An Aggressive Asian Policy

The late 1890s also saw a new turn in the United States’ attitude toward the Far East. Expanding rapidly into the Pacific in pursuit of economic and financial gain, the U.S. government saw that Russia, Germany, and France had been carving up increasing territorial and economic concessions in the near corpse of the Chinese imperial dynasty. Coming late in the imperial game of Asia, and not willing to risk large scale expenditure of troops, the U.S., led by Olney and continued by the Republicans, decided to link up with Great Britain. The two countries would then use the Japanese to provide the shock troops that would roll back Russia and Germany and parcel out imperial benefits to both of her faraway allies, in a division of spoils known euphemistically as the “Open Door.” With Britain leaving the field free to the U.S. in Latin America, the U.S. could afford to link arms in friendly fashion with Britain in the Far East.

A major impetus toward a more aggressive policy in Asia was provided by the lure of railroad concessions. Lobbying heavily for railroad concessions was the American China Development Company, organized in 1895 and consisting of a consortium of the top financial interests in the U.S., including James Stillman of the then Rockefeller-controlled National City Bank; Charles Coster, railroad expert of J. P. Morgan and Co.; Jacob Schiff, head of the New York investment bank of Kuhn, Loeb and Co.; and Edward H. Harriman, railroad magnate. Olney and the State Department pressed China hard for concessions to the ACDC for a Peking-Hankow Railway and for a railway across Manchuria, but in both cases the American syndicate was blocked. Russia pressured China successfully to grant that country the right to build a Manchurian railway; and a Belgian syndicate, backed by France and Russia, won the Peking-Hankow concession from China.

It was time for sterner measures. The attorney for the ACDC set up the Committee on American Interests in China, which soon transformed itself into the American Asiatic Association, dedicated to a more aggressive American policy on behalf of economic interests in China. After helping the European powers suppress the nationalist Boxer Rebellion in China in 1900, the U.S. also helped push Russian troops out of Manchuria. Finally, in 1904, President Theodore Roosevelt egged Japan on to attack Russia, and Japan succeeded in driving Russia out of Manchuria and ending Russia’s economic concessions. Roosevelt readily acceded to Japan’s resulting dominance in Korea and Manchuria, hoping that Japan would also protect American economic interests in the area.

Theodore Roosevelt had been a Morgan man from the beginning of his career. His father and uncle were both Wall Street bankers, both of them closely associated with various Morgan-dominated railroads. Roosevelt’s first cousin and major financial adviser, W. Emlen Roosevelt, was on the board of several New York banks, including the Astor National Bank, the president of which was George F. Baker, close friend and ally of J. P. Morgan and head of Morgan’s flagship commercial bank, the First National Bank of New York. At Harvard, furthermore, young Theodore married Alice Lee, daughter of George Cabot Lee, and related to the top Boston Brahmin families. Kinsman Henry Cabot Lodge soon became TR’s long-time political mentor.

Throughout the nineteenth century, the Republicans had been mainly a high-tariff, inflationist party, while the Democrats had been the party of free trade and hard money, i.e., the gold standard. In 1896, however, the radical inflationist forces headed by William Jennings Bryan captured the Democratic presidential nomination, and so the Morgans, previously dominant in the Democratic Party, sent a message to the Republican nominee, William McKinley, through Henry Cabot Lodge. Lodge stated that the Morgan interests would back McKinley provided that the Republicans would support the gold standard. The deal was struck.

William McKinley reflected the dominance of the Republican Party by the Rockefeller/Standard Oil interests. Standard Oil was originally headquartered at Rockefeller’s home in Cleveland, and the oil magnate had long had a commanding influence in Ohio Republican politics. In the early 1890s, Marcus Hanna, industrialist and high school chum of John D. Rockefeller, banded together with Rockefeller and other financiers to save McKinley from bankruptcy, and Hanna became McKinley’s top political adviser and chairman of the Republican National Committee. As a consolation prize to the Morgan interests for McKinley’s capture of the Republican nomination, Morgan man Garret A. Hobart, director of various Morgan companies, including the Liberty National Bank of New York City, became Vice-President.

The death of Hobart in 1899 left a “Morgan vacancy” in the Vice-Presidential spot, as McKinley walked into the nomination. McKinley and Hanna were both hostile to Roosevelt, considering him “erratic” and a “Madman,” but after several Morgan men turned down the nomination, and after the intensive lobbying of Morgan partner George W. Perkins, Teddy Roosevelt at last received the Vice-Presidential nomination. It is not surprising that virtually Teddy’s first act after the election of 1900 was to throw a lavish dinner in honor of J. P. Morgan.