Newly established in the Philip- pines and firmly entrenched in Ha- waii at the turn of the century, the United States had high hopes for a

vigorous trade with China . However, Japan and various European nations had acquired established spheres of influence there in the form of naval bases, leased territories, monopolis- tic trade rights, and exclusive con- cessions for investing in railway construction and mining .

Idealism in American foreign policy existed alongside the desire to compete with Europe’s imperi- al powers in the Far East . The U .S . government thus insisted as a matter of principle upon equality of com- mercial privileges for all nations . In September 1899, Secretary of State John Hay advocated an “Open Door” for all nations in China — that is, equality of trading opportu- nities (including equal tariffs, har- bor duties, and railway rates) in the areas Europeans controlled . Despite its idealistic component, the Open Door, in essence, was a diplomatic maneuver that sought the advantag- es of colonialism while avoiding the stigma of its frank practice . It had limited success .

With the Boxer Rebellion of 1900, the Chinese struck out against for- eigners . In June, insurgents seized Beijing and attacked the foreign legations there . Hay promptly an- nounced to the European powers and Japan that the United States would oppose any disturbance of Chinese

territorial or administrative rights and restated the Open Door policy . Once the rebellion was quelled, Hay protected China from crushing in- demnities . Primarily for the sake of American goodwill, Great Britain, Germany, and lesser colonial powers formally affirmed the Open Door policy and Chinese independence . In practice, they consolidated their privileged positions in the country .

A few years later, President Theodore Roosevelt mediated the deadlocked Russo-Japanese War of 1904-05, in many respects a strug- gle for power and influence in the northern Chinese province of Man- churia . Roosevelt hoped the settle- ment would provide open-door opportunities for American busi- ness, but the former enemies and other imperial powers succeeded in shutting the Americans out . Here as elsewhere, the United States was unwilling to deploy military force in the service of economic imperi- alism . The president could at least content himself with the award of the Nobel Peace Prize (1906) . De- spite gains for Japan, moreover, U .S . relations with the proud and new- ly assertive island nation would be intermittently difficult through the early decades of the 20th century . 9





The rise of American industry required more than great industrialists. Big industry required big amounts of capital; headlong economic growth required foreign investors. John Pierpont (J.P.) Morgan was the most important of the American financiers who underwrote both requirements.

During the late 19th and early 20th centuries, Morgan headed the nation’s largest investment banking firm. It brokered American securities to wealthy elites at home and abroad. Since foreigners needed assurance that their investments were in a stable currency, Morgan had a strong interest in keeping the dollar tied to its legal value in gold. In the absence of an official U.S. central bank, he became the de facto manager of the task.

From the 1880s through the early 20th century, Morgan and Company not only managed the securities that underwrote many important corporate consolidations, it actually originated some of them. The most stunning of these was the U.S. Steel Corporation, which combined Carnegie Steel with several other companies. Its corporate stock and bonds were sold to investors at the then-unprecedented sum of $1.4 billion.

Morgan originated, and made large profits from, numerous other merg- ers. Acting as primary banker to numerous railroads, moreover, he effectively muted competition among them. His organizational efforts brought stability to American industry by ending price wars to the disadvantage of farmers and small manufacturers, who saw him as an oppressor. In 1901, when he estab- lished the Northern Securities Company to control a group of major railroads, President Theodore Roosevelt authorized a successful Sherman Antitrust Act suit to break up the merger.

Acting as an unofficial central banker, Morgan took the lead in support- ing the dollar during the economic depression of the mid-1890s by marketing a large government bond issue that raised funds to replenish Treasury gold supplies. At the same time, his firm undertook a short-term guarantee of the nation’s gold reserves. In 1907, he took the lead in organizing the New York financial community to prevent a potentially ruinous string of bankruptcies. In the process, his own firm acquired a large independent steel company, which it amalgamated with U.S. Steel. President Roosevelt personally approved the action in order to avert a serious depression.

By then, Morgan’s power was so great that most Americans instinctively distrusted and disliked him. With some exaggeration, reformers depicted him as the director of a “money trust” that controlled America. By the time of his death in 1913, the country was in the final stages of at last reestablishing a central bank, the Federal Reserve System, that would assume much of the re- sponsibility he had exercised unofficially. 






Suffragists march on Pennsylvania Avenue, Washington, D.C., March 3, 1913.

Place Your Order Here!

Leave a Comment

Your email address will not be published. Required fields are marked *