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The Farmers' Alliance was an organized agrarian economic movement among U.S. farmers that flourished in the 1880s. First formed in 1876 in Lampasas, Texas, the Alliance was designed to promote higher commodity prices through collective action by groups of individual farmers. The movement was strongest in the South and Great Plains, and was widely popular before it was destroyed by the power of commodity brokers. Despite its failure, it is regarded as the precursor to the United States Populist Party, which grew out of the ashes of the Alliance in 1889.
Formation and growth
The Farmers' Alliance grew out of the Grange movement, which formed social organizations among farmers and which had flourished the Midwest and had spread in popularity to the South. Members were known as "Alliancemen". The movement comprised two separate organizations: the National Farmers' Alliance (Northern Alliance) in the Great Plains states, and the National Farmers' Alliance & Industrial Union (Southern Alliance) centered in Louisiana, Texas, and Arkansas. In the South Alliance included separate “Colored Alliance” chapters for African-American farmers, but overall, it was arguably the only biracial organization at the time the South.
The Alliance was formed in response to monetary deflation and falling commodity prices after the American Civil War. Deflation resulted in wide-spread debt among farmers, and many lost their lands because they were not able to achieve high enough prices on their goods.
The new Alliance was initially designed to be purely economic rather than political. The economic premise behind the Alliance was that individual farmer, through voluntary cooperation, could form agricultural cartels to eliminate middlemen and to market their goods at higher prices to larger commodity brokers. The Grange movement had attempted limited influence in politics, notably in urging the legislatures of several Midwestern states to regulate railroads to break the monopoly of individual rail lines. The Granger movement was succesful in several cases in forcing railroads to compete, but the railroad corporations successfully lobbied the United States Supreme Court to overturn these laws as unconstitutional. The failure of the political arm of the Grange movement left many farmers with the attitude that political action was futile in the face of large corporations.
The Alliance grew only slowly during its first ten years. At the Texas convention In 1883, only thirty of the almost 100 local alliances sent representatives. Alliance president W. L. Garvin appointed S. O. Daws a full-time, salaried lecturer and commissioned him to revitalize the alliance. Daws inspired growing interest in the Alliance by a series of lectures among Alliance chapters that blamed the farm crisis on "the capitalist [who] holds your confidence in one hand, while with the other he rifles your pocket." Daws's lectures successfully revitalized the movement, and in 1885, more than 600 delegates attended the Texas state alliance convention.
The deepening crisis in farm prices prompted a fast growth of the movement through the South and Great Plains in the 1880s. By 1888, the Alliance had over 250,000 members. In the South, the movement was particularly strong, and included thousands of suballiances that supported a network of cooperatives, as well as traveling lecturers, and newspapers that promoted solidarity among Alliancemen.
Effects of the Alliance
On a local level, the economic plan of the Alliance was two-fold, and included cooperation to buy goods at lower prices from merchants and to market their own goods at higher prices to brokers. Each county alliance appointed a committee of its members to bargain with merchants to purchase needed supplies at a cheaper rate in bulk using cash. The cash-purchase system had limited effect, however, since many farmers were already indebted and could participate in the arrangement. Moreover, the arrangements with merchants specified that purchases were to be made a certain level above wholesale. Many farmers suspected merchants of violating this agreement by inflating wholesale prices. Additionally, wholesalers who lost business in the agreement pressured local retail merchants to violate the agreements.
Many Alliance chapters all set up their own local cooperative stores which bought directly from wholesalers and sold their supply goods to farmers at a lower rate. Some of these stores reported annual sales ranging from $5,000 to $36,000 and claimed to sell goods at 20 to 30 percent below regular retail price.  Such stores achieved only limited success, however, since they faced the hostitlity of wholesale merchants. Moreover, local retail merchants sometimes retailed against the Alliance stores by temporarily lowering their prices in order to drive the Alliance stores out of business.
Additionally, the Alliance established its own mills for flour, cottonseed oil, and corn, as well as its own cotton gin. Such facilities allowed debt-laden farmers, who often had little cash to pay third-party mills, to bring their goods to market at a lower cost.
The national agenda
The limited effects of the local policies of the Alliance did little address the overall problem of deflation and depressed agricultural prices. By 1886, tensions had begun to form in the movement between the political activists, who promoted a national political agenda, and the political conservatives, who favored no change in national policy but a "strictly business" plan of local economic action. In Texas, the split reached a climax in August 1886 at the statewide convention in Cleburne. The political activists successfully lobbied for passage of a set of political demands that included support of the Knights of Labor and the 1886 Great Southwest Strike . Other demands included changes in governmental land policy, and railroad regulation. The demands also included a demand for use of silver as legal tender, on the grounds that this would alleviate the contraction in the money supply that fed the deflation in prices and the scarcity of credit (see gold standard).
The political activism of the Alliance gained strength in the late 1880s. In the South, the agenda centered on demands of government control of transportation and communication, in order to break the power of corporate monopolies. It also included a demand for a national "subtreasury" plan that would allow easier credit for agriculture, thus breaking the power of the centralized eastern banks over farmers in the rural South and West. The Southern Alliance also demanded reforms of currency, land ownership, and income tax policies. Meanwhile the Northern Alliance stressed the demand for free coinage of silver.
Political activists in the movement also made attempts to unite the two Alliance organizations, along with the Knights of Labor and the Colored Alliance , into a common movement. The efforts and unification proved futile, however, and the Southern Alliance organized on its own, eventually reaching 43 states. The Alliance movement as a whole reached over 750,000 by 1890.
Downfall and transition to the Populist movment
As an economic movement, the Alliance had limited and temporary success. Cotton brokers who had previously negotiated with individual farmers for ten bales at a time now needed to strike deals with the Alliancemen for 1,000 bale sales. This solidarity was usually shortlived, however, and could not withstand the retaliation from the commodities brokers and railroads, who responded by boycotting the Alliance and eventually broke the power of the movement. The Alliance had never fielded its own political candidates, preferring to work through the established Republican and Democratic parties, which often proved fickle in supporting the agenda of the Alliance.
As an economic movement, it failed, but it is regarded by historians as engendering a "movement culture" among the rural poor. Failure of the Alliance as economic vehicle prompted an evolution of the Alliance into a political movement to field its own candidates in national elections. In 1889–1890, the Alliance was reborn as the Populist Party (i.e., "People's Party"), and included both Alliancemen and Knights of Labor members from the industrialized Northeast. The Populist Party, which fielded national candidates in the 1892 election, essentially repeated all the demands of the Alliance in its platform. Although the Populist Party itself achieved only limited success and did not survive past the 1890s, many of its demands were enacted into law over the following decades.
- Handbook of Texas Online: Farmers' Alliance
- Revolut of the Rural Poor Majority: Farmers Confront the Changing Economy
- Reader's Companion to American History: Farmers' Alliance
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