This is a proverb often quoted by Theodore Roosevelt to explain his foreign policy (see big stick diplomacy.) The idea is to tread carefully, but back up your diplomacy with overwhelming military force - yet to always remain courteous, as it costs you nothing and doing otherwise may well harm your cause. Compare this phrase to Wynn Catlin's axiom Diplomacy -- the art of saying "Nice doggy" until you can find a stick. The event during which this phrase entered the nation's consciousness was the opening of the Minnesota State Fair on September 2, 1901. Following is the paragraph in which the famous phrase occurs:

Right here let me make as vigorous a plea as I know how in favor of saying nothing that we do not mean, and of acting without hesitation up to whatever we say. A good many of you are probably acquainted with the old proverb, “Speak softly and carry a big stick – you will go far.” If a man continually blusters, if he lacks civility, a big stick will not save him from trouble, and neither will speaking softly avail, if back of the softness there does not lie strength, power. In private life there are few beings more obnoxious than the man who is always loudly boasting, and if the boaster is not prepared to back up his words, his position becomes absolutely contemptible. So it is with the nation. It is both foolish and undignified to indulge in undue self-glorification, and, above all, in loose-tongued denunciation of other peoples. Whenever on any point we come in contact with a foreign power, I hope that we shall always strive to speak courteously and respectfully of that foreign power.

References:

  1. "Tuesday, Sept. 3, 1901: Roosevelt at the fair". Star Tribune Blog Archive. Sunday, August 21st, 2005. <http://www.startribune.com/blogs/oldnews/?p=11>

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