The Interstate Commerce Act & The ICC (from “Have To” History)

June 4, 2021June 4, 2023 ~ Blue Cereal

Stuff You Don’t Really Want To Know (But For Some Reason Have To) About… the Interstate Commerce Act & the Interstate Commerce Commission

Three Big Things:

1. After several states attempted to limit the power of railroads and grain storage facilities on behalf of farmers and other citizens, Congress passed the Interstate Commerce Act (1887). This established the Interstate Commerce Commission (ICC) to regulate railroads, including their shipping rates and route choices.

2. The ICC was the first federal regulatory agency; it’s “success” spawned hundreds of others in subsequent decades. When you hear people complain about “big government,” these are a big part of what they mean. At the same time, they remind us that economic systems are not natural rights; they’re practical mechanisms designed to serve the largest number of people in the most efficient ways possible – at least in theory.

3. Ideally, regulatory agencies attempt to balance the good of society and the general public with the rights of companies to make reasonable profits from providing useful goods and services. They oversee “public services” – things considered essential for most citizens but which don’t easily lend themselves to a competitive marketplace due to the infrastructure required or the necessary scale of the service.

Context

The second half of the nineteenth century was one of America’s greatest (and most controversial) eras of expansion. Rugged, individualistic homesteaders navigated bureaucracy and accepted government oversight to secure their own plots of government-sponsored land in the west, where the government was hard at work clearing out the local populace on their behalf. Railroads, arguably the most poignant symbol of progress in all of Americana, were bravely, capitalistically accepting massive government land grants in exchange for laying their tracks across the Great Plains and finally connecting one coast with another. Along the way they manipulated local townships into catering to their every fiscal whim, lest they destroy them by altering course and instead bestow their blessings on communities more willing to kiss their caboose.

For railroads, more miles of track, continued national expansion, and the vast quantities of crops farmers were shipping further and further from where they were grown meant increased profits and political influence. For farmers, on the other hand, more land, technological advances, and increased production meant lower prices, endless struggles, and increased debt just to stay in the game. Eventually, traditionally individualistic farmers began forming collectives – the Grange, the Farmers’ Alliance, etc. – and pressuring their state and local governments to balance the scales a bit. They weren’t looking for handouts, just some restraints on what they saw as unchecked corporate power and greed. It wasn’t long before other segments of society began adding their voices in support.

Regulating For The Public Good

In Munn v. Illinois (1877), the Supreme Court determined that it was perfectly constitutional for a state to regulate industries within its borders, including capping the amounts grain elevators and storage warehouses were allowed to charge for their services. As the Court explained,

When one becomes a member of society, he necessarily parts with some rights or privileges which, as an individual not affected by his relations to others, he might retain. “A body politic,” as aptly defined in the preamble of the Constitution of Massachusetts, “is a social compact by which the whole people covenants with each citizen, and each citizen with the whole people, that all shall be governed by certain laws for the common good.”
This does not confer power upon the whole people to control rights which are purely and exclusively private… but it does authorize the establishment of laws requiring each citizen to so conduct himself, and so use his own property, as not unnecessarily to injure another. This is the very essence of government.

In other words, capitalism is all very fine and well, and the individual’s (or even the corporation’s) right to property and profit is important – but only because this economic approach presumably serves a larger good. The U.S. doesn’t practice a form of free market economics because it’s holy and just to do so – it’s a pragmatic decision based on the perceived shortcomings of alternative economic systems in comparison. (To paraphrase Winston Churchill, “Capitalism is the worst economic system except for all those other forms that have been tried from time to time.”)

Munn marked as well as anything the birth of the idea that governments can and should regulate industries deemed essential to the general welfare. At the time, that primarily meant stuff related to farming and the distribution of crops, but it would eventually encompass any number of public “utilities” (electricity, water, gas, etc.) as well as some transportation systems, television and radio broadcasting, and even trash pickup.

