USA > Kansas > A standard history of Kansas and Kansans, Volume II > Part 57
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The money to prosecute the Civil War was obtained in two ways, by the issue of greenbacks which the people were compelled to accept at face value, with no interest, and hy the issue of interest-bearing government bonds which the bankers were asked to buy. The bankers refused to buy these bonds except on certain terms, and instead of compelling the banks to buy, as the people were compelled to fight, the government very foolishly acceded to the banker's terms and paid interest on these bonds, "in advance" and "in gold." The government was compelled to secure this gold from some source, and in hopes to draw it from France and England, a law was made that import duties must be paid in gold. This restriction on the greenback as legal tender caused a rapid decline in value as compared with gold, and in a few months, the people's dollar would only buy half as much goods as the banker's dollar. The govern- ment had limited the rate of interest to 7% on bonds, but as this interest was payable in high priced gold, the effect was to double the interest realized by the bankers. Thus while the producing classes were sacri- ficing their lives and receiving half pay, the financial interests were sacrificing nothing and reaping a double reward.
The next financial move was the establishing of National Banks of issue, in 1863. It has been said that while this system has its faults, yet it was the best suited to the great financial agencies. It seems to have been devised to suit the convenience of the great financial agencies and without regard to the interests of the people. The National Bank Act provided for the forming of banking associations which were authorized to issue circulating notes in the following manner. Each bank organized under the law was required to deposit with the government interest-bear- ing government bonds of the United States to the amount of not less than one-third of its capital stock. The government then returned to the bank
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circulating notes to the amount of 90% of these bonded securities. These circulating notes were then loaned out by the banks at 10% to 12% inter- est to business men and farmers, while at the same time the banks drew 7% interest in gold on the government bonds, amounting to 14% in greenbacks. As the bonds and the circulating bank notes represented the same investment, the banks were realizing about 24% on their money, all of which in the end had to be paid by the laboring classes, who were at this time too busy fighting the war to look after their own interests.
That Lincoln did not approve of these acts is well known to the older generation who have some recollection of the events of that period. That he saw trouble ahead is evident from the following extract from a letter written to the Hon. W. R. Ellis, of Chicago, at the close of the war :
We may all congratulate ourselves that this cruel war is nearing a close. It has cost a vast amount of blood and treasure. The best blood of the flower of American youth has been freely offered upon our country's altar that the nation might live. It has been indeed a trying hour for the Republic, but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow. The money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in few hands and the Republic is destroyed. I feel at this moment more anxiety for my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless.
That this is precisely what happened, we shall see by the considera- tion of subsequent events. At the close of the Civil War the people generally owned their homes and farms, and were practically free from debt except for the war bonds. This in itself was menace enough to the prosperity of the country on account of the ruinous terms which the government had entered into with the banks, which raised the bankers' money to a high premium and depreciated that of the people, and which exacted the principal over and over again in interest.
But the bankers were not content with cutting the value of the people's money in half. The next step was to take it away from them entirely, in order that they might loan the farmers and business men their money at a high rate of interest, and compel the people to either cease to transact business at all or pay tribute to the banks for a circulat- ing medium. The people did both, to their ruin. The process by which the people were deprived of their own circulating medium to make a mar- ket for that of the bankers was called the contraction of currency.
The first step in the contraction of currency was taken early in 1866; when an act was passed to provide for redeeming greenbacks in interest bearing government bonds of the denomination of $1,000. This policy operated against the producer both in agricultural and manufacturing pursuits as a two edged sword, withdrawing from circulation the money which should have been invested in the channels of trade, and at the same time burdening him with additional interest to be paid. Although a slight money stringeney was felt in some quarters as a result of this
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act, and the number of business failures doubled the next year, on the whole the effect was not seriously felt for some years.
The next step, (and one of the most pernicious in the whole financial policy) was the Credit Strengthening Act of 1869. By this act the bonds which had been bought with greenbacks were to be paid back in gold. There was considerable objection to this measure on the part of the leaders of the people, but these objectors were cried down as "repudiat- ors," and the finger of scorn was pointed at all who dared speak up in behalf of justice. It was stated by Oliver P. Morton in a speech, that the government had sold many of these bonds for 60c on the dollar in green- backs, and that it would be rank injustice to the people to enter into a new contract to pay them in their face value in gold. However, the money power did just what Lincoln said it would. A great hue and cry was raised to the effect that our government would be in disgrace if it refused to pay its debts in the best money there was. English policy was pointed to with pride. It was pictured as a good thing for the country to make itself solid with the moneyed people, and so the act was passed and an additional burden amonnting to hundreds of millions was loaded upon the people. It also had the effect of still further enhancing the value of gold to the detriment of all other circulating mediums.
