The
Nowadays only four percent of Americans is working in agriculture, but in the 1890s, nearly 30 percent of people earned on their living working on the land. The agricultural crisis was a national problem. The agricultural depression of the 1890s had the same impact on employment and industry as the Great Depression in the beginning of the 20s century. The deep agricultural crisis began in some places before 1890, as the Great Plains and Southern cotton-growing regions had been suffering since the 1880s (The Depression of 1893).
The panic of 1893 was the result of the Gilded Age (The Depression of the Mid-1890s). As the dollar was tied to gold and that is why the supply of money was limited. There was not much gold and government could not produce many dollars. Because of the gold standard farmers could not get a low-interest credit that they needed to keep going. The government decided to back the dollars by silver as well. This solved the problem of the lack of cash, but also, it devalued the currency. As the American currency became weaker, the investors from other countries were frightened out. Though the President Grover Cleveland repealed the silver act, the panic was already on (The Depression of the Mid-1890s).
The consequences of the poor monetary policy were not the only reason for the crisis. The rising costs and falling prices, plagues of grasshoppers and boll weevils, high interest rates and recovery after the Civil War made it extremely difficult to earn on living being a farmer (The Farmers' Plight).
Because of high-interests rates (more than 10 percent per year) most farmers were not able to pay their debts. Those farmers, who mechanized operations and bought more land, could compete successfully, but smaller farmers struggled to survive.
Additionally to all that, American farmers had to struggle with the competitors from Egypt to Australia for markets. The difficult situation was aggravated by the fact that the boost in productivity led to a sharp decline in prices. The price of wheat declined by 70 percent in the early nineties. In 1892, a bushel of wheat cost over $1.00. Next year it cost less than 30 cents (Dr. D. Jerome Tweton)! That time was hard for most farmers and disastrous for some.
In 1980, a lot of farmers lost their land and homes because they could not pay their debts. Their families were starving and had to live on the streets begging people passing by for small change and food.
Because of economic difficulties, most farmers were nearly bankrupted. They were angry over high railroad rates, unfair methods for grain grading and high-interest rates (Dr. D. Jerome Tweton). At that severe time, some poor families became wanderers and starved. Unemployed people were walking across the countryside and hiding on freight trains. Most of them were pleading the middle-class people to give them food and work. The stories of suicide and despair were published in many newspapers almost daily (The Depression of 1893).
In 1894, Jacob Coxey, an Ohio businessperson, organized a movement against the federal government's inaction during the economic crisis (The Depression of 1893). He worked out several programs that later won acceptance during the New Deal, but that time they were considered too radical. He offered to create government jobs to help unemployed men support their families. He planned to finance this project through the government bonds (The Depression of 1893). The crisis lasted until the prices grew up. Crops got better and the costs rebounded.
References
Dr. Tweton, D.J. “The 1890s in Review: Economic Problems Plague State”. General format. Retrieved from http://www.ndstudies.org/articles/the_1890s_in_review_economic_problems_plague_state
“The Depression of the Mid-1890s”. General format. Retrieved from http://www.digitalhistory.uh.edu/disp_textbook.cfm?smtID=2&psid=3125
“The Depression of 1893” General format. Retrieved from http://projects.vassar.edu/1896/depression.html
“The Farmers' Plight”. General format. Retrieved from http://www.digitalhistory.uh.edu/disp_textbook.cfm?smtid=2&psid=3126
