Anarchy was anathema to Grover Cleveland, and the president viewed the developing chaos on the nation’s railroads with concern. Like George Pullman, Cleveland had spent his formative years in western New York State. The son of a poor Presbyterian minister, Cleveland had settled in Buffalo in 1852 and become a hardworking lawyer. He traveled rarely, read little, and took no interest in music or culture, relaxing instead with poker games and a bachelor’s life.
After a brief stint as Erie County sheriff, eleven months as mayor of Buffalo, and two years as governor of New York, the untested politician won the 1884 Democratic nomination for president. During the election, Cleveland endured references to his illegitimate child and chants of “Ma, ma, where’s my Pa?” Yet he managed to win by a hair to become the first Democratic president since the Civil War. For a man conspicuously lacking in charisma, it was a startling political ascent.
Organized labor, responsive to urban Democratic machine politics and repelled by Republicans’ obeisance to business interests and high tariffs, backed Cleveland during the election. Yet while the conservative Cleveland mouthed sympathy for the workingman, he had done little to protect employees from the hardball tactics of their bosses.
Cleveland’s provincialism limited his understanding of the dynamic changes that the industrial revolution had imposed on the nation. During his first term, he signed a law awarding $26 million in loans to private railroad corporations. With the same pen, he vetoed a $10,000 allocation voted by Congress so that farmers recovering from a Texas drought could buy seeds. “Though the people support the Government,” Cleveland had declared, “the Government should not support the people.”
In 1888, the people failed to support him, replacing him with Benjamin Harrison. The Republican restored sky-high tariffs to protect American industry. The resulting flow of revenue stimulated a steep rise in government spending. Farmers and ordinary consumers, stung by rising prices, decided that Cleveland was the lesser of two evils after all. In an 1892 election rematch, Cleveland was returned to office, the only president elected to nonconsecutive terms.
Back in the White House at the age of fifty-seven, he governed by rote, promising that “no harm shall come to any business interest as the result of administrative policy so long as I am president.”
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Lester F. Ward, a prominent sociologist of the day, concluded that America suffered from “under-government, from the failure of government to keep pace with the change which civilization had wrought.” Since the rapid and overwhelming concentration of wealth represented the gravest threat to society, he thought, public officials had a duty to bring it under “judicious regulation.”
Cleveland disagreed. He had filled his administration with businessmen, bankers, and Wall Street speculators. In doing so, he had tipped the scales in the great debate that had been raging since the Civil War about the proper balance of power between organized capital and the men and women who toiled.
Prompted by the Supreme Court, the government had ceded more and more power to corporations. These private entities had originally been intended to serve a public function, such as building a canal or running a railroad. Each had to be created by a separate law passed by a state legislature. But with the rapid growth of industrialism, the corporation had shed its public-benefit function and become simply another way of structuring capital. It was a particularly desirable one for businessmen, in that it shielded its owners from personal liability for debts incurred by the company. And unlike most partnerships, it outlived its original organizers.
During Cleveland’s first term, the court decided a case known as Santa Clara County v. Southern Pacific Railroad Company. Its ruling was interpreted to mean that “corporations are persons” in the eyes of the Constitution. The Fourteenth Amendment, intended to endow freed slaves with the rights of citizens, was cited to protect corporations from being deprived of “life, liberty, or property, without due process of law.” Later rulings held that the Constitution protected corporations from some government regulatory measures and afforded them a breadth of rights and privileges. Judges and politicians assumed that competition would thwart any effort by corporations to abuse their privileges. The market, not the government, would serve as the regulator.
Railroad managers took advantage of the powers ceded to them by the state, but they preferred to limit competition when it was to their advantage. Railroad corporations had unprecedented amounts of capital at risk, and owners knew that competition could curb revenues. Monopolies, trusts, holding companies, collusion to fix prices, and other methods of avoiding conflict became increasingly common.
If monopoly meant corporations could raise prices, it also allowed them to lower wages. The growing size of railroad companies diminished the bargaining power of workers. This was the imbalance that Eugene Debs hoped to address with his massive industrial union. The ARU, he hoped, would give workers the clout to stand up to the monopolists.
