Populism
Describe the currency situation after the Civil War Discuss how the government took action to control inflation Explain how farmers reacted to deflation and why it hurt them. Know what “Granger Laws” refers to. Explain why the Farmers’ Alliance failed. Describe the sub-treasury plan. Discuss the platform that the People’s Party nominated a president to uphold. Compare and contrast “goldbugs” and “silverites” Discuss the candidates and campaign style of the 1896 presidential election.
-The Money Supply Too much money being printed created inflation. After the civil war ended, the US had three types of currency In circulation. (Greenbacks or paper money, gold or silver coins, and national bank notes like bonds) To get inflation under control, the federal government stopped printing greenbacks and began paying off its bonds. In 1873 Congress also decided to stop making silver into coins. (known as “The crime of ‘73”)
With fewer greenbacks in circulation, the value of money went up and caused the prices of goods to drop (deflation). Deflation hurt farmers who had taken out mortgages (loans) to pay for seed, tools, and/or to expand their farms. o The drop in prices caused by deflation meant that farmers were paid less for their crops. o Banks also raised interest rates making farmer mortgages more difficult to pay back.
-The Grange Takes Action Others joined the Independent National Party. This new political party, nicknamed the Greenback Party, wanted the government to print more greenbacks to increase the money supply.
-The Grange Fails Farmers tried to form cooperatives to set higher prices on their crops. Several western states passed “Granger laws” setting maximum rates on shipping and prohibiting railroads from charging more for short hauls than for longer ones. Railroads retaliated by refusing to ship any farm goods and promising to not lay anymore tracks until the laws were repealed.
-The People’s Party As the granges failed, a new organization formed called the Farmers’ Alliance led by Charles W. Macune. Despite their temporary success, the large farm cooperatives failed for several reasons. o 1.)Many overextended themselves by loaning too much money at low interest rates that was never repaid. o 2.)In many cases, wholesalers, manufacturers, railroads, and bankers discriminated against them, making it difficult for them to stay in business. o 3.) The exchanges also failed because they still were to small to dramatically affect world prices for farm products.
-The Subtreasury Plan Most Southern leaders of the Alliance, including Charles Macune, opposed the idea of a third political party. They proposed a new idea hoping democrats would approve: The Sub-treasury Plan. Warehouses called sub-treasuries allowed farmers to hold their crops off the market in large enough quantities to force prices up.
-A Populist for President In July of 1892, the People’s Party held its first national convention to nominate a candidate for president who would support their platform (programs): o It called for a return to unlimited coinage of silver. o Other platform planks called for federal ownership of railroads and a graduated income tax. James B. Weaver
-Goldbugs and Silverites In 1893 several railroads declared bankruptcy causing the stock market to crash and the nation to slump into a depression-its worst in history up to that point. o In June 1893, President Cleveland summoned Congress into a special session and pushed through the repeal of the Sherman Silver Purchase Act. (The act authorized the US Treasury to purchase 4.5 million ounces of silver a month to put more money into circulation to help decrease deflation) o The goldbugs believed the American currency should be based on only gold, silverites believed coining silver in unlimited quantities would solve the nation’s economic crisis.
-The Front Porch Campaign Democrat William Jennings Bryan traveled far and wide to campaign for the presidency. Republican McKinley conducted what the newspapers called his “Front-Porch Campaign” by meeting with various delegations that came to visit him. Many employers (who supported McKinley) warned their workers that if Bryan won, business would fail, unemployment would rise, and wages would be cut.
What was the currency situation after the Civil War? What did the government do to control inflation? What were “Granger Laws”? Why did the Farmers’ Alliance fail? What was the sub-treasury plan? What were the components of the platform that the People’s Party nominated a president to uphold? What was the differences between “goldbugs” and “silverites”? Who were the candidates of the 1896 presidential election and what was their campaign styles?
Define “deflation” and explain why it hurt farmers.
o “Deflation” is an increase in the value of money and a decrease in the general level of prices. Deflation hit farmers especially hard. Most farmers had to borrow money for seeds and other supplies to pant their crops. Because money was in short supply, interest rates began to rise, which increased the amount farmers owed. For those who wanted to expand their farms, rising interest rates also made mortgages more expensive. The falling prices of the period of deflation meant that farmers sold their crops for less. Nevertheless, they still had to make the same mortgage payments to the banks.