Report on the Chicago Strike

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A recession in 1893 led the Pullman Sleeping Car Company to reduce the wages of its workers. When it reduced wages, it did not reduce rents in the company housing it supplied its workers. As a result, the workers went on strike May 11, 1894. Eugene V. Debs had recently organized the American Railway Union (ARU). Although at first reluctant to get involved, he eventually seized on the Pullman strike as an opportunity to organize Pullman workers and add them to the ARU’s members. The Pullman Company refused to recognize the union. To make the strike effective, Debs organized a boycott of any train that had a Pullman car. Other labor leaders and labor organizations opposed the boycott, but ARU members around the country were able to disrupt interstate rail traffic, including that which carried the US mail. (See “King Debs,” Harper’s Weekly, July 14, 1894 for one example of the public perception this created of Debs and his union.)

To get the mail moving, President Grover Cleveland ordered US attorneys and the Army to deal with the strike, which had included acts of violence against trains and other railroad property. (The Governor of Illinois, seeing the strike as a state and local matter, claimed that Cleveland had no constitutional right to do so.) A federal court issued an injunction barring the union from hindering railroad traffic. Debs ignored the injunction. He was arrested on federal contempt and conspiracy charges. The conspiracy charge was dropped, as Debs mentions, but he was ordered to jail for contempt for ignoring the injunction. His attorneys appealed. The Supreme Court decided unanimously in In re Debs in favor of the US government and the power of the Federal courts to issue an injunction against the strike.

The Supreme Court’s decision was a setback for labor, as the courts proved willing in ensuing years to issue the injunctions that the Supreme Court had approved. As the Strike Commission report argues, however, outside the courts organized labor was finding its place in American life. In a conciliatory move, six days after the Pullman strike ended, Congress passed and Cleveland signed a law that established Labor Day, a national holiday honoring workingmen. In 1932, the Norris-LaGuardia Act gave unions full freedom of association and outlawed the kind of injunctions the Supreme Court had approved to end the Pullman strike. Public opinion toward unions changed in part because of the growing perception of the power of the so-called trusts. A “trust” was a way of establishing control over a number of firms operating in the same area of the economy. Shareholders in different corporations transferred their shares to one corporate entity that held them (hence, a “holding company”). A trust could be used to establish a monopoly over an area of the economy. For this reason, “trust busting” became part of the U.S. government’s effort to ensure free markets in the United States.

U.S. Strike Commission, Report of the Chicago Strike of June–July 1894 by the United States Strike Commission (Washington D.C.: Government Printing Office, 1894).

The commission has tried to find the drift of public opinion as to strike, boycotts, and labor disputes upon railroads, and to find their remedy. The invitation freely extended in this direction has brought before the commission many expressions of views, orally and by written communications. A condensation of these latter is presented with this report. In reaching its conclusions the commission has endeavored, after careful consideration, to give due weight to the many suggestions and arguments presented. It is encouraging to find general concurrence, even among labor leaders, in condemning strikes, boycotts, and lockouts as barbarisms unfit for the intelligence of this age, and as economically considered, very injurious and destructive forces. Whether won or lost is broadly immaterial. They are war – internecine war – and call for progress to a higher plane of education and intelligence in adjusting the relations of capital and labor. These barbarisms waste the products of both capital and labor, defy law and order, disturb society, intimidate capital, convert industrial paths where there ought to be plenty into highways of poverty and crime, bear as their fruit the arrogant flush of victory and the humiliating sting of defeat, and lead to preparations for greater and more destructive conflicts. Since nations have grown to the wisdom of avoiding disputes by conciliation, and even of settling them by arbitration, why should capital and labor in their dependence upon each other persist in cutting each other’s throats as a settlement of differences? Official reports show that much progress has been made in the more sane direction of conciliation and arbitration even in America. Abroad they are in advance of us in this policy. Were our population as dense and opportunities as limited as abroad, present industrial conditions would keep us much more disturbed than we now are by contests between capital and labor.

In England, prior to 1824, it was conspiracy and felony for labor to unite for purposes now regarded there by all classes as desirable for the safety of the Government, of capital, and for the protection of the rights of labor.1 All industrial labor is there, as a rule, covered by unions trained to greater conservatism through many disastrous conflicts under harsh conditions and surroundings. Capital abroad prefers to deal with these unions rather than with individuals or mobs, and from their joint efforts in good faith at conciliation and arbitration much good and many peaceful days have resulted. In fifteen of our States arbitration in various forms is now provided by law; the United States and eleven States have sanctioned labor organizations by statute. Some of our courts, however, are still poring over the law reports of antiquity in order to construe conspiracy out of labor unions. We also have employers who obstruct progress by perverting and misapplying the law of supply and demand, and who, while insisting upon individualism for workmen, demand that they shall be let alone to combine as they please and that society and all its forces shall protect them in their resulting contentions.

The general sentiment of employers, shared in by some of the most prominent railroad representatives we have heard, is now favorable to organization among employees. It results in a clearer presentation and calmer discussion of differences, instills mutual respect and forbearance, brings out the essentials, and eliminates misunderstandings and immaterial matters. To an ordinary observer, argument to sustain the justice and necessity of labor unions and unity of action by laborers is superfluous.