“The corporation plunders by the permission of or through the agency of the state,” said populist politician James Baird Weaver in 1892. Corporate law gave George Pullman the right to ignore the requests of the civil authorities even as he called on the government to protect his property. It let railroad corporations soak up subsidies and land grants, then conspire together to raise rates and cut wages.
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The railroad managers, along with George Pullman and other business leaders, insisted on an axiom of capitalism: workers’ wages must be determined by supply and demand. Companies, competing for labor when it was in short supply, would offer higher wages to attract employees. When too many men were looking for work, individuals would compete with each other, causing pay to fall.
In 1886, the railroads formed an organization to short-circuit this dynamic. It was this formal but extralegal body that would become the driving force behind the crisis that was now unfolding across the nation.
The group went by the bland name of General Managers’ Association, or GMA. It included the top managers of the twenty-four railroads that were based in or had lines passing through Chicago. They were a formidable bunch, controlling $818 million in capital, 40,000 miles of rail, and 221,000 employees.
Set up to deal in a coordinated way with a potential strike, the GMA was from its beginning an anti-labor organization. To paper over that fact, the managers declared that the purpose of the group was to consider “problems of management arising from the operation of railroads.” They claimed to be meeting to sort out issues like the handling of livestock and routines for switching cars. Their goal, they said, was to provide seamless service to shippers as their products traveled the various interconnected lines.
In fact, the managers’ principal goal was to hold down wages and to prevent member companies from having to compete against each other for workers. The companies asserted that wage competition on the various lines actually led to worker discontent and that their employees were better off with a single pay rate enforced across the industry. The real goal of a standard wage rate was increased profits for the roads’ stockholders.
In 1890, Congress had enacted an antitrust act sponsored by Ohio senator John Sherman, a law outlawing activity that restrained free commerce among states. Although Sherman’s law was on the books, Grover Cleveland’s pro-business administration had yet to prosecute successfully a single antitrust case. George Pullman took advantage of the lapse to dictate rates on almost all sleeping cars in the country.
Sherman declared, “I regard the Pullman Company and the Sugar Trust as the most outrageous monopolies of the day.” The firm made what Sherman considered “enormous and disproportionate profits in the cars.” Indeed, profit margins in excess of 50 percent were standard at Pullman.
In 1892, alarmed by workers’ growing demands for a bigger slice of the pie, the parent railroad corporations had reshaped the GMA into an even more aggressive anti-labor strike force, but its wage- and price-fixing still brought no government scrutiny. The group established a series of committees to handle labor problems for all railroads. One was responsible for recruiting replacement workers in the event of a strike. Another developed a unified pay scale for each of the jobs on the roads. Yet another kept track of which men should and should not be hired by members—in effect a blacklist committee.
The GMA had become the most coordinated alliance of employers in the country. Its members had watched the strike at the Pullman works carefully. On the Monday before the boycott deadline, they invited Pullman vice president Wickes to a meeting to discuss how they could “act unitedly” to oppose the ARU.
Two days into the boycott, the association appointed John M. Egan as their commanding strategist. Egan set up his headquarters in the elegant Rookery Building in the heart of Chicago’s financial district, barely a dozen blocks south of the ARU command post at Ulrich’s Hall. He made sure he had enough telephone and telegraph lines, with clerks to man them around the clock.
Egan was a perfect choice for the job. He had lately been general manager of the Chicago Great Western Railway, which stretched from Kansas City to Minneapolis, so he knew the territory and could talk to the other managers as a peer. Having given up the post, he was free to devote all his time to combating the strike.
Now forty-six, Egan had been a railroad man since he started with the Illinois Central as an apprentice machinist at the age of fifteen. A burly, iron-jawed Irishman, he was well known for having overseen the construction of the western portion of the Canadian Pacific during the 1880s, ramming the line through craggy, mountainous terrain.
Egan was determined to play hardball. He instructed member railroads to fire any employee refusing orders. He sent agents out to recruit replacements for the strikers. The East was swarming with unemployed railroaders as a result of the depression, and Egan claimed he could import fifty thousand men if he had to. “We mean business,” he told the press.
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Eugene Debs understood that the American Railway Union’s primary foe was no longer George Pullman but the General Managers’ Association. He had to adroitly direct his own large, untested, and loosely organized union in the fight against this powerful bureaucracy. The task put enormous demands on him.
