CHAPTER 20The End of Mutual Relations

In the first years of Pullman's Palace Car Company (PPCC), Albert supervised the small car-building workforce. Mass production had not yet entered the railroad industry. A desire to proclaim the uniqueness of each new product drove the brothers forward, propelled by fear and desire. Having been a carpenter himself, Albert understood the need to protect skill, nurture workers, and foster harmonious relations in the workshop. His mutualist approach denied the possibility that capital and labor had diametrically opposed interests or that conflict could have positive outcomes. The skilled workers with whom he cooperated on design and construction in the shed in Bloomington, Illinois, shared this outlook, as did many working people into the 1870s.

Mutual labor relations rested on the assumption of a common interest in the profitable organization and operation of economic units. The approach derived from the medieval ideal of the guilds, in which—in theory if not always in practice—masters, journeymen, and apprentices formed a coherent and cooperative hierarchy. Everyone worked side-by-side for the advancement of the master, and everyone automatically benefited. Local knowledge and awareness of each other's personal lives were key to mutualism in this sense, although, of course, friction, unhappiness, inequities, and indiscipline existed. As workshops developed into factories and professional managers mediated between owners and workers, the expanding scale of production destroyed the full range of interpersonal interactions.

In the railroad industry, the earliest firms adopted the mutualist ideal. Skilled drivers came with new locomotives, while a range of ranks shared a fictive kinship and a putative equality suited to a republican society. Scale came early to the industry, however. Mutualism dimmed as railroad lines lengthened and impersonal, long-distance relationships developed. Shareholders with little or no knowledge of the lives of the wage earners generating dividends cared little for the latter's welfare. Liberal notions of the relationship between employees and the firm meant corporate duty began and ended with the payment of wages, a shift reflected in liability law. Companies legally owed nothing to railroad employees killed or injured at work.

FIGURE 5. Interior of sleeping car Chicosa, an example of the intricate interiors Albert Pullman helped to create. Reproduced by permission of the Pullman Palace Car Company Photographs, Archives Center, National Museum of American History, Smithsonian Institution.

FIGURE 6. Sleeping car Chicosa on the Pullman transfer table, Pullman, Illinois. Reproduced by permission of the Pullman Palace Car Company Photographs, Archives Center, National Museum of American History, Smithsonian Institution.

Employees of the Pullman Company experienced this trajectory. As the construction of new cars accelerated to meet growing demand, Albert's direct role in production shrank. He ordered materials for the interiors and helped install upholstery, carpeting, and curtains. He learned about brakes, heaters, wheel sets, ventilation systems, and window sashes while sharing what he knew about carpentry and design. Albert treated the men making the cars as human beings rather than factors of production to the benefit of both, but excursions increasingly took him away from the shop floor. And factories in Detroit, Michigan, and later Jersey City, New Jersey, took the workers away from Albert. An ironic effect of Albert's success as an excursion host was the destruction of the mutual relations he valued. No individual could hope to manage every element of the Pullman operation, which, by 1887, encompassed three shops in three different states expending a total of $80,000 monthly in major repairs alone.¹

Though widespread in the early years of industrialization, mutualism began to disintegrate after the Civil War. In the 1870s, as corporations multiplied and expanded, friction accelerated between labor and capital. When the Pullman workforce gave Albert a horse and carriage to mark the end of his active supervision, he spoke of “the pleasant business relations we have sustained” and thanked them for their “hearty good will, and personal regard and esteem.”² These were no empty phrases but the language of mutualism. As workplaces grew larger, however, what had been viewed as a shared endeavor gradually became a divided field. The mutualist compact between managers and employees disintegrated as mass production, immigration, impersonal corporate bureaucracies, and a growing emphasis on profit reshaped economic activity.

Across the industrialized world, wage workers responded by organizing into labor unions. Initially retaining a mutualist outlook, they balanced craft exclusivity with a desire for social harmony. On the railroads, workers formed “brotherhoods,” beginning with locomotive engineers in 1863. The brotherhoods coalesced around groups of skilled white workers who demanded respect from supervisors, promoted the idea of shared interests between bosses and workers, and defended their right to control hiring, hours, and assignments.³

Fraternal benefits—life and accident insurance and regular convivial gatherings in return for small subscription fees—attracted members. But when railroad companies reacted to economic downturns by lowering wages and firing workers, the brotherhoods explored ways to fight back. From these tentative beginnings, a growing emphasis on conflict between workers and owners replaced the assumption that common ground undergirded their relationship.⁴ Division slowly exacerbated difference, and strikes became part of the armory of organized railroaders.