Many would argue that as society and technology continue to evolve, the same sorts of regulation should apply to internet access, cell phone plans, and even health care and other medical services. While it’s usually pretty easy to find a new burger joint if the one you liked before starts skimping on fries or changes their menu, it’s harder to change gas companies. The local sewer service rarely competes for your business, and only a small percentage of American homeowners get to actually choose who provides their electricity – let alone at what rate. Anytime laissez-faire capitalism would result in an “essential” service being reserved for the elite few, government steps in and makes everyone play nice. Companies providing valuable services deserve to make a reasonable profit, but not at the cost of the larger social good – or so the reasoning goes.

In the late nineteenth century, however, it was primarily grain storage and railroad rates.

The Commerce Clause Wins Again

Not quite a decade after Munn, the Court revised its opinion while pretending it was simply picking up where it left off. Wabash, St. Louis and Pacific Railway Company v. Illinois (1886) clarified that while states had the right to regulate industries within their borders, that power didn’t extend beyond state lines. Just because a railroad route began in Chicago, that didn’t mean the Illinois legislature could dictate shipping rates or other policies as it choo-choo-ed through Iowa or Missouri. This was “interstate commerce” in the truest sense of the term, making it the exclusive province of Congress – whether they chose to act on it or not.

Congress finally took the hint and created the very first federal “regulatory agency” – the Interstate Commerce Commission – in 1887. The ICC was charged with overseeing railroads and shipping of all sorts, and set strict guidelines for how the railroads could do business. Rates had to be the same for short trips as for long, and for all customers, however much or little they shipped. Railroads couldn’t even offer special packages for “preferred destinations.”

The specific rules weren’t the important part, however. These were modified or eliminated as technology, transportation, and society evolved. The important thing was the idea that government could and should set limits on important industries for the good of society. In practice, this usually means federal government. It’s nearly impossible today to find a good or service functioning purely “intrastate.” States can sometimes add to regulations while the good or service is withing their purview, but not beyond.

Over the next century, hundreds of federal agencies would be created in the image of the ICC. While Congress still established guidelines and priorities, agency directors and bureaucrats were left with the detail work – writing the actual rules and at times even taking part in enforcement. When you hear people complain about the unending nightmare of red tape, small print, and regulatory burdens on pretty much everything, this is what they mean. The positive side is that the meat you bought at the store today is probably not rotten and your kids’ clothes probably won’t burst into flames anytime the sun is too bright. The negative side is that unchecked bureaucracy tends to grow like the demonic kudzu and has proven nearly impossible to restrain, let alone prune back. No one can even agree on how many federal regulatory agencies there are, let alone which ones are necessary or what at each of them is actually in charge of.

The ICC was dissolved in 1995 after most of its regulatory power had been reduced or stripped away. Its few remaining functions were transferred to yet another agency – the “Surface Transportation Board” (as opposed to all those other sorts of transportation) which operates under the “U.S. Department of Transportation.” The Secretary of Transportation, in turn, reports directly to the President.

How Do I Remember This? (And Why It Matters)

Much of American history can be viewed as an ongoing struggle between freedom and security – nationally, locally, legally, socially, and – as in this case – economically. Just like in school, too little freedom stifles innovation and productivity; too much freedom leads to chaos, abuse, and a breakdown of the system.

The Interstate Commerce Act and ICC were the federal government’s first major effort to restrict what big business could and couldn’t do in an effort to ensure the results served everyone, not just those already at the top of the economic ladder. The resulting arguments would sound surprisingly familiar nearly a century-and-a-half later. Is it better to let big business run free or rein it in from time to time? Is government better or worse than raw capitalism at meeting the needs of the people as a whole over time? Do the basic rights guaranteed to American citizens as individuals apply to corporations as well?

If the answer to any of these questions seems obvious or easy, you’re doing it wrong.

The ICC, while no longer with us, remains the granddaddy of all federal bureaucracy and regulation. From the “alphabet agencies” of the New Deal to the half-dozen different agencies which today dictate the minutia of salmon treatment, processing, costs, transportation, and preparation long before you squeeze lemon on it at your local chain restaurant – they can all be traced back to the Interstate Commerce Commission… for better or worse.

