What Were the Economic Challenges to American Farmers

"Agronomical Bug and Gilded Historic period Politics"

In the years from the cease of the Civil War in 1865 and the plough of the century some thirty-v years later on, Americans witnessed the death of a rural and agricultural America dominated by farmers and the birth of an urban and industrial America dominated by bankers, industrialists, and city dwellers. This transformation of the United States made the land richer and more powerful than information technology had ever been before. Information technology was accomplished, nevertheless, only with tremendous difficulty, especially for those in the American agricultural community. Farmers, large and modest, witnessed numerous problems and dislocations during the era with which they establish themselves unable to cope successfully. Every bit the transformation of America took place, distressed farmers became angrier and angrier and would somewhen participate in the most influential 3rd political party move ever.

I. Problems of the American Farmer during the Gilded Age

• OVERPRODUCTION

Without question the most vexing problem and the one that surpassed all others in both its negative effect and its difficulty to accommodate to successfully was the problem of agricultural overproduction. In short, the American farmer produced far too much for his ain good. In the years post-obit the Civil War, agricultural production levels skyrocketed. The opening up of the Peachy Plains to the plow, the employ of agricultural equipment which allowed the private farmer to grow more, new farming techniques, and the spreading of the railroads (which fabricated areas remote from rivers agriculturally feasible past reducing transportation costs) all led to the flooding of the American market with agronomical produce.

As more and more crops were dumped onto the American market, it depressed the prices farmers could need for their produce. Farmers were growing more and more and making less and less. If i looks at cotton production and prices during the Gilded Age, one tin see the problem facing the farmer quite clearly. Between 1873 and 1894 cotton production doubled while the price of cotton fell from nearly 15 cents a pound to less than vi cents a pound. The aforementioned phenomenon occurred in all other sectors of the agricultural economy.

Of all the problems facing the farmer, I believe that overproduction was the gravest because it caused so many other difficulties. Not making enough to compensate expenses because of depressed crop values, farmers attempted to compensate by growing more and more. This only made the trouble worse. Furthermore, inadequate income drove farmers into ever-deepening debt and exacerbated problems in other areas.

• Tariff Policies

Farmers fell victim every bit well to the tariff policy of the U.s. during the Gilt Historic period. They were forced to buy all the manufactured goods they needed for survival on a market protected by tariff legislation at artificially loftier prices while selling what they produced on a largely unprotected and highly competitive market place at depressed prices because of oversupply and strange contest. Thus, the tariff policy of the country often worked a double hardship on agronomical interests.

The aim of American protective tariffs during the Gilded Historic period was to try to guarantee the American market to the American manufacturer of finished products at a turn a profit. The federal government consciously sought to achieve this aim every bit a ways of encouraging the industrial revolution after the Civil War. By putting an import tax or duty on manufactured goods being imported into the The states by strange manufacturers , the government hoped to make them more expensive than the similar American manufactured goods. This almost guaranteed that American consumers, seeking to maximize their disposable income, would buy American goods. Protective tariffs were 1 of the many reasons why American industry grew and then chop-chop during the terminal 3rd of the nineteenth century.

Industrial manufacturers and the people who invested in American manufacture every bit well as some of their employees were the strongest supporters of this protectionist tariff policy. They argued that protective tariffs were temporarily necessary to encourage investment in industrial concerns by making them less risky. They besides claimed that infant industries in the United States needed this form of protection from more powerful and well established European competitors. They conceded that such a policy would raise costs to consumers in the brusk run. Only with tariff protection, however, could the The states exist rapidly industrialized. In the long run, America�due south dependence on foreign manufacturers would be ended, American dollars would be kept in America, consumers would benefit from newer and amend products, and more jobs would be created for laborers.

Opponents of the country�southward tariff policy included consumers, farmers, pocket-size businessmen, etc. They argued that tariffs were merely rip-offs of the consumer by greedy robber barons and the bankers who supported them. They laughed at the idea that American big businesses were fledgling, infantile operations that needed protection. Farmers felt doubly discriminated confronting considering they felt the tariffs were practical primarily to manufactured goods while agrarian interests were left to fend for themselves.

• Monetary Policy

During the Gilded Age, the federal government pursued a monetary policy that contracted the amount of money in apportionment, making money scarcer and thus driving up its purchasing power and worth over fourth dimension. This was done by limiting currency to gilt rather than gold and silvery or gold, silvery, and greenbacks or paper coin.

