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NARRATOR: In the decades after the Civil War, big business threatened to wipe out the small farmer. Corporations bought and consolidated family farms and introduced mechanized production that smaller producers could not afford.

JOHN STEELE GORDON: The effect of the mechanization of agriculture was very profound. I mean, starting with McCormick's reaper and then with a whole series of agricultural machinery that made it much more efficient in terms of labor. In 1800, about 85% of the American workforce was involved in agriculture. By 1900, it was down to 50%.

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NARRATOR: To fight corporate consolidation, small farmers formed their own associations, such as the Grangers and the Farmers' Alliance.

STEVEN HAHN: The Farmers' Alliance attempts to mobilize white farmers, not only in the South but in the plains as well, to try to get higher prices for their crops and lower prices for supplies that they need to get. They feel that the market system as it exists is disadvantaging them.

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NARRATOR: In 1890, representatives of the Farmers' Alliance met in Ocala, Florida, proposing political and economic reforms that became known as the "Ocala Demands." Their main demand, easier access to cheap credit. Because of the nature of the farming business, farmers were usually in debt. Farmers wanted to abolish big national banks and replace them with regional branches of the US Treasury called "subtreasuries."

The subtreasuries would lend money below market interest rates, allowing farmers to make a better profit. They also demanded what they called "free silver," a policy allowing the unlimited coining of silver dollars to expand the money supply. The policy was inflationary. But since most farmers were in debt, they wanted an inflationary monetary policy.

STEVEN HAHN: If you're in debt, inflation's good for you because you can pay back the debt with cheaper dollars. And therefore, your ability to negotiate the economy and to keep your head above water would be improved.

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NARRATOR: The farmers also proposed federal regulation of the railroads to reduce the cost of transporting their farm products to market, and they call for a graduated income tax to ease the burden on the poor and the middle classes. These issues were the core of the new Populist Party that formed to further the proposals of the Farmers' Alliance. The Populists had little success in national elections, but many of their issues would eventually be adopted by the Democratic party.

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