What You’re Most Likely To Be Asked

It’s unlikely you’ll be asked to recognize or analyze the language of the Interstate Commerce Act itself (it’s not that readable). Instead, make sure you understand its connection to pretty much everything else going on at the time. It’s also a nice precursor to discussing populism (the late 19th century version) or even the Progressive movements of the early 20th century. They were all about using government to balance the power of big business against the needs of the “common man.”

In APUSH, Period 6 (1865-1898) is packed with standards related to economic development and industrial growth. The rest mostly involve westward expansion and the farmers movement (“populism”). The ICC is about both, particularly in relation to one another. Knowing the basics will help you add relevant details for any prompt related to government regulation, important Supreme Court decisions of the nineteenth century, or early efforts by farmers to push back against big businesses. It should always be mentioned when speaking or writing about railroads in this period as well. It may not be the single most important thing from this half-century, but it connects to almost everything else happening at the time – and that makes it mighty useful for making yourself look knowledgeable. (KC-6.1.III, KC-6.3, KC-6.3.II, and others)

Utah’s Core Social Studies Standards pose a question many teachers love asking in some form:

How could industrial leaders be considered both “captains of industry” and “robber barons”? (U.S. II Strand I – Industrialization)

It’s a topic typically addressed while covering the Gilded Age (closer to the start of the twentieth century), but it’s a great chance to reference events associated with the creation of the ICC. Railroads were essential to American growth and progress, as were grain storage facilities, banks, and other “wicked witch” industries of the late nineteenth century. At the same time, they tended to exploit and discard anyone non-essential to their continued growth and power. It was capitalism at its most dichotomous (the whole point of the question).

If you’re not feeling that bold, chances are good you’ll be asked something along the lines of this substandard from Utah. Some variation of this is present in over half of all state social studies standards:

Students will assess how innovations in transportation, science, agriculture, manufacturing, technology, communication, and marketing transformed America in the 19th and early 20th centuries. (U.S. II Standard 1.1)

At the very least you should recognize the ICC as the first federal regulatory agency and railroads as the first federally regulated industry.

Bonus Points: How To Sound Like You Know More Than You Do

Congress’s authority to regulate interstate commerce is found in Article I, Section 8 of the U.S. Constitution. As a practical matter, this means that Congress can regulate almost anything by tying it in some way to interstate commerce – a power confirmed by the Supreme Court a half-century before in one of those “must know” cases, Gibbons v. Ogden (1824). Combined with the “Necessary and Proper Clause” (also in Article I, Section 8; confirmed by McCulloch v. Maryland, 1819), Congress and its regulatory power became virtually unchallengeable. Throw in details like what’s covered above, then thoughtfully note that this same basic tension – big government vs. small, the Hamiltonian approach vs. the Jeffersonian approach, etc. – is still a fundamental source of conflict between the two major parties today. (You’ll have literally covered the entire range of American history in a single observation.)

If your teacher seems to lean a bit conservative (they gripe about “those people” or refer to the Civil War as “the war of Northern Aggression,” etc.), you might ingratiate yourself by referring to the current web of federal regulations (which started with the ICC) as “Kafkaesque.” Kafka was a novelist who specialized in the bizarre, especially when it involved protagonists overwhelmed by systems or powers beyond their understanding or control but forced to go along with them anyway. Remember the guy who wakes up as a giant cockroach one day and we never find out why? That was his. “Kafkaesque” is a nice literary touch and should tingle their little conservative hearts without actually committing you to any particular worldview.

Above all else, avoid taking easy positions on the “good” or “bad” of railroads, regulation, farmers’ demands, or even the ICC itself. Always reference specifics while nevertheless acknowledging the inherent complexity and the valid claims of both (or all) sides – freedom, competition, and capitalism on one side and a reasonable opportunity for individuals to succeed (or at least survive) on the other. That’s what makes it interesting – the lack of easy answers.

Follow The Yellow Brick Road

October 2, 2015June 4, 2023 ~ Blue Cereal

In 1900, L. Frank Baum published The Wonderful Wizard of Oz, a children’s book he wasn’t convinced would do particularly well – not compared to his fabulous Mother Goose and Father Goose collections a few years prior. Turns out it was a hit, and spawned multiple stage versions – usually musicals – and thirteen written sequels by Baum.

