Perhaps the single most important reform movement in American history and one which seriously threatened the two-party system was the reform movement of the late 19th century. The reform movement was born out of the Panic of 1873. Farmers in the Mid-West and South were greatly affected by the Panic and did not benefit from the recovery as did the Eastern financial and industrial class. Farmers focused on the currency, but the Greenback Party had little success. The Popullist Party was founded on a platform of government ownership of the railroads and free coinage of silver (1891). The Populists nominated J.B. Weaver for President with a platform of major reforms (1892). He polled over 1 million votes and represented a major threat to the establish parties, especially the Democrats. Adopting some of the Populist reforms, the Democrats led by William Jennings Bryan and his Cross of Gold speech captured much of the Populist vote (1896). The demise of Popularism in its Southern stronghold was the success of the Democraic Party in raising social issues--the race issue. They convinced Southern farmers and workers that Populist reforms meant integration and eventual Black dominance. This led to a generation of demagogic governors and legislators and the vicious racism of the early 20th century. This led to control of Southern state governments by the plantation class allied with millowners and other industrial interests. Blacks wre denied the vote and working-class whites voted to maintain the system out of fear of Blacks.
Perhaps the single most important reform movement in American history and one which seriously threatened the two-party system was the reform movement of the late 19th century.
The reform movement was born out of the Panic of 1873. Although referred to as a Panic, it was actually a serious depression which lasted several years. The economic downturn began during the secoind Grant Administration (1873-77). The economic downturn began in Europe. The American economy began to be affected (fall 1873). The Jay Cooke and Company, America's preeminent investment financuial concern, failed. Cooke was the principal finncil backer of the important Northern Pacific Railroad. The company also most of the Federal Government’s Civil War loans.
The collapse of Cooke cascaded into a major financial event. The New York Stock Exchange closed for 10 days. Credit throughout America vitually dried up. Thus what had begun as a financial panic in New York had repercussions for workers in industrial cities and farmers throughout the Mid-West and outh. Banks were forced to close and many went under. Without any form of depositors insurance, depositors lost their savings. Farms were foreclosed. Factories closed. Most of the major railroads failed. Many workers lost their jobs. Many were left destitute. Private charity were unable to deal with the numbers left destitute and their were no Government relief programs. President Grant and te Republican Congress as is normal in American politics were blamed by the voting public and the Democrats who had lost influence during the Civil War gained politically. The cause of the Panic was not so much Republican mismanagement as the fundamental nature of the economic system. The end of the Civil War (1861-65) rought an unprecedented era of economic expansion without any Government regulation. Speculation was rampant and there was virtually no securities laws. Both Government officials and businessmen believed in laizze-faire government, meaning no regulation or controls. An especially important case of the Panic was the frentic building of railroads. Not only were unneeded railroads built, but some were financial scams. The American economy did not fully recover until 1878 and even then farm prices never did fully recover Many average Americans had lost their savings in backs that were virtually unregulated. Farmers in the Mid-West and South were greatly affected by the Panic and did not benefit from the recovery as did the Eastern financial and industrial class. Workers were also affected and efforts to organize resulted in growing conflict between workers and industrialists.
The Greenback or National Greenback Party was founded in 1876 as American was emerging from the depression resulting from the Panic of 1873. Farmers focused on the currency as a cause of the Pacnic of 1873. Thus news fiscal policies were seen by some as the sollution to the economic crisis. The Greenback Party advocated an expansion of the money supply by issuing paper money. Esssentially this was a policy of inflation as the money supply at the time was primarily a function of the gold supply. "Greenbacks" referred to the paper currency issued by the Federal Government in 1862 to help finance the Civil War. (The bills like moder American currency had green backs.) The Party maintained that a flexible supply of paper money would benefit working people. The also charged that limiting the issuance of paper money to that which could be backed by specie (gold or silver bullion) served the interests of the wealthy. This was a position that had been argued by Edward Kellogg well before the Civil WAr (1841).
