Farmers’ Alliances,
Railroads, and
Anti-Trust Laws
Setting the Stage
The Railroad Boom
Desires to connect the rapidly developing West to the traditional East
motivated the quest to achieve the First Transcontinental Railroad
The Railroad Boom
Congress eventually transferred some 129 million acres of public land
to the railroads to subsidize construction of the Transcontinental RR
The Railroad Boom
Railway’s converted the lands
granted to them by selling them to
farmers, ranchers, and business
developers to finance the railroads
The Railroad Boom
Millions of dollars were spent by railway companies promoting the
agricultural development of the land they had to sell
The Farmers Western Migration

The U.S. gov’t also offered incentives for
farmers to settle the West:
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The Economic Panic of 1873:
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Homestead Act of 1862 gave 160 acres of land if
families pledged to live there for 5 years
Settlers from the East and South who had lost
almost everything rushed to obtain land in the
Midwest, Texas, and the Northern Great Plains
Populations skyrocketed by the 1880’s:
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Settlers moved into the areas of Kansas,
Nebraska, Iowa, Minnesota, and the Dakotas
The Farming Bonanza
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Bonanza Farms of the 1870’s:
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New machinery sped harvesting & planting;
led to bonanza farms
By 1890, the U.S. became a major crop
exporter
The Farming Bonanza

Exodusters of the 1880’s:
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Thousands of African-American farmers
migrated west to escape Jim Crow Laws
and the hostile Ku Klux Klan
Many settled on lands in Kansas, Oklahoma,
and Colorado
The Farming Bonanza

Boomers and Sooners in 1889:
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First Land Run into unassigned lands from
the former Indian Territory (Oklahoma)
50,000 people rushed to claim 2 million
acres of newly opened lands (22 Apr 1889)
Farming Bonanza
While the increased development of western farmlands continued to
improve production, prices per bushel of each crop declined
Farmers Grievances
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The Deflationary period that followed the
Civil War left little money in circulation
Deflation forced crop prices down which
hurt farmers
Deflation also made it difficult for farmers to
repay loans with devaluated money
Farmers demanded the government to print
more “Greenbacks” and produce more silver
coins
The Bland-Allison Act of 1878 added $2
million in silver coins per year
Forming Farmers
Organizations
Forming The Grange
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Agricultural Commissioner Oliver H.
Kelley toured the war-torn South
He saw the need to bring farmers
from both the North and South
together in a spirit of mutual
cooperation
Kelley rallied other leaders to
form The Grange in 1867
Organization was unusual for
the time:
Teens old enough to work
 Women members required

Forming The Grange
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Grangers put their money together
to create cooperatives
Cooperatives pooled members crops
together and held them off the
market in hopes of forcing prices up
Cooperative also tried to
negotiate better shipping
rates from the railroads
Over time, the Grange used
their collective power to
promote changes in the law
Freight Issues
The Emporia News (20 Aug 1875)
The Wichita Eagle (31 Mar 1889)
Granger Laws

Munn vs Illinois (1872)
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State of Illinois versus Munn & Scott Grain
Storage Company
Charge company with violating Illinois law
that set maximum charges for grain storage
Appeal to the U.S. Supreme Court resulted
in the case being upheld
Supreme Court ruled that the government
could regulate companies operating a
business that affected the public interest
Granger Laws

Interpreting Munn vs Illinois (1872)
In Dow v. Beidelman, 125 D. S. 680, 686, 8 Sup. ft. Rep. 1028.
It was said by Justice Gray, in delivering the opinion of the
court, that in Munn v. Illinois the court, after affirming the
doctrine that by the common law, carriers or other persons
exercising a public employment could not charge more than
a reasonable compensation for their services, and that It is
within the power of the legislature "to declare what shall be
a reasonable compensation for such services, or, perhaps
more properly speaking, to fix a maximum beyond which
any charge made would be unreasonable.“
SOURCE: Cases of Constitutional Law, by John Day Smith, College of Law, Univ.
of Minn, West Pub. Co., St. Paul, Minn., 1897
Granger Laws

Interpreting Munn vs Illinois (1872)
In Chicago, Burlington & Quincy Railroad Co. v. Iowa, 94 U.S. 155.
The Chief Justice delivered the opinion of the court,
saying: “Railroad companies are carriers for hire. They
are incorporated as such and given extraordinary power in
order that they may the better serve the public in that
capacity. They are, therefore, engaged in a public
employment, affecting the public interest, and under the
decision in Munn v. Illinois, subject to legislative control as
to their rates of fare and freight, unless protected by their
charters.”
SOURCE: The American Lawyer (Monthly Journal), Vol XII, No. 2, January
1904, New York.
Granger Laws

Wabash vs Illinois (1886)
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State of Illinois versus the Wabash, St. Louis,
and Pacific Railway Company
Charged company with violating Illinois State
laws concerning fixed rates for railroad
freight
Appeal to the U.S. Supreme Court resulted in
the case being overturned
Supreme Court ruled that only the Federal
Government had the right to regulate
interstate or intrastate commerce in the U.S.
Granger Laws

