Causes of Railroad Labor Conflict

New World railroads were seminal to nineteenth-century industrialization and European expansion. Funded by the profits of industrialization, the railroads opened new lands for agricultural and pastoral settlement, the produce of which fed the industrial workforces of the North Atlantic littoral while at the same time providing factory looms and foundries with their essential raw materials. Whether in private hands (as in the United States) or under public ownership (as in Australia), New World railroads were in managerial terms unequalled in the size and complexities of their organization. In the 1890s the power of railroad management was seemingly confirmed when they imposed dramatic reductions in wages and other employment conditions on their workforces. Where resisted, as in the United States Pullman Boycott, opposition was soon broken. Yet the managerial and financial strength of the railroads was by the 1890s more apparent than real. As mere cogs in a global production system, the railroads were financial victims of forces that they themselves helped unleash. As railroad-fueled rural expansion gradually swamped global commodity markets, the railroads found that the prices obtained for their core custom (notably corn and wheat) fell remorselessly. As prices fell, so too did railroad rates. While it was these economic mechanisms that drove management toward labor conflict, victories on this front did little to improve management’s position. The reason for this is that the railroads suffered primarily from revenue rather than labor cost problems. Saddled with large fixed costs, the railroads found that even the most severe wage and staffing cuts made little difference to their financial plight.