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Policy introduced by President Herbert Hoover and expanded by President Franklin D. Roosevelt indicating that the United Sates would no longer intervene in the affairs of Latin American nations but would instead cooperate with them.

In 1904, President Theodore Roosevelt revised the Monroe Doctrine, the long-standing policy that prevented American interference in the affairs of Latin American nations. Roosevelt's approach, termed the Big Stick policy, expressly allowed the use of diplomatic, economic, and military force in Latin American nations when U.S. interests were involved.

Later, President Woodrow Wilson altered the policy to include the “good men” clause: The United States would actively oppose any Latin American leaders who were believed to be corrupt, who had obtained their offices illegitimately, or who presumably threatened U.S. security. In 1914, Wilson refused to acknowledge the presidency of Victoriano Huerta, a Mexican general who had assumed the presidency of Mexico during a coup. During this period, American forces were sent to Cuba, Haiti, the Dominican Republic, Honduras, Nicaragua, and Panama to ensure that these nations adhered to U.S. demands.

By 1928, most Latin American nations openly resented the forceful meddling of the United States. Disturbed by this hostility, the newly elected president, Herbert Hoover, eschewed the Big Stick policy. The United States, President Hoover asserted, would be a good neighbor toward the Latin American nations. Military involvement would be abolished, and the United States would recognize the sitting governments of all nations, regardless of how they had attained power.

When Franklin D. Roosevelt became president in 1932, he embraced the good neighbor policy and converted Hoover's promises into formal agreements. First, Roosevelt rescinded the Platt Amendment, legislation that permitted American troops to intervene in foreign affairs. He then withdrew U.S. troops stationed in Cuba, Panama, and the Dominican Republic. Next, Roosevelt formally recognized all existing Latin American governments. Finally, in 1936, at the Inter-American Conference in Buenos Aires, Roosevelt's secretary of state, Cordell Hull, signed a document renouncing the United States' right to interfere in any Latin American nation.

Roosevelt noted three specific goals for his policy: First, he hoped to encourage free trade throughout the Western Hemisphere. Second, he wanted to ensure peaceful relations between the United States and the Latin American nations. Finally, with the prospect of World War II looming large on the horizon, Roosevelt wanted to maintain the security of the entire region.

The good neighbor policy succeeded in attaining these objectives. By 1941, the United States had signed 13 different trade agreements with various Latin American nations. Disputes between Latin American nations, especially border disputes in South America, were peacefully resolved. Most importantly, in 1940, the United States and all Latin American nations declared that any attack on a Western Hemisphere nation would be construed as an attack on all of the region's nations. By 1942, every country in the Western Hemisphere, except Argentina and Chile, had severed relations with Germany and Japan. When the United States entered World War II, Latin American nations supplied much of the raw materials for the U.S. war effort. In return, the United States slashed its tariffs and provided generous loans to sustain the Latin American economies.

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