1. Farmers and the Rise of Populism
Unit 6, Lesson 1

2. Essential Idea
Poor conditions for farmers led to the rise of the Populist Party and ultimately contributed to the beginning of the Progressive Era.

3. Changes in Agriculture
North, South, and West
Specialization
Commercialization
Role of technology
Loans
North, South, and West- all over the country, in all regions, farmers became increasingly a minority group as people continued to move into cities (urbanization)
What could be the political consequences of this? (farmers have less say, legislation will favor them less)
Specialization- farmers began to specialize in raise on specific cash crops.
In the North and West, for example, farmers grew almost exclusively corn or wheat, selling the crops to both national and international markets.
Commercialization- farmers began to buy food from grocery stores in towns rather than produce their own.
Farmers also used mail-order catalogs (Sears-Roebuck, for example) to purchase manufacturing goods (rather than build their own)
Role of technology- farmers became increasingly dependent on large and expensive machines, such as steam engines, seeders, and reaper-thresher combines
This became especially true when crop prices began to fall and technology was the only way to mass produce enough crops to still profit.
Large farms could work thousands of acres and were run like a factory.
As a result, the large farms, which made enough money to buy new and superior equipment, were able to grow even more. Smaller farmers were driven out of business (basically, farm monopolies formed in ways similar to business monopolies in the cities)
Loans- in order to buy expensive equipment or large tracts of farm land (mortgages), farmers often took out loans, often from banks in the East.
As time progressed, several factors made it increasingly difficult for farmers to pay back these debts.

4. Prices Fall Global competition and overproduction Deflation
Farmer debt
Global competition and overproduction- other countries (Argentina, Russia, and Canada) drove down prices on the international market for wheat.
Because of this price drop, farmers got less money for the same amount of production.
Farmers also produced too many crops with the aid of their technology, and since there were too many crops in the market, their value went down—prices lowered.
Deflation- at the same time, government policies led to a decrease in the money supply.
Silver had been devalued, essentially creating a gold standard. Money could only be printed if it was backed by gold.
The population increased much faster than gold was discovered, meaning that the same amount of money was spread thinner over a growing population.
This caused dollars to be worth more—deflation. (during inflation, prices go up because dollars lose value)
Farmer debt- since the value of money increased, it meant that whenever farmers made payments on their debt, they were actually losing more money than they had every borrowed.
(If I borrow 10 dollars from you, and deflation causes the value of a dollar to double, then when I repay you, I’m actually paying 20 dollars—I’ve lost money)
In general, farmer debt became a huge problem because farmers were getting less money for their crops (falling prices) and losing even more money due to deflation (because of the static money supply).

5. Costs Rise Manufacturing trusts Middlemen Railroads Taxes
Manufacturing trusts- as the industrial businesses of the East continued to consolidate and form monopolistic trusts, they were able to raise the prices of their goods due to the lack of competition.
Therefore, the cost of modern equipment for farmers rose.
Middlemen- these retailers would add to the cost for farmers. (when you shop at an outlet, you buy directly from the company rather than a retailer, and you save money by cutting out the middleman)
Railroads- railroads often charged high rates for transport of crops. They had virtually a monopoly over the railroads, which were the essential connection between the East and West.
Knowing that farmers had no other way to trade, railroads took advantage.
Taxes- government takes favored the East and put the West at a disadvantage.
Local and state governments charged property/land taxes (farmer had a lot more land than Easterners)
At the same time, wealthy easterners’ stock and bonds were not taxed
Tariffs protected Eastern businesses, which protected them from foreign competition and allowed them to keep their prices for manufactured goods high.
These tariffs also resulted in foreign tariffs on the farmers’ exports.

