"Why the Farmers Were Wrong"

The period between 1880 and 1900 was a boom time for American

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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 countrys money supply

was not adequate. United States government data from 1961 shows that

though the countrys population between 1865 and 1875 increased by nearly

four million, the countrys 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 Laughlins 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 nations money supply. These facts prove that the farmers

view of silver was not sound, thus invalidating their complaints about

the nations financial system.

The farmers of the late 1800s 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.