Digital History (2024)

Every year, the prices farmers received for their crops seemedto fall. Corn fell from 41 cents a bushel in 1874 to 30 cents by1897. Farmers made less money planting 24 million acres of cottonin 1894 than they did planting 9 million acres in 1873. Facinghigh interests rates of upwards of 10 percent a year, many farmersfound it impossible to pay off their debts. Farmers who couldafford to mechanize their operations and purchase additional landcould successfully compete, but smaller, more poorly financed farmers,working on small plots marginal land, struggled to survive.

Many farmers blamed railroad owners, grain elevator operators,land monopolists, commodity futures dealers, mortgage companies,merchants, bankers, and manufacturers of farm equipment for theirplight. Many attributed their problems to discriminatory railroadrates, monopoly prices charged for farm machinery and fertilizer,an oppressively high tariff, an unfair tax structure, an inflexiblebanking system, political corruption, corporations that boughtup huge tracks of land. They considered themselves to be subservientto the industrial Northeast, where three-quarters of the nation'sindustry was located. They criticized a deflationary monetarypolicy based on the gold standard that benefited bankers and othercreditors.

All of these problems were compounded by the fact that increasingproductivity in agriculture led to price declines. In the 1870s,190 million new acres were put under cultivation. By 1880, settlementwas moving into the semi-arid plains. At the same time, transportationimprovements meant that American farmers faced competitors fromEgypt to Australia in the struggle for markets.

The first major rural protest was the Patrons of Husbandry,which was founded in 1867 and had 1.5 million members by 1875.Known as the Granger Movement, these embattled farmers formedbuying and selling cooperatives and demanded state regulationof railroad rates and grain elevator fees.

Early in the 1870s the Greenback Party agitated for the issueof paper money, not backed by gold or silver, with the idea thata depreciating currency would make it easier for debtors to meettheir obligations.

Another wave of protest grew out of the National Farmers' Allianceand Industrial Union (the Southern Farmers Alliance) formed inLampedusa County, Texas in 1875, and the Northwestern Farmers'Alliance, founded in Chicago in 1880. By the late 1880s, thecooperative business enterprises set up by the Farmers' Allianceshad begun to fail due to inadequate capitalization and mismanagement.By 1890, the Farmers Alliances had begun to enter politics. In1892 the Alliance formed the Peoples' or Populist Party. Amongother things, the Populists financed commodity credit system thatwould have allowed farmers to store their crop in a federal warehouseto await favorable market prices and meanwhile borrow up to 80percent of the current market price.

The Populist platform also sought a graduated income tax, publicownership of utilities, the voter initiative and referendum, theeight-hour workday, immigration restrictions, and government controlof currency.

In the presidential election of 1892, the Populist candidate,James B. Weaver of Iowa, received more than a million popularvotes (8.5 percent of the total) and 22 electoral votes. The Populistsalso elected 10 representative, 5 senators, and 4 governors, aswell as 345 state legislators.

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