The Rise and Impact of the Populist Party during the Gilded Age

The Insufficient Currency Problem: During the Gilded Age, the money supply failed to expand at the same rate as the growing economy. In fact, the money supply actually decreased by $10\%$ .
Defining Deflation: Deflation is characterized by having too little money in circulation. This economic state triggers specific consequences for the labor market and trade:
- It lowers overall prices and wages.
- It allows lenders (creditors) to charge significantly higher interest rates to borrowers.
Economic Winners and Losers:
- Helps: Bankers and financial institutions profit because they can charge higher interest on the money they lend.
- Hurts: Farmers, ranchers, and other borrowers. These groups must borrow money at high interest rates while simultaneously receiving lower prices for their crops and herds in the marketplace.
The Vicious Cycle of Rural Debt:
1. Depressed Prices: Farmers receive less income for their products.
2. Deeper Debt: Reduced income forces farmers into more significant debt to maintain their operations.
3. Overproduction: To compensate for high debt and low income, farmers attempt to grow more crops to increase revenue. However, this overproduction further floods the market, which depresses prices even more.
Primary Causes of the Agrarian Crisis:
- Overproduction of commodities.
- Increased pressure from growing global competition.
- An inadequate domestic money supply.

The Gold Standard (Republican Position): Republicans, who held control of Congress during this era, advocated for the use of gold coins as the sole basis for currency.
The Pro-Silver Alliance: A coalition formed to support the use of silver coins to reverse the effects of deflation. This group included:
- Midwestern and Southern farmers who required higher prices for their goods.
- Western Republicans from states with significant silver mining operations.
The Sherman Silver Purchase Act (1890): This act represented a temporary victory for the pro-silver alliance. It mandated that the U.S. Treasury purchase silver and issue new silver coins and paper money. This move was bolstered by voters who supported farm protests during midterm elections.

The Granger Movement (1867): Founded by Oliver H. Kelley, this movement originally aimed to alleviate the social isolation of farm families. It eventually evolved into a powerful cooperative where farmers could collectively buy and sell crops and advocate for legislation favorable to agricultural interests.
Farmers’ Alliances (1880s): Farmers began organizing for direct political action. These activists eventually called for the creation of a third party to represent their specific interests.
The Populist Party (The People’s Party): Emerging most strongly in the Midwest, the Populists advocated for a radical platform including:
- Silver Coinage: Ending the exclusive gold standard.
- Progressive Income Tax: Implementing a system where higher income results in a higher tax rate.
- Railroad Regulation: Government oversight of rail transport to prevent exploitation of farmers.
- Direct Election of U.S. Senators: Moving away from state legislatures choosing senators.
- Eight-Hour Workday: Placing a legal limit on the length of the workday to appeal to urban laborers.
- Immigration Restriction: Limiting the flow of new arrivals to protect domestic labor.

Financial Collapse: The Panic of 1893 was the worst depression the United States had experienced up to that point. It led to widespread financial ruin and social rebellion.
Statistical Consequences of the Panic:
- $600$ banks closed their doors.
- $15,000$ businesses failed.
- $11,000$ farmers in Kansas lost their jobs.
- $20,000$ people became homeless in New York City (NYC).
- The era was marked by violent labor unrest across the nation.

Repeal of the Sherman Silver Purchase Act: In response to the Panic of 1893, President Cleveland repealed the $1890$ act, which split the Democratic Party into factions.
The Candidates:
- Republicans: Supported the gold standard exclusively. They nominated William McKinley.
- Democrats: A pro-silver faction took control of the party. They nominated William Jennings Bryan after he made an impassioned case for silver coinage.
- Populists: Chose to endorse the Democrat William Jennings Bryan rather than run their own candidate.
The Campaign Dynamics:
- Bryan campaigned as a champion for laborers.
- Republicans branded Bryan as a "communist" and raised massive amounts of capital from wealthy individuals and big business leaders who feared Bryan's populist agenda.
The Outcome and Legacy:
- William McKinley (Republican) defeated William Jennings Bryan.
- The defeat led to the end of the Populist Party as an independent entity.
- The Progressive Shift: While the Populist Party died, its ideas survived. Over the next two decades, a diverse coalition of Democrats and Republicans—calling themselves "Progressives"—implemented many of the radical Populist goals.

Warm-Up (Think-Pair-Share): How do you think farmers will be treated during the Gilded Age? Explain your answer using vocabulary words (e.g., specific technological inventions, industrialization, urbanization).
Turn and Talk: Why did the Populist party make the decision to support the Democratic candidate? What is the effect of this?
Flip Grid Research Project: Research a modern third party (other than the Democratic or Republican party) and identify:
- Who is part of the party?
- What are their policy goals and why did they form a party?
- Have they had success or elected any candidates?
- Do their goals appeal to you?
- Why do third parties matter in the political landscape?