The rift widened dramatically in 1877. Facing increased competition for traffic from new lines and financially shattered by the Panic of 1873, railroad companies adopted cost-saving policies and practices. First in Canada and then in the United States, they tried to increase productivity—to squeeze more work out of the existing labor force, as the employees saw it—by lengthening trains to operate fewer of them. Shareholder dividends tumbled because of wider economic conditions, investors complained, and the companies cut wages. On July 11, 1877, following the example of the gargantuan Pennsylvania Railroad, the Baltimore & Ohio (B&O) Railroad reduced wages by 10 percent. In Martinsburg, West Virginia, the lines clogged and closed as locomotive crews walked out in protest. The governor of West Virginia ordered the state militia to reopen the lines, which it did by shooting striking workers, one of whom died of his wounds.

Even as B&O railroaders were forced back to work, the strike spread. Accumulated grievances burst into the open and undercut mutualist assumptions, not least because of the responses of government at every level. At the major junction of Pittsburgh, a city almost entirely controlled by the Pennsylvania Railroad, a combination of insensitive supervisors and a superintendent's order to assemble longer trains with two locomotives—which threw some employees out of work and lowered the pay of others—led to a strike by train crews on July 19, 1877. Other railroaders joined in until almost all rail traffic ground to a halt in western Pennsylvania.

With no one in authority at their desks in the company's Philadelphia headquarters, the system came to a standstill while local managers awaited orders. Townspeople angered by the Pennsylvania's overwhelming power joined the strikers. National Guard troops and a detachment of Black soldiers from Philadelphia tried ineffectually to quell the disorder. Tensions rose and gunfire erupted. Several strikers died and others were wounded in the fighting. Under attack from enraged Pittsburghers, the vastly outnumbered militia members hid their weapons and vanished while the Philadelphia detachment retreated into a roundhouse before it was torched and they fled for their lives.

As violence spread, the Pennsylvania Railroad found itself paying the price for changing work routines. Company executives stamped out individual autonomy, initiative, and tradition, treating employees not as independent men in a republic but as disposable servants to whom the railroad owed no loyalty. The strike gained popular support as people rushed to the depot to find out for themselves what was happening. Burning railcars, razed buildings, and the ruins of a hotel and the roundhouse greeted them. A blazing freight car derailed and set several oil tankers on fire while looters ransacked boxcars. Strikers blocked tracks across the system.⁵ Mutualism was dead.

As the nation's railroad hub, Chicago was particularly affected when the strike moved beyond Pennsylvania. Lines entering the city came to a standstill. Derailed cars made movement impossible and workers’ organizations in other industries called for a general strike. Club-wielding police scattered crowds gathered to protest declining wages. The city's elite mobilized to protect their lives and their property. The local Law and Order League, headed by George Pullman, called for drastic measures to defend businesses, clear streets, and maintain peace at all costs.⁶ The state deployed two regiments of Illinois militia, sending troops to key railroad junctions and defending armories from attack. Fearing these preparations would prove insufficient to restore order, Governor Shelby M. Cullom appealed for help. The federal government mobilized troops at Rock Island and sent soldiers from Nebraska and Montana Territory to defend the city from what looked to some Americans like a revolutionary uprising.⁷

Cullom was not alone in calling for reinforcements. President Rutherford B. Hayes, pressed by railroad managers, dispatched federal troops to suppress the strikes. Economic depression, growing unemployment, and price increases generated the protests, but newspapers blamed mob action and the irrationality of working people for the violence. Press accounts focused on the destruction of property and the rage of the strikers and their allies. According to these stories, agitators whipped people into a fury and encouraged them to steal weapons and food, destroy railroad cars and buildings, storm banks, and attack soldiers. According to one report, “the mob are frantic with excitement.”⁸ The Pennsylvania Railroad blamed “mob violence” for the destruction. Claiming it needed the money to rebuild its Pittsburgh facilitates, the company did not pay a quarterly dividend.⁹ When customers inquired about restitution for damaged goods, officials told them to complete claim forms the railroad would submit to Allegheny County. Company directors believed the county had failed to control its populace and should therefore be held liable, demanding $2.6 million in damages and interest.¹⁰

The Pittsburgh fires destroyed the Pullman laundry, its local office, and eight Palace cars.¹¹ When Pullman officials demanded compensation from the Pennsylvania Railroad, citing a clause in their contract holding the company liable for any “damage to the cars arising from accident or casualty,” the railroad refused to pay. Railroad officials recommended Pullman join the queue and sue Alleghany County.¹² Hiring D. J. Watson, a lawyer working with the Pennsylvania Railroad, Pullman did exactly that.¹³

