The Populist Movement — People's Party
by Drew VandeCreek, Ph.D.

The collapse in agricultural prices that accompanied the Panic of 1873 gave impetus to the agrarian revolt that became the Populist Movement and informed the People's Party. By the 1880s many agriculturalists in the Northeast and Great Lakes States had adapted themselves to the production of the vegetables, fruits, and dairy products required by nearby cities. But staple-producers in the West and South faced a long chain of middlemen between themselves and the foreign markets upon which many relied. Bad weather also ravaged these regions in this period. Many farmers invested in new technology, including machinery and fertilizers, in an effort to increase productivity and make up for falling prices. But these investments required access to scarce capital, and many lenders charged farmers exorbitant rates of interest. Capital remained in short supply during this period in large part because of the American economy's general deflationary trend. As the nation expanded, its money supply could not keep up.

In the 1870s, many farmers in northern states joined a new organization known as the National Grange of the Patrons of Husbandry. More commonly known as the Grange, this organization emphasized how middlemen benefited from both supplying the farmer with materials and distributing his crops. To remedy this situation, local Grange organizations founded cooperatives helping farmers to bring their crops to market and banks expanding their access to often-scarce credit. The Grange also became an organizing force in politics, especially at the state level. Many western states passed new legislation, often called "Granger Laws," regulating railroads and grain elevators in the 1870s. In 1877 the United States Supreme Court upheld the principal behind these laws in Munn v. Illinois.

As northern farmers found more success and stability in the 1880s, many farmers in the West and South, formed voluntary associations that came to be known as Farmers' Alliances to respond to their increasing challenges. Like the Grange, these organizations formed cooperative arrangements through which farmers sought to gain higher prices for crops. They also applied this logic to purchasing farm supplies, which they provided to farmers at prices below those of local merchants. By the late 1880s, the Alliances began to call for reform and regulation in national politics. They attacked the gold standard which, they believed, made currency scarce and contributed to the period's pervasive deflation. Many farmers called for making silver legal tender. Alliance leaders also introduced the ambitious subtreasury plan, which called for the federal government to provide farmers with low-interest loans against the security of their nonperishable crops, which were to be stored in government-built warehouses. Introduced in both houses of Congress in February 1890, the bill quickly became mired in committee, never to reemerge.

When the Republican and Democratic Parties largely ignored their proposals, many Alliance members turned to the creation of a new political party. Cooperating with members of the Knights of Labor, Alliance members formed the People's, or Populist Party, in 1889 and 1890. The party provided women with a significantly larger public role than either of the mainstream parties. In 1892 the new organization held its convention in Omaha, Nebraska. There delegates, including four African-Americans, nominated candidates for national office. The party's platform advocated the abolition of national banks, a graduated income tax, public ownership of "the means of communication and transportation," direct election of Senators, civil service reform, and a working day of eight hours. In the 1892 presidential election, the Populist candidate received 1,027,329 votes and carried four states. By 1896 the Democratic Party had adopted many of the Populist Party's causes, and both organizations nominated William Jennings Bryan for the presidency in that year. Largely co-opted by the Democrats, the Populist Party faded from view.