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From Prosperity to Depression Part I: 1898-1914


From Prosperity to Depression, Part 1:  1898-1914

Iowans at the turn of the 20th C. were looking toward the future with confidence.  The United States had defeated Spain and acquired overseas holdings.  Gold discovered in Alaska was expanding the money supply and boosting the economy.  Iowa farmers were enjoying a period of prosperity that would become the benchmark—parity—the standard for comparing income from agriculture to that of manufacturing or labor.  Improvements in farm machinery, including the gasoline-powered tractor, were boosting productivity and reducing the dependence on human labor.  Telephones and electricity were transforming everyday life for those who had access to them.  There were even experimental automobiles that some predicted might even some day replace the horse.  And Iowans held powerful positions in Congress.  All in all, the 20th C. started off on a very good note in the Hawkeye State.

Historians have termed the first two decades of the new century “the Golden Age of American Agriculture”.  Improvements in farm technology were boosting output and reducing the costs of labor.  In 1892, John Froelich, a German-American farmer and inventor, successfully attached a gasoline engine to a farm implement that could go forward and in reverse.  Charles Hart and Charles Parr, two engineering students, started work on gasoline-powered equipment in Wisconsin but moved their operations to Charles City, Floyd Co., Iowa, in 1900, and two years later, sold their first machine.  In 1907, following a series of improvements, they coined the term “tractor”, and an invention that revolutionized farming got its name.  In 1915, the John Deere Company bought out the firm begun by Froelich and established a factory in Waterloo that would be come an economic powerhouse over the next century.

Improvements in field machinery came at an opportune time.  The demand for farm products was increasing with the rapid growth of eastern U.S. cities and overseas markets.  Factories in the cities were producing goods at record rates, bringing down the prices of things that farmers were buying.  According to one study, the value of the ten leading U.S. farm products rose 72% from 1899-1919 while a list of products the farmers were buying rose only 12%.

Not surprising, therefore, the value of Iowa farmland also saw an upward climb during these same years.  In Greene County, for example, an acre that sold for $36 in 1900 was worth $94 in 1910.  The value of all farm property, including land, buildings, equipment, and livestock, rose 130%.  At the same time, crop prices were also heading upward.  From 1900-1914, a bushel of corn doubled, from 30-cents to 60-cents.  With the decline in labor costs thanks to new equipment, more of that money stayed in the pockets of farm owners and operators. Even today, agriculture economists use the period from 1909-1914 to calculate “farm parity”, when labor and capital investments in farming returned the same yield as similar investments in labor or manufacturing.

Iowa enjoyed this period of relative prosperity but dark clouds were looming.  According to the Federal census, Iowa was the only state in the nation to lose population from 1900-1910.  The loss came from rural counties, 71 of which had fewer people in 1910 than ten years earlier.  Labor-saving equipment was reducing the need for hired hands.  At the same time, 28 counties, most of which had an urban center, gained in population.  The rural-to-urban trend continued through the next 50 years when half of all Iowans lived in cities. 

Another development that remained hidden at the time was that American farms, thanks to improvements that farmers were eager to adopt, was reaching a saturation point of what the market could absorb.  The rapid growth of eastern cities had created a huge domestic market, and farmers had gladly met that challenge.  But as urban growth began to level off while farm production continued to rise, the specter of farm surplus pushing down prices was lurking in the wings.  The onset of WWI created an immediate demand for farm products, but it was only temporary.  When the U.S. entered the war and made increased farm production a priority, farmers responded from both patriotic and economic motives.  When the war ended, so did the wartime price subsidies, but the increased production did not.  By 1920, the good times were over.

The early 20th C. also saw a growth in Iowa industry.  In the 19th C., lumber and coal mining had emerged early as leading industries as the Iowa pioneers built homes, barns, and fences, and fed coal into home stoves and railroad boilers.  With the development of a railroad system, farmers shipped cattle and hogs east to feed growing cities.  The invention of refrigerated cars greatly stimulated operations that packed the meat locally.  Ottumwa, Des Moines, Dubuque, and Sioux City opened major packing plants. 

In 1900, the five leading Iowa industries were meat packing, grain milling, lumber, carpentry and building, and railroad maintenance.  Most of those were heavily dependent on Iowa’s farming economy.  Twenty years later, it was a different picture in the manufacturing sector.  Meat packing and railroad maintenance were still among the top five, but newcomer categories included printing and publishing, machinery manufacture, and food processing.  Well-known products like Quaker Oats, Maytag washing machines, and Shaeffer pens were creating jobs for urban workers along with giants like John Deere.  Agriculture still dominated the Iowa economy, but several communities had significant numbers of factory workers.

Advances in farm equipment were not the only innovations of technology.  The decades before and after 1900 witnessed a revolution in daily life as new inventions rapidly found their way into Iowa homes.  Iowans were eager to take advantage of the new technologies. 

Telephone companies installed lines throughout the cities and revolutionized communication.  Callers connected with a “central” operator who sat in front of a panel with connections for everyone in the system.  The caller gave “central” the number of the person he or she was calling, and “central” plugged in the connection.  Central also became an informal contact point when there was an emergency call for a doctor or report of a fire. 

