Chapter 16 Section 2

1
Chapter 16 Section 2

• Populism

2
Unrest in Rural America

• Populism was the movement to increase farmers
  political power and to work for legislation in
  their interest.
• Economic problem for farmers-farm prices had
  dropped due to new technology
• Farmers were producing more
• High tariffs increased the cost of manufactured
  goods, made it hard to sell goods overseas
• Farmers felt they were victims of the banks and
  RR that set shipping rates

3
Money Supply

• United States Treasury increased money supply to
  finance the Union war effort
• Greenbacks-paper currency that could not be
  exchanged for gold or silver
• Inflation-decline in the value of money, paper
  money lost value prices soared

4
Three types of Currency after The Civil War

• Greenbacks, gold and silver coins, bank notes
  backed by government bonds
• To get inflation under control the federal
  government stopped printing greenbacks and began
  paying off its bonds
• Deflation-increase in the value of money and a
  decrease in the general level of prices

5
Deflation Hurts Farmers

• Money was in short supply, interest rates began
  to rise
• Falling prices of the period of deflation meant
  the farmers sold their crops for less
• Problems were due to a shortage of currency, many
  farmers concluded that eastern bankers had
  pressured Congress into reducing the money supply

6
The Crime of 73

• Some farmers encouraged the printing of more
  greenbacks to expand the money supply
• Westerners wanted the government to begin minting
  silver coins
• The decision to stop minting silver referred to
  as the Crime of 73

7
The Grange Takes Action

• Oliver H. Kelley founded the nations first
  national farm organization, the Patrons of
  Husbandry, AKA the Grange
• Gathered for social and educational purposes
• Grangers responded to crisis in three
  ways-pressured state legislatures to regulate
  railroad and warehouse rates, joined Independent
  National Party, pooled their resources and
  created cooperatives

8

• Cooperatives-marketing organizations that worked
  for the benefit of their members
• Farmers couldnt raise prices because of
  competition
• Cooperatives pooled farmers crops and held them
  off the market in order to force up prices
• Could negotiate better rates for shipping (large
  quantities)

9
The Grange Fails

• None of the strategies improved farmers
  competition
• Granger Laws-setting maximum rates and
  prohibiting railroads from charging more for
  short hauls than for long ones
• Greenback Party failed to gain support-people
  were suspicious of paper money
• Grange failed b/c they were too small to have an
  impact on prices

10
Farmers AllianceThe Alliance Grows

• A new organization after the Grange
• Charles W. Macune was the leader
• Organized large cooperatives called exchanges,
  hoped to force farm prices up and make low
  interest loans to farmers

11
The Peoples Party

• Large cooperatives failed because of
  overextending themselves by loaning too much
  money at low interest rates that were never
  repaid
• Wholesalers, bankers discriminated against them
• Still too small to affect prices on the world
  market
• People s Party-formed by Alliance leaders,
  Western states, wanted reform

12
The Subtreasury Plan

• Southern leaders opposed the idea of a third
  party, did not want to undermine the Democrats
  control of the South
• Macune suggested the Alliance call for a list of
  demands
• Subtreasury plan-called for the government to set
  up warehouses called subtreasuries
• Store crops, low interest loans from the
  government

13
Ocala Demands

• Intended to guide farmers in choosing whom to
  vote for in 1890
• Called for the adoption of the subtreasury plan,
  free coinage of silver, end to protective tariffs
  and national banks, tighter regulation of the RR,
  direct election of senators by voters instead of
  by state legislatures

14
Sherman Silver Purchase Act of 1890

• Tried to gain support of farmers
• Authorized the United States Treasury to purchase
  4.5 million ounces of silver a month
• Put money into circulation but did little to help
  farmers

15
The South Turns to Populism

• Few Democrats followed through by supporting the
  Alliance Program

16
A Populist for President

• James B. Weaver, Peoples Party, presidential
  candidate
• Platform
• Denounced the governments refusal to coin silver
• Increase money supply, unlimited coinage of
  silver at a ratio that gave 16 ounces of silver
  the same value as 1 ounce of gold
• Federal ownership of RR,
• Graduated income tax-taxed higher earnings more
  heavily

17

• Populists wanted to strengthen the hand of
  government so that could defend the public
  against what they saw as greedy and irresponsible
  private interests
• Omaha Platform-took positions popular with labor,
  including calling for an 8 hour workday,
  restricting immigration, and denouncing
  strikebreaking

18
Panic of 1893

• Not long after Clevelands inauguration, the
  nation plunged into an economic crisis
• Philadelphia and Reading RR declared bankruptcy
• RR expanded too rapidly, found it hard to repay
  loans

19
Goldbugs and Silverites

• The Panic of 1893 created a crisis for the United
  States Treasury
• Many investors owned bonds, things worsened, they
  cashed in for gold
• This caused gold to drain out the treasury and
  left the federal governments gold reserves low
• (Cleveland)Repeal of the Sherman Silver Purchase
  Act

20

• Clevelands actions split the Democratic party
  into two factions
• Goldbugs-believed the American currency should be
  based only on gold
• Silverites- believed coining silver in unlimited
  quantities would solve the nations economic
  crisis

21
The Election of 1896

• William Jennings Bryan-Democratic candidate-
  supporter of silver
• Populists Party-endorse Bryan and risk
  undermining the identity of party or split the
  silver vote

22
Bryans Campaign

• Cross of Gold speech (p. 506)
• Transformed the campaign for silver into a
  crusade
• Traveled thousands of miles making speeches

23
The Front Porch Campaign

• Republicans believed Bryan would be hard to beat
  in the South and West
• Chose William McKinley-campaigned from his front
  porch, met with different delegations at his home
• Promised workers a full dinner pail
• Republicans, convinced unlimited coinage of
  silver would ruin the country

24

• Business leaders donated huge sums of money to
  the Republican campaign
• Business would fail, unemployment would rise,
  wages would be cut if Bryan won

25
Populism Declines

• Gold strikes in other parts of the world
  increased the money supply without turning to
  silver
• This meant credit was easier to obtain and
  farmers were less distressed
• Gold Standard Act passed in 1900-officially
  adopted a gold-based currency