Below are some passages from Lawrence Goodwyn's The Populist Moment: A Short History of the Agrarian Revolt in America (1978)
This is a little long (about five editorials), but worth the effort to understand the context of our current situation.
Executive summary:
Even before the ascendence of unions, the post-civil-war Farmers Alliance and its populist political successor, the People's Party, attempted to wrest control of public policy from an exploitive and corrupt financial sector (sound familiar?). The following passages describe their heart-rending situation--the debt peonage to which most farmers were subjected, and their attempt to organize and throw off their crushing credit burdens.
The author delineates four stages in this real, populist, democratic movement:
1. Rise to consciousness and self-respect
2. Forming cooperatives to provide an alternative to the exploitive "furnishing agents."
3. Forming a political movement, attempting to take control of credit and money, in particular. (Cooperatives that failed typically did so because of lack of access to credit.)
4. The (successful) resistance of the bankers, and the populists' own internal self-defeating contradictions, particularly sectionalism (North v. South) and racism. Established modes of thinking proved too much to overcome, and unions were not yet an ally ready to join this movement. One highlight of the political defeats in the south: election rigging, lynching and arson as tools of intimidation on behalf of the Dixiecrats. In a particularly tragic turn of events, even some of the defeated populists turned racist, blaming various inferior sections of humanity for their defeat.
Many historical precedents exist for the penury to which farmers in post-civil war America sunk. There's evidence that even the earliest agricultural societies tended to favor creditors, and credit is essential for successful agriculture. The Biblical (and Babylonian) injunctions against usury, and the practice of debt jubilees demonstrate this occurred. A little theological side note: the "redeemer," a title often applied to the messiah, was the person who bought one out of debt slavery.
Historical antecedents exist too. For example, the Vietnamese fought the French, and then the Americans, fiercely to lift the burden of colonial debt peonage. Americans funded nearly 80% of the French war effort, then stepped in to preserve the prerogatives of the creditor class established by the colonists. See Jeffrey Race's War Comes to Long An for the specifics.
The more recent series of sub-prime / derivative frauds that crashed the American economy echo the series of watered stock frauds of the Gilded Age described below during which this populist movement rose.
The question now: Will current circumstances provoke similar aspirations to actual democracy rather than the ersatz variety?
The following are quotes from the book:
pp. 22-23
In the aftermath of Appomattox, the people of the South had very little capital or the institutions dealing in it--banks. Emancipation had erased the slave system’s massive investment in human capital, and surrender had not only invalidated all Confederacy currency, it had also engendered a wave of Southern bank failures. Massachusetts alone had five times as much national bank circulation as the entire South, while Bridgeport, Connecticut, had more than the states of Texas, Alabama, and North and South Carolina combined. The per capita figure for Rhode Island was $77.16; it was 13 cents for Arkansas. One hundred and twenty-three counties in the state of Georgia had no banking facilities of any kind. The South had become, in the words of one historian, a “giant pawn shop."
The furnishing merchants, able to get most of their goods on consignment from competing Northern mercantile houses, bought supplies and "furnished" them on credit to farmers, taking a lien on the farmer’s crop for security. Farmers learned that the interest they were paying on everything they consumed limited their lives in a new and terrible way; the rates imposed, were frequently well in excess of 100 per cent annually, sometimes over 200 per cent. The system had subtle ramifications which made this mountain of interest possible. At the heart of the process was a simple two-price system for all items-one price for cash customers and a second and higher price for credit customers. Interest of 25 to 50 per cent would then be charged on this inflated base. An item carrying a "cash price" of I0 cents would be sold on credit for 14 cents and at the end of the year would bring the merchant, after the addition of, say, 33 per cent interest, a total of 19 cents-—almost double the standard purchasing price. Once a farmer had signed his crop lien he was in bondage to his merchant as long as he failed to pay out, because "no competitor would sell the farmer as much as a side of fat back, except for cash, since the only acceptable security, his crop, had been forfeited." The farmer rarely was even aware of the disparity between cash and credit prices, for he usually had no basis for comparison; "many of the merchants did a credit business so exclusively they set no cash prices." The farmer soon learned that the prudent judgment--or whim--of his furnishing merchant was the towering reality of his life. Did his wife want some calico for her single "Sunday dress," or did his family need a slab of bacon? Whether he got them or not depended on the invisible scales on which the merchant across the counter weighed the central question--would the farmer’s crop yield enough money to pay off the accumulating furnishing debt?
