Taft’s “Dollar Diplomacy”

Review Questions

Why did some Central American nations object to Taft’s paying off their debt to Europe with U.S. dollars?

  1. because American currency wasn’t worth as much as local currencies
  2. because they felt it gave the United States too much leverage
  3. because they were forced to give land grants to the United States in return
  4. because they wanted Asian countries to pay off their debts instead



What two countries were engaged in a negotiation that the Lodge Corollary disallowed?

  1. Mexico and Japan
  2. Nicaragua and France
  3. Colombia and Japan
  4. Mexico and Spain



What problems did Taft’s foreign policy create for the United States?


Taft’s policies created some troubles that were immediate, and others that would not bear fruit until decades later. The tremendous debts in Central America created years of economic instability there and fostered nationalist movements driven by resentment of America’s interference in the region. In Asia, Taft’s efforts at China-Japan mediation heightened tensions between Japan and the United States—tensions that would explode, ultimately, with the outbreak of World War II—and spurred Japan to consolidate its power throughout the region.