Farmers' Alliance
The Farmers' Alliance was an organized agrarian economic movement among American farmers that developed and flourished ca. 1875. The movement included several parallel but independent political organizations — the National Farmers' Alliance and Industrial Union among the white farmers of the South, the National Farmers' Alliance among the white and black farmers of the Midwest and High Plains, where the Granger movement had been strong, and the Colored Farmers' National Alliance and Cooperative Union, consisting of the African American farmers of the South.
One of the goals of the organization was to end the adverse effects of the crop-lien system on farmers in the period following the American Civil War. The Alliance also generally supported the government regulation of the transportation industry, establishment of an income tax in order to restrict speculative profits, and the adoption of an inflationary relaxation of the nation's money supply as a means of easing the burden of repayment of loans by debtors. The Farmers' Alliance moved into politics in the early 1890s under the banner of the People's Party, commonly known as the "Populists."
Background
Agricultural crisis in the US Midwest and Plains
The quest to achieve a first transcontinental railroad across the U.S. was delayed somewhat by the American Civil War before being finally completed in May 1869. There followed a rush to complete additional railway lines to open up new frontier areas for economic development, a situation in which the United States government and the great railroad companies of the day maintained a common interest. Rather than directly undertaking railroad construction as a public works project of the federal government, Congress granted cash loans and grants of public land to subsidize construction. Some 129 million acres of public land was ultimately transferred from public ownership to the privately owned railways as part of this process.A great part of this massive stockpile of land needed to be converted into cash by the railways to finance their building activities, since railroad construction was a costly undertaking. New settlement had to be attracted to the virgin lands west of the Missouri River, which had been previously regarded by the public as worthless to the needs of agriculture due to insufficiencies of the soil as well as the arid climate. Millions of advertising dollars were spent by the railway companies promoting the agricultural development of the land which they had to sell. This effort was to be rewarded, particularly after the Panic of 1873 left many unemployed and seeking a new start. Settlers began to flood into the Midwest and Northern Great Plains in response to the railway companies' blandishments.
Populations skyrocketed. The state of Kansas grew from a population of just under 365,000 to nearly a million people during the 1870s. The number of inhabitants in Nebraska nearly tripled, rising to nearly half a million. Iowa, Minnesota, and the Dakota Territory showed parallel population gains. New counties, villages, and towns sprang up by the hundreds throughout the region and a speculative bubble emerged around the buying and selling of farmland and urban lots. Population continued to surge throughout the region well into the decade of the 1880s.
Unfortunately for those who chose to attempt to farm new lands in such places as Kansas, Nebraska, the Dakotas, and Eastern Colorado, the unusually rainy years of the early 1880s which had buoyed land prices gave way to a protracted drought beginning in the summer of 1887, bringing an end to the giddy, speculative boom. With crops failing, artificially inflated land prices plummeted; Eastern capital began to withdraw from the region. Banks collapsed and credit dried up. A decade of hard times followed, marked by the abandonment of entire communities. A sense of deep discontent with the current state of affairs was felt by the farmers who remained.
Agricultural crisis in the southeastern US
The agrarian and plantation-based economy of the Southern United States was virtually destroyed by the American Civil War. Those who had their fortunes invested in Confederate bonds and currency saw them lost, as did those whose wealth was tied up in the ownership of African American slaves. Great landed estates were broken up or rendered unworkable by the lack of a free labor supply and the flood of land sold on the market depressed prices and reduced the economic possibilities of those who counted their dollars in acres.The region faced enormous costs to replace the buildings destroyed in the war and the factories looted. The capacity of the gutted financial market to make loans was grossly insufficient for the needs of the region, exemplified by the 123 counties in Georgia with no banks whatsoever even in 1895. Merchants, finding a sellers' market, extracted extraordinary profits through inflated prices and usurious credit terms.
A new mode of production replaced the slave-based large-scale agriculture of the pre-war years. Now it would be small-scale agrarian enterprise that would proliferate and the emergence of the so-called "share system" or "cropping system," in which non-landowners paid rent for the use of the land they farmed in the form of a fixed percentage of the output generated. This system in theory served the needs of landowners and poor farmers alike, as the sharecroppers would have the incentive to produce more and benefit from increased output while landowners would be provided with a labor source to produce upon the land they held without the necessity of paying cash wages.
