I. The Farm Crisis – long term decline in commodity prices coupled with tight credit situation meant increasingly difficult times for farmers, particularly in the South and in the Great Plains areas—areas which saw the greatest successes of the Grange, the Farmers’ Alliance, and the People’s party.
A) Economic conditions
1) Decline in commodity prices – from 1870 to 1898, commodity prices on foodstuffs declined, which meant the farmers received less return on the investment they made
2) Dependency on railroads and banks – the economic power of all large corporations frightened many Americans, but particularly the power of railroads and banks. Farmers were entirely reliant upon railroads to get their product to the market, and to receive those items from the market that they wished to buy. Banks controlled credit, and their refusal to make loans to farmers by taking land as collateral meant that many farmers had great difficulty obtaining new machinery and making other capital investments that they felt they needed.
3) Tariff policy – the high tariffs protected US manufacturers from foreign competition, but it also made for higher prices for most consumer goods, which meant that farmers and workers had to spend more of their income for the necessities of life.
B) The Farmers’ Responses
1) Granger Movement – began in 1867 when Oliver H. Kelley wanted to develop a means for Southern farmers to overcome their isolation. Because isolation was a common condition for many farmers, this movement became very popular. Quickly developed into a way for farmers to develop cooperative ventures for the buying and selling of goods, to free farmers from the conventional marketplace. The Granger movement gradually declined (although it never completely vanished) as more and more members were drawn into political movements. The Grange also tended to draw as members the more prosperous farmer.
2) Greenback-Labor Party – advocated the continued use of paper money—known as “greenback”—instead of a return to the gold or silver standard. This inflationary money policy was felt by many farmers to be the root cause of much of their hardships. Greenbackers made alliances with workers organizations because both parties were concerned about the growing influence of monied corporate interests were gaining in the hall of government.
3) Farmers’ Alliance – most popular in the South and the Great Plains are; attracted many poorer farmers than were attracted to the Grange. Although there were not bi-racial local organizations, nor were the national organizations bi-racial, there was limited bi-racial cooperation between white and African American groups in the South—because the Colored Farmers Alliance agreed to limit itself to demands for economic equality, not social equality.
(a) Provided members with sense of community, which attracted a great number of farmers who felt isolated.
(b) Provided farmwomen with a greater sense of purpose, that their lives could encompass more than “Drudgery, fashion, and gossip were no longer the bounds of woman’s sphere.”
(c) Grass roots movement – Alliance cells fostered the development of local leaders; a number of charismatic speakers like Mary Elizabeth Lease (quoted as saying the farmers “should raise less corn and more hell”) and “Sockless” Jerry Simpson.
(d) Use of vigilante justice – farmers often worked in concert against thieves and greedy ranchers, who tried to enclose common grazing areas.
(e) Promotion of racial understanding – in the South, although separate Alliances were maintained for blacks and whites, recognition was beginning to dawn on a number of members that white and black farmers had many things in common; in the words of Southern Alliance leader Tom Watson, “You are kept apart that you may be fleeced of your earnings.”
C) Farmers’ Alliance Proposals
1) Alliance Exchange – proposal by Charles W. Macune to allow Alliance members to sign joint bank notes for loans, and to set up a corporation owned by the Alliance were farmers could buy needed supplies. Plan had to be abandoned when Texas bankers refused to allow farmers to sign joint notes.
2) Subtreasury Plan – proposal by Alliance president Charles W. Macune to allow farmers to store their grain in government owned silos until a higher price was asked for the grain, when the farmer could then sell it at this more favorable higher price; would also allow farmers to obtain low-interest loans up to the value of 80% of his crop. Banks refused to go along with this idea; it was introduced as a bill in Congress, but it was allowed to die in committee
3) Proposals to ease credit restrictions – attempts to pressure bankers to ease credit restrictions
D) The Shift to Politics
1) The People’s Party – many Alliance members developed the idea that they would only see the proposals that they put forth become reality if they were able to exert some political pressure. The People’s Party, or Populists, were more successful in the West (particularly Kansas, Nebraska, and the Dakotas) than in the South, where white voters were extremely resistant to abandoning the Democratic Party
(a) Election of 1892 -- People’s Party run candidates for President (James B. Weaver) and vice-president on a platform backing the subtreasury plan, free and unlimited coinage of silver, a pledge to increase the amount of money in circulation, and institute a graduated income tax. Although Weaver stirs few with the power of his oratory, his candidacy does draw over a million votes—and, more importantly, he carried the states of Colorado, Kansas, Nevada, and Idaho, for a total of twenty-two electoral college votes, enough to give Cleveland the victory over Harrison.
