In some states a Grange movement developed; it managed to get laws passed to help farmers. But the Grange, as one of its newspapers put it, "is essentially conservative and furnishes a stable, well- organized, rational and orderly opposition to encroachments upon the liberties of the people, in contrast to the lawless, desperate attempts of communism." It was a time of crisis, and the Grange was doing too little. It lost members, while the Farmers Alliance kept growing.

From the beginning, the Farmers Alliance showed sympathy with the growing labor movement. When Knights of Labor men went on strike against a steamship line in Galveston, Texas, one of the radical leaders of the Texas Alliance, William Lamb, spoke for many (but not all) Alliance members when he said in an open letter to Alliance people: "Knowing that the day is not far distant when the Farmers Alliance will have to use Boycott on manufacturers in order to get goods direct, we think it is a good time to help the Knights of Labor.…" Goodwyn says: "Alliance radicalism- Populism-began with this letter."

The Texas Alliance president opposed joining the boycott, but a group of Alliance people in Texas passed a resolution:

Whereas we see the unjust encroachments that the capitalists are making upon all the different departments of labor… we extend to the Knights of Labor our hearty sympathy in their manly struggle against monopolistic oppression and… we propose to stand by the Knights.

In the summer of 1886, in the town of Cleburne, near Dallas, the Alliance gathered and drew up what came to be known as the "Cleburne Demands"-the first document of the Populist movement, asking "such legislation as shall secure to our people freedom from the onerous and shameful abuses that the industrial classes are now suffering at the hands of arrogant capitalists and powerful corporations." They called for a national conference of all labor organizations "to discuss such measures as may be of interest to the laboring classes," and proposed regulation of railroad rates, heavy taxation of land held only for speculative purposes, and an increase in the money supply.

The Alliance kept growing. By early 1887, it had 200,000 members in three thousand suballiances. By 1892 farmer lecturers had gone into forty-three states and reached 2 million farm families in what Goodwyn calls "the most massive organizing drive by any citizen institution of nineteenth century America," It was a drive based on the idea of cooperation, of farmers creating their own culture, their own political parties, gaining a respect not given them by the nation's powerful industrial and political leaders.

Organizers from Texas came to Georgia to form alliances, and in three years Georgia had 100,000 members in 134 of the 137 counties. In Tennessee, there were soon 125,000 members and 3,600 suballiances in ninety-two of the state's ninety-six counties. The Alliance moved into Mississippi "like a cyclone," someone said, and into Louisiana and North Carolina. Then northward into Kansas and the Dakotas, where thirty-five cooperative warehouses were set up.

One of the leading figures in Kansas was Henry Vincent, who started a journal in 1886 called The American Nonconformist and Kansas Industrial Liberator, saying in the first issue:

This journal will aim to publish such matter as will tend to the education of the laboring classes, the farmers and the producer, and in every struggle it will endeavor to take the side of the oppressed as against the oppressor…

By 1889, the Kansas Alliance had fifty thousand members and was electing local candidates to office.

Now there were 400,000 members in the National Farmers Alliance. And the conditions spurring the Alliance onward got worse. Corn which had brought 45 cents a bushel in 1870 brought 10 cents a bushel in 1889. Harvesting wheat required a machine to bind the wheat before it became too dry, and this cost several hundred dollars, which the farmer had to buy on credit, knowing the $200 would be twice as hard to get in a few years. Then he had pay a bushel of corn in freight costs for every bushel he shipped. He had to pay the high prices demanded by the grain elevators at the terminals. In the South the situation was worse than anywhere-90 percent of the farmers lived on credit.

To meet this situation, the Texas Alliance formed a statewide cooperative, a great Texas Exchange, which handled the selling of the farmers' cotton in one great transaction. But the Exchange itself needed loans to advance credit to its members; the banks refused. A call was issued to farmers to scrape together the needed capital for the Exchange to operate. Thousands came on June 9, 1888, to two hundred Texas courthouses and made their contributions, pledging $200,000. Ultimately, $80,000 was actually collected. It was not enough. The farmers' poverty prevented them from helping themselves. The banks won, and this persuaded the Alliances that monetary reform was crucial.

There was one victory along the way. Farmers were being charged too much for jute bags (to put cotton in), which were controlled by a trust. The Alliance farmers organized a boycott of jute, made their own bags out of cotton, and forced the jute manufacturers to start selling their bags at 5 cents a yard instead of 14 cents.

The complexity of Populist belief was shown in one of its important leaders in Texas, Charles Macune. He was a radical in economics (antitrust, and capitalist), a conservative in politics (against a new party independent of the Democrats), and a racist. Macune came forward with a plan that was to become central to the Populist platform-the sub-Treasury plan. The government would have its own warehouses where farmers would store produce and get certificates from this sub-Treasury. These would be greenbacks, and thus much more currency would be made available, not dependent on gold or silver, but based on the amount of farm produce.

There were more Alliance experiments. In the Dakotas, a great cooperative insurance plan for farmers insured them against loss of their crops. Where the big insurance companies had asked 50 cents an acre, the cooperative asked 25 cents or less. It issued thirty thousand policies, covering 2 million acres.

Macune's sub-Treasury plan depended on the government. And since it would not be taken up by the two major parties, it meant (against Macune's own beliefs) organizing a third party. The Alliances went to work. In 1890 thirty-eight Alliance people were elected to Congress. In the South, the Alliance elected governors in Georgia and Texas. It took over the Democratic party in Georgia and won three-fourths of the seats in the Georgia legislature, six of Georgia's ten congressmen.

This was, however, Goodwyn says, "an elusive revolution, because the party machinery remained in the hands of the old crowd, and the crucial chairmanships of important committees, in Congress, in the state legislatures, remained in the hands of the conservatives, and corporate power, in the states, in the nation, could use its money to still get what it wanted."

The Alliances were not getting real power, but they were spreading new ideas and a new spirit. Now, as a political party, they became the People's party (or Populist party), and met in convention in 1890 in Topeka, Kansas. The great Populist orator from that state, Mary Ellen Lease, told an enthusiastic crowd:

Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street and for Wall Street… Our laws are the output of a system which clothes rascals in robes and honesty in rags.… the politicians said we suffered from overproduction. Overproduction, when 10,000 little children… starve to death every year in the U.S. and over 100,000 shop girls in New York are forced to sell their virtue for bread.,…