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article number 624
article date 01-03-2017
copyright 2017 by Author else SaltOfAmerica
American Corporations Grow Big & Powerful, Late 1800’s, Part 2: Labor Becomes Restless
by Arthur Schlesinger

From the 1941 book, Political and Social Growth of the American People, 1865-1940.


If the public at large awoke only slowly to a realization of the peril, the wage-earners had long since taken up the gage of battle with the new economic overlords. As industry changed over to large-scale methods and impersonal corporate control, the rift between those who worked for pay and those who paid for work steadily widened.

More and more, workingmen lost the sense of being self-respecting craftsmen or masters of their own tiny shops, and became mere tenders of machines, their conditions of labor dictated by managers representing absentee owners.

When stockholders clamored for bigger dividends or employers engaged in price-cutting competition, the wage-earners’ pay was the first to suffer. They toiled in gloomy, ill-ventilated structures amidst dangerous unguarded machinery, and the workday, which in many branches had been cut to ten hours during the short-lived labor movement of the 1830’s, tended to grow longer rather than shorter.

The employers’ rapacious demand for cheap labor drew increasing numbers of women and children into the mills and factories, while the plight of native workingmen was further aggravated by competition with the hordes of immigrant laborers.

Meanwhile, the number of wage-earners vastly increased, marking the first appearance of a genuine proletarian class in America. In 1860 only about one and a third million worked in factories, mines and rail transportation; thirty years later the total reached four and a quarter million, a rate of growth far exceeding that of the population in general.

An aggrieved class in the United States usually turns to political action for relief, but for the workingmen the prospect was not encouraging in an era when government and people were enchained by the doctrine of laissez faire.

Though some optimistic souls did from time to time try to launch labor parties, the shrewder labor leaders, mindful of the successes attained by capital through joint economic effort, devoted their energies to promoting similar combinations among the toilers. The factory system packed workingmen densely in cities where, mingling with their fellows and exchanging ideas, they responded readily to appeals to unite against the enemy.

War-time prosperity had caused a rebirth of the earlier labor movement, with the result that local unions were formed in many crafts, city trade assemblies were set up for more general action, and ten or more national unions came into being. In the flush years preceding the Panic of 1873 the movement continued to grow.

Under the leadership of William H. Sylvis of the Iron Molders’ Union, a promising attempt was made in 1866 to federate the country’s labor organizations into an all-inclusive association called the National Labor Union. Its constitution declared: “Heretofore the highest form labor associations have taken is the national union of some of the trades. Between these organizations, however, there was no sympathy or systematic connection, no cooperative effort, no working for the attainment of a common end, the want of which has been experienced by every craft and calling.”

The new body also included groups espousing various political reforms.

The National Labor Union advocated the eight-hour day, better pay, arbitration as a substitute for strikes and, with particular emphasis, cooperative shops in which the workers should supply the capital and share the profits.

Such cooperatives as were tried, however, including the iron foundries conducted by Sylvis’s own union, failed either from mismanagement, inadequate capital or unfair competition.

The National Labor Union held seven annual congresses, the last one for the purpose of launching a labor party. But internal dissension rent the organization, and the crash of 1873 administered the finishing blow.

Police attempt to control the demonstrators at Tompkins Square, New York, January, 1874. Labor organizations were requesting that New York City institute public works programs to employ many who lost their jobs in a recession. from “Frank Leslie’s illustrated newspaper,” January 31. 1874.

In the somber years that ensued, the labor movement reached a low ebb, most of the local and national groups dissolving or maintaining a bare existence. The total number of union members fell from over three hundred thousand in 1873 to less than fifty thousand in 1878.

One of the organizations that managed to keep alive served as the channel for a second and more successful effort to combine the varied forces of labor on a nation-wide basis. This was the Noble Order of the Knights of Labor, founded in 1869 at Philadelphia by Uriah S. Stephens and six other garment cutters.

Unlike the National Labor Union, it aimed to unite all workers, skilled and unskilled, in one big union without regard to trade or vocation. The Knights of Labor held that the mechanization of industry was steadily erasing craft distinctions and thus putting all wage-earners on the same level, and that only through consolidated action could labor defend its rights against concentrated capital.

