During the economic panic of 1893, the Pullman Palace Car Company cut wages as demands for their train cars plummeted and the company's revenue dropped. A delegation of workers complained of the low wages and twelve-hour workdays, and that the corporation that operated the town of Pullman didn't decrease rents, but company owner George Pullman "loftily declined to talk with them."
Many of the workers were already members of the American Railway Union (ARU), led by Eugene V. Debs, which supported their strike by launching a boycott in which union members refused to run trains containing Pullman cars. The strike effectively shut down production in the Pullman factories and led to a lockout. Railroad workers across the nation refused to switch Pullman cars (and subsequently Wagner Palace cars) onto trains. The ARU declared that if switchmen were disciplined for the boycott, the entire ARU would strike in sympathy.
The boycott was launched on June 26, 1894. Within four days, 125,000 workers on twenty-nine railroads had quit work rather than handle Pullman cars. Adding fuel to the fire the railroad companies began hiring replacement workers (that is, strikebreakers), which only increased hostilities. Many African-Americans, fearful that the racism expressed by the American Railway Union would lock them out of another labor market, crossed the picket line to break the strike; thus adding a racially charged tone to the conflict.
On June 29, 1894, Debs hosted a peaceful gathering to obtain support for the strike from fellow railroad workers at Blue Island, Illinois. Afterward groups within the crowd became enraged and set fire to nearby buildings and derailed a locomotive. Elsewhere in the United States, sympathy strikers prevented transportation of goods by walking off the job, obstructing railroad tracks or threatening and attacking strikebreakers. This increased national attention to the matter and fueled the demand for federal action.
The railroads were able to get Richard Olney, general counsel for the Chicago, Milwaukee and St. Paul Railway, appointed as a special federal attorney with responsibility for dealing with the strike. Olney obtained an injunction barring union leaders from supporting the strike and demanding that the strikers cease their activities or face being fired. Debs and other leaders of the ARU ignored the injunction, and federal troops were called into action.
The strike was broken up by United States Marshals and some 12,000 United States Army troops, commanded by Nelson Miles, sent in by President Grover Cleveland on the premise that the strike interfered with the delivery of U.S. Mail, ignored a federal injunction and represented a threat to public safety. The arrival of the military and subsequent deaths of workers led to further outbreaks of violence. During the course of the strike, 13 strikers were killed and 57 were wounded. An estimated 6,000 rail workers did $340,000 worth of property damage (about $8,818,000 adjusted for inflation to 2010).
Clarence Darrow agreed to represent Debs and, after a "brilliant" defense, may have been "robbed of a victory" due to the U.S. attorney dropping the prosecution of a charge of conspiracy to obstruct the mail after a juror's illness. Debs was then tried for, and eventually found guilty of violating the court injunction, and was sent to prison for six months.
At the time of his arrest, Debs was not a socialist. However, during his time in prison, he read the works of Karl Marx. After his release in 1895, he became the leading socialist figure in America. He ran for President for the first of five times in 1900.
A national commission formed to study causes of the 1894 strike found Pullman's paternalism partly to blame and Pullman's company town to be "un-American". In 1898, the Illinois Supreme Court forced the Pullman Company to divest ownership in the town, which was annexed to Chicago.
Pullman thereafter remained unpopular with labour, and when he died in 1897, he was buried in Graceland Cemetery at night in a lead-lined coffin within an elaborately reinforced steel-and-concrete vault. Several tons of concrete were placed to prevent his body being exhumed and desecrated by labor activists.
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