Raise Less Corn and More Hell  - The Rise of Populism [1892 to 1900]

A revolt against the special privileges of industrialization and the American banking system spread quickly throughout

the Midwest and South and reached its zenith with the founding of the People's party in the early 1892.

Expanding Markets 

Prior to the Civil War, only a handful of American farmers sold their crops abroad. After the War, however, international markets for United States agricultural goods expanded dramatically. In the years from 1860 to 1900, agricultural products comprised 75% of the United States' total export trade.

Increased Efficiency  

The American Farmer is introduced to a variety of labor saving machines that increased their efficiency and productivity.  By 1890 there are 900 manufacturers of farm machinery.  The American farmers takes out loans to purchase new equipment. The efficient cultivation of crops leads to OVERPRODUCTION and a market surplus!!  The Mechanized Farmer; Impact of Mechanization

Financial Complexities

Many farmers, however, did not understand fully the financial complexities of commodity markets or foreign trade. Middlemen, especially railroad agents and owners, profited from the ignorance of the farmers. Thus, even as markets for farm products expanded, farmers often did not benefit from that expansion.

The Plight of the American Farmer

Mother Nature: Unreliable irrigation,  bug infestations, drought and flood erosion

Currency Issues:  Rise in big business in the northeast created a shortage in currency  (leads to high interest rates – up to 40%)   A Review of Banking History; Low inflation and a scarcity of paper money increased farmers’ debt burden during the 1880s, while decreasing real wages and crop prices

Taxes:  Farmers can’t hide land and property the way the wealthy can hide stocks and bonds - property taxes were high!

"To add to their miseries, the soil-tillers were gouged by their government—local, state, and national. Their land was over assessed, and they paid painful local taxes, whereas wealthy easterners could conceal their stocks and bonds in safe-deposit  boxes." American Pageant p.611

Tariffs: Set up to protect our American industries,  but not to protect farmers who end up paying higher prices for goods  Review of Tariff

Single Cash Crops: Great when prices are high;  disaster when prices are low - Can lead to bankruptcy Farmer Cartoon
Crop Specialization

Storage and shipping fees:  Farmers had to store crops prior to shipping. Railroads owned the grain elevators and  charged very high prices. It in some cases it will cost more to store and ship the grain then the crop is worth

 "Railroad octopus had the grain growers in its grip. Freight rates could be so high that the farmers sometimes lost less if they burned their corn for fuel than if they shipped it. If they raised their voices in protest, the ruthless railroad operators might let their grain spoil in damp places or refuse to provide them with cars when needed" American Pageant p.611

Questions to Consider 

#1 How did farmers try and protect their economic interests and way of life during this period?  Were they successful?  Why or why not?

#2 Who were the Populists?  Why were they so appealing to farmers?  Did they change American politics?  If so, how? 

UNITY = SUCCESS
Grange – Farmer’s Alliance – Populist Party

Historical Context: Republican laissez-faire policies that favored big business and allowed corporations to consolidate. These corporations were hard to regulate with an undefined government role. City, state, and federal governments added to this by gouging the farmers, ripping them off by making them pay painful taxes when they could least afford to do so.     

The Granger movement was founded in 1867 to advance the social and economic interests of rural farmers. 

1867- Oliver Kelley started the first National Grange of the Patrons of Husbandry AKA the Grange  it began as a non-political group whose goals were to stimulate farm families (social, educational, and fraternal)  Milton Grange

Farmers and Laborers' Union of America was a regional association in the Southwest. By 1890, it had 3 million members. 

Northwest Farmers' Alliance began in Chicago and spread throughout the Midwest. By 1890, it had 2 million members. 

Colored Farmers National Alliance addressed the needs of African-American farmers in the South and in the Midwest. By 1890, it had between 1 and 1.5 million members.

Munn v. Illinois (1877) – Railroad discrimination against farmers led to pro-farming legislation in the Grange Laws. These laws were challenged by large corporations, but the Supreme Court ruled in favor of state regulation because it had a direct effect on the general public. In its ruling, the court upheld the right of state legislatures to regulate railroad rates. 

"Chief Justice Morrison R. Waite wrote the majority opinion. In it he stated that private property becomes subject to regulation by the government through its 'police powers' when the property is devoted to the public interest" Eric Foner and John A. Garraty, eds., The Reader's Companion to American History (Boston: Houghton Mifflin, 1991) 759.  

"Common carriers exercise a sort of public office, and have duties to perform in which the public is    interested.... Their business is, therefore, 'affected with a public interest.'"-- (From the majority opinion of Chief Justice Waite.)

After this legal victory, the Grange backed away from political activism. In addition, improved agricultural conditions in the Midwest caused membership to drop.

Wabash, St. Louis and Pacific RR Co. v. IL (1886) – Reversal of 1877 decision, only the federal government was declared able to regulate interstate commerce.

The Story of Jacob Coxey