II) The System of 1896 – the response on the part of the two major political parties charted the course for American politics until the onset of the Great Depression and the election of 1932.
A) Depression of 1893 – the most severe economic depression that the United States had faced to that point, set off by the bankruptcy of the Philadelphia and Reading Railroad, which then set off a panic on Wall Street when British investors began pulling financial backing out of American firms and demanding gold payment. Over 750,000 workers eventually went out on strike that year, and millions found themselves suddenly unemployed. Caused in part by a lack of currency in circulation, by the fact that currency growth had not kept pace with the growth of the economy.
1) Silverites and Goldbugs – when the majority of currency in circulation was made of precious metals, the worth of the metal in the coin would supercede its worth as currency, and therefore people would not spend it (especially true for gold).
(a) “Free and unlimited coinage” – people would present their gold or silver to the government, which would make coins of it; once gold or silver was turned into a coin, it was no longer able to fluctuate with the value of the precious metal that it contained.
2) 1894 Election – not surprisingly, many people blamed the party that controlled the White House for this fiasco, and returned majorities for the Republican Party in both the House and the Senate.
B) William Jennings Bryan – the “Boy Orator of the Plains.” Bryan seized upon the silver issue, and made it his own. Bryan was also the first politician from a major party to identify with the (white) underclass, mainly the small farmer, because his devotion to the tenets of his Baptist creed largely prevented immigrant workers in cities from identifying with him or his cause (a fact that proved fatal in the fall election that year).
1) “Cross of Gold” speech – speech before the Democratic convention in 1896 brought many in the audience to tears with its eloquence; however, it did not persuade all of the members of the party to back his candidacy after Bryan won the nomination—the goldbug faction of the party walked out of the convention and named their own candidate, Alton Parker, who promptly proclaimed that he saw no reason for a gold Democrat not to vote for the Republican candidate, William McKinley.
2) Split of Democratic Party – essentially remains unhealed until the rise of FDR in 1932, when he is able to patch together a coalition of urban ethnic workers, blacks, and Southern plutocrats.
C) Marcus J. Hanna – Cleveland oil man, associate of John D. Rockefeller, in politics to further his economic ends and those of his friends. Although he was only the campaign manager for McKinley in this election, he is by far the more important figure.
1) The Businessman’s Tax – because of the enmity that Bryan stirred in the business class, with his appeals to small farmers, workers, and the downtrodden, Hanna was able to essentially “tax” a number of businessmen in the country, to the tune of somewhere between $3.5 and $7 million (compared to Bryan’s war chest of $300,000), which allowed the McKinley campaign to outspend Bryan by a 15 to 1 margin.
2) “Economic Chaos” – businessmen promise they will close down their factories if Bryan were elected; this dissuades many workers who may have been inclined to overlook Bryan’s fundamentalist side to vote for McKinley instead.
D) The Forces of “Good Government” – as a result of the forces unleashed in the period after the Civil War, which seemed to be coming to a head at the end of the 1890s, dramatic changes in the way local governments are constituted quickly evolve.
1) Attempts to remove politics from local government.
(a) Development of City Manager style government – the cities of the South first develop this; suppose to put the reigns of power in a city in the hands of an “expert” and remove the hazards of politics from government. In effect, this removes the governing of the city from its citizens, who have no direct say in who is responsible for the day-to-day running of the city.
(b) At-Large Elections – again removes responsibility from those elected, which is no longer answerable to any one constituency—except that constituency which can afford to provide campaign funds.
III) Conclusion – the growth of the Progressive Movement is spurred by the “dangers” that the conflict between capitalists and labor seems to hold for the ability of the upper middle class to retain control of the body politic; most of the people who become associated with the Progressive Movement are in fact working to regain that control.