6. Analyze.

7. Farmers Organize Plight of the Farmers The Grange (1868) Cooperatives
“Granger laws”
Munn v. Illinois (1877)
*initially the farmers were at the mercy of the industrialists because the easterners had started to learn to join together (at the top they formed monopolies, at the bottom they formed unions)
Farmers were highly individualistic and independent, so “joining forces” for their common good was more difficult.
The Grange- organized by Oliver Kelley, this organization originally served a more social function, united the isolated farmers in fraternal activities (picnics, concerts, etc.)
By 1875, the Grange had 800,000 members, mostly from the Midwest and South.
Cooperatives- farmers began to form cooperatives, which are businesses owned and run by a group of people (in this case farmers) for their mutual benefit.
In the case of the Grange, the cooperative worked to cut out the middle man by running their own warehouses (where they stored the harvest). They also worked together to keep prices high on their crops—if the farmers were not competing, but instead cooperated, they could all agree on a higher prices and all profit—simliar to interlocking directorates?
“Granger laws”- Grangers also ventured into politics.
Their primary political goal was to get local governments to pass laws that would regulate railroad rates, especially in the Midwestern states.
Munn v. Illinois- the railroads challenged state regulation in this Supreme Court case.
The Supreme Court ruled that states could regulate businesses of a public nature, such as railroads.
What could be the limits of these laws? (state laws can’t apply to railroads if they go beyond the borders of the state)

8. Analyze.

9. Regulating the Railroads
Wabash v. Illinois (1886)
Interstate Commerce Act (1886)
Interstate Commerce Commission
Government regulation
Wabash v. Illinois- this ruling said that states could not regulate interstate commerce (job of the federal government), which basically nullified the Granger laws.
This ruling undid most of the efforts of the Grange, and the organization went into decline.
Interstate Commerce Act- outraged, farmers pushed Congress to pass the Interstate Commerce Act, which enabled the federal government to regulate interstate commerce, especially the railroads.
Interstate Commerce Commission- this was the first regulatory agency. It investigated unfair discriminatory railroad practices.
The ICC outlawed charging more for “short haul” shipments than “long haul,” required railroads to publically post their rates (so they couldn’t change different people different rates), and made railroad “pools” (basically railroad cooperatives that worked to keep rates high) illegal.
However, the railroads were able to exploit the ICC to their own benefit. (How? Confused here)
The Interstate Commerce Act and the ICC represent the first step of the federal government away from laissez-faire approaches to economics and a step toward regulation of businesses (which would grow even more during the Progressive Era)

10. Farmers’ Alliances Farmers’ Alliances Ocala Platform
Potential political future
Farmers’ Alliances- by the late 1800s crop prices had fallen to new lows.
Initially these alliances were localized (North, South, East, West, black and white) and focused on the needs of each particular region. (education on farming methods, economic issues, political issues)
By 1890 there were over one million farmers involved in farmers’ alliances.
Soon, however, these alliances grew in size and some began to merge, making the movement ripe for entering politics.
Ocala Platform- this meeting of the National Alliance met to address the problems of rural America.
The alliance attacked both major parties, seeing them as in the pockets of Wall Street and big businesses (modern day comparisons?)
The delegates created a seven tiered platform:
Direct election of U.S. senators (as opposed to the current system of state legislatures selecting senators—this move would “increase democracy”)
Lower tariff rates (help farmers trade on the international market)
Graduated income tax (take money from the rich in the East and distribute it to help the farmers?)
A new banking system regulated by the federal government (national bank, like the Fed? Thought Lincoln had already made a national bank?)
Increase money supply and cause inflation by using silver (raises crop prices)
Federal storage for farmers’ crops (why?)
Federal loans to farmers (cut out the middlemen and creditors, give fairer interest rates)
Potential political future- the alliances did not form a political party. However, local and state candidates did benefit if they supported the alliances.
Eventually the idea of the Grange and the alliances would become part of the Populist movement, which was a political movement and challenged the two party system.

