The Panic of 1893 and Labor Activism

The Panic of 1893 and Labor Activism

It would become clear by the late 1890s that fusion with the major political parties was a short-sighted strategy. In 1892, however, the Populists were becoming increasingly influential in state and local politics throughout the West and the South. To capitalize on this momentum and become a significant force in national politics, the Populists would have to do better at attracting urban voters and Northern farmers. This presented a host of challenges given the often-competing economic interests of farmers who owned land and equipment and laborers who worked for wages. In addition, Populist leaders would have to overcome cultural traditions that divided Northerners and Southerners, and transcend the cultural divide between rural and urban America.

Finally, the Populists needed to find a way to resolve tensions between the ethnically, racially, and religiously diverse citizenry and their base within the Farmer’s Alliance, which were predominantly old-stock Anglo Protestants. From a strictly tactical point of view, the Populists did not have to secure the support of black voters or any particular ethnic group to become a national political party. However, the People’s Party could not succeed if it failed to secure a significant foothold among the workforce of urban America, which was becoming increasingly diverse. These voters tended to support local political machines that provided immediate and tangible benefits to their communities. Most urban dwellers were unenthusiastic about some aspects of the Populist platform that were designed to benefit farmers, especially plans to increase farm prices through federally financed warehouses.

Given these obstacles, the Populists were relatively successful in crafting a class-based message based on the solidarity of all workers and farmers against bankers and Capitalists. This success was partially due to a lingering recession that began in the early 1890s and became a full-fledged depression in 1893. The depression would linger until the late 1890s. Similar to the railroad speculation that triggered the economic problems of the 1870s, the Panic of 1893A financial crisis that was spurred by railroad speculation. The Panic of 1893 led to high unemployment and a depression that lasted for several years. began when leading railroads declared bankruptcy. By the end of the year, 500 banks had failed and unemployment neared 20 percent. Farmers had experienced several years of depression before the Wall Street crash, while industrial workers faced declining pay.

Figure 3.16

An engraving depicting barges burning during the Homestead Strike, which is listed as the “Homestead Riot” by the publisher of the magazine that printed these images in 1892. Students should consider the implications of referring to the event as either a “riot” or a “strike.”

The most patent example of labor strife before the Panic of 1893 occurred in the steel mills of Pennsylvania. In the spring of 1892, a plant owned by Andrew Carnegie in Homestead, Pennsylvania, reduced pay just as a hard-won union contract was coming to an end. Management had anticipated the workers’ decision to strike and stockpiled warehouses full of finished steel in advance. Management also contracted with the Pinkerton detective agency to escort strikebreakers into the factory. The intent was to crush the union, which had secured the previous contract with a strike. The aging Andrew Carnegie was genuinely distressed about the resulting violence, yet did nothing to intercede with the decisions of the plant managers. After workers armed themselves and seized control of the plant, managers of the Homestead plant hired replacement workers and Pinkerton guards. The striking men clashed with the Pinkertons and sought to keep the replacement workers from entering the plant. Several men died in the conflict which was later crushed by federal troops. Most of the formerly unionized workers that survived the Homestead StrikeOccurred in 1892 when steelworkers in Homestead, Pennsylvania, were locked out of their mills following demands for higher pay. The conflict turned violent in early July when workers clashed with armed guards hired by Carnegie Steel, leaving a dozen people dead and leading to the deployment of National Guard troops. meekly accepted the reduced pay, twelve-hour shifts, and elimination of their union. From the perspective of the workers in Pennsylvania, any tears the distant Andrew Carnegie cried for those who died at his plant were crocodilian.

A businessman in Ohio named Jacob Coxey was outraged by the Homestead Strike. In addition to his sympathy for the laborers, Coxey believed that the federal government should borrow money and provide temporary jobs until the economy recovered. Although this idea would serve as the basis of the New Deal response to the depression of the 1930s, the notion was considered radical during the depression of the 1890s. Coxey was an outstanding promoter, however, and led a group of a hundred workers who marched from central Ohio to the nation’s capital to ask for jobs. By the time they arrived, their numbers had grown to several hundred, and they were joined by several thousand other unemployed men who launched their own journeys to Washington, DC, from communities across America. The media dubbed these men “Coxey’s ArmyA group of several hundred protesters who marched to the nation’s capital in 1894 in support of the ideas of Ohio politician Jacob Coxey. These Ohioans were joined by hundreds of others who believed that the federal government should provide temporary jobs following the Panic of 1893. However, Coxey’s ideas were not seriously considered and his “army” was turned away..” The federal government treated them as invaders. Coxey was arrested for “trespassing” on what was actually pubic land, and most of his followers returned to their homes.

