Populism
I.
Tough Economic Times
A. 1873 and 1878 Economic Panics
1. Caused by failing railroads
2. Banks failed
3. Businesses and farmers had over-borrowed – they started to fail
4. High unemployment
5. Farmers dealt with falling crop prices and loans being called in by banks.
B. Tariffs
1. Tax on imported goods
i. Discouraged people from buying foreign goods
ii. Encouraged people to buy American goods
2. Businesses like tariffs
i. Protected factory jobs
ii. Protected business’ profits
3. Tariffs Hurt Farmers
i. Caused high prices on machinery and manufactured goods.
ii. Tariffs on manufactured goods caused manufacturing nations in
Europe to retaliate with their own tariff on American farm
products.
iii. American tariffs, thus, indirectly decreased the world market for
American farm goods.
C. Monetary Policy
1. The value of money is linked to the money supply.
i. If the government increases the supply of money, then the value or
purchasing power of each dollar goes down (inflation).
ii. If the government decreases the money supply, then the value goes
up (deflation).
2. Inflation is good for people who owe a lot of money.
3. Deflation is good for banks who lend money.
4. Supporters of deflation supported a “tight money” policy of less money in
circulation.
D. Gold Bugs
1. Until 1873 the U.S. had a Bi-Metallic standard.
i. U.S. coins were made of both gold and silver.
ii. Treasury notes could be traded in for gold or silver.
2. In 1873 Congress put the nation’s currency on a gold standard.
i. This reduced the amount of money in circulation.
ii. Prevented inflation.
3. Conservative “Gold Bugs” were pleased.
i. “Gold Bugs” tended to be lenders of money.
ii. The money they were repaid was more valuable than the money
they lent.
E. Silverites
1. Silverites were enraged.
2.
3.
4.
5.
II.
i. Western farmers
ii. Silver miners
Silverites claimed that the gold standard would lower farm prices (it
would hurt farmers).
Silverites called for “free silver” – the unlimited coining of silver dollars
to increase the money supply.
Bland-Allison Act of 1878
i. Required the federal government to purchase and coin more silver.
ii. This would increase the money supply and cause inflation.
iii. It was vetoed by President Rutherford B. Hayes.
iv. Congress overrode his veto.
v. The Bland-Allison Act had little effect:
a. Hayes ordered the treasury not to purchase more silver than
was required by law.
b. The treasury minted the coins, but did not release them.
Sherman Silver Purchase Act
i.
Increased the amount of silver being purchased by the treasury.
Organizing Farmer Protests
A. The Grange
1. Oliver H. Kelley founded the Patrons of Husbandry – aka – The Grange in
1867.
2. Helped farmers form cooperatives which bought goods in large quantities
at lower prices.
3. Also pressure legislatures to regulate businesses that farmers depended on:
i. Operators of grain elevators.
ii. Railroads
B. Farmers’ Alliances
1. Formed all around the nation.
2. Fought against monopolies – Railroad
3. Famers’ Alliance of the South called for:
i. Federal Regulation of the Railroads
ii. More money in circulation
iii. Creation of State Departments of Agriculture
iv. Anti-Trust Laws
v. Farm credit
4. In general Farmers’ Alliances allowed for full participation of women.
5. African Americans worked through the Colored Farmers’ Alliance
C. Government Actions
1. 1887 – Texas Seed Bill
i. Provided seed grain to drought victims.
ii. Democratic President Grover Cleveland vetoed the bill.
iii. Cleveland believed that “though people supported the government,
the government should not support the people.”
2. Interstate Commerce Act
i. Required railroad rates to be set in proportion to the distance
traveled.
ii. Made it illegal to give special rates to some customers.
iii. Set up the Interstate Commerce Commission.
III.
Populists
A. 1891 – The People’s Party was founded – known as the Populists. They wanted:
1. An increased circulation of money.
2. Progressive income tax – percentage of taxes increases with a rise in
income.
3. Government ownership of communications and transport systems.
4. 8 hour workday.
5. Opposed the use of Pinkerton’s to break strikes.
6. Hoped to unite African American and white farmers.
B. 1896 Election
1. Economic depression was the main issue.
2. Republican William McKinley – supported the gold standard.
3. Democrat William Jennings Bryan – supported free silver policies.
i.
Was known for his famous “Cross of Gold” speech.
ii.
Bryan won the south and West – but lost the election.
iii.
McKinley won the industrial Midwest and the North.
iv.
Workers feared inflation would lower the purchasing power of
their wages.
C. $100 million worth of gold was discovered in Canada, Alaska, and South Africa.
1. U.S. returned to a gold standard.
2. Crop prices began a slow rise.
3. The silver movement died and so did Populism.
4. The Progressive Party will later adopt many populist ideas.