Alexander Campbell help popularize Kellogg's views on paper money during the 1860s. It was, however, not until the Panic of 1873 that Kellogg's and Cambell's ideas received substantial popular support. There was considerable opposition to the idea, especially from the financial class as creditors stood to lose vast sums if their outstanding loans were repaid in a deflated currency. Congress passed the Specie Resumption Act (1875). This put the United States on a hard currency system with paper money backed by specie. The Greeback Party was formed to repeal The Specie Resumption Act and to increase the printing of paper money (1876). The Greenback Party polled a mere 80,000 votes in its first election (1876). Labor troubles in the wake of the Panic of 1873 year increased support for the Party. Labor unrest was especially serious in 1877 and many workers began to join farmers in viewing ecinomic problems on the manipulation of financeers and industrialists. The result was considerable success for the Greeback Party in the next Congressioinal election (1878). The Party this time polled nearly 1 million votes and elected 14 Greenback Congressnen. Support for the Party, however, wained after the 1878 election. The economy had recivered from the depression following the Pacnic of 1873. With the return of economic prosperity, there was less interest in economic reform. The Greenback Party had been founded largely on one issue and that issue had become increasingly moot with propperity and the realization that the Specie Resumption Act would not be repealed. The Party did poorly in the election of 1884 and that was to prove to be its last national campaign. The Greenback Party thus failed, it was, however, to have a major inpact on the Populist Party and the Democratic Party.
Rural discontent continue to simmer in the Mid-West and South. Farm prices had never truly recovered fron the sharp drop in the 1870s. Farmers continued to blame Eastrern Financeers and the railroads for their problems. Many farmers continue to focus on the currency and fiscal policy. The American dollar as a result of the Specie Resumption Act (1875) was tied to gold. The government in effect pledged to redeem each paper dollar into gold. This thus limited the money supply to the gold supply. The Government could only print dollars tht it had the gold to reedeem. As only a limited amount of gold was available, this severely limited the money supply and credit. Credit was critical to farmersbecause they needed low-interest loans. American farmers were enormously successful in producing grain and other farm products. Unfortunately this increasing production led to falling prices. Farmers needed low-interest loans to keep going and the maintauning the gold standard meant that the money supply was limited at credit rates high and loans difficult to obtain. As the farmers were unable to increase their prices, thousands lost their farms. The Greeback Party had failed to alleviate the problems in rural America. Economic problems in the 1880s again generated calls from farmers for Government action. Farmers began organizing to demand action. This took the form of farmers alliances. Some if these groups organized a meeting in Ocala, Florida to discuss possible political action (December 1890). The representatives found any kind of joint action was not possible, because of considerable differences among the participants. Many of the representatives were still committed to the Democratric Party. In the South race was a factor. Many southern reoresenttives feared that weakenung the Democratic Party could privide an opning for Republican inroads which could attract Black support.
Congress took two actions in 1890 that would oprifoundly affect thecPopulist movement. Congress passed the Sherman Silver Purchase Act. This was a step toward currency expansion as silver was much more abundant than gold. Also the Republicans in Congress decided not to support a bill to protect the civil rights of Blacks in the South. This meant that Southern Whites could continue their efforts to turn back the gains achieved by Blacks under Reconstruction. The Republican withdrawl from civil rights and its traditions as the party of Lincon open the way for a new political force. Tom Watson of Georgia tried to convince Southern white farmers to join forces with still largely rural Blacks to push for economic reforms.
The Popullist Party was founded as the People's Party on a platform of government ownership of the railroads and free coinage of silver. From the begeginning, workers and farmer's were at the heart of the Party. The Knights of Labor, an erly labor union, and the Farmers' Alliance joined forces to form the Party. Farmers at the time were heavily dependent of the railroads and found they had little bargaing power in dealing with them. Thus public ownership of the railroads was a ket demand of the Party. While the railroads were a key concern, the Party also advocated public ownership of the steamship lines as well as telephone and telegraph systems. The Party drawing from its Greeback Party roots advocated the free coinage of silver, the abolition of national banks, a progressive income tax, and the popular election of United States Senators. (Senators at the time were elected by state legislatures.) Many of these reforms were eventually adopted by the Republicanns and Democrats and enacted by law or amendment. William Peffer of Kansas and Tom Watson of Georgia joined the Party's to become the first Populist Senators (1891). This demonstrated the Party's centers of support in the Mid-West and South. The name "populist" was derived from the Latin populus which meant people. This was a name that had been adopted by astate political organization in Kansas.
Mid-Western and Southern farmers were widely disatisfied with both the Republicans and the Democrats in addressing rural issues. Represenatives of the new Populist Party came together in Omaha, Nebraska (February 1892). The convention was dominated by the farmers' alliances. The Populists nominated J.B. Weaver for President with a platform of major reforms (1892). Weaver was a Federal Civil War general from Iowa nd had been one of the Greeback Congressmen elected in 1878. His Vice Presidential running mate was James G. Field of Virginia who had been a Confederate general in the Civil War. The Populists werre the only political party to run Federal and Confederate gnerals together. Weaver polled over 1 million votes and carried four states. This represented a major threat to the establish political parties, especially the Democrats.
