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American History II


The Rise of Populism

            Worsening conditions in rural America in the 1870s caused large numbers of people to abandon their farms. At the same time, changes in agricultural practices and the agricultural marketplace forced independent farmers to become more like businessmen. But small farmers like small town merchants, had none of the power that made urban businessmen prosperous. In reaction to these trends, farmers began to take political action and in the 1890s organized the Populist movement, out of which a third political party was formed.

            The industrial revolution that the United States was undergoing created not only changes in how man made products were produced, but also changes in agriculture. Agriculture was also becoming mechanized. This mechanization of agriculture led to huge improvements in the efficiency of agricultural production as measured in yields per acre; but mechanization also caused problems for the "yeoman farmer," the small independent family farmer. First of all, machines cost money. Agricultural machinery has always been relatively expensive; modern tractors cost as much as Rolls Royces. So mechanization meant that farmers would have to make greater capital investments in their farms. Once purchased, machines demanded upkeep and repair, which took not only the farmer's time and caused him to need additional skills, it also cost additional money for parts. The time that was needed to repair machines could come from time saved in the fields. But all in all, machines added to the risks that independent farmers had to take because there were no guarantees that they could pay off loans taken out to buy equipment if weather, locusts and other pests, prairie fires, etc., adversely affected crop yields.

            A second problem was growing agricultural debt. As the west was settled, new agricultural lands were put into production. As the frontier moved toward becoming closed, agricultural land prices increased. The net effect of these two trends was that land prices went up and crop prices went down. Faced with reductions in income, farmers began mortgaging their existing property in order to buy or rent more land so that they could put more land in cultivation. The drive for more land had been fueled in the 1870s and early 1880s by unusually high rainfall in the Midwest, but these record rainfalls ended in the late 1880s hurting yields per acre. By cultivating more land, farmers hoped to pay off their debts. But there were two things wrong with this strategy. One was that if more land was cultivated and the amount of product increased faster than demand, prices would fall and the farmer could actually make no more, or possibly even make less. The other was that the urban businessmen who were willing to make farm loans charged farmers extraordinarily high interest rates on their mortgages; if prices fell or yields dropped below expected levels, farmers would be unable to pay their mortgages and would lose their land. When drought struck the Midwest (i.e., Kansas, Nebraska, etc.) in 1886, the combination of too little water for crops and high interest rates was disastrous for many farmers. By the mid-1880s, Midwestern farmers had the highest per capita debt in the United States, and thousands were soon defaulting on mortgages.

            A third problem factor was growing specialization in agriculture. Farmers were being introduced to new crops on a regular basis during the late 19th century. But many farmers did not trust the markets for these new crops or failed to recognize their potential. Thus, most farmers preferred to plant the crops that were "traditional" to their region. Many farmers planted a single cash crop while raising only very small amounts of other crops for their personal use to feed their families and farm animals. Corn and wheat farmers who did this were following a long established pattern in the United States, one begun by tobacco farmers in early colonial Virginia and followed by the cotton planters as well. At the time, most urban businessmen were diversifying their holdings; but farmers continued to invest all of their capital in a single crop. This was for farmers and all-or-nothing gamble. If they had high yields and got a good price, they would be well-rewarded. But if the crop failed for any of a number of reasons, or if prices dropped, the farmer risked losing everything.

            A fourth factor affecting farmers was the changing character of markets for agricultural goods. Before the Civil War, only a handful of American farmers sold their crops abroad. But after the Civil War international markets for U.S. agricultural goods expanded. In the years from 1860 to 1900, agricultural products comprised 75% of the total American export trade. Very few American farmers understood either international trade or the complexities of commodities markets. Middlemen who bought farmers' entire crops, especially railroad agents and owners, were more aware of both domestic and international market economics. Because of that , they profited handsomely from the ignorance of the farmers. The result was that even as markets for farm products expanded, farmers saw less and less of that profit.

            All of this forced farmers to become businessmen, but most farmers, generally poorly educated, remained ignorant of basic business practices. They had none of the power that had made other businessmen prosperous. Farmers, for example, had no control over the marketplace and were not in the position that prosperous businessmen were in to fix prices and force competitors out of business. Small farmers were not in a position to force suppliers of the goods and services they needed to give them more favorable treatment, rebates, etc., as many large industrialists were doing. Small farmers were not in a position to bribe legislators, as many on the large industrialists were doing at the time, to get the laws they wanted. Ultimately, farmers' prosperity depended on six different factors which they could neither regulate nor control: business cycles, credit, transportation costs, labor supply, price structure, and government policies.

            It was in reaction to these problems that farmers began to take political action. More and more farmers began to view the federal government as a potential source of protection against the effects that the emerging industrial society was having on them. Farmers were not the only Americans to sense the possible benefits of government activity, however. Other groups were also beginning to reach the same conclusions about what government could do for them.

            One of the first things farmers had to overcome was the "Agrarian myth," the concept that the most significant person in American society is the "yeoman farmer." This idea is closely associated with the Jeffersonian ideal of the farmer as the bedrock of American democracy. The ideal suggested that small farmers could become both self-sufficient and prosperous. The gulf between this ideal and the reality of farming in the late 19th century--falling income, loss of profits to the railroads, high debt, etc.--frustrated and enraged farmers. Gradually, they managed to work beyond this myth, and the "rugged individualism" it implied, to form organizations that would work to improve their situation through collective action.

