George Mortimer Pullman was an engineer and ambitious entrepreneur. He found success as a building contractor. In 1867, Pullman created a new line of luxury railroad cars featuring comfortable seating, restaurants, and improved sleeping areas known as Pullman coaches. Following his success in 1867, he built a town on a four thousand acre piece of land. There, twenty-seven years after his initial success, one of the most dramatic events in United States labor history took place: the Pullman Strike.

In 1880, near Lake Calumet on the southwest edge of Chicago, the village of Pullman was built. His town contained a hotel, a school, a library, a church, and office buildings, as well as parks and recreational facilities. Pullman also built houses with indoor plumbing and gas heating. He managed his town as he did his other businesses; he leased the housing to his workers.

Many factors contributed to the economic downturn of 1893. The nation’s gold reserves dropped drastically, federal spending depleted U.S. Treasury surpluses, and finally the passage in 1890 of the Sherman Silver Act culminated in the financial panic of 1893. ¹ All of these events unleashed a domino effect on the American economy. Corporations failed, resulting in mass layoffs. Many banks also closed, unable to keep afloat during this chaotic time. Combined, all of these closures and general uncertainly plunged the country into a major economic depression. Pullman’s response to the crisis was to fire more than a third of his workforce; he instituted reduced hours and cut the wages for the remaining hourly employees by more than twenty-five percent. Because Pullman had promised the town’s investors a six percent return, there was no corresponding reduction in the rents and other charges paid by the workers. Rent was deducted directly from their paychecks, leaving many workers with no money to feed and clothe their families.²

In desperation, many of Pullman’s workers joined the American Railway Union (ARU). Eugene V. Debs was the organizer of the ARU and well known for a strike against the Great Northern Railway company. In May of 1894, Pullman workers went on strike. Workers agreed to permit trains carrying the U.S mail to operate as long as they did not contain Pullman cars. Railroads refused to participate. Despite Debs’ opposition, an ARU convention voted to stop handling Pullman cars after the company ignored efforts to settle the dispute. The union, by detaching Pullman cars from the trains, sought to deplete the revenues of the Pullman Palace Car Company (PPCC) and force negotiations.³ George Pullman refused to negotiate. As the strike proceeded, rail lines were shut down and the railroads formed the General Managers Association (GMA), an organization of twenty-four railroad companies operating in or through Chicago. The railroads were determined to honor their contracts with the PPCC, insisting that trains run with Pullman cars attached. Alarmed at the rapid growth of the ARU, they were eager for a chance to crush it.⁴

The ARU responded with a union walkout, and fifty thousand railroad workers walked off from their jobs. When striking workers refused to spread out and end the strike, U.S. attorney general Richard Olney, who supported the GMA, obtained an order holding the workers in contempt, declaring the strike illegal. Richard Olney requested federal troops, saying they were needed to move the mail, and President Grover Cleveland sent more than two thousand troops to Chicago. Rioting and fighting broke out between the troops and the strikers. Many strikers were killed and wounded by the troops. Debs was arrested and charged for disobeying the court order and for conspiracy to obstruct the U.S. mail. Debs spent six months in prison. Many workers returning to their jobs found out that they had been permanently replaced and blacklisted from future railroad work.

The failure of the strike was a major defeat for labor unions in the United States. The ARU fought for what they believed was right as labor workers, but with the unfortunate disagreement, and the undesirable fight against business management, and no agreement between both ARU and GMA, the strike came to an end by the federal government.⁵ Clearly, the Pullman Strike of 1894 was not only a defeat for American labor, but it had a significant impact on the life and welfare of American workers for decades. One legacy of this event, however, was the federal government’s decision to declare a national holiday, known as Labor Day, six days after the end of the strike.