2Populism and Free Silver in the 1890s aka: The Wizard of Oz meets Monetary PolicyGet your clicker! Ch 48!
3Goals: SWBAT…Identify and explain basic micro and macro economic ideasApply these ideas to explain and analyze the Populist and Free Silver movements of the 1890sExamine The Wizard of Oz as a Monetary Allegory
4Our Agenda Today Economics Basics Late 1800s Monetary Policy Populism and the Wizard of Oz
5I understand the economics behind Populism and Free Silver. 1- Strongly disagree2- Disagree3- Agree4- Strongly agree
6Intro to Econ: Key Terms Demand, Supply, and PriceFiscal PolicyMonetary PolicyMoney SupplyBusiness CycleTariffRecessionInflation and Deflation
8Intro to Econ What causes prices to go up? Demand Change vs. Supply ChangeInflation vs. Deflation
9Economics of the 1890s If Demand goes down…. If Supply goes up…. DEFLATION! Prices go down!What was happening to crop prices in the late 1800s? Why?What was happening to farm costs (i.e., mortgages, manuf. goods) in the late 1800s? Why?
10I have a better understanding of how supply and demand impact prices. 1- Strongly disagree2- Disagree3- Agree4- Strongly agree
11Economics of the 1890s Very high tariffs (taxes on imports) Agric. prices down (1860s to 1890s)Depression of 1893Why did farmers want inflation?
13Economics of 1890s Is inflation bad? Yes for creditors (i.e., bankers) No for debtors (i.e., farmers)Some inflation is healthy, necessaryWhy did farmers want inflation?
14The government should have helped farmers more. 1- Strongly disagree2- Disagree3- Agree4- Strongly agree
15Government and Economy A Short Digression…Capitalism?Communism?Socialism?
16Government and Economy A Short Digression…Capitalism?Adam SmithThe Wealth of Nations (1776)Laissez Faire, Free Market should replace MercantilismAllow for competition to “naturally” regulate economy
17Government and Economy A Short Digression…Communism?Karl Marx and Friedrich EngelsThe Communist Manifesto (1848)Capitalism will collapse, Proletariat will rise up and overthrow BourgeoisieStateless, Classless Total equalityNot quite Lenin or Mao
18Government and Economy A Short Digression…Socialism?Great variationParts of W. Europe and N. America todayGovernment control or regulation of some parts of economySchools, healthcare, “natural” monopolies; More worker and consumer protection
19Government and Economy How can the government influence the economy?Fiscal Policy: taxes and/or spendingMonetary Policy: money supply and/or interest ratesToday the Federal Reserve Bank (The FED) is in charge of Monetary Policy
20Government and Economy Traditional Economics?Mercantilism Free Market CapitalismWealth of Nations by Adam Smith (1776)The Government should stay out of the economyRecessions are good!Reality?
21Government and Economy Monetary Policy to stimulate the economy…Increase the money supply and/or lower interest ratesRisks?Could lead to inflation, but unlikelyif in a recessionWARNING: The economy is a moving target!
22Government and Economy Recessions During the 1800s:Panic of 1819Panic of 1837Panic of 1857Panic of 1873Depression of 1893(FYI – Great Depression begins in 1929)
23Government and Economy High Tariffs During the 1800s:Tariff of 1816 – 15 to 20 percentTariff of 1824 – Whig Party and Henry ClayTariff of 1828 – 50 percentTariff of 1832 – down slightlyTariff of 1857 – Democrats lower tariffMorrill Tariff of 1861 – 47 percent“mongrel” Tariff Act of 1883McKinley Tariff Act of 1890Dingley Tariff of 1897 – over 50 percent!(FYI – Hawley-Smoot Tariff of 1930)
24Government and Economy Monetary Policy During the 1800s:It was a mess!First Bank of the US ( )Second Bank of the US ( )Banks, States, and Federal govt printed moneyFederal govt wanted no debt
25Government and Economy Monetary Policy During the 1800s:Mint Act of 1792unlimited Silver & Gold at 15:1“Crime of 1873” – govt. stopped minting silverUSA essentially on gold standard in 1879Sherman Silver Purchase Act (1890) not enough, and soon repealed
26Government and Economy Monetary Policy During the 1800s:Market value vs. Official valueBy 1894 Market value was over 30: (i.e., 30 silver = 1 gold)Populists wanted govt to resume minting silver at 16:1FREE SILVER!!