The contraction of currency continued year after year, and by 1872 began to have a decided effect on the prosperity of the country. There were an unprecedented number of business failures. Wages were low and the laboring classes were beginning to organize and talk of striking. The farmers found that the "honest dollar" they had been voting for was getting very elusive, that it took more and more wheat every year to get it, but that it did not pay any more taxes or interest than the green- back did. As wages lowered the market for produce was curtailed, and the farmers being unable to buy the product of the laboring man, nor the laboring man the produce of the farmer, a paralysis of industry followed ; and in 1873 the country was plunged into one of the worst panics of its history. Business was at a standstill. Half a million men were out of work and tramping the country. Wages went lower and lower, and many of the trades organizations struck only to find themselves out of work entirely instead of getting more pay. The market prices of farm produce went far below the cost of production. But taxes had to be paid, and the necessities of life provided if possible. Those who had farms, homes or chattels were obliged to mortgage them at a high rate of interest. So the interest parasite took a second hold on the vitals of the nation. The people now had not only the national debt to pay but private debts on their homes and chattels at such exorbitant rates of interest that it was almost out of the question to pay the principal.
Congress evidently thought the money god was angry and must be appeased, for instead of repealing the laws that had brought about this condition, the statesmen of '73 said the financiers had "lost confidence" and that the only way to restore this confidence was to demonetize silver and further enhance the power of gold. This was done, and the legal tender value of silver coin was limited to $5.00. This was a serious blow
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to the already battered fortunes of the laboring and agricultural classes. There was no real money now but gold, and no gold except in the banks, but interest and debt must be paid in gold and so the only thing that could be done was to borrow more. The circulating medium, which under the greenback system had been based upon credit, was now based on debt, the interest on which could be paid only by incurring more debt. It was held by the advocates of demonetization that this measure was necessary to insure money against a possible fluctuation in value. How- ever, no provision was even thought of to protect labor and its products from a fluctuation in value. In fact every advantage had been given by by those in power to the speculators and gamblers to enable them to make the value of produce fluctuate in any way that would make the most money for them.
The final act in the contraction policy was the resumption of specie payments, provided for by the Sherman act of 1875, to take effect Janu ary 1, 1879. The entire amount of paper money in circulation at that time was $777,176,250, while of gold there was only about $100,000,000. The resumption of specie payments meant the redeeming of this paper in gold coin. As there was not enough gold coin to do this, the act involved the issuing of more interest bearing bonds, increasing the public debt and further limiting the circulating medium. In an effort to secure the repeal of this act, the Hon. D. C. Haskell of Kansas, summed up the situation as follows :
We have sixty millions less of currency in circulation than we had two and a half years ago, counting National Bank notes and legal tenders. During the five years immediately preceding the resumption of the Bank of England in 1821, the contraction amounted to one hundred and two millions. It very nearly ruined English industries, and yet we, in two and a half years, have accomplished an equal contraction, and that too through the operations of a law that was intended to relieve our indus- tries by a slight increase in currency. I am satisfied that if any other important law than this resumption act was found to be as uncer- tain and indefinite in its provisions, it would be snatched from the Statute book within an hour. We ask that Wall street, the Rothschilds and the Barings shall no longer have control of our financial legislation; and when I charge that our legislation has been in the interest of the capital- ist and the dealer in money, I charge that which I can prove from the record, and I challenge successful contradiction.
That the financial policy of the country had been formed for the bene- fit of English capital was denied by its sponsors, but that it was patterned after the English system was openly boasted. Our statesmen who thought we needed such a system evidently overlooked the fact that this system in Great Britain had separated the population into two classes-one of extreme wealth and one of extreme poverty ; that the agricultural classes had been reduced to serfdom from which they sought relief by a general exodus from their native land. Similar results might well have been expected in this country. The circulating medium which was $52 per capita in 1866, had been cut down to $12.28 by 1877, and before the Populist Uprising came to a head it had been reduced to less than $5.00. Vol. II-34
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Another prolific cause of unrest was the oppression of the transporta- tion corporations. In 1862 there was not a mile of railroad in Kansas. Ten years later there were over two thousand miles, and in the next two decades building proceeded on a large scale. Instead of the people build- ing the necessary arteries of distribution the privilege was delegated by the government to private corporations and individuals who used their power to perpetrate the most flagrant injustices upon the people depend- ent on them for a means of marketing their produce and securing sup- plies. The greed of these corporations knew no bounds. In the first place, the national and state governments realizing that railroads were essential to the development of the country, especially the vast areas be- yond the reach of the waterways, gave immense grants of land outright to these corporations. The companies then required the citizens of the loealities through which the road was to be built to vote vast sums in bonds, in most cases more than the road would eost. Sometimes the people were given stock for this money, but if they were, the company always reorganized and eheated them out of it later. The next step was to sell "watered stock" for several times the worth of the road, and then charge the people a tariff for service, high enough to pay big dividends on this inflated valuation. But not content with these injustiees they made diseriminating freight rates in such a way that they had complete control of the distribution of products and had the industries of the people at their mercy. It had the effect of working the ruin of hundreds of inde- pendent salt producers in Kansas, as well as producers of oil and min- erals, and took the natural resources of the state from the hands of the people and gave them over to the trusts and combines. It was one of the greatest obstacles in the way of successful farming. It was the ruin of the cattle men, as the large packing houses were given such heavy rebates that the independent shipper stood no chance in the market. The people attempted to relieve the situation by offering inducements to rival lines, but once this supposed competitor had a road built on the people's money, they found they had burdened themselves with bonds in vain, as all rail- road corporations were alike.
