Early Success and the Reality of International Trade

Early Success Easy Credit TermsRailroads promoted land and credit

Several successful years for small and large commercial farmers – International business

Lots of rainfall and good crops worldwide

But gradually climate dried and land failed.

Supply rises, prices fall and farmers produce more, to make up in volume what they lost in price.

Big grain supply allowed railroads to hike prices on all farmers, cutting deeply into profits.

Borrowed “Cheap” money and heavily in debt.

Sought Government help through regulation

The Grange, Farmers Alliances and the beginning of Populism

During Reconstruction (1875), Congress pulled money – Greenbacks - out of circulation - back to gold standard.

So money increases in value again – bad for farmers.

They had borrowed with ‘cheap money’ not backed by gold but must pay back with more valuable money that is based on gold.

Once again farmers push for ‘cheap money’.

Railroad monopolies (no competition) allowed charging of any prices they demanded.

Secret deals with storage companies & middlemen on rates allowed agents to charge high prices to farmers.

Wheat prices fell in late 1870s when money increased in value AND when international competition increased.

Paying high prices for freight & receiving low prices for crops hurt profits and kept them in debt.

Patrons of Husbandry - Oliver Kelley - 1867

Grange – a farmers organization for education

- Fight railroads’ high pricing

- Teach farmers how to organize

- Set up farm co-operatives

- Elect officials to speak for their

interests

- Sponsor state legislation

Farmers Alliance – 4 Million Members

1892 – Populist Party – formed in Omaha, Nebraska out of farmers’ alliance movement

Sought political power for farmers – supported…- Graduated income tax - Cheap money to pay debt easier- Federal loan programs- Restrictions on immigration- Direct election of senators- 8 hour workday

Important contributions to Democrats in later years

Challenged ‘laissez-faire’ capitalism.

Rejected idea that the rights of business ownership were considered absolute (do what they want).

Supported Industrialism and Capitalism but believed it was developing in brutal and chaotic ways.

Growth should be more guided by needs of people and their communities.

Bimetallism – making currency based on silver and gold.

Free Silver - money exchanged for either metal makes more money available – and thus cheaper - because more silver than gold was available. (Debt repayment)

Big issue in Presidential Campaign of 1896

William Jennings Bryan makes ‘Cross of Gold’ Speech

McKinley beats Bryan and Populism fades until Roosevelt