Wilhelm made a speech at Tangier in March 1905 advocating Moroccan independence, and in the ensuing controversy asked for a conference on Morocco and invited Roosevelt to secure French participation. Roosevelt, though reluctant, was concerned that a full imbroglio on this subject could provoke a general war in Europe, given the interlocking alliances that could easily trip off reciprocal declarations of war among the Great Powers. He arranged a conference at Algeciras, Spain, and secured acceptance of a protocol in April 1906. Under this arrangement, the independence and borders and economic stability and commercial accessibility of Morocco were secured, but France and Spain were put in charge of Moroccan domestic security, and the command and training of police. This was an acceptable arrangement and preserved everybody’s dignity, though it effectively delivered control of Morocco to France, and Roosevelt took the unnecessary step of having the Algeciras convention ratified by the Senate, which did so on condition that it not be misunderstood as departure from traditional American non-involvement in the affairs of Europe.
Roosevelt had suggested a general peace conference in 1904, but that had been postponed by the Russo-Japanese war. Czar Nicholas II took up this cause himself and the result was the Hague Peace Conference from June to October 1907. Roosevelt’s hopes for a world court were not successful, but there was a formal agreement that powers outside the Americas would not try to employ force against countries in the Americas for the collection of debts. This confirmed Roosevelt’s redefinition of the Monroe Doctrine in the Venezuelan and Dominican debt crises, which effectively conferred on the United States the sole authority to apply force to anyone in the hemisphere, except Canada, which was understood to be a stable, unoffending and close ally of Great Britain. Europe was on a hair trigger for war and no European power cared a farthing or a fig for what went on in Latin America, but all were anxious not to antagonize the United States of America. In November and December 1907, Root succeeded in holding a conference in Washington that ended war involving several of the Central American republics. (Costa Rica, Guatemala, Honduras, Nicaragua, and El Salvador, as well as Mexico and the U.S., attended.)
In domestic matters, Roosevelt continued his reform agenda into his second term. In 1906, he approved and had adopted the Hepburn Act, which strengthened the Interstate Commerce Commission and authorized it to prevent monopolistic exploitation by railways; the Pure Food and Drug Act, which outlawed and penalized false packaging and labeling and the sale of seriously defective food and pharmaceuticals; and the Meat Inspection Act, which required sanitary conditions in meat-packing establishments and forbade the sale of contaminated meat. This was not an ambitious reform program by the standards of other advanced countries. Bismarck, in order to shut down labor radicalism and militant unionization, had provided unemployment insurance and pensions for the working class, and Britain under Disraeli and Gladstone had legislatively improved working conditions and housing standards, and legislation was promised by the incoming Liberal government of Sir Henry Campbell-Bannerman in 1905 for unemployment insurance and pensions. This and more would be presented, with a moderate income tax to pay for it, by the chancellor of the Exchequer, David Lloyd George, in 1909 and 1910. There would be nothing like this in the United States for another 30 years. But Roosevelt was concerned to be, and be seen as, a reformer and innovator.
Another of the president’s passions was conservation. He was a hunter, ornithologist, and lover of nature, and a believer in the strenuous outdoors life. In the course of his administration, 148 million acres were set aside as national forest lands, 80 million acres of mineral lands were withdrawn from public sale, the Inland Waterways Commission and National Conservation Commission were established, and public awareness of the value of natural resources and the dangers of spoliation were greatly increased by a White House Conservation Conference in May 1908.
The one significant blemish on this very successful administration was the financial panic of 1907, which reduced the Dow-Jones Industrial Average (which at time of this writing stands at over 14,000, though that reflects a great deal of inflation) to 8, a brief reduction of over 70 percent, and led to urgent requests to J.P. Morgan to assist in stabilizing financial markets, which he did. An acquisition of a distressed competitor by United States Steel Corporation was permitted, with an assurance of no anti-trust consequences, and the Aldrich-Vreeland Act was passed in 1908, authorizing semi-currency to be issued by regional banks backed by government securities, and establishing a National Monetary Commission, which eventually (1912) recommended the establishment of the central bank, the Federal Reserve. (Nelson W. Aldrich, the co-sponsor of the act, was John D. Rockefeller’s son-in-law, and his nephew and namesake, Nelson A. Rockefeller, would be a four-term governor of New York and the 41st vice president of the U.S.) The crisis passed quickly, but President Roosevelt was revealed as having not the remotest idea how the financial markets, or monetary policy generally, functioned.