These railroad corporations were privileged characters. They avoided taxation, seeured any legislation they happened to want, and made and unmade publie officials. All public officials and state and national legis- lators, as well as newspaper men, rode around on free passes and charged their mileage up to the people. It was not without justification that Jerry Simpson on the day of the triumph of the Populist party, stood on the south steps of the State-house before a large crowd and said: "Fel- low citizens, we have come to-day to remove the seat of the government of Kansas from the Santa Fe offiees, back to the State-house where it belongs."
But the transportation companies, not content with extortion from the people, oppressed their laborers beyond endurance. According to the Kansas Bureau of Labor for the year 1886, the railroads did not pay a living wage on which a family could subsist comfortably while employ- ment lasted, to say nothing of saving for periods of enforced idleness.
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In 1885, the Knights of Labor were well enough organized in Kansas that they declared a strike on the Gould lines. It was a protest that cost dearly, for the corporations had everything their own way at that time.
In the development of the vast natural resources of the country, pow- erful manufacturing monopolies had grown up under government favor and protection until they became more powerful than the government itself. They bought raw material at their own price, sold the finished product at any figure they wished to ask, and rewarded labor as they saw fit.
Another great grievance was the operations of speculators in farm produce. In the latter eighties and early nineties the farmers sold their corn, which, according to the agricultural reports, cost 21c per bushel to produce, for ten to fifteen cents per bushel. The grain speculator re- ceived forty-five to sixty cents per bushel for the same corn, and before it reached the laboring man who must buy it for food, the price was con- siderably higher. It was so with all farm products. The farmer felt that he was playing against a fixed game. The banks had control over the currency and could withdraw their notes from circulation at will, making money scarce and produce cheap just at the time the farmer must have cash for interest and taxes. Then they could make money plentiful and manufactured articles high in the winter and spring when the farmer had nothing to sell, but was forced to buy the necessaries of life.
These were the combinations against which the farmers of Kansas struggled in the People's Movement, while at the same time they were endeavoring to bring wild land under cultivation, pay off bonds and mortgages, and provide homes and higher education for their children.
III
GROWTH OF THE THIRD PARTY IN KANSAS
The attempts of the people to wrest control of the means of liveli- hood from the hands of corporate power began to take political form in 1870. This movement took different names at each successive stage of its development, and in different localities. yet having but one object in view, that of equality of opportunity. These different manifesta- tions of the will of the people must be considered as one and the same, and any political propaganda having economic readjustment as its aim should be considered as a part of the third party movement. It espouses the people's cause and is the people's party.
The first records of the Third Party in Kansas is an account of a meeting held in the State House, February 9. 1870, for the purpose of organizing a Workingman's party. W. V. Barr made a speech in which he favored the distribution of publie lands in small tracts to the people, instead of granting them in large tracts to corporations. He was promptly denounced as a red handed anarchist, but evidently oth- ers were thinking the same thing, for the Liberal Republican party
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which had its rise in Missouri in 1870, and nominated Horace Greeley for President, in 1872, made this one of its main principles.
A labor convention was held at Leavenworth, July 20, 1870. Amos Sanford and F. P. Baker were sent as delegates to the National Labor Congress. The officers of this convention were: Hugh Cameron, W. V. Barr, B. F. Sylvis, H. B. Carter, W. R. Loughlin, John C. Ketche son, A. R. Johnson, and S. Markham. These same men were interested in the Workingman's Party.
The National Labor Congress met at Cincinnati, in August, and analyzed conditions as follows:
The wrongs of the laboring class are inflicted through monopolies.