In ways people outside the South had difficulty perceiving, the crop lien system became for millions of Southerners, white and black, little more than slavery. "When one of these mortgages has been recorded against the Southern farmer," wrote a contemporary, "he had usually passed into a state of helpless peonage .... From this time until he has paid the last dollar of his indebtedness, he is subject to the constant oversight and direction of the merchant." The man with the ledger became the farmer’s sole significant contact with the outside world. Across the South he was known as “the furnishing man" or "the advancing man." To black farmers he became "the Man."
....
p.71
On the "sod-house frontier" of the West, the human costs were enormous. Poverty was a "badge of honor" which decorated all. Men and children "habitually" went barefoot in summer and in winter wore rags wrapped around their feet. A sod house was its home literally constructed out of prairie sod that was cut, sun-dried, and used as a kind of brick. Out of such materials, the very "civic culture" of the agrarian revolt was constructed. The farmers knew where their problems were. A social historian reports that farmers in the 1870’s and 1880’s reserved their "deepest enmity" for grain and stock buyers and for the railroads that served farmers and middlemen alike.
Everywhere the farmer turned he seemed to be the victim of rules that somehow always worked to the advantage of the biggest business and financial concerns that touched his world. To be efficient, the farmer had to have tools and livestock that cost him forbidding rates of interest. When he sold, he got the price offered by terminal grain elevator companies. To get his produce there, he paid high rates of freight. If he tried to sell to different grain dealers, or elevator companies, or livestock commission agents, he often encountered the practical evidence of secret agreements between agricultural middlemen and trunk line railroads. The Northern Pacific named specific grain terminal to which farmers should ship, the trunk line simply refusing to provide railroad cars for the uncooperative.
Among the large new business combinations that were engaged in creating trusts in virtually every major branch of American commerce, the watering of stock became so routine that it is not too much to say that the custom provided the operating basis for the entire industrial system that was emerging. To pay even nominal dividends on watered stock, companies needed high rates of profit—in effect, they converted their customers into [p.72] real sources of direct capital. Railroad networks that cost $250,000 in public money to build were owned by companies that capitalized themselves at $500,000 and then sold construction bonds on $500,000 more. Agrarian spokesmen wondered out loud why the citizenry should be paying interest on public indebtedness of one million d0llars, 75 per cent of which was watered stock. Railroad magnates rarely bothered to reply to such critics beyond offering an occasional opinion that popular concern about the interior affairs of business corporations was "officious."
.....
[p. 84]
...the searing educational experience of the [failed] cooperative struggle of 1888 ... brought a new perspective on the larger American society. The discovered truth was a simple one, but its political import was radical: the [Farmer's] Alliance cooperative stood little chance of working unless fundamental changes were made in the American monetary system.
[p. 97]
It is one of the enduring ironies of history that established systems of hierarchy rarely find it necessary to rely on sensible defences as an essential means of maintaining power. Police or other modes of social authority are sometimes necessary, but logic rarely is. Indeed, throughout recorded history, the presence in all human societies of jerry-built modes of thought, behavior, and racial and religious memories have served to help protect traditional elites by strewing complicated psychological and emotional roadblocks in the path of those with unsanctioned but relatively thoughtful innovations. So pervasive have been these habits of thought that established hierarchies have tended to be defended as venerable repositories of good sense when they are, in fact, merely powerful and orderly.
A complementary presumption is that insurgent movements are nonsensical. Indeed, the very thought that an insurgent movement, in its fundamental tenets, may be more than superficial calls into question the usefulness of the established order that resists the movement. Participants in the mainstream of most societies generally find such causal relationships difficult to accept because to do so would challenge their own individual modes of thought and behavior. The existence of a coherent protest movement is, therefore, an awkward fact for any society. For Americans, Populism proved particularly awkward.
....
[p.159]
What happened to the ...'reform program" in Texas happened everywhere. The American political system was not seen to be democratic, but hierarchical; business lobbies governed the legislative process on the vital issues. In 1891, as it had many times before, the Democratic "party of the people" revealed itself as a business party.
