Inventing Dollar Diplomacy: The Gilded-Age Origins of the Roosevelt Corollary to the Monroe Doctrine

Abstract

This essay offers a new reading of the transition from the “uncertainty” and “improvisation” typical of late nineteenth-century U.S. foreign policy to the executive-driven, interventionist strategies of the early twentieth century.1 As Emily Rosenberg has persuasively argued, one key event in that transition occurred in 1905 with Theodore Roosevelt's creation of a customs receivership in the Dominican Republic. The Dominican intervention became the model for the new century's Dollar Diplomacy, based on a complex vision of the way that American policy-makers, working in harness with powerful bankers and economic experts, could remake tropical societies.2 Roosevelt's corollary to the Monroe Doctrine, an interventionist manifesto, provided a rationale for the new policy. Historians have identified many factors in the development of the aggressive foreign policies of the early twentieth century. These include the creation of a world-class navy after 1890, the growing importance of New York as a world financial center, the desire to end social conflict at home through trade expansion abroad, and the emergence of the United States as a colonial empire after the Spanish-Cuban-American War of 1898. To these underlying factors can be added several world events that encouraged Roosevelt, whose vigorous leadership style is almost palpable in Figure 1, to treat the Dominican crisis as a chance to project the United States as a Great Power, ready and able to solve disputes in the western hemisphere. Those events include the redeployment of the Royal Navy away from Latin America, the prospect of heightened imperial rivalry in Asia with Japan's likely victory in the Russo-Japanese War, and sharpened hostility among Britain, France, and Germany in North Africa and elsewhere.3 Finally, there were the trigger incidents that Roosevelt cited to justify the intervention, above all the threat of European intervention in the Dominican Republic and the chaotic political and economic conditions that kept the Caribbean republic from paying its foreign debt.4