Like industrial workers, farmers experienced severe economic hardships and a loss of political power in the face of rapid industrialization. The introduction of new machinery such as the combine harvester, introduced in 1878, led to substantial increases in the productivity of American farms. Soaring production, however, led to a decline in agricultural prices in the late nineteenth century, a trend that was accelerated by increased agricultural production around the world. Faced with an economic crisis caused by falling prices and escalating debt, farmers fought back, creating new organizations to champion their collective economic and political interests.
From the end of the Civil War to the mid-1890s, increased production of wheat and cotton, two of the most important American crops, led to a precipitous drop in the price these crops fetched on the open market. Falling prices created a debt crisis for many farmers. Most American farmers were independent businessmen who borrowed money to pay for land, seed, and equipment. When their crops were harvested and sold, they repaid their debts with the proceeds. As prices fell, farmers increased production in an effort to cover their debts. This tactic led to a greater supply of farm produce in the marketplace and even lower prices. Unable to pay back loans, many farmers lost their property in foreclosures to the banks that held their mortgages and furnished them credit.
To make matters worse, farmers lived isolated lives. Spread out across vast acres of rural territory, farmers had few social and cultural diversions to enliven the long, hard days they worked from sunup to sundown. As the farm economy declined, more and more of their children left the monotony of rural America behind and headed for cities in search of new opportunities and a better life.
Early efforts to organize farmers were motivated by a desire to counteract the isolation of rural life by creating new forms of social interaction and cultural engagement. In 1867, Oliver H. Kelly, who worked as a clerk in the Department of Agriculture, founded the Patrons of Husbandry to brighten the lonely existence of rural Americans through educational and social activities, including lectures, agricultural fairs, and picnics. Known as Grangers (from the French word for “granary”), the association grew rapidly in the early 1870s, especially in the Midwest and the South. Between 1872 and 1874, approximately fourteen thousand new Grange chapters were established.
In addition to helping to alleviate rural isolation, Grangers formed farm cooperatives to sell their crops at higher prices and pool their purchasing power to buy finished goods at wholesale prices. The Grangers’ interest in promoting the collective economic interests of farmers led to their increasing involvement in politics. Rather than forming a separate political party, Grangers endorsed candidates who favored their cause. Perhaps their most important objective was the regulation of shipping and grain storage prices. In many areas, individual railroads had monopolies on both of these services and, as a result, were able to charge farmers higher-than-usual rates to store and ship their crops. By electing sympathetic state legislators, Grangers managed to obtain regulations that placed a ceiling on the prices railroads and grain elevators could charge. The Supreme Court temporarily upheld these victories in Munn v. Illinois (1877) by affirming the constitutionality of state regulation of private property that benefited the public interest. In 1886, however, in Wabash v. Illinois the Supreme Court reversed itself and struck down these state regulatory laws as hindering the free flow of interstate commerce.
Granger Movement, 1876 As the farmer's central placement in this lithograph implies, farmers were the heart of the Granger movement. The title is a variation on the movement's motto, "I Pay for All." A farmer with a plough and two horses stands at the center of the scene providing food for all, while other occupational types positioned around him echo a similar refrain based on their profession. Note the attitude toward the broker implied by the label "I Fleece You All." Library of Congress
Another apparent victory for regulation came in 1887 when Congress passed the Interstate Commerce Act, establishing the interstate Commerce Commission (iCC) to regulate railroads. Although big businessmen could not prevent occasional government regulation, they managed to render it largely ineffective. Large railroad lines found it easier to influence decisions of the ICC than those of agencies at the state level, which were more inclined to support local farmers and other shippers. In time, railroad advocates came to dominate the ICC and enforced the law in favor of the railway lines rather than the shippers. Implementation of the Sherman Antitrust Act (see chapter 16) also favored big business. From the standpoint of most late-nineteenth-century capitalists, national regulations often turned out to be more of a help than a hindrance.
By the late 1880s, the Grangers had abandoned electoral politics and once again devoted themselves strictly to social and cultural activities. A number of factors explain the Grangers’ return to their original mission. First, prices began to rise for some crops, particularly corn, relieving the economic pressure on midwestern farmers. Second, the passage of regulatory legislation in a number of states convinced some Grangers that their political goals had been achieved. Finally, a lack of marketing and business experience led to the collapse of many agricultural collectives.
The withdrawal of the Grangers from politics did not, however, signal the end of efforts by farmers to form organizations to advance their economic interests. While farmers in the midwestern corn belt experienced some political success and an economic upturn, farmers farther west in the Great Plains and in the Lower South fell more deeply into debt, as the price of wheat and cotton on the international market continued to drop. In both of these regions, farmers organized Farmers' Alliances. In the 1880s, Milton George formed the Northwestern Farmers’ Alliance. At the same time, Dr. Charles W. Macune organized the much larger Southern Farmers’ Alliance, which boasted more than 4 million members. Southern black farmers, excluded from the Southern Farmers’ Alliance by prevailing white supremacist sentiment, created a parallel Colored Farmers’ Alliance, which attracted approximately a quarter of a million supporters. The Alliances formed a network of recruiters to sign up new members. No recruiter was more effective than Mary Elizabeth Lease, who excited farm audiences with her forceful and colorful rhetoric, delivering 160 speeches in the summer of 1890 alone. Not only did Lease urge farmers and workers to unite against capitalist exploitation, but she also agitated for women’s rights and voiced her determination “to place the mothers of this nation on an equality with the fathers.”