[pp. 268-9]
The collective effect of twentieth-century agricultural legislation--from the Federal Reserve Act of 1913 to the abrupt ending of the Farm Security Administration's land relocation program in 1943--was to assist in the centralization of American agriculture at the expense of the great mass of the nation’s farmers. The process of offering credit, first to the nation’s most affluent large-scale farming interests, and then in the 1920's to sectors of the agricultural middle class—while at the same time denying it to the "whole class" of Americans who worked the land—had the effect of assisting large-unit farming interests to acquire title to still more land at the expense of smallholders. Purely in terms of land-ownership patterns, "agri-business" began to emerge in rural America as early as the 1920's, not, as some have suggested, because large-scale corporate farming proved its "efficiency" in the period 1940 to 1970. In essence, “agri-business" came into existence before it even had the opportunity to prove or disprove its "efficiency." In many ways, land centralization in American agriculture was a decades-long product of farm credit policies acceptable to the American banking community. The victory won by goldbugs in the 1890's thus was consolidated by the New Deal reforms. These policies had the twin effects of sanctioning peonage and penalizing family farmers. The end result was a loss of autonomy by millions of Americans on the land.
In a gesture that was symbolic of the business-endorsed reforms of the Progressive era, William Jennings Bryan hailed the passage of the Federal Reserve Act in 1913 as a "triumph the people." His response provided a measure of the intellectual achievements of reformers in the Progressive period. Of longer cultural significance, it also illustrated how completely idea of "reform" had become incorporated within the new political boundaries established in Bryan’s own lifetime. The reformers of the Progressive era fit snugly within these boundaries--in Bryan’s case, without his even knowing it. Meanwhile, the idea of substantial democratic influence over the structure of the nation’s financial system, a principle that had been the operative political objective of greenbackers, quietly passed out of American political dialogue. It has remained there ever since.
The manner in which the citizens of a democratic society become culturally intimidated, so that some matters of public discussion pass out of public discussion, is not the work of a single political moment. It did not happen all at once, nor was it part [p.270] of a concerted program of repression....It happened to the whole society...through a kind of acquiescence that matured into settled resignation. This sophisticated despair, grounded in the belief that hierarchical American society could, perhaps, be marginally "humanized" but could not be fundamentally democratized, became the operative premise of twentieth-century reformers. Their perspective acquired a name and, rather swiftly, a respectability always denied Populism. In 1900-1930 it was popularly recognized as "progressivism." Later, it became known as "liberalism."
[p.273]
Given the ballot box potentiality of "the people" as against "the great trusts and combinations," Republicans obviously could not afford to have the campaign decided on that basis. The countervailing idea of the "progressive society" materialized slowly out of the symbolic values embedded in the gold standard. The "sanctity of contracts" and the "the national honor," it soon became apparent, were foremost among them. But, gradually, and with the vast distributional range afforded by the Republican campaign treasury, broader themes of "peace, progress, patriotism, and prosperity," came to characterize the campaign for William McKinley. The "progressive society" advanced by Mark Hanna in the name of the corporate community was inherently a well-dressed, churchgoing society. The various slogans employed were not mere expressions of a cynical politics, bur rather th authentic assertions of an emerging American world view.
[Note: Churchgoing J.P. Morgan had to remove himself from a consultation with America's Episcopal Bishops to deal with the panic of 1907]
[p.284...after McKinley's victory]
A consensus thus came to be silently ratified: reform politics need not concern itself with structural alteration of the economic customs of the society. ..removing from mainstream reform politics the idea of people in an industrial society gaining significant degrees of autonomy in the structure of their own lives...The range of political possibility was decisively narrowed--not by repression, or exile, or guns, but by the simple power of the reigning new culture itself.
[p. 287]
In addition to the banishment of the "financial question" as a political issue, three other developments soon materialized in the wake of the 1896 election to establish enduring patterns for the twentieth century--the rapid acceleration of the merger movement in American industry, the decline of public participation in the democratic process itself, and corporate domination of mass communications.
[p. 291]
...our numerous progressive societies have created, or are busily creating, overpowering cultural orthodoxies through which the citizenry is persuaded to accept the system as "democratic"--even as the private lives of millions become more deferential, anxiety-ridden, and (no other phrase will serve) less free.
