1. Demands for Reform Chapter 19 Section 3

2. 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.

3. II. Farmers Become Trapped in a Cycle of Debt Farmers worried about shrinking profits received from their crops. Farmers worried about shrinking profits received from their crops. Farmers found themselves in a cycle of debt they could not get out of. Farmers found themselves in a cycle of debt they could not get out of. How did the cycle of debt run? How did the cycle of debt run?

4. The Cycle of Debt: 1.Cotton prices fell during 1875 and remained low through 1900. 2.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.

5. 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.

6. III. Texans Call for Reforms – The Grange Formal name of the Grange = Patrons of Husbandry. Formal name of the Grange = Patrons of Husbandry. The Grange: The Grange: –social/political organization that called for economic changes; –set up stores throughout Texas where members could buy supplies more cheaply; –pressured state legislature to deal with unfair shipping rates charged by railroads. The Grange eventually replaced with more aggressive political organization = Farmers’ Alliance The Grange eventually replaced with more aggressive political organization = Farmers’ Alliance

7. III. Texans Call for Reforms By 1886, Farmers Alliance had 100,000 members. By 1886, Farmers Alliance had 100,000 members. Alliance members formed the Populist Party also called the People’s Party. Most party members were poor farmers and sometimes African Americans. Alliance members formed the Populist Party also called the People’s Party. Most party members were poor farmers and sometimes African Americans.

8. III. Texans Call for Reforms The Populist Party began to fade away in Texas before the turn of the century. The Populist Party began to fade away in Texas before the turn of the century.

9. IV. New Laws Prohibits Trusts 1889 - TX legislature passed antitrust law stopping companies from joining together to fix prices or limit production. 1889 - 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.

10. 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.

11. 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.

12. V. About Governor James S. Hogg He was the first native-born Texan to become Governor; He was the first native-born Texan to become Governor; He helped write one of the first antitrust laws in Texas (and the U.S.) to protect the public from monopolies; He helped write one of the first antitrust laws in Texas (and the U.S.) to protect the public from monopolies; He supported bills to increase education funding; He supported bills to increase education funding; He would not back down from a fight against big business; and He would not back down from a fight against big business; and Spoke effectively to Texans of their hopes and dreams = “one of our own”. Spoke effectively to Texans of their hopes and dreams = “one of our own”.