1. Economics, Race, and the Populist Party (1867-1896)

2. Historical Background: Economic Turmoil of the 1870s
The Panic of 1873
Northern and Southern investors borrowed more and more money, betting the post-Civil War economy would continue to grow
But when the nation’s largest bank went bankrupt (could not pay debts for railroad construction), it triggered a financial panic
Smaller banks closed
89 railroads went bankrupt
18,000 companies closed
5-year depression
3 million unemployed workers
Currency Dispute
Roots in the Civil War/Fueled by the Panic of 1873
During the Civil War the government printed “greenbacks” not backed by gold
After the War, northern bankers wanted to pull greenbacks out of circulation and return to the gold standard (less money in circulation)
Southern and Western farmers wanted more greenbacks in circulation (“easy money”) to help them pay off their debts

3. Farmers Unite to Address Common Problems
Why were farmers angry?
Economic Distress
Problems with the Railroads
Crop prices fell = lower profits and little cash
Farmers had to borrow money for seed and supplies = higher interest rates and more debt
Paper money was being replaced (again) with gold and silver and money was worth less = harder to pay back loans
Lenders (banks) foreclosed on their mortgages
Little competition among railroads = higher rates to transport crops to market
Railroads charged different rates for different crops
There was no standard rate (regulation)

4. Farmers Unite to Address Common Problems
In order to affect change, farmers needed to organize
The Grange
Formed by Oliver Hudson Kelley in 1867
Organization of farmers
Formed in order to fight for government regulation of big business (specifically railroads)
Sponsored some state regulation of railroads
The Farmers’ Alliances
Inspired by the Grange and included people who sympathized with farmers
Sent lecturers to towns to educate people about lower interest rates and regulation of railroads and banks
250,000 African Americans belonged to the Colored Farmers’ National Alliance (most organizations were segregated)

5. Grangers Begin to Make Progress
Munn v. Illinois (1876)
Supreme Court ruled that states can regulate railroads and certain other businesses within their own borders
Wabash v. Illinois (1886)
Supreme Court rules states could not regulate rail lines between different states (interstate)
Leads to development of the Interstate Commerce Commission (federal regulation)

6. Is the Omaha Platform Relevant?
7. There should be a graduate income tax.
2. Wealth belongs to him who creates it.
10. The government should limit immigration into the United States.
15. The President of the United States should be able to serve one four-year term only.
8. The government should own and operate the telephone and telegraph…
5. The government alone, not the bankers, should control the money supply.

7. What in the world is Populism?
Political Parties of the 1890s
Democratic Party
Populist Party
Republican Party
Political movement of farmers and laborers in the late 19th century (People’s Party)
Goals: 1. Regulate the railroads 2. Make more cash available (back the dollar with silver, not gold) 3. Direct election of senators and 1 year terms for presidents 4. Graduated income tax 5. Restrictions on immigration and 8-hour workday
“Fusion Coalition”

8. 1892 Presidential Election: Populist candidate won over a million votes!

9. The Panic of 1893 Causes Results Railroads expanded faster than market
Railroads went bankrupt
Stock market collapsed
Banks stopped loaning $
Farmers borrowed too much $
Businesses sold too much on credit
15,000 businesses collapsed
156 railroad companies went bankrupt
600 banks closed
Government funds and monetary reserves dropped
Gold value dropped severely

10. Political Parties of the 1890s
The Election of 1896
Political Parties of the 1890s
Democratic Party
Populist Party
Republican Party
Southerners
Wealthy farmers
Supported low tariffs (wanted other countries to buy their crops)
Political movement of farmers and laborers in the late 19th century
Goals: 1. Regulate the railroads 2. Make more cash available (back the dollar with silver, not gold) 3. Direct election of senators and 1 year terms for presidents 4. Graduated income tax 5. Restrictions on immigration and 8-hour workday
Northerners
Wealthy businessmen (connected to the railroad)
Southern African Americans (poor farmers)  party of Lincoln
Supported high tariffs (didn’t want to compete with other countries’ products)
“Fusion Coalition”

11. The Election of 1896
Populists decide to improve their chances by supporting the Democratic candidate, William Jennings Bryan, who agreed to support the silver-backed dollar.

12. Gold Bugs v. Silverites Gold Bugs and Silverites Gold Bugs
Silverites (Bimetallists)
Who They Were
Bankers and businessmen
(Northerners/Republicans)
Farmers and laborers
(Southerners & Westerners/Democrats & Populists)
What They Wanted
Gold standard
Less money in circulation
Bimetallism (both gold AND silver)
More money in circulation
Why
Loans would be repaid in stable money.
Products would be sold at higher prices.
Effects
DEFLATION
Prices fall
Value of money increases
Fewer people have money
INFLATION
Prices rise
Value of money decreases
More people have money
William McKinley (Republican)
William Jennings Bryan
(Democrat/Populist)

13. Bryan loses but carries most of the South and West
The Election of 1896
Effects: 1. Period of Prosperity 2. Populists ideas were absorbed into the Progressive Party
Bryan loses but carries most of the South and West

14. Populist Party Politics
Populists didn’t always align with Democrats; sometimes they aligned with Republicans, especially in the South where Republicans were poor black farmers and Democrats were rich land owners. When Populists united with Republicans, their platform was sometimes called the “Fusion” ticket.