Inflation/Deflation

1. What is inflation? What could the government do to fight this?

2. What is deflation? What could the government do to fight this?

3. Which is worse? Why?

Farmers and the Populist Movement

Ch. 13.3

I. Farmers’ ProblemsA. Debts

1. Railroads charged high prices for shipping and storagea. Few companies- little competitionb. Farmers bought seeds on credit w/high interest

rates

2. Prices fell, farmers mortgaged their farms3. Banks foreclosed on farms

B. Monetary Issues1. Greenbacks, money not backed by a metal,

were printed during the Civil War- not worth much

2. Greenbacks phased out, value of money went up (deflation)

3. With prices falling, farmers wanted more money in circulation

II. Rise of PopulismA. Farmer’s Alliances

1. The Grange, founded by Oliver Hudson Kelley, helped organize farmers and fight against railroads and banks

2. other Farmers’ Alliances were formed and organized lecturers

B. Populist Party1. “People’s Party”

formed 1892 2. Platform:

a. Lift tax burden from farmers

b. Increase money supply- higher prices

c. Graduated income taxd. Federal loanse. Popular election of

senators, secret ballots, 1 term for President

f. 8-hr work day, immigration reform

3. Party had early success, adopted by Democratic Party

C. Panic of 18931. Causes: Farmer debt, fast growth of

railroads, limited gold supply2. Effects: Stocks fell, silver dropped,

businesses and banks collapsed, unemployment, wages and prices fell

YearLebergott

Romer

1890 4.0 4.0

1891 5.4 4.8

1892 3.0 3.7

1893 11.7 8.1

1894 18.4 12.3

1895 13.7 11.1

1896 14.5 12.0

1897 14.5 12.4

1898 12.4 11.6

1899 6.5 8.7

1900 5.0 5.0

D. Silver and Gold1. Gold Bugs- wanted $ backed by gold standard

a. Bankers and businessesb. Stable currency, deflation

2. Silverites- wanted bimetallism, $ backed by silver and golda. Farmers and laborersb. Inflation, stimulate the economy

III. Fall of PopulismA. Election of 1896

1. William McKinley (Rep., Gold) vs William Jennings Bryan (Dem., Silver)

2. Bryan campaigned hard but McKinley outspent Bryan

3. McKinley won, killing the Populist movement

B. Legacy of Populism1. Popular movements of the poor could have

political impact2. Many reforms ideals would later succeed

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