For workers at the Pullman Palace Car Company in the 1890s, home was the company town of Pullman, Illinois, and rent was deducted from their wages. While owner George Pullman touted it as a model town, the men and women who labored there during the 1893 depression endured starvation wages, deplorable living and working conditions, and, worst of all, Pullman’s paternalistic control over all aspects of their lives. Workers appealed to the American Railway Union (ARU), which organized a nationwide strike and boycott against Pullman. In this open letter in the Chicago Herald in June 1894, as the strike began, Pullman explained his motives for cutting wages during the economic depression of 1893.
In the first week of May last there were employed in the car manufacturing department at Pullman, Ill., about 3,100 persons. On May 7, a committee of the workmen had an interview by arrangement with Mr. Wickes, vice-president, at which the principal subject of discussion related to wages, but minor grievances as to shop were also presented, and it was agreed that another meeting should be held on the 9th of May, at which all the grievances should be presented in writing. The second meeting was held. As to the complaints on all matters except wages, it was arranged that a formal and thorough investigation should be made by Mr. Wickes, to be begun the next day, and full redress was assured to the committee as to all con-plaints proved to be well founded.
The absolute necessity of the last reduction in wages, under the existing condition of the business of car manufacturing, had been explained to the committee, and they were insisting,, upon a restoration of the wage scale of the first half of 1893, when Mr. Pullman entered the room and addressed the committee, speaking, in substance as follows:
"At the commencement of the very serious depression last year, we were employing at Pullman 5,816 men, and paying out in wages there $305,000 a month. Negotiations with intending purchasers of railway equipment that were then pending for new work were stopped by them, orders already given by others were canceled, and we were obliged to lay off, as you are aware, a large number of men in every department, so that by November 1, 1893, there were only about 2,000 men in all departments, or about one third of the normal number. I realized the necessity for the most strenuous exertions to procure work immediately, without which there would be great embarrassment, not only to the employees and their families at Pullman, but also to those living in the immediate vicinity, including between 700 and 800 employees who had purchased homes and to whom employment was actually necessary to enable them to complete their payments.
"I canvassed the matter thoroughly with the manager of the works and instructed him to cause the men to be assured that the company would do everything in its power to meet the competition which was sure to occur because of the great number of large car manufacturers that were in the same condition, and that were exceedingly anxious to keep their men employed. I knew that if there was any work to be let, bids for it would be made upon a much lower basis than ever before. (NOTE.—The selling prices of passenger, baggage, box, refrigerator and street cars in the last two years have fallen by percentages, varying in the separate classes, from 17 to 28, the average reduction, taking the five classes together, being 24 percent.)
"The result of this discussion was a revision in piecework prices, which, in the absence of any information to the contrary, I supposed to be acceptable to the men under the circumstances. Under these conditions, and with lower prices upon all materials, I personally undertook the work of the lettings of cars, and by making lower bids than other manufacturers I secured work enough to gradually increase our force from 2,000 up to about 4,200, the number employed, according to the April pay rolls, in all capacities at Pullman.
"This result has not been accomplished merely by reduction in wages, but the company has borne its full share by eliminating from its estimates the use of capital and machinery, and in many cases going even below that and taking work at considerable loss, notably the 55 Long Island cars, which was the first large order of passenger cars let since the great depression and which was sought for by practically all the leading car builders in the country. My anxiety to secure that order, so as to put as many men at work as possible, was such that I put in a bid at more than $300 per car less than the actual cost to the company. The 300 stock cars built for the Northwestern road and the 250 refrigerator cars now under construction for the same company will result in a loss of at least $12 per car, and the 25 cars just built for the Lake Street elevated road show a loss of $79 per car. I mention these particulars so that you may understand what the company has done for the mutual interests and to secure for the people at Pullman and vicinity the benefit of the disbursement of the large sums of money involved in these and similar contracts, which can be kept up only by the procurement of new orders for cars, as you know, about three fourths of the men must depend upon contract work for employment.
"I can only assure you that if this company now restores the wages of the first half of 1893, as you have asked, it would be a most unfortunate thing for the men, because there is less than sixty days of contract work in sight in the shops under all orders and there is absolutely no possibility, in the present condition of affairs throughout the country, of getting any more orders for work at prices measured by the wages of May 1893. Under such a scale the works would necessarily close down and the great majority of the employees be put in idleness, a contingency I am using my best efforts to avoid.
"To further benefit the people of Pullman and vicinity we concentrated all the work that we could command at that point, by closing our Detroit shops entirely and laying off a large number of men at our other repair shops, and gave to Pullman the repair of all cars that could be taken care of there.
"Also, for the further benefit of our people at Pullman we have carried on a large system of internal improvements, have expended nearly $160,000 since August last in work which, under normal conditions, would have been spread over one or two years. The policy would be to continue this class of work to as great an extent as possible, provided, of course, the Pullman men show a proper appreciation of the situation by doing whatever they can to help themselves to tide over the hard times which are so seriously felt in every part of the country.
“There has been some complaint made about rents. As to this I would say that the return to this company on the capital invested in the Pullman tenements for the last year and the year before was 3.82 percent. There are hundreds of tenements in Pullman renting for from $6 to $9 per month, and the tenants are relieved from the usual expenses of exterior cleaning and the removal of garbage, which is done by the company. . . .”
On the question of rents, while, as stated above, they make a manifestly inadequate return upon the investment, so that it is clear they are not, in fact, at an arbitrarily high figure, it may be added that it would not be possible in a business sense so to deal with them.
The renting of the dwellings and the employment of workmen at Pullman are in no way tied together. The dwellings and apartments are offered for rent in competition with those of the immediately adjacent towns of Kensington, Roseland, and Gano. They are let alike to Pullman employees and to very many others in no way connected with the company, and, on the other hand, many Pullman employees rent or own their homes in those adjacent towns. The average rental at Pullman is at the rate of $3 per room per month. There are 1,200 tenements, of varying numbers or rooms, the average monthly rental of which is $10; of these there are 600 the average monthly rental of which is $8. In very many cases men with families pay a rent seemingly large for a workman, but which is in fact reduced in part, and often wholly repaid, by the subrents paid by single men as lodgers.
On May 10, the day after the second conference above mentioned, work went on at Pullman as usual, and the only incident of note was the beginning by Mr. Wickes, assisted by Mr. Brown, the general manager of the company, of the promised formal investigation at Pullman of the shop complaints.
A large meeting of employees had been held the night before at Kensington, which, as was understood by the company, accepted the necessity of the situation preventing an increase of wages; but at a meeting of the local committee held during the night of May 10 a strike was decided upon, and accordingly the next day about 2,500 of the employees quit their work, leaving about 600 at work, of whom very few were skilled workmen. As it was found impracticable to keep the shops in operation with a force thus diminished and disorganized, the next day those remaining were necessarily laid off, and no work has since been done in the shops.
The pay rolls at the time amounted to about $7,000 a day, and were reduced $5,500 by the strike, so that during the period of a little more than six weeks which has elapsed the employees who quit their work have deprived themselves and their comrades of earnings of more than $200,000.
Source: Reply of the Pullman Company, U.S. Strike Commission, Report and Testimony on the Chicago Strike of 1894 (Washington D.C.: Government Printing Office, 1895), 578–80. Reprinted in Thomas G. Manning, The Chicago Strike of 1894 (New York: Holt, Rinehart and Winston, 1960), 4–7.