The Populist Party SS.912.A.3.1- Analyze the economic challenges to American farmers and farmers' responses to these challenges in the mid to late 1800s.

Bell ringer Yet, after all our years of toil and deprivation, dangers and hardships, our homes are being taken from us by an infamous [wicked] system of mortgage foreclosure. It takes from us at the rate of five hundred a month the homes that represent the best years of our life, our toil, our hopes, our happiness. How did it happen? The government, siding with Wall Street, broke its contracts with the people. . . . As Senator Plumb [of Kansas] tells us, “Our debts were increased, while the means to pay them [cash] was decreased.” – Mary Elizabeth Lease Based on the quote above what was life like for farmers in the 1800’s and what problems were they facing? In what ways do you think would farmers and supporters of farming respond to some of these problems?

Farmers and the Populist Movement Essential Question What economic problems confronted American farmers in the late 1800’s?

Farmers faced many Problems Review of problems for farmers in the late 1800s: Droughts Debt and tariffs Banks foreclosing on mortgages Railroads were taking advantage of farmers by overcharging transportation fees Prices of crops were falling Good farming land was becoming scarce

Tariffs In the 1800s, the country was divided on the issue of tariffs (taxation) Business owners: tariffs protected American factory jobs – and their own profits; tariffs reduced foreign competition. Workers and consumers: tariffs encouraged American business to raise prices.

Tariffs Hurt Farmers Tariffs raised prices of manufactured goods, such as machinery. Tariffs on manufactured goods spurred manufacturing nations in Europe to retaliate with their own tariffs against American crops. RESULT: tariffs indirectly reduced the world market for American farm products!

Problems with the Railroads Railroad companies heavily increase the price of shipping goods Why were the railroad companies able to charge so much for shipping and storage? BECAUSE THERE WAS NO COMPETITION Union Pacific and Central Pacific partook in a merger since there were no other western railroad companies - they could charge whatever price they wanted and the farmers had no other option, so they had to pay In addition – grain brokers and merchants met with railroad companies secretly to determine market prices of crops

The Money Supply For some farmers, the silver supply was even more important. Money supply: the amount of money in the national economy; directly related to the value of money.

The Money Supply & Inflation Supply goes up, value of dollar drops. This leads to inflation, a widespread rise in prices and value of goods and services. People who borrow money benefit from inflation because it raises the prices of the goods they sell.

The Money Supply & Deflation In contrast, if the government reduces the money supply, the value of each dollar becomes greater. This causes deflation, or a drop in the prices of goods. People who lend money are helped by deflation because the money receive in payment of a loan is worth more than the money they lent.

Monetary Policy After the Civil War, the federal government made the first of several attempts to take paper money (greenbacks) out of circulation. This policy created a furor among farmers and others who favored inflated prices. The monetary policy became a major political issue.

Farmers Organize Improved communication allowed farmers to organize powerful protest groups. The Grange (1866), a.k.a. the Patrons of Husbandry; Oliver H. Kelley, founder Developed cooperatives through which farmers bought goods in large quantities at lower prices. Pushed for farmer-friendly legislation

The Farmers’ Alliances (1880s) -Launched harsh attacks against monopolies, such as those that controlled railroads -Called for more money in circulation -Encouraged the creation of state departments of agriculture -Pushed anti-trust laws -Instituted farm credit

Mary Elizabeth Lease “raise less corn and more hell” Kansas lawyer & a leader of the movement “raise less corn and more hell” Led Kansas revolt over high mortgage interest & railroad rates

The Beginning of Populism Leaders of the Alliance movement realized that to make far-reaching changes, they would need to build a base of political power Populism – the movement of the people also referred to as the People’s Party was created in 1892 The first convention was held on July 2, 1892 – people demanded reforms to lift the burden of debt from farmers and to give them a stronger voice in politics

The Populist Platform Increased circulation of money Unlimited minting of silver Progressive income tax Percentage of taxes owed increases with a rise in income Places greater financial burden on wealthy industrialists and lesser one on farmers Government ownership of communications and transportation systems.

Other Populist Issues 8-hour work day Opposition to the Pinkertons, the private police force that had been involved in the bloody Homestead Strike in 1892 United front of African-American and white farmers

The Government Responds In every election from 1880 to 1892, no candidate won a majority of the popular vote. Only rarely did the president’s party control Congress. Grover Cleveland

Granger Laws – Help for Farmers In 1871 Illinois authorized a commission to “establish maximum freight and passenger rates and prohibit discrimination” The RRs fight back In 1877 – Case of Munn v. Illinois Challenged the constitutionality of regulatory laws Supreme Court ruled in favor of the Granger Laws States won the right to regulate the RRs for the benefit of farmers and consumers

Interstate Commerce Act (1887) Interstate Commerce Act passed to regulate interstate RR freight charges Made it illegal to give special rates to some customers

The Sherman Anti-Trust Act 1890: Passed by Congress to curb the power of trusts and monopolies Enforcement was lax until 1900s

?Silver or Gold? The two political parties were divided when determining a way to fix the economy The Issue – which metal to use as the nations monetary currency Two sides: Republicans – business owners and bankers of the Northeast “Gold bugs” – favored the gold standard, or backing dollars solely with gold Effects: deflation – prices fall, value of $ increases, fewer people have money Democrats – farmers and laborers of the South and West “Silverites” – favored bimetallism – a monetary system where the gov’t would give citizens either gold or silver in exchange for paper money or checks Effects: inflation – prices rise, value of money decreases, more people have money

Election of 1896 Ongoing depression affects campaign The candidates: Republican: William McKinley – gold standard platform  Democrat and Populist: William Jennings Bryan – former Silverite congressman from Nebraska

Bryan’s “Cross of Gold” 1896 Democratic Convention: “You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold!”

Populism’s Legacy Silver movement died, as did Populism. Goals of Populism lived on. In future decades, the Progressives applied populist ideas to urban and industrial problems. A new era of reform was at hand.

Journal Writing Activity Answer the following question by writing a minimum of 2 paragraphs: “How did the Populist Party and Grange movement attempt to help farmers overcome the economic challenges they faced in the late 1800’s? Were they successful in helping the farmers? Why or why not?”