I. Farmers and the Populist Movement

A. Farmers Unite to address common problems of the late 1800s.

a. Farmers go into debt because of… 1. deflation after Civil War2. high shipping costs3. Due to economic recession railroads & banks

demanded payment of loans – many farms were foreclosed

4. Government raises tariffs (to help American manufacturing) – bad for farmersa. Prices on farm machinery up b. Railroads charged even morec. Farmers felt the government did not care about

them

What farmers wanted

B. Value of money was connected to the money supply.a. If the government produces more = value goes

down = Inflation = prices rise

b. Good for people who borrow $, what they pay back is worth less than what they borrowed

c. Good for farmers because it raises prices of their goods

a. If the government produces less = value goes up = Deflation = prices drop

b. People who lend money are helped because the money they receive in payment is worth more than the money they lent out

c. In post civil-war, nation’s money supply shrank as government took out circulation of money issued during the war = deflation resulted.

d. In order to prevent inflation the government put the nation’s currency on a gold standard (It was on a bimetallic standard). 1. Conservatives “Gold Bugs” were pleased because

many were big lenders

What Farmers Wantedd. “Silverites” (those who supported

bimetalism) were upset.

e. Farmers feared that a gold standard system would depress farm prices.

f. Wanted “free silver” = unlimited coining of Silver to stimulate crop prices

g. Deflation bad for farmers because crop prices would continue to drop.

h. Inflation good for farmers because crop prices would rise (people spend more $, when they have more $)

Farmer Alliances Formed

b. Farmers form organizations (Alliances) to address their common problems

a. Difficult due to distances1. Oliver Kelley – The “Grange”

2. Called on government to regulate businesses that farmers relied on.a. Railroads, grain elevator operators who stored grain

b. Farmer’s Alliances formed for a political voice

3. Government (President Cleveland) responds by passing the Interstate Commerce Act a. Regulated railroad prices between states. Must

consider distance traveled in prices

b. No more special rates for customers

c. Set up ICC (Interstate Commerce Commission) to enforce laws.

C. The Rise and Fall of Populisma. The Populist Party provides a political power base for the farmer’s alliances.b. The Populist Party supported the financial and governmental reforms proposed by farmers

1. increase circulation of money2. unlimited minting of silver3. progressive income tax4. Socialize/Nationalize communication

and transportation systems.

c. Farmers continued to suffer increasingly as a general business collapse deepens into an economic depression in the late 1800s.

d. The metal backing paper currency becomes a major issue in the 1896 presidential campaign.

1. Republicans support William McKinley, who favors the gold standard.

e. The Populist Party and Democrats both back William Jennings Bryan, who favors a bimetal system.

1. The “Cross of Gold” Speechf. Bryan is defeated and the Populist Party

collapses. (page 281 electoral map – close election)

President William McKinley

1. McKinley raises tariffs

2. Supported Gold Standard

3. However, crop prices surprisingly slowly rose, silver movement died, as did Populism.

4. Populism did inspire other historic reforms.