Populism and Free Silver in the 1890s

aka: The Wizard of Oz meets Monetary Policy

Get your clicker! Ch 48!

Goals: SWBAT… Identify and

explain basic micro and macro economic ideas

Apply these ideas to explain and analyze the Populist and Free Silver movements of the 1890s

Examine The Wizard of Oz as a Monetary Allegory http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

Our Agenda Today

Economics Basics Late 1800s Monetary Policy Populism and the Wizard of Oz

I understand the economics behind Populism and Free Silver.

1- Strongly disagree 2- Disagree 3- Agree 4- Strongly agree

Intro to Econ: Key Terms Demand, Supply, and Price Fiscal Policy Monetary Policy Money Supply Business Cycle Tariff Recession Inflation and Deflation

http://www.thebluecollarinvestor.com/blog/wp-content/uploads/2008/11/business-cycle-graph-better.jpg

http://priyankaseconomicblog.files.wordpress.com/2009/10/calvin-on-supply-and-demand3.jpg

Intro to Econ What causes prices to go up?

Demand Change vs. Supply Change Inflation vs. Deflation

Economics of the 1890s If Demand goes down…. If Supply goes up…. DEFLATION! Prices go down! What was happening to crop prices in

the late 1800s? Why? What was happening to farm costs

(i.e., mortgages, manuf. goods) in the late 1800s? Why?

I have a better understanding of how supply and demand impact

prices.

1- Strongly disagree 2- Disagree 3- Agree 4- Strongly agree

Economics of the 1890s Very high tariffs (taxes on imports) Agric. prices down (1860s to 1890s)

Depression of 1893

Why did farmers want inflation?

http://www.flickr.com/photos/farlane/3791930988/in/set-72157601329141029/

Economics of the 1890s

Economics of 1890s Is inflation bad? Yes for creditors (i.e., bankers) No for debtors (i.e., farmers) Some inflation is healthy, necessary

Why did farmers want inflation?

http://www.cthistoryonline.org/cdm-cho/cho/journeys/j_life_rural_farm.html

The government should have helped farmers more.

1- Strongly disagree 2- Disagree 3- Agree 4- Strongly agree

Government and EconomyA Short Digression…

Capitalism? Communism? Socialism?

Government and EconomyA Short Digression…

Capitalism? Adam Smith The Wealth of Nations (1776) Laissez Faire, Free Market should

replace Mercantilism Allow for competition to “naturally”

regulate economy

Government and EconomyA Short Digression…

Communism? Karl Marx and Friedrich Engels The Communist Manifesto (1848) Capitalism will collapse, Proletariat

will rise up and overthrow Bourgeoisie Stateless, Classless Total equality

Not quite Lenin or Mao

Government and EconomyA Short Digression…

Socialism? Great variation Parts of W. Europe and N. America

today Government control or regulation of some parts of economy

Schools, healthcare, “natural” monopolies; More worker and consumer protection

Government and Economy How can the government influence

the economy? Fiscal Policy: taxes and/or spending

Monetary Policy: money supply and/or interest rates

Today the Federal Reserve Bank (The FED) is in charge of Monetary Policy

http://www.fotosearch.com/illustration/inflation.html

Government and Economy Traditional Economics? Mercantilism Free Market

Capitalism Wealth of Nations by Adam Smith

(1776) The Government should stay out of

the economy Recessions are good! Reality?

Government and Economy Monetary Policy to stimulate the

economy… Increase the money supply and/or

lower interest rates Risks? Could lead to inflation, but unlikely if in a recession WARNING: The economy is a moving

target!

Government and EconomyRecessions During the 1800s: Panic of 1819 Panic of 1837 Panic of 1857 Panic of 1873 Depression of 1893

(FYI – Great Depression begins in 1929)

Government and EconomyHigh Tariffs During the 1800s: Tariff of 1816 – 15 to 20 percent Tariff of 1824 – Whig Party and Henry Clay Tariff of 1828 – 50 percent Tariff of 1832 – down slightly Tariff of 1857 – Democrats lower tariff Morrill Tariff of 1861 – 47 percent “mongrel” Tariff Act of 1883 McKinley Tariff Act of 1890 Dingley Tariff of 1897 – over 50 percent!(FYI – Hawley-Smoot Tariff of 1930)

Government and EconomyMonetary Policy During the 1800s: It was a mess!

Banks, States, and Federal govt printed money

First Bank of the US (1791-1811) Second Bank of the US (1816-1836)

Federal govt wanted no debt

Government and EconomyMonetary Policy During the 1800s: Mint Act of 1792 unlimited Silver & Gold at 15:1 “Crime of 1873” – govt. stopped

minting silver USA essentially on gold standard in

1879 Sherman Silver Purchase Act (1890)

not enough, and soon repealed

Government and EconomyMonetary Policy During the 1800s: Market value vs. Official value By 1894 Market value was over 30:1

(i.e., 30 silver = 1 gold) Populists wanted govt to resume

minting silver at 16:1FREE SILVER!!

