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Agrarian Discontent In the Late 1800's
The period between 1880 and 1900 was a boom time for American
politics. The country was for once 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 bulwark of agriculture, 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. Finally, years of drought in the midwest and the downward spiral
of business in the 1890_s devastated many of the nation_s farmers. As a
result of the agricultural depression, many farm groups, most notably the
Populist Party, arose to fight what farmers saw as the reasons for the
decline in agriculture. During the last twenty years of the nineteenth
century, many farmers in the United States saw monopolies and trusts, railroads,
and money shortages and the demonetization of silver as threats to their
way of life, though in many cases their complaints were not valid.
The growth of the railroad was one of the most significant
elements in American economic growth. However, in many ways, the railroads
hurt small shippers and farmers. Extreme competition between rail companies
necessitated some way to win business. To do this, many railroads offered
rebates and drawbacks to larger shippers who used their rails. However,
this practice hurt smaller shippers, including farmers, for often times
railroad companies would charge more to ship products short distances than
they would for long trips. The rail companies justified this practice by
asserting that if they did not rebate, they would not make enough profit
to stay in business. In his testimony to the Senate Cullom Committee, George
W. Parker stated, _...the operating expense of this road...requires a certain
volume of business to meet these fixed expenses....in some seasons of the
year, the local business of the road...is not sufficient to make the earnings...when
we make up a train of ten of fifteen cars of local freight...we can attach
fifteen or twenty cars...of strictly through business. We can take the
latter at a very low rate than go without it._ Later, when asked the consequences
of charging local traffic the same rate as through freight, Mr. Parker
responded, _Bankruptcy, inevitably and speedy..._. 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. 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._ (Doc. H). The railroads regularly used
rebates and drawbacks to help win the business of large shippers, and made
up this loss in profit by increasing the cost to smaller shippers such
as farmers. 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, for these farmers were
hurt by the unfair practices of the railroads.
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 such companies as Carnegie Steel and Standard Oil, which controlled
a majority of the nation_s supply of raw steel and oil respectively. The
rise of these monopolies and trusts concerned many farmers, for they felt
that the disappearance of competition would lead to erratic and unreasonable
price rises that would hurt consumers. James B. Weaver, the Populist party_s
presidential candidate in the 1892 election, summed up the feelings of
many Americans of the period in his work, A Call to Action: An Interpretation
of the Great Uprising. He wrote, _It is clear that trusts are...in conflict
with the Common law. They are monopolies organized to destroy competition
and restrain trade.... Once they secure control of a given line, they are
master of the situation... They can limit the price of the raw material
so as to impoverish the producer, drive him to a single market, reduce
the price of every class of labor connected with the trade, throw out of
employment large numbers persons...and finally...they increase the price
to the consumer.... The main weapons of the trust are threats, intimidation,
bribery, fraud, wreck, and pillage._ However, the facts refute many of
Weaver_s charges against the monopolies. While it is true that many used
questionable means to achieve their monopoly, many were not out to crush
competitors. To the contrary, John D. Rockefeller, head of Standard Oil,
competed ruthlessly not to crush other refiners but 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 was never
realized. Prices tended to fall during the latter part of the 1800_s creating
what some have called a _consumer_s millennium_. Thus, the agrarian complaints
against monopolies were not incredibly valid, for the monopolies did very
little harm to farmers of the time.
Finally, deflation and falling prices during the late
1800_s led to the most heated complaint of farmers and the Populist party
that grew out of agricultural discontent. Deflation had been running rampant
during the latter half of the 1800_s, as evidenced by the drastic fall
in the value of wheat and cotton. To fight the deflationary trend, the
Populists demanded a reversal 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 _to no less than
$50 per capita._. Here again, the farmers are wrong in the assessment of
their problems. It is true that the country_s money supply was not adequate.
United States government data from 1961 shows that though the country_s
population between 1865 and 1875 increased by nearly four million, the
country_s money supply actually decreased. However, many farmers used the
money supply to explain problems that indeed had very little to do with
the money supply at all. This fact is best summed up in a quote from J.
Laurence Laughlin_s article, _Causes of Agricultural Unrest_. He says,
_Feeling the coils of some mysterious power about them, the farmers...
have attributed their misfortunes to the _constriction_ in prices, caused,
as they think, not by an increased production of wheat throughout the world,
but by the _scarcity of gold._. Furthermore, history has shown that battle
between gold and silver had little real meaning. The real battle was not
between gold or silver, but instead what would be done to check deflation.
William McKinley, in his 1896 acceptance speech, said, _Free silver would
not mean that silver dollars were to be freely had without cost or labor...
It would not make labor easier, the hours shorter, or the pay better. It
would not make the farming less laborious or more profitable..._. Many
farmers saw silver as a cure-all for their problems, failing to see that
changes in the world were to blame. Finally, the discovery of gold in Alaska
and improved methods of extracting gold from low-grade ore did much to
increase the nation_s money supply. These facts prove that the farmers_
view of silver was not sound, thus invalidating their complaints about
the nation_s financial system.
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. However, in some cases, these farmers_
complaints were not justified. Many of the fears that farmers had about
monopolies, such as the idea of unfair and unreasonable price increases,
happened in very few occasions; in fact, prices went down in the latter
part of the nineteenth century. Finally, history has proven that their
view of silver as a way to end deflation and the decrease in crop values
was inaccurate. The farmers of the period, though, used these issues to
change the shape of American politics and bring it face to face with the
problems the country was facing.
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