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America's Debt to Populists

Stephen Mihm, an associate professor of history at the University of Georgia, is a contributor to the Bloomberg View. Follow him on Twitter at @smihm.
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Their high poll numbers notwithstanding, few people believe that Donald Trump, Ben Carson or Bernie Sanders will capture their parties’ nominations, much less win the general election. If these populists eventually fall by the wayside, will their early dominance of the race be remembered as more than a historical footnote?

At first glance, footnote status appears to have been the fate of many of their insurgent 19th-century predecessors: the men and women who ultimately formed the People’s Party, or Populists. These reformers made a concerted bid for the White House in 1896, nominating William Jennings Bryan. He was trounced by William McKinley, and the People’s Party soon vanished from the political scene.

But that may well be a shortsighted parallel. While the Populists evaporated after 1896, significant portions of their platform survived. A subsequent generation of reformers implemented many of the reforms that were deeply controversial when first proposed. The historian Charles Postel, who has written a sympathetic portrayal of the movement, put it well when he wrote, “By a turn of fate, Populism proved far more successful dead than alive.”

When the Populists met in 1892 and drafted what became known as the Omaha Platform, their demands contained a number of changes that never would come to pass. For example, they wanted silver to be a substantial component of the monetary supply. Instead, the U.S. adopted the gold standard in 1900. Likewise, they demanded that the nation’s telegraph, telephone and railroad networks be nationalized. Nothing of the sort happened, unless you count the creation of Amtrak in 1971.

But many other Populist proposals were later reincarnated in altered form.

The party’s Omaha Platform contained the idea of a graduated income tax to replace the protective tariffs that had long served as the federal government’s main source of revenue. The reaction in much of the mainstream press was hostile and contemptuous. In 1895, the Chicago Tribune denounced the plans of the “scatterbrain Kansas Populists” to “levy a graduated income tax,” which it said would be designed for “the purpose of confiscating large incomes speedily.”

That was the consensus in the 1890s, and although Populists and their allies in the Democratic Party managed to secure the passage of an income tax in 1894, the Supreme Court declared it unconstitutional the following year.  

But the idea never died. In 1913, after a series of state-level battles, the U.S. ratified the 16th Amendment, legalizing the income tax. Congress passed the Revenue Act of 1913. The same legislation also implemented another plank of the Populist Party, and significantly reduced tariff duties.

That was hardly the Populist Party’s only accomplishment from beyond the grave. One of its hobbyhorses was reform of the political process: they advocated for women’s suffrage; the adoption of the “secret ballot,” to shield citizens from coercion at the voting booth; direct election of senators, and the use of statewide referendums and initiatives to settle vexed political questions. All of these became law after 1896.

And what of the Populist demand -- articulated in the Omaha Platform -- for a “national currency, safe, sound, and flexible, and issued by the general government only, a full legal tender, for all debts public and private”? It never came to pass as they imagined, but the Federal Reserve Act of 1913 arguably answered many of these demands, even if some of the surviving Populists -- like some of their present-day heirs -- viewed the Fed with suspicion.

“It is interesting to note,” the historian John Hicks wrote in 1931, “that since the Populists were condemned as lunatics for holding such views, legislation has been adopted that, while by no means going the full length of an irredeemable paper currency, does seek to accomplish the ends that the Populists hand in mind.” (In 1933, President Franklin D. Roosevelt went the rest of the way, taking the U.S. off the gold standard.)

The list goes on. The eight-hour workday? Populists demanded it in the 1890s; a new generation of reformers managed to secure the first federal legislation mandating an eight-hour-workday (for railroad workers) in the Adamson Act, passed in 1916, which paved the way for later, comprehensive laws stipulating an eight-hour workday.

Populists also pushed the creation of a system of government sub treasuries, or warehouses, where farmers could store their products -- and use them as collateral for loans -- while they awaited better prices. The idea went nowhere in the 1890s because it seemed like a radical expansion of the federal government. But in 1916, Congress passed the Warehouse Act, which implemented a remarkably similar system of storage facilities and provisions for loans to farmers.

Which brings us back to the politicians on the left and right now channeling the spirit of the Populists. None of them is likely to be making policy from the White House next year, but don’t be surprised if some of their more radical proposals one day become law.

(This is the last of two parts. Read Part 1.)

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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