The Money Supply During Civil War federal government expanded the money supply by issuing paper money that caused inflation Decline in the value of money. Paper money lost value and prices of goods soared. After the Civil War there was 3 types of currency, paper money (greenbacks), gold and silver coins, and bonds. To get inflation under control the federal government stopped printing paper money to pay off bonds and also stop making silver coins.

More The decision to stop silver coinage and printing greenbacks meant there was a deflation in the economy. An increase in the value of money Decrease in the prices of goods Gold Standard – currency is backed by gold

Tariff Main source of Government revenue High during Civil War Tariff create surplus Industry no longer needs protection Surplus withdrew money from circulation Surplus tempting to Graft – and corruption

Pendleton Act - in response of Assassination of President Cleveland Government workers have to take exam Jobs be awarded on merit rather than on political ties (spoils system)

Role of the Farmer Diversification gives way to single crop – Wheat, Corn Farmer becomes specialist and businessmen Expensive machinery Hundreds of acres Subject to World market Competitive Tariffs high, hard to sell goods overseas

Hard Time on the Farm 1880’s and 1890’s – low prices Deflated currency (borrow $1,000, pay bank with 1000 bushel of corn. Price drops and it takes 2000 bushels to pay loan.) Interest rates are high due to a shortage of money Increase the amount farmers will owe on loans Nature Grasshopper, floods, droughts, and winter of 86/87

And More Middlemen Charged high rates getting products to market Railroad freights high

Agrarian Unrest 1890 – farmers ½ total population Independent minded and individualistic This will hurt Populist in the long run Cannot form successful group Conditions goading farmer into large-scale political uprising High Tariff Railroad rates Deflation of the economy Nature conditions In come the Populists

Populist Party Populists Platform Graduated income tax Direct election of US senators Government ownership or regulation of Rail Road Single Term for President Initiative and Referendum Women’s suffrage Australian Ballot Free and unlimited coinage of Silver

William Jennings Bryan Became Democratic nominee for 1896 election. Instead of Grover Cleveland Was a strong supporter of silver Stole Populists thunder Merged with democrats Decided it was the best chance Bryan failed to reach urban population Did not win a state outside the South and West Lost election to William McKinley Decline of Populist With Bryan defeat, populism fades out Failure to reduce hardships on farmers

Lasting Effects Bryan’s style of campaigning becomes norm Traveling around country Giving speeches directly to the people Reform issues picked up by Progressives Graduated income tax Initiative and referendum Women’s suffrage Other issues will be realized Secret ballot Graduated income tax