The claim of Great Britain was that the word "coast" should be interpreted to include adjacent islands. Hence the ten league line would follow the general direction of the shore but would cut across the inlets and headlands and thus leave the towns in the possession of Canada. The American contention was that the line should follow closely the windings of the shore of the mainland, thus giving the United States a continuous strip of coast. The controversy was referred in 1903 to a board composed of three Americans, two Canadians and the Lord Chief Justice of England. On all the important points the English representative concurred with the Americans and a line was subsequently drawn in general conformity with our contention.[7]

The most complicated negotiation of the period, as well as one of the most complicated in our history, concerned the North Atlantic Coast fisheries. Under the treaty of 1818 relating to matters remaining over from the War of 1812, the United States possessed certain rights on the fishing grounds off Newfoundland and Labrador. From then on there was intermittent negotiation concerning the meaning of the terms of the treaty and the justice of fishing regulations made by Canada. In 1908 the United States and Great Britain made a general arbitration treaty, under the terms of which the fisheries question was referred to members of the Court of Arbitration at The Hague.[8] The award, made in 1910, upheld the rights of American fishermen on the coasts of Newfoundland, and recommended the establishment of a permanent fishery commission to settle all future controversies. This was accomplished in 1912 and an irritating and long-standing dispute was put to rest.

"Dollar diplomacy" was the chief novelty in our relations with China. The expression was used in President Taft's administration, when his Secretary of State, P.C. Knox, devoted much attention to promoting loans, contracts and concessions in Central and South America, and more particularly in China. The argument for dollar diplomacy was that it opened new fields for the use of American capital, and thus indirectly benefited the whole people. The President also believed that investments in China would further American influence there and react favorably in continuing the open-door policy which had been initiated by Secretary Hay. The objection most commonly made was that the government became bound up in the interests of investors and might be compelled to interpose with armed force when difficulties arose between the investor and the state where the investment was made.

An opportunity for large investments in China was presented during 1912-1913. In the former year a revolution in that distracted country had come to an end and a republic had been set up with Yuan Shih-kai as President. Since the new government was in need of funds, it undertook to borrow through an associated group of bankers from six foreign nations, the United States among them. The financial interests agreed to the loan, but insisted on having a hand in the administration of Chinese finance, so as to ensure repayment. At this point President Wilson's administration began. The bankers at once asked him whether he would request them to participate in the "six-power" loan, as President Taft had done. Wilson declined to make the request, fearing that at some future time the United States might be compelled to interfere in Chinese financial and political affairs, whereupon the American bankers withdrew and the six-power group subsequently disintegrated.

Relations with Japan have been a cause for negotiation on several occasions. During the Russo-Japanese War, which came to a close in 1905, American sympathies were mainly with the Japanese. The correspondence which brought about a cessation of hostilities was initiated by President Roosevelt, and the peace conference was held in Portsmouth, New Hampshire. During the course of the sessions American sympathies shifted somewhat to the Russian side, and when the Japanese did not receive all that they demanded of Russia they felt somewhat dissatisfied.

A subject which seemed at times to contain unpleasant possibilities was the restriction of Japanese immigration into the United States. The western part of the country, especially California, has objected vigorously to the presence of the Japanese on the coast, and as Japan refused to agree to such a treaty as that which restricts Chinese immigration, recourse was had to the Root-Takahira agreement of 1908, by which the Japanese government itself undertook to prevent the emigration of laborers to the United States. It was more difficult to reach an agreement concerning Japanese who were already living in the United States. In 1913 the legislature of California had before it a law forbidding certain aliens from holding land in the state. As the act would apply almost solely to the Japanese, the federal government was placed in an embarrassing position. Under existing treaties the Japanese were granted equal rights with other aliens, but the states were able to modify the practical operation of treaty provisions, as California planned to do, by declaring certain aliens ineligible to citizenship and then placing particular restrictions upon them. The Secretary of State, William J. Bryan, went to California and attempted to persuade the state authorities to alter their land laws. Although the law was eventually passed, it was modified to the extent of allowing Japanese to lease agricultural lands for terms not greater than three years.