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Populism

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.

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Populism

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  1. Populism

  2. 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

  3. 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

  4. The Money Supply • To fund the Civil War, US government had flooded the market with paper money (“greenbacks”) • Supply of $↑ = Value of $↓ (inflation)

  5. 3 Types of Money • Greenbacks • Gold & Silver coins • Bank notes backed by government bonds

  6. Government response to inflation • 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)

  7. 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

  8. “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

  9. 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

  10. 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

  11. 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

  12. 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 ….

  13. 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

  14. 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

  15. The People’s Party • 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

  16. 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

  17. 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

  18. The Omaha Platform • 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

  19. 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

  20. 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

  21. 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

  22. 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

  23. 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

  24. 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

  25. 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.”

  26. 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)

  27. William McKinley’s“Front Porch” Campaign • 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

  28. William McKinley • 1843 – 1901 • 25th President (1897-1901) • Republican • Expansionist who oversaw the Spanish-American War • Assassinated in 1901

  29. 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

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