Essay, Pages 3 (549 words)
In the late 1800s, many farmers were trapped in a vicious economic cycle. Crops prices began falling and farmers were often forced into mortgaging their farms so they could buy more land and produce more crops to break even. Good farming land was becoming rare and the banks took over the mortgages of farmers who couldn’t make payments on their loans. The railroads, on the other end, took advantage of farmers by charging them extreme prices for shipping and storage.
Both equally frustrating the farmer, who pretty much resembled a larger economic problem because if he wasn’t doing well then the whole nation can’t do well either.
Banks controlled the farmer, they watched the farmer’s and had input on everything they did. The Banks relentlessly took over the mortgages of farmers who couldn’t make payments on their loans (doc d). Generally, the average farmer struggled during the late 1800’s due to the huge increase of agriculture worldwide.
Because of many technological improvements, which boosted competition, now farmers faced foreign competition, and are now forced to adjust the prices of their crops to stay competitive.
An increase of production repaid the farmer’s losses only temporarily. However, farmers soon realized the limitations of farming land. Also they realized that their own surplus of crops just lower the cost so in the end they don’t make as big of a profit. (doc e). The troubles of a farmer were part of a larger economic problem that was affecting the entire nation.
Deflation followed the Civil War, which made the amount of money in circulation decreased therefore the value increased. This was bad for the farmer because products took up a lower value.
Loans that needed to be repaid with dollars are now worth more than what the farmers had originally borrowed, so many farmers lost money. The farmers saw a solution. It was the use of “cheap money” to reverse the effects of deflation. Farmers demanded the increase of greenbacks with the addition of unlimited coinage of silver (doc b). With the passage of the Bland-Allison Act in 1878, around 2 to 4 million was added to the silver supply.
Yet that only eased it, and didn’t solve the main problem (doc). To make things even worse, railroad companies added more load on the farmer’s by taking advantage with prices to transport grain. A lack of competition among the railroads enabled them to put high costs, sometimes making a shipment of grain nearly unprofitable (doc h). Also, railroads gained control over grain storage prices, enabling their influence over the market of price of crops. Justifying the transport prices became unchallengeable due to the lack of competition (doc g). There’s not much farmers can do than hope for some reforms since they’re stuck in a cycle of credit that meant longer hours and more debt with every year.
Good farming land quickly became rare and the banks took over the mortgages of farmers who couldn’t keep up with payments on their loans. The railroads took advantage of farmers by charging them excessive prices for shipping and storage. As a solution the Bland-Allison Act in 1878 was pasted. The issue of the farmer’s debt stuck around. There validity of the farmer complaints is totally acceptable due to all the struggles and hardships they went through.