Capital and Labor
A constitutional convention was called in 1875 to rewrite the 1869 constitution, a hated vestige of Radical Republican rule.
Every avenue to cutting spending at any level of government was explored. Salaries of public officials were slashed. The number of offices was reduced. Judgeships, along with most other offices, were made elective rather than appointive.
The state road program was curtailed, and the immigration bureau was eliminated.
Perhaps the worst change was the destruction of the statewide school system. The new charter created a “community system” without a power of taxation, and schools were segregated by race.
Despite the basic reactionary character, the new constitution also was visionary. Following the lead of several other states, the Democrats declared railroads to be common carriers and subject to regulation.
To meet the dual challenge of lawlessness and Indian insurrection, Gov. Coke in 1874 re-established the Texas Rangers.
While cowboys and cattle drives are romantic subjects for movies on the Texas of this period, the fact is that the simple cotton farmer was the backbone of the state’s economy.
But neither the farmer nor the cattleman prospered throughout the last quarter of the 19th century. At the root of their problems was federal monetary policy and the lingering effects of the Civil War.
Although the issuance of paper money had brought about a business boom in the Union during the war, inflation also increased. Silver was demonetized in 1873. Congress passed the Specie Resumption Act in 1875 that returned the nation to the gold standard in 1879. Almost immediately a contraction in currency began. Between 1873 and 1891, the amount of national bank notes in circulation declined from $339 million to $168 million.
The reduction in the money supply was devastating in the defeated South. Land values plummeted. In 1870, Texas land was valued at an average of $2.62 an acre, compared with the national average of $18.26 an acre. With the money supply declining and the national economy growing, farm prices dropped. In 1870, a bushel of wheat brought $1. In the 1890s, wheat was 60 cents a bushel. Except for a brief spurt in the early 1880s, cattle prices followed those of crops.
Between 1880 and 1890, the number of farms in Texas doubled, but the number of tenants tripled. By 1900, almost half the state’s farmers were tenants.
The much-criticized crop-lien system was developed following the war to meet credit needs of the small farmers. Merchants would extend credit to farmers through the year in exchange for liens on their crops. But the result of the crop-lien system, particularly when small farmers did not have enough acreage to operate efficiently, was a state of continual debt and despair.
The work ethic held that a man would benefit from his toil. When this apparently failed, farmers looked to the monetary system and the railroads as the causes. Their discontent hence became the source of the agrarian revolt that developed in the 1880s and 1890s.
The entry of the Texas & Pacific and the Missouri-Kansas-Texas railroads from the northeast changed trade patterns in the state.
Since the days of the Republic, trade generally had flowed to Gulf ports, primarily Galveston. Jefferson in Northeast Texas served as a gateway to the Mississippi River, but it never carried the volume of trade that was common at Galveston.
The earliest railroad systems in the state also were centered around Houston and Galveston, again directing trade southward. With the T&P and Katy lines, North Texas had direct access to markets in St. Louis and the East.
Problems developed with the railroads, however. In 1882, Jay Gould and Collis P. Huntington, owner of the Southern Pacific, entered into a secret agreement that amounted to creation of a monopoly of rail service in Texas. They agreed to stop competitive track extensions; to divide under a pooling arrangement freight moving from New Orleans and El Paso; to purchase all competing railroads in Texas; and to share the track between Sierra Blanca and El Paso.
The Legislature made weak attempts to regulate railroads, as provided by the state constitution. Gould thwarted an attempt to create a commission to regulate the railroads in 1881 with a visit to the state during the Legislature’s debate.
The railroad tycoon subdued the lawmakers’ interest with thinly disguised threats that capital would abandon Texas if the state interfered with railroad business.
As the 19th century closed, Texas remained an agricultural state. But the industrial base was growing. Between 1870 and 1900, the per capita value of manufactured goods in the United States rose from $109 to $171. In Texas, these per capita values increased from $14 to $39, but manufacturing values in Texas industry still were only one-half of annual agricultural values.
In 1886, a new breed of Texas politician appeared. James Stephen Hogg was not a Confederate veteran, and he was not tied to party policies of the past.
As a reform-minded attorney general, Hogg had actively enforced the state’s few railroad regulatory laws. With farmers’ support, Hogg was elected governor in 1890, and at the same time, a debate on the constitutionality of a railroad commission was settled when voters amended the constitution to provide for one. The reform mood of the state was evident. Voters returned only 22 of the 106 members of the Texas House in 1890.
Despite his reputation as a reformer, Hogg accepted the growing use of Jim Crow laws to limit blacks’ access to public services. In 1891, the Legislature responded to public demands and required railroads to provide separate accommodations for blacks and whites.
The stage was being set for one of the major political campaigns in Texas history, however. Farmers did not think that Hogg had gone far enough in his reform program, and they were distressed that Hogg had not appointed a farmer to the railroad commission. Many began to look elsewhere for the solutions to their problems. The People’s Party in Texas was formed in August 1891.
The 1892 general election was one of the most spirited in the state’s history. Gov. Hogg’s supporters shut conservative Democrats out of the convention in Houston, so the conservatives bolted and nominated railroad attorney George Clark for governor.
The People’s Party, or Populists, for the first time had a presidential candidate, James Weaver, and a gubernatorial candidate, T.L. Nugent.
Texas Republicans also broke ranks. The party’s strength centered in the black vote. After the death of former Gov. E.J. Davis in 1883, Norris Wright Cuney, a black, was party leader. Cuney was considered one of the most astute politicians of the period, and he controlled federal patronage.
White Republicans revolted against the black leadership, and these “Lily-whites” nominated Andrew Jackson Houston, son of Sam Houston, for governor.
Black Republicans recognized that alone their strength was limited, and throughout the latter part of the 19th century, they practiced fusion politics, backing candidates of third parties when they deemed it appropriate. Cuney led the Republicans into a coalition with the conservative Democrats in 1892, backing George Clark.
The election also marked the first time major Democratic candidates courted the black vote. Gov. Hogg’s supporters organized black voter clubs, and the governor got about half of the black vote.
Black farmers were in a quandary. Their financial problems were the same as those small farmers who backed the Populists.
White Populists varied in their sympathy with the racial concerns of blacks. On the local level, some whites showed sympathy with black concerns about education, voting, and law enforcement. Black farmers also were reluctant to abandon the Republican Party because it was their only political base in Texas.
Hogg was re-elected in 1892 with a 43 percent plurality in a field of five candidates.
Populists continued to run well in state races until 1898. Historians have placed the beginning of the party’s demise in the 1896 presidential election in which national Populists fused with the Democrats and supported William Jennings Bryan.
Although the Populist philosophy lived on, the party declined in importance after 1898. Farmers remained active in politics, but most returned to the Democratic Party, which usurped many of the Populists’ issues.
— This multi-part narrative of Texas' past, from prehistoric times to 1980, is based on "A Concise History of Texas" by former Texas Almanac editor Mike Kingston. Mr. Kingston's history was published in the 1986–1987 edition of the Texas Almanac, which marked Texas' sesquicentennial. Robert Plocheck, associate editor of the Texas Almanac, edited and expanded Mr. Kingston's history.