"'Tis An Angry Wind That Blows': Lone Star Populism"
In the years from the end of the Civil War in 1865 and the turn of the century some thirty-five years later, Americans lived through 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 of the United States made the country richer and more powerful than it had ever been. It was accomplished, however, only with tremendous difficulty and dislocation for the agricultural community. Texas, which remained rural and agricultural during this transformation, was plagued by numerous problems. As these problems intensified and elected officials proved unwilling or unable to address them successfully, Texas farmers flocked to protest movements and eventually participated in a third political party challenging the supremacy of the long-dominant Democrats. While unable to ever gain national power, the Peoples' Party would prepare Texas and the United States for changes implemented during the Progressive Era from 1900 to 1920.
Agrarian Problems and Discontent
Without question the most vexing problem and the one that surpassed all others in both its negative effect and its difficulty to adjust to successfully was the problem of agricultural overproduction. In short the American farmer produced far too much for his own good. Production levels skyrocketed in the years following the Civil War. The opening up of the Great Plains to the plow, the use of farm machinery which allowed the individual farmer to grow more, new farming techniques, and the spreading of railroads (which made areas remote from rivers agriculturally viable by reducing transportation costs) all led to the flooding of the American market with agricultural produce.
As more and more crops were dumped onto the American market, it depressed prices the farmer could command for his produce. Farmers were growing more and more and making less and less. If one looks at cotton production and prices during the Gilded Age, one can see the problem facing the farmer quite clearly. Between 1873 and 1894 cotton production doubled in the United States while the price of cotton fell from about fifteen cents to less than six cents a pound. The same phenomenon occurred in all other sectors of the agricultural economy.
Just as troubling for farmers was the monetary policy followed by the federal government which contracted the amount of money in circulation, making money scarcer and thus driving up its purchasing power over time. This was done in 1873 by limiting currency to gold rather than gold, silver, and greenbacks as it had been since the war. When the amount of money in circulation is contracted, wages and prices go down and purchasing power goes up. This is known as "hard money" or deflation. When the amount of money is expanded, wages and prices go up while purchasing power goes down. This is known as "soft money" or inflation.
Bankers, businessmen, investors and lenders supported hard money arguing that it was a prerequisite to industrialization. Unless money retained its worth, people with money wouldn't invest it in risky ventures and bankers wouldn't lend. Farmers and debtors, on the other hand, were advocates of soft money. They felt it was insane to limit currency to gold while Western silver mines were turning out tons of equally acceptable metal for currency. By circulating more money, Americans who lived in areas where banks and money were scarce would have a better chance at obtaining it. The hard money policy the government pursued during the Gilded Age worked a real hardship on debtors and particularly farmers who had to borrow each year in order to plant a crop. Not only did they have to repay principal and interest on such debts but had to do so with dollars that were harder to come by and that had greater purchasing power than those they had originally borrowed. Farmers, constantly in debt because of the nature of agriculture and its problems during this era, found themselves caught in this double-bind year after year, sinking deeper and deeper into debt.
A particularly crippling problem for farmers was the emergence of tenant farming or sharecropping and the crop-lien system. Originally a postwar phenomenon limited to the South to replace the system of black slavery, these adjustments spread nationwide as more and more farm owners slipped into debt and lost their lands to mortgage foreclosure. Tenant farmers rented the right to farm someone else's land for a cash payment. Since money was so scarce (especially in the South following the loss of the Civil War), landless farmers would farm someone else's land and at the end of the growing season would give up a predetermined share of whatever they grew as the rental payment - one-third of a cotton crop and one-quarter of any grain crop. This was solely for the right to farm the land. If you also needed housing, equipment, farm animals, seeds, etc. you could usually get them for another one-third to one-quarter of the crop you produced. Thus, many farmers who were forced to till land they didn't own could expect to retain as little as one-half to one-third of their yield.
Since food and clothing were necessities during the growing season and because of poverty and a scarcity of money in agricultural areas, the crop-lien system emerged and spread as well during the Gilded Age and beyond. A sharecropper could obtain food, clothing, and other necessities on credit from either the landowner or a credit merchant during the growing season in return for a lien against the share of the crop produced sufficient to meet the credit they had been extended plus interest ranging upward to twenty-five percent. By the time the crop came in, it was all gone to the landowner and the credit merchant. Year after year, the landless farmer fell deeper in debt and became trapped for life.