It was also turned into one very odd black and white silent film in 1925, directed by and starring a man with the very unfortunate name “Larry Semon.”

Egads.

The story was thus already pretty well-known when MGM released the vehicle by which most of us became acquainted with the Land of Oz – the 1939 Judy Garland film responsible for getting “follow FOLLOW follow FOLLOW…” stuck in our heads. After CBS decided to show it pretty much annually from 1956 until hell freezes over, in a time of three and only three major networks, it became a staple of Americana.

In the mid-1960’s, an educator by the name of Henry Littlefield published a piece arguing that The Wonderful Wizard of Oz was in fact an allegory of sorts – that in the spirit of Gulliver’s Travels or Animal Farm, Baum’s innocent tale was actually commentary on politics and economic policy in the late 19th century.

I’m no expert, but those who are find it highly unlikely Baum intended any such thing. Then again, I care very little what he INTENDED when he wrote it; I’m of the school that once an author releases his work into the world, it’s no longer his to control. If I want to use it as a ‘Parable of Populism’ – to make the history and fiscal disputes of the day a bit more palatable to teenagers – that’s damn well what I’m going to do.

Take that, dead writer guy.

It doesn’t take much Googling to find Littlefield’s essay or dozens of sites sharing their own variations. For those of you who aren’t quite THAT interested, but may nevertheless feel mildly curious enough to at least finish THIS post, the highlights go something like this:

The Scarecrow = Midwestern Farmers. While not considered particularly intellectual, they were smart in practical and stubborn ways. No matter how often they were knocked down or otherwise disassembled, they bounced back time and again. What they needed was to recognize this in themselves – they’d had it all along, you see.

“You see,” he continued confidentially, “I don’t mind my legs and arms and body being stuffed, because I cannot get hurt. If anyone treads on my toes or sticks a pin into me, it doesn’t matter, for I can’t feel it. But I do not want people to call me a fool, and if my head stays stuffed with straw instead of with brains, as yours is, how am I ever to know anything?”

The Tin Man = Northeastern Factory Workers. Having slaved away under dehumanizing conditions for so long, they’d essentially lost their souls – their hearts – the parts which make us most human. Upton Sinclair would capture this less festively a few years later in The Jungle, a book he intended to be about the factory-driven destruction of the human spirit and instead ended up being about how gross sausage is. Meat-packing was reformed; factory labor continued to kill the human spirit for another few generations.

I thought I had beaten the Wicked Witch… [but] she thought of a new way to kill my love for the beautiful Munchkin maiden, and made my axe slip again, so that it cut right through my body, splitting me into two halves. Once more the tinsmith came to my help and made me a body of tin, fastening my tin arms and legs and head to it, by means of joints, so that I could move around as well as ever. But, alas! I had now no heart…

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The Lion = William Jennings Bryan. Before he went down in history as they guy who argued for Biblical values and against monkey-men in the infamous Scopes Trials, Bryan was THE voice of the Populist movement – and their candidate for President in both 1896 and 1900. His ‘roar’ had great impact on the farmers of the Midwest but far too little on the factory workers of the Northeast. He lost both times.

…[T]here came from the forest a terrible roar, and the next moment a great Lion bounded into the road. With one blow of his paw he sent the Scarecrow spinning over and over to the edge of the road, and then he struck at the Tin Woodman with his sharp claws. But, to the Lion’s surprise, he could make no impression on the tin, although the Woodman fell over in the road and lay still.

Dorothy = ??? Dorothy is our protagonist, our ‘everyman’. She need not represent anything or anyone other than us, the reader, responsible for our role in confronting the realities around us without the power to fully control any of them single-handedly. Some argue she’s an echo of Mary Elizabeth Lease, a rather vocal lecturer and writer who argued for women’s suffrage and temperance but was best known for her passionate orations in defense of populism. This may be hinted at in Judy Garland’s Dorothy, but the child in the original text isn’t the “raise less corn and more hell!” type by any stretch.