With so many cases on the docket, Alleghany County responded slowly. Frustrated by the delays, George Pullman traveled to Pittsburgh in January 1880. He took PPCC accountants with him at Watson's urging in order to explain the company's demand for $78,000 in damages. Watson told George that the county commissioners did not believe Pullman's damage estimate. George met with Pennsylvania Railroad officials and the commissioners, aware from Watson that a payment was possible but only on the commissioners’ terms. The county settled all claims for a total of $1.6 million, $58,000 of which went to PPCC, a third less than the sum George demanded.¹⁴

Mutualism died in other ways, too. The Panic of 1873 combined with the railroad strike of 1877 struck fear into the American upper class, who responded by withdrawing from leisure pursuits that brought them into contact with working people. As the historian Sven Beckert writes, exclusive social clubs became central to the culture and self-identity of the wealthy after the turmoil of the 1870s. Philanthropic activity directed at needy people did not vanish, but upper-class Americans invested more time and energy on large dinners and other social functions for themselves than in reaching out to those below them on the social scale. Elite Americans made a concerted effort to draw a clear line between “those who belonged to the bourgeois world and those who did not.” Exclusivity meant unity: even as celebratory feasts and fancy parties separated classes, they tightened connections among elites.¹⁵

Most conspicuously evident in Manhattan, the new social exclusiveness—one might call it class consciousness—entered Chicago. Before 1877, the city had just one upper-class club, the Chicago Club. Its prime location across from the Palmer House made the Chicago Club a crucial node in Chicago business networks. Both Albert and George paid the $300 initiation fee and subscribed $80 annually to be members.¹⁶ In the months immediately following the 1877 strike, however, competitors appeared. Businessmen created the new Union Club downtown and the Calumet Club on the south side. George joined the Union League Club, a national organization for leading Republicans.¹⁷ In December 1877, George Pullman and Benjamin Field helped to form the Commercial Club to foster “the growth and prosperity of the City of Chicago.” They planned, among other initiatives, to encourage the federal government to build and equip Fort Sheridan in the event the city needed protection in a hurry.¹⁸ Not to be outdone, Albert joined other gentlemen who established the West Side Club at St. Caroline's Court Hotel, though this organization seems to have been less concerned with social control and more with sociability.¹⁹

Company-funded welfare plans represented another response to the development of labor unions generally and to the strikes of 1877 specifically. Railroads began providing insurance against accidents and sickness to select groups of workers, usually the high-earning employees who joined brotherhoods. Offering these benefits had been common practice in the United Kingdom since the 1850s, something Albert and George learned from their interactions with the Midland Railway. That company had established a friendly society (a type of mutual benefit club) for employees in 1859, providing support to members and their families after accidents, in sickness, and in old age. By 1880, half of the total Midland workforce joined it, testament to its solid reputation. Midland Railway general manager James Allport played a prominent part in the nationwide Railway Benevolent Institution (RBI), which assisted other railway workers.²⁰

Pullman pioneered company-administered life insurance in the United States. In 1873, Albert, at George's request, took the lead in creating the Pullman Mutual Benefit Association (PMBA) and served as its first president. The PMBA was designed “to enable all employees of sleeping or palace car companies, and such other persons as may desire, to have their lives insured at a comparatively slight cost to themselves.” Joining the association required payment of a relatively modest $2 initiation fee, but the real burden was the $1 levy on members when one of their number died. This was, in theory, its strength: there would always be money to pay the death benefit, although neither the annual cost of membership nor the actual amount paid to survivors could be known beforehand.²¹ Pullman employees did not appreciate the unpredictable nature of the levy and of the benefits, and the PMBA did not catch on, especially as mistrust in the company grew.

The first American railroad to open a similar organization was the B&O, whose “relief department” appeared in 1880, seven years after the PMBA.²² Before then, workers who were killed or injured could expect little or no assistance from employers guided by Liberal labor relations philosophies. Corporations like Pullman and the railroads accepted almost no liability for workplace accidents. Fraternal orders and mutual benefit societies, including the brotherhoods, filled the void, but most workers remained uninsured. Some employers subsidized insurance, but this was rare in the United States.²³ While inspired by the Midland Railway Friendly Society, the PMBA was a reaction, though not a particularly successful one, to the growing presence of labor unions.²⁴ Designed for a maximum of two thousand members, it came nowhere near attracting that number and, as labor relations deteriorated, the company lost interest “in insurance or relief undertakings or organizations on behalf of its employes.”²⁵ Mutualist ideals and organizations had no place in the post-1877 corporate economy.

The demise of mutual relations in the railroad industry contributed to Albert becoming marginal to Pullman Company operations. His own actions did not exactly burnish his reputation. The insurance firm collapse and the banking failure convinced him to look temporarily for safer investments. His work in England gave him a new political outlook, and he developed a liking for the Chicago Democratic party, finding its characters sympathetic and its policies congenial. Most of all, he drew on his early experiences with politicians to forge new networks in the political arena, widening the gulf with George.