When the amount of money in circulation is contracted (such equally occurred following the Civil War when silver was demonitized), purchasing power goes up. When the amount of money in circulation is expanded, purchasing power goes down. The first is referred to as "hard money" while the second is known as "soft coin". Contraction or difficult money equals deflation while expansion or soft money equals aggrandizement.

Bankers, businessmen, investors and lenders supported difficult money, arguing that it was a prerequisite to industrialization. Unless money retained its worth, people with money would non invest in risky industrial ventures and bankers wouldn�t lend.

Farmers and debtors were the strongest advocates of soft money. They felt it was insane to limit currency to gilt while Western silver mines were turning out tons of equally adequate metal for currency. By coining both gold and argent, Americans who lived in areas where banks and coin were scarce would have a better chance of obtaining currency. Farmers and debtors argued that soft coin or inflation would provide desperately-needed debtor relief. It would mean that those constantly in debt could repay in dollars that were easier to come up by and worth less than in dollars, as was before long the case, that were harder to obtain and worth more than.

The hard coin policy the government pursued during the Gilt Historic period worked a real hardship on debtors such as farmers. Not only did they have to repay principal and interest on debt but had to exercise then with dollars that were increasingly harder to come by and that had greater purchasing ability than those they had originally borrowed. Farmers, who were constantly in debt considering of the nature of agronomics and its problems during this era, found themselves defenseless in this double bind year afterward year.

• Revenue enhancement and Depository financial institution Policies

The government, one time once again to encourage rapid industrialization, gave significant tax break to industries that were not given to farmers. Every bit manufacture became more and more profitable and agriculture less so, banks were increasingly reticent to lend money to agrarians. When they did, it was at a higher rate of involvement. Farmers also suffered from the fact that most of the banks were located in the urban, industrial Northeast while there were fewer in rural agricultural areas. Thus farmers were driven to the credit merchant in the ingather-lien system.

• Differential Freight Rates

The urban, industrial Northeast was the recipient equally well of depression railroad rates considering it was the almost overbuilt area of the country. Since the roads were losing money considering of excessive contest in that region, owners oft tried to make it up in less competitive areas such as the farming areas of the South and the Midwest by charging more for rail service. Thus, farmers felt that the higher transportation costs they were forced to pay and which made agriculture less rewarding were in order to subsidize the industrial interests they increasingly detested.

• Tenant Farming, Sharecropping, and the Ingather-lien System

Equally agronomics became less rewarding, more and more farm owners lost their farms when they could non repay banking concern loans and their mortgages were foreclosed on or they could not pay their taxation liabilities and their farms were auctioned off as a event. During the Gilded Historic period, more and more farmers lost their land and slipped down the agricultural ladder into tenant farming, sharecropping, and the crop-lien system.

Tenant farmers rented the correct to farm someone else�s land for a cash payment. Since money was so deficient (especially in the S following the loss of the Ceremonious State of war), landless farmers would subcontract someone else�s land and at the end of the growing season would give up a predetermined share of any they grew as the rental payment - one/iii of any cotton wool crop and 1/four of any grain crop.

Since food and habiliment were necessary during the growing season and because of poverty and a scarcity of coin in rural areas, the crop-lien system emerged and spread during the Gilt Age and beyond. A sharecropper could obtain food, clothing, and other necessities of life on credit from either the landowner or a credit merchant during the growing season in return for a contractual lien against whatever share of the ingather in the field was sufficient to meet the credit they were extended plus interest. The landowner or credit merchant charged a credit purchase price that was approximately 60% higher than the cash purchase price. Interest rates were by and large unspecified until the end of the growing flavor but averaged nearly 25% annually.

Past the time the ingather came in, it was all gone to the landowner for the right to farm the land and to the credit merchant for nutrient and vesture. Indeed, most sharecroppers under the crop-lien system ended the year in debt to the credit merchant and were thus legally obligated to continue the relationship the adjacent yr to pay off the debt. Year after yr, the landless farmer fell deeper in debt. Many were trapped for life.

The system injure all the more because the credit merchant could dictate the crop that would be grown past croppers he extended credit to. In the South, that meant cotton fiber considering it was non-perishable and could always be sold somewhere at some price. This, notwithstanding, exacerbated the problem of overproduction and depressed the cost of cotton even farther. Information technology was an endless bike.

