Revisiting Dollar Diplomacy

Like many of you, I’m enjoying the Ken Burns documentary on the Roosevelt family running on PBS this week.

I have always been a great admirer of Theodore Roosevelt. He was undoubtedly one of our most influential presidents.

Where I take issue with conventional wisdom, most presidential historians, and some of the documentary’s passages is that they tend to portray Roosevelt’s successor, William Howard Taft, as a political bumbler and ineffectual president.

In my view, President Taft was a good president, a great man, and perhaps the most distinguished public servant in the history of the United States. 



Integrity

William Taft’s entire public career was hallmarked by integrity, competence, and good judgment.

Here is his resume in a nutshell: assistant county prosecutor, state superior court judge, Solicitor General of the United States, federal circuit court judge, first Civil Governor of the Philippines, Secretary of War, President of the United States, and Chief Justice of the Supreme Court.



During this remarkable career, there was not a hint of political or personal scandal, and in each position, he demonstrated the ability to get things done.

As Governor of the Philippines, Taft laid the foundation for self-government through a massive infrastructure program as well as education and land reform. As a member of the Roosevelt cabinet, he was a loyal and effective troubleshooter, deftly handling delicate situations in Cuba, Panama, and Japan. 



As president, he achieved the following: signed the Sherman Antitrust Act, negotiated compromise tariff reform and a forward-looking free-trade pact with Canada, created a separate Department of Labor and postal savings system, shepherded constitutional amendments through Congress for direct election of senators and the federal income tax, directed the Interstate Commerce Commission to regulate unfair railroad rates, and vigorously promoted American business abroad as a tool to enhance American influence.

Dollar Diplomacy

The expression “dollar diplomacy” was coined to describe the policy of supporting American companies and commercial interests abroad. In many ways, investors can thank Taft for jumpstarting the growth of blue-chip multinationals that form the core of many retirement portfolios.

President Taft was also the true “trustbuster,” prosecuting 90 cases — twice as many as Roosevelt. As a Taft supporter aptly put it: “Roosevelt cut enough hay, Taft will put it in the barn.”

Indeed, he did. 

With this record of accomplishment, why wasn’t Taft re-elected, and why doesn’t he rank higher in presidential surveys? 



First of all, following the theatrical and colorful Roosevelt was a tough act — especially if, like Taft, you were reserved, restrained, judicial, and orderly.

Ironically, Roosevelt’s rhetoric was strident, but he was usually careful in action, always seeking balance and equilibrium between conflicting interests. President Taft was perhaps overly cautious in public pronouncements and delivered more than he promised. Thus, it was more personality than policy that separated Taft and Roosevelt.

Second, the Republican Party in 1912 was over-confident after 12 continuous years of a Republican in the White House, and the progressive wing was restless with Taft’s middle-of-the-road approach. Theodore Roosevelt’s challenge for the 1912 Republican nomination and subsequent third-party Bull Moose challenge during the general election made Taft’s loss to Woodrow Wilson inevitable.

Referring to the Roosevelt/Taft bloodbath, railroad czar and political operator Chauncey Depew put it well: “The only question now is which corpse gets the most flowers.”

No doubt the third volume of Edmund Morris’s trilogy will closely chronicle the total meltdown in the once close Taft/Roosevelt relationship. Perhaps Roosevelt expected perfect continuity, stating: “Taft’s policies, principles, purposes and ideals are the same as mine.”

Perfect is the enemy of good, and I believe Roosevelt’s challenge to President Taft was unwarranted. Imagine former President Reagan not only challenging former President George Bush for the 1992 Republican nomination but also mounting a third-party challenge during the general election? 



Nonetheless, President Taft took his defeat with grace, dignity, and good humor. Offered the Kent Chair of Constitutional Law at Yale, the 300-pound Taft suggested that a “Sofa of Law” might be more suitable.

William Howard Taft capped his remarkable career with a nine-year tenure as Chief Justice of the Supreme Court, where he brought harmony and efficiency to a divided court until his health failed in 1930. 



So ended the 40-year public career of a man described by Theodore Roosevelt as “the most lovable personality I have ever come into contact with.”

Another tribute came from Will Rogers: “It is great to be great but it’s greater to be human.”

Until next time,

Carl Delfeld for Wealth Daily