Money Shortage And Farmers And Silver example essay topic

Northern and Western farmers experienced heavy demand for foodstuffs for the Union armed forces and for the thriving industrial cities. Farmers brought increased acreage under cultivation, employed more machines, and enjoyed relatively high agricultural prices. There were a number of complaints that followed after the Civil War. After the Civil War the demand for agricultural produce declined and prices fell. Also, American farmers faced increased competition in world markets from newly plowed lands in Argentina, Australia, and Canada. Nevertheless, American farmers continued to expand their output.

Wheat farmers, who in 1866 received more than $1.50 per bushel of wheat, and in 1894 received less than $. 70. Corn and cotton farmers suffered similar sharp declines in prices. With such low prices, farmers had great difficulty earning a living. Another complaint was the insufficient and expensive credit farmers had driven up. Since farmers were considered poor credit risks, banks were reluctant to grant them loans.

Despite state laws prohibiting usury, farmers often had to pay excessive interest rates, as high as 25 percent per year. Farmers unable to meet their mortgage payments, thus lost their homes and farms in the process. This was followed by high rates charged by Middlemen. Farmers complained that they received only about half the price that city consumers paid for agricultural produce. Farmers blamed this situation on the high rates charged by middlemen. Once they secure control of a given line of business, they are master of the situation and can dictate to the two great classes with which they deal-the producer of the raw material and the consumer of the finished product...

Doc. F. For example, grain storage elevators, packinghouses, insurance companies, wholesale distributors, and especially the railroads. Since each railroad had a virtual monopoly over the transportation of crops from the small farm town along its tracks, farmers endured poor service and exorbitant rates. Railroads manipulated shipping costs, the new rates ruined many farmers. Ironically, the rule that guided the railroad companies in determining their rates was what the traffic will bear. The rate is five cents.

Why, what do you mean You promised me a rate of two cents and I went ahead with my business with that understanding... Doc. H and Doc. G. Lastly, high industrial prices also contributed to the complaints of farmers. While farmers received low agricultural prices, they paid dearly for manufactured goods. The farmers blamed high industrial prices upon the high tariff rates, which kept out many foreign goods and thus protected American manufacturers from foreign competition, and the growth of business monopoly, which curtailed domestic competition. To see to the improvement of their economic conditions, farmers joined in organizations such as, the Grange, the Greenback-Labor party, and the Populist party.

The origin of the Populist party had came from farmers who had believed that Eastern industrialists and bankers controlled both the Democratic and Republican parties. This was illustrated in the political cartoon in Doc. D. One of their most prized speakers was William Jennings Bryan. farmers and silver interests gained control of Democratic nominating convention and in turn, was nominated under both the Democratic and Populist ballot. In order to arrest the downward trend in agricultural prices after the Civil War, farmers demanded cheap money, or otherwise known as inflation. Cheapening the value of money would in crease and ease the repayment of debts. True, the farmer would have to pay more for his manufactured goods, but he would benefit in the end.

In document C, it shows a graph of the United States population and money in circulation between, 1865-1895. As the population doubled between 1865 and 95, but the money in circulation, apparently stayed the same, not accommodating for the growth and expansion that was needed for the economy to flourish. This growth mainly came from the increased number of immigrants coming in. One of the many stressed points, in which the Populist party wanted to slow down.

It is proposed by one wing of the Democratic party and its allies, the People's and Silver parties, to inaugurate action on the part of the United States at a ratio of 16 ounces of silver to one ounce of gold... Doc. B. For years the federal government used two metals, silver and gold, for coinage. This was called bimetallism. The government set the ratio between silver and gold at 16: 1. The 16: 1 ratio meant the government considered 16 ounces of silver to be equivalent to 1 ounce of gold. Since private silversmiths needed silver commercially and offered a slightly higher price, the government received very little silver for coinage.

So in effect, Congress passed the Coinage Act in 1873, ending the coinage of silver money, that is, demonetizing silver. Shortly afterwards, when miners discovered rich deposits of silver in Nevada and Colorado, the market price of silver fell sharply. Silver interests, which now wanted to sell their silver to the government, vigorously denounced the demonetization of silver as the Crime of 73. The farmers reasoned that the coinage of silver would increase the amount of money in circulation and thus cheapen the value of money. The political alliance of farmers and silver interests mustered sufficient strength in Congress to pass the Bland-Allison Act of 1878. This law required the government to purchase and coin silver in limited quantities.

The law did little to relieve the money shortage, and farmers and silver interests agitated for a further expansion of silver coinage. Congress responded again, as Populist party wanted under their claims for a responsive government, in 1890 by passing the Sherman Silver Purchase Act, which increased the amount of silver that the government was required to buy. Like the Bland-Allison Act, it did not halt the steady decline of any agricultural prices. Though the farmers reasoned that the coinage of silver would increase the amount of money in circulation and would, in turn, cheapen the value of money was partially correct, but ill flawed... Doc. B and Doc. E. In fact, so much silver was now being mined that its value rapidly declined.

It was now advantageous to redeem silver coin and paper money for gold. By 1893 these redemption's reduced the government's gold reserves to bare minimum. Many people that the Treasury would soon be unable to redeem silver currency for gold and that the country would have to go off the gold standard. The farmers ultimately were shooting themselves in the foot without even knowing it. In addition, shortly after the election of 1896, the Populist party later disappeared. However, though the People's party had disappeared some of their goals would emerge later on in the progressive movement, so in retrospect, all was not lost.