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Rh organizations designed to promote the farmers' interests. The most influential of these organizations was the Patrons of Husbandry, which was founded in 1867 and spread chiefly after 1872 by local clubs or “granges,” especially in the West and South.

321. The height of the movement was reached in the autumn of 1874, It threatened the disruption of the old political parties

in most of the Middle Western states. By holding the balance of power the Grangers secured legislation in many of these states, fixed maximum railway rates, and provided for regulation through commissions to prevent discriminations. In the reaction after the panic of 1873 (when nearly a fifth of the railway mileage of the United States had passed into the hands of receivers) many of the “Granger laws” were repealed, the regulation was rendered nominal and the railways more than regained their political power in the states; yet the agitation had established the important principle, sanctioned by decisions of the Supreme Court, that the railways were common carriers subject fully to public regulation so far as it was not confiscatory. The movement for regulation of interstate commerce by congressional legislation was begun at this time under the leadership of congressmen from the Granger states. Later efforts were more wisely considered and more effective; but the rural democracy showed its opposition to the increasing political influence of capital, to special privileges and to the attempts of corporations to avoid public control periodically thereafter (see ). The attempt to eliminate the middlemen by co-operative stores and grain elevators was another feature of the time which gained a brief strength but soon declined.

322. The presidential election of 1872 took place in the midst of this Western upheaval. At the same time in the South the

reform Republicans and Democrats were uniting under the name of “Conservatives” against the carpet-bag rule, and control was passing into their hands. A reform movement was active against the evident corruption in national and municipal administrations, for Grant's trust in his appointees was grossly violated. The Tweed Ring was systematically looting New York City, and prior to Tweed's indictment in 1871 (See ; ; ) it was acquiring large power in state legislation. Jay Gould, the railway operator, was one of the signers of Tweed's million dollar bail bond. Civil service reformers, men of moderate views with respect to Reconstruction, such as Carl Schurz, many War Democrats who had adhered to the Union party, and tariff reformers began to break away.

323. The Liberal-Republican movement started in Missouri, and a national convention was called to meet at Cincinnati on

the first of May 1872. Their platform announced irreconcilable differences on the tariff and left it to the Congressional districts, attacked the corruption of civil service by the administration, supported the results of the war as embodied in the last three amendments and demanded amnesty and local civil government for the South. It opposed further land grants to railways, but denounced repudiation and demanded specie payments in terms which excluded from its support the advocates of inflation of the currency. This effort to combine the opponents of Grant's administration was wrecked by the nomination of Horace Greeley, a strong protectionist, who did not command the confidence of the masses of the disaffected. Although endorsed by the

Democrats, Greeley was defeated by Grant, who ran on the record of the Republican party, which now dropped the word Union from its name. Greeley died before the electoral count; the Democrats won only the states of Maryland, Kentucky, Missouri, Tennessee, Georgia and Texas, the votes of Louisiana and Arkansas being thrown out.

324. The enormous cost of the war, the excessive railway building, over-trading, and inflated credit and fluctuating currency, the sinking of capital in opening new farming lands and in readjusting manufactures to new conditions brought their results in the panic of 1873, precipitated by the failure (Sept. 18) of Jay Cooke, the financier of the Northern Pacific railway. For over

five years the nation underwent a drastic purgation; railway building almost ceased, and so late as 1877 over 18% of the

railway mileage of the nation was in the hands of receivers. The iron industry was prostrated, and mercantile failures for four years amounted to $775,000,000. At the close of the period there was a replacement of partnerships and individual businesses by corporations, but in the interval political unrest was in the foreground.

325. The charges that congressmen had been bribed by stock in the (q.v.), a construction company

controlled by Union Pacific stockholders, led to a congressional investigation which damaged the reputations of prominent Republicans, including Vice-president Schuyler Colfax; but the same Congress which investigated this scandal voted itself retroactive increases of salary, and this “back-pay grab” created popular indignation. Evidences of fraud and corruption in revenue collection under the “moiety system,” and the general demoralization of the civil service continued. The demand for relief from the stringency of the crisis of 1873 expressed itself in the so-called Inflation Bill (passed April 1874), providing a maximum of four hundred million dollars for greenback issues. This was vetoed by Grant, but he later signed a bill accepting as a maximum the existing greenback circulation of $382,000,000. This compromise was satisfactory neither to contractionists nor greenbackers. The latter especially resented the provisions regarding the national banks and their circulation.

326. The “tidal wave” in the Congressional elections of 1874 was the result of these conditions. It marked a political

revolution. The House of Representatives, which exhibited a two-thirds Republican majority in 1872, showed an opposition majority of about seventy, and the Senate was soon to be close. Such Republican strongholds as Pennsylvania, Ohio and Massachusetts went over to the Democrats in the state elections, while in the grain-raising states of the Middle West the Grangers were holding the balance of power, and in the South the Republican radicals remained in force in few states and only by the use of Federal troops. President Grant in his message of December 1874 acknowledged that public opinion was opposed to this use of force, but declared that without it negro suffrage would be worse than a mockery. Thus by the year 1874 the era of triumphant Republicanism and Reconstruction was closing. The leaders perceiving power about to pass from them rapidly enacted a series of party measures before the meeting of the newly elected Congress. Under the leadership of Senator John Sherman an act was passed (Jan. 14, 1875) providing for resumption of specie payments on the 1st of January 1879, gradually contracting greenbacks to three hundred million dollars and compensating this by expanding the circulation of the national banks. Sherman's personal preference was to make the greenbacks exchangeable for 4% bonds and thus to make the general public instead of the banking houses the purchasers of these securities, but he was unable to convince his colleagues. In the field of the tariff a similar policy was followed. The act of 1870 had somewhat reduced duties on tea, coffee, sugar and iron; but under Western pressure in 1872 the Republican, Congress had consented to a 10% reduction on most classes of goods in order to save the

general system of protection. On the eve of their relinquishment of full power the Republicans (March 3, 1875) repealed the Tariff Act of 1872, increased the duties on molasses and sugar and increased the revenue tax on tobacco and spirits. Thus the tariff was restored to the war basis, before the incoming Democratic House could block the advance. Similarly on the 1st of March

Congress passed a Civil Rights Act, milder than the measure for which Sumner had fought so long, guaranteeing equal rights to the negroes in hotels, public conveyances, and places of amusement and forbidding the exclusion of them from juries. But an effort to pass a new force bill levelled against the intimidation of negro voters failed. By these measures the Republicans placed the