Increasingly, the modern condition of "the people" is illustrated by their general acquiescence in their own political inability to affect their governments in substantive ways. Collective political resignation is a constant of public life in the technological societies of the twentieth century....In the absence of alternatives, millions have concentrated on trying to find private modes of escape, often through material acquisition.
[p.294]
The meaning of the agrarian revolt was its cultural assertion as a people's movement of mass democratic aspiration. ... [focused] in the earnest probings of people bent on discovering a way to free themselves from the killing grip of the credit system.
[p.297-8]
But their movement was defeated, and the moment passed. Following the collapse of the People's party, farm tenantry increased steadily and consistently, decade after decade, from 25 per cent in 1880, to 28 per cent in 1890, to 36 per cent in 1900, and to 38 per cent in 1910. The 180 counties in the South where at least half the farms had been teanat-operated in 1880 increased to 890 by 1935. Tenantry also spread over the fertile parts of the corn belt as an increasing amount of Midwestern farmland came to be held by mortgage companies. Some 49 per cent of Iowa farms were tenant-operated in 1935 and the land so organized amounted to 60 per cent of the farm acreage in the state. In 1940, 48 per cent of Kansas farms were tenant-operated. The comparable figure for all Southern farms was 46 per cent. But in the South, those who had avoided tenantry were scarcely in better condition than the sharecroppers. An authoritative report written by a distinguished Southern Sociologist in the 1830's included the information that over half of all landowners had "short-term debts to meet current expenses on the crop." The total for both tenants and landowners shackled to the furnishing merchant reached 70 per cent of all farmers in the South. As one historian put it, the crop lien had "blanketed" the entire region. As in the Gilded Age, the system operated in a way that kept millions living literally on the wages of peonage.
[p.301]
Democratic pressure from below--from crop-mortgaged farmers desperate to escape their furnishing merchants--emboldened the early Alliance leadership to undertake the "joint-note" plan within the centralized state-wide cooperative. And tactical democratic strategy from above, in the form of William Lamb's "politics of the sub-treasury," helped raise the political consciousness of many hundreds of thousands of farmers to a level necessary for them to make the personal decision to break with their cultural inheritance and support the new People's Party. The Alliance lecturing system was organic to this democratic message-carrying...
As the farmers labored to create a workable infrastructure of mass cooperation in 1887-92, the opposition of the American banking and corporate communities gradually brought home to Alliance leaders, and to masses of farmers, the futility of the cooperative effort--in the absence of fundamental restructuring of the monetary system.
[Their solution--the "sub-treasury' plan would end] the enormous influence of moneylenders over interest rates...The contracted currency, the twenty-five year decline in volume and prices, would have been ended in one abrupt--and democratic--restructuring.
[p.320]
...the popular aspirations of the people of the “third world" in the twentieth century have easily become as threatening to modern Americans as the revolt of their own farmers was to goldbugs eighty years ago. Though American foreign policy and American weapons have defended anachronistic feudal and military hierarchies in South America, Africa, and Asia, such actions being justified at home as necessary to the defense of "democracy," neither the policy nor the justification has proved notably persuasive to the non-Americans who are the mass victims of such hierarchies. The resulting unpopularity of America puzzles Americans. The policies themselves, however, are not debatable within the limits of public dialogue sanctioned in modern America. Under such constraints, the ultimate political price that Americans may be forced to pay for their narrowed cultural range in the twentieth century has emerged as a question of sobering dimension.
15
However they were subsequently characterized, Populists in their own time derived their most incisive power from the simple fact that they declined to participate adequately in a central element of the emerging American faith. In an age of progress and forward motion, they had come to suspect that Horatio Alger was not real. In due course, they came to possess a cultural flaw that armed them with considerable critical power. Heretics in a land of true believers and recent converts, they saw the coming society and they did not like it. It was perhaps inevitable that since they lost their struggle to deflect that society from its determined path of corporate celebration, they were among the last of the heretics. Once defeated, they lost what cultural autonomy they had amassed and surrendered their progeny to the training camps of the conquering army. All American including the children of Populists, were exposed to the dogmas of progress confidently conveyed in the public school system and in the nation’s history texts. As the twentieth-century recipients of this instruction, we have found it difficult to listen with sustained attention to the words of those who dissented, at the moment a transcendent cultural norm was being fashioned.