Though differing in the basis of membership, the Knights championed many of the same demands as the National Labor Union—the eight-hour day, fairer wages, industrial arbitration, the establishment of cooperatives, the abolition of child labor and similar reforms.

For ten years the Knights grew but slowly. In order to protect members from persecution by employers, complete secrecy cloaked their doings, even the order’s name being withheld from the public. With the return of prosperity in 1879 and the open use of the order’s name two years later, the membership shot upward until in 1886 it reached seven hundred thousand, drawn chiefly from the ranks of unskilled labor.

As a peaceable way of improving conditions for the workers, Terence V. Powderly, who headed the Knights from 1879 to 1893, encouraged the formation of cooperatives. More than a hundred and thirty-five were set up, principally in the mining, cooperage and shoe industries, where wages were exceptionally low; but these enterprises encountered the same difficulties as those of the National Labor Union and enjoyed no greater success.

Meanwhile, the sudden expansion of membership drew into the order many socialists, radicals and other jangling elements.

In spite of their avowed attachment to arbitration, the Knights became embroiled in an increasing number of strikes, boycotts and other disturbances. The disastrous failure of some important railway strikes in 1886 cast further discredit on the order, precipitating it into a decline as rapid as its rise.

A homebuilt bomb explodes, killing 7 policemen at Haymarket Square, Chicago, May 1886. From “Harper’s weekly” for May 15, 1886.

Another reason for its collapse was the advent of a rival labor group based upon a wholly different principle of organization. Started in 1881 by disgruntled members of the Knights of Labor, this body adopted its present name, the American Federation of Labor, when it reorganized on a broader basis in 1886.

Discarding the idea of one big union, the American Federation, like the British Trades Union Congress upon which it was modeled, was a confederation of self-governing labor bodies, supervised by a central board of officials. Its core consisted of national unions, but it also included city trade assemblies, state federations of labor and local unions lacking national affiliations.

Thus, the new organization, comprising only skilled workers, made allowance for the special interests of particular groups among them.

The central officials confined their activities to strengthening and extending the union movement, acting in an advisory capacity during industrial conflicts, and lobbying for favorable legislation.

The Federation shunned cooperatives, but in other respects its program resembled that of the Knights, including the eight-hour day, legislative prohibition of child labor and the improvement of working conditions in factories and mines.

From the outset the dominant figure in the A. F. of L. was Samuel Gompers, born of Jewish parentage in a London tenement. As a member of the Cigarmakers’ Union in New York, he had breathed into it a militant spirit which enabled it to issue from the depression years stronger than when it entered.

President of the American Federation almost continuously until his death in 1924, he stamped it with his vigorous personality. Distrustful of intellectuals and theorists, he stood firm against all efforts to commit it either to a socialist program or to the experiment of a labor party.

The membership of the affiliated bodies grew from 150,000 in 1886 to 200,000 in 1890 and to 550,000 in 1900.

One important group of unions, the four Railway Brotherhoods (engineers conductors, firemen and brakemen), did not join, feeling that, because of their strategic position in American economic life, they had everything to lose and nothing to gain from casting in their lot with the Federation.

Moreover, the great bulk of unorganized and unskilled workers, perhaps ninety per cent of the whole, remained outside A. F. of L. ranks. The Federation’s success rested on its effectiveness as an alert and compact minority.

Marching miners depicted by political cartoonist W. A. Rogers.


With the ranks of both labor and capital mobilized for defense and aggression, the stage was set for a trial of strength between the opposing forces. The antagonism usually turned on questions of wages, the length of the workday or the right of employees to form unions; but behind such specific issues lay a fundamental difference in point of view.

Labor asserted its inalienable right to have a voice in determining working conditions, to share more amply in the profits of industry, to raise its standard of living through better homes and more leisure. In short, labor’s spokesmen insisted that the lot of the toilers keep pace with the increase of the wealth they helped create.

Employers, on the other hand, viewed labor as but one of many factors in industry, its rate of pay to be governed by the “iron law” of supply and demand, not by humanitarian considerations or notions of fancied right. Indeed, the role of the wage-earner seemed to them of small moment as compared with the indispensable part played by financial resources, inventive ability, machinery, managerial talent and business enterprise.