In practice, however, a system of virtual slavery emerged, in which poor whites and freed blacks became enmeshed in the usury of merchants and landowners providing essential supplies on credit. A crop-lien system emerged in which future crops would be mortgaged to merchants or landowners in exchange for credit for current purchases. Written contracts made these loans legally enforceable and those so enmeshed frequently found themselves forced to pay inflated prices at high rates of interest. If the value of the credit exceeded the cash value of the crop, the arrangement was automatically rolled over for another year and a never-ending cycle amounting to a condition of perpetual servitude resulted.
Moreover, this crop-lien system contributed to the establishment of a cotton monoculture, as merchants demanded this easily storable, readily marketable commodity to be produced for the satisfaction of debt. Not accidentally, the requirement by merchants for cotton production made production of adequate food and fodder for sustenance virtually impossible, further deepening the debt of the farmer to his merchant-creditor. A sense of deep discontent with the current state of affairs was felt by the small-holding and tenant farmers of the South.
Organizational histories
The Northern Alliance
The National Farmers' Alliance, commonly known as the "Northern Alliance," was established on March 21, 1877, by a group of members of the Grange movement from New York state. The group sought to organize in order to fight what they deemed the unfair practices of the railroad transportation mill, for the reform of the tax system, and for the legalization of Grange-sponsored insurance companies.This first organization proved largely ineffectual but does seem to have provided the inspiration for the first effective Alliance group, which was established on April 15, 1880, by newspaper editor Milton George in Chicago. George's paper, Western Rural, gave the new organization public exposure and inspired the establishment of chartered local organizations, beginning in Filley, Nebraska and soon spreading throughout the American Midwest. Dues were not collected in the earliest phase of Northern Alliance's existence, with editor George financing the group's launch — a fact which spurred growth. Within a month more than 200 locals had been chartered, with claims made that 1,000 local groups had been established by the end of the organization's first year.
The Northern Alliance made its greatest inroads in areas which were stricken by drought in 1881, including the states of Kansas, Nebraska, Iowa, and Minnesota. Growth was slower in states less severely affected, including as Illinois, Wisconsin, and Michigan. Local organizations proved easier to launch than did statewide bodies and in its first years the Alliance was dominated by these local groups, with state-level bodies floundering. The locals did organize themselves at the state level, however, with delegates gathering in founding conventions in Nebraska, Kansas, Iowa, Wisconsin, Illinois, Minnesota and Michigan between January 1881 and the middle of 1882.
The new movement strove to protect farmers from the capitalistic and industrial powers of monopolies and unsympathetic public officials. The Northern Alliance sought to enact a more equitable tax system on mortgage property, pass income tax law, abolish free travel passes to public officials, and regulate interstate commerce by Congress.
By the time of the organization's 2nd Annual Convention, held early in October 1881, the organization claimed a membership of 24,500. A year hence, at the 3rd Convention of October 1882, some 2,000 locals and a total membership of 100,000 was claimed. This proved to be a high-water mark for the organization, however, as prosperity returned to Midwestern agriculture in 1883 and the 4th Convention was poorly attended and no convention was held at all in 1884. With work to do and money to be made, early enthusiasm in the new radical reform organization fell precipitously. Even National Secretary Milton George lost heart, publishing less and less news of the Farmers' Alliance in his newspaper's pages. State and local organizations became moribund.
A fall of wheat and livestock prices following the harvest of 1884 reinvigorated the Farmers' Alliance and activity again exploded. In 1885 a new Alliance group was established for the Dakota Territory, where wheat reigned supreme, followed by a state organization for Colorado, as interest spread westward. New national principles were composed and mailed out to the entire readership of Western Rural and a 5th Convention was successfully held in November 1886. A system of dues was established, thereby funding and energizing the state organizations.
The program of the organization became steadily more radical in this interval, including demands for government ownership of one or more of the intercontinental railroad lines as well as for unlimited coinage of silver at its historic ratio to gold. Connections began to be forged with the Knights of Labor, the leading industrial trade union organization of the day. Ten state organizations were fully functioning by 1890 and new members flooded into the Farmers' Alliance at the rate of 1,000 per week. Kansas alone boasted 130,000 members, closely followed by Nebraska, the Dakotas, and Minnesota, and the national office optimistically projected 2 million members in the near future.
The idea emerged to put this enthusiastic and growing membership to work to advance the group's goals through a political organization.