farmers versus merchants and bankers -- 1/2/24

Today's encore selection -- from American Bonds: How Credit Shaped a Nation by Sarah L. Quinn. Many farmers in the late 1800s were effectively reduced to debt peonage -- they could only borrow from a local bank that charged what they deemed to be exorbitant rates, they could only buy supplies from local merchants who also charged what they deemed to be excessive prices, and they could only ship their produce via a railway at what they deemed to be monopolistic rates. The only solution seemed to be organizing into “alliances” in order to gain more favorable terms for credit and supplies:

“Their efforts regularly met with backlash from local lenders and stores who wanted to preserve the existing system of crop liens and share­cropping. If a local Alliance organized a coop to buy specific farm supplies, for example, local merchants might refuse to conduct any business with known members. There were banks that refused to lend money to Alliance members, warehouses that refused to store Alliance goods, and towns that passed special taxes on Alliance trade.

"For farmers organized in the Colored Alliance, anti-Alliance backlash was particularly brutal, as the Leflore County Massacre Illustrates. In 1880, a black organizer in Mississippi named Oliver Cromwell established a local chapter of the Colored Alliance and initiated a boycott of local merchants, directing members to shop at an Alliance store in a nearby town. When white merchants threatened retaliation, local black community members rallied in Cromwell's defense. The town erupted in violence. The National Guard, called in to impose order, arrested 40 local black men and turned them over to a local white posse. When the National Guard left, an armed mob terrorized the countryside. The history of the massacre remains shrouded in mystery -- it was purposely not recorded in the county news, and a journalist who later went to investigate found locals too terrified to speak of it -- but one scholar has estimated the number of dead at 25, and there were reports at the time that the mob killed up to 100 people, including women and children. After the massacre, local white planters issued a notice against the Colored Alliance's plans to 'corrupt Negroes to further their intentions and selfish motives' and refused to sell goods to any members of the Colored Alliance. A nearby distributor of an Alliance newsletter was warned not to distribute further materials in the area.

"For white Alliance members, who did not face the equivalent terrors of lynch mobs and massacres, the escalating series of backlashes had a radicalizing effect. Schwartz contends that the more local merchants and landlords fought the cooperatives, the more members saw that combating the entire oppressive system of credit, purchases, sales, and distribution was the only way to uplift farmers. Farmers began to think that if the Alliance was to break the system of debt peonage, they needed to create not just cooperative stores, but an entirely new system of credit and distribution to support it."



Sarah L. Quinn


American Bonds: How Credit Shaped a Nation


Princeton University Press


Copyright 2019 Princeton University Press


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