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2.6 The Grange, Regulation & Populism What is the Grange? • The farms and farmers represented the food production for the country called the Grange Causes/Problems • Late 1860s Oliver Hudson Kelly • Problem: Farmers in debt as crop prices fell and fees increased • Farmers borrowed large sums of money to buy equipment and land • Problem: Railroads charges large fees to transport crops and owned grain elevators used for grain storage • Smallest farmers charged more than large farmers on railroads • Merchants who sold farm equipment, banks, railroads all became rich National Grange Movement • Formed in 1867 by Oliver Hudson Kelly as a social group • Purpose: to stimulate self-improvement through education for Local farmers • Cooperatives formed to drives prices down to help limit farm costs • Campaign to unite/educate farmers nationwide • To save farms, farmers would have to battle industry (railroads) States Create Granger Laws 1870s • Midwestern State governments (Minnesota, Iowa, Wisconsin and Illinois) attempt to limit railroad rates, and grain storage fees through state laws. • State laws shot down by federal courts- no regulation of interstate commerce is allowed except by feds! Supremacy Clause & Commerce Clause) Regulation of Industry • The Grange united with state legislatures to enact laws regulating railroads and grain elevators • Munn v Illinois 1877 Supreme Court ruled that states can regulate the use of private property (railroad and grain elevators) when it is used in the public interest. Grangers won! • Later, Wabash v Illinois 1886 Only Feds had power to regulate the railroad between states • Later, Interstate Commerce Act 1887 : all railroads must create equal rates and publish rates to the public Time Zones • Created a standard time • People start working off of clocks not the sun • 1883 Railroad owners proposed four time zones for service and safety • New York school Principal C. F. Dowd was the first person who proposed dividing the Earth into time zones as railroads required accurate time-keeping • 1918 Congress adopted the time zones Government Assistance • Newlands Act (1901) - federal Bureau of Reclamation set up in Interior Dept. to build interstate irrigation projects Farmers Alliance 1870 • Some states formed (strong) alliances for protection with prices and competition • Texas & New York formed Farmers Alliance with 1 million members by 1890 • Southern Farmers Alliance formed (whites only) • Colored Farmers Alliance for blacks in South 1 million members by 1890 • Problem: all Farmer Alliances wanted the government to print more money supply Gold Standard • 1873 Congress adopted the gold standard which used gold only to back paper money • The government promised to redeem any bill for gold • Gold had to match paper money! • This actually reduced the paper money and angered farmers • Farmers pressed for silver (cheaper) Bland-Allison Act 1878 • “Grand Bland Plan” was an act of United States Congress requiring the U.S. Treasury to buy a certain amount of silver and put it into circulation as silver dollars • Democrats and populists favored • Republican President Hayes vetoed but Congress overrode veto and passed • Bimetallism • Climax in 1896 election Populist Party Formed in 1892 • Farmers backed new third party • Farmers, labor leaders and reformers • Platform: Income tax, bank regulation, government ownership of railroad & telegraph companies • Silver as standard, not gold • 1892 Election Democrat Grover Cleveland won and Populist Party Weaver lost (3rd parties never won pres.) 1892 Election & Farmers • During the 1892 election, large numbers of southern white farmers refused to leave the Democratic Party and support the Populist Party because of the racial division in the South made it difficult for cooperation between whites and blacks Panic of 1893 Causes National economic crisis set off by the collapse of two of the country's largest employers, the Philadelphia and Reading Railroad and the National Cordage Company. A panic erupted on the stock market. Hundreds of businesses had overextended themselves, borrowing money to expand their operations. When the financial crisis struck, banks and other investment firms began calling in loans, causing hundreds of business bankruptcies across the United States. Panic of 1893 • • • • • • 1893 Economic Depression Major railroad company failed Investors pulled money out of stock market Thousands of businesses collapsed By 1894 over 3 million people unemployed Cleveland focused on the Sherman Silver Purchase Act of 1890; required the government to pay for silver purchases with gold or silver • New Colorado silver strike made silver value go down (high supply=low demand) • Cleveland asked Congress to repeal the Sherman Silver Act and they did. Gold standard only! Results:1890s Economic Depression • The severe economic depression of the 1890s strengthened the Populists’ argument that wage earners and farmers alike were victims of an oppressive economic system! • Thought: Silver, which is cheaper was needed to stimulate economy End of Cleveland • Wilson-Gorman Tariff Act 1894-lowered the tariff on imports • But his policies during the depression were generally unpopular (1893 Pullman Strike). His party deserted him and nominated William Jennings Bryan in 1896. Election of 1896 • Republican William McKinley against Democrat William Jennings Bryant • Bryant was against the gold standard and wanted silver included • Populists supported Democrats because of silver • Bryant’s Cross of Gold Speech vowed to resist gold and called it sacrilegious (used religion) • Business leaders did not like this and pledged support for Republican McKinley (Pro-Business) • McKinley won! • Inauguration speech, made sure that only gold would be the standard in America. Election 1896 • President William McKinley • VP Garret Hobart • Republican • William J. Bryan • Democrat • Populist supported but lost 1896 End of Populist Party • Gold Standard won! • Many platforms that the Populist supported would however start the groundwork for reforms in the American future • Populist ideas transformed into mainstream political ideas of “for the common ordinary American”