After orchestrating the Senate’s successful effort to block U.S. membership in the League of Nations, Henry Cabot Lodge boasted, “We have torn Wilsonism up by the roots.” But repudiation of Wilsonian internationalism and rejection of collective security through the League of Nations did not mean that the United States retreated into isolationism. The United States emerged from World War I with its economy intact and enjoyed a decade of stunning growth. New York replaced London as the center of world finance, and the United States became the world’s chief creditor. Economic involvement in the world and the continuing chaos in Europe made withdrawal impossible.

One of the Republicans’ most ambitious foreign policy initiatives was the Washington Disarmament Conference, which convened in 1921 to establish a global balance of naval power. Secretary of State Charles Evans Hughes shaped the Five-Power Naval Treaty of 1922 committing Britain, France, Japan, Italy, and the United States to a proportional reduction of naval forces. The treaty led to the scrapping of more than two million tons of warships, by far the world’s greatest success in disarmament. By fostering international peace, President Harding also helped make the world a safer place for American trade.

A second major effort on behalf of world peace came in 1928, when Secretary of State Frank Kellogg joined French foreign minister Aristide Briand to produce the Kellogg-Briand pact. Nearly fifty nations signed the solemn pledge to renounce war and settle international disputes peacefully.

But Republican administrations preferred private-sector diplomacy to state action. With the blessing of the White House, a team of American financiers led by Charles Dawes swung into action when Germany suspended its war reparation payments in 1923. Impoverished, Germany was staggering under the massive bill of $33 billion presented by the victorious Allies in the Versailles treaty. When Germany failed to meet its annual payment, France occupied Germany’s industrial Ruhr Valley, creating the worst international crisis since the war. In 1924, the Dawes Plan halved Germany’s annual reparation payments, initiated fresh American loans to Germany, and caused the French to retreat from the Ruhr. Although the United States failed to join the League of Nations, it continued to exercise significant economic and diplomatic influence abroad. These Republican successes overseas helped fuel prosperity at home.