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Populism and Free Silver in the 1890s

Populism and Free Silver in the 1890s. aka: The Wizard of Oz meets Monetary Policy Get your clicker! Ch 48!. Goals: SWBAT…. Identify and explain basic micro and macro economic ideas Apply these ideas to explain and analyze the Populist and Free Silver movements of the 1890s

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Populism and Free Silver in the 1890s

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  1. Populism and Free Silver in the 1890s aka: The Wizard of Oz meets Monetary Policy Get your clicker! Ch 48!

  2. Goals: SWBAT… • Identify and explain basic micro and macro economic ideas • Apply these ideas to explain and analyze the Populist and Free Silver movements of the 1890s • Examine The Wizard of Oz as a Monetary Allegory http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  3. Our Agenda Today • Economics Basics • Late 1800s Monetary Policy • Populism and the Wizard of Oz

  4. I understand the economics behind Populism and Free Silver. • 1- Strongly disagree • 2- Disagree • 3- Agree • 4- Strongly agree

  5. Intro to Econ: Key Terms • Demand, Supply, and Price • Fiscal Policy • Monetary Policy • Money Supply • Business Cycle • Tariff • Recession • Inflation and Deflation http://www.thebluecollarinvestor.com/blog/wp-content/uploads/2008/11/business-cycle-graph-better.jpg

  6. http://priyankaseconomicblog.files.wordpress.com/2009/10/calvin-on-supply-and-demand3.jpghttp://priyankaseconomicblog.files.wordpress.com/2009/10/calvin-on-supply-and-demand3.jpg

  7. Intro to Econ • What causes prices to go up? • Demand Change vs. Supply Change • Inflation vs. Deflation

  8. Economics of the 1890s • If Demand goes down…. • If Supply goes up…. • DEFLATION! Prices go down! • What was happening to crop prices in the late 1800s? Why? • What was happening to farm costs (i.e., mortgages, manuf. goods) in the late 1800s? Why?

  9. I have a better understanding of how supply and demand impact prices. • 1- Strongly disagree • 2- Disagree • 3- Agree • 4- Strongly agree

  10. Economics of the 1890s • Very high tariffs (taxes on imports) • Agric. prices down (1860s to 1890s) • Depression of 1893 • Why did farmers want inflation? http://www.flickr.com/photos/farlane/3791930988/in/set-72157601329141029/

  11. Economics of the 1890s

  12. Economics of 1890s • Is inflation bad? • Yes for creditors (i.e., bankers) • No for debtors (i.e., farmers) • Some inflation is healthy, necessary • Why did farmers want inflation? http://www.cthistoryonline.org/cdm-cho/cho/journeys/j_life_rural_farm.html

  13. The government should have helped farmers more. • 1- Strongly disagree • 2- Disagree • 3- Agree • 4- Strongly agree

  14. Government and Economy A Short Digression… • Capitalism? • Communism? • Socialism?

  15. Government and Economy A Short Digression… • Capitalism? • Adam Smith • The Wealth of Nations (1776) • Laissez Faire, Free Market should replace Mercantilism • Allow for competition to “naturally” regulate economy

  16. Government and Economy A Short Digression… • Communism? • Karl Marx and Friedrich Engels • The Communist Manifesto (1848) • Capitalism will collapse, Proletariat will rise up and overthrow Bourgeoisie • Stateless, Classless  Total equality • Not quite Lenin or Mao

  17. Government and Economy A Short Digression… • Socialism? • Great variation • Parts of W. Europe and N. America today • Government control or regulation of some parts of economy • Schools, healthcare, “natural” monopolies; More worker and consumer protection

  18. Government and Economy • How can the government influence the economy? • Fiscal Policy: taxes and/or spending • Monetary Policy: money supply and/or interest rates • Today the Federal Reserve Bank (The FED) is in charge of Monetary Policy http://www.fotosearch.com/illustration/inflation.html

  19. Government and Economy • Traditional Economics? • Mercantilism  Free Market Capitalism • Wealth of Nationsby Adam Smith (1776) • The Government should stay out of the economy • Recessions are good! • Reality?

  20. Government and Economy • Monetary Policy to stimulate the economy… • Increase the money supply and/or lower interest rates • Risks? • Could lead to inflation, but unlikely if in arecession • WARNING: The economy is a moving target!

  21. Government and Economy Recessions During the 1800s: • Panic of 1819 • Panic of 1837 • Panic of 1857 • Panic of 1873 • Depression of 1893 (FYI – Great Depression begins in 1929)

  22. Government and Economy High Tariffs During the 1800s: • Tariff of 1816 – 15 to 20 percent • Tariff of 1824 – Whig Party and Henry Clay • Tariff of 1828 – 50 percent • Tariff of 1832 – down slightly • Tariff of 1857 – Democrats lower tariff • Morrill Tariff of 1861 – 47 percent • “mongrel” Tariff Act of 1883 • McKinley Tariff Act of 1890 • Dingley Tariff of 1897 – over 50 percent! (FYI – Hawley-Smoot Tariff of 1930)

  23. Government and Economy Monetary Policy During the 1800s: • It was a mess! • First Bank of the US (1791-1811) • Second Bank of the US (1816-1836) • Banks, States, and Federal govt printed money • Federal govt wanted no debt

  24. Government and Economy Monetary Policy During the 1800s: • Mint Act of 1792 unlimited Silver & Gold at 15:1 • “Crime of 1873” – govt. stopped minting silver • USA essentially on gold standard in 1879 • Sherman Silver Purchase Act (1890) not enough, and soon repealed

  25. Government and Economy Monetary Policy During the 1800s: • Market value vs. Official value • By 1894 Market value was over 30:1 (i.e., 30 silver = 1 gold) • Populists wanted govt to resume minting silver at 16:1 FREE SILVER!!