27Government and Economy Monetary Policy During the 1800s:What if Govt minted silver at 16:1 in 1890s?Money Supply?Increase! But gold deposits would go downInflation?Not likely since recession
28Government and Economy Monetary Policy During the 1800s:Gresham’s Law named for Sir Thomas Gresham ( )“When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear”aka: “Bad money drives out good money”
29Government and Economy Monetary Policy During the 1800s:According to Gresham’s Law, if Populists get their way, Gold is….Good Money that will be undervalued and driven out of circulation, perhaps out of the countryBankers think silver is “bad”
30I have a better understanding of U. S I have a better understanding of U.S. government monetary policy of the 1800s.1- Strongly disagree2- Disagree3- Agree4- Strongly agree
31The Rise of Populism 1894 Unemployment over 18 percent Tariff very highFarmers caught in a debt cyclecrop prices down 55 percent!Farmers Revolted and Organized!Granger movement (1860s to 1880s)Farmers Alliance (1880s)People’s Party formed in 1890s
32The Election of 1896 Republicans endorsed William McKinley High tariffs and gold standardConservative “sound money” positionDemocrats and Populistsendorsed William Jennings BryanBimetallic standard (silver & gold) at 16:1WJB gave “Cross of Gold” speech
33The Election of 1896 Republicans/McKinley won! Democrats became party of “progressive” reformPopulist party fades away; many positions adopted by Democrats
34The Election of 1896 Free Silver issue disappears: WHY? Gold Discoveries in 1880s and 1890sBy 1897 Economy was improving1900 Gold Standard ActNew focus in Imperialism
35The Wizard of Oz Book written by Frank Baum in 1900 Movie in 1939 What’s the story?
36The Wizard of Oz Story begins in the West (Kansas) as did Populists Dorothy?Heroine from poor farmRepresents honest, plucky AmericaMary Elizabeth Lease?
37The Wizard of Oz Cyclone/Tornado = Free Silver Movement The Land of Oz?The Gold StandardOz = Gold (ounce)
38The Wizard of Oz Wicked Witch of the East (WWE) House lands on and kills= Eastern business interests, Grover ClevelandSilver shoes put on Dorothy
39The Wizard of Oz Yellow Brick Road? = Gold Emerald City? Washington DC
40The Wizard of Oz Scarecrow needs? Appear brainless, but smart = western farmers
41The Wizard of Oz Tin Woodman needs? Once flesh and blood; needs bigger, kinder heart= industrial workers
42The Wizard of Oz Cowardly Lion needs? = WJB Stopped fighting for silverFell asleep in….?Poppy Fields = Imperialism
43The Wizard of Oz Travel to Emerald City? = Coxey’s march to DC for job in 1894Emerald Palace?= White HouseSeven passages & three flights of stairs?= Crime of ‘73
44The Wizard of Oz Dorothy and Friends must? Kill Wicked Witch of the WestWWW = McKinleyFate of WWW?Melts with waterFarmers in West need rain to counter droughtRain = inflation
45The Wizard of Oz The Wizard? = Marcus Alonzo Hanna, an advisor to McKinley & head of RNC
46The Wizard of Oz Wizard turns out to be ordinary Gang seeks help from Good Witch of the South= supporters in Southproblems are fixedDorothy uses silver shoes to return to Kansas
47How did we do? SWBAT…Identify and explain basic micro and macro economic ideasApply these ideas to explain and analyze the Populist and Free Silver movements of the 1890sExamine The Wizard of Oz as a Monetary Allegory
48I think the Wizard of Oz accurately reflects the people and issues of the 1890s. 1- Strongly disagree2- Disagree3- Agree4- Strongly agree
49I understand the economics behind Populism and Free Silver. 1- Strongly disagree2- Disagree3- Agree4- Strongly agree