Agrarian Discontent 1880 to 1900Agrarian Discontent 1880 to 1900Ben BoydAP US HistoryThe 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.” (Document 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. The argument made by the railroads was that if they did not rebate, they would not make enough profit to stay in business. George W. Parker, vice president of the Cairo Short Line Railroad, as stated before the Senate Cullom Committee (Document G) reasserts all of the above mentioned, proving that the railroads did in fact end up charging farmers more, all in efforts to stay in business.
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
, p. 44: “By our common share in the world, the small family has a lot to lose.”) The American Farmers advocated the nationalization of public enterprises, encouraging the revaluation of the productive forces. That said, they feared that this would lead to a “super-market” and they sought a Federal Government where small business could not profit from government regulation. That idea was echoed in the 1840s when Thomas B. Wilson, president of the American Federation of Redistributive Societies (F.R.S; www.redistributivesofsocieties.com, http://www.usf.org/rsa/fry.html), which sought to create a common economic model, implemented a single system of distribution that would allow farmers to receive “compensation” and give their business to people who had paid more. With this model, they expected that the U.S. government would eliminate the major competition and a “high social cost” would be passed onto owners of government-supported businesses. This, along with a nationalized economy, was viewed by a large number of farmers as the solution to many problems.
The United States (1890-1914)
Despite what the early American farmer considered utopian, the U.S. faced not only massive competition from its neighbors to the west, but also enormous economic and political problems related to agricultural and industrial production and the development of agriculture. This competition created numerous challenges for farmers and, ultimately, for society. In early 1892, Theodore Roosevelt signed the Federal Agriculture Law (Act 1892)—the first official agricultural law signed in the 21st century—that limited the amount of land the government could sell to private hands. He made some amendments to the law that had created a national system of land management. Roosevelt’s policies for the country became somewhat more aggressive, as his state and territory policies became the main concern of farming owners—a situation that was especially dangerous for American farmers in areas of agricultural production. In 1892, when the National Land Loan Act [National Land Bank Act] became law, nearly 15 percent of the total total amount of Federal land sold to private hands had to be sold by private hands. A state-owned lender at the time owned about 2% of the vast majority of the federal lands in the country. Farmers also bought or rented about one-third of the land; that was almost twice as much as they paid for the land themselves. The law also expanded and consolidated the federal banking system, thus allowing the banks ownership of large amounts of government securities. The Federal Reserve system, which used to be in effect on a voluntary basis, was put in place in 1893 to eliminate the Federal Bank. Under the terms of the new law, farmers who sold stocks on central banks to their local banks had to pay a monthly fee, rather than having to pay tax on the securities. This was known as “redemption.” Roosevelt’s bill