Great Railroad Strike of 1877
1873 saw a significant economic depression in Europe. The effects of this downturn reached the United States on September 18 with the failure of banking firm Jay Cooke and Company. As Cooke was the country–s top investment banker, the principal backer of the Northern Pacific Railroad as well as a prime investor in other railroads, and as the company which had handled most of the government–s wartime loans, its failure was catastrophic. In response, the U.S. economy sputtered and then collapsed. Shortly after Cooke–s demise, the New York Stock Exchange closed for 10 days, credit dried up, foreclosures and factory closings became common. Of the country's 364 railroads, 89 went bankrupt, over 18,000 businesses failed between 1873 and 1875. Unemployment reached 14 percent by 1876, while workers who kept their jobs were employed for a mere six months out of the year and suffered a 45% cut in their wages to approximately one dollar per day. This economic cataclysm is now referred to as the Panic of 1873.
While the public blamed President Ulysses S. Grant and the United States Congress for mishandling the economy, in particular Grant's monetary policy of contracting the money supply, the causes of the panic were actually much deeper. With the end of the Civil War, the country experienced feverish, unregulated growth, especially in the railroad industry, with the government giving massive land grants and subsidies to railroad companies. Thus, the massive overbuilding of the nation–s railroads, and the overinvestment by bankers of depositors– funds in the railroads laid the foundation for the Panic and the depression that followed. A full economic recovery was not seen until 1878-79.
When the Civil War ended, a boom in railroad construction ensued, with roughly 35,000 miles of new track being laid from coast-to-coast between 1866 and 1873. The railroads, then the second largest employer outside of agriculture, required large amounts of capital investment, and thus entailed massive financial risk. Speculators fed large amounts of money into the industry, causing abnormal growth and over expansion. Cooke's firm, like many other banking firms, was investing a disproportionate share of depositors– funds in the railroads, thus paving the way for the ensuing collapse.
In addition to Jay Cooke's direct infusion of capital in the railroads, the firm had become a federal agent for the government in the government–s direct financing of railroad construction. As building new track in areas where land had not yet been cleared or settled required land grants and loans that only the government could provide, the use of Jay Cooke–s firm as a conduit for federal funding worsened the effects that Cooke–s bankruptcy had on the nation–s economy.
In the wake of the Panic of 1873, a bitter antagonism between workers and the leaders of industry developed. By 1877, 10% wage cuts, distrust of capitalists and poor working conditions led to a number of railroad strikes that prevented the trains from moving. This antagonism lingered well after the depression ended in 1878-79, eventually erupting into the labor unrest that marked the following decades and that eventually led to the birth of labor unions in the United States.
Additionally, the 1876 presidential election between Samuel J. Tilden and Rutherford B. Hayes had been a narrow victory for Tilden in the popular vote, but while Tilden had a plurality of electoral votes (184-165) he did not have a majority as is required by the United States Constitution. This sent the election to the House of Representatives who were unable to reach agreement. On January 29, 1877, the U.S. Congress passed a law forming a 15-member Electoral Commission to decide on a winner. Five members came from each house of the U.S. Congress, with the other five members coming from the Supreme Court of the United States. Thanks in part to a deal brokered by Thomas Alexander Scott (who will surface as a figure during the strike), the commission awarded the disputed electoral votes to Hayes. Thus, the mood of the country grew darker, as those who had voted for Tilden felt disenfranchised.
The great railroad strike of 1877 started on July 14 in Martinsburg, West Virginia, in response to the cutting of wages for the second time in a year by the Baltimore & Ohio Railroad (B&O). Striking workers would not allow any of the stock to roll until this second wage cut was revoked. The governor sent in state militia units to restore train service, but the soldiers refused to use force against the strikers and the governor called for federal troops. Meanwhile, the strike spread to Cumberland, Maryland, stopping freight and passenger traffic. When Governor John Carroll of Maryland directed the 5th and 6th Regiments of the National Guard to put down the strike, citizens from Baltimore attacked the troops as they marched from their armories towards B&O's Camden Station for the train to Cumberland, causing violent street battles between the striking workers and the Maryland militia. When the outnumbered troops of the 6th Regiment fired on an attacking crowd, they killed 10 and wounded 25. The rioters injured several members of the militia, damaged engines and train cars, and burned portions of the train station. On July 21–22, the President sent federal troops and Marines to Baltimore to restore order.
Pittsburgh, Pennsylvania became the site of the worst violence. Thomas Alexander Scott of the Pennsylvania Railroad, often considered one of the first robber barons, suggested that the strikers should be given "a rifle diet for a few days and see how they like that kind of bread." However, local law enforcement officers refused to fire on the strikers. Nonetheless, his request came to pass on July 21, when militiamen bayoneted and fired on rock-throwing strikers, killing twenty people and wounding twenty-nine others. Rather than quell the uprising however, this action merely infuriated the strikers who then forced the militiamen to take refuge in a railroad roundhouse, and then set fires that razed 39 buildings and destroyed 104 locomotives and 1,245 freight and passenger cars. On July 22, the militiamen mounted an assault on the strikers, shooting their way out of the roundhouse and killing 20 more people on their way out of the city. After over a month of constant rioting and bloodshed, President Rutherford B. Hayes sent in federal troops to end the strikes.
Three hundred miles to the east, Philadelphia strikers battled local militia and set fire to much of Center City before federal troops intervened and put down the uprising.
