The once-hailed utopian Pullman Company and town would be the location of a major labor strike that would spread like the Great Railroad Strike of 1877. Pullman City was 14 miles south of downtown Chicago near Lake Calumet. At its peak, the strike would involve over 250,000 in 27 states, and it lasted three weeks. The violence resulted in the death of 13 strikers and over 60 wounded with property damage of more than $340,000 (about $9 million today). The strike was the effort of the American Railways Union, headed by the socialist Eugene V. Debs. The trouble started in May 1894 when 3,000 of Pullman's 5,800 employees at the Chicago plant were laid off. In an effort to save jobs, George Pullman cut the wages of the remaining employees by 25 percent. Pullman had seen orders for his railcars plummet as a result of the Panic of 1893. Pullman was labor friendly, but he was hardheaded and a poor communicator. He had even been hailed by many as a paternal capitalist, but Pullman was no Andrew Carnegie or George Westinghouse. He ran Pullman City as a profit center. Workers were required to live in Pullman City, in which Pullman ran all utilities and services and charged rent for a profit. Pullman charged rents 25 percent higher than those in surrounding neighborhoods. In addition, he purchased water from Chicago at 4¢ per 1,000 gallons and sold it to his town at 10¢. Clergy were charged rent on churches, and the library charged a fee, too.
Members of the American Railways Union asked that the rents in the Pullman worker town be reduced. Pullman ended up firing the union representatives, which brought Debs, the union president, into the disagreement. Pullman then locked out the employees. Things escalated quickly to a strike, as Pullman Company announced it would pay a regular dividend to its stockholders. The strike slowly started to evolve along related railways, as three-quarters of the rails moving in and out of Chicago closed. The union called for a nationwide boycott of Pullman cars. Railroad workers across the nation refused to switch Pullman cars. The General Managers Association managed the combination of rail lines and companies. The association had strong ties in the Grover Cleveland administration as well as with J. P. Morgan.
With the depression of 1893 reaching a peak, the situation was volatile. Not wanting another Haymarket Riot or Railroad Strike of 1877, President Cleveland got involved, hiring 3,600 special deputies and sending 6,000 troops to Pullman City. The troops had the full protection of the U.S. government. The newspapers supported Cleveland initially, but it was short-lived. Pullman used scabs and strikebreakers at the factory, which caused violence. Federal involvement inspired more rioting by the workers as the unemployed joined in. On July 7, the strike erupted into shootings and deaths as troops clashed with workers in Chicago. The strike started to spread across the country along the railroads. Cleveland was forced to get an injunction against the strikers. The federal injunction was based on the fact the strike interfered with delivery of the U.S. mail. It was the first time the federal government had used an injunction to stop a strike. However, the strikers stood their ground.
Chicago began to attract socialists and anarchists to “help.” Ray Baker, second in command of Jacob Sechler Coxey's army of marchers (the cross-country labor march for jobs), showed up in Chicago. The country seemed split between fear and outrage. Pullman refused arbitration, and New York and other large cities supported him, characterizing the strike as an attack on society. As famous socialists and anarchists such as Emma Goldman joined the effort, many feared a rebellion in America's large cities. The timing was poor for the strikers, as an anarchist had just assassinated the president of France. Republican industrialist Mark Hanna, however, supported the workers, calling Pullman a “damn idiot.” Hanna would be one of those to expose Pullman's “utopia.” Other paternal capitalists such as Andrew Carnegie and John Rockefeller were appalled at the extent of Pullman's profit making on his worker city. Debs was an outstanding speaker and pulled in socialists such as Goldman to Chicago. Goldman was an anarchist, socialist, Russian immigrant, and revolutionary. Goldman would later inspire Leon Czolgosz, President McKinley's future assassin. Earlier she had been the girlfriend of the attempted assassin of Henry Clay Frick during the Homestead Strike. The strike was reaching the level of the Railroad Strike of 1877. Mayors from over 50 cities asked Pullman to accept arbitration.
Samuel Gompers, one of the most enlightened labor leaders of the time, tried to mediate a settlement. He sent a telegram to President Cleveland only to have it rejected. Cleveland commented, “If it takes the entire army and navy of the United States to deliver a postal card in Chicago, that card will be delivered.” Cleveland sent 14,000 federal troops, and the anger now turned toward him. Cleveland sent the federal troops without notifying Governor Altgeld of Illinois and against his wishes. Governor Altgeld stated in a letter made public, “I am advised that you have ordered federal troops to go into service in the State of Illinois. Surely, matters have not been correctly presented to you in this case or you would not have taken the step, for it is entirely unnecessary and, as it seems to me unjustifiable.” Cleveland's use of federal troops was considered anti-workingman, when even capitalists had condemned Pullman for his hardheaded approach.
The strike ended with the heavy federal crackdown, but the courts took over to take revenge for the upheaval. The result of the “Debs Strike” would change the landscape of American politics. Debs was sentenced to six months in prison for disobeying the injunction; he would later form the American Socialist Party. The Sherman Anti-Trust Act was used to support the conviction, and the Supreme Court upheld its use against labor. In addition, the Supreme Court upheld the use of a federal injunction because of interruptions to the U.S. mail. The Supreme Court of Illinois in 1897 forced the Pullman Company to divest itself of the City of Pullman. The U.S. Senate launched investigations that resulted in a condemnation of Pullman's use of paternalism for profit. Thanks to the oratory of Debs and the exposed abuses of Pullman, the public sided with the workers. The socialists gained back much of what they had lost in the Haymarket Riot. Socialists would oust Gompers as president of the American Federation of Labor for his middle-of-the-road approach. Debs would run for president a number of times, getting as high as 6 percent of the vote in 1912. President Cleveland, a Democrat, lost the support of his party in 1896 and would be forced to run as a third-party candidate. The Democratic majority lay in ruins, and the elections of 1894 and 1896 would sweep in a Republican majority. In general, the federal government and companies gained enormous power to stop national strikes, which would not be adjusted until the passing of the National Relations Act (Wagner Act) of 1935. For his part, Debs made the Socialist Party part of the American scene for years to come.
See also: Great Railroad Strike of 1877; Haymarket Riot; Homestead Strike of 1892; National Labor Relations Act (Wagner Act); Panic of 1893; Paternal Capitalism—Homestead and Wilmerding, Pennsylvania; Steel Strike of 1959
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