Government and EconomyMonetary Policy During the 1800s: What if Govt minted silver at 16:1 in

1890s? Money Supply?Increase! But gold deposits would go

down Inflation?Not likely since recession

Government and EconomyMonetary Policy During the 1800s: Gresham’s Law named for Sir

Thomas Gresham (1519-1579)

“When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear”aka: “Bad money drives out good money”

Government and EconomyMonetary Policy During the 1800s: According to Gresham’s Law, if

Populists get their way, Gold is….

Good Money that will be undervalued and driven out of circulation, perhaps out of the

country

Bankers think silver is “bad”

I have a better understanding of U.S. government monetary

policy of the 1800s.

1- Strongly disagree 2- Disagree 3- Agree 4- Strongly agree

The Rise of Populism

Tariff very high Farmers caught in a debt cycle1869-1896 crop prices down 55

percent! Farmers Revolted and Organized!Granger movement (1860s to 1880s)Farmers Alliance (1880s)People’s Party formed in 1890s

1894 Unemployment over 18 percent

The Election of 1896Republicans endorsed William McKinley High tariffs and gold standard Conservative “sound money” positionDemocrats and Populists endorsed William Jennings Bryan Bimetallic standard (silver & gold) at

16:1 WJB gave “Cross of Gold” speech

The Election of 1896Republicans/McKinley won!Democrats became party of

“progressive” reformPopulist party fades away; many

positions adopted by Democrats

The Election of 1896Free Silver issue disappears: WHY? Gold Discoveries in 1880s and 1890s By 1897 Economy was improving 1900 Gold Standard Act New focus in Imperialism

The Wizard of Oz Book written by

Frank Baum in 1900

Movie in 1939 What’s the story?

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

The Wizard of Oz Story begins in the

West (Kansas) as did Populists

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

Dorothy? Heroine from poor

farm Represents honest,

plucky America Mary Elizabeth Lease?

The Wizard of Oz

Cyclone/Tornado = Free Silver Movement

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

The Land of Oz? The Gold Standard Oz = Gold (ounce)

http://babycreativeblog.files.wordpress.com/2009/10/tornado-4.jpg

http://www.open2.net/blogs/media/blogs/39197167_gold.jpg

The Wizard of Oz

Wicked Witch of the East (WWE)

House lands on and kills

Silver shoes put on Dorothy

http://www.physicsdaily.com/physics/Grover_Clevelandhttp://www.babygadget.net/pics/silver-shoes.jpg

= Eastern business interests, Grover Cleveland

The Wizard of Oz

Yellow Brick Road?

http://www.lonelyplanet.com/maps/north-america/usa/washington-dc/map_of_washington-dc.jpg

= Gold

Emerald City? Washington DC

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

http://www.flickr.com/photos/farlane/3791930988/in/set-72157601329141029/

The Wizard of Oz

Scarecrow needs? Appear brainless,

but smart = western farmers

The Wizard of Oz

Tin Woodman needs?

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

http://www.uni.edu/schneidj/webquests/adayinthelife/lotsofworkers.jpg

= industrial workers

Once flesh and blood; needs bigger, kinder heart

The Wizard of Oz

Cowardly Lion needs?

http://www.old-picture.com/american-history-1900-1930s/pictures/Jennings-William-Jennings.jpg

= WJB

Fell asleep in….?

Poppy Fields = Imperialism

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

Stopped fighting for silver

The Wizard of Oz

Travel to Emerald City?

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

= Coxey’s march to DC for job in 1894

Emerald Palace? = White House Seven passages &

three flights of stairs? = Crime of ‘73

http://blogs.ancestry.com/circle/wp-content/uploads/2008/08/Coxeys%20Army.bmp http://www.destination360.com/north-america/us/washington-dc/white-

house

The Wizard of Oz

Dorothy and Friends must?

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

WWW = McKinleyFate of WWW? Melts with water Farmers in West need

rain to counter drought

Rain = inflationhttp://4.bp.blogspot.com/_RMIeFF2Drjg/Snn9B2F1yNI/AAAAAAAABR8/62cVVZGoBUM/s400/Mckinley.jpg

Kill Wicked Witch of the West

The Wizard of Oz

The Wizard?

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

= Marcus Alonzo Hanna, an advisor to McKinley & head of RNC

www.nndb.com/people/013/000101707/

The Wizard of Oz

Wizard turns out to be ordinary

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

Gang seeks help from Good Witch of the South

problems are fixed Dorothy uses silver

shoes to return to Kansas http://www.starpulse.com/Movies/Wizard_Of_Oz,_The/gallery/

WIZARDOZ007/

= supporters in South

How did we do? SWBAT… Identify and

explain basic micro and macro economic ideas

Apply these ideas to explain and analyze the Populist and Free Silver movements of the 1890s

Examine The Wizard of Oz as a Monetary Allegory

http://bigpicture.typepad.com/comments/images/2008/07/14/inflation_recession_alligator.jpg

I think the Wizard of Oz accurately reflects the people and issues of

the 1890s. 1- Strongly disagree 2- Disagree 3- Agree 4- Strongly agree

I understand the economics behind Populism and Free Silver.

1- Strongly disagree 2- Disagree 3- Agree 4- Strongly agree

Thanks and have a great

day!

http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html