Pennsylvania's third major industrial city at the time, Reading, was also hit by the Strike's fury. This city was home of the engine works and shops of its namesake Reading Railroad, against which engineers were already on strike since April 1877. Fresh work stoppage all classes of the railroad's local workforce; mass marches; blocking of rail traffic; trainyard arson; and the burning down of the bridge providing this railroad's only link to the west - to prevent local militia from being mustered to Harrisburg or Pittsburgh - were prelude to the Reading Railroad Massacre, in which sixteen citizens were shot by state militia mobilized by Reading Railroad management, not by local public officials.
The strike then spread to the American Midwest, increasing in brutality and intensity. On July 21, disgruntled workers in East St. Louis, Illinois, halted all freight traffic, with the city remaining in the control of the strikers for almost a week. The strike was finally halted by a combination of military force, and an injunction that ordered workers not to interfere with railroad operations.
On July 24, rail traffic in Chicago was paralyzed when angry mobs of groups of unemployed citizens wreaked havoc in the rail yards, shutting down both the Baltimore and Ohio and the Illinois Central Railroads. Soon, other railroads were brought to a standstill, with demonstrators shutting down railroad traffic in Bloomington, Aurora, Peoria, Decatur, Urbana and other rail centers throughout Illinois. In sympathy, coal miners in the pits at Braidwood, LaSalle, Springfield, and Carbondale went on strike as well. In Chicago, the Workingmen–s Party organized demonstrations that drew crowds of twenty thousand people.
Judge Thomas Drummond of the United States Court of Appeals for the Seventh Circuit, who was overseeing numerous railroads that had declared bankruptcy in the wake of the Panic of 1873 rules that "A strike or other unlawful interference with the trains will be a violation of the United States law, and the court will be bound to take notice of it and enforce the penalty. Drummond told federal marshals to protect the railroads, and asked for federal troops to enforce his decision: he subsequently had strikers arrested and then tried them for contempt of court.
The mayor of Chicago, Monroe Heath, asked for five thousand vigilantes to help restore order (they were partially successful), and shortly thereafter the National Guard and federal troops arrived. On July 25, violence between police and the mob erupted with events reaching a peak the following day. These blood-soaked confrontations between police and enraged mobs occurred at the Halsted Street viaduct, at nearby 16th Street, at Halsted and 12th, and on Canal Street. The headline of the Chicago Times screamed, "Terrors Reign, The Streets of Chicago Given Over to Howling Mobs of Thieves and Cutthroats." Order was finally restored, however, with the deaths of nearly 20 men and boys, the wounding of scores more, and the loss of property valued in the millions of dollars.
The 1877 Shamokin Uprising occurred on July 25, when 1000 men and boys, many of them coal miners, marched to the Reading Railroad Depot in Shamokin, Pennsylvania. They looted the depot when the town announced it would only pay them $1/day for emergency public employment. The mayor, who owned coal mines, formed a vigilate group that killed 2 out of 14 civilian shooting casualties.
The Great Railroad Strike of 1877 began to lose momentum when President Hayes sent federal troops from city to city. These troops suppressed strike after strike, until at last, approximately 45 days after it had started, the Great Railroad Strike of 1877 was over.
The strike and its repercussions were attributed on a number of factors by contemporaries:
While no complete accounting of the economic losses caused by this strike exists, it is known that the engineers' and firemen's brotherhoods lost approximately $600,000 over the forty-five days of the strike, while for the Burlington Railroad the losses were at least $2,100,000.
After the Great Railroad Strike of 1877, union organizers planned for their next battles while politicians and business leaders took steps to ensure that such chaos could not reoccur. Many states enacted conspiracy statutes. States formed new militia units, and National Guard armories were constructed in a number of cities. For workers and employers alike, the strikes had shown the power of workers in combination to challenge the status quo. They were driven, as a Pittsburgh state militiaman, who was ordered to break the 1877 strike, pointed out, by –one spirit and one purpose among them–that they were justified in resorting to any means to break down the power of the corporations.–
Thus, in the wake of the strike, unions became better organized and the number of strikes increased. In the 1880s there were nearly ten thousand strikes and lockouts and in 1886 nearly 700,000 workers went on strike. As is to be expected, business leaders took a more rigid stance against the unions. Nonetheless, and possibly because of the more rigid stance, the labor movement continued to grow.
One result of the strike was increased public awareness of the grievances of railroad workers. In 1880 the B&O railroad, which had the lowest wage rate of any major railroad, established the Baltimore and Ohio Employees' Relief Association, which provided coverage for sickness, injury from accidents, and a death benefit. In 1884, the B&O became the first major employer to offer a pension plan.
In 1886, there was a national strike aimed at reducing the average workday from twelve to eight hours, and 340,000 workers struck at 12,000 companies nationwide. In Chicago, police were trying to break up a large labor meeting in Haymarket Square, when a bomb exploded without warning, killing a police officer. Police fired into the crowd, killing one and wounding many more. Because of the riot, four labor organizers were hanged. The hangings of these organizers took the steam out of the national labor movement and energized management. By 1890, Knights of Labor membership had fallen to ten percent of its previous levels.
In 1893-1894, a severe depression swept the nation and America saw some of its worst strikes in history, including that against the Pullman Palace Car Company. The strike, which had been caused by severe wage cuts, stopped railroad traffic, with battles between troops and strikers breaking out in twenty-six states.
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