THE PROBLEMS OF FARMERS THE RISE OF THE POPULIST MOVEMENT 1865-1900

The Power of Industries & Government Policies In the late 1800’s, many Americans embraced the idea of LAISSEZ-FAIRE. Laissez-faire (French for “let people do as they choose). People believed the government should not interfere in the economy EXCEPT to protect people’s private property and to keep the peace. Laissez-Faire Policy led to few Rules for businesses States & Federal government kept taxes and spending low States & federal government did not have rules and regulations for businesses (like they do today)----this led to some abuses by businesses.

Government Tax Polices After the Civil War, northern businesses wanted HIGH TARIFFS (taxes on imported products). So the US Government enacted laws which set TARIFFS at high rates. The Morrill Tariff (1861)– adopted by NORTHERN controlled Congress during the Civil War and made high tariffs US policy until 1913. By 1865, tariff rates had nearly tripled in the US High Tariffs Hurt Farmers When the US raised tariffs on imported (foreign) products, other countries raised their tariffs on US products coming into their country. Really hard on US FARMERS who sold their crops to other countries. High Tariffs caused US crops to be higher priced in foreign countries= US crops harder to sell= hurt farmers financially. High Tariffs benefitted US industries like northern factories after the Civil War IS THIS REALLY LAISSEZ-FAIRE???

The Power of the Railroads During the Civil War, the US government initiated the building of the 1st TRANSCONTINENTAL RAILROAD (CONNECTING THE EAST WITH THE WEST US for the first time). 1862-Pacific Railway Act- US government set a plan for TWO companies to build the Transcontinental Railroad (Union Pacific and the Central Pacific) The Transcontinental Railroad was completed at Promontory Point, Utah in 1869. By the end of the 1800’s, there are 5 transcontinental railroads. The US Government gave Private Companies Incentives Many US companies were not eager to assume the RISK of building these railroads through dangerous mountains, harsh weather, Indian attacks. US offered each railroad construction company LAND GRANTS (land along each side of the track they built) to sell for a profit (120 million acres) US government offered LOW INTEREST LOANS TO RAILROAD companies too. Companies who built the railroads and ran the railroads grew extremely wealthy and powerful. Railroads gave REBATES (cheap rates) to BIG CORPORATIONS and charged FARMERS HIGH SHIPPING RATES= HURT FARMER PROFITS

The Banks and the Farmers In the 1800’s, farm technology helped farmers produce much more (supply) than they could on their own. Technology like the McCormick Harvester were expensive so farmers often took out loans from banks. Getting a loan sometimes required a farmer to mortgage their land or home Banks often charged HIGH INTEREST RATES for loans after the Civil War because of DEFLATION. During hard times (droughts, competition, pests) farmers who could not pay back their loans would loose their farms and land to the bank. (FORECLOSURE) Many Farmers became convinced that the banks were “out to get them”.

The Currency Problem Some Farmers believed that ADJUSTING THE MONEY SUPPLY in the US would solve most of their economic problems. During the Civil War, the US Government had issued millions of $$ in PAPER MONEY (GREENBACKS) that could not be exchanged for gold or silver== INFLATION==VALUE OF MONEY FELL= PRICES OF GOOD WENT UP. After the Civil War, the US government had 3 types of currency: greenbacks, gold coins, silver coins ==lots of money in circulation. Post Civil War--The Government decided to slow inflation so they stopped making Greenbacks. 1873- US Government stopped making silver coins (Farmers called it the “Crime of 73”) As the economy grew and the money supply shrank==DEFLATION ==value of money increased and prices fell= amount farmers got for crops decreased. Deflation hurt farmers badly— INTEREST RATES ON LOANS WENT UP. Falling crop prices==hard to make bank payments.

Farmer’s Seek Solutions A) 1866- The Patrons of Husbandry or (Grange) FOUNDED by Oliver H. Kelly. Mostly organized to ease isolation of farm life & educate farmers about new techniques. 1873- US sank into an economic depression==farm income fell==membership in Grange grew= by 1874 the Grange had between 800,000 & 1.5 million members. Successes of the Grangers Pressured state legislatures to pass “Granger Laws”—laws that allowed states to regulate railroad rates and warehouse fees. Established “Cooperatives” – marketing group made up of farmers that tried to get higher crop prices (pooled crops & held them off market) while lowering cost of farming (negotiate better shipping rates from railroads). None of these strategies improved farmer’s problems in the late 1800’s. Why? Railroads fought ”Granger Laws” by cutting services & not laying new track. 1886- Wabash v. Illinois —US Supreme Court ruled that states COULD NOT regulate railroads or any business that was conducted across state lines---ONLY US GOVERNMENT COULD & it would NOT. Eastern businesses refused to do business with cooperatives.

Farmer’s Seek Solutions B) The Farmer’s Alliance gained membership when The Grange lost popularity. 1890- 1.5 to 3 million members (mostly from South & Great Plains) Proposed VERY LARGE cooperatives called (EXCHANGES) Limited Success: The Texas Exchange marketed cotton at slightly higher prices Illinois Exchange—negotiated lower railroad rates for wheat farmers. Ultimately Failed: Lent too much money at low interest rates that was never repaid. Most railroads, businesses, bankers discriminated against them. Still too small to make big change!!

The Populist Movement (Party) Many Alliance members (mostly in the West) became convinced that to make real change they would form a new political party. Members in Kansas formed the People’s Party or Populists. Successful in getting People’s Party candidates elected to Congress & state government in Kansas== other states followed the example= People’s Party grew. Southern state Farmers Alliance Members Opposed a Third Party Charles Macune (Farmer’s Alliance Founder) proposed Sub Treasury Plan -- called for government run warehouses & low interest loans to farmers. 1892 The Omaha Platform (official Platform of People’s Party) – called for free coinage of silver (16 oz. to 1 oz. gold), federal ownership of railroads, graduated income tax, 8 hour workday, immigration restrictions. –also nominated its 1st candidate for President. 1892– The Populist Party nominated James B. Weaver (he lost but Populist Party made a good showing).

The 1896 Election The Republicans Republicans nominated William McKinley and supported only coinage of gold as currency. Pro-businesses, supported high tariffs McKinley conducted the Front Porch Campaign– greeting the press, government delegates & others from his front porch. McKinley promised urban factory workers a ‘Full Dinner Pail”—prosperity if elected. Many business owners warned urban workers that if McKinley lost…they would loose their jobs. The Democrats Nominated William Jennings Bryan (strong supporter of Silver Coinage issue) The Populist Party met and decided to endorse Bryan. Bryan gave a nomination speech that supported Free Coinage of Silver and stood up for the Farmer (Cross of Gold Speech) Bryan traveled the US giving 600 speeches in 14 weeks!

1896 Election Outcome McKinley (Republicans) won a decisive victory. 51% of popular vote—including urban workers in northeast. 95 electoral votes Bryan won the South & West but lost urban workers to Republicans. The Populist Party lost popularity after the 1896 Election Failed to ease hardships of farmers & regulate big businesses Some reforms they favored were later adopted: graduated income tax, direct election of Senators, government regulation of businesses. The US Economy experienced prosperity after 1896– gold discovered in Alaska (more money in circulation), farm crop prices went up… The Wizard of Oz connection with the Problems of Framers & the Demands of the Populist Party???