With two such irreconcilable attitudes, protracted industrial warfare was inevitable, particularly in view of what even President Cleveland called the “grasping and heedless exactions of employers.”

Yet neither side was wholly blameless in these encounters, for, in varying degrees, both were actuated by irresponsibility, greed and criminality.*

* The extreme of labor lawlessness is illustrated by the Molly Maguires, a secret organization of Pennsylvania anthracite miners, whose career of terrorism and assassination was finally ended in 1876 by the punishment of the ringleaders.

Nor did either party envisage such contests as other than purely private affairs, of no concern to the public. It was many years before the American people came to realize that, whichever combatant won a strike, the community was the loser, thanks to business paralysis, enhanced prices and the added costs of police protection and of charity.

The first great struggle stemmed from a series of wage reductions on the Pennsylvania, New York Central and Baltimore & Ohio lines during the lean years after the Panic of 1873.

In the latter half of July, 1877, rioting and lawlessness convulsed rail centers all the way from Baltimore to St. Louis and San Francisco. On appeal of the governors, President Hayes sent troops to Maryland, Pennsylvania, West Virginia and Illinois.

At Pittsburgh the contest resembled a pitched battle. State guardsmen in the neighborhood, called to arms, fraternized with the men but when a militia detachment from Philadelphia killed nearly twenty strikers, a raging mob besieged the soldiers for twelve hours in a roundhouse.

Order was finally restored by patrols of citizens.

Meanwhile, about sixteen hundred cars, a hundred and twenty-six locomotives and most of the railway shops and supplies had been destroyed, a loss estimated at five million dollars.

Here a elsewhere the strike failed. In the end the men went back to work at the reduced pay.

Burning the Pittsburgh Roundhouse, 1877.

If the return of prosperity in 1879 did not lessen the tension between capital and labor, strikers generally found it easier to win their demands, for in boom times industrialists could offset added costs by raising prices to the consumers.

According to the federal Bureau of Labor, nearly 24,000 strikes and lockouts took place in the score of years from 1881 to 1900, involving about 128,000 establishments and over 6,600,000 wage-earners, at a total loss to employers and employees of $450 million and an incalculable cost to the public at large.

The business recession of 1884-1885 yielded a startling harvest of industrial conflicts—strikes, sympathetic strikes, lockouts, nation-wide boycotts—causing the years 1885-1886 to be called the “Great Upheaval.” Twice as many disorders occurred as in any previous two-year period.

Three of these disturbances involved the Gould railway system in the Southwest. The first, in March, 1885, resulted in the restoration of a ten-per-cent wage cut. Six months later a second strike, caused by discrimination against workers belonging to the Knights of Labor, also concluded triumphantly for the men.

But the third and greatest of the outbreaks ended in their utter rout. Started in protest , against the discharge of a foreman affiliated with the Knights, the conflagration raged during March and April, 1886, in all parts of the Gould domain, throwing nearly nine thousand employees out of work in five states and territories.

The same year signalized a country-wide movement for an eight-hour day, a demand given special point by the need of providing work for the jobless through a shortening of hours. Sponsored by the American Federation of Labor, the movement was backed by trade unions representing 340,000 members.

Before May 1, the date set for a general strike, 150,000 wage-earners secured a shorter day (eight or nine hours) without a demonstration, whereas of those who actually struck only 42,000 won their point. In many cases, the gains were presently lost through the aggressive activities of employers’ associations formed for the express purpose of fighting unionized labor.

Yet the conception of an eight-hour day excited wide popular interest, and the public gradually came to accept it as a just demand.

The next historic strike took place in July, 1892, at Homestead, Pennsylvania, among the employees of the Carnegie Steel Company, who were confronted with wage reductions and a refusal to recognize their right to organize. The hiring of three hundred armed Pinkerton detectives to guard the plant precipitated a fierce battle, resulting in ten deaths and the injury of over sixty.

Reënforced by eight thousand militia, the company gradually resumed operations with nonunion men. The strike dragged to a close in November, and the defeat prevented organized labor for many years from unionizing the steel industry.

