Radical Political Parties
Define: populism
greenbacks
Populist Party graduated income tax
Sherman Silver Purchase Act of 1890
Sherman Anti-Trust Act
Socialist Party
Social Darwinism
inflation deflation
Panic of 1893
Eugene Debs
Charles Darwin
Drastic times call for drastic measures. Economic decline
after the Civil War drove farmers to embrace populism, a
movement to increase the political power of farmers and to
make new laws to help them.
Farm prices dropped due to farm industry changes. Before
the Civil War farm life was simpler. Farmers grew their
own food, spun their own yarn, and chopped their own
timber. New equipment such as Cyrus McCormick’s
thrasher and harvester changed that. Railroads expanded out
west and millions of acres of farmland opened up. Farmers
turned to single crop farms, which caused new problems.
The more single-crop farmers produced the more the market
was flooded. The result: prices declined.
In the South in 1865, cotton sold for $1 a pound. In 1892
the price was 7cents a pound. Wheat prices tumbled from
$2.50 per bushel in the 1860s to 50cents a bushel in 1890.
Farmers sold crops at tremendous losses. So farmers
depended more on banks to loan them money to buy new
equipment. Their debts multiplied. The drop in prices, loss
of revenue, and defaulting on loans led to an economic
recession in farming. In Kansas, between 1889 and 1893,
11,122 farmers lost their farms to banks.
Farmers felt victimized by buyers and banks. In addition,
high tariffs increased the cost of manufactured goods
farmers needed at home and made it harder to sell their own
goods overseas. England and France refused to buy US
grain because of the tariffs. Banks seemed to victimize
farmers too by charging high interest rates on loans. Then
railroads set unfair shipping rates on farm products. Grain
elevator owners, by the railways, overcharged for the storage
of farmers’ products.
Meanwhile, news reports of robber barons throwing ritzy
parties at their ‘cottages’ in Newport or the Berkshires,
infuriated farmers who were losing everything. At one of his
summer bashes, William Vanderbilt was reported to have
had a play sandbox constructed at his cottage in Newport
where guests used silver shovels to dig for rubies and
diamonds.
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What was the purpose of populism?
What were farms like before the Civil War?
How did farming change after the Civil War?
How did farming change after the Civil War?
How did these changes cause more problems for farmers in
the decades to come? Prove with data.
6. How were farmers victimized by tariffs? Banks? Railroads?
and grain elevator operators?
Populism rose out of frustration. A big problem to
farmers was the money supply. To finance the Civil War,
President Lincoln issued greenbacks or paper currency that
could be exchanged for gold or silver coins. This increased
the money supply and caused inflation or a decline in the
value of money. As paper money lost value, prices soared.
After the Civil War the government stopped printing
greenbacks and, in 1873, stopped making silver coins to curb
inflation. This meant that the US did not have a large
enough money supply to meet the demand in the growing
economy. In 1865 there was about $30 in circulation for
each American but by 1895 there was only $23 per person.
The result was deflation or an increase in the value of
money and a decrease in the level of prices.
Farmers blamed their money problems on the shortage of
currency. They wanted more money in circulation. So in
1890 frustrated farmers formed a political party known as
the Populist Party. Based among poor, white cotton farmers
in the South (North Carolina, Alabama, and Texas) and
wheat farmers in the Great Plains (Kansas and Nebraska), it
represented a radical crusading form of farming with
hostility to banks, railroads, and rich robber barons.
Also known as the People’s Party, the populists put
together political policies that they wanted to get passed in
Congress and nominated candidates to run for government
offices. Its political policy platform called for:
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the adoption of free coinage of silver
an end to protective tariffs
an end to national banks
tighter railroad regulations
direct elections of US senators [not by state legislatures as
the Constitution directed]
6. secret or private balloting or voting
7. a graduated income tax
They wanted the government to lend money to the farmers,
not national banks. They wanted the government to protect
the consumer from unsafe goods and unfair practices such as
inflated shipping fares by railroads. Voting was not private.
Voter selection was visible to all those. Employers could
fire workers who did not vote for his candidate. Ballot
boxes were stuffed with false votes. Others met voters at the
door and paid them to vote for their candidate.
“We believe that the powers of the government
should be expanded…to the end that oppression,
injustice, and poverty shall eventually cease in the
land.” Populist Party Platform
Populists wanted a graduated income tax, one that taxed
higher earnings more heavily. They believed that wealthy
people would pay more tax than the poor. (It wasn’t until
1914 that Americans paid an income tax. Only 1% of
Americans were rich enough to pay it and the average bill
was $41.)
