Unrest in Rural America
• In the 1890s, a political movement called
Populism emerged to increase the
political power of farmers and to work
for 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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Unrest in Rural America (cont.)
• 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.
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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.
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Unrest in Rural America (cont.)
• 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.
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Unrest in Rural America (cont.)
• 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.
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Unrest in Rural America (cont.)
• 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.
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Unrest in Rural America (cont.)
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.
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The Farmers’ Alliance (cont.)
• 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.
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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.
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The Farmers’ Alliance (cont.)
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.
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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.
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The Rise of Populism (cont.)
• 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.
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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.
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The Rise of Populism (cont.)
• 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.
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The Rise of Populism (cont.)
• 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.
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The Rise of Populism (cont.)
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.
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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.”
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The Election of 1896 (cont.)
• 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.
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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.
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