This is a little long (about five editorials), but worth the effort to understand the context of our current situation.
Executive summary:
Even before the ascendence of unions, the post-civil-war Farmers Alliance and its populist political successor, the People's Party, attempted to wrest control of public policy from an exploitive and corrupt financial sector (sound familiar?). The following passages describe their heart-rending situation--the debt peonage to which most farmers were subjected, and their attempt to organize and throw off their crushing credit burdens.
The author delineates four stages in this real, populist, democratic movement:
1. Rise to consciousness and self-respect
2. Forming cooperatives to provide an alternative to the exploitive "furnishing agents."
3. Forming a political movement, attempting to take control of credit and money, in particular. (Cooperatives that failed typically did so because of lack of access to credit.)
4. The (successful) resistance of the bankers, and the populists' own internal self-defeating contradictions, particularly sectionalism (North v. South) and racism. Established modes of thinking proved too much to overcome, and unions were not yet an ally ready to join this movement. One highlight of the political defeats in the south: election rigging, lynching and arson as tools of intimidation on behalf of the Dixiecrats. In a particularly tragic turn of events, even some of the defeated populists turned racist, blaming various inferior sections of humanity for their defeat.
Many historical precedents exist for the penury to which farmers in post-civil war America sunk. There's evidence that even the earliest agricultural societies tended to favor creditors, and credit is essential for successful agriculture. The Biblical (and Babylonian) injunctions against usury, and the practice of debt jubilees demonstrate this occurred. A little theological side note: the "redeemer," a title often applied to the messiah, was the person who bought one out of debt slavery.
Historical antecedents exist too. For example, the Vietnamese fought the French, and then the Americans, fiercely to lift the burden of colonial debt peonage. Americans funded nearly 80% of the French war effort, then stepped in to preserve the prerogatives of the creditor class established by the colonists. See Jeffrey Race's War Comes to Long An for the specifics.
The more recent series of sub-prime / derivative frauds that crashed the American economy echo the series of watered stock frauds of the Gilded Age described below during which this populist movement rose.
The question now: Will current circumstances provoke similar aspirations to actual democracy rather than the ersatz variety?
The following are quotes from the book:
pp. 22-23
In the aftermath of Appomattox, the people of the South had very little capital or the institutions dealing in it--banks. Emancipation had erased the slave system’s massive investment in human capital, and surrender had not only invalidated all Confederacy currency, it had also engendered a wave of Southern bank failures. Massachusetts alone had five times as much national bank circulation as the entire South, while Bridgeport, Connecticut, had more than the states of Texas, Alabama, and North and South Carolina combined. The per capita figure for Rhode Island was $77.16; it was 13 cents for Arkansas. One hundred and twenty-three counties in the state of Georgia had no banking facilities of any kind. The South had become, in the words of one historian, a “giant pawn shop."
The furnishing merchants, able to get most of their goods on consignment from competing Northern mercantile houses, bought supplies and "furnished" them on credit to farmers, taking a lien on the farmer’s crop for security. Farmers learned that the interest they were paying on everything they consumed limited their lives in a new and terrible way; the rates imposed, were frequently well in excess of 100 per cent annually, sometimes over 200 per cent. The system had subtle ramifications which made this mountain of interest possible. At the heart of the process was a simple two-price system for all items-one price for cash customers and a second and higher price for credit customers. Interest of 25 to 50 per cent would then be charged on this inflated base. An item carrying a "cash price" of I0 cents would be sold on credit for 14 cents and at the end of the year would bring the merchant, after the addition of, say, 33 per cent interest, a total of 19 cents-—almost double the standard purchasing price. Once a farmer had signed his crop lien he was in bondage to his merchant as long as he failed to pay out, because "no competitor would sell the farmer as much as a side of fat back, except for cash, since the only acceptable security, his crop, had been forfeited." The farmer rarely was even aware of the disparity between cash and credit prices, for he usually had no basis for comparison; "many of the merchants did a credit business so exclusively they set no cash prices." The farmer soon learned that the prudent judgment--or whim--of his furnishing merchant was the towering reality of his life. Did his wife want some calico for her single "Sunday dress," or did his family need a slab of bacon? Whether he got them or not depended on the invisible scales on which the merchant across the counter weighed the central question--would the farmer’s crop yield enough money to pay off the accumulating furnishing debt?
