Agrarian Discontent in the Late 1800's - Why the Farmers Were Wrong

"Why the Farmers Were Wrong"

The period between 1880 and 1900 was a boom time for American

politics. The country was for once free of the threat of war, and many

of its citizens were living comfortably. However, as these two decades

went by, the American farmer found it harder and harder to live

comfortably. Crops such as cotton and wheat, once the bulwark of

agriculture, were selling at prices so low that it was nearly impossible

for farmers to make a profit off them. Furthermore, improvement in

transportation allowed foreign competition to materialize, making it

harder for American farmers to dispose of surplus crop. Finally, years

of drought in the midwest and the downward spiral of business in the

1890's devastated many of the nation's farmers. As a result of the

agricultural depression, many farm groups, most notably the Populist

Party, arose to fight what farmers saw as the reasons for the decline in

agriculture. During the last twenty years of the nineteenth century,

many farmers in the United States saw monopolies and trusts, railroads,

and money shortages and the demonetization of silver as threats to their

way of life, though in many cases their complaints were not valid.

The growth of the railroad was one of the most significant

elements in American economic growth. However, in many ways, the

railroads hurt small shippers and farmers. Extreme competition between

rail companies necessitated some way to win business. To do this, many

railroads offered rebates and drawbacks to larger shippers who used their

rails. However, this practice hurt smaller shippers, including farmers,

for often times railroad companies would charge more to ship products

short distances than they would for long trips. The rail companies

justified this practice by asserting that if they did not rebate, they

would not make enough profit to stay in business. In his testimony to

the Senate Cullom Committee, George W. Parker stated, "...the operating

expense of this road...requires a certain volume of business to meet

these fixed expenses....in some seasons of the year, the local business

of the road...is not sufficient to make the earnings...when we make up a

train of ten of fifteen cars of local freight...we can attach fifteen or

twenty cars...of strictly through business. We can take the latter at a

very low rate than go without it." Later, when asked the consequences of

charging local traffic the same rate as through freight, Mr. Parker

responded, "Bankruptcy, inevitably and speedy...". While the railroads

felt that they must use this practice to make a profit, the farmers were

justified in complaining, for they were seriously injured by it. A

perfect example of this fact can be found in The Octopus by Frank Norris.

A farmer named Dyke discovers that the railroad has increased their

freight charges from two to five cents a pound. This new rate, "...ate

up every cent of his gains. He stood there ruined." (Doc. H). The

railroads regularly used rebates and drawbacks to help win the business

of large shippers, and made up this loss in profit by increasing the cost

to smaller shippers