Dollar Diplomacy

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  • Dollar Dimplomacy
    • Ideology behind Dollar Diplomacy
      • Taft preferred to use economic influence rather than military force
      • Believed better-run economies in Latin America would give Europeans less excuse to intervene
        • Indirectly strengthened the Monroe Doctrine
      • Wanted more markets for American goods
        • America's economy growing continuously
      • Felt economic influence would increase America's political influence
      • Said to Congress: "This policy has been characterised as substituting dollars for bullets
      • Philander Knox fully supported the President's emphasis on trade and investment as central to foreign policy
    • What Dollar Diplomacy did in practice
      • Taft assisted American businessmen in protecting and expanding trade and investment in places like Latin America and the Far East
      • US lent Latin America money to pay off European debts
        • Advisers sent to help organise their economics in a way that benefited US
      • Costa Rica and Guatemala rejected the 'help'
      • American banks took over financial control in Honduras, Haiti, and Nicaragua
        • Done to protect American trade and investment; however, also brought stability to country
    • Nicaragua
      • October 1909 - civil war broke out
        • Between dictator José Santos Zelaya and conservative politicians led by General Juan J. Estrada
      • US supported Estrada financially
        • But acted when Zelaya executed two Americans captured while fighting with the rebels
      • 2,700 marines sent to protect American interests
        • Removed shortly afterwards but a small group remained until 1925
    • The Far East
      • Taft and Knox increased US financial involvement in Japan
        • E.g. loans for the Hukuang railway
      • Proposed loans to China to try and keep South Manchuria open to US investment
        • The proposals pushed Russia and Japan together to cooperate in Manchuria to keep other powers out

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