A Skeptics View of American History
Episode 11 Misconceptions About the Original Populists
By Gerald Stoler PhD (2012)
In this lecture (in my view the least accurate), Stoler traces the history of America’s original populists, ie The People’s Party (aka The Populist Party). The latter flourished in the 1890s.
Stoler incorrectly states the Populists’ primary demand during the 1892 presidential election was to increase the money supply via unlimited silver coinage. According to Lawrence Goodwyn in The Populist Moment, this was only a secondary campaign issue. According to Goodwyn, the Populists main demand was to end the creation of money by private banks by abolishing the national banks created under the National Banking Acts of 1863 and 1864.*
Had they captured the presidency and congress, they would have directed the US Treasury (as stipulated in the US Constitution) to take over from private banks in issuing legal tender treasury notes.
The Populist Party grew out of a period in which most of the US population still lived on farms, and in which most farmers borrowed in the spring to pay for fertilizer, seed and farm machinery and repaid their loans after the fall harvest. The 1880s and 1890s were a period of severe deflation (ie inadequate money in circulation), in which a drop in crop prices made it extremely difficult for farmers to repay their debts.
Stoler also fails to correctly identify the cause of this historic deflation, namely a sudden contraction of the money supply triggered by a demand from Eastern banks that the post Civil War government retire $450 million in treasury notes that Lincoln issued to pay for the Civil War.
The Populist Party received one million popular votes in the 1892 election, as well as capturing numerous senate and congressional seats, governorships and state legislative seats.
In 1896, the Populist Party endorsed the Democrat’s Free Silver candidate William Jennings Bryan for president. Bryan would lose in a landslide to William McKinley.
*These laws allowed private banks to issue paper money backed (and printed) by the US Treasury “proportionate” to capital (usually US Treasury bonds) banks had on deposit with the Comptroller of Currency at the Treasury. As a general rule, these banks were allowed to issue nine times as much money as they held on deposit. This essentially granted them total control of the amount of money in circulation. See (The Populist Moment by Lawrence Goodwyn https://stuartbramhall.wordpress.com/2017/01/27/populism-americas-largest-mass-democratic-movement/)