  26. Government and Economy Monetary Policy During the 1800s: • What if Govt minted silver at 16:1 in 1890s? • Money Supply? Increase! But gold deposits would go down • Inflation? Not likely since recession

  27. Government and Economy Monetary Policy During the 1800s: • Gresham’s Law named for Sir Thomas Gresham (1519-1579) “When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear” aka: “Bad money drives out good money”

  28. Government and Economy Monetary Policy During the 1800s: • According to Gresham’s Law, if Populists get their way, Gold is…. Good Money that will be undervalued and driven out of circulation, perhaps out of the country Bankers think silver is “bad”

  29. I have a better understanding of U.S. government monetary policy of the 1800s. • 1- Strongly disagree • 2- Disagree • 3- Agree • 4- Strongly agree

  30. The Rise of Populism • 1894 Unemployment over 18 percent • Tariff very high • Farmers caught in a debt cycle 1869-1896 crop prices down 55 percent! • Farmers Revolted and Organized! Granger movement (1860s to 1880s) Farmers Alliance (1880s) People’s Party formed in 1890s

  31. The Election of 1896 Republicans • endorsed William McKinley • High tariffs and gold standard • Conservative “sound money” position Democrats and Populists • endorsed William Jennings Bryan • Bimetallic standard (silver & gold) at 16:1 • WJB gave “Cross of Gold” speech

  32. The Election of 1896 Republicans/McKinley won! Democrats became party of “progressive” reform Populist party fades away; many positions adopted by Democrats

  33. The Election of 1896 Free Silver issue disappears: WHY? • Gold Discoveries in 1880s and 1890s • By 1897 Economy was improving • 1900 Gold Standard Act • New focus in Imperialism

  34. The Wizard of Oz • Book written by Frank Baum in 1900 • Movie in 1939 • What’s the story? http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  35. The Wizard of Oz • Story begins in the West (Kansas) as did Populists Dorothy? • Heroine from poor farm • Represents honest, plucky America • Mary Elizabeth Lease? http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  36. The Wizard of Oz • Cyclone/Tornado = Free Silver Movement The Land of Oz? • The Gold Standard • Oz = Gold (ounce) http://babycreativeblog.files.wordpress.com/2009/10/tornado-4.jpg http://www.open2.net/blogs/media/blogs/39197167_gold.jpg http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  37. The Wizard of Oz Wicked Witch of the East (WWE) • House lands on and kills • = Eastern business interests, Grover Cleveland • Silver shoes put on Dorothy http://www.babygadget.net/pics/silver-shoes.jpg http://www.physicsdaily.com/physics/Grover_Cleveland

  38. The Wizard of Oz Yellow Brick Road? • = Gold Emerald City? • Washington DC http://www.lonelyplanet.com/maps/north-america/usa/washington-dc/map_of_washington-dc.jpg http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  39. The Wizard of Oz Scarecrow needs? • Appear brainless, but smart • = western farmers http://www.flickr.com/photos/farlane/3791930988/in/set-72157601329141029/ http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  40. The Wizard of Oz Tin Woodman needs? • Once flesh and blood; needs bigger, kinder heart • = industrial workers http://www.uni.edu/schneidj/webquests/adayinthelife/lotsofworkers.jpg http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  41. The Wizard of Oz Cowardly Lion needs? • = WJB • Stopped fighting for silver • Fell asleep in….? • Poppy Fields = Imperialism http://www.old-picture.com/american-history-1900-1930s/pictures/Jennings-William-Jennings.jpg http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  42. The Wizard of Oz Travel to Emerald City? • = Coxey’s march to DC for job in 1894 Emerald Palace? • = White House • Seven passages & three flights of stairs? • = Crime of ‘73 http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html http://blogs.ancestry.com/circle/wp-content/uploads/2008/08/Coxeys%20Army.bmp http://www.destination360.com/north-america/us/washington-dc/white-house

  43. The Wizard of Oz Dorothy and Friends must? • Kill Wicked Witch of the West • WWW = McKinley Fate of WWW? • Melts with water • Farmers in West need rain to counter drought • Rain = inflation http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html http://4.bp.blogspot.com/_RMIeFF2Drjg/Snn9B2F1yNI/AAAAAAAABR8/62cVVZGoBUM/s400/Mckinley.jpg

  44. The Wizard of Oz The Wizard? • = Marcus Alonzo Hanna, an advisor to McKinley & head of RNC www.nndb.com/people/013/000101707/ http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  45. The Wizard of Oz Wizard turns out to be ordinary Gang seeks help from Good Witch of the South • = supporters in South • problems are fixed • Dorothy uses silver shoes to return to Kansas http://www.starpulse.com/Movies/Wizard_Of_Oz,_The/gallery/WIZARDOZ007/ http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

  46. How did we do? SWBAT… • Identify and explain basic micro and macro economic ideas • Apply these ideas to explain and analyze the Populist and Free Silver movements of the 1890s • Examine The Wizard of Oz as a Monetary Allegory http://bigpicture.typepad.com/comments/images/2008/07/14/inflation_recession_alligator.jpg

  47. I think the Wizard of Oz accurately reflects the people and issues of the 1890s. • 1- Strongly disagree • 2- Disagree • 3- Agree • 4- Strongly agree

  48. I understand the economics behind Populism and Free Silver. • 1- Strongly disagree • 2- Disagree • 3- Agree • 4- Strongly agree

  49. Thanks and have a great day! http://thefedorachronicles.com/hollywood/Movies/WizardofOz.html

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