Coxey’s Army inspired Populist supporter L. Frank Baum to write the novel The Wizard of Oz based on Coxey’s efforts and the Populist message. Although its political meaning was soon forgotten, Baum intended the Scarecrow to represent farmers, the Tin Man to represent industrial workers, and the Cowardly Lion to embody political leaders who often lacked the courage to represent their constituents over powerful outside interests. Overcoming these shortcomings, the three characters unite with Dorothy—a female personification of the purity of the American people and the strength of Populism in the Great Plains. Together, they marched along the yellow-brick road, which symbolized the gold standard as measured by ounces (abbreviated as “oz”). Together, they withstood the sinister plot of the wicked witch. The witch represented the money interests of the East that sought to divide farmers, workers, and political leaders. The four heroes finally reach Oz and meet the Wizard, a small man who hid behind a facade of smoke and mirrors. In the end, the only way home was for Dorothy to click her heels together. Although modern audiences remember those shoes as being ruby red, they were actually silver in the original novel and represented the Populist goal of free silver as a panacea for the nation’s economic woes.

The Knights of Labor endorsed the Populist Party, but their numbers had declined substantially following a number of strikes that had been crushed by federal and state governments during the last two decades. Other unions were hesitant to back the Populists. Skilled workers at this time joined craft-specific unions that were affiliates of the American Federation of Labor (AFL)A national federation of independent craft unions that was formed after a meeting in Columbus, Ohio, in 1886. Leaders of most of the nation’s largest unions were present at this meeting and agreed to join the AFL to coordinate their activities and increase their political clout., a national confederation of independent unions, which had been founded in 1886 by Samuel GompersFounded the AFL and led that organization from 1886 until his death in 1924, with the exception of a period between 1894 and 1895 when members of the organization revolted against his leadership because of his lack of support for the People’s Party.. The AFL focused on tactical goals, such as pay increases, through collective bargaining and strikes. The AFL was relatively successful in this regard, and the 250,000 skilled workers it represented by 1892 had enjoyed modest pay increases prior to the start of the depression. However, these wage increases would not last and the majority of laborers were not eligible to join the AFL.

Gompers’s union remained more conservative than groups such as the Knights of Labor. The AFL generally excluded women and minorities and rejected ideas such as collective ownership of factories. Many AFL leaders were reluctant to join the Populists, especially Gompers. The AFL leader specifically warned its members about the potential dangers of affiliating with any political party, especially an unknown quantity like the Populists. For a few years in the mid-1890s, however, some AFL members rejected Gompers and his advice and supported the Populists.

A major strike was launched during the depression by a union that was more radical than the AFL, the United Mine Workers (UMW), which was formed in the summer of 1894. The workers had two main demands: First, the return of wages to previous levels, and second, that these wages would be paid in cash. In the wake of bank failures and depression, it was difficult and expensive to finance operations in US dollars. This difficulty led mining companies and some factories to issue their own currency known as scripCurrency that is issued by an employer or some other organization and is not a legal tender.. This employer-issued currency was not legal tender. As a result, miners and factory workers who were paid in scrip could only redeem their paychecks for goods at company-owned stores. These goods were usually overpriced. Payment in scrip also prevented workers from moving or finding new jobs because they had no cash. Others became dependent on credit accounts that had been opened on their behalf at the company store.

Figure 3.17

An image depicting American Railway Union leader Eugene Debs as “King Debs” during the Pullman Strike. In this anti-union image, Debs is depicted as preventing the movement of railcars that were full of food while factories were forced to sit idle for lack of coal and other supplies.

Although the UMW had only 15,000 members, miners were part of a unique culture that stressed brotherhood and mutual aid. These principles were a matter of life and death given the dangers of mining and the importance of teamwork in completing their daily work. This brotherhood inspired solidarity behind the strike and also led miners to march from one mine to another to spread the word of their activities. By May, a strike that began only weeks earlier had grown to include an estimated 250,000 miners nationwide. Many eastern miners in Pennsylvania were subjected to violence from hired men known euphemistically as “detectives.” The miners gave as good as they got in skirmishes in West Virginia, Illinois, and Ohio. In the isolated coal fields of Colorado, thousands of miners marched hundreds of miles to spread word of the strike and support one another. However, in the lean times of the depression, the mines still offered better pay than many jobs that were more susceptible to the forces of supply and demand. As a result, the operators successfully resisted union demands in the 1890s. The strikes cost the companies hundreds of thousands of dollars in lost revenue in addition to the expenses of hiring the police force that was used to break the strikes.

A second major strike occurred in 1894 involving the Pullman Palace Car Company near Chicago. Industrialist George Pullman experimented with a theory called welfare CapitalismA system where private employers provide services for the welfare of their workers, such as health care and other benefits., building a factory town to house the workers who built his passenger railcars. Pullman believed the brutal living conditions and high rents workers endured in cities were a leading cause for their unhappiness. He hoped that by creating a model city and paying for all of his workers’ expenses, he would avoid labor strikes and command a loyal workforce. By establishing a factory in the countryside with fresh air and no access to alcohol, Pullman believed, Illinois would be home to a healthy and sober workforce with unparalleled productivity.

