A World Safe for Capitalism: Dollar Diplomacy and America’s Rise to Global Power by Cyrus Veeser (review)

I 18 The Latin Americanist Fall 2004 A WorldSafefor Capitalism:DollarDiplomacy andAmerica’s Rise to GlobalPower. By Cyrus Veeser. New York: Columbia University Press, 2002.247~. $27.50. In A World Safe for Capitalism, Cyrus Veeser sheds new light on one of the many egregious examples of U.S. economic and political intervention in Latin America. In 1892, a U.S. firm, the San Doming0 Improvement Company, bought the debt of the Dominican Republic from Dutch investors. The SDIC’s incompetence ultimately led to the Roosevelt administration taking over the debt itself in 1905, and the United States would control Dominican finances until 1941. U.S. marines occupied the country in 1903-1904, 1914, and 1916-1924.In its quest for economic and political order, the U.S.would eventually support the dictator Rafael Trujillo (who ruled from 1930to 1961)until his assassination led to political conflict that would eventually prompt President Lyndon Johnson to invade in 1965. The more than 20,000 marines who came ashore owed their presence in large part to the SDIC’s machinations seven decades prior. It is not Veeser’s intent to connect the SDIC to Lyndon Johnson , but rather to fill a gap in the historical literature on U.S.-Latin American relations. Specifically, very little has been written about the SDIC itself and the way in which Roosevelt was exasperated with its action. This stands in contrast to the conventional wisdom that U.S. presidents automatically supported private U.S. businesses . Roosevelt’s actions were therefore intended not to support a business (indeed, toward the end the SDIC would find its influence virtually nil in the U.S. government) but rather to supplant it. Veeser also seeks to highlight the specific ways in which the Dominican case was related to the famous “Roosevelt Corollary” to the Monroe Doctrine. Monroe’s original intent was to keep European influence out of the hemisphere, while Roosevelt added the notion that the United States was an “international police power” in the region, ready and willing to act in cases of “wrongdoing ” in the hemisphere. In this case, the inability of Dominican presidents to handle debt made them “wrongdoers.” But, as Veeser aptly points out, Roosevelt tacitly included the SDIC and its owner, Smith M. Weed, in the same category. That became clear when Roosevelt eventually worked directly against the interests of the company and ended its relationship with the Dominican Republic. Weed, labeled by the New York Times as Mephistopheles for his corrupt practices (including a vote buying scheme) on behalf of New York politicians, followed Book Reviews 119 a strategy all too common in the era of Dollar Diplomacy. Believing that the U.S. government could always be counted on to support business (especially in Central America or the Caribbean), he undertook a highly risky and morally questionable investment in Latin America. Weed’s own personal connections to President Benjamin Harrison and Secretary of State James Blaine gave him the confidence to do so. They encouraged him given their own feeling that having Latin American debt in European hands was dangerous. They had no reason to believe that future presidents would feel differently. When the going got rough, especially in terms of European incursions or domestic disorder, the company would ask the U.S. government to send warships as a symbol of its willingness to use force. Working closely with the dictator Ulysses Heaureaux (who had gained power in 1882) the company also endeavored to reform the economy. It hoped to end traditional agricultural and grazing practices (efforts that were never fully successful) and thereby orient the economy to export production. In what must be the earliest example of a “Chicago boy,” the SDIC hired a professor from the newly formed University of Chicago to promote the gold standard (an experiment that failed). Through the 1890s,the SDIC engineered loans that pushed the Dominican debt from $5 million to $35 million, with very little to show for it in the way of infrastructure or development. Ever-present corruption, conflicts of interest, and mismanagement (including the printing of worthless paper money) dragged the country to the brink of economic collapse. The beginning of the end came...