1. Banking and money monopolies which is the great central source through which all other monopolies exist and operate.
2. Transportation monopolies.
3. Manufacturing monopolies.
4. Land monopolies.
5. Commereial and grain monopolies.
For these evils they recommended the following measures :
1. The establishment of a monetary system adapted to the exigen- cies of legitimate commerce.
2. The payment of national debt and no funding.
3. Preservation of the public domain for actual settlers and tillers of the soil.
4. Tariff for revenue only.
5. Requiring in all future wars the money to be collected from the wealth of the country and not entailed on the future earnings of labor.
6. Holding legislators more aecountable by requiring fundamental laws to be submitted to a vote of the people.
7. A Board of Management of curreney and revenue.
The National Reform party was the outgrowth of this Labor Con- gress. When the Workingman's Party of Kansas held its state con- vention in Topeka. September 22d. it endorsed the platform of the National Reform Party, favored a tax exemption of $1.000 to each householder, instead of $200, declared that every human being was born with a natural right to land. and that no legislative enaetment should be allowed to become a law until passed upon by the people. This was probably the first time the referendum was advocated in Kan- sas. A full state tieket was nominated, led by W. R. Loughlin, who polled only 108 votes.
This labor movement was lost to view in the exeitement of the Greeley campaign of 1872. The Labor Reform party put up a national ticket, the nominees of which declined the honor. The platform was an elaboration of the principles of the Labor Congress and is impor- tant because it advanced for the first time a number of the planks on which the people were to make their stand in the reform movement of the next twenty years. The preamble asserted the right of the indi- vidual to the use and enjoyment of the fruits of his labor and talents.
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and declared against the granting of special privileges. The body of the platform was as follows:
1. A national circulating medium, based on the faith and resources of the nation, legal tender for all debts, and issued directly to the people without the intervention of any system of banking corporations.
2. Payment of the national debt according to the original contract without mortgaging the property of the people or the future exigencies of labor to enrich a few capitalists at home and abroad.
3. The burdens of government should bear equal on all classes, and the exemption from taxation of government bonds bearing extravagant rates of interest is a violation of all just principles of revenue laws.
4. Public lands should neither be granted nor sold in amounts exceed- ing one hundred and sixty acres.
5. Modification of tariff laws to admit free all articles of common use which we cannot produce, and to lay duties on luxuries and articles of which we have the raw materials.
6. Prohibition of the importation by capitalists of Chinese labor.
7. Eight hour law for all mechanics and day-laborers in the employ of the government or of states or municipalities.
8. Abolition of contract prison labor.
9. Money for prosecuting wars should be assessed upon the wealth of the country and not entailed as a burden upon posterity.
10. Government control over railroads and telegraph corporations in order that they shall not be privileged to exact such rates of freight, transportation or charges by whatever name, as may bear unequally upon prodneer or consumer.
11. Civil service reform to remove all partisan influence.
12. Occupancy of presidential chair limited to one term.
The tenets of this platform were ahead of the time even for Kan- sas. The reform forces of this state united under the Liberal Republi- can banner and voted for Greeley in 1872. The Democrats fused with the Liberals here as they did all over the country, even in the South, adopting the platform and candidates of the reformers. The nominat- ing convention met in Topeka, September 11th, and was opened by Charles Robinson, of Lawrence. Addresses were made by Col. S. N. Wood, Rev. Pardee Butler, Ilon. Marcus J. Parrott, and W. R. Lough- lin. The Hon. Thaddeus Walker was nominated for governor; W. R. Longhlin and S. A. Riggs for Congress; Pardee Butler, William Lari- mer and Alois Thoman for Presidential Eleetors; V. S. Osborne for Auditor : C. H. Pratt for Treasurer; and L. J. Sawyer for Superin- tendent of Public Instruction. The other nominations were made by the Democrats. John Martin, whom the Populists sent to the United States Senate in 1893, was largely instrumental in bringing about the fusion of the Liberal Republicans and Democrats in Kansas. The Lib- eral party elected two State Senators and fourteen members of the House, and cut the Republican majority down from 40,000 to about 30,000.
The Liberals did not meet the needs of the West. They touched on reform but did not strike deep. Aside from the public land plank there was little of interest in their platform except a protest against
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corruption and extravagance in public office, and inequalities in tax- ation.
IV
RISE OF THE FARMERS' MOVEMENT
Prior to their final amalgamation in 1890, the laborers and the farmers took turn about at playing politics in Kansas. The defeat of Horace Greeley by an overwhelming majority put an end to the Liberal Republican movement into which the labor movement had merged, but a propaganda was already under way among the farmers. A Farmers' State Convention was held in Topeka, March 26, 1873. Alfred Gray, then Secretary of Agriculture, and J. K. Hudson, who so bitterly opposed the farmers a few years later, were among the leaders at this time. The resolutions adopted at this meeting show that the farmers understood their economic situation as well in 1873 as they did in 1893, although the knowledge was probably not as widespread. They were briefly as follows :
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