September 21, 2023: AmericanStudying the Panic of 1873: The Railroad Strike

[On September20th, 1873, the New York Stock Exchange closed for tendays, a key moment in the developing economic crisis that came to be known as the Panicof 1873. So for the 150th anniversary of that moment this weekI’ll AmericanStudy a handful of Panic contexts, leading up to a weekend post on2023 echoes of those histories!]

On how ahugely important labor action was influenced by the Panic, and vice versa.

As I wrotein my recent LaborDay Saturday Evening Post ConsideringHistory column, labor unions and labor activism go all the way back to thefoundational moments and eras in American history, and became significantlymore possible still (at least in legal terms) and thus more widespread afterthe 1842 Massachusetts Supreme Judicial Court decision I discuss there. Butthose antebellum labor organizations and actions generally remained local,contained to the specific communities and settings where they originated. Itwas in the period immediately following the Civil War that a truly nationallabor movement began to emerge, as illustrated by the August 1866 foundingof the National Labor Union in Baltimore and the 1869 creationof the Knights of Labor in Philadelphia. And not too long after, the firsttruly national labor action took place, the 1877 protests and riots that cameto be known collectively as the Great Railroad Strike.

The GreatRailroad Strike thus certainly has to be contextualized by both the labormovement’s longstanding presence and its unfolding late 19th centuryshifts, and it’s in those contexts that I’ve always thought about these 1877events. But in researching this week’s series, I’ve learned just how much thestrike was also influenced by the Panic of 1873 and the resulting depression. AsI discussed earlier in the week, the collapseof the railroad boom was a major factor in the Panic itself; moreover, oneof the immediate results of the Panic was the September1873 failure of financier Jay Cooke’s banking andinvestment company, which was closely tied to railroad bonds and thecollapse of which furthered the railroad implosion. Due to these factors(complemented and extended by the usual corporate greed and short-sightedness,natch), railroad companies began to cut workers’ wages consistently and steeply,culminating in three distinct and equally sizeablecuts in 1877 alone. As I discussed in that Saturday Evening Post column, the fight for better wages was alwaysat the heart of the American labor movement, and these post-Panic wage cutswere without question the central cause of the largest and most national laboraction to date.

So theGreat Railroad Strike of 1877 was clearly interconnected with and even causedby the Panic of 1873—but I would argue that the strike surely played a role aswell in helping end the post-Panic economic downturn. Most of the narratives ofthat 1870s Long DepressionI’ve encountered suggest that it simply “ended in 1879” (with some lingeringaftereffects, of course), but if American history teaches us anything abouteconomic downturns, it’s that counteringand reversing them requires specificand sustained government intervention.And I think it’s no coincidence that the first such sustained federalgovernment response to the Long Depression seems to have begun in late 1877,spurred on by newly elected President RutherfordB. Hayes’ Secretary of the Treasury John Sherman as well as Congressmenlike Missouri’sRichard Bland and Senators like Iowa’s William Allison.Government intervention requires both acknowledgment of the problem and acollective appetite for solutions, and I can’t imagine anything providing moreclarity on both counts than a nationwide labor strike.

Last 1873contexts tomorrow,

Ben

PS. Whatdo you think?