The Treatment of American Farmers During the Latter Part of the 19th Century

The contention of whether or not the farmers in the late part of the 19^th century were exploited and their ways of life ultimately endangered is not subject to challenge. As the political policies implemented throughout the latter part of this era certainly put small, family-owned farms at an economic disadvantage in relation to the industrialized areas. Government officials regularly put big businesses at an advantage by appeasing them with favorable legislation. This, accompanied with the overall profiteering demonstrated by the railroad companies, banks, and other big businesses involved in the process of farming and distribution, made agrarian discontent rampant among farmers throughout the nation. However, some of the claims made by these farmers were discernibly invalid, as they inadvertently escalated the situation by trying to push the balance of power in their favor, and depriving the situation of equilibrium. Farmers and agricultural workers pursued both their legitimate and illegitimate complaints through diplomatic, economic, and political means, and attempted to rectify their situation.

Much to the dismay of the farmers, government policies were legislated that were coincidentally favorable towards big-businesses, especially railroad companies. These pieces of legislation disrupted the operation of small-farms, and made it difficult for said farmers to turn a profit and support their families. As a result, entire farming communities and experienced an internal recession of their own. Another underlying cause of this recession was that farmers in the United States were exporting into unprotected markets (with an already small profit margin) and inversely, importing from protected markets. With this vulnerability to high import prices, government tariffs had a particularly drastic effect on them. As such, when the Dingley Tariff of 1897 was passed and the government raised the tariff to an astounding 52 percent, it was not financially viable for farmers to continue importing goods that they required, since there weren't any alternatives available, the farmers were compelled to pay the tariffs.

Certain resources were readily available in areas surrounding major farming communities, particularly silver, and as such farmers had an abundance of silver. However, as the government's currency had long been backed by gold stock and not silver, the farmers were left with a large stockpile of "useless" material. Additionally, as the population in the United States increased throughout the 1800's, the money in circulation dropped, therefore causing a short supply of money. Farmers faced fierce opposition against their proposals for currency policy reform, the soon-to-be president; William McKinley addressed their concerns in his acceptance speech given in Canton, Ohio, on August 26, 1896. In this speech McKinley acknowledged the political interest of the farmers in their proposition to change the currency ratio, and bluntly stated that such an economic move would cause "hard times" over the American people. One political theorist, J. Laurence Laughlin, argued that the growth of the world markets and the diminished production of goods, rather than the scarcity of gold, was the underlying cause of farmer's economic hardship. Laughlin also stated that because of the lack of "worldly" capacity by the farmers, world markets would often exploit their prices. Ultimately, Congress passed the Gold Standard Act of 1900, which required all currency to be backed by gold rather than silver, and the farming communities were sent into an uproar. The long-time discontent over the government currency policies that caused farmers to purchase gold at inflated rates in order to operate was at its tail-end in the 1900s.

The governments on both the local and national level were partially responsible for the financial failure of farmers, however; as they corruptly allowed a select few railroad companies to essentially monopolize the market, enabling them to set their own freight rates, which led to price gouging and unethical business practices. There were also instances in which the railroad lines possessed elevators that were used to measure the amount of grain that was being hauled (thus calculating the transportation cost), and would inflate or deflate the weight depending on what was in their best interest. Railroad companies were also notable for not having set rates, and adjusting the rates based on the client, they would often quote one price and change the price once the service was performed, and the clients were obliged to pay it.

While railroad companies played a large role in the diminished success of farmers, there were other contributing factors. Some of these were a result of unfair business ethics, and some were more natural occurrences. Much of the financial hardship experienced by the farming communities can be traced back to their local banks. The national corporate banks in the United States, which offered more competitive loan rates, saw the farming communities as unreliable and untrustworthy, and thus refused to loan out business capital to them. As a result, farmers had to turn to their local banks in order to fulfill their credit needs. With centralized control over the local credit needs, these banks, much like the railroad companies of the time, had in effect, a monopoly over their local credit business. Local banks would often, unfortunately, charge high, non-competitive interest rates which pushed farmers into further economic hardship. As these farmers became heavily indebted to local banks (that were often financed by Eastern businessmen and corporations), debt collectors often seized their farms and foreclosed onto their properties, which took away the livelihood of these people. In essence, these farmers became economic slaves to their banks.

Another potential reason for farmer's lack of probability is that many of the farms throughout the west were located in isolated farming communities, and thus the transportation costs and expenses on other materials that were vital to their farm's operation and daily lives were extremely expensive. Thus, farmers were not able to easily gain access to valuable resources and goods that were necessary for economic expansion, and to effectively compete in a worldly market.

A cause that certainly cannot be attributed to anyone at fault is also that of natural hardships. Natural hardships were abundant, and much to their dismay, agricultural workers were not able to control such occurrences. Such hardships include bug infestation, severe drought, and the overall lack of knowledge of how to best adjust to their environment.

Even though many of the farmers' complaints were certainly understandable and legitimate, there were also a number of illegitimate claims made against corporations, government officials, and American society overall, that were simply invalid. Farmers had long protested over the scaled railroad freight rates that often gave bulk-discounts to those people traveling nationwide or for long distances, as much of the farmer's business and operations were local or regional. As such, these freight rates were not lucrative to them, and essentially discriminated against them. However, George W. Parker, vice-president of the Cairo Short Line Railroad, made an assertive point in his testimony for the Senate Cullom Committee in 1885. Parker argued that the railroad's current business model was vital to the continued operations of the company. Parker stated that it was necessary to offer bulk-discounts at a slightly adjusted price, in order to fill the vacancies on the train and help supplement the local transportation costs. In order to be economically and financially sufficient, these added passengers were necessary, as approximately 33 percent of the operating expenses had to be paid regardless of the volume of business on the line. This argument made on behalf of rail lines, is understandable and their business model is viable. Thus, the farmer's complaints in this particular instance can be deemed invalid.

In the instances of legitimate complaints, the farmers tried to effectively combat their ill-treatment, and incorporated several methods of reform, including economic and political measures. Those involved in the agricultural industry and directly affected by the shrewd big-business practices and favorable government legislation, took political measures to try and voice their opinions. Thus, a political party was established in order to initiate legislation that would better this situation, this party was later known as the Populist Party and sported a political platform that emphasized the reformation of the government and the elimination of corrupt policy-making. Small-farmers also began to pool their resources together in order to get an economic advantage with their suppliers of machinery, seed, and other supplies that were necessary to successfully run a farm. Additionally, a loose coalition was formed, which enacted a series of regulations, known as the Granger Laws.

While the farmers certainly had every right to be disgruntled at the way their government had treated them and they tried to improve their situation through appropriate and honorable means: through the formation of coalitions, their own internal policy-making (Granger Laws), and the Greenback Movement.