The Rise and Fall of the Great Powers (50 page)

The role of foreign trade in the United States’ economic growth was small indeed (around 8 percent of its GNP derived from foreign trade in 1913, compared with Britain’s 26 percent),
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but its economic impact upon other countries was considerable. Traditionally, the United States had exported raw materials (especially cotton), imported finished manufactures, and made up the usual deficit in “visible” trade by the export of gold. But the post-Civil War boom in industrialization quite transformed that pattern. Swiftly becoming the world’s largest producer of manufactures, the United States began to pour its farm machinery, iron and steel wares, machine tools, electrical equipment, and other products onto the world market. At the same time, the Northern industrialists’ lobby was so powerful that it ensured that foreign products would be kept out of the home market by higher and higher tariffs; raw materials, by contrast, or specialized goods (like German dyestuffs) were imported in ever-larger quantities to supply American industry. But while the surge in the country’s industrial exports was the most significant change, the “transportation revolution” also boosted American farm exports. With the cost of carrying a bushel of wheat from Chicago to London plummeting from 40 cents to 10 cents in the half-century before 1900, American agricultural produce streamed across the Atlantic. Corn exports peaked in 1897 at 212 million bushels, wheat exports in 1901 at 239 million bushels; this tidal wave also included grain and flour, meat and meat products.
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The consequences of this commercial transformation were, of course, chiefly economic, but they also began to affect international relations. The hyperproductivity of American factories and farms
caused a widespread fear that even its enormous domestic market might soon be unable to absorb these goods, and led powerful interest groups (midwestern farmers as well as Pittsburgh steel producers) to press the government to give all sorts of aid to opening up, or at least keeping open, markets overseas. The agitation to preserve an “open door” in China and the massive interest shown in making the United States the dominant economic force in Latin America were only two of the manifestations of this concern to expand the country’s share of world trade.
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Between 1860 and 1914 the United States increased its exports more than sevenfold (from $334 million to $2,365 billion), yet because it was so protective of its own market, imports increased only fivefold (from $356 million to $1,896 billion). Faced with this avalanche of cheap American food, continental European farmers agitated for higher tariffs—which they usually got; in Britain, which had already sacrificed its grain farmers for the cause of free trade, it was the flood of American machines, and iron and steel, which produced alarm. While the journalist W. T. Stead wrote luridly of “the Americanization of the world”—the phrase was the title of his book of 1902— Kaiser Wilhelm and other European leaders hinted at the need to combine against the “unfair” American trading colossus.
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Perhaps even more destabilizing, although less well understood, was the impact of the United States upon the world’s financial system and monetary flows. Because it had such a vast surplus in its trade with Europe, the latter’s deficit had to be met by capital transfers—joining the enormous stream of direct European investments into U.S. industry, utilities, and services (which totaled around $7 billion by 1914). Although some of this westward flow of bullion was reversed by the returns on European investments and by American payments for services such as shipping and insurance, the drain was a large one, and constantly growing larger; and it was exacerbated by the U.S. Treasury’s policy of accumulating (and then just sitting on) nearly one-third of the world’s gold stock. Moreover, although the United States had by now become an integral part of a complete global trading system—running a deficit with raw-materials-supplying countries, and a vast surplus with Europe—its own financial structure was underdeveloped. Most of its foreign trade was done in sterling, for example, and London acted as the lender of last resort for gold. With no central bank able to control the financial markets, with a stupendous seasonal outflow and inflow of funds between New York and the prairie states conditioned solely by the grain harvest and that by a volatile climate, and with speculators able to derange not merely the domestic monetary system but also the frequent calls upon gold in London, the United States in the years before 1914 was already becoming a vast but unpredictable bellows, fanning but also on occasions dramatically cooling the world’s trading system. The American banking crisis of 1907 (originally
provoked by an attempt by speculators to corner the market in copper), with consequent impacts on London, Amsterdam, and Hamburg, was merely one example of the way the United States was impinging upon the economic life of the other Great Powers, even before the First World War.
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This growth of American industrial power and overseas trade was accompanied, perhaps inevitably, by a more assertive diplomacy and by an American-style rhetoric of
Weltpolitik.
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Claims to a special moral endowment among the peoples of the earth which made American foreign policy superior to those of the Old World were intermingled with Social Darwinistic and racial arguments, and with the urging of industrial and agricultural pressure groups for secure overseas markets. The traditional, if always exaggerated, alarm about threats to the Monroe Doctrine was accompanied by calls for the United States to fulfill its “Manifest Destiny” across the Pacific. While entangling alliances still had to be avoided, the United States was now being urged by many groups at home into a much more activist diplomacy—which, under the administrations of McKinley and (especially) Theodore Roosevelt, was exactly what took place. The 1895 quarrel with Britain over the Venezuelan border dispute—justified in terms of the Monroe Doctrine—was followed three years later by the much more dramatic war with Spain over the Cuban issue. Washington’s demand to have sole control of an isthmian canal (instead of the older fifty-fifty arrangement with Britain), the redefinition of the Alaskan border despite Canadian protests, and the 1902–1903 battlefleet preparations in the Caribbean following the German actions against Venezuela were all indications of U.S. determination to be unchallenged by any other Great Power in the western hemisphere. As a “corollary” of this, however, American administrations showed themselves willing to intervene by diplomatic pressure
and
military means in Latin American countries such as Nicaragua, Haiti, Mexico, and the Dominican Republic when their behavior did not accord with United States norms.