The Yellow Brick Road = The Gold Standard. It’s an almost sacred path to the Emerald City, but one fraught with inconsistency and danger. There are pitfalls and surprises, and even substantial gaps prohibiting all but the most creative travelers for going forward. But, when you add…

The Silver Slippers + The Yellow Brick Road = Bimetallic Standard. NOW we’re talking!

At that moment Dorothy saw lying on the table the silver shoes that had belonged to the Witch of the East. “I wonder if they will fit me,” she said to Toto. “They would be just the thing to take a long walk in, for they could not wear out.” She took off her old leather shoes and tried on the silver ones, which fitted her as well as if they had been made for her.

The folks at MGM were clearly unconcerned with allegorical monetary policy when they opted to give Dorothy ruby slippers to better demonstrate the glories of the relatively new ‘Technicolor’ of the day. You can’t trust Hollywood, children! If they’ll lie about shoe color, they’ll lie about ANYTHING!

The Wizard / The Emerald City = The President and Washington, D.C. The consummate politician, the man behind the curtain presents himself with a different face to whoever he’s speaking at the time. His power is based on illusion and on the willingness of the people around him to believe. Mandatory eyewear is locked on every citizen or visitor to maintain the illusion of green – wealth, growth, and envy – and while Oz lacks a real power source such as gas, it has plenty of hot air. Enough to power a balloon ride back to Omaha.

First they came to a great hall in which were many ladies and gentlemen of the court, all dressed in rich costumes. These people had nothing to do but talk to each other, but they always came to wait outside the Throne Room every morning, although they were never permitted to see Oz…

The Witches = Support from N/S, Opposition from E/W – particularly the moneyed interests of the Northeast and the Railroads and other large scale owners in the west. In the Presidential Elections of 1896 and 1900, most of Bryan’s support came – if you view the results with sufficient preconceptions – from the North and the South. McKinley won due to support from the West and the East. If you look at it the maps just… right…

That’s the thing, though – once you’re looking for the allegory, it’s everywhere. Dorothy is constantly seeking and needing clean water, a primary obsession with any homesteader or farmer of the day. Water is what finally destroyed the Wicked Witch of the West, who primarily sends nature’s own dangers to thwart Dorothy and her friends. The Populist Party was born in Omaha, Nebraska – the birthplace of the Wizard once he’s no longer a political fraud and goes back to being a well-intentioned, if ineffective, travelling performer.

Soon the backstory of the flying monkeys seems to parallel the plight of American Indians and the field of poppies seems to have something to do with China and the people who break so easily are the postbellum South and –

It kinda takes on a life of its own.

On the other hand, there are plenty of events which even the most creative mind can’t reasonably tie to history or populism. The Quadlings who lack arms but fire their heads at you on long necks are a fascinating obstacle, and the fragile ‘china people’ are far more poignant once you drop the weak ‘unreconstructed South’ connection. And how many varieties of ‘the little people’ (or field mice or Winkies or…) can one book have before it no longer makes sense to label them all with the same Jacksonian value?

If it’s an allegory, it’s a rather inconsistent one.

It could, of course, be both – partly inspired by events of the day, partly rounded out as a colorful children’s tale. Just because the latest Captain America or Batman movies don’t strictly mirror current events doesn’t mean they don’t have plenty to say about our national ideals and choices in a time of perpetual ‘war on terror’.

But as I said, I don’t care. It’s a tool, and as long as it helps make bimetallism, third party politics, and the plight of the Midwestern farmer a bit more palatable for my darlings, I’ll just keep trotting it out – without shame. I could go looking for some better answer, some amazing new solution instead, but… seems to me in this case the thing I most need has been with me all along.

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RELATED POST: Let’s Have A (Populist) Party!

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Singing Bi, Bi, For Our Money Supply…

September 25, 2015June 4, 2023 ~ Blue Cereal

The Populist Party reached their zenith in the 1890’s. Although they won state and local elections here and there, before and after this decade, their only real shot at the Presidency came in the Elections of 1896 and 1900. Both times they ran William Jennings Bryan as their candidate, and both times the Democratic Party gave in and joined them in the nomination.

Both times they were defeated by Republican William McKinley. So, that must have sucked for them.

