America’s open-door policy emerged from the interplay between the private and public sectors.[1] The reciprocal relationship between the American businessman and the American politician has roots traced back to a great debate between Theodore Roosevelt, William Jennings Bryan, and a coalition of American businessmen during 1899-1901.[2] The debate developed the strategy for America’s economic strength to “dominate all underdeveloped areas of the world.”[3] The partnership between the public and private sector endured throughout the decades due to the strong understanding that the American businessmen must have an overseas market for their product to ensure America’s domestic prosperity.[4] The open door policy helped shape American foreign policy from 1900-1958.

 

            The depression and social unrest that occurred during the 1890’s prompted American manufacturers, American farmers, American merchants and American entrepreneurial groups to blame a lack of available markets to sell their products as the reason for the poor economic climate of the country.[5] As a result, American leaders concluded that overseas expansion would provide an outlet to end such tensions.[6] The open door policy provided the proper tactics for the United States to embark on world expansion of its financial market, as well as the strategy required to open such markets for the sale of American products in underdeveloped countries.[7]

            The “Review of the World’s Commerce,” a report prepared by the State Department’s Bureau of Foreign Commerce on April 25, 1898, noted that American artisans and operatives must have access to sell their goods in foreign markets if such livelihoods are expected to keep their employment throughout the entire year.[8] Government officials invested their time on behalf of the private companies, and on behalf of such company interests to expand the private sector overseas.[9] The State Department’s Bureau of Foreign Commerce vowed to become a staunch competitor in “the world-wide struggle for trade.”[10]

            Nearly twenty years later during the 1920’s, American policy makers, such as Secretary of State, Charles Hughes, thought it essential that businessmen have “the most direct interest in the conduct of foreign relations.”[11] Exports were crucial to America’s social and economic progress.[12] The principle of the open door policy, which was the relationship between America’s domestic welfare and the country’s overseas economic expansion, was written into all “enabling agreements negotiated with foreign countries,” otherwise known as Section 317 of the tariff legislation of 1922.[13] During 1924, while serving as the Secretary of Commerce, Herbert Hoover noted the important role American exports provided to the “domestic progress, both socially and economically,” for the citizens of the United States.[14] Hoover further understood the “protection and support” required by the United States government for all businessmen interested in the “development of American enterprise abroad.”[15] Hoover’s top aid, Julius Klein, understood the American corporation had the specific task of internationalizing business.[16] American corporations helped develop American foreign policy, and business executives and government leaders believed that overseas expansion was “essential to industrial prosperity.”[17] Such American companies as Ford, General Motors and American Telephone and Telegraph focused their activities in Europe and other industrialized countries.[18] Due to such overseas expansion, the overseas investment in such countries skyrocketed to 602 million dollars by 1929.[19] As such, American financiers continued their plea for government assistance to help develop capital for such an overseas enterprise.[20] After 1934, American corporations slowly continued to increase their overseas investments.[21]

            The open door policy surpassed generalities that trade was the basic exchange of goods and services.[22] Trade became defined as “the expansion and control of markets for America’s corporate system.”[23] In 1935, President Franklin Delano Roosevelt stressed the importance of a viable foreign market for American corporations if the “domestic prosperity for our people” is to endure throughout the future.[24] Beginning in 1938, President Roosevelt used public funds supplied by the American taxpayer to help struggling businessmen with their corporate developments in areas such as Haiti and Brazil.[25] According to President Roosevelt’s Secretary of State, Cordell Hull, on February 19, 1938, “Only healthy international trade will make possible a full and stable domestic economy.”[26] John L. Lewis, a leader in the Congress of Industrial Organizations, argued the United States government should help increase the buying power throughout South America. Lewis advocated the idea that “Government loans should be granted to provide the peons with buying power.”[27]

            American businessmen wanted to secure and maintain the system of free enterprise in every country throughout the world.[28] According to steel industry leader, James A. Farrell, it was “imperative that business interests and government agencies act together to assure American business a proportionate and equitable share in the [world’s] trade.”[29] President Roosevelt’s Business Advisory Council assured Farrell that the further expansion of America’s opportunity for trade and investment in foreign countries was vital to obtain maximum prosperity for the United States.[30]

            By 1941, spokesmen for the business community stressed the need for American businessmen to become “missionaries of capitalism” throughout the world.[31] Advocates of the oil industry argued that America “must set the pace and assume the responsibility of the majority stockholder in this corporation known as the world.”[32] American businessmen feared that if America did not continue to expand overseas then America’s economic system would suffer another serious depression.[33] The threat of another catastrophic depression could not be overemphasized during 1943.[34]

            American corporations became heavily dependent upon foreign expansion and foreign markets. The sale of American goods to people in foreign countries developed an immense cash surplus for American corporations involved with such overseas expansion.[35] American corporations depended heavily on such overseas markets.[36] By 1956, such American companies as Standard Oil of New Jersey, H.J. Heinz, and Colgate Palmolive attributed at least 70 per cent of their total sales to foreign markets.[37] By the same afore-referenced year, 1956, such American companies as American Radiator, Gillette Razor and F.W. Woolworth received at least 40 per cent of their total sales from the overseas markets.[38] The total foreign sales, including corporate subsidiaries and all exports from parent American companies, amounted to $58 billion in 1956.[39]

            As America’s overseas expansion continued, the system set in place by the open door policy drew similarities between the American economic system and the old British Empire.[40] Regardless of any similarities between America and the old British Empire, the United States remained focused on foreign markets.[41] The aggressive expansion policy championed in part by the American corporations provided America’s predominance throughout the world.[42] The overseas economic expansion of American corporations was aided by the American politician from the initial political argument which founded such an open door policy for American trade throughout the world. The American businessmen called for more overseas economic expansion, and the American politician advocated such request by creating policy that allowed such an action to take place.[43] “Men on occasion acted in certain ways because their pocketbook nerve prompted them to do so.”[44]

           

           

           

           

 

 

 



[1] Williams, William A., The Tragedy of American Diplomacy (W.W. Norton: New York: 1972) Pgs. 48-50

[2] Ibid Pg. 45

[3] Ibid

[4] Ibid Pgs. 26, 43-45, 147-148, 232

[5] Ibid Pg. 30

[6] Ibid Pg. 38

[7] Ibid Pg. 45-47

[8] Ibid Pg. 48

[9] Ibid

[10] Ibid Pgs. 48-49

[11] Ibid Pg. 136

[12] Ibid Pg. 137

[13] Ibid Pgs. 47, 137

[14] Ibid Pg. 137

[15] Ibid

[16] Ibid

[17] Ibid Pgs. 147-148

[18] Ibid Pg. 148

[19] Ibid

[20] Ibid Pgs. 149

[21] Ibid Pg. 168

[22] Ibid Pgs. 168-171

[23] Ibid. Pg. 169

[24] Ibid. pg. 171

[25] Ibid. pg. 180

[26] Ibid. pg. 194

[27] Ibid. pg. 196

[28] Ibid. pg. 198

[29] Ibid. pg. 199

[30] Ibid

[31] Ibid pg. 231

[32] Ibid

[33] Ibid pg. 232

[34] Ibid

[35] Ibid

[36] Ibid

[37] Ibid

[38] Ibid

[39] Ibid

[40] Ibid pg. 234

[41] Ibid pg. 235

[42] Ibid pg. 138

[43] Ibid pg. 26, 45, 50

[44] Ibid pg. 37