The American Yawp — Chapter Fifteen: Capital and Labor
Abridged for Intermediate-High Learners

In 1877, railroad workers across America went on strike. Their companies had cut wages even while paying rich dividends to shareholders. Workers shut down rail traffic from Baltimore to St. Louis. State militias fired on crowds; in Baltimore, eleven strikers died. President Rutherford B. Hayes sent federal troops, and after six weeks the Great Railroad Strike was crushed. Nearly one hundred Americans died. The strike showed that industrial America had entered an age of conflict between capital and labor.

Railroads led the march of capital. National railroad mileage tripled after the Civil War. Governments gave railroad companies a generous land subsidy and millions in bonds. Railroads created a national market and made fortunes for investors. The corporation was a legal invention that let companies raise enormous sums while protecting owners from losses. Between 1895 and 1904, thousands of companies merged as competition melted into monopoly. In 1901, banker J. P. Morgan formed U.S. Steel, the world's first billion-dollar company. By 1913 the United States produced one third of the world's industrial output. Technology also changed life: Thomas Edison built an electric power system, Frederick Taylor's "scientific management" divided factory work into small, repeated tasks, and mechanization replaced skilled workers with machines.

Wealth and poverty grew together. Writers called it the Gilded Age: a glittering surface over deep inequality. "Robber barons" like Cornelius Vanderbilt, John D. Rockefeller, Andrew Carnegie, and J. P. Morgan won enormous fortunes; by 1900 the richest 10 percent may have controlled 90 percent of the nation's wealth. Some rich Americans defended inequality with social Darwinism, claiming that the "survival of the fittest" made the rich naturally superior. The Republican Party became the party of business and kept the tariff high to protect American factories from foreign competition.

Workers fought back through unions. The Knights of Labor welcomed skilled and unskilled workers, including women, and grew to 700,000 members by 1886. That year a national strike for the eight-hour day shook the country. In Chicago, a bomb exploded during a protest at Haymarket Square, killing seven policemen; the court charged each anarchist with conspiracy, and four were hanged. The American Federation of Labor, a union of skilled craftsmen, sought "pure and simple" gains: higher wages, shorter hours, safer conditions. In 1892, steel workers at Homestead, Pennsylvania, battled hundreds of Pinkerton detectives hired by the mill. In 1894, railroad workers boycotted Pullman cars nationwide in support of striking Pullman employees; President Grover Cleveland sent federal troops, and a court injunction jailed the union's leader, Eugene V. Debs. Debs left prison a socialist. The final two decades of the century saw over twenty thousand strike and lockout actions.

Farmers organized too. Falling crop prices and heavy debts drove them into the Farmers' Alliance, and in 1892 they formed the People's (Populist) Party. At Omaha, the Populists demanded government ownership of railroads, free coinage of silver to create inflation and ease debts, a graduated income tax, and the direct election of senators. Their candidate, James B. Weaver, won over one million votes. After the Panic of 1893 brought a terrible depression, Populism grew even stronger. But in 1896 the movement split when many Populists backed Democrat William Jennings Bryan. In his famous "Cross of Gold" speech, Bryan demanded free silver: "You shall not crucify mankind upon a cross of gold." Bryan lost to Republican William McKinley, and the Populist Party faded.

Radicals went further. Anarchists like Emma Goldman wanted to destroy government and capitalism. Socialists, following Karl Marx, said workers should own the factories and farms. In 1901 they formed the Socialist Party of America; in 1912 their candidate, Eugene Debs, won almost one million votes, 6 percent of the total. Though the party never took power, its ideas influenced later reformers.