credit to alleviate these woes. Although most of the farms resulting from The Homestead Act were settled after 1890, western expansion was critical in the Populist movement. Western farmers were especially susceptible to large transaction costs that resulted from shipping their product to far away markets. Making matters worse was a drop in prices that strangled all profits. An example of how the changing nature of American markets affected prices, wheat dropped from an 1870 price of $1.06 a bushel to a meager 63 cents in 1897. As farm debt grew and many lost their farms or were threatened with foreclosure, the American farmer began to feel squeezed by the new economy and soon felt resentment toward the railroads, the middlemen and the banks. The farmers relied on equipment that was very expensive to pay off at prices bordering on usury. The problem was compounded by the drop in farm prices and the sense, correctly in this case, that other sectors were benefiting from the capital rules of the eastern bankers while the farmer was left to die on the vine. The yeoman farmer of the west, however, would not go down without a fight.Although disenfranchised groups are notorious for the free-rider problems that choke collective action movements, a disparate group of reformers came together to form a powerful coalition. Incorporating both the Grangers and the Greenbacks, the Populist movement, in 1892, met in Omaha to draft a platform that would codify for the nation their demands as a party. The Populist platform of 1892which met in Omaha on July 4demanded, among other things, the free and unlimited coinage of silver at the ratio of 16-1; government ownership and operation of railroads and the telephone, telegraph, and postal systems; prohibition of the alien ownership of land; restriction of immigration; and, presciently, a graduated income tax. After nominating James B. Weaver of Iowa for President, the movement generated over one mi...
