Early Success and the Reality of
International Trade


Early Success
Easy Credit Terms
Railroads promoted land and credit

Several successful years for small and large commercial farmers – International business

Lots of rainfall and good crops worldwide

But gradually climate dried and land failed.


Supply rises, prices fall and farmers produce more, to make up in volume what they lost in price.

Big grain supply allowed railroads to hike prices on all farmers, cutting deeply into profits.

Borrowed “Cheap” money and heavily in debt.

Sought Government help through regulation

The Grange, Farmers Alliances and the beginning of Populism


During Reconstruction (1875), Congress pulled money –
Greenbacks - out of circulation - back to gold standard.

So money increases in value again – bad for farmers.

They had borrowed with ‘cheap money’ not backed by gold but must pay back with more valuable money that
is based on gold.

Once again farmers push for ‘cheap money’.


Railroad monopolies (no competition) allowed charging of any prices they demanded.

Secret deals with storage companies & middlemen on rates allowed agents to charge high prices to farmers.

Wheat prices fell in late 1870s when money increased in value AND when international competition increased.

Paying high prices for freight & receiving low prices for crops hurt profits and kept them in debt.


Patrons of Husbandry - Oliver Kelley - 1867

Grange – a farmers organization for education
- Fight railroads’ high pricing
- Teach farmers how to organize
- Set up farm co-operatives
- Elect officials to speak for their interests
- Sponsor state legislation

Farmers Alliance – 4 Million Members


1892 – Populist Party – formed in Omaha, Nebraska out of farmers’ alliance movement

Sought political power for farmers – supported…
- Graduated income tax
- Cheap money to pay debt easier
- Federal loan programs
- Restrictions on immigration
- Direct election of senators
- 8 hour workday

Important contributions to Democrats in later years


Challenged ‘laissez-faire’ capitalism.

Rejected idea that the rights of business ownership were considered absolute (do what they want).

Supported Industrialism and Capitalism but believed it was developing in brutal and chaotic ways.

Growth should be more guided by needs of people and their communities.


Bimetallism – making currency based on silver and gold.

Free Silver - money exchanged for either metal makes more money available – and thus cheaper - because more silver than gold was available. (Debt repayment)

Big issue in Presidential Campaign of 1896

William Jennings Bryan makes ‘Cross of Gold’ Speech

McKinley beats Bryan and Populism fades until Roosevelt