11. The “Money Question” The “Money Question” Inflation
Methods of inflation
Opponents to inflation
The “Money Question”- one of the most hotly debated issues of the era was whether or not to expand the money supply.
This question reflected the tension between the “haves” and “have-nots” of the industrial age. (the rich did not want to increase money supply, the poor did)
Inflation- debtors, farmers, and small start-up businesses wanted to increase the money supply, which causes inflation.
Inflation would make it easier to pay off loans to creditors.
Many people had blamed the Panic of 1873 on the government’s refusal to increase the money supply with the growing population (the Crime of 73 had caused a decrease in money supply by essentially restricting the supply to gold-backed money)
Methods of inflation- these “soft-money” or “easy-money” advocates wanted to increase the money supply by either simply printing off money (greenbacks, just like during the Civil War) or by allowing for the unlimited minting of silver coins (bimetallism)
Opponents to inflation- the group of “hard” or “sound” money advocates was made up mostly of bankers, creditors, investors, and large businesses.
They favored keeping money backed by gold and not creating any inflation.
As the population grew and the money supply remained static, the value of dollars increased (increased demand).
This made the money they were paid back in loans worth more than it had been when they had loaned it out (helped them, hurt debtors).

12. The “Money Question” Specie Resumption Act (1875) Greenback Party
Demands for silver money
Bland-Allison Act (1878)
Tariff disputes
(picture of James Weaver, Greenback nominee and future Populist leader)
Specie Resumption Act (1875)- paper money (greenbacks) that was not backed by specie (gold or silver) had been issued during the Civil War.
This had helped northern farmers but had angered northern creditors and investors.
In 1875, Congress sided with the creditors, withdrawing the last greenbacks from circulation.
Greenback Party- supporters of paper money (and inflation) formed the Greenback Party.
In the 1878 congressional elections, the Greenback party managed to win 14 seats in Congress, including James B. Weaver (future leader of Populists).
Though the party died out by the end of the 1870s, the issue of increasing the money supply did not.
Demands for silver money- when more silver was discovered in the West, especially Nevada, calls for silver coinage became even louder.
Bland-Allison Act- this law worked as a compromise.
It did not allow for unlimited silver coinage, as farmers, debtors, and miners wanted, but it did allow for the coinage of between 2 and 4 million dollars worth of silver per month
It also set the value of silver at standardized ratio of 16:1 in relation to gold (gold worth 16 times as much)
Silverites continued to push for the coinage of UNLIMITED silver.
Tariff disputes- western farmers and eastern capitalists also disagreed on whether tariffs on foreign imports should be high or low.
Tariffs were initially raised to help the Union economy and help fund the Union’s efforts in the Civil War.
Post-Civil War, many southerners and westerners objected to the high tariffs because they allowed eastern businesses to keep prices on manufactured goods high (didn’t have to compete with foreign manufacturing).
They also objected to the high tariffs because it caused other countries to place high tariffs on their exports (hurt farmers especially in the international markets)
To the farmers, industrialists were getting rich at the expense of rural America.

13. The Rise of the Populists
Rise of Populism
Populist party emerges
Omaha Platform
Political planks
Economic planks
Election of 1892
Populist party emerges- the People’s Party, better known as the Populist party, grew out of the farmers alliances.
They opposed Wall Street and the “money trust”—the financial conspiracies of the eastern elite.
Omaha Platform- in 1892, delegates from different states met in Omaha to declare a national platform for the Populist party and nominate a president and vice-president.
The Omaha Platform consisted of both political and economic planks
Political planks:
Direct popular election of senators
Enacting of state laws by voters themselves through initiatives and referendums placed on ballots (bypassing legislature)
(initiative=voters can petition to force the legislature to consider a bill, referendum=voters getting to vote on a law that has been placed on the ballot, whether or not the legislature has voted on it)
Economic planks:
UNLIMITED coinage of silver to increase the money supply (inflation through bimetallism)
Graduated income tax (graduated=progressive tax, a tax whose rate rises with the person’s income)
Nationalization of the railroads (to control unfair rates)
Nationalization of telephone and telegraph system
Federal loans to farmers and warehouses for crops to help stabilize crop prices
Eight hour work day for industrial workers—NOTE THAT THE PEOPLE’S PARTY INCLUDED NOT JUST FARMERS BUT ALSO INDUSTRIAL WORKERS IN THE EAST, MAKING THIS A MORE GENERAL MOVEMENT OF THE LOWER CLASSES
Election of James Weaver ran and won more than one million votes and actually won 22 electoral votes.
However, Weaver’s call for racial equality in the South caused him to lose votes.
Between the two major parties, Grover Cleveland won for the second time, largely due to the unpopularity of the McKinley tariff and the Billion Dollar Congress.
The Populist showing in the election, however, signaled that they soon might threaten the two major parties in the next election.