Historians argue (as historians love to do) about the extent to which Populism impacted the Progressive movement a few decades later or the New Deal after that, but the cause/effect relationship between them isn’t nearly as important as the underlying question behind ALL of them:

How much should the government help? How do we balance freedom – including personal liberty and capitalistic choice – with security? Even assuming the government has the ability to deftly swoop in and regulate the economy and interactions of a nation into perfectly balanced equity, is this a good idea?

I mean, Harry Potter was safe and secure at the Dursley’s under the stairs – literally and completely. No harm could come to him. As the series progressed, he grew increasingly autonomous and faced greater and greater danger. Finally, released even from the rules of Hogwarts or the direction of Dumbledore – completely and totally independent – he frickin’ DIES!

Er… at least for a bit.

The same tension exists in owning a dog, managing a school, or legislating a nation. Too many restrictions stifle growth, maturity, progress, and basic fun. Too few, and it’s chaos.

Not that most American farmers in the late 19th century were pondering such abstractions. Mostly they’d joined their voices – and their votes – to demand a few basic policy changes to compensate for what they perceived as gross imbalance in the economic order of things. They didn’t see themselves as wanting ‘help’ so much as fighting to remove cancers in the system.

What did they want?

First, government regulation (or even ownership) of railroads, telegraphs, banks, etc. – anything so ubiquitous as to essentially be a public utility. In the same way government today regulates the companies providing gas, water, or electric in your home, they considered certain services too essential to be left to the whims and biases of the free market.

Second, they wanted a progressive income tax. Under a flat tax, everyone paid the same percentage of their income. You made $10,000 this year? Pay ten percent. You made $50,000? Ten percent. $250,000? Ten percent. Those making the least paid the least; those making the most paid the most.

The Populists wanted a weighted system. If you made $10,000 this year, you pay little, or nothing. You made $50,000? Ten percent. $250,000? Twenty percent. $1,000,000? Fifty percent. Those making the most were still left with more than everyone else, and those making the least were freed from the burden of paying at all.

The Populists called this equitable. Those who felt they were being punished for staying in school or working hard disagreed. The basic argument continued for the next million years.

Third, and maybe biggest on the list, the Populists wanted to dramatically increase the money supply. They wanted more coins minted, and they wanted to allow paper money to be printed backed up by silver in the national treasury as well as gold. This was called a ‘bimetallic standard’ – ‘bi’, of course, meaning ‘two’.

If you’re a bi… cycle, you have two wheels.

If you’re bi… lingual, you speak two languages.

If you’re bi… polar, you have two emotional extremes.

If you’re bi… pedal, you walk upright, on two feet.

If you’re bi…

Huh. I can’t think of any other examples. But you get the idea.

In any case, today all paper money is backed up by the ‘full faith and credit of the federal government’ – so THAT should make us all feel MUCH, MUCH better about things. But not then – then it was actual specie. Metal value.

Silver is valuable and not at all common, but it’s far more plentiful than its friend gold. The change would be dramatic. More money in circulation lowers the value of each dollar – counterintuitively helping those with less money and especially those in debt.

Explaining this in class makes everyone’s brain hurt.

Talking economics in high school is like trying to diagram sentences in another language. Students’ brains are not acclimated to this sort of information; they’ve experienced relatively little of the real world, financially speaking.

Then again, when it comes to economics, WE don’t actually know what we’re talking about half the time. Most economic theories are made up AFTER stuff happens, then applied backwards to prove that whatever happened HAD to, and explaining why – until next time, when it works differently. It can be a bit of a mess.

But imagine a student – Jacobie – shows up to class one day with a pizza box. He was in charge of snacks for Students Obesity Club that day, and has a half-dozen slices left over.

The food quickly draws attention and Max offers him a dollar for one of the slices. He accepts.

Oliana buys another two at a dollar each, and as supply dwindles and more students arrive – thus increasing demand – Jacobie sells another two for a total of five dollars. He may have thrown in the last packet of parmesan for cash up front.

As he’s about to either eat or auction off the final slice, Leena approaches him with head down but eyes coyly up. Batting her sad little lashes, she tells Jacobie that she has no money – BUT, if he’ll “loan” her this last slice of pizza – because she’s soooooo huuuunnngryyyyyy – she’ll repay him double tomorrow.

