Developing a viable foreign policy for the United States was a responsibility that rested largely with John Hay, but McKinley worked closely with his secretary of state and kept himself well informed of points at issue in the complex series of negotiations that Hay conducted. "The one indispensable feature of our foreign policy," observed Hay in 1899, "should be a friendly understanding with England." McKinley agreed, though he was more reserved in stating the point. Both understood that in relations with Canada and the Latin American nations, the United States and Britain had common objectives. Common interests extended to the Far East as well. Central in McKinley's thinking was the idea that American prosperity had come to depend on healthy commercial relations with the rest of the world. Trade, in turn, depended on international security and the avoidance of war. Security for American trade, not territorial expansion, should therefore be the major objective of American foreign policy. These, then, were the principles that governed McKinley's position in international relations after the Spanish-American War. They found application first in negotiations to assure the construction of an isthmian canal and then in working out an American policy toward China.
The interoceanic canal had long been an objective of naval enthusiasts, and a dramatic demonstration of the canal's importance captured national attention during the war with Spain. The USS Oregon had required ninety-eight days to make the voyage from Juan de Fuca Strait around Cape Horn to Cuba, and it was clear that military security required a shortening of the journey. Furthermore, a canal would facilitate trade with nations on the west coast of South America. McKinley had emphasized the desirability of such a "maritime highway" in his annual message of 1898, and Hay set about clearing the way for its construction. One obstacle was the Clayton-Bulwer Treaty of 1850, by which the United States and Britain had agreed to joint construction. Faced with more immediate concerns elsewhere, Britain was now prepared to have the United States proceed alone. Together with Sir Julian Pauncefote, the British ambassador, Hay therefore drafted a treaty in 1899 to provide for American construction of the canal, but the Senate so amended it that the British rejected the pact. Eventually, in 1901, Hay and Pauncefote drafted a new treaty, which both nations found acceptable. Yet by that time McKinley had died, and credit for completing the canal negotiations went to his successor.
Of greater importance, because of the way Americans perceived it, was development of the Open Door policy for China. At the time the United States gained its Philippine foothold in the Far East, the great powers were busy establishing spheres of influence for themselves in a China weakened by internal divisions and by defeat at the hands of the Japanese in the Sino-Japanese War of 1894–1895. Japan extended control over Formosa and the nearby Pescadores, and other nations found themselves attracted to the fabled markets of China itself. Russia obtained special rights in the Liaotung Peninsula; France staked out a sphere of influence on Kwangchowan Bay; Germany secured a leasehold on the Shantung Peninsula; Britain leased the port of Wei-hai, enlarged its leased territory of Kowloon, and secured recognition of economic interests in the Yangtze Valley.
American expansionists, captivated by the thought of economic penetration of the Far East, were perturbed by the partition of China. In 1898, McKinley had informed the peace commissioners in Paris that they could not be indifferent to commercial opportunities in Asia, adding that "we seek no advantages in the Orient which are not common to all. Asking only the open door for ourselves, we are ready to accord the open door to others." What McKinley meant when he referred to an open door became clearer after Hay had sent two sets of notes to the great powers. The first set, sent in September 1899, requested that each recipient avoid interfering with the commercial rights of other nations within its sphere of influence, permit Chinese officials their right to collect existing tariffs, and avoid railroad-rate and port-dues discriminations against the nationals of any country operating within Chinese leaseholds. Receiving an indifferent response, Hay announced in March 1900 that since none of the powers had raised serious objection to his note, he considered their approval "final and definitive."
Through his first Open Door notes, Hay had intended to promote trading opportunities in the Far East, and to that end he had also hoped to prevent the dismemberment of China. Unfortunately he had reckoned only with the great powers, and a society of Chinese nationalists known as the Boxers had other ideas about Chinese affairs. Launching a drive to rid their land of all foreigners, they occupied the city of Peking, cut telegraph lines, and laid siege to the British compound, where members of foreign legations had taken refuge. An international force of eighteen thousand men, including twenty-five hundred Americans, managed to rescue the beleaguered diplomats on 14 August, but the disturbance increased the possibility that China would be carved up by powers determined to secure broader and more binding commitments than they already had.
To avert that possibility, Hay issued the second set of Open Door notes in July 1900. He instructed American envoys in foreign capitals that the United States would adhere to a program of peace for China, that the nation would hold the Boxers accountable for injuries to American citizens, and that in the future the United States would uphold "the principle of equal and impartial trade with all parts of the Chinese Empire." Hay was not committing the United States to the defense of China against other powers; he was pledging only that in the promotion of American interests the United States would maintain respect for China. Through his secretary of state, McKinley had become identified with a policy that was neither as clear nor as forceful as most Americans believed it to be. To his successors he left the difficult task of coping with realities that did not always conform to popular suppositions.
For all McKinley's preoccupation with foreign affairs, he never lost sight of domestic problems, especially if they were likely to become issues in elections. In 1899, for example, he began to study the growth of large business combinations, a development that agitated the minds of reformers and that appeared to require his attention if all citizens were to share the benefits of a restored economic prosperity. Referring to the dangers of trusts and monopolies in his annual message that year, he indicated that the growth of combinations was a matter to which Congress should turn its attention. McKinley's method of handling the trusts was typical of his method of dealing with all potentially controversial matters. He waited until interested parties and persons had discussed the issues and taken positions. Then he acted to find policies for satisfying as many interests as possible. It was an approach that had served him well in the complex politics of Ohio and in Congress. It was also an approach that led to his enormous popularity in all sections of the country and among all classes of people.