Lesson 1: Agrarian Unrest

Lesson Focus

As America industrialized, farmers faced growing hardships from falling prices and powerful railroad monopolies. We will explore how they organized to demand fair treatment and economic justice.

People to Know

Oliver Hudson Kelley

Learning Objectives

• Identify the key problems farmers faced, including overproduction, debt, and railroad abuses.
• Discuss the rise and fall of the Grange, the first national farm organization.
• Analyze the impact of the Interstate Commerce Act, the first federal law to regulate railroads.

During the late 1800s, natural disasters like grasshoppers and economic issues like crop overproduction created severe hardship for farmers.
Facing falling prices and rising debt, farmers grew angry, believing bankers, railroads, and the government ignored their problems.
This widespread discontent fueled a powerful movement for reform, as farmers began to organize to demand government help and fair treatment in an industrializing economy. Note that this set the stage for major political conflict.

Railroads exploited their position as a natural monopoly in the West, where farmers had no other shipping options.
Companies engaged in corrupt practices like stock watering to artificially inflate their value and made secret pooling agreements to keep freight rates unfairly high.
These abuses angered farmers who felt trapped and cheated. Pay special attention to how this anger directly led to organized protests and demands for government control over the powerful railroad industry.

To combat isolation and railroad abuses, Oliver Hudson Kelley founded the Grange in 1867.
This organization grew into a powerful political lobby that established farmer-owned cooperatives and successfully pushed for Granger laws to regulate railroad rates.
The movement’s greatest success came in 1877 with the Supreme Court case Munn v. Illinois, which affirmed that states could regulate private industries essential to the public good, a landmark decision.

The Grange's influence faded after its business ventures failed, discrediting the organization and causing membership to decline by 1880.
The final blow came in 1886 with the Supreme Court's Wabash Railway decision.
The court ruled that states could not regulate railroad traffic that crossed state lines. This decision effectively destroyed the Granger laws, proving that state-level reforms were not enough to control the massive interstate railroad networks.

Following the Wabash Railway decision, which limited state power, it became clear that federal action was needed.
In response, Congress passed the Interstate Commerce Act in 1887, which declared that railroad rates must be fair and created the Interstate Commerce Commission (I.C.C.) to enforce this.
Although the I.C.C. was initially too weak to be effective, the law set a vital precedent for federal regulation of private industry.