As the situation of the farming community deteriorated in the aftermath of the Civil War, agrarians grew angrier and angrier, turning to various protest political movements in hopes of reversing the forces that seemed to be conspiring against them. Among these movements were the Greenback Party (which advocated inflation through the use of paper currency), the Grange (a self-help program of farmers designed to eliminate middlemen), the Anti-Monopoly Party, and others. By the middle 1880s the vehicle for expressing agrarian dissatisfaction was the Farmers Alliance, parts of which originated in the state of Texas. The Alliance was a pressure group designed to force the existing political parties and the government they controlled into adopting agrarian demands.
The Farmers Alliance called upon the federal government to institute a "subtreasury plan" to help agrarians avoid being forced to sell their non-perishable crops on a glutted market when they could command the least for the fruits of their labor. Rather than selling at the worst possible time, farmers would be allowed to store their non-perishable crops in government storage facilities and receive loans made through what came to be known as "fiat money". These would be tickets or certificates which could be circulated as currency. Farmers would thus have money to live on while glut gave way to scarcity and prices rose. At such time, the farmer would negotiate the sell of his crop on deposit and use the proceeds to repay the government loan.
Another major demand of the Alliance was for the free coinage of silver as a way of inflating the currency system. Such a change away from the gold standard would provide them with debtor relief - it would become easier to repay debts in dollars that were worth less and easier to come by. Other demands included: the abolition of national banks, a progressive federal income tax, lowering protective tariffs on manufactured goods, the direct election of U. S. senators, and governmental regulation or nationalization of the railroad and telegraph industries.
Growing Militancy: James Stephen Hogg's Attorney-Generalship and
James Stephen Hogg's political career
reflected the growing agrarian discontent in Texas in the 1880s at the
same time that the Farmers Alliance became more and more active. He was
more liberal than many conservative elements of his Democratic party as
demonstrated by his war against monopolies operating in the state of Texas
during his attorney-generalship. While he was not nearly as radical as
the Alliance, he felt that some of their demands were valid and supported
both a state railroad commission and currency inflation through the free
coinage of silver. However, he was adamantly opposed to the subtreasury
plan and the concept of "fiat money". As he attempted to climb the political
ladder to the governorship in 1890, the Attorney-General reached out to
Alliance members for support and made the creation of a Texas Railroad
Commission the cornerstone of his campaign. With candidate Hogg leading
the way, Texas voters approved of a constitutional amendment authorizing
the commission and sent him to the Governor's Mansion. The next two years
produced a powerful Texas Railroad Commission headed by John H. Reagan
and a number of other progressive measures. The most militant Alliance
members, however, were not satisfied because Hogg would not accept all
of their demands, most importantly the subtreasury plan and "fiat money".
They were enraged as well with Hogg's failure to consult with them about
his appointments to the new railroad commission.
As a result of growing Alliance dissatisfaction with Hogg and an ultimatum issued by Newton Finley, chairman of the State Democratic Executive Committee, stating that Alliance members would be barred from the party's nominating primaries unless they abandoned demands for the subtreasury plan, a new third party - the Peoples' party or Populists - was launched in Texas in 1891. While some members of the Alliance believed it worked best as a pressure group within Democratic ranks and refused to join the new party, the majority took up the new banner. The break for most became complete when the Democrats nominated and elected Grover Cleveland, a "hard money" advocate of the gold standard, president in 1892 and a depression which began in 1893 further contracted the money supply and intensified suffering in agricultural quarters.
The Populists' political demands were a direct outgrowth of Alliance proposals since 1885: public ownership of railroads, the subtreasury plan with its fiat money component, government regulation of business, abolition of the national banking system, a graduated income tax, the direct election of U. S. senators, term limitations, referendum & recall, as well as laws to help laborers. The new Peoples' party spread its message with evangelical fervor across the state. They founded almost one hundred newspapers within the state, the most important of which were the Texas Advance and the Southern Mercury , both published in Dallas. Orators, many of them preachers, spread out in rural areas to convert alienated farmers to the new party. Camp meetings, styled after religious revivals, were held to recruit and energize political converts.
