Dollar Diplomacy

In economic and business affairs the United States has long been strongly internationalist. American foreign policy has often tried to provide businessmen with fresh opportunities. In the early years of the twentieth century, for example, the industrial nations of Europe were dividing the trade of China between them. To ensure that Americans also profited from this rich new market the United States' government worked to ensure freedom of trade in China by persuading other nations to accept a policy called the "Open Door."

The close relationship between American foreign policy and American business interests has shown itself in other ways. Political leaders have sometimes encouraged American businesses to invest abroad as a way of strengthening the political position of the United States. This happened in the early 1900s, when President Taft favored a policy known as "Dollar Diplomacy." This encouraged Americans to invest in areas that were strategically important to the United States, such as Latin America.

American firms which have established themselves in other countries have often received a mixed welcome. Their critics accuse them of using their economic power to influence foreign governments to follow policies that serve the political and economic interests of the United States rather than those of the country in which they are working. But foreign leaders often welcome American investment. They see such investment as a way of obtaining new jobs and new technology, and so of improving their countries' living standards.

Bryn O'Callaghan: An illustrated history of the USA; Longman, Harlow, 1990/1996, page 87