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Congress passes Payne-Aldrich Tariff
New York City garment worker uprisingBallinger-Pinchot Affair
Triangle Shirtwaist Company fire
Standard Oil anti-trust caseU.S. Steel Corporation anti-trust caseTaft and Roosevelt split Republican Party
Woodrow Wilson is elected president27th U.S. president; alienated himself from fellow Republicans by supporting Payne-Aldrich Tariff and other non-progressive policies
Former U.S. president; split Republican Party in 1912 by running against Taft on Progressive Party ticket
Whereas Theodore Roosevelt had employed “Big Stick” diplomacy to bend weaker nations to his will, William Howard Taft preferred to use money as leverage. Taft believed that he could convince smaller, developing nations to support the United States by investing American dollars in their economies. “Dollar Diplomacy,” as pundits dubbed it, not only made allies but also made money for American investors.
Taft put his new policy to the test in Manchuria, where he offered to purchase and develop the Manchurian Railway to prevent Russia and Japan from seizing control of it and colonizing the region. However, both powers refused to hand the railway over to the United States, and the deal quickly fell through. The United States also dumped millions of dollars of investment into unstable Latin American countries like Honduras, Nicaragua, Cuba, and the Dominican Republic but eventually had to send occupation troops to protect their investments. In short, Taft’s “Dollar Diplomacy” failed.
After these unsuccessful attempts at diplomacy, Taft devoted himself to domestic matters, making trust-busting his top priority. Amazingly, he filed ninety lawsuits against monopolistic trusts in just four years—more than twice as many as Roosevelt had filed in a little less than eight years. In 1911, the Supreme Court finally used the previously neglected Sherman Anti-Trust Act to dissolve John D. Rockefeller’s Standard Oil Company for “unreasonably” stifling its competition. Later that year, Taft famously filed a lawsuit against J.P. Morgan’s U.S. Steel Corporation. The lawsuit infuriated Taft’s predecessor and political ally Theodore Roosevelt, who had helped form the company back in 1901.
Many Progressive Republicans hoped that Taft would keep his campaign promise to reduce the protective tariff. Although he tried, Taft did not have enough political clout to prevent conservatives within the party from repeatedly amending a bill for a lower tariff. By the time the Payne-Aldrich Tariff reached the president, conservatives had made so many amendments to keep tariffs high on certain products that the overall tariff rate had remained practically unchanged. In 1909, Taft signed the bill anyway and then hailed it as the best bill Republicans had ever passed. Outraged, Progressives denounced the tariff and called Taft a traitor.
Taft further alienated his supporters (and his friend Teddy Roosevelt) when he fired Gifford Pinchot, the head of the forestry division in the Department of Agriculture, for insubordination. Pinchot, a progressive, a personal friend of Roosevelt, and a popular conservationist, had angered Taft by opposing Secretary of the Interior Richard Ballinger’s decision to sell public wilderness lands in Alaska and the Rocky Mountains to corporate developers. Taft refused to reinstate Pinchot even after Roosevelt and several prominent Republicans appealed on his behalf. The 1910Ballinger-Pinchot Affair thus blackened Taft’s public image and earned him many enemies within his own party.
Outraged by Taft’s actions, Roosevelt, proclaiming that he was as “strong as a bull moose,” founded the Progressive Republican Party, or Bull Moose Party, so that he himself could run against Taft on a third-party ticket in the presidential election of 1912. The Democrats, meanwhile, nominated Progressive Woodrow Wilson, who was a southerner by birth but had moved north to become the president of Princeton University and, later, governor of New Jersey. The proper and respectable Wilson championed a progressive package he called the New Freedom to tackle trusts and the high tariff. Once again, former labor organizer Eugene V. Debs entered the race as the Socialist Party nominee.
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