The Southern Farmers’ Alliance advocated a sophisticated plan to solve the farmers’ problem of mounting debt. Macune devised a proposal for a subtreasury system. Under this plan, the federal government would locate offices near warehouses in which farmers could store nonperishable commodities. In return, farmers would receive federal loans for 80 percent of the current market value of their produce. In theory, temporarily taking crops off the market would decrease supply and, assuming demand remained stable, lead to increased prices. Once prices rose, farmers would return to the warehouses, redeem their crops, sell them at the higher price, repay the government loan, and leave with a profit. Of the many recommendations proposed by the Alliances, the subtreasury system came closest to suggesting a realistic solution to the problem of chronic farm debt.
The first step toward creating a nationwide farmers’ organization came in 1889, when the Northwestern and Southern Farmers’ Alliances agreed to merge. Alliance leaders, including Lease, saw workers as fellow victims of industrialization, and they invited the Knights of Labor to join them. They also attempted to lower prevailing racial barriers by bringing the Colored Farmers’ Alliance into the coalition. The following year, the National Farmers’ Alliance and Industrial Union held its convention in Ocala, Florida. The group adopted resolutions endorsing the subtreasury system, as well as recommendations that would promote the economic welfare of farmers and extend political democracy to “the plain people.” These proposals included tariff reduction, government ownership of banks and railroads, a constitutional amendment creating direct election of U.S. senators, adoption of the secret ballot, and provisions for state and local referenda to allow voters to initiate and decide public issues.
Finally, the Alliance pressed the government to increase the money supply by expanding the amount of silver coinage in circulation. In the Alliance’s view, such a move would have two positive, and related, consequences. First, the resulting inflation would lead to higher prices for agricultural commodities, putting more money in farmers’ pockets. Second, the real value of farmers’ debts would decrease, since the debts were contracted in pre-inflation dollars and would be paid back with inflated currency. Naturally, the eastern bankers who supplied farmers with credit opposed such a policy. In fact, in 1873 Congress, under the leadership of Senator John Sherman, had halted the purchase of silver by the Treasury Department, a measure that helped reduce the money supply. Investment bankers, such as J. P. Morgan, opposed a bimetallic monetary standard that added silver to gold coinage. They believed that only the use of gold would preserve the faith that foreign investors had in U.S. currency. Under the Sherman Silver Purchase Act (1890), the government resumed buying silver, but the act placed limits on its purchase and did not guarantee the creation of silver coinage by the Treasury. In the past, some members of the Alliance, including Lease, had favored expanding the money supply with greenbacks (paper money). However, to attract support from western silver miners, Alliance delegates emphasized the free and unlimited coinage of silver. Alliance supporters met with bitter disappointment, though, as neither the Republican nor the Democratic Party embraced their demands. Rebuffed, farmers took an independent course and became more directly involved in national politics through the formation of the Populist Party.
Populists Rise Up
In 1892 the National Farmers’ Alliance moved into the electoral arena as a third political party. The People’s Party of America, known as the Populists, held its first nominating convention in Omaha, Nebraska, in 1892. In addition to incorporating the Alliance’s Ocala planks into their platform, they adopted recommendations to broaden the party’s appeal to industrial workers. Populists endorsed a graduated income tax, which would impose higher tax rates on higher income levels. They also favored the eight-hour workday, a ban on using Pinkerton “mercenaries” in labor disputes, and immigration restriction, which stemmed from the unions’ desire to keep unskilled workers from glutting the market and depressing wages. Reflecting the influence of women such as Mary Lease, the party endorsed women’s suffrage. Although African Americans contributed to the founding of the Populists, the party did not offer specific proposals to prohibit racial discrimination or segregation. Rather, the party focused on remedies to relieve the economic plight of impoverished white and black farmers in general.
In 1892 the Populists nominated for president former Union Civil War general James B. Weaver. Although Weaver came in third behind the Democratic victor, Grover Cleveland, and the Republican incumbent, Benjamin Harrison, he managed to win more than one million popular votes and 22 electoral votes. For a third party competing for the presidency for the first time, this was a noteworthy accomplishment.
At the state level, Populists performed even better. They elected 10 congressional representatives, 5 U.S. senators, 3 governors, and 1,500 state legislators. Two years later, the party made even greater strides by increasing its total vote by 42 percent and achieving its greatest strength in the South. This electoral momentum positioned the Populists to make an even stronger run in the next presidential election. The economic depression that began in 1893 and the political discontent it generated further enhanced Populist chances for success.
REVIEW & RELATE
• Why was life so difficult for American farmers in the late nineteenth century?
• What were the similarities and differences between farmers' and industrial workers' efforts to organize in the late nineteenth century?