[On September 20th, 1873, the New York Stock Exchange closed for ten days, a key moment in the developing economic crisis that came to be known as the Panic of 1873. So for the 150th anniversary of that moment this week I’ll AmericanStudy a handful of Panic contexts, leading up to a weekend post on 2023 echoes of those histories!]
On how a
hugely important labor action was influenced by the Panic, and vice versa.
As I wrote
in my recent Labor
Day Saturday Evening Post Considering
History column, labor unions and labor activism go all the way back to the
foundational moments and eras in American history, and became significantly
more possible still (at least in legal terms) and thus more widespread after
the 1842 Massachusetts Supreme Judicial Court decision I discuss there. But
those antebellum labor organizations and actions generally remained local,
contained to the specific communities and settings where they originated. It
was in the period immediately following the Civil War that a truly national
labor movement began to emerge, as illustrated by the August 1866 founding
of the National Labor Union in Baltimore and the 1869 creation
of the Knights of Labor in Philadelphia. And not too long after, the first
truly national labor action took place, the 1877 protests and riots that came
to be known collectively as the Great Railroad Strike.
The Great
Railroad Strike thus certainly has to be contextualized by both the labor
movement’s longstanding presence and its unfolding late 19th century
shifts, and it’s in those contexts that I’ve always thought about these 1877
events. But in researching this week’s series, I’ve learned just how much the
strike was also influenced by the Panic of 1873 and the resulting depression. As
I discussed earlier in the week, the collapse
of the railroad boom was a major factor in the Panic itself; moreover, one
of the immediate results of the Panic was the September
1873 failure of financier Jay Cooke’s banking and
investment company, which was closely tied to railroad bonds and the
collapse 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 sizeable
cuts in 1877 alone. As I discussed in that Saturday Evening Post column, the fight for better wages was always
at the heart of the American labor movement, and these post-Panic wage cuts
were without question the central cause of the largest and most national labor
action to date.
So the
Great Railroad Strike of 1877 was clearly interconnected with and even caused
by the Panic of 1873—but I would argue that the strike surely played a role as
well in helping end the post-Panic economic downturn. Most of the narratives of
that 1870s Long Depression
I’ve encountered suggest that it simply “ended in 1879” (with some lingering
aftereffects, of course), but if American history teaches us anything about
economic downturns, it’s that countering
and reversing them requires specific
and sustained government intervention.
And I think it’s no coincidence that the first such sustained federal
government response to the Long Depression seems to have begun in late 1877,
spurred on by newly elected President Rutherford
B. Hayes’ Secretary of the Treasury John Sherman as well as Congressmen
like Missouri’s
Richard Bland and Senators like Iowa’s William Allison.
Government intervention requires both acknowledgment of the problem and a
collective appetite for solutions, and I can’t imagine anything providing more
clarity on both counts than a nationwide labor strike.
Last 1873
contexts tomorrow,
Ben
PS. What
do you think?
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