin America
President Woodrow Wilson's intervention in Latin America was driven by his belief in "moral diplomacy" or "missionary diplomacy", a policy that stood in stark contrast to his predecessor William Howard Taft's "dollar diplomacy". Wilson's approach was based on morality and the spread of democracy, while also seeking to curb imperialism and promote American ideals globally.
Wilson's initial statements regarding Latin America were well-intentioned, expressing a desire for "cordial understanding and cooperation" with Latin American nations, and a hope to "cultivate the friendship and deserve the confidence" of these states. However, his insistence on democratic governments in these countries undermined the promise of self-determination, and his actions often contradicted his words, leading to permanent hostility between the US and several Latin American nations.
In Mexico, for instance, Wilson refused to recognise the authoritarian government of Victoriano Huerta, who had seized power in 1913. Instead, he supported Venustiano Carranza, who became the de facto president of Mexico in 1914. However, when Pancho Villa, a rival of Carranza, provoked a confrontation with the US in 1916, Wilson unilaterally sent thousands of troops into Mexico, causing alarm and ultimately failing to capture Villa. This interventionism in Mexico was characteristic of Wilson's approach to Latin America, which frequently involved the use of military force.
Wilson also sent troops to Nicaragua, Haiti, and the Dominican Republic, ensuring a long-term US military presence in the Caribbean and Central America. In Haiti, US forces under Wilson's command forced the Haitian legislature to choose his selected candidate as president. In the Dominican Republic, Wilson responded to chronic revolution by sending in marines to restore order, but the subsequent military occupation failed to create the intended democratic state.
Wilson's actions in Latin America were driven by his belief in the superiority of democracy and his commitment to promoting American ideals abroad. However, his interventions often had negative consequences, including increased hostility towards the US, and in some cases, failed to achieve their stated objectives.
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Wilson's use of military force
Woodrow Wilson, a fierce critic of imperialism, was determined to reverse the "dollar diplomacy" policies of his predecessor, William Howard Taft. Wilson's foreign policy, known as "moral diplomacy", was based on morality and the belief that his predecessors' policies had bred dislike of the US and often sacrificed goodwill for short-term gain.
Despite his intentions to limit US involvement in Latin America and the Caribbean, Wilson's use of military force in the region was extensive. He sent troops to Nicaragua, Haiti, and the Dominican Republic, ensuring a US military presence in the Caribbean and Central America for decades. In fact, Wilson intervened in Latin American affairs more than any other president.
In Nicaragua, Wilson's predecessor, Taft, had supported the overthrow of José Santos Zelaya and set up Adolfo Díaz in his place. This caused resentment among the Nicaraguan people, which eventually resulted in US military intervention under Wilson. In 1914, Wilson sent troops to Haiti to protect Americans during a rebellion against the country's oppressive leader. After the rebellion, Wilson agreed to a treaty with Haiti to oversee its finances and police the nation, and the US remained involved in the area for 19 years.
In Mexico, Wilson ordered General John J. Pershing to lead several thousand troops into the country to capture Pancho Villa. Pershing's army won several convincing victories over the disorganized Mexican rebels, but ultimately failed to find Villa, damaging the international reputation of the US military. Wilson recalled Pershing and his men in January 1917 as the US entered World War I.
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Frequently asked questions
Dollar diplomacy was a foreign policy created by President William Howard Taft and his secretary of state, Philander C. Knox, to ensure the financial stability of a region while protecting and extending U.S. commercial and financial interests there. Taft urged Wall Street investors to invest money in foreign markets in order to increase American influence abroad.
Wilson was an intense critic of imperialism and his goal was to reverse Roosevelt’s and Taft’s policies. He believed that U.S. intervention in foreign nations achieved short-term goals but ultimately bred distrust and dislike of the United States.
Wilson acted vigorously to maintain U.S. supremacy in Central America and the Caribbean. However, he immediately withdrew governmental support for American businesses operating in the Caribbean and China. He also reversed previous policies by signing the Jones Act of 1916, which promised independence for the Philippines once they formed a stable government.
Wilson's "moral diplomacy" achieved mixed results. While he wanted to stabilize the Caribbean and Latin America with minimal American involvement, he sent troops to Nicaragua, Haiti, and the Dominican Republic, ensuring a U.S. military presence in the Caribbean and Central America for decades.
