2Setting the SceneAmerican farmers struggled against two forces: nature and the economy.Post-Civil War: farmers in debt.Borrowing heavily to purchase expensive new equipment in order to increase productivity.Tenant farming increased; crisis loomed.
4The Farmers’ Complaints National panics: & 1893Railroads failed.Banks failed.Businesses went under.Unemployment soared.Loans called in by banks.Crop prices plummeted.
5Tariffs In the 1800s, the country was divided on the issue of tariffs. 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.
6Tariffs Hurt FarmersTariffs 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!
7The Money SupplyFor 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.
8The 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.
10The 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.
11Monetary PolicyAfter 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.
12U.S. Mint, New Orleans, Louisiana Gold Bugs1873 – worst economic panic in U.S. history to that pointUntil that point, U.S. currency was on a bimetallic standard, consisting of both gold and silver coins as well as U.S. treasury notes that could be traded for gold or silver.U.S. Mint, New Orleans, Louisiana
13After the panic, U.S. currency was put on the gold standard. Result: money in circulation decreased; deflation ensued.“Gold Bugs,” many of them big lenders, won a major victory.Farmers lost…again.
14Silverites & Greenback Party Mostly made up of western farmers and the silver-mining industry.Called for free silver – the unlimited coining of silver dollars to increase the money supply.The Greenback Party, founded in 1875 to promote continued issuing of paper money, joined the Silverite cause.
15The Bland-Allison Act (1878) Required the federal government to purchase and coin more silver, increasing the money supply and causing inflation.Passed by Congress, but vetoed by Hayes, who opposed the inflation it would create.Congress overrode the veto, but the act had limited effect.
16The Treasury Department: refused to buy more than the minimum amount of silver required under the act.Refused to circulate the silver dollars that the law required it to mint.
17Sherman Silver Purchase Act Passed by Congress in 1890Increased the amount of sliver the government was required to purchase every month1893: another panic ensues; the government nearly went bankrupt when foreign investors withdrew their gold from the U.S.The Sherman Silver Purchase Act is blamed…then repealed.
18Farmers OrganizeImproved communication allowed farmers to organize powerful protest groups.The Grange (1866), a.k.a. the Patrons of Husbandry; Oliver H. Kelley, founderDeveloped cooperatives through which farmers bought goods in large quantities at lower prices.Pushed for farmer-friendly legislation
19The Farmers’ Alliances (1880s) -Launched harsh attacks against monopolies, such as those that controlled railroads-Called for moremoney in circulation-Encouraged thecreation of statedepartments ofagriculture-Pushed anti-trust laws-Instituted farm credit
21Kansas lawyer and member of Farmers’ Alliance, Mary Elizabeth Lease
22The 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
23Interstate Commerce Act (1887) Interstate Commerce Act passed to regulate interstate RR freight chargesMade it illegal to give special rates to some customers
24The Sherman Anti-Trust Act 1890: Passed by Congress to curb the power of trusts and monopoliesEnforcement was lax until 1900s
25The PopulistsThe Farmers’ Alliances founded the People’s Party; its supporters became known as Populists.
26The Populist Platform Increased circulation of money Unlimited minting of silverProgressive income taxPercentage of taxes owed increases with a rise in incomePlaces greater financial burden on wealthy industrialists and lesser one on farmersGovernment ownership of communications and transportation systems.
27Other Populist Issues 8-hour work day Opposition to the Pinkertons, the private police force that had been involved in the bloody Homestead Strike in 1892United front of African-American and white farmers
28Though Populism generated excitement in the 1892 campaign, James B Though Populism generated excitement in the 1892 campaign, James B. Weaver earned barely one million votes.Cleveland returned to the presidency.
29Election 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
30Bryan’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!”
31McKinley WinsDespite his best efforts, Bryan failed to win the support of the industrial and urban midwestern and northern states.Factory workers feared that free silver might cause inflation, which would eat away at the buying power of their wages.
32McKinley Administration 1897 – McKinley raised tariffs to new heights.1900 – increased worldwide gold supply(discoveries in S. Africa, Yukon, Alaska)Congress returned U.S. to gold standardTo surprise of farmers, crop prices began a slow rise.
33Populism’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.