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A Story for Labour Day

In these days of ‘gig’ employment and lots of home delivery options, we may forget why there is a day dedicated to those who work for a living—that is, most of us. In the late 1800s, there was a lot of labour unrest, in part because of long hours, over-controlling bosses, low pay and dangerous working conditions. Below is an example, from Volume 2 of my book The Yankee Road of an entrepreneur who went too far.

The Pullman Experiment

George M. Pullman was born in 1831 in Brocton, New York, a village located on US 20 in Chautauqua County, a few miles southwest of Dunkirk, the original western terminus of the Erie Railroad. Brocton was called Salem Corners by its early Yankee settlers, but later renamed in honor of prominent local families the Brockways and the Mintons. Pullman’s father was from Rhode Island, while his mother was a Minton. He was one of ten children, and his father had considerable trouble providing for his large family. George had a few years of schooling, but continued to study on his own at night for many years.

At age fourteen, he found a job as a clerk in a general store. Three years later, he moved to Albion, New York, on the Erie Canal north of Batavia, where he joined a brother making cabinets. Then, he bid and won a contract to move some structures near the canal to free up space for some widening of the waterway.

In 1853, George’s father died after a long illness (possibly tuberculosis), and George helped support his mother and siblings. By 1855, he had accumulated $6,000 from his contracts, and decided to move to Chicago, where he gained more work from locals who were being forced by the city to raise their houses up above the marshy, lakeside level. Moving from house-lifting to larger structures, Pullman became prosperous.

The Pullman Palace Car

In 1859, he noticed businessmen buying headrests in an attempt to get some sleep on an overnight train, and some of his old cabinet-making experience came back to him. Why not make a railcar that had beds for sleeping? He managed to acquire two old passenger cars from the Chicago and Alton Railroad and turned them into “sleepers.” They were put on the Chicago to St. Louis overnight run. They were rough but popular, given the alternative.

Then, Pullman got caught up in the Colorado gold fever, and went off to find his fortune. Like so many others, he had little luck, and by 1863 he was back in Chicago. He spent the next year, and $18,000, developing his “Palace Car,” a bigger and more luxurious sleeper. His big break came in 1865, when the US government opted to use the car, which Pullman called “The Pioneer,” to transport the body of Abraham Lincoln from Washington to Springfield, Illinois for the funeral. Pullman never looked back.

The Landowner

By the late 1870s, his successful company was in need of a large area for a new railcar construction site. Pullman decided to acquire four thousand acres of land south of Chicago in Calumet County, near the Illinois-Indiana border and a short distance from Lake Michigan. There, he built new shops and hired an architect to design a townsite for his employees, as the works would be far from other towns and local transportation was spotty. Moreover, Pullman wanted his workforce and their families dependent on him and subject to his opinions on propriety and morality.

By 1885, 1,400 housing units were available. Pullman decided not to sell the homes, but to have his employees rent from him. As well, he provided stores and public meeting places — all for rent. This policy, oddly enough, included church services: he had a non-denominational church built in the center of town, and was irate when he found that the mostly immigrant families did not want to share this rental facility and co-ordinate services with other denominations. Pullman’s insistence on rent and on owning the store and the bank carried his paternalism to an extreme. He wanted a 6 percent return on his non-factory assets, but never did achieve it.

The Big Strike

Coal companies in rural Pennsylvania might be able to exploit their geographical advantage to exercise similar control over workers’ lives, but Chicago was not rural, and it was expanding rapidly. Soon, a growing proportion of Pullman’s workforce was commuting to the works from their owned or rented houses elsewhere.

Pullman tried pressuring them to move to his facilities, but in insisting on a 6 percent return, he let amenities and homes deteriorate. When the economy crashed in 1894, he thought he could lay off employees and still get his rent from them. Workers left, which only made him dictatorial. Finally, they went on strike.

The Pullman strike entered history only because ‘muckrakers’ exposed Pullman’s town practices in the newspapers and thus railroad workers across the country, who were hurting as badly as everyone else, decided they would not operate any trains that had a Pullman car attached.

Pullman’s Failure

In the end, this became a national crisis, and President Grover Cleveland felt he had to call up army units to establish order. Eventually, the Illinois Supreme Court found that the company had violated its charter by becoming involved in land deals, rather than simply railcar construction and repair. Pullman’s experiment in welfare capitalism was over.