1. Populism

2. Declining Profits
Thanks to new technologies, farmers had opened up the Great Plains and were producing a much greater supply of grains
Grain supply ↑ = Grain prices ↓
Farmers were earning LESS

3. Rising Costs
High tariffs + unionized factory workers = high prices on manufactured goods
Banks were charging high interest on loans
Railroads were charging higher fees for shipping grain to eastern markets
Farmers were paying MORE

4. The Money Supply
To fund the Civil War, US government had flooded the market with paper money (“greenbacks”)
Supply of $↑ = Value of $↓ (inflation)

5. 3 Types of Money Greenbacks Gold & Silver coins
Bank notes backed by government bonds

6. Government response to inflation
Stopped printing greenbacks
Stopped minting silver coins
Started paying off government bonds to reduce number of bank notes in circulation
Response was too strong and reduced the money supply too greatly
Supply of $↓ = Value of $↑ = Prices ↓ (deflation)

7. Deflation Hurts Farmers
Decrease in money supply meant loans were harder to get and interest rates were higher
Farmers were getting LESS for their crops but paying MORE for mortgages & other loans

8. “The Crime of ’73”
Farmers believed that greedy banks had pressured government into reducing the money supply
Began to organize and campaign for government to resume printing greenbacks and/or minting silver coins

9. The Grange
“The Patrons of Husbandry” founded in 1867 by USDA official Oliver H. Kelley
Designed to organize rural farmers; by 1874, the Grange had over 1 million members

10. The Grange Takes Action
Pressured state legislatures to regulate railroad & warehouse rates
Joined Independent National Party (also called the Greenback Party) a new political party aimed at getting the government to print more paper money
Created farmers’ cooperatives

11. Farmers’ Cooperatives
Pooled farmers’ crops and held them off the market in order to limit supply and force up prices
By working together, farmers could also negotiate better shipping and warehousing rates

12. The Grange Fails
Greenback Party failed to win public support – average American didn’t trust paper money
Cooperatives never grew large enough to be effective
Many states did pass laws setting maximum rates for railroads, but ….

13. Wabash v. Illinois
1886
Supreme Court ruled that states could not regulate railroads because the railroads were involved in interstate commerce; interstate commerce can only be regulated by federal law

14. The Farmer’s Alliance Formed in 1877 in Texas
By 1890 had nearly 3 million members
Also tried to create cooperatives, but failed for many of the same reasons

15. The People’s Party Founded in 1890, more commonly called the Populists
Western farmers of the Alliance decided that the changes needed to help farmers required a new political party
Southern farmers opposed a third-party because it might weaken the Democratic Party

16. The Subtreasury Plan
Southern farmers proposed that the government set up warehouses called subtreasuries where farmers could store their surplus crops
Also wanted government to provide low-interest loans to farmers
Many Democratic politicians won elections in the South after promising to support the Subtreasury Plan, but then reneged

17. The Sherman Silver Purchase Act of 1890
Congress authorized the US Treasury to purchase 4.5 million ounces of silver per month to put more money into circulation
Still, it wasn’t enough to ease deflation, so it didn’t help farmers

18. The Omaha Platform
Called for unlimited coinage of silver at a ratio of 16 oz. of silver = 1 oz. of gold (bimetallism)
Called for federal takeover of railroads
Called for a graduated income tax
Called for tighter government regulation of banking and industries

19. A Populist Candidate for President
1892, Populists met in Omaha, NE and nominated James B. Weaver to run for President of the United States
Came in a distant 3rd place in the election with only 22 electoral votes, but still a strong showing for a 3rd party candidate

20. Panic of 1893
2 large railroad companies were forced into bankruptcy, triggering a collapse of the banks who had loaned the railroads money
Worst economic crisis US had experienced to that point
18% unemployment

21. Treasury Crisis
Panic of 1893 caused investors to cash in their government bonds for gold, draining the US gold reserve
Congress responded by repealing the Sherman Silver Purchase Act to stop people from trading in silver for gold

22. Goldbugs vs. Silverites
Repeal of the Sherman Silver Purchase Act split the Democratic Party
Goldbugs believed that US currency should be backed exclusively with gold
Silverites believed that coining unlimited silver would ease the economic crisis

23. Election of 1896
Populists wanted to nominate a candidate who supported silver, but Democrats beat them to the punch
Faced with either supporting the Democratic candidate and giving up their 3rd party status or nominating their own candidate and splitting the pro-silver vote, the Populists chose to support the Democrats

24. William Jennings Bryan
Only 36 when Democrats & Populists nominated him for president
Powerful speaker who won nomination with his pro-silver “Cross of Gold” speech

25. The “Cross of Gold” Speech
“Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold.”

26. Bryan’s Campaign
Toured the country for weeks, giving hundreds of speeches
Strongly supported in the West and South, but not by city-dwellers (who didn’t care about the silver issue) or Catholic immigrants (who didn’t like his Protestant minister style speeches)

27. William McKinley’s “Front Porch” Campaign
Republican candidate
McKinley refused to travel and speak, opting instead to stay home in Ohio and let visitors come to him
Republican Party had local Republicans campaign for McKinley instead
Won support of urban workers and big business

28. William McKinley 1843 – 1901 25th President (1897-1901) Republican
Expansionist who oversaw the Spanish-American War
Assassinated in 1901

29. Gold in Alaska
Alaska had been purchased by US from Russia in 1867 for $7.2 million
Discovery of gold in 1898 boosted the nation’s gold reserves and ended the silver debate, leading to the decline of the Populist Party