Book Review

The extent to which this is really a work about "the politics and culture of dollar diplomacy" is debatable, but there can be no doubt that it is a major and superb contribution to the history of U.S. foreign relations and to that of the old textbook period we used to call the Progressive Era. "Dollar diplomacy," sometimes simply associated with the unsuccessful Wil-liam Howard Taft and the attempt to replace bullets with dollars (to paraphrase the rotund president himself), is transformed here into a historical concept of genuine explanatory and periodizing value.	1
The "missionaries" in question are the financial experts, usually academics of dubious actual expertise, who assumed a commanding presence after 1900 in a series of countries deemed unstable by the United States and objects of benevolent reform. Quintessential progressive prophets of order, discipline, and uplifting, these figures formed the crucial link in a triangular collaboration that also included U.S. banking firms and government officials (domestic as well as foreign). The project originated in the new geopolitical situation after the War of 1898, which engendered a sense of external "responsibility" on the part of the United States, not only for colonial annexations such as the Philippines, where the model was pioneered, but also for regimes ranging from nearby Latin American countries to Liberia in Africa. Dollar diplomacy, in Emily S. Rosenberg's account, was in this context a precise, long-term strategy designed to address the structural instability of these regimes, an instability that, aside from being an obvious disgrace in itself, provided other and rival "civilized" powers reason to meddle on grounds of legitimate financial claims. Military intervention, though sometimes unavoidable, was seen as a costly means for the United States to execute its duty of maintaining order; in any case, it failed to deal with fundamental causes. Better then to reform the whole structure, and the ingenious way to do that was to create a completely new financial system by imposing the gold standard (along with a central bank). Gold, in contrast to silver, indicated the disciplinary workings of an automatic, supranational principle that, once in place, would (i) impose sound fiscal practices on the regime, (ii) cure the local ruling classes of their perverse interest in the plums of state corruption and force them instead into properly entrepreneurial and modernizing pursuits, and (iii) integrate reform objects in the expanding dollar sphere by locating the gold deposits in New York and denominating the new currencies in dollars. This last move was in turn predicated on some sizable, restorative loan from Wall Street, thus necessitating cooperation among experts, government officials on both sides, and investment bankers in New York. To guarantee the workings of the operation then typically required the presence of a U.S. controller, technically a private citizen but appointed, or at least cleared, by the U.S. government, to be in charge of the crucial customs collections and budgetary system of the recipient country. By nature, this executive function tended to extend across a whole range of sectors such that the U.S. overseer came not only to "reform" the indigenous systems of banking and taxation but also to have decisive say on roads, sanitation, education, and the like.	2
Eventually, then, there would be harmonious, constantly improving regimes requiring less and less oversight, minimizing the involvement of the United States as a state while maximizing its involvement as an economy, all of which was symbolized by the smoothly contractual and seemingly private nature of the proceedings. The realities turned out otherwise. Apparently in a position of receivership, these countries became, as Rosenberg crisply puts it, "dollar dependencies." Yet they were in fact not just analogues of bankrupt firms but foreign social systems supposedly beyond the immediate political control of the United States. So when financial reconstruction, despite some initial success, largely failed to eradicate instability and indeed often deepened it, the gunboats and the marines tended to reappear to secure the proverbial U.S. life and property. Nonetheless, the strategy lasted in one version or another from Theodore Roosevelt through to Herbert Hoover.	. . .