1. What was the plight of the farmers?

At the end of the 19th century, about a third of Americans worked in agriculture, compared to only about four percent today. After the Civil War, drought, plagues of grasshoppers, boll weevils, rising costs, falling prices, and high interest rates made it increasingly difficult to make a living as a farmer. In the South, one third of all landholdings were operated by tenants. Approximately 75 percent of African American farmers and 25 percent of white farmers tilled land owned by someone else.
Every year, the prices farmers received for their crops seemed to fall. Corn fell from 41 cents a bushel in 1874 to 30 cents by 1897. Farmers made less money planting 24 million acres of cotton in 1894 than they did planting 9 million acres in 1873. Facing high interests rates of upwards of 10 percent a year, many farmers found it impossible to pay off their debts. Farmers who could afford to mechanize their operations and purchase additional land could successfully compete, but smaller, more poorly financed farmers, working on small plots marginal land, struggled to survive.

Many farmers blamed railroad owners, grain elevator operators, land monopolists, commodity futures dealers, mortgage companies, merchants, bankers, and manufacturers of farm equipment for their plight. Many attributed their problems to discriminatory railroad rates, monopoly prices charged for farm machinery and fertilizer, an oppressively high tariff, an unfair tax structure, an inflexible banking system, political corruption, corporations that bought up huge tracks of land. They considered themselves to be subservient to the industrial Northeast, where three-quarters of the nation's industry was located. They criticized a deflationary monetary policy based on the gold standard that benefited bankers and other creditors.

All of these problems were compounded by the fact that increasing productivity in agriculture led to price declines. In the 1870s, 190 million new acres were put under cultivation. By 1880, settlement was moving into the semi-arid plains. At the same time, transportation improvements meant that American farmers faced competitors from Egypt to Australia in the struggle for markets.

The first major rural protest was the Patrons of Husbandry, which was founded in 1867 and had 1.5 million members by 1875. Known as the Granger Movement, these embattled farmers formed buying and selling cooperatives and demanded state regulation of railroad rates and grain elevator fees.

Early in the 1870s the Greenback Party agitated for the issue of paper money, not backed by gold or silver, with the idea that a depreciating currency would make it easier for debtors to meet their obligations.

Another wave of protest grew out of the National Farmers' Alliance and Industrial Union (the Southern Farmers Alliance) formed in Lampedusa County, Texas in 1875, and the Northwestern Farmers' Alliance, founded in Chicago in 1880. By the late 1880s, the cooperative business enterprises set up by the Farmers' Alliances had begun to fail due to inadequate capitalization and mismanagement. By 1890, the Farmers Alliances had begun to enter politics. In 1892 the Alliance formed the Peoples' or Populist Party. Among other things, the Populists financed commodity credit system that would have allowed farmers to store their crop in a federal warehouse to await favorable market prices and meanwhile borrow up to 80 percent of the current market price.

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