In ways people outside the South had difficulty perceiving, the crop lien system became for millions of Southerners, white and black, little more than slavery. "When one of these mortgages has been recorded against the Southern farmer," wrote a contemporary, "he had usually passed into a state of helpless peonage .... From this time until he has paid the last dollar of his indebtedness, he is subject to the constant oversight and direction of the merchant." The man with the ledger became the farmer’s sole significant contact with the outside world. Across the South he was known as “the furnishing man" or "the advancing man." To black farmers he became "the Man."
....
p.71
On the "sod-house frontier" of the West, the human costs were enormous. Poverty was a "badge of honor" which decorated all. Men and children "habitually" went barefoot in summer and in winter wore rags wrapped around their feet. A sod house was its home literally constructed out of prairie sod that was cut, sun-dried, and used as a kind of brick. Out of such materials, the very "civic culture" of the agrarian revolt was constructed. The farmers knew where their problems were. A social historian reports that farmers in the 1870’s and 1880’s reserved their "deepest enmity" for grain and stock buyers and for the railroads that served farmers and middlemen alike.
Everywhere the farmer turned he seemed to be the victim of rules that somehow always worked to the advantage of the biggest business and financial concerns that touched his world. To be efficient, the farmer had to have tools and livestock that cost him forbidding rates of interest. When he sold, he got the price offered by terminal grain elevator companies. To get his produce there, he paid high rates of freight. If he tried to sell to different grain dealers, or elevator companies, or livestock commission agents, he often encountered the practical evidence of secret agreements between agricultural middlemen and trunk line railroads. The Northern Pacific named specific grain terminal to which farmers should ship, the trunk line simply refusing to provide railroad cars for the uncooperative.
Among the large new business combinations that were engaged in creating trusts in virtually every major branch of American commerce, the watering of stock became so routine that it is not too much to say that the custom provided the operating basis for the entire industrial system that was emerging. To pay even nominal dividends on watered stock, companies needed high rates of profit—in effect, they converted their customers into [p.72] real sources of direct capital. Railroad networks that cost $250,000 in public money to build were owned by companies that capitalized themselves at $500,000 and then sold construction bonds on $500,000 more. Agrarian spokesmen wondered out loud why the citizenry should be paying interest on public indebtedness of one million d0llars, 75 per cent of which was watered stock. Railroad magnates rarely bothered to reply to such critics beyond offering an occasional opinion that popular concern about the interior affairs of business corporations was "officious."
.....
[p. 84]
...the searing educational experience of the [failed] cooperative struggle of 1888 ... brought a new perspective on the larger American society. The discovered truth was a simple one, but its political import was radical: the [Farmer's] Alliance cooperative stood little chance of working unless fundamental changes were made in the American monetary system.
[p. 97]
It is one of the enduring ironies of history that established systems of hierarchy rarely find it necessary to rely on sensible defences as an essential means of maintaining power. Police or other modes of social authority are sometimes necessary, but logic rarely is. Indeed, throughout recorded history, the presence in all human societies of jerry-built modes of thought, behavior, and racial and religious memories have served to help protect traditional elites by strewing complicated psychological and emotional roadblocks in the path of those with unsanctioned but relatively thoughtful innovations. So pervasive have been these habits of thought that established hierarchies have tended to be defended as venerable repositories of good sense when they are, in fact, merely powerful and orderly.
A complementary presumption is that insurgent movements are nonsensical. Indeed, the very thought that an insurgent movement, in its fundamental tenets, may be more than superficial calls into question the usefulness of the established order that resists the movement. Participants in the mainstream of most societies generally find such causal relationships difficult to accept because to do so would challenge their own individual modes of thought and behavior. The existence of a coherent protest movement is, therefore, an awkward fact for any society. For Americans, Populism proved particularly awkward.
....
[p.159]
What happened to the ...'reform program" in Texas happened everywhere. The American political system was not seen to be democratic, but hierarchical; business lobbies governed the legislative process on the vital issues. In 1891, as it had many times before, the Democratic "party of the people" revealed itself as a business party.
