In the aftermath of Haymarket, the Knights’ cooperative vision did not entirely fade. A new rural movement, the Farmers’ Alliance, arose to take up many of the issues that Grangers and Greenbackers had earlier sought to address. Founded in Texas during the depression of the 1870s, the Farmers’ Alliance spread across the plains states and the South, becoming by the late 1880s the largest farmer-based movement in American history. A separate Colored Farmers’ Alliance arose to represent rural African Americans. The harsh conditions farmers were enduring — including drought in the West and plunging global prices for corn, cotton, and wheat — intensified the movement’s appeal. Traveling Alliance lecturers exhorted farmers to “stand as a great conservative body against… the growing corruption of wealth and power.”

Like earlier movements, Alliance leaders pinned their initial hopes on cooperative stores and exchanges that would circumvent middlemen. Cooperatives gathered farmers’ orders and bought in bulk at wholesale prices, passing the savings along. Alliance cooperatives achieved notable victories in the late 1880s. The Dakota Alliance, for example, offered members cheap hail insurance and low prices on machinery and farm supplies. The Texas Alliance established a huge cooperative enterprise to market cotton and provide farmers with cheap loans. When cotton prices fell further in 1891, however, the Texas exchange failed. Other cooperatives also suffered from chronic underfunding and lack of credit, and they faced hostility from merchants and lenders they tried to circumvent.

The Texas Farmers’ Alliance thus proposed a federal price-support system for farm products, modeled on the national banks. Under this plan, the federal government would hold crops in public warehouses and issue loans on their value until they could be profitably sold. When Democrats — still wary of big-government schemes — declared the idea too radical, Alliances in Texas, Kansas, South Dakota, and elsewhere decided to create a new political party, the Populists. In this venture, the Alliance cooperated with the weakened Knights of Labor, seeking to use rural voters’ substantial clout on behalf of urban workers who shared their vision.

By this time, farmer-labor coalitions had made a considerable impact on state politics. But state laws and commissions were proving ineffective against corporations of national and even global scope. It was difficult for Wisconsin, for instance, to enforce new laws against a railroad company whose lines might stretch from Chicago to Seattle and whose corporate headquarters might be in Minnesota. Militant farmers and labor advocates demanded federal action.

In 1887, responding to this pressure, Congress and President Grover Cleveland passed two landmark laws. The Hatch Act provided federal funding for agricultural research and education, meeting farmers’ demands for government aid to agriculture. The Interstate Commerce Act counteracted a Supreme Court decision of the previous year, Wabash v. Illinois (1886), that had struck down states’ authority to regulate railroads. The act created the Interstate Commerce Commission (ICC), charged with investigating interstate shipping, forcing railroads to make their rates public, and suing in court when necessary to make companies reduce “unjust or unreasonable” rates.

Though creation of the ICC was a direct response to farmer-labor demands, its final form represented a compromise. Radical leaders wanted Congress to establish a direct set of rules under which railroads must operate. If a railroad did not comply, any citizen could take the company to court; if the new rules triggered bankruptcy, the railroad could convert to public ownership. But getting such a plan through Congress proved impossible. Lawmakers more sympathetic to business called instead for an expert commission to oversee the railroad industry. In a pattern that repeated frequently over the next few decades, the commission model proved more acceptable to the majority of congressmen.

The ICC faced formidable challenges. Though the new law forbade railroads from reaching secret rate-setting agreements, evidence was difficult to gather and secret “pooling” continued. A hostile Supreme Court also undermined the commission’s powers. In a series of sixteen decisions over the two decades after the ICC was created, the Court sided with railroads fifteen times. The justices delivered a particularly hard blow in 1897 when they ruled that the ICC had no power to interfere with shipping rates. Nonetheless, the ICC’s existence was a major achievement. In the early twentieth century, Congress would strengthen the commission’s powers, and the ICC would become one of the most powerful federal agencies charged with overseeing private business.