unrest in rural america in the 1890s, a political movement called populism emerged to increase the...

Unrest in Rural America• In the 1890s, a political movement called

Populism emerged to increase the political power of farmers and to workfor legislation for farmers’ interests.

• The nation’s money supply concerned farmers.

• To help finance the Union in the Civil War, the government issued millions of dollars in greenbacks, or paper currency that could not be exchanged for gold or silver coins.

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• This rapid increase in the money supply without a rapid increase in goods for sale caused inflation–a decline in the value of money.

• The prices of goods greatly increased.

• To get inflation under control, the federal government stopped printing greenbacks and started paying off bonds.

• Congress also stopped making silver into coins.

Unrest in Rural America (cont.)


• As a result, the country did not have a large enough money supply to meet the needs of the growing economy.

• This led to deflation–or an increase in the value of money and a decrease in the general level of prices.

• Deflation forced most farmers to borrow money to plant their crops.

• The short supply of money caused an increase in interest rates that the farmers owed.



• Some farmers wanted more greenbacks printed to expand the money supply.

• Others wanted the government to mint silver coins.

• The Grange was a national farm organization founded for social and educational purposes.

• When the country experienced a recession, large numbers of farmers joined the Grange for help.

• The Grange changed its focus to respond to the plight of farmers.



• Grangers put their money together and created cooperatives–marketing organizations that worked to help its members.

• The cooperatives pooled members’ crops and held them off the market to force the prices to rise.

• Cooperatives could negotiate better shipping rates from railroads.



• The Grange was unable to improve the economic conditions of farmers.

• By the late 1870s, many farmers left the Grange and joined other organizations that offered to help them solve their problems.



How did the Grange try to help farmers?Some Grangers pressured state legislatures to regulate railroad and warehouse rates. Others joined the Independent National Party, or Greenback Party, to pressure the government into printing more greenbacks to increase the money supply. Grangers also formed cooperatives to help farmers market their crops for higher prices and negotiate better shipping rates.

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The Farmers’ Alliance


• The Farmers’ Alliance was formed in 1877.

• By 1890 it had between 1.5 and 3 million members with strength in the South and on the Great Plains.

• The Alliance organized large cooperatives called exchanges for the purpose of forcing farm prices up and making loans to farmers at low interest rates.

• These exchanges mostly failed.

• Many exchanges overextended themselves by loaning too much money at low interest rates that were not repaid.

• Wholesalers, manufacturers, railroads, and bankers discriminated against the exchanges.

• The exchanges were too small to dramatically affect world prices for farm products.

The Farmers’ Alliance (cont.)


• Members of the Kansas Alliance formed the People’s Party, or Populists, to push for political reforms that would help farmers solve their problems.

• Most Southern leaders of the Alliance opposed the People’s Party because they wanted the Democrats to retain control of the South.

• One Southern leader, Charles Macune, came up with a subtreasury plan to set up warehouses where farmers could store their crops to force prices up.



Why did the exchanges set up by the Farmers’ Alliance fail?

Many exchanges overextended themselves by loaning too much money at low interest rates that were not repaid. Wholesalers, manufacturers, railroads, and bankers discriminated against the exchanges. The exchanges were too small to dramatically affect world prices for farm products.



The Rise of Populism


• In 1890 the Farmers’ Alliance issued the Ocala Demands to help farmers choose candidates in the 1890 elections.

• The demands included the adoption of the subtreasury plan, the free coinage of silver, an end to protective tariffs and national banks, tighter regulation of the railroads, and direct election of senators by voters.

• Many pro-Alliance Democrats were elected to office in the South.

• By early 1892, Southern members of the Alliance began to realize that Democrats were not going to keep their promises to the Alliance and they were ready to leave the Democratic Party and join the People’s Party.

• In July 1892, the People’s Party held its first national convention where it nominated James B. Weaver to run for president.

The Rise of Populism (cont.)


• The People’s Party platform called for unlimited coinage of silver, federal ownership of railroads, and a graduated income tax, one that taxes higher earnings more heavily.

• It also called for an eight-hour workday, restriction of immigration, and denounced the use of strikebreakers.

• Democrats nominated New Yorker Grover Cleveland for the 1892 presidential election.

• Cleveland won the election.



• The Panic of 1893 was caused by the bankruptcy of the Philadelphia and Reading Railroads.

• It resulted in the stock market crash and the closing of many banks.

• By 1894 the country was in a deep depression.



• President Cleveland wanted to stop the flow of gold and make it the sole basis for the country’s currency, so he had Congress repeal of the Sherman Silver Purchase Act.

• This caused the Democratic Party to split into the goldbugs and the silverites.

• Goldbugs believed the American currency should be based only on gold.

• Silverites believed coining silver in unlimited amounts was the answer to the nation’s economic crisis.



What was the People’s Party platform in the election of 1892?

The People’s Party platform called for unlimited coinage of silver, federal ownership of railroads, and a graduated income tax, or one that taxes higher earnings more heavily. It also called for an eight-hour workday, restriction of immigration, and denounced the use of strikebreakers.



The Election of 1896


• The Democrats nominated William Jennings Bryan for the presidential election of 1896.

• He strongly supported the unlimited coinage of silver.

• Populists also supported Bryan for president.

• The Republicans nominated William McKinley of Ohio for president.

• He promised workers a “full dinner pail.”


• Most business leaders liked McKinley because they thought that unlimited silver coinage would ruin the country’s economy.

• McKinley won the election of 1896.

• New gold strikes in Alaska and Canada’s Yukon Territory and in other parts of the world increased the money supply without needing to use silver.

• As the silver issue died out, so did the Populist Party.

The Election of 1896 (cont.)


Why did William McKinley appeal to workers and business leaders?

McKinley promised workers a “full dinner pail.” Most business leaders liked him because they thought that unlimited silver coinage would ruin the country’s economy.

The Election of 1896 (cont.)

unrest in rural america in the 1890s, a political movement called populism emerged to increase the...

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