During the Hayes administration, the United States had few problems with foreign governments and little inclination to become an imperialist power. The primary problems that the administration faced involved Mexican bandits, who ignored the border between the United States and Mexico; Californians, who discriminated against Chinese residents of their state; and Ferdinand de Lesseps, who ignored Hayes and plunged ahead with his plans to build a Panama Canal.

Relations with Mexico and China

Three months after his inauguration, Hayes on June 1, 1877, ordered the Army to keep "lawless bands" from invading the United States, even if it had to cross into Mexico to punish these cross-border outlaws. Porfirio Diaz, who had assumed the Mexican presidency a month earlier (and would remain dictator until overthrown in 1911), protested and sent troops to the border to protect Mexico's sovereignty. Diaz agreed to pursue bandits jointly with American troops. Order on the border, however, did not happen until three years later. With the incursions stopped, Hayes, on February 24, 1880, revoked his 1877 order permitting the army to follow outlaws into Mexico.

The 1868 Burlingame Treaty with China allowed unrestricted Chinese immigration to the United States. Chinese laborers had been migrating to California since the 1849 gold rush and had drifted from the gold fields into railroad construction (the Central Pacific Railroad employed 10,000 from 1866-1869), agriculture, and urban jobs in factories, laundries, and homes. With the completion of the transcontinental railroad and the flood of cheaper manufactured goods from the East, California manufacturers cut costs by employing Chinese labor at low wages. The hostility of white laborers toward Chinese workers intensified during the depression that followed the Panic of 1873. The Great Strike of 1877 inspired anti-Chinese riots in San Francisco and a Workingmen's Party wanting to "stop the leprous Chinamen from landing" expanded rapidly, becoming a major force in California politics by early 1878. 

At the 1878 California Constitutional Convention, the anti-Chinese movement secured articles preventing the Chinese from voting and from working on local and state public works, or for any corporation operating under California law. These articles violated the federal Constitution, and federal courts struck them down, but they sent a message to Congress. The legislature responded with a bill that restricted incoming vessels to no more than fifteen Chinese passengers—thus violating the Burlingame Treaty, which allowed the immigration of Chinese and Americans to each other's country. Hayes vetoed the bill on March 1, 1878, and was bitterly denounced west of the Rocky Mountains.

Hayes, however, also responded to the pressure from the West Coast. He thought it best to discourage but not prohibit the influx of Chinese labor (which he noted was slowing down) and wanted negotiations with China to revise the Burlingame Treaty. Hayes appointed a commission to do so and by November 17, 1880, the commissioners had concluded immigration and commerce treaties with China. The immigration treaty enabled the United States to regulate, limit, and suspend, but not prohibit, the coming of Chinese laborers. The commerce treaty prohibited the export of opium to either country. Congress ratified these treaties in 1881 after Hayes had left office. 

A Transoceanic Route

Schemes to connect the Atlantic and Pacific oceans through Mexico, Nicaragua, or Panama revived dramatically in 1879. In May of that year, the Congres International d'Etudes du Canal Interoceanique meeting in Paris was dominated by Ferdinand de Lesseps, the builder of the Suez Canal. With little thought and no research, he proposed that a sea-level Panama Canal be built by 1892 for $240 million.

Aniceto Garcia Menocal, an American naval officer attending the congress, had surveyed the route, realized that a sea level canal was impossible, and advocated a Nicaraguan canal with locks. The gathering ignored the opinions of the expert engineers who were present, got wrapped up in de Lesseps's vision, and endorsed his sea-level Panama proposal. De Lesseps immediately organized a private syndicate to build the canal, but throughout 1879 had little success in raising the necessary funds. Nevertheless, he remained optimistic, landed with an entourage at Colon, Panama (then part of Colombia), inspected the proposed route, and declared that the canal would be built. 

The plans and activities of de Lesseps concerned Hayes. The President would have been uneasy about any non-American inter-oceanic canal but was doubly suspicious of a French project. Little more than a decade had elapsed since Napoleon III had tried to make Maximilian the emperor of Mexico. Hayes concluded that "The true policy of the United States as to a canal across any part of the Isthmus is either a canal under American control, or no canal." Following his inspection of Panama, de Lesseps toured the United States. He was feted in New York, and Hayes and the House Inter-oceanic Canal Committee received him courteously. He addressed crowds on a whirlwind tour all the way to San Francisco and back, stressing that his private venture no way contradicted the Monroe Doctrine. Indeed, the French government assured the Hayes administration that it had nothing to do with the de Lesseps proposal. 

Hayes, however, was not reassured and in a special message to Congress on March 8, 1880, stated unequivocally that "The policy of this country is a canal under American control." A canal, Hayes proclaimed, "would be the great ocean thoroughfare between our Atlantic and our Pacific shores, and virtually a part of the coast line of the United States. Our merely commercial interest in it is greater than that of all other countries, while its relations to our power and prosperity as a nation, to our means of defense, our unity, peace, and safety, are matters of paramount concern to the people of the United States."

In addition, Hayes anticipated the corollary to the Monroe Doctrine that Theodore Roosevelt would later proclaim, warning European investors not to look to their governments for protection. The United States would deem such intervention by European power as "wholly inadmissible. If the protection of the United States is relied upon, the United States must exercise such control as will enable this country to protect its national interests and maintain the rights of those whose private capital is embarked in the work."

American capitalists were not attracted to de Lesseps venture. Hayes, no doubt, discouraged some; others were surely aware of the engineering absurdity of a sea-level Panama Canal. De Lesseps nonetheless forged ahead and claimed audaciously that Hayes's version of the Roosevelt Corollary guaranteed the political security of his proposed canal. De Lesseps returned to France in April 1880 and secured support from the French people. Despite Hayes's efforts, the project went forward but ultimately failed.