Mobbing Pinkerton detectives at Homestead, 1892.

Meanwhile, far to the west, repeated wage cuts due to the falling price of silver ore goaded the miners of the Coeur d’Alene district in Idaho to bloody measures. In order to combat strike breakers imported by the management, the men seized the property and harried the “scabs” out of the district. But, at the governor’s request, President Harrison sent in troops, martial law was declared, and the strike failed.

This affair, however, proved the forerunner of intermittent disorders that ravaged Coeur d’Alene for years.

The widespread unemployment and distress bred by the Panic of 1893 plunged the labor world into another welter of struggles which, because of their destructive character, made thoughtful men fear for the stability of the social order. The number of wage-earners involved in strikes during 1894 reached six hundred and ninety thousand, surpassing the mark set in 1886.

The gravest disturbance took place in Chicago as the outgrowth of drastic wage cuts by the Pullman Palace Car Company. The reductions did not apply to the highly paid officers and managers, and it was well known that the company had on hand a surplus of over four million dollars.

The employees’ cause was promptly championed by the American Railway Union, a new organization formed by Eugene V. Debs in the hope of combining all rail workers in a single body. It was the precursor of the vertical or industrial union, which was to constitute the basic idea of the ClO in the 1930’s.

After demanding vainly that the company submit the dispute to arbitration, the American Railway Union ordered its hundred and fifty thousand members to cease handling Pullman cars on all roads. In the last week of June the strike spread to twenty-three lines, affecting traffic operations in twenty-seven states and territories.

The vortex of the storm, however, was Chicago. There, until the United States government took a hand, the principal antagonists were the General Managers’ Association, representing the rail companies, and the American Railway Union.

Lawless mobs and gangs of hoboes and criminals, always present on such occasions, terrorized the community, burning, looting and killing. The damages, direct and indirect, inflicted on the property and business of the country were later estimated at eighty million dollars.

Despite Governor John P. Altgeld’s refusal to ask for federal troops, President Cleveland intervened on his own authority.

On July 2 the government secured from the federal circuit court a “blanket injunction” which forbade Debs, his fellow strike leaders and “all other persons whomsoever” to interfere in any manner, direct or indirect, with the operation of the railways. The next day two thousand soldiers were dispatched to Chicago under General Nelson A. Miles.

Troops called in by President Cleveland guard trains during the Pullman strike of 1894. From “Harpers Weekly” for July 28, 1894.

Though the Constitution specifies that the governor or legislature should apply for federal protection against “domestic violence,” Cleveland found warrant for his unprecedented course in the obligation to safeguard the mails, protect interstate commerce and uphold the processes of the federal courts.

On July 10 Debs was arrested on the charge of conspiracy in restraint of trade under the Sherman antitrust act. Released on bail, he was rearrested a week later on a new charge, contempt of court, that is, violation of the judicial injunction of July 2.

The government’s vigorous action broke the back of the disturbance, causing its complete collapse a few weeks later.

Other than as a great labor insurrection, the strike of 1894 is epochal because of the new legal conceptions and practices which issued from it. The employment of United States troops without consent of the state authorities marked a novel and impressive development of national power. The application of the Sherman antitrust act to labor combinations—later upheld by the courts—threw unexpected light on that law.

Perhaps most significant of all was the part played by the judiciary in using the injunction as a weapon in industrial warfare. Though this was not the first time it had been so used, the sweeping character of the injunction in the Pullman strike caused profound concern among the friends of labor.

The use of injunction was denounced as “judicial tyranny”—unjust because it seemed to range the might of the government on the side of the employers, illegal because those violating the court order were sentenced without trial by jury and subjected to penalties not prescribed by statute.

Opposition to “government by injunction” became a cardinal issue of the American Federation of Labor, resulting finally in action by Congress under President Wilson intended to restrict its operation.

* * *

The tumult and lawlessness attending this thirty years’ war should not be allowed to divert attention from the constructive forces which, quietly but surely, were breeding saner relations between labor and capital.

As trade unions grew in strength and improved in leadership, they were slower to resort to methods of coercion and violence. Amidst the “confused alarms of struggle and flight” they slowly learned lessons of self-control and responsible action in the economic sphere, not unlike the lessons in political self. government which the early colonists had learned through the town meeting and the provincial assembly.

