The most famous and widespread labor conflict was the Pullman Strike of 1894. The Pullman Palace Car Company was founded by George Pullman in 1867 to manufacture sleeper cars for the railroad; however, the economy was entering hard times by the 1890s. To curb the difficulties of the economy, Pullman built a town to house his employees. The severe economic depression, often referred to as “the Great Panic”, hit the company town of Pullman, Illinois in full force when Pullman laid off workers and reduced the wages of remaining employees. The reduced wages were also combined with increased utilities and rents—and the inability for employees to pay towards owning their home. After immediate negotiations failed to increase wages, 4000 factory employees began an impromptu wildcat strike and walked out of the Pullman Palace Car Company.
The wildcat strike was not obtaining the desired result as Pullman was able to hire strikebreakers to fill gaps and continue production. May 11, 1894, the American Railroad Union, founded by Eugene V. Debs in 1893, entered into the strike and called for a massive boycott of all trains that pulled a Pullman car. The Chicago based boycott spread to the entire continental United States and impeded the entire railroad infrastructure. With over 250,000 workers participating in the boycott and strike across 27 states, railroad companies began looking to the federal government for assistance in resolution.
Resolution first came in the form of a federal injunction. The boycott had impeded the motion of United States mail cars and forced President Grover Cleveland to step in and demand an immediate retraction of all boycott activities. When the American Railroad Union failed to comply, President Cleveland ordered the United States Army to intervene in Chicago and other select locations and put an end to the strike once and for all. When the army arrived, the protesters began to riot and in an unfortunate set of consequences, 26 civilians were killed in the crossfire with nearly $80 million worth of damage. Eugene Debs was arrested and charged with violating the court injunction and the American Railroad Union dissolved shortly after his arrest.
The most significant outcome of the Pullman strike was the identification of the federal government’s role in strike resolution and their ability to curtail the agenda of labor unions. Tension and threats of violence encouraged both labor unions and companies to let the government step in to resolve economic disputes—a significant turning point in the progressive nature of labor unions.