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The period between 1880 and 1900 was a boom time for American Politics. The country was finally free of the threat of war, and many of its citizens were living comfortably. However, as these two decades went by, the American farmer found it harder and harder to live comfortably. Crops such as cotton and wheat, once the sustenance of the agriculture industry, were selling at prices so low that it was nearly impossible for farmers to make a profit off them. Furthermore, improvement in transportation allowed foreign competition to materialize, making it harder for American farmers to dispose of surplus crop. Mother Nature was also showing no mercy with grasshoppers, floods, and major droughts that led to a downward spiral of business that devastated many of the nation’s farmers. As a result of the agricultural depression, numerous farms groups, most notably the Populist Party, arose to fight what the farmers saw as the reasons for the decline in agriculture. During the final twenty years of the nineteenth century, many farmers in the United States saw monopolies and trusts, railroads, and money shortages and the loss in value of silver as threats to their way of life, all of which could be recognized as valid complaints.
The growth of the railroad was one of the most significant elements in American economic growth, yet it hurt small shippers and farmers in many ways. Extreme competition between rail companies necessitated some way to win business. To do this, railroads would offer rebates and drawbacks to larger shippers who used their rails. This practice hurt smaller shippers, including farmers, because often times railroad companies would charge more to ship products short distances than they would for long trips. This was known as the “long haul, short haul evil”. The rail companies justified this practice by asserting that if they did not rebate, they would not make enough profit to stay in business. So while the railroads felt that they must use this practice to make a profit, the farmers were justified in complaining, for they were seriously injured by it. A perfect example of this fact can be found in The Octopus by Frank Norris. In The Octopus a farmer named Dyke discovers that the railroad has increased their freight charges from two to five cents a pound. This new rate, “…ate up every cent of his gains. He stood there ruined.
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Competition became so vicious between the railroads that these companies tried to end it by establishing pools in order to divide the traffic equally and to charge similar rates. The pool lacked legal status, while the trust was a legal device that centralized control over a number of different companies by setting up a board of trustees to run all of them. As a result, many farmers, already hurt by the downslide in agriculture, were ruined. Thus, the farmers of the late nineteenth century had a valid complaint against railroad shippers since they were severely hurt by the unfair practices of the railroads.
The Interstate Commerce Act of 1887 was passed to provide that a commission be established to oversee fair and just railway rates, prohibit rebates, end discriminatory practices, and require annual reports and financial statements. The act established a new agency, the Interstate Commerce Commission, which allowed the government to investigate and oversee railroad activities. This in turn benefited the farmers but until this act was put in place farmers were strongly affected by the problems stated above.
Near the end of the nineteenth century, business began to centralize, leading to the rise of monopolies and trusts. Falling prices, along with the need for better efficiency in industry, led to the rise of companies, the Carnegie Steel and Standard Oil Company being one of the most significant. The rise of these monopolies and trusts concerned many farmers; for they felt that the disappearance of competition would lead to abnormally unreasonable price raises that would hurt consumers and ultimately themselves. James B. Weaver, the Populist party’s presidential candidate in the 1892 election, summed up the feelings of the many American Farmers of the period in his work, A Call to Action: An Interpretation of the Great Uprising (Document F). “It is clear that trusts are contrary to public policy and hence in conflict with the common law.”
Fearing that the trusts would stamp out all competition, Congress passed the Sherman Antitrust Act in 1890, which outlawed trusts and other restraints of trade. Violators were fined up to five thousand dollars and one year in prison. The Sherman Antitrust act, however, failed to define either trust or restraint of trade clearly. This was only a slight problem to the farmers because big businesses still continued to create trusts which hindered the agricultural economy.
While it is true that many used questionable methods to achieve their monopoly, there were also other businessmen out there that were not aiming to crush out the competition. In fact, John D. Rockefeller, head of Standard Oil, competed ardently to not crush out his competitors, but instead to persuade them to join Standard Oil and share the business so all could profit. Furthermore, the fear that the monopolies would raise prices unreasonably never really happened. On the contrary, prices tended to fall during the latter part of the 1800's creating what some have called a "consumer's millennium". Even though the monopolies had minimal direct effect on the economy, the farmers still hold a valid complaint in saying that monopolies led to economic difficulties within the agricultural district.
Finally, deflation and falling prices during the late nineteenth century led to the most bitter complaint of farmers and the Populist party that grew out of agricultural discontent. Deflation had very aggressive during the latter half of the 1800's, resulting in the drastic fall of the value of wheat and cotton. To fight the deflationary trend, the Populists demanded a rebuke of the Coinage Act of 1873, which demonetized silver. The Populist platform for the 1892 election called for unlimited coinage of silver and an increase in the money supply. “The national power to create money is appropriated to enrich bondholders; a vast public debt payable in legal-tender currency has been funded into gold bearing bonds, thereby adding millions to the burdens of the people.” (Document A). From increasing the money supply, the farmers’ debt would thus be lowered because the value of the dollar would essentially be less. United States government data from 1961 (Document C) shows that although the country’s population between 1865 and 1875 increased by nearly four million, the country's money supply decreased. These statistics give farmers a valid complaint because it demonstrated how the lack of money supply increased their overall debt.
The picture of Document D, shows a wealthy eastern businessman controlling a huge number of western farmers. These farmers were essentially under control by these businessmen because the more these industrial businessmen increased their prices along their railroads and their factories, the more the farmers suffered because of the overall increased prices of the farmers goods which needed to be transported from one place to another.
The farmers of the late 1800's had many reasons for being dissatisfied with their situation. Unfair railroad practices, such as rebates and drawbacks, hurt them severely, while companies developing monopolies also was cause to the farmers’ problems. Different acts were put in place such as the Sherman Anti-trust act but did not actually benefit the farmers because they were not strictly enough enforced. Deflation and the road to a depression was also a cause towards the agricultural downfall in the late 1800’s. The depression caused prices to increase and farmers debt in due course to also increase. The farmers had a valid complaint towards the lack of money supply in the nation. As the population rose by millions each year, the monetary supply needed to be increased as stated by the populist party. This increase in money supply would in turn lower the farmers debt and create a greater satisfaction within the farmers union. All in all, the farmers had completely valid complaints to explain the downfall of the agrarian economy.