Enlightened employers, for their part, betrayed a greater readiness to meet their demands. In the words of the federal Anthracite Coal Strike Commission of 1902, “Experience shows that the more full the recognition given to a trades union, the more businesslike and responsible it becomes. Through dealing with business men in business matters, its more intelligent, conservative, and responsible members come to the front and gain general control and direction of its affairs.”

In the more strongly organized occupations the practice gradually developed of settling differences through joint conferences instead of the ordeal by battle, the arrangements being embodied in trade agreements. If adjustment by common consent proved impossible, the alternative still remained of peaceful arbitration by disinterested parties.

Some employers sought to improve the relations between capital and labor by removing the sources of friction before trouble arose. Such efforts were generally modeled on similar schemes in the leading industrial countries abroad.

Thus, in 1880, the Baltimore and Ohio Railroad with the help of its employees instituted a fund for paying disability and death benefits, and four years later inaugurated an old-age-pension plan.

A different device was to allow the workers to participate in a company’s earnings over and above their regular wages. The Pillsbury Flour Mills in Minneapolis, which adopted profit sharing in 1882, was the largest establishment in the world using the plan at the time. By 1893 more than a hundred American concerns were doing so. By these and kindred measures it was hoped to spur the employee to greater endeavors and make him feel more genuinely a part of the business.

Some companies also founded “model towns” in order to take the men and their families out of the slums. From the standpoint of organized labor, however, this expedient smacked of feudal paternalism; and perhaps in most instances the employer’s real motive was to head off the formation of trade unions.

The company-owned towns frequently proved a means of exploiting the workmen through high charges for rent, food, water and light. Dissatisfaction with conditions in the town of Pullman, just south of Chicago, contributed to the ill feeling which produced the great railroad strike of 1894.

More acceptable to the labor elements were the gains accruing from legislation. These years beheld a growing tendency on the part of the states to depart from a rigorous laissez faire attitude. Such concessions, though falling far short of the thoroughgoing measures adopted in Great Britain and Germany, attested the ever greater effectiveness of the lobbying activities of organized labor.

Before 1879 various legislatures had adopted acts for shortening the workday, but for one reason or another these statutes failed of their purpose, being unenforced or unenforceable.*

* In 1868 Congress took an advanced stand by specifying an eight-hour day for workmen employed by the federal government, but for nearly twenty years the law was ineffectively administered when not wholly disregarded.

In that year, however, Massachusetts set an example for other commonwealths by putting teeth into her earlier ten-hour law in regard to children and women in factories. Other industrial states followed, and the evil of child labor declined a third during the eighties, only to thrive again in the next decade as cotton mills multiplied in the South.

New England mill workers, 1868. From “Harper’s Weekly” for July 25, 1868.

During the eighties, too, acts began to be passed for guarding dangerous machinery, assuring better sanitary conditions in factories, and providing for government inspection.

The ominous proportions of the Great Upheaval elicited in 1886 the first presidential message devoted solely to the
labor problem. Tacitly recognizing the right of workers to organize, Cleveland proposed a national commission to assist in settling industrial controversies of an interstate character. Congress responded in 1888 with a law for arbitrating differences between interstate railways and their employees on condition that both parties should consent and neither be bound by the outcome.

Not until ten years later did the Erdman act specify that, once a dispute was submitted to arbitration the decision should be final. Meantime fifteen states had enacted legislation for voluntary arbitration and non-enforceable decisions in cases falling within their jurisdictions. These as well as many of the other measures for labor welfare left much to be desired, while even adequate laws were seldom adequately enforced.

Least progress of all greeted the legislative efforts to secure a shorter workday for men. When such acts were adopted, the courts invariably held them unconstitutional, save in especially hazardous occupations, on the ground that they interfere with the individual’s freedom of contract.

As late as 1900 seventy per cent of the industrial wage-earners still labored ten hours or more each day. In particular fields the conditions were appalling. The steel industry generally maintained a twelve-hour day for seven days a week; train-men commonly worked seventy hours a week; and the hours in the textile mills varied from sixty to eighty-four.

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