Dollar diplomacy was a form of US foreign policy developed by President William Howard Taft, which consisted of using the economic power of the United States over Latin America and East Asia (with loans), rather than using military force.
It should be noted that it was President Roosevelt (Taft's predecessor) who laid the foundation for this policy. All this in order to protect the interests of the United States in Latin America, by encouraging stability in those countries and expanding US commercial interests in those nations.