The rapid concentration of power and wealth, under stimulating legislative conditions, in persons, corporations, and monopolies has greatly changed the business and industrial situation. Our railroads were chartered upon the theory that their competition would amply protect shippers as to rates, etc., and employees as to wages and other conditions. Combination2 has largely destroyed this theory, and has seriously disturbed the natural working of the laws of supply and demand, which, in theory, are based upon competition for labor between those who “demand” it as well as among those who supply it. The interstate commerce act and railroad-commission legislation in over thirty States are simply efforts of the people to free themselves from the results of this destruction of competition by combination. Labor is likewise affected by this progressive combination. While competition among railroad employers of labor is gradually disappearing, competition among those who supply labor goes on with increasing severity. For instance, as we have shown, there is no longer any competitive demand among the 24 railroads at Chicago for switchmen. They have ceased competing with each other; they are no longer 24 separate and competing employers; they are virtually one. To be sure, this combination has not covered the whole field of labor supply as yet, but it is constantly advancing in that direction. Competition for switchmen’s labor still continues with outside employers, among whom, again, we find a like tendency to eliminate competitive demand for labor by similar combination. In view of this progressive perversion of the laws of supply and demand by capital and changed conditions, no man can well deny the right nor dispute the wisdom of unity for legislative and protective purposes among those who supply labor.

However men may differ about the propriety and legality of labor unions, we must all recognize the fact that we have them with us to stay and to grow more numerous and powerful. Is it not wise to fully recognize them by law; to admit their necessity as labor guides and protectors, to conserve their usefulness, increase their responsibility, and to prevent their follies and aggression by conferring upon them the privileges enjoyed by corporations, with like proper restrictions and regulations? The growth of corporate power and wealth has been the marvel of the past fifty years. Corporations have undoubtedly benefited the country and brought its resources to our doors. It will not be surprising if the marvel of the next fifty years be the advancement of labor to a position of like power and responsibility. We have heretofore encouraged the one and comparatively neglected the other. Does not wisdom demand that each be encouraged to prosper legitimately and to grow into harmonious relations of equal standing and responsibility before the law? This involves nothing hostile to the true interests and rights of either. . . .

The commission deems recommendations of specific remedies premature. Such a problem, for instance, as universal Government ownership of railroads is too vast, many-sided, and far away, if at-tempted, to be considered as an immediate, practical remedy. It belongs to the socialistic group of public questions where Government ownership is advocated of monopolies, such as telegraphs, telephones, express companies, and municipal ownership of waterworks, gas and electric lighting, and street railways. These questions are pressing more urgently as time goes on. They need to be well studied and considered in every aspect by all citizens. Should continued combinations and consolidations result in half a dozen or less ownerships of our railroads within a few years, as is by no means unlikely, the question of Government ownership will be forced to the front, and we need to be ready to dispose of it intelligently. As combination goes on there will certainly at least have to be greater Government regulation and control of quasi-public corporations than we have now.

Whenever a nation or a state finds itself in such relation to a railroad that its investments therein must be either lost or protected by ownership, would it not be wise that the road be taken and the experiment be tried as an object lesson in Government ownership? The Massachusetts Railroad Commission, which is noted for its eminent services as a conservative pioneer in the direction of Government control of railroads through the force of public opinion, for several years urged that the experiment of State ownership be tried with the Fitchburg system, because of the large State investment in the Hoosac Tunnel. We need to fear everything revolutionary and wrong, but we need fear nothing that any nation can successfully attempt in directions made necessary by changed economic or industrial conditions. Other nations under their conditions own and operate telegraphs and railroad with varying results. Whether it is practicable for this nation to do so successfully when it becomes necessary to save an investment or when the people determine it shall be done, is an open and serious question which can not be answered fully except by actual experiment. . . .

In solving these questions, corporations seldom aid the efforts of the people or their legislators. Fear of change and the threatened loss of some power invariably make them obstructionists. They do not desire to be dealt with by any legislation; they simply want to be let alone, confident in their ability to protect themselves. Whatever is right to be done by statutes must be done by the people for their own protection and to meet the just demand that railroad labor shall have public and impartial hearing of all grievances.

The commission does not pretend to present a specific solution of these questions. Its effort is simply to present the facts; to point out that the relations of capital and labor are so disturbed as to urgently demand the attention of all thinking and patriotic citizens; to suggest a line of search for practical remedial legislation which may be followed with safety, and, finally, to urge and invite labor and railroads to hearty cooperation with the Government and the people in efforts to substitute law and reason in labor dispute for the dangers, sufferings, uncertainties, and wide-spread calamities incident to strikes, boycotts, and lockouts. . . . can we fix the hanging period?

The commission urges employers to recognize labor organizations; that such organizations be dealt with through representatives, with special reference to conciliation and arbitration when difficulties are threatened or arise. It is satisfied that employers should come in closer touch with labor and should recognize that, while the interests of labor and capital are not identical, they are reciprocal.

The commission is satisfied that if employers everywhere will endeavor to act in concert with labor; that if wages can be raised under economic conditions they can be raised voluntarily, and that if when there are reductions, reasons be given for the reduction, much friction can be avoided. It is also satisfied that if employers will consider employees as thoroughly essential to industrial success as capital, and thus take labor into consultation at proper times, much of the severity of strikes can be tempered and their number reduced.

  1. 1. Based on English common law, American law considered organized labor a conspiracy among workers to hinder the free competition for labor. This view began to change with some state court decisions in the first half of the nineteenth century. As the excerpt from In Re Debs in this chapter indicates, the U.S. government presented the efforts of labor to shut down rail traffic during the Pullman strike as a conspiracy.
  2. 2. Control by one or more people over a number of firms operating in the same area of the economy, in this case railroads. A “Trust” was a way of establishing a combination. Shareholders in different corporations transferred their shares to one corporate entity that held them (hence, a “holding company”). A trust could be used to establish a monopoly over an area of the economy. For this reason, “trust busting” became part of the U.S. government’s effort to ensure free markets in the United States. This paragraph in the Strike Commission’s report described the effect of combinations or trusts on labor. In re Debs below referred to the American Railway Union effort to organize other unions to shut down railroad traffic as a “combination.” See illustration on page 136.
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