The factory town of Pullman featured relatively spacious living quarters, a beautiful library and church, and a store where workers could purchase items on credit. Employee purchases at the store, as well as rent, were deducted from their paychecks. Pullman’s welfare Capitalism was less liberal, however, when it came to freedom of expression. He did not tolerate dissent or even independent organizations or meetings in his town. He employed inspectors who watched the employees to make sure they abided by his standards of clean living and were not organizing any kind of labor movement. Although outsiders marveled at the order and cleanliness of this factory town, workers resented the controlling aspects of their employer. Still, as long as wages were high, most at least appeared to agree with middle-class observers who considered industrial workers “lucky” to live in work in a town like Pullman.

The depression reduced the demand for Pullman’s luxury railcars, and the factory responded with layoffs and pay cuts. These cuts were not accompanied by reduced rents or prices in the company store. As a result, workers were faced with conditions that resembled what sharecroppers faced—they had little or no pay once their rent and expenses were deducted. Many of Pullman’s employees were members of the American Railway Union (ARU) led by Eugene DebsAn Indiana politician who became one of the leading national figures in labor and political history from the 1890s to the early 1920s. Eugene Debs was a founder of the American Railway Union and led the Pullman Strike. He would later grow more radical in his criticism of the Capitalist system and represent the Socialist Party as its candidate for president in several elections.. In May 1894, the ARU supported a local strike of Pullman workers. More significant was Debs’s nationwide strike of all ARU members who refused to work on any train that included cars made by the Pullman Company. The potential significance of the Pullman Strike was clear: by mobilizing all workers within an entire industry, a strike began by workers at a single company could have national implications.

By July, the nation’s rail traffic had slowed substantially due to the large number of Pullman railcars. Even if rail companies agreed to isolate the Pullman Company, its thousands of railcars could not simply be placed on sidetracks. The federal government responded by ordering the strike to end and mobilizing troops to force railroad workers to follow the orders of their bosses. When this gambit failed, the government required trains with Pullman cars to also transport the US mail. If workers refused to work on these trains, they could be charged with the federal crime of interfering with the US mail.

President Grover Cleveland vowed to end the strike by any means possible. “If it takes every dollar in the Treasury and every soldier in the United States Army to deliver a postal card in Chicago,” he declared, “that postal card should be delivered.” The US attorney general broke the strike by securing a court order demanding an end to the strike because by slowing rail traffic the unions were acting to restrain trade. This was a provision of the Sherman Anti-Trust Act that was originally intended to limit the power of corporations and trusts rather than labor unions. However, because one union—and a controversial union leader such as Debs—had succeeded in disrupting the nation’s transportation network, it appeared to many as if the ARU had become too powerful.

With the intervention of the federal government, the Pullman StrikeIn response to a decline in wages, workers at the factory town of Pullman, Illinois, declared a strike in the summer of 1894. They were supported by Eugene Debs and the American Railway Union, whose members declared their intention to make sure no railcar made by the Pullman Company moved until the wages of their fellow workers were restored. Believing that the strike was derailing economic recovery, the federal government used the army to end the strike. was crushed and train traffic resumed its previous volume. The union at the Pullman factory was broken, and ARU and union activism in general suffered a major defeat. Had the Pullman Strike been successful and if unions were permitted to use sympathy strikes such as Debs had intended, the balance of power between workers and corporations might have been drastically altered. Instead, the workers who had participated in the strike were fired. Some were even blacklisted, meaning they were branded as “troublemakers” and their names placed on a list that was circulated to other employers. Debs himself was sent to jail for six months for his violation of an earlier court order. His sentence did not curtail his growing radicalism, as the union leader began envisioning the creation of a utopia in the West. Five years later, Debs turned to Socialism in hopes of fulfilling his dream of worker solidarity.

Figure 3.18

This turn-of-the-century illustration proposes the idea that consumers were the victim of conflicts between labor and management. The image depicts conflict between a Capitalist labeled “Commercial Trust” and a worker labeled “Labor Trust” who is wielding a club labeled “Strike.” On his knees between the two is a helpless “Consumer” who appears to be begging for mercy.

A small strike in the coal fields of western Missouri and eastern Kansas in 1899 demonstrated the folly of excluding workers of a particular race or ethnicity. Management of the Kansas and Texas Coal Company intentionally recruited only black workers in hopes of convincing their lily-white workforce that all would be permanently replaced if they did not end their strike immediately. Railroad management circulated handbills throughout the South that advertised Missouri and Kansas as “the paradise for colored people.” While these circulars urged Southern blacks “to join your friends in the land of plenty,” the reception these men received was anything but friendly. The 1,200 black men who arrived in the region on special trains that summer immediately recognized that their reception might be slightly less friendly than promised. Their convoys stopped to pick up armed guards, and management instructed the riders against looking out of their windows. A Midwestern sheriff demonstrated a much stronger prejudice than typified Southern lawmen, threatening to prevent blacks from entering his city “if it takes deputizing every man in Cherokee County [Kansas].” As a result, the miners were housed in stockades guarded by state troops and Pinkerton guards. If western Missouri and eastern Kansas was paradise for black men, one new arrival reportedly exclaimed, this was “as near as [he] ever wanted to get to heaven.”