William Howard Taft was the 27th President of the United States, serving from 1909 to 1913. He was born in Cincinnati, Ohio, in 1857, and grew up in a politically active family. After completing his studies at Yale University and Cincinnati Law School, Taft began a successful legal career in Cincinnati.

In the late 1800s, Taft entered politics and rose quickly. He served as a judge on the Ohio Superior Court and later as Governor-General of the Philippines. In 1901, he was appointed as Secretary of War under President Theodore Roosevelt.

In 1908, Taft was nominated as the Republican candidate for President, and he defeated his Democratic opponent, William Jennings Bryan, in the general election. As President, Taft is perhaps best known for his efforts to promote conservation and reform the tariff system. He signed the Payne-Aldrich Tariff Act, which lowered tariffs on imported goods, and the Antiquities Act, which protected national monuments and landmarks.

Despite these accomplishments, Taft’s presidency was marked by controversy and political infighting. He faced criticism from both progressives and conservatives and his relationship with Roosevelt, his predecessor and political mentor, became strained.

In the 1912 election, Taft was defeated by Roosevelt, who ran as a third-party candidate. After leaving office, Taft returned to his legal career and later served as Chief Justice of the United States Supreme Court. He is remembered as a dedicated public servant who worked to promote conservation and reform the tariff system.

But for me, the highlight here will be dollar diplomacy, which failed during his time but as I am writing it, I know the importance of currency in global politics.

Dollar diplomacy was a foreign policy created by U.S. President William Howard Taft and his Secretary of State Philander C. Knox in 1909-1913. It aimed to use American economic power and private capital to influence and protect U.S. interests in Latin America and East Asia. Taft described it as “substituting dollars for bullets” and as a way to promote peace, stability, and trade.

Some examples of dollar diplomacy are:

  • Taft paid off the debts of several Central American countries to European creditors, making them dependent on the United States instead. He also intervened militarily in Nicaragua when it refused to accept American loans and installed a pro-U.S. government.
  • Taft supported the development of railroads in China with international financing and tried to expand the Open Door policy to Manchuria. However, he faced resistance from Russia and Japan, who had their own interests in the region.
  • Taft proposed the Lodge Corollary, an amendment to the Roosevelt Corollary, which stated that no foreign corporation other than American ones could acquire strategic lands in the Western Hemisphere. This was aimed at preventing Japan from gaining a foothold in Mexico.

The success of dollar diplomacy was mixed and often controversial. On one hand, it helped secure some markets and opportunities for American businesses and investors, and it prevented European intervention in the Western Hemisphere. On the other hand, it aroused resentment and resistance from the countries affected by it, who saw it as a form of economic imperialism and interference in their sovereignty. It also failed to achieve its goals in some cases, such as in China, where U.S. influence was limited by stronger powers. Furthermore, it contradicted some of the principles of democracy and self-determination that the United States claimed to uphold.

Dollar diplomacy was eventually abandoned by Taft’s successor, Woodrow Wilson, who publicly repudiated it and adopted a more moralistic approach to foreign policy. However, some aspects of dollar diplomacy continued to influence U.S. relations with Latin America and Asia in the following decades.

While searching for this blog I realize that President Taft was taking decisions about income tax. It was in the early time and we are talking about pre-first world war so it was not much thought about. Many businesses don’t want government in their day-to-day life. During his presidency, he proposed a two-percent tax on the net income of all corporations except banks, which he believed would make up for revenue lost by tariff reductions. He also proposed that Congress adopt a constitutional amendment that would permit the collection of personal federal income taxes. Additionally, he supported constitutional amendments mandating a federal income tax and the direct election of senators by the people. Just a few days after his inauguration, On March 15, 1909, a special session of the United States Congress convened to consider revision of the tariff. On June 16, 1909, Taft proposed a two-percent tax on the net income of all corporations except banks and proposed that Congress adopt a constitutional amendment that would permit the collection of personal federal income taxes. On August 6, 1909, Taft signed the Payne-Aldrich Tariff Act which established a Tariff Board and reduced the tariff. The Payne-Aldrich Tariff Act was a law passed by the U.S. Congress in 1909 in response to a call from Republican President William Howard Taft for lower tariffs. However, his acceptance of a bill that failed to significantly decrease rates caused him to lose the support of the progressive wing of his party. The Payne-Aldrich Tariff Act dropped rates in general only by about 5 percent, and it raised rates for such as iron and coal.

The federal income tax was first introduced under the Revenue Act of 1861 to help pay for the Civil War. It was renewed in later years and reformed in 1894 in the form of the Wilson-Gorman tariff. When the federal income tax was implemented to help finance World War I in 1913, for example, the marginal tax rate was 1% on income of $0 to $20,000, 2% on income of $20,000 to $50,000, 3% on income of $50,000 to $75,000 and so on. Many of the taxes we pay today were created in the 1920s and 1930s, including the estate tax, gift tax, and Social Security taxes. Income tax rates used to apply to everyone based on income regardless of status—single, married, and heads of households.

Though his dollar diplomacy and tax policies were not much successful, we can’t ignore them. they helped yes a politician needs to be aware of when to reduce tax and when to increase it, as there are many ways to look at it.