Transcript Chapter 16 Section 2

Chapter 16 Section 2
Populism
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
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
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
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
“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”
The Grange Takes Action
• Oliver H. Kelley founded the nation’s 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
• Cooperatives-marketing organizations that
worked for the benefit of their members
• Farmers couldn’t 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)
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 supportpeople were suspicious of paper money
• Grange failed b/c they were too small to
have an impact on prices
Farmers Alliance
The 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
•
The People’s 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
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
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
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
The South Turns to Populism
• Few Democrats followed through by
supporting the Alliance Program
A Populist for President
• James B. Weaver, People’s Party,
presidential candidate
• Platform
• Denounced the government’s 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
• 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
Panic of 1893
• Not long after Cleveland’s inauguration,
the nation plunged into an economic crisis
• Philadelphia and Reading RR declared
bankruptcy
• RR expanded too rapidly, found it hard to
repay loans
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 government’s gold
reserves low
• (Cleveland)Repeal of the Sherman Silver
Purchase Act
• Cleveland’s 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
nation’s economic crisis
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
Bryan’s Campaign
• Cross of Gold speech (p. 506)
• Transformed the campaign for silver into a
crusade
• Traveled thousands of miles making
speeches
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
• Business leaders donated huge sums of
money to the Republican campaign
• Business would fail, unemployment would
rise, wages would be cut if Bryan won
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 1900officially adopted a gold-based currency