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Wall Street History
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02/09/2001
The Homestead Strike of 1892
Last week we discussed the air traffic controllers and the
PATCO strike of 1981. This week I thought we''d go back about
a hundred years and examine the first confrontation between a
modern corporation and organized labor, the Homestead Strike
of 1892.
But first, ever so briefly, in 1856, Sir Henry Bessemer had
discovered an efficient way to make steel, and with vast iron ore
deposits in the area of the Great Lakes, Pittsburgh quickly
became the steel capital.
At the same time, industrialist Andrew Carnegie had decided by
1873 to concentrate his business acumen on the steel industry.
Carnegie realized the tremendous potential that existed in the
product and it fit one of his many mottoes, "Capitalism is about
turning luxuries into necessities." Steel became a necessity.
In particular, with the expansion of the railroad between 1880
and 1900, US Steel production rose from 1.25 million tons to
over 10 million annually. Carnegie''s furnaces produced about
one-third of the nation''s output.
He was also the first to recognize the importance of controlling
unit costs and Carnegie stressed that the employees should
understand the full breakdown. "Responsibility for money or
materials (must) be brought home to every man," he would say.
By 1892, something else was in full swing, that being the union
movement. The Amalgamated Association of Iron and Steel
Workers (hereafter, "Amalgamated"), founded in 1876, quickly
became the largest craft union with some 24,000 workers. But
this excluded the unskilled and it had failed to organize the
largest steel plants. The Homestead Works of Pittsburgh was an
important exception.
Back in 1883, Henry Clay Frick, one of the great dirtballs of all
time, had sold Homestead to Carnegie. Frick had initially made
his fortune in the coal industry (and since my relatives in the
Pittsburgh area worked under his thumb, we don''t care much for
the man). Carnegie then eventually made Frick president of the
Homestead Works.
Since Carnegie was focused on costs more than anyone else in
the business, he was soon able to dominate the industry. Of
course maintaining cost controls also meant holding down
wages. But Amalgamated had already organized the plant when
Carnegie purchased it.
Carnegie prided himself on his good relations with labor. He
even spoke fondly of unions and he wanted the workers to
simply call him Andy. In 1886, he wrote, "To expect that one
dependent upon his daily wages for the necessaries of life will
stand by peacefully and see a new man employed in his stead is
to expect too much."
But Carnegie was a hypocrite, for at the same time his laborers
were generally working 12-hour days, 7 days a week; with new
immigrants being paid just $9 a week, less than they were
making in Europe. Even after a strike in 1889, Amalgamated
had to settle for a sliding wage scale that paralleled the profits of
the plant in exchange for continuing union recognition.
The next showdown was slated for 1892, when the contract came
up for renewal. And as the July deadline approached, Carnegie
and his Homestead president, Frick, knew what had to be done.
The steel industry was in the midst of a general business
slowdown and if profits were to be maintained near existing
levels, the number of workers would have to be reduced. In
addition, the union had to deal with the fact that labor-saving
devices were constantly being created, thus further impinging on
their jobs.
As was his tradition, Andrew Carnegie left Pittsburgh for his
castle in Scotland most every summer, and this year was no
exception. That meant that Frick was running the whole show.
Before he left, Carnegie and Frick had proposed a lower
minimum wage for the new contract as well as a loss of
bargaining power for the union. Great deal, huh? And while
Carnegie may not have known the extent to which Frick would
take advantage of his full authority, he certainly had a good idea
of what was to come and clearly didn''t stand in the way.
On June 29, 1892, a lockout of the union workers began at the
Homestead Works. Frick had a 3-mile long stockade installed
around the factory, complete with barbed wire and slots for
rifles. Knowing that the union wouldn''t accept the reduced wage
pact, the Amalgamated formally struck on July 1. Frick''s whole
goal was to replace the union workers with cheaper nonunion
labor. But as the unionists were protesting outside the plant, it
would be tough to bring in the nonunion folks without protection.
In the middle of the night on July 6, 300 Pinkerton detectives,
notorious for their union-busting tactics, secretly cruised down
the Monongahela River towards Homestead. They were loaded
up on two barges and hoped to surprise the unionists camped
outside the works. But a union sentry spotted them and, instead,
the well-armed unionists were lying in wait for the Pinkertons.
No one knows who fired the first shot, but what is known is that
a gun battle (with a little dynamite thrown in, courtesy of the
unionists) ensued which lasted the better part of the day. In the
end the heavily outnumbered Pinkertons had to surrender and
were forced to walk a gauntlet, where they were pummeled by
the strikers and their wives.
Homestead proved to be the bloodiest labor battle the country
had witnessed. But the final casualty figures are still unclear
(each of my sources had a different tally, for instance). So, I''m
going to pick the median of the various totals and say that about
13 died; 3-7 Pinkertons and 6-10 steel men. What is not in
dispute is that hundreds were wounded, with over 100 of those
being serious.
Of course, now the unionists were in charge of the plant. Well,
that wasn''t going to work so on July 12 the governor of
Pennsylvania sent in 8,000 state militiamen to reoccupy
Homestead and thus allow strikebreakers to get production
flowing again.
Then on July 23, a Russian-Polish immigrant anarchist by the
name of Alexander Berkman (who had nothing to do with the
strike or Homestead beforehand) entered the office of Henry
Frick and attempted to kill him. Frick was shot but was able to
wrestle the man down. That same day he went back to work,
bandages and all. And it was also at this point that the unionists
saw support for their cause drastically eroded within the public.
The strike dragged on until November, but Amalgamated was
finished at Homestead. When Andrew Carnegie returned from
Scotland he was none too sympathetic. No concessions were
made and the lower wages were imposed with longer hours.
Carnegie said nothing in public about the battle of July 6 but he
knew where the blame lay. Years later he said, "No pangs
remain of any wound received in my business career save that of
Homestead."
The Homestead strike of 1892 represented a reversal for the
labor movement that lasted until the days of the New Deal. And
for the president of the United States, Benjamin Harrison, the
response to the strike was crushing in his race for reelection
against Grover Cleveland that fall. Harrison was abandoned by
labor and it worsened when he used federal troops to take over
the Coeur d''Alene mines in Idaho later that campaign season.
Next week, we start a series on the mineworkers and their union.
Sources:
"Morgan: American Financier," Jean Strouse
"The American Century," Harold Evans
"A History of the American People," Paul Johnson
"The Presidents," edited by Henry Graff
"America: A Narrative History," Tindall and Shi
Brian Trumbore
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