14. Panic of 1893 Panic of 1893 Sherman Silver Purchase Act repealed
J.P. Morgan
**This whole slide needs further clarification
Panic of the stock market crashed as a result of overspeculation and dozens of railroad companies went into bankruptcy as a result of overbuilding.
The depression went on for four years. Farm foreclosures reached new highs and unemployment reached 20 percent.
People relied on soup kitchens and charity, and hoboes hopped railroads in search of jobs (this was a bad one, comparable to the Great Depression?)
Sherman Silver Purchase Act repealed- the Sherman Silver Purchase Act had increased the paper money supply. People were taking this paper money and exchanging it for gold, slowly draining away the nation’s gold supply (which was necessary for backing money, thus threatening the money supply?)
When the gold supply ran DANGEROUSLY low (under 100 million, while the safe supply levels were above 350 million), Cleveland had Congress repeal the Sherman Silver Purchase Act.
J.P. Morgan- repealing the Sherman Silver Purchase Act slowed but did not stop the bleeding of the gold reserves, and they fell to only 41 million dollars.
If the gold was all drained, the country would be forced off the gold standard.
This could cause the dollar to become unstable in value (like today?) and would have mortally crippled America’s international trade (need help explaining this)
In desperation, in 1895 Cleveland asked J.P. Morgan to make a loan of gold to the U.S. Government.
Morgan and his bankers agreed to loan the government 65 million dollars in gold (with a hefty 7 million dollar fee for the service, go figure).
This loan helped limit the gold leak from the U.S. treasury and helped stabilize the nation’s finances.
Basically, J.P. Morgan bailed out the government, ha!

15. Responses to Panic of 1893 Coxey’s Army Coin’s Financial School
Democrats suffer
Coxey’s Army- as the economic depression worsened, there were worries of “class warfare” occurring between the rich and the poorer labor classes.
In 1894, Populist Jacob Coxey led thousands of unemployed to Washington to demand that the federal government spend 500 million dollars on public works projects to create jobs.
Coxey and others were arrested for trespassing and the movement broke apart, but it still riled fears of the poor rising up against the rich.
***Remember, the Pullman Strike and other labor disputes were flaring up across the nation around the same time.
***These events fueled the idea that the government was in cahoots with big business, since the government sided against labor virtually every time.
Coin’s Financial School- also in 1894, William H. Harvey presented lessons in economics and taught readers that the depression was caused by a conspiracy of rich bankers in his illustrated book.
The book also argued for the unlimited free coinage of silver.
Democrats suffer- Democrats especially began to suffer losses as their constituents increasingly turned to the Populist party.
Republicans dominated the 1894 congressional elections because of votes the Populist siphoned away from the Democrats.
Also, Populist were continuing to gain more seats in Congress themselves, setting up for an interesting 1896 presidential election—could the Populists take the White House and disrupt the two-party system?

16. Election of 1896 William Jennings Bryan Cross of Gold speech
Populists join Democrats
Future implications
William Jennings Bryan- at the Democratic nominating convention, pro-silver Democrats dominated.
Bryan, a brilliant and youthful speaker, embraced much of the Populist platform, especially silver coinage.
Cross of Gold speech- Bryan’s speech literally made him the nominee overnight. In his speech, he called for bimetallism, declaring that “you shall not crucify mankind upon a cross of gold.” (Christian allusion)
Populists join Democrats- since the Democrats had taken the major issue of the Populists, unlimited coinage of silver, the Populist had little choice but to join with the Democrats (which also gave them more national prominence)
Future implications- though a third party may not stand much chance in general elections, if it gets big enough, one of the major parties will adopt parts of its platform.

