Demands for Reform Chapter 19 Section 3

I. Monopolies Use Unfair Tactics In the late 1800s, large companies that operated in Texas joined together and formed trusts. In the late 1800s, large companies that operated in Texas joined together and formed trusts. These trusts: These trusts: –helped to prevent other companies from selling the same product or service; –reduced or eliminated competition and free trade; –Could hold a monopoly on a business, which allowed them to pay very low prices for materials they bought and charge very high prices for the goods they sold = huge profits.

II. Farmers Become Trapped in a Cycle of Debt Overall, companies formed trusts to ensure their business partners would have control over an industry. Overall, companies formed trusts to ensure their business partners would have control over an industry. As a result, Farmers worried about shrinking profits received from their crops. They found themselves in a cycle of debt they could not get out of. As a result, Farmers worried about shrinking profits received from their crops. They found themselves in a cycle of debt they could not get out of.

The Cycle of Debt: 1.Cotton prices fell during 1875 and remained low through To offset the drop in prices, farmers borrowed extra money to buy more land, equipment, seed, and other supplies to produce more crops = overproduction. 3.This overproduction dropped the price of cotton even more. 4.With lower crop prices and increased debts from land/equipment/seed purchases, many farmers could not get out of the cycle of debt. They must produce more and more crops to try to pay debts and make profits.

Casualty of Commercial Farming The rise of commercial farming in the lower Rio Grande Valley resulted in displacement of Mexican American landowners. The rise of commercial farming in the lower Rio Grande Valley resulted in displacement of Mexican American landowners.

IV. New Laws Prohibits Trusts TX legislature passed antitrust law stopping companies from joining together to fix prices or limit production TX legislature passed antitrust law stopping companies from joining together to fix prices or limit production. Main reason for antitrust laws - unfair business practices by railroads. Main reason for antitrust laws - unfair business practices by railroads. The law often has been used to prevent unfair practices. The law often has been used to prevent unfair practices.

IV. New Laws Prohibits Trusts In 1887, the U.S. Congress created the Interstate Commerce Commission (ICC). The ICC set rules for interstate railroads that connected two or more states. In 1887, the U.S. Congress created the Interstate Commerce Commission (ICC). The ICC set rules for interstate railroads that connected two or more states. As an authority to control intrastate railroads was also needed. Intrastate shipments went from one part of the state to another. As an authority to control intrastate railroads was also needed. Intrastate shipments went from one part of the state to another.

V. Governor Hogg Regulates the Railroads At the request of Governor James S. Hogg in 1891, the legislature created the Texas Railroad Commission, a state agency to regulate railroads operating in Texas. At the request of Governor James S. Hogg in 1891, the legislature created the Texas Railroad Commission, a state agency to regulate railroads operating in Texas. Soon, many railroads ceased unfair practices, such as fixing prices and charging more for short hauls than for long hauls. Soon, many railroads ceased unfair practices, such as fixing prices and charging more for short hauls than for long hauls.

V. Governor Hogg Regulates the Railroads Since then, the Railroad Commission has been expanded to regulate other industries, particularly the oil industry. Since then, the Railroad Commission has been expanded to regulate other industries, particularly the oil industry. Governor Hogg is remembered as one of Texas’s most important governors, in part, because of his establishment of the Texas Railroad Commission. Governor Hogg is remembered as one of Texas’s most important governors, in part, because of his establishment of the Texas Railroad Commission.

Advancements in Agricultural Industries Barbed Wire – fencing that prevented cattle and other animals from destroying crops Barbed Wire – fencing that prevented cattle and other animals from destroying crops Windmills – allowed cattle, sheep, goats, and crops to be watered on a farmer’s land, they did not have to be near a river or water source Windmills – allowed cattle, sheep, goats, and crops to be watered on a farmer’s land, they did not have to be near a river or water source Irrigation – is an artificial application of water to the soil; usually used to assist the growing of crops in dry areas and during period of inadequate rainfall Irrigation – is an artificial application of water to the soil; usually used to assist the growing of crops in dry areas and during period of inadequate rainfall

Economic Impact of the Agricultural Industry Products were moved, sold, and transported across the nation Products were moved, sold, and transported across the nation New cash crops were grown in Texas (ex: wheat, sorghum) New cash crops were grown in Texas (ex: wheat, sorghum) Cotton and corn grown across the state Cotton and corn grown across the state Crops affect inflation Crops affect inflation Income from agriculture exceeded income from cattle ranching by 1900s Income from agriculture exceeded income from cattle ranching by 1900s