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Populism
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Describe the currency situation after the Civil War
Discuss how the government took action to control inflation
Explain how farmers reacted to deflation and why it hurt them.
Know what “Granger Laws” refers to.
Explain why the Farmers’ Alliance failed.
Describe the sub-treasury plan.
Discuss the platform that the People’s Party nominated a
president to uphold.
Compare and contrast “goldbugs” and “silverites”
Discuss the candidates and campaign style of the 1896
presidential election.
-The Money Supply
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Too much money being printed created inflation.
After the civil war ended, the US had three types of currency In
circulation. (Greenbacks or paper money, gold or silver coins, and
national bank notes like bonds)
To get inflation under control, the federal government stopped printing
greenbacks and began paying off its bonds.
In 1873 Congress also decided to stop making silver into coins. (known
as “The crime of ‘73”)
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With fewer greenbacks in circulation, the value of money
went up and caused the prices of goods to drop (deflation).
Deflation hurt farmers who had taken out mortgages
(loans) to pay for seed, tools, and/or to expand their farms.
o The drop in prices caused by deflation meant that farmers were
paid less for their crops.
o Banks also raised interest rates making farmer mortgages more
difficult to pay back.
-The Grange Takes Action
 Others joined the Independent National Party.
 This new political party, nicknamed the Greenback Party,
wanted the government to print more greenbacks to
increase the money supply.
-The Grange Fails
Farmers
tried to form cooperatives to set higher prices on their crops.
Several western states passed “Granger laws” setting maximum rates on
shipping and prohibiting railroads from charging more for short hauls than
for longer ones.
Railroads retaliated by refusing to ship any farm goods and promising to
not lay anymore tracks until the laws were repealed.
-The People’s Party
 As the granges failed, a new organization formed called the
Farmers’ Alliance led by Charles W. Macune.
 Despite their temporary success, the large farm
cooperatives failed for several reasons.
o 1.)Many overextended themselves by loaning too much money at
low interest rates that was never repaid.
o 2.)In many cases, wholesalers, manufacturers, railroads, and
bankers discriminated against them, making it difficult for them to
stay in business.
o 3.) The exchanges also failed because they still were to small to
dramatically affect world prices for farm products.
-The Subtreasury Plan
Most Southern leaders of the Alliance, including Charles
Macune, opposed the idea of a third political party. They
proposed a new idea hoping democrats would approve: The
Sub-treasury Plan.
Warehouses called sub-treasuries allowed farmers to hold
their crops off the market in large enough quantities to force
prices up.
-A Populist for President
 In July of 1892, the People’s Party held its first national
convention to nominate a candidate for president who
would support their platform (programs):
o It called for a return to unlimited coinage of silver.
o Other platform planks called for federal ownership of railroads and a
graduated income tax.
James B. Weaver
-Goldbugs and Silverites
 In 1893 several railroads declared bankruptcy causing the stock
market to crash and the nation to slump into a depression-its
worst in history up to that point.
o In June 1893, President Cleveland summoned Congress into a special
session and pushed through the repeal of the Sherman Silver Purchase
Act. (The act authorized the US Treasury to purchase 4.5 million ounces
of silver a month to put more money into circulation to help decrease
deflation)
o The goldbugs believed the American currency should be based on only
gold, silverites believed coining silver in unlimited quantities would
solve the nation’s economic crisis.
-The Front Porch Campaign
 Democrat William Jennings Bryan traveled far and wide to
campaign for the presidency.
 Republican McKinley conducted what the newspapers
called his “Front-Porch Campaign” by meeting with various
delegations that came to visit him.
 Many employers (who supported McKinley) warned their
workers that if Bryan won,
business would fail, unemployment
would rise, and wages would be cut.
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What was the currency situation after the Civil War?
What did the government do to control inflation?
What were “Granger Laws”?
Why did the Farmers’ Alliance fail?
What was the sub-treasury plan?
What were the components of the platform that the
People’s Party nominated a president to uphold?
What was the differences between “goldbugs” and
“silverites”?
Who were the candidates of the 1896 presidential election
and what was their campaign styles?
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Define “deflation” and explain why it hurt farmers.
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Define “deflation” and explain why it hurt farmers.
o “Deflation” is an increase in the value of money and a decrease in
the general level of prices. Deflation hit farmers especially hard.
Most farmers had to borrow money for seeds and other supplies to
pant their crops. Because money was in short supply, interest rates
began to rise, which increased the amount farmers owed. For those
who wanted to expand their farms, rising interest rates also made
mortgages more expensive. The falling prices of the period of
deflation meant that farmers sold their crops for less. Nevertheless,
they still had to make the same mortgage payments to the banks.