The Keys to Success
Given the historic dominancy of the Democratic party in Texas, winning control of government through the electoral process would be an extremely difficult task. If the Populists were to have any realistic chance, two prerequisites had to be met. First, the party had to convince voters of its political viability. This has always been the bane of third party movements in the United States given the reticence of voters to throw their votes away on a doomed candidacy. It has been and remains a Catch-22 situation: the only way to prove viability is to win and you can't win until you prove your viability. Even if disenchanted with conservative Democrats, farmers who couldn't be persuaded that the Democrats were beatable were unlikely to vote Populist.
The second key to Populist success was skillful handling of the race issue. The Populists would have to draw the support of all disenchanted farmers if they were to overthrow the long dominant Democrats. All included black as well as white Texas farmers. This likely would be a near-impossible task given the racial views prevailing in Texas of the 1890s. Some Anglos were likely to refuse to cooperate with or join blacks in the challenge. This was a decade in which Anglos segregated Texas society and were moving to disfranchise the Texas black.
Given the obstacles that faced them, the Populists did enjoy limited early success in the electoral arena. At the national level, James B. Weaver, their first presidential candidate, attracted over a million popular votes and carried four states in the Electoral College. In Texas, the prospects for the future looked even brighter. Though unable to deny Governor Hogg's reelection in 1892, the Populist candidate for the state's top office, Thomas L. Nugent, garnered almost twenty-five percent of the vote. Nugent's vote total rose to thirty-six percent in his second try for the governorship in 1894 though he was defeated by Democrat Charles Culberson. Additionally, twenty-two Populist candidates were elected to the Texas House of Representatives and two to the Texas Senate over Democratic opponents. If they could build upon top of these and other similar victories across the country, the Populists might achieve the impossible - taking control of the government in 1896 and implementing their agenda.
Instead of marking the ultimate triumph of Populism, the election of 1896 turned out to be the undoing of the party in both Texas and the United States. Over the preceding four years, Populist political gains had been made largely at the expense of the Democratic party in the agricultural regions of the South, Midwest, and West. The fervor for currency inflation through the free coinage of silver had intensified and built in these areas because of the depressed economic conditions which began with the Panic of 1893. The depression further restricted the amount of money in circulation, exacerbated the problem of indebtedness, and produced ever louder demands to abandon the gold standard throughout rural America. The Democratic party responded to and sought to protect itself from the Populist threat by nominating William Jennings Bryan for the presidency on a platform embracing free silver, a major Populist demand. Democrats hoped to bring farmers back into their fold be adopting their primary political demand.
The Democratic effort to "coopt" the Populists placed the insurgents in an untenable position. If they nominated their own candidate for president on a full-blown Populist platform, the free silver vote would be split between two candidates, thereby insuring the election of Republican candidate William McKinley who urged continuation of the gold standard. There would be no inflationary relief from the depression. If, on the other hand, the Populists fused with the Democrats and worked for Bryan's election in order to keep the free silver vote united, they were virtually cooperating in the elimination of their own party. While some Texas Populists refused fusion in favor of party integrity, it is an indication of the historic pragmatism of the American voter that the Populist nominating convention seconded the nomination of Democratic candidate Bryan in hopes of maximizing inflationists' chances of victory. When Bryan went down to defeat, the Populists had the worst of both worlds - free silver and inflation were lost causes and the Populist party would become a withering shell of its former self.
The Demise of Populism and Long-Term Impacts
While the Populists would hang around for another year or two following Bryan's defeat, the movement was clearly in decline. Many members returned to the Democratic fold once the election was over, convinced that the Populists could never win and that the odds of achieving change were better as an interest group within the dominant party. The Peoples' party never demonstrated its statewide viability though it came close with forty-four percent of the votes cast in the Texas' gubernatorial election in 1896. Now those numbers plummeted. The improvement of the national economy also proved critical. Agriculture was still in bad shape but the supercontraction of money caused by the depression eased and the Populist crusade lost its fervor in the process.
Though never able to win political control, the Peoples' party nonetheless had a significant impact in the Lone Star State. It forced Democrats across Texas in a more liberal direction. Agrarian discontent also helped produce the Texas Railroad Commission and the passage of some additional antitrust laws before the close of the decade. Finally, the demand for change and reform, though rejected by voters in the 1890s, prepared Texas for more moderate reforms during the Progressive Era which lay just ahead.