Essay on Farming Economics in the Late 1800’s

Capitalism is the foundation of America and its opportunities; however, in the time period known as the Gilded Age the many flaws of capitalism were easily seen in the corrupt society. When the United States was founded the farmer was the cornerstone of the nation’s society. Their views were greatly respected by almost every politician in the country, especially those who believed in the Jeffersonian Ideal. It stated that the agrarian system was the best possible way of life for Americans and that farmers were to be highly respected, as they were the key to life in America.

Eventually that began to change as industry became a huge part of the country and the rich industrialists gained political power. The new industry also worked against the farmers as it provided technological innovations that increased production so much, the market was flooded with farmers’ products, drastically reducing prices and profits. Also, with the monopoly of the railroads and the lack of competition, transportation and storage rates of goods skyrocketed to levels that were impossible for farmers to make any profits. They eventually came to have many debts to equipment vendors and other banks & lenders.

Furthermore, as the value of money deflated, the amount of their debts increased along with a drop in earnings. All of this combined to anger American farmers, and they created the Populist Party. In the Platform of the People’s (Populist) Party of 1892, representatives of the farmers express their anger with these trends. Also, political cartoons began to show up around the country, such as the drawing in The Farmer’s Voice, a Chicago newspaper, which shows the poor farmer being locked in chains by an eastern aristocrat teamed with the government. Life was hard for the American farmer during the Gilded Age. Valuable agriculturalist demands for reform were shut down by corrupt government officials that worked for immoral industrialists, meanwhile, overproduction and monopolies continued to harm valuable farming interests. Even though industrialists and President McKinley disagreed, one of the most important issues to farmers was the reinstatement of silver as official currency.

A major objective of the growing Populist Party was the restoration of silver as currency. The farmers of America, and the Populists that represented them, felt that the loss of silver as legal tender had been the major reason for the economic hardships most farmers were feeling. Between 1865 and 1870 U.S. government data shows that the U.S. population rose by more than 4 million; however, the money in circulation dropped more than 308 million (Document C). This dropped the currency level to below a billion dollars, a level it would not regain until 1885, thirty years later. The American farming community was convinced that this deflation was the cause of their woes. They thought that inflation would better help them by reducing the value of the loans they took out and making them easier to pay back. President McKinley disagreed, in his acceptance speech in Canton, Ohio he stated, “Free silver would not mean that silver dollars were to be had freely without cost or labor…It would not make labor easier, the hours shorter, or the pay better. It would not make farming less laborious or more profitable” (Document B). People that followed McKinley’s beliefs were convinced that overproduction was the key issue that was hurting the farmers. They felt the production had exceeded the possible market. J Lawrence Laughlin said that, “The sudden enlargement of supply without any corresponding increase in demand produced that alarming fall in the price of wheat which has been the farmer’s excuse for thinking that silver is the magic panacea for all his ills” (Document E). This was a valid point as the amount of farmland being cultivated had increased rapidly along with technological innovations allowing farmers to cultivate more land effectively. However, the strong deflation had so much of an effect on the farmers by raising the cost of farm equipment and other seasonal goods, as well as making it very difficult to pay back loans that had been taken out in a time of high inflation, that it became more important than simply producing less food.

Although the Populists wanted to put a large political platform in place, they wanted to do it through due political process, not through radical revolution. One of their main issues was the unfair practices of powerful businesses. The farmers felt that they had been taken advantage of by big business in America. The cost of farm equipment had risen dramatically at a crucial time when new technology was allowing farmers to produce more than ever. Also, the big trusts in the country ruled their industries with ruthless efficiency. James Weaver claims, “that they are monopolies organized to destroy competition and restrain trade” (Document F). He goes on to say that they wish to impoverish the producer and overcharge the consumer just to increase the wealth of a few. They used threats, intimidation, and bribery to have their way and create a political climate that was very comfortable for them. People like Teddy Roosevelt, the hero of the common farmer, where the enemies of the trusts. He had set out to attack these powerful companies and destroyed more than forty of them. T.R. helped to further the cause of the Populists and their pro-farmer economic agenda.

Many of the powerful corporations during the Gilded Age were merciless competitors, willing to do anything or destroy anyone to make money. Railroads seemed to be the worst of the monopolies, and the most hated by American farmers. These railroads charged many different shipping rates that all depended on the highest possible amount they could squeeze out of the poor farmers. Sure George Parker told the Senate Cullom Committee that a regulation of rates at reasonable prices would mean, “Bankruptcy, inevitably and speedily” (Document G). But that probably wasn’t true. The reason railroads didn’t want to regulate prices was that they wanted to create regional charges, and get the most money possible out of each area. This caused some farmers to bring their goods to railroad depots, only to find out that the price they had negotiated yesterday was no longer available and that they had to pay twice as much. The federal government attempted to regulate the railroad rates on interstate commerce, but the monopolies had a lot of political power on their side and the laws were rarely enforced. The Populists were extremely angry with this and it is reflected in popular literature of the time. In Frank Norris’ book The Octopus he tells the story of a farmer who is ruined by a sudden rate hike on shipping costs. He writes, “All his calculations to a profit on his little investment he had based on a freight rate of two cents a pound. He was under contract to deliver his crop. He could not draw back. The new rate ate up every cent of his gains. He stood there ruined” (Document H). The two hundred and fifty percent increase in shipping cost, from two cents a pound to five cents, cost a farmer his only profit for the year. This was not uncommon during the Gilded Age. The Populists had had enough from the railroads and the other powerful monopolies, they vowed to push their agenda and gain respect for the American farmer.

The industrialists and anti-Populists of the time made a few valid arguments. They believed that overproduction was the key problem facing the farmers, and it was a huge wound to the prosperity of the farmers. Also, they believed that the government should leave the economy alone, not spend its time busting trusts. Many popular politicians over the history of the United States would agree with that, too. However, the Populist Platform made many more persuasive arguments that worked to improve conditions for farmers much more than any ideas that the businessman had. First, the return of silver as accepted currency would help reduce the pain of paying back loans and give more money to the farmers when they sold their crops. Second, The destruction of trusts was good for the economy and Americans because it allowed for competition. Also, regulation of railroad rates would benefit all and prevent corrupt railroad officials from taking advantage of farmers. These points were much more valuable and well thought out than the ideas of the capitalists, and would much better benefit the farmers the Populists represented. This was a democratic solution to a capitalist problem, not a corrupt solution catering to the rich minority.

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