American West and Industrialization

Part 6: Progressive Era Politics

Overview
In the 1800s, many inventions
made farming and ranching
more productive, but they also
made them more expensive. 
Farmers went deeper into debt as
railroad shipping and storing
rates soared, and many farmers
started political organizations. 
These organizations, like the
Grange and the Populist Party,
called for the federal regulation
of the railroad industry and a
graduated income tax, among
other things.
 Farmers and Politics
In the late 1800s, many farmers were going into debt due to increased costs for
machinery and shipping and decreased prices for crops.
The National Grange of the Patrons of Husbandry, known as The Grange,
was formed in 1867 to help the interests of farmers. 
Members of the Grange became involved in politics and worked to impose
regulations on the railroads.
As farmers became more actively involved in politics through organizations like
the Grange, they argued for more regulation of the railroads.
The only way most farmers could ship their crops to market was through the
railroads, and many farmers thought the rates the railroads charged were
unfair.
Railroads also owned many of the warehouses and grain elevators used by
farmers, and so farmers called for the federal government to regulate the
rates railroads charged for storing and shipping their crops.
 Munn v. Illinios (1877)
In Munn v. Illinois, the Facts of the Case: Illinois regulated grain
Supreme Court ruled warehouse and elevator rates by establishing
that states had the maximum rates for their use.
right to regulate
certain businesses Question: Did the state-imposed rates deny the
within their borders, warehouse and elevator owners equal protection
including the and due process under the 14th Amendment?
railroad.  Conclusion: No on both counts. Waite, for the
The Supreme Court Court, took a broad view of the state's police
upheld an Illinois power. He argued that the states may regulate
state law that the use of private property "when such
regulated the rates regulation becomes necessary for the public
railroads could good." Waite resurrected an ancient legal
charge for storing doctrine to support his view: "When property is
crops in grain affected with a public interest, it ceases to be
elevators. juris privati only."
 Wabash v. Illinois (1886)
Less than ten years later, in Facts of the Case: The specific allegation is
that the railroad company charged
the 1886 case Wabash Bailey and Swannell, in Gilman, 10
cents per pound more for transporting
v. Illinois, the Supreme goods a shorter distance than Elder &
Court ruled that states McKinney, in Peoria.
cannot regulate railroad Question: Was the Illinois law prohibiting
this discrimination a violation of the
rates because the exclusive powers of Congress to
railroads went across regulate interstate commerce?
state lines.  Conclusion: Yes. The court declared that
the Constitution reserves this power
The Supreme Court stated exclusively for Congress. Therefore any
state law which conflicts would be
that only Congress could unconstitutional. This decision prompts
regulate rates for Congress to take action.

interstate railroads.
 Interstate Commerce Act (1887)
In 1887, Congress The Interstate Commerce Act created the Interstate
passed Commerce Commission, the first true federal regulatory
the Interstate agency. It was designed to address the issues of
Commerce railroad abuse and discrimination and required the
Act.  following:
This act allowed Shipping rates had to be "reasonable and just"
the federal
government to Rates had to be published
regulate the Secret rebates were outlawed
railroad
industry.  Price discrimination against small markets was made
illegal.
Farmers welcomed
the federal Although the law granted the Commission power to
regulation of investigate abuses and summon witnesses, it lacked
railroads. the resources to accomplish its lofty goals. Later
presidents would assure that reform would not go too
far, by appointing pro-railroad commissioners.
Populist Party
Farmers also supported the newly
formed Populist Party, which
emerged in the late 19th
century.
The Populist Party grew out of
agrarian revolt when the prices
of agriculture began to collapse
in the 1870s. 
By the late 1880s, the Populists
developed a political agenda
which called for regulation and
reform in national politics,
including the elimination of
tariffs, the direct election of
senators, the establishment of
income tax, and limits on
immigration.
 Knights of Labor
The Populist Party
supported
the Knights of
Labor, a very
important American
labor organization.
The Knights of Labor
called for many
changes such as:
child labor laws
equal pay for women
progressive income tax
Panics of 1873 and 1893
Both the Panic of 1873 and the Panic of
1893 started because of the failures of
companies involved in the railroad industry. 
In the mid-1800s, railroads in the United States
had expanded tremendously, and many
railroad companies had been quite profitable
during the boom in railroad construction.
Some companies, however, had overextended
themselves during this time. 
In 1873, Jay Cooke and Company, an investment
bank that had invested heavily in the Northern
Pacific Railroad, collapsed.
This started a depression that lasted until 1879. 
In 1893, the Philadelphia and Reading Railroad
declared bankruptcy. 
This was the start of the Panic of 1893.
 Gold Standard
In the late 1800s, argument ensued in the
United States over what the U.S. currency
should be backed by―gold, silver, or
paper. 
Some believed the U.S. currency should be
backed only by gold.
This was known as the gold standard. 
Others believed that the currency should be
backed by gold and silver. 
William Jennings Bryan, a Democrat,
believed that the U.S. currency should be
backed by silver, which he said would lead
to a more stable economy. 
Bryan voiced his opposition to the gold
"You shall not press down upon the brow of
standard in his famous "Cross of
labor this crown of thorns; you shall not crucify
Gold" speech at the Democratic National
mankind upon a cross of gold."
Convention in 1896.
Greenback Party
Yet another group, called the Greenback
Party, was formed in 1874 and
supported paper notes.
During the Civil War, Congress had issued
paper money that was not backed by
silver or gold, called greenbacks. 
The greenbacks had caused inflation and
cut the value of the dollar in half. 
Congress started taking greenbacks out of
circulation after the Civil War, but the
Greenback Party wanted to continue the
issuance of greenbacks. 
Many members of this party were farmers
who had a lot of debt and had a hard
time repaying those debts.