The handling of the strike depended on a flow of information. Debs faced the considerable challenge of forming a picture of the nationwide situation on the basis of telegrams, occasional firsthand reports, and newspaper accounts. These last were often inaccurate, biased, or confused.
Issues that had not occurred to ARU officers before the strike had to be decided on the fly. Should workers walk out at another car company if managers brought Pullman cars in for repair? Should they strike a Brooklyn streetcar line because the cars had been manufactured at the Pullman plant? Should the union attack a company that made switches if it sent experts to operate signals and gates on railroads that had been struck?
From the beginning, the hand that Debs was dealt had included a wild card: a growing cast of sympathizers, unemployed men, teenagers, hoodlums, and the merely curious who congregated at rail yards and crossings. The second day of the boycott, two thousand people gathered at Grand Crossing. The South Side neighborhood, barely a mile from the site of last year’s Columbian Exposition, encompassed a major rail intersection where the Illinois Central converged with the Lake Shore & Michigan Southern line.
Along with Pullman strikers from the nearby model town and idle switchmen, these crowds moved onto the tracks. They blocked suburban trains as well as freight and passenger traffic, turning the morning commute into an unexpected ordeal for passengers.
As one historian pointed out, “Portly officials who had not handled a throttle in twenty years climbed into cabs” to drive trains. Railroad detectives and supervisors roamed the yards to throw switches and direct trains, occasionally getting one through the maze of tracks. With police officers looking on, crowd members were content to watch and jeer—they damaged no railroad property.
Debs said he was ready to send members out to guard railroad property if any rioting broke out. He instructed his men not to interfere with trains except by quitting work. If replacements showed up, “we will coax them not to work” but not prevent them from going about their jobs.
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The goal of the managers, on the other hand, was not just to support George Pullman in his dispute with his employees. The American Railway Union posed a threat to the railroads that the individual brotherhoods never had. Alarmed by the ARU victory over the Great Northern, the managers saw the boycott as an opportunity to crush the union before it gained any more strength.
Egan vehemently denied a rumor that the GMA was pressuring George Pullman to compromise. Just the opposite. “We have organized to resist this strike to the bitter end,” he said. The GMA policy was to ignore all communication from the ARU. There would be no negotiations.
In spite of the railroads’ combined financial might, Egan and the managers knew they were taking a risk. The depression had already pushed numerous rail lines into bankruptcy. The others were vulnerable to any cutoff of revenues.
Nor could they count on public support. For years, railroad executives had been in wide disfavor for their arrogant and high-handed ways. Citizens in the West, who were particularly dependent on the companies, hated them. The corporations had gobbled up public land and financial subsidies while the directors cavalierly lined their own pockets. They then turned around and charged what farmers and shippers considered inordinate rates to carry goods.
On the other hand, Americans sympathized with the Pullman workers, who had become emblems of the anguish so many were enduring during this disastrous downturn. Even newspapers that raged against the boycott and “Dictator Debs” criticized George Pullman for his frustrating intransigence.
Once the boycott began, the railroads did not want Pullman to arbitrate. Any compromise would be seen as a victory for the ARU and would add to the union’s strength. After the initial meeting with Wickes, the managers no longer included Pullman Company executives in their strategy sessions. Whatever its cause, the conflict was now an industrial war between two determined antagonists.
Egan assigned thirty railroad detectives to begin amassing information about ARU leaders. On June 29, he announced that any railroad employee who was discharged or quit work would be blacklisted for life, raising the stakes for the men. Replacement workers, on the other hand, would be guaranteed permanent positions.
The animosity toward the ARU extended beyond the Chicago railroads. Collis Huntington, one of the backers of the first transcontinental line and now the proprietor of the Southern Pacific, wrote privately to his nephew Henry: “I think we should get men on our own line who do not belong to any union.” Henry agreed: “We are going to break this strike … we are making history.”
Everyone from the striking switchman to the president of the United States now saw that the scope of the crisis had widened. Although the boycott was ostensibly a show of sympathy for the Pullman strikers, a New York Times reporter wrote, “in reality it will be a struggle between the greatest and most powerful railroad labor organization and the entire railroad capital.”