20 THE GRANGER MOVEMENT 



farmer who had met with reverses or who wished to make im- 

 provements or purchase additional land was obliged to apply 

 for loans. The agent did not furnish the money himself but 

 procured it from eastern capitalists and loaned it to the farmer 

 on a mortgage at usurious rates of interest, after charging a 

 commission at both ends of the deal. 1 



That the disturbed state of the currency, due to inflation 

 during the war, was a cause of financial depression among the 

 agricultural classes and especially of the high rates of interest, 

 seems probable; however that may have been, it is evident 

 that the currency situation was detrimental to the welfare of 

 the farmer in various ways. The agricultural products of the 

 country, always in excess of home consumption, were obliged 

 to seek markets abroad, and this sale of the surplus in the world 

 market also fixed prices at home; but these sales abroad had 

 to be made in the standard gold and silver currency of the world, 

 while all purchases of supplies were made in a depreciated paper 

 currency, and there was sure to be more or less leakage in the 

 process of changing from one to the other. 2 The farmer also 

 suffered from the fluctuations resulting from the unstable con- 

 dition of the currency and the accompanying speculation, but 

 the most serious injury came from the rise in value of the cur- 

 rency, as measured in gold, during the period from 1865 to the 

 resumption of specie payments in 1879. As has already been 

 noted, a large part of the agricultural population was in debt 

 from one cause or another and most of these debts, contracted 

 in greatly depreciated currency, had to be paid with money 

 worth from fifteen to twenty per cent more than the actual 

 value of that which had been borrowed. 3 These financial 

 burdens were little noticed during the six or seven years of 

 prosperity immediately following the war, but the panic of 



1 Nation, xxv. 282 (November 8, 1877); W. A. Peffer, The Farmer's Side, 34-42, 

 68-86; J. R. Elliot, American Farms, 45-52. 



2 Flagg, in American Social Science Journal, vi. 114 (July, 1874). 



3 Nation, xvi. 381 (June 5, 1873); Peffer, The Farmer's Side, 67-115; Carr, 

 Patrons of Husbandry, 392-428; Flagg, in American Social Science Journal, 

 vi. 111-113 (J u ly> 1874); Rhodes, History of the United States, vii. 53-73; D. R. 

 Dewey, Financial History of the United States, 292-298, 342, 344-352, 357. 