Elihu Root retired as secretary of state to run successfully for the position of U.S. senator from New York in 1908, and was replaced by the under secretary, Robert Bacon, in 1909. Bacon was a Harvard friend of Roosevelt’s and had long been a close junior associate of J.P. Morgan’s. Roosevelt had been a highly popular and successful president, and he adhered to his pledge not to seek reelection. He sponsored as a Republican candidate, Secretary of War Taft, who was nominated, along with New York congressman James Schoolcraft Sherman (no relation to the secretary of state or the general) for vice president. The Republican platform promised tariff reform, conservation, and vigilance against trusts. Foreign policy did not figure too prominently in the campaign. The Democrats, reeling from the debacle of the previous election, went back to William Jennings Bryan for the third time, and a twice-defeated candidate for governor of Indiana, John F. Kern, for vice president. Bryan’s platform avoided a direct promise of bimetallism, and pledged war on the trusts and a reduction of tariffs. The Socialists renominated Debs.
The Republicans were very popular and Roosevelt left no one in any doubt of his support for Taft, a distinguished Ohio appellate judge, very capable governor of the Philippines, and competent (if not overly busy) war secretary. The Republicans won their fourth consecutive term, 7.68 million votes for Taft to 6.4 million for Bryan, 421,000 for Debs, 253,000 for the Prohibitionists. (The Populist thunder was always stolen by the mighty Nebraska orator and crusader, Bryan.) Taft won 52 percent to 43 percent for Bryan and 5 percent for the others, 321 electoral votes to 162 for Bryan, the Democrats again bottled up in the unforgiving, segregationist South. The Republicans retained control of both houses of Congress; they were providing the country imaginative, sensible government, economic growth, and rising prestige in the world. The legal tradition in the State Department was reinforced by Taft’s selection of Roosevelt’s attorney general, Philander C. Knox, as secretary of state. Knox had been counsel for Andrew Carnegie, Andrew Mellon, and Henry C. Frick, and his presence, along with Bacon’s in Roosevelt’s administration, indicated the limitations of Roosevelt’s trust-busting militancy.
7. PRESIDENT WILLIAM HOWARD TAFT
The leisurely and commercially oriented style of the elephantine Taft (the only U.S. president who weighed over 300 pounds) was quite a contrast with Roosevelt. His principal initiative in foreign policy was the transmutation of the Open Door into what became known as “Dollar Diplomacy,” in which the administration intervened directly with the Chinese to have American banking groups inserted in consortia for the construction of railways with European and other interests in China and Manchuria. The Russians and the Japanese demarcated spheres of influence between themselves in Manchuria, in contravention of the Open Door, in order not to be trespassed upon by the Americans, and they did so with the agreement of the British and the French, who had effectively divided the whole mass of China, with Manchuria divided between Russia and Japan and the rest split up between the Western powers. American bankers declined to enter into arrangements that would attract the disapproval of foreign powers, and generally lost interest in China as a business venue. Taft and Knox had been incited to their actions by the bankers’ agent, Willard Straight, a financial adventurer, who, in the tradition of such deal facilitators, had limited support from the various parties he was trying to bring together. The whole exercise was a rather crude intrusion in the affairs of China and of the principal foreign powers engaged there not closely attached to the defined interests of the American private sector in China. It forfeited some of the prestige Roosevelt had earned, with Hay and Root, for crisp execution of sensible and even imaginative policy in the area (despite Hay’s fantasies about the benignity or even existence of the Open Door).
More successful was the resolution of the timeless Newfoundland fisheries issue, which was referred to the Hague Tribunal in 1910 and became subject to a reasonable compromise that was accepted in good heart by both sides. If Taft and Knox managed to settle one long-standing dispute with the British and the Canadians on America’s northern border, they exacerbated another, with the Central Americans. The prominence of financial considerations in the determination of foreign policy achieved indecent depths in Nicaragua. That country was still considered a possible site for an inter-oceanic canal, if there were a desire to construct one in competition to the U.S. canal in Panama. In June 1911, following a routine coup d’état, the Knox-Castrillo Convention was concluded, surrendering the control of Nicaraguan customs and an open-ended right of intervention to the United States, which also undertook the administration of Nicaragua’s national debt. Before the Senate could act on this, Nicaragua defaulted on a loan from a British banking group, and Knox handed over control of that country’s finances to an American banking group who then advanced $1.5 million to the hard-pressed regime, and took over the national bank of Nicaragua and the state railway system (rudimentary as they were). But the Senate, which, with the House, changed hands to the Democrats in 1910, rejected the Knox-Castrillo agreement and a similar arrangement with Honduras. (As the Democrats had the entire congressional delegation of the Old South, they often had majorities in both houses.)
