Workers suspected that the railroads were coordinating their actions, blunting the effectiveness of a potential strike against one road by agreeing to take up its lost traffic until the strike ended. Now the B & O, another of the nation's four largest roads, had made its move. Several months earlier, the gigantic Pennsylvania Railroad had announced a similar wage cut. In the summer of 1877 the Baltimore and Ohio Railroad precipitated what became the nation's largest and most violent industrial strike to date with a ten percent wage reduction. Illinois, the High Court established the constitutional principle of public regulation of private businesses involved in serving the public interest.įacing declining revenues, the railroads cut their remaining workers' wages. The railroads quickly came to see the fate of the case as a key to their future profitability. Outraged, a partner in a Chicago grain warehouse had sued to overturn the legislation, and the case had wound its way through the federal courts. The laws also precluded the operators of grain elevators from taking advantage of their monopoly positions and virtually dictating crop prices to farmers. Many railroads believed that they depended upon these profitable routes for their survival. The laws prevented the carriers from extracting high profits on those routes where they faced little competition from water transportation or other railroads. In response to the Grange's persistent lobbying on behalf of farmers and other rural interests, the state of Illinois had begun to regulate rates charged by railroads and grain elevators. In March of 1877 the United States Supreme Court upheld the Granger Laws in the case of Munn v. Passenger rates fell by one-half, and freight rates by two-thirds along some competitive routes. Each in turn slashed its rates in order to attract passengers and freight traffic. Slow economic times, combined with a huge surplus in railroad capacity, brought the major carriers to a remorseless struggle for survival. The rich were comfortable because of their superior talents and thrift, argued the exponents of a new ideology that turned Charles Darwin's theory of evolution into a grim new vision of society's "survival of the fittest."Īmong American businesses, the depression especially undermined the positions of railroads. The poor were so because they lacked ability and determination. In this period many Americans came to embrace the doctrine of laissez faire, or the belief in the untrammeled free market represented a harmonious and self-regulating system producing the greatest good for the greatest number of individuals. Unsafe machines presented a threat to workers' health and safety, but courts consistently ruled that a worker accepted the risks of any job he accepted. Many workers labored ten or more hours per day, six days per week. Others required workers to live in company housing. This scrip could only be redeemed at company stores, which often charged considerably more than shops on the open market. Many employers pressed their advantage by requiring their employees to receive pay in company scrip rather than United States currency or bank notes. Workers in this period faced a bevy of challenges and potential threats. By 1877, craft unions represented fewer than one percent of all non-farm workers. The accelerating pace of mechanization also undermined the positions of many factory operatives by allowing unskilled labor to produce the same products that once required the command of special techniques. But in the early 1870s these groups still represented fewer than five percent of all non-farm workers in America. Skilled workers had responded to the rise of national business concerns like railroads by replacing their locally oriented groups with new national craft unions. Industrial workers now faced a marketplace that treated labor as a simple commodity. If a worker disliked or feared his working conditions, another hungry man would surely step forward to take his place. With so many unemployed workers available, stronger employers no longer feared strikes. The depression undermined the position of many workers and trades unions. Now their boards and managers laid off employees or cut wages, and many workers had nowhere else to go. Many had overextended themselves during the railroad building boom that followed the Civil War. These businesses faced straitened circumstances during the depression of the 1870s. Where individual proprietors had once retained labor, increasingly large corporations now hired workers for wages. In 1877 many of the tensions underlying American economic and political development in the Gilded Age came to a head.
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