Chapter 26
Rumbles of Discontent
1865-1900
The Farm Becomes a Factory
High prices caused farmers to concentrate on growing single "cash" crops, such as wheat or corn, and use their profits to buy produce at the general store and manufactured goods in town.
The speed of harvesting wheat dramatically increased in the 1870s by the invention of the twine binder and the in the 1880s by the combine. This mechanization of farms brought about the idea that farms were "outdoor grain factories."
Deflation Dooms the Debtor
Because Western farmers grew single crops (wheat or corn), they existed in a one-crop economy, like the southern cotton farmers. Farmers' livelihoods depended on the price of their single product, which was unpredictable and out of their control.
In the late 1800s, deflation caused the relative prices of crops to decrease. Thousands of farms foreclosed, and some farmers became tenant farmers, renting instead of owning the land that they farmed.
Unhappy Farmers
In the late 1800s, poor soil and droughts forced many people to abandon their farms and towns.
Farmers sold their produce in an unprotected world market, but they had to buy their manufactured equipment in a tariff-protected home market.
Farmers were at the mercy of various corporations: harvester trust, the barbed-wire trust, the fertilizer trust, railroad trust.
Farmers made up half the population in 1890, but they failed to organize until they were forced to do so by the federal government 50 years later.
The Farmers Take Their Stand
The National Grange of the Patrons of Husbandry (also known as the Grange), organized in 1867, was led by Oliver H. Kelley. Kelley's first objective was to enhance the lives of isolated farmers through social, educational, and fraternal activities.
The Grangers also sought to improve the farmers' collective troubles. They established cooperatively owned stores for consumers and cooperatively owned grain elevators and warehouses for producers.
Some Grangers entered politics and made Grange Laws, which tried to force public control of private business for the general welfare. The Grangers' influence faded after courts reversed their laws.
The Greenback Labor Party sought to improve the working conditions of laborors.
Prelude to Populism
Farmers formed the Farmers' Alliance in the late 1870s. They cooperated in buying and selling to gain control over the railroads and manufacturers. The Alliance had limited power because it excluded blacks and landless tenant farmers. The Colored Farmers' National Alliance was formed in the 1880s to attract black farmers.
The People's Party, or "Populists," formed from frustrated farmers in the agricultural belts of the West and South. They called for a graduated income tax; government ownership of the railroads, telegraph, and telephone; the direct election of U.S. senators; a one-term limit on the presidency; the adoption of the initiative and referendum to allow citizens to shape legislation more directly; a shorter workday; and immigration restriction.
The Populists nominated General James B. Weaver for the presidential election of 1892.
In 1892, a series of violent worker strikes swept through the nation, including the Homestead Strike.
The Populist Party did not win the election. One of the main reasons was that the party supported the black community. The party's leaders, such as Thomas Edward Watson, felt that a black man had a right to vote. The party counted on many black votes from the South, but many Southern blacks were denied the right to vote through literacy tests and poll taxes. The Southern whites voted against the party because of the party's equal rights views toward blacks.
Cleveland and Depression
Grover Cleveland again ran for president in the election of 1892 and won, beating out the Populist Party and the Republican Party.
The panic of 1893 was the United States' worst economic depression in the 1800s. It was caused by overbuilding, over-speculation, and the agricultural depression.
The Sherman Silver Purchase Act of 1890 was created by Benjamin Harrison, and it forced the government to purchase a certain amount of silver every month. Indebted farmers pushed for the Act because they wanted to cause inflation so they could pay off their debts with cheaper money. People started to exchange their silver for gold from the government. An increase in silver production lead to a significant drain on the Treasury's gold reserves, which decreased confidence in the country's finances. Because of this, Cleveland was forced to repeal the Sherman Silver Act Purchase in 1893.
J.P. Morgan lent the government $65 million in gold to increase the Treasury's reserve.
Cleveland Breeds a Backlash
The Wilson-Gorman Tariff of 1894 lowered tariffs and added a 2% tax on incomes over $4,000. The Supreme Court ruled income taxes unconstitutional in 1895.
The embarrassment over the Wilson-Gorman Tariff caused the Democrats to lose seats in Congress, giving the Republicans an majority in Congress.
Grant, Hayes, Garfield, Arthur, Harrison, and Cleveland were known as the "forgettable presidents."
Coxey's Army and the Pullman Strike
The panic of 1893 strengthened the Populists' stance that farmers and laborers were being oppressed by the economic and political systems.
"General" Jacob S. Coxey led a protest in Washington in 1894, demanding that the government start a public works program.
Eugene V. Debs helped to organize the American Railway Union. The Pullman strike of 1894 was started when the Pullman Palace Car Company cut wages. Federal troops broke up the strike.
Golden McKinley and Silver Bryan
The Republican candidate for the election of 1896 was William McKinley. Marcus Alonzo Hanna was McKinley's influential campaign manager. Hanna felt that the prime function of government was to aid business, and he believed in the "trickle down effect" (laborers do well if the business does well). The Republican platform supported the gold standard.
The Democratic candidate was William Jennings Bryan. He supported inflation through the unlimited coinage of silver, which caused many Populists to support him as a candidate.
Class Conflict: Plowholders versus Bondholders
William McKinley won the election of 1896. Many of McKinley's votes came from the East. Many of Bryan's votes came from the debt-stricken South and the trans-Mississippi West. Businesses and wage earners in the East voted for their jobs and had no reason to favor inflation, which was the heart of Bryan's campaign.
The election of 1896 was the last election in which a candidate tried to win the election with help from the farmers. There were more people in cities, so future elections focused on trying to win the urban vote.
The political era from 1896 to 1932 was called the "fourth party system." This time period was characterized by lower voter turnout, weakening of party organizations, and the fading of issues like civil-service reform. New political issues became concern for industrial regulation and the welfare of labor.
Republican Stand-pattism Enthroned
The Dingley Tariff Bill, passed in 1897, instituted high tariff rates to generate revenue to cover the annual Treasury deficits.
The Republicans claimed credit for bringing prosperity to the nation following the panic of 1893.
The Gold Standard Act of 1900 allowed for paper currency to be redeemed for gold.