The Populists conducted a legendry political campaign with almost religious fervor. The exoerience of this first presidebtial election prepared the Party to more effectively contest the next presidential election in 1896.
The Financial Panic of 1893 was brouhht on by the continuing dispute in American politics over the value of the dollar. The growing influene of the Populists had succeeded in enducing Congress to pass the Sherman Silver Purchase Act (1890). This had authorized the Treasury to issue dollars backed by silver as well as gold. This substantially increased the money supply which made made credit available at lower rates. Unfortunately it also caused the dollar to lose money on world markets. The silver purchases in effect devalued the dollar in the eyes of British bankers. Britain at the time maintained a pure gold standard. Nervous international bankers began calling in dollar loans. Grover Cleveland who had been defeated in his bid for reelection in 1888 was returned to the presidency in the election of 1892 convinced Congress to repeal the Sherman Siover Purchase Act. Still confidence in the American dollar was undermined and many foreign investors thought that the dollar would be devalued. American gold reserves thus declined as investors sold dollar assetts. American gold reserves fell below $100 million (April 1893) mening there was little bullion to back the dollar. The result was the Financial Panic of 1893 which led to a sharp 4-year economic drepression.
The Populists campaigned vigorously in the the mid-term Congressional elections of 1894. They proved very successful throughout the Farm Belt. The depression following the Panic of 1893 was a factor in the election. The Party polled 1.4 million votes. The Party suceeded in electing elected six Senators and seven Representatives.
The election of 1896 was the turning point for the Populist Party. Rather than running a candidate that would earn a substantial number of voytes, but have no chance of winning, they decided to support the Democratic candidate who was willing to support some of their program. The Populists by this time had huge influence within the Democratic Party. They neogtiated with presumed Demoratic candidate William Jennings Bryan. The Populists offered to support Bryan if he woyld accept Populist Senator Tom Watson of Georgia as Vice Presidential running mate. After helping Bryan secure the Democratic nomination, Bryan chose Arthur Sewall, a conservative Democrat hostile to trade unions. Bryan did adopt some of the key issues of the Populists and at the Convention where Sewall was chosen delivered his Cross of Gold speech which electrified the delegates. It was one of the most famous orations in American political history. Bryan's choice of Sewall cost him the support of workers in many northern states. It also effectively split the Populist Party. Many in the Party refused to support Bryan. Others such as Mary Lease, while disappointed, reluctantlh campaigned for him. Tghe campaign was dominated by the issue of the gold standard and the coinage of silver. On this issue the Republicans generally prevailed except in the Farm Belt. Free silvr simply did not resonate with urban workers. Bryan's defeat proved to be the death knell for the Populist Party. The Party continued to win some electioins in a few Western states. It was, however, never again a major factor in national politics. This was not just because Bryan lost, but because of Democratic Party tactics to win back Populist voters in the South.
The demise of Popularism in its Southern stronghold was the success of the Democraic Party in raising social issues--the race issue. They convinced Southern farmers and workers that Populist reforms meant integration and eventual Black dominance. This led to a generation of demagogic governors and legislators and the vicious racism of the early 20th century. This led to control of Southern state governments by the plantation class allied with millowners and other industrial interests. Blacks wre denied the vote and working-class whites voted to maintain the system out of fear of Blacks.
The history of third parties in the United States is often associated with economic problems. The economic depression of the 1890s had by 1900 subsided and economic propsperity was another factor in the demise of the Populist Party. The Party was largely associted with Free Silver and as that issue subsided, so did support for the Party. Many Populists in 1890 again decided to support the Democratic Candidate William Jennings Bryan. A minority rejected "fusion" and nominated Wharton Barker and Ignatius Donnelly. The Populists failed to make any inpression on the American electorate. They were outpolled by two other third parties, the Prohibition and Socialist parties.
The Populist Party became increasingly dominated by Tom Watson who secured the nomination. His running mate was Thomas Tibbles. Watson had by this time seen the futility of contesting elections against Democratic Party race baiters. Under his guidance the Party sharply shifted to the right. Watson attacked socialism and the Party's early calls for public ownership of railroads and telephine and telegraph companies. He also called for the reorganization of the Ku Klux Klan. As the Populist Party's presidential candidate in 1904, Watson earned only about 120,000 votes.
The Populist Part by 1908 was no longer a factor in American politics.
Tom Watson with Samuel Williams tallied a mere 29,100 votes.
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