The
Panic of 1893 began which devastated the railroad industry. Demand for sleeping cars plummeted, so to maintain a profitable enterprise, Pullman lowered wages for employees. Rents, automatically deducted from paychecks, were not decreased. Meanwhile, the
American Railway Union (ARU), led by
Eugene V. Debs, formed in Chicago on June 20, 1893. Membership grew to 150,000, including many of the white workers of Pullman. Pullman employees attempted to use the union to leverage support for wage increases, but their pleas were ignored. On May 11, 1894, employees went on strike. Pullman leadership, however, had put itself in a financial position to withstand a short-term work stoppage as the nation recovered from the financial panic. To combat this, the ARU launched a
boycott on Pullman, where ARU would refuse to run trains with the cars. The extensive use of Pullman cars across the country further crippled the railroad industry and stymied rail traffic. The twenty-four Chicago railroads represented by the General Managers' Association rallied together against the boycott. They used
strikebreakers to replace striking workers and convinced lines to run Pullman cars with their mail cars. If strikers shut down lines with mail cars, the federal government would have to intervene as it threatened interstate commerce. Indeed, lines were closed and the government found the boycott in violation of the
Sherman Antitrust Act. Thousands of
U.S. Marshals and
Army troops were deployed to Chicago to break the boycott. Fights between the workers and the military left dozens dead or injured. After ARU leaders, including Debs, were jailed, the strike and boycott were quelled. Some workers that renounced the union were allowed to return to work. Although the public was generally opposed to the boycott, the strike also tarnished the Pullman brand. Pullman died in 1897 and had his grave sealed in a block of concrete and steel to prevent desecration of his body.
Aftermath The Pullman Strike changed the American labor landscape. It was an example of the power a union could have against an industry, but it also affirmed the right of the government to intervene against strikes, particularly after the
Supreme Court upheld the actions in
in re Debs (1895). The
Illinois Supreme Court forced the Pullman Company to sell its non-industrial holdings in 1898 and residents were given the first option on purchasing their houses. Most of the land was sold off by 1907. Under second president
Robert Todd Lincoln, Pullman cars were converted to all-steel construction. This required a $5 million investment in remodeling the shops. Despite a brief labor strike in 1904, the Pullman Company restored its place as a leading railcar provider. However, the town never recovered its identity as a company town as employees moved to newer neighborhoods nearby. ==Agreement with Brotherhood of Sleeping Car Porters==