A World Safe for Capitalism: Dollar Diplomacy and America's Rise to Global Power (review)

Cyrus Veeser, an assistant professor at Bentley College, argues that the origins of Dollar Diplomacy can be found in the story of an American firm, the San Domingo Improvement Company (SDIC), and its efforts in the Dominican Republic in the 1890s. The story culminates during the presidential administration of Theodore Roosevelt with a major shift in American policy toward Latin America. Rather than relying on private business to promote U.S. interests, Americans decided to take a more intrusive approach to stabilizing Latin American nation states. Veeser covers ground similar to that found in Richard H. Collin's Theodore Roosevelt's Caribbean (1990), but he uses additional sources, furnishes more detail on the Dominican side of the story, and makes a different argument—namely, that the Roosevelt Corollary to the Monroe Doctrine contained more elements of Dollar Diplomacy than other scholars have perceived.

Veeser defines Dollar Diplomacy as the United States exerting pressure on "a number of Latin American nations to accept U.S. supervision of their finances in exchange for fresh loans from U.S. banks" (p. 5). He supports his findings with research in three languages in archives in four different countries. Perhaps as important, and in contrast to an earlier generation of American foreign policy historians, Veeser emphasizes that the Dominicans did not give in to the demands of American business and government officials. Rather, he explains how Dominicans—and one in particular, the dictator Ulises Heureaux—manipulated the various interests involved, including planters and merchants and European and American financiers.

Veeser includes a map that, with his description of the geography of the Dominican Republic, clearly draws the context in which politicians and outside investors attempted to shape the agriculturally oriented economy into a more expansive capitalist and modern society. The story, presented in a somewhat choppy fashion, began in 1892-1893, when SDIC negotiated to take over the Dominican Republic's foreign debts. The company's founders were politicians, not business people, and they astutely played upon their relationships with officials in Washington to increase the firm's influence in the capital of Santo Domingo and in European capitals and financial circles. His evidence often indicates that the SDIC's power rested on perceived rather than actual influence with Washington, but Veeser shows that the SDIC's actions prosecuted the Monroe Doctrine with little effort from Washington necessary. The SDIC was not, however, doing a very good job of making money on the bonds it let in Europe or of remaking the Dominican economy.

Although the SDIC's weaknesses were notable, it was the corruption and political abilities of Heureaux that consistently undermined the SDIC's efforts to reshape the Dominican economy. Following Heureaux's assassination in 1899, the situation grew steadily worse, as a series of revolutions undermined the SDIC's ability to collect customs duties that were supposed to pay for both government administration and interest on the bonds. In 1904 the SDIC (clearly employing its relationships in Washington) won an arbitration case with Heureaux's successors that was patently unfair to European investors—and probably to the Dominicans (the SDIC never opened its records). Pressed by European diplomats and realizing that the SDIC posed a problem to U.S. interests, Roosevelt took over the custom houses in order to eliminate corruption and to stabilize the country's political economy. U.S. actions also included granting new bank loans and allowing European investors access to future income. Thus began a long period of unsuccessful U.S. direct interference in the Dominican Republic.

Although an earlier version of Veeser's work won Columbia's Bancroft dissertation prize, this book has some problems that undermine its contributions. The author argues that the case of the SDIC is sui generis because it fits none of the several models...