American History: Foreign Policy During the 1920s

American History: Foreign Policy During the 1920s
British and American officials signing a British war loan in 1917

FAITH LAPIDUS: Welcome to THE MAKING OF A NATION – American history in VOA Special English.

The nineteen twenties are remembered as a quiet period in American foreign policy. The nation was at peace. Americans elected three Republican presidents in a row: Warren Harding, Calvin Coolidge and Herbert Hoover. These conservatives in the White House were generally more interested in economic growth at home than in relations with other countries.

But the United States had become a world power. It was tied to other countries by trade, politics and shared interests. And America had gained new economic strength.

This week in our series, Bob Doughty and Shirley Griffith discuss American foreign policy during the nineteen twenties.


BOB DOUGHTY: Before World War One, foreigners invested more money in the United States than Americans invested in other countries -- about three billion dollars more. The war changed this. By nineteen nineteen, Americans had almost three billion dollars more invested in other countries than foreign citizens had invested in the United States.

American foreign investments continued to increase greatly during the nineteen twenties.

Increased foreign investment was not the only sign of growing American economic power. By the end of World War One, the United States produced more goods and services than any other nation, both in total and per person.

Americans had more steel, food, cloth, and coal than even the richest foreign nations. By nineteen twenty, the United States national income was greater than the combined incomes of Britain, France, Germany, Japan, Canada, and seventeen smaller countries. Quite simply, the United States had become the world's greatest economic power.

A steel worker at a rolling mill in Pittsburgh, Pennsylvania
A steel worker at a rolling mill in Pittsburgh, Pennsylvania

SHIRLEY GRIFFITH: America's economic strength influenced its policies toward Europe during the nineteen twenties. In fact, one of the most important issues of this period was the economic aid the United States had provided European nations during World War One.

Americans lent the Allied countries seven billion dollars during the war. Shortly after the war, they lent another three billion dollars. The Allies borrowed most of the money for military equipment and food and other needs of their people.

The Allied nations suffered far greater losses of property and population than the United States during the war. And when peace came, they called on the United States to cancel the loans America had made. France, Britain, and the other Allied nations said the United States should not expect them to re-pay the loans.

BOB DOUGHTY: The United States refused to cancel the debts. President Coolidge spoke for most Americans when he said, simply: "They borrowed the money." He believed the European powers should pay back the war loans, even though their economies had suffered terribly during the fighting.

However, the European nations had little money to pay their loans. France tried to get the money by demanding payments from Germany for having started the war. When Germany was unable to pay, France and Belgium occupied Germany's Ruhr Valley. As a result, German miners in the area reduced coal production. And France and Germany moved toward an economic crisis and possible new armed conflict.

SHIRLEY GRIFFITH: An international group intervened and negotiated a settlement to the crisis. The group provided a system to save Germany's currency and protect international debts. American bankers agreed to lend money to Germany to pay its war debts to the Allies. And the Allies used the money to pay their debts to the United States.

BOB DOUGHTY: Some Americans with international interests criticized President Coolidge and other conservative leaders for not reducing or canceling Europe's debts.

They said the debts and the new payment plan put foolish pressure on the weak European economies. They said this made the German currency especially weak. And they warned that a weak economy would lead to serious social problems in Germany and other countries.

However, most Americans did not understand the serious effect that international economic policies could have on the future of world peace. They believed that it was wrong for the Europeans -- or anyone -- to borrow money and then refuse to pay it back.

SHIRLEY GRIFFITH: Many Americans of the nineteen twenties also failed to recognize that a strong national military force would become increasingly important in the coming years. President Coolidge requested very limited military spending from the Congress. And many conservative military leaders refused to spend much money on such new kinds of equipment as submarines and airplanes.

Some Americans did understand that the United States was now a world power and needed a strong and modern fighting force.

One general, Billy Mitchell, publicly criticized the military leadership for not building new weapons. But most Americans were not interested. Many Americans continued to oppose arms spending until the Japanese attack on Pearl Harbor in Hawaii in nineteen forty-one.

BOB DOUGHTY: American policy toward the League of Nations did not change much in the nineteen twenties.

In nineteen nineteen, the Senate denied President Wilson's plea for the United States to join the new League of Nations. The United States, however, became involved unofficially in a number of league activities. But it continued to refuse to become a full member. And in nineteen thirty, the Senate rejected a proposal for the United States to join the World Court.

The United States also continued in the nineteen twenties to refuse to recognize the communist government in Moscow. However, trade between the Soviet Union and the United States increased greatly during this period. And such large American companies as General Electric, DuPont, and R-C-A provided technical assistance to the new Soviet government.


SHIRLEY GRIFFITH: The Coolidge administration was involved actively in events in Latin America. Secretary of State Charles Evans Hughes helped several Latin American countries to settle border disputes peacefully.

In Central America, President Coolidge ordered American Marines into Nicaragua when President Adolfo Diaz faced a revolt from opposition groups. The United States gave its support to more conservative groups in Nicaragua. And it helped arrange a national election in nineteen twenty-eight. American troops stayed in Nicaragua until nineteen thirty-three.

However, American troops withdrew from the Dominican Republic during this period. And Secretary of State Hughes worked to give new life to the Pan American union.

BOB DOUGHTY: Relations with Mexico became worse during the nineteen-twenties. In nineteen twenty-five, Mexican President Plutarco Elias Calles called for laws to give Mexico more control over its minerals and natural wealth. American oil companies resisted the proposed changes. They accused Calles of communism. And some American business and church leaders called for armed American intervention.

However, the American Senate voted to try to settle the conflict peacefully. And American diplomat Dwight Morrow helped negotiate a successful new agreement.

SHIRLEY GRIFFITH: These American actions in Nicaragua and Mexico showed that the United States still felt that it had special security interests south of its border. But its peaceful settlement of the Mexican crisis and support of elections in Nicaragua showed that it was willing to deal with disputes peacefully.

America's policies in Latin America during the nineteen-twenties were in some ways similar to its policies elsewhere. It was a time of change, of movement, from one period to another. Many Americans were hoping to follow the traditional foreign policies of the past. They sought to remain separate from world conflict.

BOB DOUGHTY: The United States, however, could no longer remain apart from world events. This would become clear in the coming years. Europe would face fascism and war. The Soviet Union would grow more powerful. And Latin America would become more independent.

The United States was a world power. But it was still learning in the nineteen twenties about the leadership and responsibility that is part of such power.


FAITH LAPIDUS: Our program was written by David Jarmul. The narrators were Bob Doughty and Shirley Griffith. You can find our series online with pictures, transcripts, MP3s and podcasts at You can also follow us on Facebook and Twitter at VOA Learning English. Join us again next week for THE MAKING OF A NATION -- an American history series in VOA Special English.


This is program #174