            The Grange was the first of these efforts. The full name of the Grange was "The National Grange of the Patrons of Husbandry." The word grange comes from an archaic word for "granary," but in the context of American history it refers to an association of farmers founded in the United States in 1867. The Grange worked first at the state level and eventually at the national level to pass pro-agriculture legislation. The Grange also began creating "cooperatives" that allowed farmers to pool their capital in order make purchases of machinery, supplies, insurance, etc. more economical. At first most of the Granges were in Minnesota, the home sate of the founder, Oliver Kelley. But during the 1870s the movement spread rapidly, fed by farmers' desperation over hard times, high railroad shipping rates, and tight money credit policies. By 1875, the membership exceeded 850,000. During these years, the "Grangers" placed growing emphasis on the extent to which farmers were being exploited and victimized by railroads, merchants, and banks. The Patrons of Husbandry soon found itself leading a national agrarian movement that established hundreds of purchasing cooperatives, created a number of banks that gave farmers more favorable treatment, pushed through legislation regulating railroads and grain elevators, and campaigned for political candidates. Few of the Grange's economic initiatives succeeded. They were often opposed by businessmen, and they suffered from the inexperience of the Grangers who ran them. Nevertheless, the Grange movement set important precedents with their legislation, particularly those regulating railroads (as affirmed by the Supreme Court in Munn v. Illinois, 1877). Probably even more important, however, the Granger movement marked the beginning of an aggressive and self-conscious effort by the nation's farmers to define their problems in economic terms and to address them through economic and political action.

            Munn vs. Illinois was decided by the Supreme Court in 1877. In deciding the case, the justices upheld the right of a state legislature to regulate railroad rates. The Chief Justice, Morrison R. Waite, wrote the majority opinion stating that private property becomes subject to regulation by the government through its "police powers" when the property is devoted to the "public interest." Common carriers and public utilities are two of the major kinds of private property devoted to the public interest. Waite wrote that "Common carriers exercise a sort of public office, and have duties to perform in which the public is interested. . . .  Their business is, therefore, 'affected with a public interest.'" Perhaps somewhat surprisingly, the Grange backed away from political activism after its small victory in Munn vs. Illinois. In addition, improved agricultural conditions in the Midwest caused membership to drop as farmers reverted to more individualized solutions to what difficulties they had. Farmers had not yet seen political activism as a permanent part of their existence.

            But as agricultural conditions worsened again in the late 1880s, farmers again turned to collective action. The Grange was succeeded by three regional organizations in the 1880s:
the Farmers and Laborers Union of America in the southwest, the Northwest Farmers' Alliance
in the Midwest, and the Colored Farmers National Alliance in the Midwest and south. By 1890, the Farmers and Laborers Union had some three million members; the Northwest Farmers' Alliance had two million; and the Colored Farmers National Alliance had nearly a million and a half members. All three groups held a convention in St. Louis, Missouri, in 1889 but could not overcome regional differences to form a national organization. In the elections of 1890, Southern farmers joined with local Democrats. Midwestern farmers formed their own local parties which became known as "People's Parties," which earned them the name "Populists."

            Populist orators traveled throughout rural areas of the nation trying to whip up support for pro-farm candidates in the election of 1890. In the 1890 elections, farmers elected five U.S. senators, six state governors, 46 congressmen, and may state legislators. Encouraged by this, they again set their sights on a national coalition. So the three major farmers' organizations held a joint convention in Omaha, Nebraska, in 1892.

        As the people who joined the Populist movement saw it, there were several major problems with American society:

1. There was too great an emphasis on property rights as compared to the good of the society as a whole.
2. Monopolies were making competition impossible
3. Social Darwinism & laissez-faire economics were ideologies that were harming the society.
4. Industrial society had turned the individual worker into a commodity, a piece of equipment.
5. Wealth was not just unevenly distributed, it was distributed in such a way that the gap between the rich and the poor was enormous and widening.

Those attending the Omaha convention created a platform that stated six principal goals:

1. Establishing a permanent union of all working classes
2. Obtaining and increased share of the nation's wealth for the workers
3. Securing government ownership of railroads
4. Securing government ownership of communications systems
5. Obtaining a more flexible and fair distribution of the national currency and taking the nation off the gold standard
6. Eliminating ownership of land by those who do not actually use it.

            These demands were clearly radical for the time and quite obviously bear some indications that the ideas of Karl Marx were being taken seriously in some quarters. The Populists also had a set of secondary goals which were less radical. All of these secondary goals were enacted into law within twenty years: a secret ballot, a graduated income tax, and direct election of senators. At the time these goals were set, in most places, people lined up at polling places and simply told the election worker who they wanted to vote for when they came to the head of the line.

            William Jennings Bryan was nominated both by the Democratic party and by the Populists as a presidential candidate in1896. At the 1896 Democratic national convention, he delivered the "Cross of Gold" speech in favor of unlimited coinage of silver and against the gold standard. (The unlimited coinage of silver would have expanded the money supply significantly, thereby making it easier for people to get credit at reasonable interests rates, and because it would have produced some inflation, easier for them to repay debts with de-valued dollars.)  Bryan believed that government should place an emphasis on protecting individuals and the democratic process from the powerful monopolies. Bryan lost the election to the Republican candidate, William McKinley, who ran on a platform of "prosperity for all." Bryan ran for president again in 1900, hoping to make the election a referendum on American imperialism, but lost to McKinley a second time. McKinley would be assassinated shortly after his second term began.  Bryan's third and final campaign for president was in 1908, when he lost to Republican candidate William Howard Taft. Bryan continued as a spokesman for various causes in to the 1920's and served as the prosecuting attorney in the Scopes trial in his last really celebrated public role.

            The Populist movement after 1900 heavily began to buy into the racism and ethnocentrism that was becoming rampant in the United States.  Tom Watson was the Populists' candidate for president in 1904 and 1908. Because Watson was vehemently anti-Semitic, anti-Black and anti-immigrant, all of which would narrow its base of support for elections, his candidacy is evidence of the extent to which the Populist movement had deteriorated into a narrowly ethnocentric movement in a relatively short period of time.

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