Demands for Reform

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Demands for Reform

• Chapter 19 Section 3

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I. Monopolies Use Unfair Tactics

• In the late 1800s, large companies that operated
  in Texas joined together and formed trusts.
• These trusts
• helped to prevent other companies from selling
  the same product or service
• reduced or eliminated competition and free trade
  
• Could hold a monopoly on a business, which
  allowed them to pay very low prices for materials
  they bought and charge very high prices for the
  goods they sold huge profits.
• Overall, companies formed trusts to ensure their
  business partners would have control over an
  industry.

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II. Farmers Become Trapped in a Cycle of Debt

• Farmers worried about shrinking profits received
  from their crops.
• Farmers found themselves in a cycle of debt they
  could not get out of.
• How did the cycle of debt run?

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The Cycle of Debt

• 1. Cotton prices fell during 1875 and remained
  low through 1900.
• 2. To offset the drop in prices, farmers borrowed
  extra money to buy more land, equipment, seed,
  and other supplies to produce more crops
  overproduction.
• 3. This overproduction dropped the price of
  cotton even more.
• 4. With lower crop prices and increased debts
  from land/equipment/seed purchases, many farmers
  could not get out of the cycle of debt. They
  must produce more and more crops to try to pay
  debts and make profits.

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Casualty of Commercial Farming

• The rise of commercial farming in the lower Rio
  Grande Valley resulted in displacement of Mexican
  American landowners.

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Advancements in Agricultural Industries

• Barbed Wire fencing that prevented cattle and
  other animals from destroying crops
• Windmills allowed cattle, sheep, goats, and
  crops to be watered on a farmers land, they did
  not have to be near a river or water source
• Irrigation is an artificial application of
  water to the soil usually used to assist the
  growing of crops in dry areas and during period
  of inadequate rainfall

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IV. New Laws Prohibits Trusts

• 1889 - TX legislature passed antitrust laws
  stopping companies from joining together to fix
  prices or limit production.
• Main reason for antitrust laws - unfair business
  practices by railroads.
• The law often has been used to prevent unfair
  practices.

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IV. New Laws Prohibits Trusts

• In 1887, the U.S. Congress created the Interstate
  Commerce Commission (ICC). The ICC set rules for
  interstate railroads that connected two or more
  states.
• As an authority to control intrastate railroads
  was also needed. Intrastate shipments went from
  one part of the state to another.

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V. Governor Hogg Regulates the Railroads

• At the request of Governor James S. Hogg in 1891,
  the legislature created the Texas Railroad
  Commission, a state agency to regulate railroads
  operating in Texas.
• Soon, many railroads ceased unfair practices,
  such as fixing prices and charging more for short
  hauls than for long hauls.

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V. Governor Hogg Regulates the Railroads

• Since then, the Railroad Commission has been
  expanded to regulate other industries,
  particularly the oil industry.
• Governor Hogg is remembered as one of Texass
  most important governors, in part, because of his
  establishment of the Texas Railroad Commission.

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Economic Impact of the Agricultural Industry

• Products were moved, sold, and transported across
  the nation
• New cash crops were grown in Texas (ex wheat,
  sorghum)
• Cotton and corn grown across the state
• Crops affect inflation
• Income from agriculture exceeded income from
  cattle ranching by 1900s