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The story of the Populist movement is both ideological and economic. Can they be separated? Please respond to the following:
•Explain how the formation of the Populist movement was based on economics.
a) Since the civil war had cause so much debt the federal government took most paper money “green backs” and silver coins out of circulation and leaving gold as the primary form of currency. Once the gold became scarce the result was deflation. Deflation pushed down the prices of all goods, including crops, resulting in farmers making small to no profits; mean while their debts stayed the same as above, The Populist movement was formed to try and reverse deflation so the crop price would rise, which would lower debts and remonetize silver allowing it to be the more acceptable currency thereby ending the use of gold and putting more currency in the marketplace,
•Describe Populism, an ideological movement, in terms of a “war between the classes.”
a) The war between the classes simply meant a war between the Farmers and the bankers. With the bankers and commercial interest groups refusing to do business with Farmers that were reaching poverty. The Populism sought to enter the political arena. To combat the conspiracy of the bankers and commercial interest groups the leader of the Populism movement lobbied members of congress to support the Subtreasury Plan, under this plan crops would have been used as collateral for low cost government loans to struggling farmers and the crops would be stored in government warehouse. Another disappoint came to the farmers when Congress did not pass the plan.
•Give evidence to show the role that economics played in killing the Populist movement.
a) In 1897 the long deflationary trend had final come to an end; silver currency was being used again. Farmers were able to get low interest government loans and federal regulation of railroad rates which allowed farmers to move their product much cheaper than before.