18. Election of 1896 William McKinley “Gold bug” Democrats
Republican platform
William McKinley- William McKinley was nominated by the Republicans. Though he had sponsored the highly unpopular McKinley Tariff, he was also seen as a friend of labor.
Also, the Panic of 1893 had occurred under the Democrats, so the Republicans could basically blame them for the economic crisis (justly or unjustly is another question) and gather support for themselves.
“Gold bug” Democrats- the silver issue caused many Democrats to leave the Democratic party and join the Republicans (the Republicans gained the gold bugs, the Democrats gained the populists)
Republican platform- the Republicans ran on higher tariffs to protect industry (and help transform American into a prosperous INDUSTRIAL nation) and on upholding the (still unofficial) gold standard against unlimited silver coinage (despite McKinley’s previous silver-friendly voting record)

19. Election of 1896 The campaigns Results Election of 1896 McKinley Bryan
McKinley- McKinley’s campaign was largely managed by Marcus Hanna (a Hamiltonian, part of his support of a more industrial America).
Hanna gathered money from industrialists and was able to campaign heavily through mass media (also a big business), which was an increasingly effective medium.
McKinley largely stayed at home and ran a “front porch” campaign. This safe approach kept him from making any mistakes. McKinley was also very charismatic.
Bryan- Bryan, on the other hand, aggressively campaign, traveling 18,000 miles and making 600 speeches. His enthusiasm and oratory skill helped him gather more support, though mostly in the smaller western and southern states.
Results- Bryan failed for a few reasons:
Wheat prices rose, making farmers less desperate
Many industrialists made their contracts contingent on McKinley winning. Some factory owners even threatened to shut down if Bryan won—fear was used to take votes from Bryan
Bryan won many states, but mostly smaller states in terms of population (and thus smaller in terms of electoral vote)
McKinley became president. Though winning just 51% of the popular vote, he won the electoral vote in a landslide.

20. Analyze.

22. McKinley’s Presidency
Gold in Alaska (1897)
Gold Standard (1900)
Spanish-American War
McKinley benefited from being elected just as the economy began to recover.
Gold in Alaska- Gold found in Alaska (Seward’s “folly”) helped increase the money supply, just as the proponents of bimetallism had wanted.
This caused farm prices to rise, helping farmers.
Factory production increased and the stock market recovered, and the Republicans took credit (though not very justified in doing so)
Gold Standard- Gold became the official backing of money and the silver coinage issue was largely forgotten.
Spanish American War- McKinley also led America (though reluctantly) into war in 1898, which ended in the establishment of the United States as a world power (more on this in a future unit)

23. Significance of Election of 1896
Impact on politics
Urban dominance
Birth of “modern politics”
“Death” of the Populists
“Birth” of Progressivism
Impact on politics- the Election of 1896 ended the stalemate of Gilded Age politics.
Republicans would go on to dominate seven out of the next nine elections and hold both houses of Congress 17 of the next 20 times.
The Republicans became the party of business, industry, and a strong national government, while the Democrats were relegated to the backburner.
Urban dominance- the election was a clear victory for big business, urban centers, and conservative economics. The Jeffersonian ideal of America had lost to the Hamiltonian ideal—industrialization and urbanization triumphed over agrarianism.
Birth of “modern politics”- McKinley had an expensive, well organized political campaign to become president.
Earning favorable publicity in the mass media became a key to winning elections.
Also, international politics grew in importance as the country moved from isolationism and neutrality (Washington’s foreign policy) to being heavily involved and influential in international affairs.
Death of the Populists- the Populist party went into decline and ceased to exist as a national party.
Birth of Progressivism- however, the trend of reform-minded politics would continue.
Ideas such as the income tax, direct election of senators, and better working conditions would be adopted by both major parties.
The next era was filled with social reform movements and was known as the Progressive Era.

24. I want student of the day……..