[pp. 268-9]
The collective effect of twentieth-century agricultural legislation--from the Federal Reserve Act of 1913 to the abrupt ending of the Farm Security Administration's land relocation program in 1943--was to assist in the centralization of American agriculture at the expense of the great mass of the nation’s farmers. The process of offering credit, first to the nation’s most affluent large-scale farming interests, and then in the 1920's to sectors of the agricultural middle class—while at the same time denying it to the "whole class" of Americans who worked the land—had the effect of assisting large-unit farming interests to acquire title to still more land at the expense of smallholders. Purely in terms of land-ownership patterns, "agri-business" began to emerge in rural America as early as the 1920's, not, as some have suggested, because large-scale corporate farming proved its "efficiency" in the period 1940 to 1970. In essence, “agri-business" came into existence before it even had the opportunity to prove or disprove its "efficiency." In many ways, land centralization in American agriculture was a decades-long product of farm credit policies acceptable to the American banking community. The victory won by goldbugs in the 1890's thus was consolidated by the New Deal reforms. These policies had the twin effects of sanctioning peonage and penalizing family farmers. The end result was a loss of autonomy by millions of Americans on the land.
In a gesture that was symbolic of the business-endorsed reforms of the Progressive era, William Jennings Bryan hailed the passage of the Federal Reserve Act in 1913 as a "triumph the people." His response provided a measure of the intellectual achievements of reformers in the Progressive period. Of longer cultural significance, it also illustrated how completely idea of "reform" had become incorporated within the new political boundaries established in Bryan’s own lifetime. The reformers of the Progressive era fit snugly within these boundaries--in Bryan’s case, without his even knowing it. Meanwhile, the idea of substantial democratic influence over the structure of the nation’s financial system, a principle that had been the operative political objective of greenbackers, quietly passed out of American political dialogue. It has remained there ever since.
The manner in which the citizens of a democratic society become culturally intimidated, so that some matters of public discussion pass out of public discussion, is not the work of a single political moment. It did not happen all at once, nor was it part [p.270] of a concerted program of repression....It happened to the whole society...through a kind of acquiescence that matured into settled resignation. This sophisticated despair, grounded in the belief that hierarchical American society could, perhaps, be marginally "humanized" but could not be fundamentally democratized, became the operative premise of twentieth-century reformers. Their perspective acquired a name and, rather swiftly, a respectability always denied Populism. In 1900-1930 it was popularly recognized as "progressivism." Later, it became known as "liberalism."
[p.273]
Given the ballot box potentiality of "the people" as against "the great trusts and combinations," Republicans obviously could not afford to have the campaign decided on that basis. The countervailing idea of the "progressive society" materialized slowly out of the symbolic values embedded in the gold standard. The "sanctity of contracts" and the "the national honor," it soon became apparent, were foremost among them. But, gradually, and with the vast distributional range afforded by the Republican campaign treasury, broader themes of "peace, progress, patriotism, and prosperity," came to characterize the campaign for William McKinley. The "progressive society" advanced by Mark Hanna in the name of the corporate community was inherently a well-dressed, churchgoing society. The various slogans employed were not mere expressions of a cynical politics, bur rather th authentic assertions of an emerging American world view.
[Note: Churchgoing J.P. Morgan had to remove himself from a consultation with America's Episcopal Bishops to deal with the panic of 1907]
[p.284...after McKinley's victory]
A consensus thus came to be silently ratified: reform politics need not concern itself with structural alteration of the economic customs of the society. ..removing from mainstream reform politics the idea of people in an industrial society gaining significant degrees of autonomy in the structure of their own lives...The range of political possibility was decisively narrowed--not by repression, or exile, or guns, but by the simple power of the reigning new culture itself.
[p. 287]
In addition to the banishment of the "financial question" as a political issue, three other developments soon materialized in the wake of the 1896 election to establish enduring patterns for the twentieth century--the rapid acceleration of the merger movement in American industry, the decline of public participation in the democratic process itself, and corporate domination of mass communications.
[p. 291]
...our numerous progressive societies have created, or are busily creating, overpowering cultural orthodoxies through which the citizenry is persuaded to accept the system as "democratic"--even as the private lives of millions become more deferential, anxiety-ridden, and (no other phrase will serve) less free.
