Page 2 of
5 THE
SHAPE OF US POPULISM, Part 2 Long-term effects of the
Civil War By Henry C K Liu
more democratic
political process. The discontent was sharpened in
the South by a steady fall of cotton prices,
dropping by half from 1877 to 1897.
The
National Farmers' Alliance The National
Farmers' Alliance formed in Texas in 1875 was the
first political organization of US populism. Known
also as the Southern Alliance, it grew quickly to
a membership of three million out of a total adult
male working population of 18 million. A separate
"Negro" organization, the Colored Farmers'
Alliance, had one million members.
Concrete achievements of Southern populism
were meager, mostly due to the race problem. The
Bourbons managed to
control the newly emancipated "Negro" vote
with the unhappy result that many white farmers
viewed the disenfranchisement of the "Negro" as a
necessity for breaking Bourbon domination.
Southern populism was diverted in later decades by
the Southern upper classes from its original
progressive objective to a crusade for white
supremacy.
A Northern Alliance of farmers
in Kansas, Nebraska, Minnesota and the Dakotas
emerged with a stable of able leaders, among whom
was Mary Elizabeth Lease who called on farmers to
"raise less corn and more hell". The alliances
advocated measures to protect the interests of
farmers and appealed to industrial workers for
support. With the Southern Alliance leaders
preferring to stay within the Democratic Party,
the Western leaders formed the populist People's
Party in May 1891 in Cincinnati, Ohio.
The People's Party The populist
platform of the People's Party demanded a series
of reforms designed to break the control of
political bosses and to give back to the people
effective control of their government. It also
aimed at restoring a more equitable economic
system through nationalization of the railroads,
communication networks, a graduated income tax,
shorter work days and work weeks and a stable
currency to ward off inflation that repeatedly
outpaced wage increases.
To address the
problem of farm credit, the platform proposed a
"sub-treasury" plan by which the government would
store non-perishable farm produce in national
warehouses and give loans to farmers to whom it
belonged up to but not more than 80% of it value.
Populism was essentially a resurgence of the
spirit of Jeffersonian agrarian democracy that had
shape American ideals and institutions at the
founding of the republic.
The currency
issue The issue that aroused most
controversy was that of currency. Southern and
Western farmers were convinced that the main
reason for the fall of farm prices was the policy
of deflation adopted by the Federal government
after the Civil War to punish Southern debtors. By
limiting the quantity of greenbacks and silver
dollars, making them redeemable in gold, the
Treasury had increased the value of money held by
Northern money trusts and correspondingly deflated
prices of commodities produced by farmers and
miners.
Farmers saw the product of the
labor decrease in value while their debts
increased in value. They felt it unfair that they
had to repay the loan they took out earlier when
wheat was selling for $1 a bushel with money that
could later buy wheat at 60 cents a bushel. The
Populists demanded an increase in the quantity of
money in the form of paper currency or
unrestricted coinage of silver at the constant
ratio of 16:1. The silver coin proposal received
strong support from the silver miners.
The
Populists were convinced that the maintenance of
the gold standard was a conspiracy of
international financiers, for whom the
Northeastern banks were agents, to impoverish the
masses. This attitude was a foundation of
isolationist sentiment in the US, particularly in
the rural regions of the South, the West and the
Middle West.
Populism reduced to a
sectional movement The election of 1892
showed that US populism, deprived of the support
of the Southern populists, was reduced to mostly a
sectional movement. Democratic candidate Grover
Cleveland, having lost the White House in 1888 to
Republican Benjamin Harrison despite a popular
vote majority but a 168 to 233 loss in electoral
votes, recaptured the presidency from Harrison
with both a popular vote and electoral majority.
People's Party candidate James B Weaver won
1,041,028 popular votes and 22 electoral votes,
all from states west of the 95th meridian, with
support mostly from Western farmers and miners.
Populist appeal to industrial labor was not
successful.
Populism co-opted by both
major parties The long-term impact was the
growth of populist influence within the two major
parties. Populist candidates ran on Democratic and
Republican tickets. The most notable was John P
Altgeld, a German immigrant who became Democratic
governor of Illinois, giving the state a
progressive administration. Shortly after the 1892
election, the country plunged into a severe and
long depression in which unemployment grew to over
4 million, or 18.4%, with double-digit
unemployment from 1893 to 1899.
Cleveland,
as the first Democrat in the White House since
before the Civil War, pushed during his first term
the repeal of the Bland-Allison Silver Purchase
Act of 1878, which aimed at free coinage of
silver, modified by Senator William B Allison to
require the US Treasury to purchase between $2
million and $4 million worth of silver bullion
each month at market prices to be coined into
silver dollars, which were made legal tender for
all debts. Always a hard-currency advocate,
Cleveland believed that inflating the money supply
through the purchase and coinage of silver
undermined confidence in the nation's currency and
punished creditors by repaying them with money
less valuable than they had originally loaned. On
this issue Cleveland stood apart from his populist
constituency, especially in the South and West.
As with all presidents up to that time,
Cleveland did not feel compelled to take any
action to stimulate the slowing economy towards
recovery, viewing his mandate as limited to
balancing the Federal budget and preserving the
gold standard.
Gold versus
silver Agitation for action on the question
of silver had become intense by 1890. Farmers were
straining under growing debt and falling prices.
Western mining interests were anxious for a ready
market for their silver and exerted pressure on
Congress for bimetallism, the use of both silver
and gold as a monetary standard. Western voices
were much stronger with the recent addition of
Idaho, Montana, Washington, Wyoming and the
Dakotas to the Union. The Sherman Silver Purchase
Act of 1890 was part of a broader compromise. The
Democrats gave their support to the protective
McKinley Tariff in return for Republican votes for
silver. The Act obliged the Treasury to purchase
4.5 million ounces of silver each month at market
rates, doubling the amount authorized by
Bland-Allison and to issue notes redeemable in
either gold or silver.
The planned
government purchases amounted to almost the total
monthly output from the mines. The increased
supply of silver drove down the price. Many mine
operators in the West tried to reduce expenses by
cutting miner wages, causing labor unrest and
sporadic violence in mining towns.
As the
price of silver continued to decline, holders of
the government notes rationally redeemed them for
gold rather than silver as prescribed by Gresham's
Law of bad money driving out good. The result of
the growing value disparity between the two metals
was the depletion of the US gold reserves and the
hoarding of gold by market participants,
contributing to the Panic of 1893.
The
presidential election of 1896 was set in the depth
of a severe depression that stimulated progressive
reactions. The public was increasingly convinced
that the economy had become fundamentally unsound
due to a flawed structure and that government had
a responsibility to protect the general welfare as
it became threatened by destructive and unfair
market forces. The Republicans nominated William
McKinley, an Ohio native and a nationally known
figure with a track record of advocating high
tariffs on imports to project domestic industry as
a formula for prosperity, as typified by his
McKinley Tariff of 1890. McKinley was also a
fervent defender of the gold standard.
Mark Hanna, the model for Karl
Rove The McKinley campaign was managed by
Mark Hanna who introduced new advertising-style
techniques that revolutionized political campaign
practices. A century later, the Hanna campaign
style would be openly admired as a model by
present-day
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