Theodore Roosevelt believed that the Chief Executive should be an aggressive leader in both foreign and domestic affairs. After completing the three and a half years that remained of McKinley's term, Roosevelt was elected President in his own right in 1904.

Early in his administration Roosevelt ordered the government to prosecute a number of trusts, and earned the title of "trust buster." He did not oppose the growth of industrialism, but felt that vigilant government supervision over big business was essential to the public interest. He thus allied himself with the progressive wing of the Republican party.

In 1902 Roosevelt forced the owners of the leading anthracite coal mines to agree to arbitrate wage and other demands of their workers, who were on strike. This was the first time that a President had taken labor's side. Roosevelt believed labor, business, and the public were all entitled to what he called a "square deal."

When Panama revolted in 1903 against Colombia, of which it had been a part, Roosevelt supported the revolution by immediately recognizing the new republic. In return, Panama granted the United States the right to build a canal across the Isthmus of Panama, a concession Colombia had refused to make. In this same period, United States influence over Caribbean nations was greatly extended.

Roosevelt's foreign policy was to "speak softly and carry a big stick"—to avoid starting trouble but to be prepared to use force if trouble occurred. His favorite "big stick"—the U.S. Navy—was displayed in the 1907-09 around-the-world cruise of the Great White Fleet (the ships were painted white).

By this time the United States was an important world power and Roosevelt used his prestige to help settle foreign disputes. He was awarded the 1906 Nobel Peace Prize for his arranging a negotiated settlement of the Russo-Japanese War (1905). He helped ease a crisis among European powers by persuading France to participate in the Algeciras Conference (1906), called to settle differences over Morocco.

Conservation of natural resources became a major government policy during Roosevelt's administration. Millions of acres of government-owned land were withheld from sale to private interests to prevent what Roosevelt termed the "wasteful use" of the nation's forests and minerals. Exposure of insanitary and fraudulent practices in the food and drug industries brought the federal Pure Food and Drug Act in 1906.