Two hundred percent. In 24 hours.

He of course relents. The pizza is gone.

Vic has been watching this entire process, and believes he’s found the key to both popularity and prosperity. The next day, he shows up in class with a towering stack of pizza goodness – 12 full-size pizzas of various toppings – and two very nicely printed and laminated signs declaring he’s offering them today only for $2.00 per slice.

He sells most of the first box, but things quickly slow. Lowering the price to $1.00 helps a little, but it still looks like he’ll be stuck with 9 or 10 boxes of pizza with ten minutes to go. He panics and drops to 50 cents a slice… then a quarter… and manages to move enough that he’s only losing a little money for his troubles.

He might have broken even if he hadn’t splurged on the #$@% signs.

Just before the bell, Leena slides up and hands him two quarters. She takes two slices of pizza in a napkin, glides sweetly over to Jacobie, and presents them to him with an appreciative smile. “Here you go – we’re even,” she states.

Has Jacobie made a profit?

On the one hand, he loaned ONE piece of pizza and was repaid with TWO. That’s doubling his investment by any definition, surely?

On the other hand, he loaned out $2.50 worth of pizza, and was repaid with 50 cents worth of pizza. Framed in those terms, he lost roughly 80% of what he put in.

So it is with paper money.

When there’s not very much of it, it’s worth more. This benefits those few who have the money – Jacobie and his limited supply of pizza. It makes things hard for everyone else, but the haves will sometimes loan to the have-nots in a gesture of goodwill and a reasonable return.

Increase the supply, and the value of each individual dollar – or slice – goes down. This benefits the masses, but hurts the people holding the pizza boxes. It particularly chafes creditors. They may be repaid, but they’re being repaid in dollars worth far less than those they loaned. The numbers say they’re making more, but the value says they’re losing – severely.

The Populist tended to have less money, and to owe more than they had to banks and other creditors. The idea of ‘freeing up’ the money supply was quite appealing to them – ironic, in a way, given that much of their distressed circumstances sprang from overproduction of something.

Add some silver to the existing gold reserves, and we have a path to prosperity – a road along which anything might be possible. And you can bring your dysfunctional singing friends, too.

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Let’s Have A (Populist) Party!

September 23, 2015June 4, 2023 ~ Blue Cereal

I stopped to ask him what the machine was and what it did. He told me it was a manure spreader – a ‘sh*tslinger’, he said.
Oh! It’s a big ol’ thing, isn’t it? I asked.
Well, he explained, it takes a LOT of sh*t to make stuff grow.
Isn’t THAT the truth, I thought. Always.

Farmers in the late 19th century were frustrated.

To be fair, some of their struggles were not entirely unexpected. As the west ‘filled up’ with white homesteaders, choice farmland was increasingly rare. The U.S. Government had run out of peoples to remove, and even at their most Manifestly Destined could find no justification for another war with Mexico.

The 1890 Census would soon declare the frontier ‘closed’, to the chagrin of men like Frederick Jackson Turner who believed the westward struggle against nature and deprivation both defined and strengthened American character. Things were so desperate that white guys began looking lustfully at Oklahoma as their last best hope – the same ‘Indian Territory’ (I.T.) to whom the bulk of surviving Amerindians had been forcibly removed.

I.T. had been chosen both for its distance from existing ‘civilization’ and the tacit assumption it represented the most god-forsaken plot of unloveable soil on the continent. Now it was being eyed with a desire born of desperation and a few hopeful shots of delusion. By 1889, the first sections were being opened to white settlement via land run, and eventually Oklahoma would become the 46th State of the Union.

But not yet.

As the century approached another turn, farmers across the Great Plains – even those in slightly more cooperative climes than Oklahoma’s – were enduring hard times. This was not unprecedented, but it did seem to be persisting – and advances in both literacy and communication facilitated an awareness that not everyone seemed to be sharing similar struggles.

It wasn’t always a lack of production. Many farmers across the Plains were quite successful – at least in the traditional sense. They were growing and raising more good stuff than ever before! Wheat! Corn! Cotton! Moo-cows! Chickens! Tomatoes! Quiche!

