Why Farmers Turned Economic Pain Into Politics

PART II — U.S. HISTORY, 1491 TO THE PRESENT · CHAPTER 23

While industrial workers organized against corporate power in the cities, American farmers faced a parallel squeeze: falling crop prices, rising costs, and a currency system that worked against anyone who owed money. Farmers built their own political movements in response, and by the 1890s their demands had produced a national third party serious enough to reshape how both major parties approached economic policy.

Farmers Face a Cost-Price Squeeze

Farm prices fell for several reasons, including expanding agricultural output at home and abroad, even as farmers’ costs for railroad shipping, equipment, and loan interest kept rising. A relatively tight money supply and the long deflationary trend of the late nineteenth century increased the real burden of fixed debts, which is why indebted farmers often attacked the gold standard and demanded monetary expansion. The gold standard was part of the monetary setting, not the sole cause of falling farm prices.

Why Free Silver Appealed to Debtors

Supporters of free silver wanted the government to coin silver more freely alongside gold, expanding the money supply. They expected a larger currency supply to produce some inflation, raise crop prices, and make fixed debts easier to repay in dollars worth slightly less than before. Creditors and many business interests preferred the gold standard because they valued currency stability and feared inflation. The argument was therefore about who benefited from the value of money itself, not simply about loyalty to one metal.

Farmers Build Organizations Before They Build a Party

The National Grange, founded in 1867, began as a social and educational organization for farm families before moving into direct political action, successfully pushing several state legislatures to pass Granger Laws regulating railroad shipping rates. Farmers’ Alliances that grew rapidly across the South and West in the 1880s went further, building cooperative buying and selling arrangements to bypass exploitative middlemen and developing an increasingly ambitious political program that would soon feed directly into a new national party.

Populism Builds a National Political Movement

The People’s Party, commonly called the Populists, formed in 1892 out of this farmer organizing and issued the Omaha Platform, demanding the free and unlimited coinage of silver to expand the currency, a graduated income tax, direct election of U.S. senators, and government ownership of railroads and the telegraph system. Populists in some areas attempted political coalitions across racial lines between Black and white farmers who shared the same economic grievances, though most such alliances ultimately broke down under the weight of the era’s entrenched white supremacy.

The Election of 1896 Tests Populism’s Reach

Democrat William Jennings Bryan electrified the 1896 Democratic convention with his Cross of Gold speech, attacking the gold standard on behalf of ordinary farmers and workers. The Populists nominated Bryan for president but paired him with their own vice-presidential nominee, Thomas E. Watson, while Democrats ran Arthur Sewall. Fusion arrangements varied by state. Republican William McKinley won the election on a platform defending the gold standard and industrial growth, backed by business interests and much of the growing urban and industrial vote. Bryan’s defeat and the strategic costs of fusion weakened Populism as an independent national party, even as several of its specific proposals, including the graduated income tax and direct election of senators, would become law within a generation.

Government Begins to Regulate Big Business

Congress passed the Interstate Commerce Act in 1887, creating the Interstate Commerce Commission as the first federal regulatory agency, aimed at controlling railroad rate abuses that had angered farmers and shippers alike, though the commission initially lacked strong enforcement power. The Sherman Antitrust Act of 1890 banned combinations in restraint of trade in broad, vague language that courts spent the next decade interpreting, often against labor unions rather than the business trusts the law had ostensibly targeted, a pattern that would not shift decisively until the Progressive Era.

Gilded Age Politics Rewards Patronage Over Reform

Gilded Age politics was saturated with patronage, but it was not empty of policy conflict. Voter turnout was often extremely high, and party loyalties were intense. Republicans and Democrats fought over the tariff, currency, veterans’ pensions, civil-service reform, and the proper reach of federal power. Neither major party consistently challenged concentrated corporate power in the way later Progressives would, but the era’s elections were not simply interchangeable contests over jobs. The assassination of President James Garfield in 1881 by a disappointed office-seeker did produce one significant reform, the Pendleton Civil Service Act of 1883, which began replacing patronage appointments with a merit-based federal civil service, though patronage politics continued to dominate state and local government for years afterward.

Answer without looking back.

REBUILD THE POPULIST ARGUMENT

1 Explain how the gold standard’s deflationary effect specifically hurt indebted farmers.

2 What did the Grange accomplish through Granger Laws, and how did Farmers’ Alliances go further?

3 List three demands from the Populist Omaha Platform.

4 Why did the 1896 election effectively end Populism as an independent political force, even though some of its ideas later became law?

5 Explain why the Sherman Antitrust Act was often used against labor unions rather than business trusts in its early years.