• Loss of Status and Power

Ane of the factors hardest for farmers to deal with was the recognition that a rural and agricultural America dominated by farmers had given way to an urban and industrial American dominated by those interests. Farmers found the major political parties of the Gilded Age unresponsive to their demands that regime bargain with their issues. Farmers no longer controlled the social, economical, or political systems and this was a bitter pill to swallow. 2. The Unresponsiveness of the Republican and Democratic Parties to Agrarian Needs

During the Gilt Age from 1877-1896, political competition between the two major parties was incredibly intense and close. Elections were more often than not decided by less than 1% of the popular vote and what happened in a string of fundamental swing states determined which party would control the White Firm for the side by side four years. Given these circumstances, it was incumbent on the parties to acrimony every bit few voters as possible. The Republican and Democratic parties, therefore, refused to take business firm public stances on the major bug of the day - currency policy and tariff policy - which were both divisive and polarized. While the government pursued a "hard" coin policy and protective tariffs in general, the parties tried to cloud their issue stances by appealing to party loyalty and using "encarmine shirt" oratory or nominating favorite son candidates from the key swing states. While smart politically, information technology ignored the plight and demands of agrarians.

The Gilt Age likewise witnessed intense population increases from urbanization and immigration in the industrial states of the Northeast. In the American political system, population equals political ability. Gaining more and more seats in the House of Representatives and votes in the Electoral College, the Northeast had the votes to swing the country, Congress, and the presidency in favor of urban and industrial interests. Farmers therefore found lilliputian receptivity to their demands either in Congress or from the major political parties.

Iii. The Agrestal Reaction: Self-Help Programs to Political Demands

• The Grange Economic Self-Help Cooperatives

In the 1870s, a farm organisation known equally the Patrons of Husbandry, but more popularly chosen the Grange, arose and instituted a cooperative program to assist farmers aid themselves. The buying and selling coops founded past the Grange attempted to put more money into farmers� pockets past eliminating middlemen from these economical transactions.

Despite heroic efforts past Grangers, the cooperative movement failed for a variety of reasons. The middlemen - the targets of the motion - fought back by refusing to allow farmers sharecrop land they owned, denying the farmers credit at mercantile stores they ran, or refused to buy or process the farmers� crops at any cost whatsoever. The cooperative stores set up by the Grange also failed because they were underfinanced and could not afford to offering goods for sale on a credit footing. This forced poor farmers into the hands of credit merchants who charged higher prices merely made credit available nether the ingather-lien system. The selling cooperatives as well failed because farmers were unable, given their poverty, to wait for everyone�s ingather to be collected, processed, transported, and sold at a higher price. Farmers, desperate to convert their remaining crop into cash to meet debts and live betwixt growing seasons, were forced to sell to a local buyer at any price they could go.

• The Farmers Alliance

Because of the failure of the Grange to solve agrestal issues through its self-assistance programs, farmers began to get more militant. The Farmers Brotherhood, a much more politically-oriented arrangement, began to attract more and more support in the 1880s as it demanded a governmental response to the plight of the farmer.

The Farmers Brotherhood chosen upon the federal regime to institute a "subtreasury program" to assist farmers avert being forced to sell their not-perishable crops on a glutted market when they could command the least for their labors. Farmers hoped to wait until the overabundance which occurred at the end of each growing season and temporarily depressed prices to their everyman point had dissipated and given way to scarcity when prices would ascent. This, yet, would crave fiscal subsidization from the federal regime. Theoretically, when farmers placed their crop on eolith in federal storage facilities, the Treasury Department would loan the farmer upwardly to 80% of the crop�south current value and agree on to the crop as collateral. When scarcity collection prices up, the farmer would sell and repay the regime with a nominal charge per unit of interest. Not surprisingly given the atmosphere of the times, the proposal was considered revolutionary and rejected past Congress and the political parties.

The subtreasury programme was far from the only need of the Alliance, which realized that agrarian difficulties could never exist solved past the farmers themselves. The situation was so grave that the organization demanded a complete agenda of programs and laws which would requite justice and peradventure prosperity to the beleaguered farming customs. Among these demands were the abolition of national banks, the free coinage of silver to inflate the currency system and provide debtor relief, the enactment of a progressive income tax to shift the tax burden to rich industrialists, the lowering of protective tariffs on manufactured appurtenances, the direct ballot of U. S. senators, and governmental regulation or nationalization of the railroad and telegraph industries.

During the heart and belatedly 1880s the Farmers Alliance pressured the Republican and Democratic parties and Congress to deal with the situation by meeting their political demands. When the parties and government refused or passed laws that farmers viewed as ineffective shams, such as the Interstate Commerce Act and the Sherman Silver Purchase Deed, the members of the Alliance made the determination to abandon traditional politics and form a third party of their own making. That party and the agrarian challenge of the status quo resulted in a political realignment and an end to the Gilded Age political arrangement.

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Source: https://www.austincc.edu/lpatrick/his1302/agrarian.html

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