The American
Farmer in the Gilded Age In the years from the end of the Civil War in 1865 and the turn of the century some thirty-five years
later, 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 brought tremendous difficulty,
especially for those in the American agricultural community. As the transformation of America took place,
distressed farmers became angrier and angrier and would eventually participate in the most influential third political party
movement ever, the People’s or Populist Party which speedily took the lead in the battle for farmers’ rights.
The
party lived only to die, but it did pave the way for Theodore Roosevelt’s conservation policy, for the closer regulation
of railroads and trusts, for the Federal Reserve Banking System and for a series of reforms that greatly promoted popular
control of the government, both state and national.
Farmers in the Gilded Age faced many problems, but the most problematic were overproduction
of crops, hard money policies (deflation), and high tariffs.
Over Production
By over producing crops the prices went dramatically
down, for example cotton fell from 15 cents per pound to 6 cents per pound. The same phenomenon occurred
in all other sectors of the agricultural economy. To compensate for falling prices, farmers produced more and more crops which
made prices continue to plummet.
Hard Money
The Gilded Age farmer was operating on borrowed money and hard
money (deflated) at that, as opposed to soft money (inflated), which was more difficult to come by, thus making it harder
to pay back loans.
During the Gilded Age, the federal government pursued a monetary policy that contracted
the amount of money in circulation, making money scarcer and thus driving up its purchasing power and worth over time. This
was done by limiting currency to gold rather than gold and silver or gold, silver, and greenbacks or paper money. When the
amount of money in circulation is contracted (such as occurred following the Civil War when silver was demonetized), 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 money".
Contraction or hard money equals deflation while expansion or
soft money equals inflation. These policies benefited the industrialized age, but greatly demised the farming
industry in Gilded America.
The government, to encourage rapid industrialization, gave significant tax breaks to industries that
were not given to farming. As industries 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 interest, making it even more difficult to
make a profit.
High
Tariffs
Farmers fell victim to the tariff policy of the United States during the Gilded Age.
They were forced to buy all the manufactured goods they needed for survival on a market protected by tariff legislation at
artificially high prices while selling what they produced on a largely unprotected and highly competitive market at depressed
prices because of oversupply and foreign competition. Thus, the tariff policy of the country often worked a double hardship
on agricultural interests.
The aim of American protective tariffs during the Gilded Age was to try to guarantee the American market
to the American manufacturer of finished products at a profit. The federal government consciously sought to achieve this aim
as a means of encouraging the industrial revolution after the Civil War.
By putting an import tax or duty on manufactured goods being imported
into the United States by foreign manufacturers, the government hoped to make them more expensive than the similar American
manufactured goods. This virtually guaranteed that American consumers, seeking to maximize their disposable income, would
buy American goods. Protective tariffs were one of the many reasons why American industry grew so quickly during the final
third of the nineteenth century.
Farmers felt discriminated against because they felt the tariffs were applied primarily
to manufactured goods while agrarian interests were left to fend for themselves.
References www.austincc.edu/lpatrick/his1302/agrarian.html