Rural residents devised their own telephone system.  They strung lines along fence rows or poles and provided a generator for the system.  Each phone had its own distinctive ring, a unique series of longs and shorts.  All phones would ring whenever any call was made, but only the home with the particular ring was supposed to answer.  However, since it was easy to listen in, “party lines” were notorious for eavesdropping on the affairs of neighbors.  The quality of the connections was also inferior to town phone lines

Automobiles began making their appearance in the Iowa landscape around 1900.  By 1905, there were 1,573 automobiles registered in the state, but because not all cars were registered, that number is undoubtedly low.  Four factors kept initial purchases low.  1) They were at first more of a plaything of the rich.  They might be good for short rides in the country, but owners often kept their buggies.  2) They were not reliable.  They broke down, needed frequent repairs, and the support services needed to maintain them was not in place. 3) Iowa roads were not in good condition. Spring muds or winter snows might keep roads impassable for weeks at a time, putting drivers at the mercy of near-by farmers to rescue stranded passengers.  4) Early automobiles were expensive.  In a 1904 magazine article listing the price of numerous models, over one-quarter cost over $4,000, and eight were over $6,000.  The latter figure was equivalent to the price of a 160-acre farm. 

In 1908, Henry Ford brought out the Model-T that overcame many of the original deficiencies of the auto.  It was reliable and it was affordable.  Thanks to Ford’s genius for mass production, its original $900 price tag dropped steadily until by 1926, it was selling for a little more than one-third of that cost.  It was the Model-T that put Iowa, and the nation, on wheels.  By 1917 in Greene County, Ford was capturing 57% of all new car sales.  No competitor reached even 20% of that total.

While wealthy town and city families were the first to purchase cars, farmers were especially eager to take advantage of the new transportation when they became affordable.  By 1916, Iowa led the nation in per capita auto registrations, with eight of the top nine “car” states coming from the Midwest.  The car enabled farm youth to attend high schools and adults to expand their shopping trips to town more often than Saturday night only.  It increased the demand for better roads and shifting responsibility for building and maintaining them from the township to the county and sometimes to the state.  Urban residents wanted highways that connected them with other communities while farmers main concern were local roads, creating a political battle over road taxes and their distribution. 

Electricity was another innovation that transformed daily life. The installation of electrical systems in cities and small towns across the state in the decades before and after 1900 greatly improved the lives of Iowa families.  Electric lights replaced smoky kerosene lanterns.  One woman declared that the electric iron was the greatest labor-saving device ever invented.  Electric kitchen appliances and wash machines eliminated drudgery for Iowa households.  Street lights made travel safer. 

Bringing electric power to the farms was a different story.  Power companies were usually private, for-profit businesses.  Stringing long lines in the country that served only a few households was not a profitable undertaking.  There were commercial home generators that produced enough electricity to turn on electric lights but rarely much more. The situation created a significant challenge for the farms.  No matter how financially successful the farm was, its family could not have the same benefits as the town home. 

Until then, a social divide began to form between the farm and the town.  It is not that rural living became worse; rather, town life became better while farm life did not.  Without electricity, farm homes continued to haul water from pumps, use outdoor toilets, and light their homes with kerosene lanterns.  Farm parents wondered if they even wanted their children to inherit the farm and deny themselves the conveniences that town families enjoyed.  Commentators began to notice dissatisfaction among the rural population, especially among farm women, with many families considering “a flight from the farm” to escape farm deficiencies.  It was not until the Rural Electrification Act in 1935 helped to finance rural electric cooperatives that farm families finally began to enjoy the full range of the blessings of electricity.

In addition to technological improvements, Iowans began to changing social roles.  Women especially began to push for opportunities that took them beyond the home.  Women’s clubs and study groups appeared all across the state bringing women together to learn about ways to expand their knowledge and care for their children.  Often their desire to create more pleasant surroundings for themselves and their families led them into projects for community improvement, but here they found that the reins of power were firmly in the hands of men.  The drive for women’s suffrage gathered strength but was unable to achieve only the right to vote on referenda and bond issues until the Nineteeth Amendment to the Constitution granted full suffrage to women nationwide in 1920.  The battle over the manufacture and sale of alcohol continued, often with women’s groups in the forefront of prohibition forces.  In 1919, prohibition become the law of the land across the United States.  Because it depended in large part by local law enforcement officers, those communities where the law was not popular were not often aggressive in reining in liquor suppliers.

Politics in the first two decades of the 20th C. encompassed debate over the proper role of government.  The rise of large corporations and the creation of huge personal fortunes seemed to threaten the democratic principles that had guided the nation through its first 125 years.  What came to be known as the Progressive movement favored using the government to restrict or balance concentrations of wealth in private hands.  Many of the sharpest conflicts were not fought out between the Republican and Democratic Party.  Republicans dominated the political scene for a half century following the Civil War.  Policy clashes within the Republican Party over issues like the restriction of free railroad passes offered to officials in exchange for political support and direct election of U.S. senators instead of by the Iowa legislature were attempts to reduce the power of special interests and return power to the people. 

As a whole, Iowans seemed satisfied with their role in the nation through the first decade of the 20th C.  The economy was strong, and daily life was enjoying the introduction of new technologies.  Not many were paying to attention to foreign affairs.  Why would anyone think that the United States would be  drawn into a conflict between the crowned heads of Europe?  But the seeds of not one but two devastating world wars were being sewn in events far removed from the Hawkeye State, and life would never be the same after that.

Tom Morain

Graceland University, 2020


For Further Reading:

Thomas Morain, Prairie Grass Roots  (ISU Press, 1979)

Leland Sage, A History of Iowa (ISU Press, 1974)

Dorothy Schwieder, Iowa: The Middle Land (ISU Press, 1996)