In 1904 the Russian invasion of the southern Chinese province of Manchuria prompted the Japanese to attack the Russian fleet. Roosevelt held mixed emotions about the Japanese. The president admired Japanese military prowess, but he worried that if Japan succeeded in driving the Russians out of the area, it would cause “a real shifting of equilibrium as far as the white races are concerned.” To prevent that from happening, Roosevelt convened a peace conference in Portsmouth, New Hampshire, in 1905. Under the agreement reached at the conference, Japan received control over Korea and parts of Manchuria but pledged to support the United States’ Open Door policy. In 1906, fresh from this achievement, the president sent sixteen American battleships on a trip around the globe in a show of force meant to demonstrate that the United States was serious about taking its place as a premier world power.

When Roosevelt’s secretary of war, William Howard Taft, became president (1909–1913), he continued his predecessor’s foreign policy with slight modification. Proclaiming that he would rather substitute “dollars for bullets,” Taft encouraged private bankers to invest money in the Caribbean and Central America. Eager to embrace the president’s policy of dollar diplomacy, the bankers doubled their investments in the region. Yet Taft did not rely on financial influence alone. He backed up American commercial investments by dispatching more than 2,000 U.S. troops to the region to guarantee economic stability. The president sought to extend his dollar diplomacy to China by trying to weaken Russia’s and Japan’s hold over Manchuria, but he succeeded only in drawing the two rivals closer together.

Taft’s diplomacy also led to extensive intervention in Nicaragua. In 1909 American fruit and mining companies in Nicaragua helped install a regime sympathetic to their interests. When a group of rebels threatened this pro-American government, Taft invoked the Roosevelt Corollary and sent in American marines to police the country and deter further uprisings. They remained there for another twenty-five years. Under the U.S. occupation, American bankers took control of the country’s customs houses and paid off debts owed to foreign investors, a move meant to forestall outside intervention in a nation that was now under American “protection.”