In the Late 1800's
"Why the Farmers Were Wrong"
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.
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
demonetizations of silver as threats to their way of life,
though in many cases their complaints were not valid.
The development 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 incentives 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 discovered 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
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.