But the really novel feature of American external policy in this period were its interventions and participation in events
outside
the western hemisphere. Its attendance at the Berlin West Africa Conference in 1884–1885 had been anomalous and confused: after grandiose speeches by the U.S. delegation in favor of free trade and open doors, the subsequent treaty was never ratified. Even as late as 1892 the
New York Herald
was proposing the abolition of the State Department, since it had so little business to conduct overseas.
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The war with Spain in 1898 changed all that, not only by giving the United States a position in the western Pacific (the Philippines) which made it, too, a sort of Asiatic colonial power, but also by boosting the political fortunes of those who had favored an assertive policy. Secretary of State Hay’s “Open Door” note in the following year was an early indication
that the United States wished to have a say in China, as was the commitment of 2,500 American troops to the international army sent to restore order in China in 1900. Roosevelt showed an even greater willingness to engage in
grosse Politik
, acting as mediator in the talks which brought an end to the Russo-Japanese War, insisting upon American participation in the 1906 conference over Morocco, and negotiating with Japan and the other Powers in an attempt to maintain the “Open Door” in China.
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Much of this has been seen by later scholars less as being based upon a sober calculation of the country’s real interests in the world than as reflecting an immaturity of foreign-policy style, an ethnocentric naïveté, and a wish to impress audiences both at home and abroad—traits which would complicate a “realistic” American foreign policy in the future;
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but even if that is true, the United States was hardly alone in this age of imperialist bombast and nationalist pride. In any case, except in Chinese affairs, such diplomatic activism was not maintained by Roosevelt’s successors, who preferred to keep the United States free from international events occurring outside the western hemisphere.

Along with these diplomatic actions went increases in arms expenditures. Of the two services, the navy got the most, since it was the front line of the nation’s defenses in the event of a foreign attack (or a challenge to the Monroe Doctrine) and also the most useful instrument to support American diplomacy and commerce in Latin America, the Pacific, and elsewhere. Already in the late 1880s, the rebuilding of the fleet had commenced, but the greatest boost came at the time of the Spanish-American War. Since the easy naval victories in that conflict seemed to justify the arguments of Admiral Mahan and the “big navy” lobby, and since the strategists worried about the possibility of a war with Britain and then, from 1898 onward, with Germany, the battle fleet was steadily built up. The acquisition of bases in Hawaii, Samoa, the Philippines, and the Caribbean, the use of naval vessels to act as “policemen” in Latin America, and Roosevelt’s dramatic gesture of sending his “great white fleet” around the world in 1907 all seemed to emphasize the importance of sea power.

