they had less to complain about. In the first of two articles in July 1874, the newspaper rested its argument on somewhat shaky ground—it claimed that New England railroads were controlled by “moral suasion” and good government. The second article offers a somewhat more plausible explanation, noting the lower rates associated with railroads that faced substantial competition. Transport on the Chicago and Northwestern was 2.47 cents per ton mile against 1.50 cents on the Pennsylvania and the Erie and 1.57 cents on the New York Central. Passenger travel was 3.16 cents per mile in the West, but only 2.48 cents on the Pennsylvania, 2.2 cents on the Erie, and 2 cents on the New York Central. The article also suggested that the higher rates out west were especially annoying because western roads enjoyed heavy public subsidies.
State- and county-level studies indicate that areas with no railroad service were less likely to support railroad regulation. Southern communities generally seemed more interested in seeing railroads built than worrying about regulating them.40 A letter to the editor in the (Macon) Georgia Weekly Telegraph dated 24 February 1874 warned that the “law of supply and demand” regulates prices but “when prices are regulated by artificial means . . . it is bound to work to the injury of some.” It cautioned Georgia farmers that westerners’ desire for cheap transport could in the end hurt southern cotton farmers.
California offers an intriguing contrast to other states because of different practices in storing and shipping grain: instead of using elevators, farmers placed crops in sacks in the field until ready to sell them. They then exported grain directly to Great Britain on boats out of San Francisco. Grangers in California thus directed their frustration, not at railroads or warehousemen, but at grain dealers who cornered the supply of sacks.41 Of course, farmers could have avoided the problem by buying their sacks in advance. The lack of planning seems to have been due to ignorance of storage methods among new growers. One could consider the actions of the dealers simply as risk-taking, entrepreneurial activity rather than something more nefarious.
A look at the establishment of Granges by county in Minnesota in the period 1868–76 is revealing. Figure 1.13 shows that counties with railroads also had greater numbers of subordinate Granges. Some of this was undoubtedly due to denser county populations of agricultural families. The number of subordinates in a county is positively correlated with county population, with a correlation coefficient of 0.67.42 Yet the striking success of the Grange where railroads had already been built is notable: people may have been reluctant to support organizations that spoke out against railroads when hoping they could attract one to their county, but didn’t hesitate once the railroads were built. Grange activity—measured as number of subordinates per person in the county—was much stronger in counties with railroads, particularly those with only a single line.43
Borrowing Costs. Debt is a part of life for most farmers. The lag time between planting and harvesting means that farmers need cash and credit in predictable cycles, although climate and weather issues such as droughts, floods, and windstorms can undermine this predictability. In isolated areas, nineteenth-century farmers relied on local bankers, storekeepers, and farm-implement dealers for credit. These loans naturally carried risk for the lender: bad weather or pests could devastate the entire surrounding area. Risk led to high interest rates; in 1872, for instance, about half the real estate mortgages in the Dakota Territory carried rates of 24 percent.44 Like transportation costs, borrowing costs were a constant worry for farmers.
Figure 1.13. Density of Minnesota Granges by County and Minnesota Railroad Lines, 1874. Sources: Minnesota Historical Society, http://www.worldmapsonline.com/historicalmaps/kr-1874-minnesota.htm
The postbellum years were particularly difficult because many farmers had very little cushion. Discharged soldiers came home to find that years of neglect had taken their toll on farms. Abolition complicated matters in the South, as people had to adapt to a new sort of labor force. Because most battles had taken place on southern soil, destruction of property—including railroad lines and rolling stock—and disruption of land made things even worse. Families who had lost young men especially suffered. Low real wages for common soldiers during the war, coupled with high prices for many “store-bought” goods, meant that few farm families had any savings when peace came. Adding to these woes, the nation’s return to a gold standard after the war led to deflation. To the extent that debtor farmers did not anticipate this, they had borrowed dollars at one value but had to pay back dollars that were worth substantially more.
Grange organizers stressed the potential of collective arrangements that could help ease credit problems for farmers. These problems became that much more acute just as the Grange movement took off. The Panic of 1873, sparked in part by risky behavior by some railroad companies, led to a severe recession and major financial upheaval. Foreigners were particularly reluctant to invest in US railroads, drying up capital even further.45
Taxes. Although the United States experimented with a federal income tax during the Civil War, this method of raising money quickly disappeared once the conflict ended, and it did not return until 1913 with the passage of the Sixteenth Amendment. State taxation on slave property, of course, also went by the wayside after war’s end.
State and federal tax revenue came instead from property taxes (particularly on cultivated land), excise taxes (especially on alcohol), and import tariffs (mostly on manufactured goods). The Grange thus had little trouble persuading farmers that they disproportionately bore the burden of taxes in the United States, both on production inputs and on the consumption items they purchased. Oddly, under the Tariff Act of 1883 domestic vegetable (but not fruit) growers benefited from protectionist import duties, with the case of Nix v. Hedden confirming that tomatoes should be considered a vegetable.46
FARM VALUE: AN ALTERNATIVE LOOK AT ECONOMIC STATUS
The value of an asset reflects expected future flows—income and nonpecuniary benefits—yielded by that asset. Thus, another way to evaluate how well farmers were doing in the 1870s is to look at the value of what they owned.
Table 1.1 shows that, in real terms (using 1860 prices as a base), the average value of an acre of farm land was lower in 1870 than in 1860. Over the same period, average farm size fell from nearly 200 acres to just over 150 acres. Although the per capita value of GDP and per capita wealth fluctuated over the decade, the general trend was upward.47 So, by comparison to the average American, the average farmer was not keeping up in terms of asset holdings. The Grange could and did exploit this discrepancy in its efforts to recruit members.
Table 1.1. Farm Number, Size, and Value, 1850–80
Source: http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx#27514, Carter et al. (2006, Series Cc2).
Self-Improvement, at Least for Some
Improving farmers’ economic status was paramount for the early Grangers, particularly Oliver Kelley, and appealing to economic interests generated the Grange’s initial success. But the inability of the Grange to live up to its economic goals also caused it to founder a few years later, as Chapter 3 discusses.
From the beginning, however,