Populists tried to appeal to organized labor. The Populist
Platform of 1892 Election Year called for an 8-hour work
day, restricted immigration, and an end to strikebreakers.
But organized labor stayed in the Democratic Party, which
won the 1892 presidential election with Grover Cleveland as
the next president. The populists did succeed in electing 5
senators and 10 congressmen to the 1892 Congress.
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What caused deflation after the Civil War?
What was the purpose of the Populist Party?
What was the Populist Party’s political platform?
Why did they want these changes made?
What did the Populists support to try and win union
support?
The Panic of 1893 was after Cleveland’s inauguration. The
country plunged into an economic crisis. In the first seven
months of 1893, 172 state banks, 177 private banks, and 47
savings and loan associations closed. By the end of the year,
500 shut their doors. More than 15,000 businesses failed.
Also 156 railroads failed including, the Reading,
Philadelphia, Union Pacific, and the Atchison, Topeka &
Santa Fe Railroads went bankrupt.
By 1894 the country was in a deep depression. About 1520% of the workforce, or 2 to 3 million were unemployed.
In Michigan unemployment was 43.6%. President Cleveland
didn’t believe it was his job to do anything about the
unemployed. He believed it was the sole responsibility of
businesses to tackle that problem.
But money Problems
were dealt with by
Pres. Cleveland b/c
the Panic of 1893
was a US Treasury
crisis. American and
European investors
owned US
Government Bonds.
As the economy went
under, investors
cashed in government
bonds for gold and
depleted the gold
reserve, which
dropped below
$100,000,000.
Cleveland protected
the gold reserve by repealing the Sherman Silver Purchase
Act of 1890, which authorized the treasury to purchase 4.5
million ounces of silver per month. It allowed the treasury
to issue legal tender notes for the silver bullion it bought.
Owners of the bonds could turn around and present them for
gold, thus draining the system.
As a result of the repeal, the US used only gold as a basis
for its currency, not silver or paper currency. This alienated
Cleveland from Populists and Democrats who supported
silver bullion to increase paper money circulation due to
limited gold reserves. No silver meant less currency
circulated and additional money problems for the farmers
and the poor.
Socialist Party was another group of progressive thinkers.
They focused their efforts on regulating big business. Many
believed that wealth was concentrated in the hands of too
few people. Some wanted to break up businesses to restore
competition and supported the 1890 Sherman Antitrust Act
which prohibited business activities that reduced competition
and required the federal government to investigate and go
after trusts and companies suspected of violating anti-trust
laws. Others pushed for government regulations to prevent
abuse in businesses and supported the Interstate Commerce
Commission of 1887, which sought to regulate trade
between states.
Other progressives supported socialism – the idea that the
government should own and operate industry for the
community. The Socialist Party was formed to promote the
ideals of socialism. Eugene Debs, a lanky labor leader
associated with the Pullman Strike of 1894 became the head
of the Socialist Party. In 1912 he won nearly 1 million votes
as the American Socialist Party candidate for president. But
most Americans believed in free enterprise not socialism so
the socialist party did not grow in influence.
Social Darwinism was challenged the way others thought.
In 1859 a book by Charles Darwin called On the Origin of
Species by Means of Natural Selection introduced a new
theory of evolution. Darwin, a scientist, argued that plant
and animal life evolved over time by a process of natural
selection. Those species, which could not adapt to the
changing environment died while others adapted and thrived.
This notion was coined “survival of the fittest.”
English philosopher, Herbert Spencer, took this theory a
step further. He argued that society progressed and became
better because only the fittest people survived. Those who
shared his views were called Social Darwinists and the ideas
were labeled Social Darwinism, which strongly reinforced
individualism.
Darwinism paralleled the government’s economic doctrine
of laissez-faire. It opposed government interference with
business. John D. Rockefeller supported Darwinism. The
growth of his company, Standard Oil, was “merely the
working out of the law of nature and the law of God.”
Needless-to-say, Christians were outraged by the concept
of natural selection and theory of evolution. The Bible
explained evolution in Genesis. But Darwinists persevered.
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What were the causes and effects of the Panic of 1893?
How did the US treasury looses its gold?
How did the Sherman Silver Purchase effect the panic?
What did the repeal of the Sherman Silver Purchase mean
to money circulation?
5. What differences were between socialists and Darwinists?