Interpreting Wabash vs Illinois (1886)
The shipment in that case was one from a point within the State of
Illinois to the city of New York, and was what is known as a through
shipment. The State had endeavored to deal not with the through rate,
but with that part of the rate which applied within the State of Illinois.
The Supreme Court of the United States held that the State of Illinois
had no jurisdiction; that the shipment from the Illinois point to New
York must be regarded as one entire shipment; that it was an interstate
shipment; that it was commerce between the States, with which, by
the terms of the Federal Constitution, Illinois had nothing to do, for the
reason that the power which the State of Illinois might exert over a
shipment within the State had been withdrawn from the State and
conferred upon the Congress of the United States.
SOURCE: Hearings before the Committee on Interstate Commerce of the U.S.
Senate, Government Printing Office, Washington, D.C., 1900
Granger Laws

Interpreting Wabash vs Illinois (1886)
It cannot be too strongly insisted upon that the right of
continuous transportation from one end of the country to
the other is essential in modern times to that freedom of
commerce from the restraints which the State might
choose to impose upon it, that the commerce clause was
intended to secure. This clause, giving Congress the power
to regulate commerce among the States and with foreign
nations, as this court has said before, was among the most
important of the subjects which prompted the formation of
the Constitution.
SOURCE: Wabash, St. Louis, and Pacific Railroad Company v. Illinois, 118 U. S.
557 (1886)
Forming The Farmers’ Alliances
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The Northern & Southern Alliances:
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The roots of the “Southern Alliance” date
back to 1875 in Lampasas County, Texas
The “Northern Alliance” was formed in 1877
by a group of members of The Grange in NY
Forming The Farmers’ Alliances
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The Northern & Southern Alliances:
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The new movements strove to protect the
farmers from the capitalistic and industrial
powers of monopolies like the railroads
They also fought for:
The
 The
 The
 The
 The
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abolishment of National Banks
regulation of Interstate Commerce
enactment of Income Tax Laws
increased issuance of Paper Money
free and unlimited Coinage of Silver
revision of Tariffs
Forming The Farmers’ Alliances
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The Colored Farmers Alliance:
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Since the Southern Farmers’ Alliance barred
African-American membership due to racism,
African-Americans formed their own alliance
1886: A group of Black Farmers organized in
Houston County, Texas as the Colored
Farmers Alliance
The new organization was dedicated to:
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improvement of agricultural efficiency
increasing the levels of education
providing benefits to the sick and disaabled
Responding to Farmers Grievances
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The Interstate Commerce Act (1887):
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First Federal program for regulating private
businesses
Passed by Congress in response to the repeal
of Granger Laws by the U.S. Supreme Court
Primarily designed to regulate the monopolistic
railroad industries that were employing unfair
and discriminatory practices
Also used to address the questionable activities
of other big businesses like J. D. Rockefeller’s
Standard Oil and J.P. Morgan’s U.S. Steel Inc.
Responding to Farmers Grievances
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Interpreting the Interstate Commerce Act
All charges made for any service rendered or to be
rendered in the transportation of passengers or
property as aforesaid [by railroad], or in connection
therewith, or for the receiving, delivering, storage,
or handling of such property, shall be reasonable
and just; and every unjust and unreasonable
charge for such service is prohibited and declared
to be unlawful.
SOURCE: An Act to Regulate Commerce in The Statutes at Large of the United
States of America, from December, 1885, to March, 1887. Washington, D.C.:
Government Printing Office, Washington, D.C.,1887.
Responding to Farmers Grievances

Interpreting the Interstate Commerce Act
4. The purpose of the Act is to promote and facilitate commerce by the
adoption of regulations to make charges for transportation just and
reasonable, and to forbid undue and unreasonable preferences or
discriminations.—Texas & Pacific Ry Co. v. Interstate Commerce
Commission, (1896).
5. The principal objects of the Act were to secure just and reasonable
charges for transposition; to prohibit unjust discriminations in the
rendition of like service under similar circumstances and conditions; to
prevent undue or unreasonable preference to persons, corporations, or
localities; to inhibit greater compensation for a shorter than for a longer
distance over the same line; and to abolish combinations for the pooling
of freight.— Interstate Commerce Commission v. Chicago Great Western
Railway Company, (1907).
SOURCE: Digest of Decisions of the Courts and Interstate Commerce Commission,
by E. B. Peirce (Commerce Counsel), Chicago, IL., 1908.
Elevating the Farmers Grievances
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Educated Speakers supported the cause
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Mary Elizabeth Lease, was a teacher sent to
help educate the farmers
She became a spokesperson and advocate for
the farmer’s struggle against “Big Business.”
This is a nation of inconsistencies. . . . . . . . . . . . Wall Street owns the
country. It is no longer a government of the people, by the people, and for
the people, but a government of Wall Street, by Wall Street, and for Wall
Street. The great common people of this country are slaves, and monopoly is
the master. . . . . . The parties lie to us and the political speakers mislead
us. We were told two years ago to go to work and raise a big crop, that was
all we needed. We went to work and plowed and planted; the rains fell, the
sun shone, nature smiled, and we raised the big crop that they told us to;
and what came of it? Eight-cent corn, ten-cent oats, two-cent beef and no
price at all for butter and eggs - that's what came of it. (circa 1890)
The Legality of
Government Regulation