Consequently, while the naval expenditures of $22 million in 1890 represented only 6.9 percent of total federal spending, the $139 million allocated to the navy by 1914 represented 19 percent.
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Not all of this was well spent—there were too many home fleet bases (the result of local political pressures) and too few escort vessels—but the result was still impressive. Although considerably smaller than the Royal Navy, and with fewer
Dreadnought-
type battleships than Germany, the U.S. Navy was the third largest in the world in 1914. Even the construction of a U.S.-controlled Panama Canal did not stop American planners from agonizing over the strategical dilemma of dividing the fleet, or leaving one of the country’s coastlines exposed: and the records of
some officers in these years reveal a somewhat paranoid suspicion of foreign powers.
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In fact, given its turn-of-the-century
rapprochement
with Great Britain, the United States was immensely secure, and even if it feared the rise of German sea power, it really had far less to worry about than any of the other major powers.
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The small size of the U.S. military was in many ways a reflection of that state of security. The army, too, had been boosted by the war with Spain, at least to the extent that the public realized how minuscule it actually was, how disorganized the National Guard was, and how close to disaster the early campaigning in Cuba had come.
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But the tripling of the size of the regular army after 1900 and the additional garrisoning tasks it acquired in the Philippines and elsewhere still left the service looking insignificant compared with that of even a middle-sized European country like Serbia or Bulgaria. Even more than Britain, the United States clung to a laissez-faire dislike of mass standing armies and avoided fixed military obligations to allies. Less than 1 percent of its GNP went to defense. Despite its imperialist activities in the period 1898–1914, therefore, it remained what the sociologist Herbert Spencer termed an “industrial” society rather than a “military” society like Russia. Since many historians have suggested that “the rise of the superpowers” began in this period, it is worth noting the staggering
differences
between Russia and the United States by the eve of the First World War. The former possessed a front-line army about ten times as large as the latter’s; but the United States produced six times as much steel, consumed ten times as much energy, and was four times larger in total industrial output (in per capita terms, it was six times more productive).
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No doubt Russia seemed the more powerful to all those European general staffs thinking of swiftly fought wars involving masses of available troops; but by all other criteria, the United States was strong and Russia weak.

The United States had definitely become a Great Power. But it was not part of the Great Power system. Not only did the division of powers between the presidency and the Congress made an active alliance policy virtually impossible, but it was also clear that no one was in favor of abandoning the existing state of very comfortable isolation. Separated from other strong nations by thousands of miles of ocean, possessing a negligible army, content to have achieved hemispheric dominance and, at least after Roosevelt’s departure, less eager to engage in worldwide diplomacy, the United States in 1913 still stood on the edges of the Great Power system. And since most of the other countries after 1906 were turning their attention from Asia and Africa to developments in the Balkans and North Sea, it was perhaps not surprising that they tended to see the United States as less a factor in the international power balances than had been the case around the
turn of the century. That was yet another of the common pre-1914 assumptions which the Great War itself would prove wrong.

The third and final element in understanding the way the Great Power system was changing in these decades is to examine the volatile alliance diplomacy from Bismarck’s demise to the outbreak of the First World War. For although the 1890s saw some relatively small-scale conflicts (the Sino-Japanese War, the Spanish-American War, the Boer War), and later one large if still localized encounter in the Russo-Japanese War, the general tendency after that time was for what Felix Gilbert has termed the “rigidification” of the alliance blocs.
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This was accompanied by the expectation on the part of most governments that if and when the next great war occurred, they would be members of a coalition. This would enhance and complicate assessments of relative national power, since allies brought disadvantages as well as benefits.