But thanks to the laws of supply and demand, the more they raised, the lower the selling price. That’s great for those purchasing, but suck city for those producing. Throw in improved agriculture in Europe, and the American farmer was in a world of hurt.

As individualists, they reacted in an individually sensible, hard-working way – they looked to produce MORE.

Farmers already worked 365 days a year, sun-up to sun-down. They worked on Sundays, birthdays, Christmas, and when they were sick. They labored in the earth and cared for any animals they held, enduring drought and deluge, heat waves and freezes, in hopes of coaxing forth from the earth sustenance for themselves and the world.

They grew and raised stuff you could eat, or wear, or – back in the day – smoke. They were useful. Heck – they were essential!

But this was a time of the ‘newer and better’ – machinery, fertilizers, and other technological wonders (“just look at this scientifically shaped point on this metal – that’s right, folks… REAL METAL – shovel!”) With ‘newer and better’, they could bring even more land into production! Purchase more acres, more machinery, more seed, more productivity – PROGRESS!

But… this meant they’d need money. Borrowed money.

Looking east they saw a world of bankers and businessmen, of numbers and percentages, stock markets and manipulation. Men in suits, working what had already become known as “bankers’ hours” – 5 days a week minus holidays, done by mid-afternoon, and inside by the stove when it was cold or near an open window when it was hot.

They didn’t actually grow anything, or produce anything your kids could eat, or wear, or even that you could smoke, drink, or otherwise enjoy.

Instead, they scribbled in little books, mysterious ciphers covered in obscure terms, and this somehow meant they got to keep part of your money. You couldn’t for the life of your loved ones tell exactly WHAT they were doing, but you knew you needed them – they held access to loans, to financing, to equipment, seed, and survival during patient years. How did THIS make sense, they wondered?

There’s a reason Dickens only a generation before had written Ebenezer Scrooge as a money lender (albeit a British one) – what could be more cold-hearted and useless in this life?**

It wasn’t JUST the banks, of course – farmers felt taken advantage of by railroads, the operators of grain elevators and silos, and pretty much anyone with money or influence in a system they instinctively believed warped in favor of the Ebenezers, but lacked the time or worldviews to master themselves.

So the banks loaned money to the farmers, and the farmers purchased land and equipment. And it worked, in a sense – they became even harder-working, even more productive. They raised even MORE stuff you could eat, smoke, and wear!

Which meant, of course, that prices went even LOWER. In some cases, less than was necessary to break even. Some couldn’t pay back their loans. So, they renegotiated, perhaps borrowed more, bought more, raised more…

See a pattern?

For the first time in American history, it seemed, a large demographic was doing everything right – they were honest, hard-working, productive, and responsible – and they were failing.

Individuals had of course failed before, despite their best efforts, but individual failure can always be blamed on fate, or sin, or some personal shortcoming perhaps hidden in the mix. When the most idealized segment of American Dreamers – those whom Jefferson declared “the chosen people of God” – were facing bankruptcy and starvation, however…

Either malicious players were subverting the system, or the system was broken. They weren’t quite ready to go full Tom Joad (“Damn right, I’m bolshevisky!”), but they were – for the first time en masse – willing to call on the one earthbound entity big enough to tackle perceived corruption and necessary correction on such a grand scale. Those who most clearly defined ‘individualism’ in the American psyche began talking, and joining together, to petition their government for a redress of grievances.

The Populist Party was born.

They wanted what in their minds would be a return to a level (or fertile?) field. Government regulation or control of railroads, grain storage, even telegraphs – not to make things ‘easier’, but to make things ‘fair’. (The railroads and other owners likely quibbled over the precise definition of that term in such circumstances.)

They also wanted to turn bi. Not just themselves, but the entire country.

That’s probably best covered next time.

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**I should, um… clarify for any of my creditors who might be reading this that these are not MY sentiments, of course. These are the approximated impressions of a thousand long-dead homesteaders. I love everyone the same and value our varied contributions to the Great American Melting Pot of Commerce.

Also, I’m expecting a check and should be caught up by Monday.