The Sherman Anti-Trust Act (1890):
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The Governments first intervention to remedy
the restraint on trade caused by monopolies or
trusts
Although the measure passed through both
Houses of Congress, it was too vague.
Interpretation and enforcement of the act laid
in the opinions of the U.S. Supreme Court
The Legality of Government Regulation

Interpreting the Sherman Anti-Trust Act
WASHINGTON, D. C, Tuesday, April 28,1908. Statement of Joseph Nimmo, Jr., Statistician
and Economist, before a U.S. Senate Subcommittee.
Mr. NIMMO: Mr. Chairman and gentlemen, the antitrust act of July 2,
1890, is one of the most unfortunate legislative misadventures ever
placed upon the statute books of the United States. I will enumerate
some of its errors: . . . . . .
Second. The words "railroad" and "railroad rates" do not occur in the
statute; hence it was assumed that it had no reference to railroads or to
railroad transportation. But the Supreme Court of the United States
subsequently declared that it does apply to railroads almost exclusively.
Fourth. It was the main intent of the law to conserve competition and
to prevent combinations. It had just the opposite effect as it applied to
the railroads. It forced them to consolidate.
SOURCE: Hearings before the Senate Subcommittee on the Judiciary, Government Printing Office,
Washington, D.C., 1908.
The Legality of Government Regulation

Interpreting the Sherman Anti-Trust Act
"The Act applies to interstate railroads as carriers conducting
interstate commerce, and one of the principal instrumentalities
thereof . . . . . . . . . That the company may not charge
unreasonable prices for transportation, nor can it make unjust
discriminations, nor select its patrons, nor go out of business
when it chooses, while a mere trading or manufacturing
company may do all these things. But the very fact of the public
character of a railroad would itself seem to call for special care
by the legislature in regard to its conduct, so that its business
should be carried on with as much reference to the proper and
fair interests of the public as possible.”
SOURCE: A Treaties on the Sherman Anti-Trust Act, by William W. Thornton, The W. H.
Anderson Co., Cincinnati, OH., 1913.
Farmers and National Politics
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Forming New Political Parties:
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Aug 1874: Members of The Grange joined a
coalition of Democrats and reform minded
Republicans to form the “Greenback Party.”
May 1876: The members of the “Greenback
Party” met in Indianapolis, Indiana to establish
their political platform:
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opposition to dependency on the Gold Standard
renewal of the non-gold “Greenback” notes
expansion of the U.S. money supply
Farmers and National Politics
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Forming New Political Parties:
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By 1880: The “Greenback Party” expanded its
political platform to include:
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instituting a nation-wide Income Tax
Establishing the Eight-Hour Workday
Granting Women the Right to Vote
1880 Presidential Election:
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“Greenback Party” nominated
James B. Weaver for President
He received a large number of
votes from the Great Plains & West
Farmers and National Politics
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Forming New Political Parties:
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The “Greenback Party” was in decline during
the Presidency of Grover Cleveland:
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1884 Election: The party failed to
gain any seats in the House of
Representatives except Weaver
By 1890: The “Greenback Party”
had merged with the Democrats
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James B. Weaver opposed the idea
He joined other former “Greenbacks”
to form a new party.
Farmers and National Politics
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Forming New Political Parties:
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Dec 1890: Members of the Farmers’ Alliance
met in the Marion Opera House in Ocala, Fla.
As a result of the meeting, the Ocala Demands
were established, demanding the:
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abolishment of National Banks
creation of sub-treasuries for issuing low interest
loans to farmers
increase of currency to not less than $50 per capita
passing of laws against monopolies and trusts
minting of more silver coinage
Farmers and National Politics
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Forming New Political Parties:
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1892: Members of The Grange, the Farmers’
Alliance, and former “Greenbacks” met to form
the People’s Party (or Populists).
4 July 1892: The Populists met at Omaha,
Nebraska and established the Omaha Platform:
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Increase the Money Supply in the U.S.
Establish a Graduated Income Tax System
A Federal Loan Program for Farmers
Mandatory Labor Reform (8 Hour Workday)
Government Restrictions on Immigration
Farmers and National Politics

Forming New Political Parties:

1892: The Populists nominated candidates for
President, as well as other states/federal offices
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James B. Weaver won 1 million
popular votes in the West but lost
the election to Grover Cleveland.
The Populists elected 3 Governors
and 5 State Senators to office
By 1900: The Populists had
merged with the Democrats