causes of debt

Farmers’ Debt

attempted solutions

expensive machinery

fall in wheat prices

drought 1885-1890

railroad shipping cost

“bonanza farms” huge, single crop,

investors mortgaging land to buy more land

political organizing -

Populism

Situation: lots of money that no-one trusts = INFLATION

Solution: take greenbacks out of circulation = less money = PRICES DOWN

Deflation hits farmers hard

$2.00

68¢Farmers want MORE money in circulation

Farmer’s Problems:

1. Deflation (falling prices)

NEXT… Railroad shipping rates

the railroads gouge the farmers,

especially for short hauls

Farmer’s Problems:

1. Deflation (falling prices)

2. Railroad shipping rates

NEXT… DebtFarmers had

borrowed, bought on credit, and mortgaged

property for land, seed, & equipment

Farmer’s Problems:

1. Deflation (falling prices)

2. Railroad shipping rates

3. Debt

The result?

Farmer’s organize

Oliver Hudson Kelley

Grange - 1867

Originally social and educational

Organize to fight the railroad, set up cooperatives, sponsor new laws “Granger Laws”

led to

Farmers’ Alliances

Farmers’ Alliances

•Political organization

•Sent lecturers from town to town

topics: banks, government, the railroad

4,000,000 members & 250,000 in “Colored Farmers‘National Alliance

•1887 Interstate Commerce Act – Congress can regulate railroads and prevent unfair rates (ICC)

The Populist Party 1892“We seek to restore the government of the Republic to the hands of the ‘plain people’…We assert our purposes to be identical with the purposes of the National Constitution.” –People’s Party platform

Goals:

Lift debt burden

Give people a voice

•Increase in money supply

•Graduated income tax

•Federal loan program

•Popular election of Senators

•Single terms for President and V.P.

•Secret ballots

•Eight hour work day

•End to immigration

Populist Party Platform

Populist results in their 1st election10% of popular vote 5 senators

3 governors 1,500 state legislators

Panic of 1893

Causes:

Industry over-expansion, especially railroads

Shrinking federal gold reserve

President Grover Cleveland did nothing

“It is no longer a government of the people, by the people and for the people, but a government of Wall Street, by Wall Street and for Wall Street….”

MaryElizabethLease

“Raise less corn and more hell!”

Depression of 1893

Results:

Six major railroads

BANKRUPT

500 banks COLLAPSED

3,000,000 jobs LOST

Major Political Debate: How to Fix the Economy

Gold Standard versus Bimetallism$ backed only by gold

Republicans, North-east, bankers & businessmen

Deflation, less money, worth more, lower prices

$ backed by silver & gold

Democratic, South and West, farmers and laborers

Inflation, more money, less debt, higher prices

Republicans back the gold standard Candidate: William McKinley

Democrats back bimetallism Candidate: William Jennings Bryan

Presidential Election 1896

Populists back bimetallism Support William Jennings Bryan

BryanBryan’’ss““Cross of GoldCross of Gold””

SpeechSpeech

BryanBryan’’ss““Cross of GoldCross of Gold””

SpeechSpeechYou shall not You shall not press down press down upon the brow upon the brow of labor this of labor this crown of crown of thorns; you thorns; you shall not shall not crucify crucify mankind upon mankind upon aa cross of goldcross of gold!!

McKinleyA puppet of The Wealthy?

1896 Election 1896 Election ResultsResults

1896 Election 1896 Election ResultsResults

Why Did Bryan Why Did Bryan Lose?Lose?

Why Did Bryan Why Did Bryan Lose?Lose?

Inflation scared urban Inflation scared urban voters.voters.

McKinleyMcKinley’’s campaign was s campaign was well-well-organized and highly organized and highly funded by big business $$$funded by big business $$$$$$$.$$$$.

Gold TriumphsGold TriumphsGold TriumphsGold Triumphs

1900 1900 GoldGoldStandard ActStandard Act

A victory for the A victory for the

forces offorces ofconservatism.conservatism.