Farmers and the Populist Movement Farmers unite to address their economic problems, giving rise to the Populist movement.

Farmers trapped in a vicious economic cycle. Prices of crops kept dropping. Farmers mortgaged their farms to buy more land and produce more crops. Good Farming land was becoming scarce. Banks were foreclosing on the mortgages of increasing numbers of farmers. Railroads were taking advantage charging high prices for shipping and storage.

Economic Distress Greenbacks- paper money issued by the United States during the civil war. They could not be exchanged for silver or gold money. They were worth less than hard money of the same face value. The U.S had issued $500 million in greenback money.

Hard Money Included both coins and paper money printed in “Yellow” ink. Could be exchanged for gold. The U.S. after the civil war took greenbacks out of circulation.

Problems with retiring greenbacks. It increased the value of the money that stayed in circulation. Farmers who had borrowed money had to pay back their loans in dollars that were worth more than the dollars they had borrowed. At the same time farmers were losing money for their crops.

Bland-Allison Act of 1878 Required the government to buy and coin at least $2 million to $4 million of silver each month. It was not enough to support the increase in the money supply the farmers wanted.

Railroads Due to lack of competition they would charge more to transport grain. They were also making deals with grain brokers that allowed them to control grain storage prices and influence the market price. Many farmers had to mortgage their farms for credit to buy seed and supplies.

Oliver Hudson Kelley Created the Patrons of Husbandry which became better known as the GRANGE. It was originally created as a social outlet and an educational forum for isolated farm families. 1870’s they started to fight the railroads. Taught its members how to organize, set up cooperatives and sponsor state legislation to regulate railroads.

Farmers’ Alliances Created from the Grange. Sent lecturers to educate people about: Lower interest rates on loans Government control over railroads and banks. Mary Elizabeth Lease was one of their speakers. Membership grew to 4 million The Southern Alliance was the largest.

Colored Farmers’ National Alliance 250,000 African Americans belonged to this membership. Some alliance members promoted cooperation between black and white alliances. Most members accepted the separation of the organizations.

Populism The movement of the people. July 2, 1892 first Populist party convention was held in Omaha, Nebraska. They demanded reforms: To lift the burden of debt from farmers Give the people a greater voice in government.

Populist Economic Reform An increase in money supply Would produce a rise in prices received for goods and services. A graduated income tax A federal loan program.

Populist Governmental Reforms The election of U.S. senators by popular vote. Single terms for President and Vice President. A secret ballot to end vote fraud.

Populist Workday Reform Called for an eight hour workday Wanted restrictions on immigration. The Populists’ programs eventually became the platform of the Democratic Party. Kept alive the concept that the government is responsible for reforming social injustices.

The Panic of 1893 Feb 1893 The Philadelphia and Reading Railroad went bankrupt. Later so did the Erie, Northern Pacific, Union Pacific and the Santa Fe. The gold supply was low due to obligation to purchase silver. People panicked and traded paper money for gold.

The Panic Continues The panic spread to Wall Street where the prices of stocks fell rapidly. The price of silver plunged which caused silver mines to close. By the end of the year 15,000 businesses and 500 banks had collapsed. (Sound Familiar????)

Wall Street Ripple Effect Investments continued to decline. Consumer purchases and wages fell. Prices of goods also fell. The panic deepened into a depression. 3 million people lost their jobs. December 1894 one fifth of the work force was unemployed. Many farm families suffered both hunger and unemployment.

America splits into two parties Democrats were the farmers and laborers of the South and West. Republicans were the business owners and bankers of the industrialized Northeast.

Silver or Gold Was the central issue over which would be the basis of the nation’s monetary system. Bimetallism- a monetary system in which the government would give citizens either gold or silver in exchange for paper currency or checks. People who supported this were known as “silverites”.

Gold Bugs Gold Standard- was favored by President Cleveland who wanted backing dollars solely with gold. They were known as “gold bugs”.

1896 Presidential Election Republican Party nominated William McKinley. Their commitment was to the gold standard.

William Jennings Bryan The Democrats nominated William Jennings Bryan. They favored a combined gold and silver standard, including unlimited coinage for silver.

The Populist Party Liked Bryan and the Democratic platform but hated the Vice President nominee Arthur Sewall who was a Maine Banker.

The Compromise The Populist party compromised by endorsing Bryan and nominating their own candidate for V.P. Thomas Watson of Georgia.

The End of Populism With the election of William McKinley as President, Populism collapsed, burying the hopes of the farmers.

The Populist Movement left two powerful legacies. A message to the elite that the downtrodden could organize. That the downtrodden could have a political impact. Their agenda reforms would be enacted in the twentieth century.