Populism
Declining Profits
Thanks to new
technologies, farmers
had opened up the
Great Plains and were
producing a much
greater supply of
grains
 Grain supply ↑ =
Grain prices ↓
 Farmers were earning
LESS

Rising Costs




High tariffs + unionized
factory workers = high
prices on manufactured
goods
Banks were charging high
interest on loans
Railroads were charging
higher fees for shipping
grain to eastern markets
Farmers were paying
MORE
The Money Supply


To fund the Civil
War, US
government had
flooded the market
with paper money
(“greenbacks”)
Supply of $↑ =
Value of $↓
(inflation)
3 Types of Money
 Greenbacks
 Gold
& Silver
coins
 Bank notes
backed by
government
bonds
Government response to
inflation



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
Stopped printing
greenbacks
Stopped minting silver coins
Started paying off
government bonds to
reduce number of bank
notes in circulation
Response was too strong
and reduced the money
supply too greatly
Supply of $↓ = Value of $↑
= Prices ↓ (deflation)
Deflation Hurts Farmers
Decrease in money
supply meant loans
were harder to get
and interest rates
were higher
 Farmers were getting
LESS for their crops
but paying MORE for
mortgages & other
loans

“The Crime of ’73”


Farmers believed that
greedy banks had
pressured government
into reducing the money
supply
Began to organize and
campaign for government
to resume printing
greenbacks and/or
minting silver coins
The Grange
“The Patrons of
Husbandry” founded
in 1867 by USDA
official Oliver H.
Kelley
 Designed to organize
rural farmers; by
1874, the Grange had
over 1 million
members

The Grange Takes Action



Pressured state
legislatures to regulate
railroad & warehouse rates
Joined Independent
National Party (also called
the Greenback Party) a
new political party aimed
at getting the government
to print more paper money
Created farmers’
cooperatives
Farmers’ Cooperatives
Pooled farmers’ crops
and held them off the
market in order to
limit supply and force
up prices
 By working together,
farmers could also
negotiate better
shipping and
warehousing rates

The Grange Fails



Greenback Party failed to
win public support –
average American didn’t
trust paper money
Cooperatives never grew
large enough to be
effective
Many states did pass laws
setting maximum rates
for railroads, but ….
Wabash v. Illinois
1886
 Supreme Court ruled
that states could not
regulate railroads
because the railroads
were involved in
interstate commerce;
interstate commerce
can only be regulated
by federal law

The Farmer’s Alliance
Formed in 1877 in
Texas
 By 1890 had nearly
3 million members
 Also tried to create
cooperatives, but
failed for many of
the same reasons

The People’s Party

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
Founded in 1890, more
commonly called the
Populists
Western farmers of the
Alliance decided that the
changes needed to help
farmers required a new
political party
Southern farmers
opposed a third-party
because it might weaken
the Democratic Party
The Subtreasury Plan
Southern farmers proposed
that the government set up
warehouses called
subtreasuries where
farmers could store their
surplus crops
 Also wanted government to
provide low-interest loans
to farmers
 Many Democratic politicians
won elections in the South
after promising to support
the Subtreasury Plan, but
then reneged

The Sherman Silver
Purchase Act of 1890
Congress authorized
the US Treasury to
purchase 4.5 million
ounces of silver per
month to put more
money into circulation
 Still, it wasn’t enough
to ease deflation, so it
didn’t help farmers

The Omaha Platform

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Called for unlimited
coinage of silver at a ratio
of 16 oz. of silver = 1 oz.
of gold (bimetallism)
Called for federal
takeover of railroads
Called for a graduated
income tax
Called for tighter
government regulation of
banking and industries
A Populist Candidate for President


1892, Populists met in
Omaha, NE and
nominated James B.
Weaver to run for
President of the United
States
Came in a distant 3rd
place in the election with
only 22 electoral votes,
but still a strong showing
for a 3rd party candidate
Panic of 1893



2 large railroad
companies were forced
into bankruptcy,
triggering a collapse of
the banks who had
loaned the railroads
money
Worst economic crisis US
had experienced to that
point
18% unemployment
Treasury Crisis


Panic of 1893 caused
investors to cash in their
government bonds for
gold, draining the US gold
reserve
Congress responded by
repealing the Sherman
Silver Purchase Act to
stop people from trading
in silver for gold
Goldbugs vs. Silverites



Repeal of the Sherman
Silver Purchase Act split
the Democratic Party
Goldbugs believed that
US currency should be
backed exclusively with
gold
Silverites believed that
coining unlimited silver
would ease the economic
crisis
Election of 1896


Populists wanted to
nominate a candidate
who supported silver, but
Democrats beat them to
the punch
Faced with either
supporting the
Democratic candidate and
giving up their 3rd party
status or nominating their
own candidate and
splitting the pro-silver
vote, the Populists chose
to support the Democrats
William Jennings Bryan
Only 36 when
Democrats &
Populists nominated
him for president
 Powerful speaker who
won nomination with
his pro-silver “Cross
of Gold” speech

The “Cross of Gold” Speech

“Having behind us the
producing masses of this
nation and the world,
supported by the commercial
interests, the laboring interests
and the toilers everywhere, we
will answer their demand for a
gold standard by saying to
them: You shall not press
down upon the brow of labor
this crown of thorns; you shall
not crucify mankind upon a
cross of gold.”
Bryan’s Campaign


Toured the country for
weeks, giving hundreds
of speeches
Strongly supported in the
West and South, but not
by city-dwellers (who
didn’t care about the
silver issue) or Catholic
immigrants (who didn’t
like his Protestant
minister style speeches)
William McKinley’s
“Front Porch” Campaign


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
Republican candidate
McKinley refused to travel
and speak, opting instead
to stay home in Ohio and
let visitors come to him
Republican Party had
local Republicans
campaign for McKinley
instead
Won support of urban
workers and big business
William McKinley

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1843 – 1901
25th President (18971901)
Republican
Expansionist who
oversaw the SpanishAmerican War
Assassinated in 1901
Gold in Alaska
Alaska had been
purchased by US from
Russia in 1867 for
$7.2 million
 Discovery of gold in
1898 boosted the
nation’s gold reserves
and ended the silver
debate, leading to the
decline of the Populist
Party
