Dollar Diplomacy
Impacts of Dollar Diplomacy
- Ensured hemispheric control as it stopped European intervention in Latin-America by using American loans to pay off European debts meaning they'd no reason to be there. - Led to a souring of diplomatic relations between America , Costa Rica and Guatemala. Both Latin American countries viewed Dollar Diplomacy as 'thinly veiled imperialism' and rejected it outright by refusing to sign treaties based on the principles of Dollar Diplomacy. - Soured relations between the US and Honduras as America bought the national debt of Honduras to establish US financial control there. This led to the Hondurans rejecting a treaty with America. - Led to the financial control of Honduras as the treaty rejection led to the US provoking and sponsoring a revolution, which installed a pro-US regime that was more amenable to the dictates of Dollar Diplomacy. - Led to a souring of diplomatic relations between America and Nicaragua as those with mining interests and the Taft Government backed a revolution to overthrow Zelaya. - Led to the financial control of Nicaragua as American companies and businesses bought controlling shares in Nicaraguan banks and railroads, which forced the country to cooperate. - Enraged nationalist sentiment in Nicaragua even further and marines had to suppress a revolution in 1912. - Maintained the independence of many Latin-American states. - Divided opinion between imperialists (those who believed in America's moral duty and obligation to extend its power and influence through colonisation, use of military force etc) and anti-imperialists. - Kept influence in China by investing heavily in their railway network. - Prevented the colonisation of Liberia by approving a US loan to them. Enraged Britain and France in the scramble for Africa.
Make a list of countries that Dollar Diplomacy impacted.
Dollar Diplomacy impacted Costa Rica, Guatemala, Honduras, Haiti, Dominican Republic, Nicaragua, Liberia, Japan, Russia, China
What was Dollar Diplomacy?
Dollar Diplomacy was the policy of using America's financial power, rather than military intervention (the Big Stick), to extend their influence abroad. Basically, it meant making other nations dependant on the dollar so that they welcome America.
With which major foreign policy of 1903 did Dollar Diplomacy begin?
In one sense, Dollar Diplomacy started when Theodore Roosevelt forced through the building of the Panama Canal and ensured it would be under the control of America for a price.
What actions were the US prepared to take to prevent European intervention in Latin-America?
The US were prepared to use American loans to pay off European creditors. Financial managers would then move in and remake the economy to suit the USA's trade and business interests. Tax would be collected more efficiently, budgets regularised and a form of gold standard adopted.
What was the main aim of Dollar Diplomacy?
The main aim was to prevent any European intervention in Latin-America by managing the financial affairs of countries whose economies were 'backwards' by US standards, and thus, ensure that European debts were paid back.
Why did William Taft introduce it?
William Taft used Dollar Diplomacy because he was a Progressive in foreign policy and did not believe in wielding the 'Big Stick', in order, for the US to extend its influence abroad. He believed 'Big Stick' to be 'thinly veiled imperialism', which was against America's founding principles. He, also, used it as he wanted America to be less involved in World affairs, except for trade, as outlined by George Washington.