On page 169 is where Croly uses the phrase.
In the New York Independent, the following is written: (Page 957, this was originally published in 1912)
The New Democracy resembles in some points Croly's "Promise of American Life," from which Colonel Roosevelt got the New Nationalism which he preached for a season.
Herbert Croly himself is unfortunately a forgotten figure in history. But for most conservatives, you will likely recognize the name "The New Republic", a magazine that is still in production to this day. Herbert Croly founded it. Herbert Croly's influence upon progressivism is profound. National Review had a series in 2009 titled "The Four Horsemen of Progressivism" in which they highlighted some of the founding fathers of progressivism, and Croly was one of the four. You can read the article on this blog, NRO has the article locked for subscribers only. It's title is "Herbert Croly’s American Bismarcks"
William Safire tells the following tale in his book "Safire's Political Dictionary" on page 467:
"The former president was stamping about Africa in 1910, bored and regretting not having sought a third term. His friend, Judge Learned Hand, sent him a book by Herbert Croly, The Promise of America, which differed from the Jeffersonian ideal of the least government being the best government, and restated and extended much of Roosevelt's own thought. On his return, TR invited Croly to tea in Oyster Bay and promptly took over the program; the phrase new nationalism probably came from Croly as well.
"I hope that you will find in it as comprehensive and progressive a statement of American Political ideas and ideals as I have found. I think that Croly has succeeded in stating more adequately than anyone else, - certainly of those writers whom I know, - the bases and prospective growth of the set of political ideas which can be fairly described as Neo-Hamilton, and whos promise is due more to you, as I believe, than to anyone else"
Ultimately, what's important to walk away with is this: the slogan itself is not as important as the programme, and it would be very hard, if not impossible, for anybody who's read all of Theodore Roosevelt's life and work(not just the fluffy good-time good feeling stuff) to walk away with anything other than one conclusion: Roosevelt was a big government guy, influenced by other big government guys.