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Economics, Race, and the
Populist Party (1867-1896)
Historical Background: Economic
Turmoil of the 1870s
• The Panic of 1873
– Northern and Southern investors borrowed more and more
money, betting the post-Civil War economy would continue to
grow
– But when the nation’s largest bank went bankrupt (could not pay
debts for railroad construction), it triggered a financial panic
•
•
•
•
•
Smaller banks closed
89 railroads went bankrupt
18,000 companies closed
5-year depression
3 million unemployed workers
• Currency Dispute
– Roots in the Civil War/Fueled by the Panic of 1873
– During the Civil War the government printed “greenbacks” not
backed by gold
– After the War, northern bankers wanted to pull greenbacks out of
circulation and return to the gold standard (less money in
circulation)
– Southern and Western farmers wanted more greenbacks in
circulation (“easy money”) to help them pay off their debts
Farmers Unite to Address Common
Problems
Why were farmers angry?
Economic Distress
Problems with the Railroads
• Crop prices fell = lower profits and little
cash
• Farmers had to borrow money for seed
and supplies = higher interest rates and
more debt
• Paper money was being replaced (again)
with gold and silver and money was worth
less = harder to pay back loans
• Lenders (banks) foreclosed on their
mortgages
• Little competition among railroads = higher
rates to transport crops to market
• Railroads charged different rates for
different crops
• There was no standard rate (regulation)
Farmers Unite to Address Common
Problems
• In order to affect change, farmers needed to
organize
The Grange
• Formed by Oliver Hudson Kelley in 1867
• Organization of farmers
• Formed in order to fight for government
regulation of big business (specifically
railroads)
• Sponsored some state regulation of railroads
The Farmers’
Alliances
• Inspired by the Grange and included people
who sympathized with farmers
• Sent lecturers to towns to educate people
about lower interest rates and regulation of
railroads and banks
• 250,000 African Americans belonged to the
Colored Farmers’ National Alliance (most
organizations were segregated)
Grangers Begin to Make Progress
•
Munn v. Illinois (1876)
–
•
Wabash v. Illinois (1886)
–
•
Supreme Court ruled that states
can regulate railroads and
certain other businesses within
their own borders
Supreme Court rules states could
not regulate rail lines between
different states (interstate)
Leads to development of the
Interstate Commerce
Commission (federal
regulation)
The Omaha Platform
• To take their fight to the national level, farmers needed more than just a
fraternity
– They needed a political party
• Use the provided handout to examine the Omaha Platform, written by
the Populist Party
1.
Read the Background Information
•
2.
Read the Omaha Platform and Relevant Information
•
3.
Highlight important facts or ideas.
In Part A, use the information you’ve gathered from the reading to
determine which ideas the Populists would have supported or opposed.
•
4.
Use specific information from the Omaha Platform to support your findings.
In Part B, use the information you’ve gathered to infer (make an educated
guess about) which statements are probably true or false.
•
5.
Highlight important facts or ideas.
Use specific information from the Omaha Platform to support your findings.
In Part C, use the information you’ve gathered to explain the limited
success of the Populist Party.
What in the world is Populism?
Political Parties of the 1890s
Democratic Party
Populist Party
Republican Party
• Political movement of
farmers and laborers in the
late 19th century
• Goals:
1. Regulate the railroads
2. Make more cash available
(back the dollar with silver,
not gold)
3. Direct election of senators
and 1 year terms for
presidents
4. Graduated income tax
5. Restrictions on immigration
and 8-hour workday
“Fusion Coalition”
1892 Presidential Election: Populist candidate
won over a million votes!
The Panic of 1893
Causes
Results
1.
2.
3.
4.
5.
6.
1.
2.
3.
4.
Railroads expanded faster than market
Railroads went bankrupt
Stock market collapsed
Banks stopped loaning $
Farmers borrowed too much $
Businesses sold too much on credit
15,000 businesses collapsed
156 railroad companies went bankrupt
600 banks closed
Government funds and monetary
reserves dropped
5. Gold value dropped severely
The Election of 1896
Political Parties of the 1890s
Democratic Party
Populist Party
Republican Party
• Southerners
• Political movement of
• Northerners
• Wealthy farmers
farmers and laborers in the • Wealthy businessmen
• Supported low tariffs
late 19th century
(connected to the railroad)
(wanted other countries to • Goals:
• Southern African
1. Regulate the railroads
buy their crops)
Americans (poor farmers)
2. Make more cash available
 party of Lincoln
(back the dollar with silver,
• Supported high tariffs
not gold)
(didn’t want to compete
3. Direct election of senators
with other countries’
and 1 year terms for
products)
presidents
4. Graduated income tax
5. Restrictions on immigration
and 8-hour workday
“Fusion Coalition”
The Election of 1896
Populists decide to improve their chances by
supporting the Democratic candidate, William
Jennings Bryan, who agreed to support the
silver-backed dollar
Gold Bugs v. Silverites
Gold Bugs and Silverites
Gold Bugs
Silverites (Bimetallists)
Who They
Were
Bankers and businessmen
(Northerners/Republicans)
Farmers and laborers
(Southerners & Westerners/Democrats
& Populists)
What They
Wanted
Gold standard
Less money in circulation
Bimetallism (both gold AND silver)
More money in circulation
Why
Loans would be repaid in stable
money.
Products would be sold at higher
prices.
Effects
DEFLATION
• Prices fall
• Value of money increases
• Fewer people have money
INFLATION
• Prices rise
• Value of money decreases
• More people have money
William McKinley
(Republican)
William Jennings
Bryan
(Democrat/Populist)
The Election of 1896
Effects:
1. Period of Prosperity
2. Populists ideas were
absorbed into the
Progressive Party
Bryan loses but carries most of
the South and West
Central Historical Question
Why did the Populist Party attract
millions of supporters?
Using Primary Sources
• Read Document A. In the margins, respond to the following:
– Sourcing: Who wrote this? When?
– Contextualization: What was going on for farmers at the time? Lease
is a woman who is speaking to a group of women. What does this say
about women’s involvement in politics in the 1890s?
– Close Reading: How is this document supposed to make you feel?
• Read the first paragraph: How is this supposed to make the audience feel?
Why might she use religious references?
• Read the second and third paragraphs together: How was this supposed to
make the audience feel? Who are the good guys? Who are the bad guys?
What emotions does she appeal to?
• Read the final paragraph: How was this supposed to make the audience feel?
• Now read Document B. Use the handout to answer the questions
about Bryan’s “Cross of Gold” Speech.
• Do these themes resonate today? Which parts of these speeches
could we expect to hear from today’s politicians? Which parts
seem outdated?