Dissatisfied Nicaraguans eventually revolted against the collapse of their little country into helpless tutelage by the United States. Taft landed a force of Marines to protect American interests. Knox attempted a treaty that would pay Nicaragua enough ($3 million) to clear its financial problems and would unwind the more draconian measures, in exchange for exclusive and permanent rights for a canal (though the Panama Canal was nearing completion), but the Senate balked. The U.S. Marines settled in for a long stay to assure their country’s interests and supervise financial arrangements (a less storied and rhapsodized use of the Marine Corps than Jefferson’s suppression of the Barbary pirates or Polk’s seizure of the capital of Mexico) for more than 20 years, to 1933. As a parting gift to the Nicaraguans, the United States helped install the Somoza family in charge of Nicaragua, and they remained, rather oppressively, and almost uninterruptedly, from 1936 to 1979, until they were replaced by the quasi-communist Sandinistas. A future president (the next Roosevelt) would famously describe the original Somoza as “a son-of-a-bitch, but our son-of-a-bitch,” and it fell to a later president, Ronald Reagan, to assist in sending “the little colonel in the green fatigues,” the Sandinista leader, Daniel Ortega, packing. American policy in Nicaragua throughout this period cannot be judged a triumph of progressive liberality.
The administration’s commendable attempt at virtual free trade with Canada, in the teeth of general tariff increases and the attraction to Canada of preferential trade arrangements with the British Empire, came unstuck with the defeat of the Canadian Liberal government of Sir Wilfrid Laurier and its replacement by a less pro-American Conservative government led by Sir Robert L. Borden. (Both Canadian prime ministers were capable leaders, but contrary to the conservative view, reciprocity, as it was called, was an imaginative policy by Taft and Knox. It was ultimately more than replicated by free-trade arrangements entered into between the two countries in 1989 at the behest of the Conservative leader in Canada then, Brian Mulroney.) Knox also tried to maintain Root’s network of 25 arbitration treaties, but these were gradually whittled down by exceptions made for various categories of national interest.
The United States was already trying to counter rising Japanese influence in the Far East, which led to complications with Britain. The British, in conformity with their customary policy of organizing and operating a balance of power, had been something of a sponsor of Japan, for which country it had (very profitably) built a substantial navy, until the Japanese felt able to design and build their own ships. The British had been in the habit of looking on Russia as a potential intruder on their vast Indian empire, and were commercial rivals of the United States in the Far East, so the arrival of Japan as a major indigenous power with which Britain had no natural rivalry was a welcome development. The Anglo-Japanese Alliance resulted, and was a demonstration of the astuteness of the British Foreign Office, as Britain was the first of the Great Powers to recognize the geostrategic potential of Japan.
The rise of Germany, and its abrupt and relentless pursuit of a naval construction competition that constituted the greatest and most sustained threat to British naval supremacy since the Spanish Armada three centuries before, changed that, and all other British strategic considerations. Russia had allied itself with France, in response to Austria-Hungary’s effort to bar Russian advances in the southern Slavic nations that tentatively emerged after the forcible retirement of the Turks, and Britain had allied itself to France to contain the Germans. Since the Triple Entente (Britain, France and Russia) and the Triple Alliance (Germany, Austria-Hungary, and loosely, Italy) were so closely balanced, and as has been evident in other matters, the British opened a long campaign of appeasement of the United States, presciently based on the possibility that the great and soaring weight of America could be necessary to repulse Germany in the end; British strategic thinking and practice were reconfigured to meet the direst threat. The patronage of Japan would have to yield to truckling to the Americans and the new intimacy with Russia, warming to its highest point since both powers were in the death grips of war with Napoleon a century before.