Increasingly, the modern condition of "the people" is illustrated by their general acquiescence in their own political inability to affect their governments in substantive ways. Collective political resignation is a constant of public life in the technological societies of the twentieth century....In the absence of alternatives, millions have concentrated on trying to find private modes of escape, often through material acquisition.
[p.294]
The meaning of the agrarian revolt was its cultural assertion as a people's movement of mass democratic aspiration. ... [focused] in the earnest probings of people bent on discovering a way to free themselves from the killing grip of the credit system.
[p.297-8]
But their movement was defeated, and the moment passed. Following the collapse of the People's party, farm tenantry increased steadily and consistently, decade after decade, from 25 per cent in 1880, to 28 per cent in 1890, to 36 per cent in 1900, and to 38 per cent in 1910. The 180 counties in the South where at least half the farms had been teanat-operated in 1880 increased to 890 by 1935. Tenantry also spread over the fertile parts of the corn belt as an increasing amount of Midwestern farmland came to be held by mortgage companies. Some 49 per cent of Iowa farms were tenant-operated in 1935 and the land so organized amounted to 60 per cent of the farm acreage in the state. In 1940, 48 per cent of Kansas farms were tenant-operated. The comparable figure for all Southern farms was 46 per cent. But in the South, those who had avoided tenantry were scarcely in better condition than the sharecroppers. An authoritative report written by a distinguished Southern Sociologist in the 1830's included the information that over half of all landowners had "short-term debts to meet current expenses on the crop." The total for both tenants and landowners shackled to the furnishing merchant reached 70 per cent of all farmers in the South. As one historian put it, the crop lien had "blanketed" the entire region. As in the Gilded Age, the system operated in a way that kept millions living literally on the wages of peonage.
[p.301]
Democratic pressure from below--from crop-mortgaged farmers desperate to escape their furnishing merchants--emboldened the early Alliance leadership to undertake the "joint-note" plan within the centralized state-wide cooperative. And tactical democratic strategy from above, in the form of William Lamb's "politics of the sub-treasury," helped raise the political consciousness of many hundreds of thousands of farmers to a level necessary for them to make the personal decision to break with their cultural inheritance and support the new People's Party. The Alliance lecturing system was organic to this democratic message-carrying...
As the farmers labored to create a workable infrastructure of mass cooperation in 1887-92, the opposition of the American banking and corporate communities gradually brought home to Alliance leaders, and to masses of farmers, the futility of the cooperative effort--in the absence of fundamental restructuring of the monetary system.
[Their solution--the "sub-treasury' plan would end] the enormous influence of moneylenders over interest rates...The contracted currency, the twenty-five year decline in volume and prices, would have been ended in one abrupt--and democratic--restructuring.
[p.320]
...the popular aspirations of the people of the “third world" in the twentieth century have easily become as threatening to modern Americans as the revolt of their own farmers was to goldbugs eighty years ago. Though American foreign policy and American weapons have defended anachronistic feudal and military hierarchies in South America, Africa, and Asia, such actions being justified at home as necessary to the defense of "democracy," neither the policy nor the justification has proved notably persuasive to the non-Americans who are the mass victims of such hierarchies. The resulting unpopularity of America puzzles Americans. The policies themselves, however, are not debatable within the limits of public dialogue sanctioned in modern America. Under such constraints, the ultimate political price that Americans may be forced to pay for their narrowed cultural range in the twentieth century has emerged as a question of sobering dimension.
15
However they were subsequently characterized, Populists in their own time derived their most incisive power from the simple fact that they declined to participate adequately in a central element of the emerging American faith. In an age of progress and forward motion, they had come to suspect that Horatio Alger was not real. In due course, they came to possess a cultural flaw that armed them with considerable critical power. Heretics in a land of true believers and recent converts, they saw the coming society and they did not like it. It was perhaps inevitable that since they lost their struggle to deflect that society from its determined path of corporate celebration, they were among the last of the heretics. Once defeated, they lost what cultural autonomy they had amassed and surrendered their progeny to the training camps of the conquering army. All American including the children of Populists, were exposed to the dogmas of progress confidently conveyed in the public school system and in the nation’s history texts. As the twentieth-century recipients of this instruction, we have found it difficult to listen with sustained attention to the words of those who dissented, at the moment a transcendent cultural norm was being fashioned.
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