Erdman Act

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Erdman Act

Synopsis

The Erdman Act, an early step toward the passage of the more comprehensive Railway Labor Act of 1926, was a federal law that attempted to alleviate labor unrest in the railroad industry by requiring mediation of any labor dispute "seriously interrupting or threatening to interrupt" interstate commerce. In the event that mediation failed, the act provided for an arbitration board whose decision would be binding. Additionally, Section 10 of the act prohibited the railroads from requiring as a condition of employment any discriminatory agreements pertaining to union membership.

Timeline

1878: Thomas Edison develops a means of cheaply producing and transmitting electric current, which he succeeds in subdividing so as to make it adaptable to household use. The value of shares in gas companies plummets as news of his breakthrough reaches Wall Street.
1883: Foundation of the League of Struggle for the Emancipation of Labor by Marxist political philosopher Georgi Valentinovich Plekhanov marks the formal start of Russia's labor movement. Change still lies far in the future for Russia, however: tellingly, Plekhanov launches the movement in Switzerland.
1888: Serbian-born American electrical engineer Nikola Tesla develops a practical system for generating and transmitting alternating current (AC), which will ultimately—and after an extremely acrimonious battle—replace Thomas Edison's direct current (DC) in most homes and businesses.
1891: French troops open fire on workers during a 1 May demonstration at Fourmies, where employees of the Sans Pareille factory are striking for an eight-hour workday. Nine people are killed—two of them children—and 60 more are injured.
1894: Thomas Edison gives the first public demonstration of his kinetoscope film projector, in New York City.
1898: United States defeats Spain in the three-month Spanish-American War. As a result, Cuba gains it independence, and the United States purchases Puerto Rico and the Philippines from Spain for $20 million.
1898: Chinese "Boxers," a militant group opposed to foreign occupation of their country, organizes.
1898: Marie and Pierre Curie discover the radioactive elements radium and polonium.
1898: Bayer introduces a cough suppressant, derived from opium. Its brand name: Heroin.
1900: China's Boxer Rebellion, which began in the preceding year with attacks on foreigners and Christians, reaches its height. An international contingent of more than 2,000 men arrives to restore order, but only after several tens of thousands have died.
1904: The 10-hour workday is established in France.
1908: An earthquake in southern Italy and Sicily kills some 150,000 people.

Event and Its Context

Background: Railroad Growth and Labor Unrest

The history of organized labor during the nineteenth century is in large part a history of the rail industry. The railroads were the nation's first truly national industry and had a significant impact on interstate commerce. From the end of the Civil War until World War I, the rail industry burgeoned. In 1865, for example, the national rail network consisted of 35,000 miles of track; by 1880 that figure had grown to 93,000 miles; by 1890, 164,000 miles; and by 1916, 254,000 miles. In 1880 there were about 419,000 railroad employees; by 1900 that number had grown to just over 1 million, and by 1916, 1.7 million. Additionally, technical innovations lowered the cost of shipping goods. In 1865 freight rates were about two cents per ton-mile, but by 1900 that figure had fallen to about three-quarters of a cent per ton-mile. In 1880 the annual freight ton-mileage per employee was about 88,000. This figure rose to 101,000 in 1890; 138,000 in 1900; and 215,000 in 1916. By 1916 the railroads were carrying 77 percent of intercity freight and an astounding 98 percent of intercity passenger traffic.

Although this was the "Golden Age" of the rail industry, it was also a period of widespread corruption and discrimination against organized labor. Robber barons whose names remain familiar today—Jim Fisk, Jay Gould, Tom Scott, and Commodore Vanderbilt—manipulated the stock market, engaged in ruinous rate wars, and grew wealthy on the backs of labor. While annual freight ton-mileage was growing briskly, the average real wages of rail workers were virtually stagnant, growing from about $465 per year in 1880 to just $602 in 1890, then declining to $591 in 1900. (These figures are constant 1880 dollars.)

Inevitably, the railroad owners clashed with workers who were struggling to organize to improve their working conditions. One of the most dramatic clashes occurred in 1877. On 17 July in Martinsburg, West Virginia, rail workers who were members of the Trainmen's Union struck to protest their second pay cut that year, refusing to let any trains move until their wages were restored. The strike, which rapidly spread to Baltimore, Pittsburgh, Chicago, St. Louis, and other cities, grew increasingly violent. In Pittsburgh, for example, townspeople set fire to the station house and destroyed 104 locomotives, over 2,100 train cars, and 79 buildings. Eventually, federal troops put down the uprisings, and the Trainmen's Union was temporarily crushed.

Rail workers, however, continued their efforts to form unions and to bargain with their employers. In 1884, with the backing of the Knights of Labor, they brought about a systemwide strike against the Union Pacific railroad; in 1885 they won wage concessions from Jay Gould. More importantly, the Knights' membership rolls swelled—from 50,000 in 1883 to over 700,000 just three years later. Conflict, however, continued. In 1886 the Knights called for a strike against Gould's Southwestern Railroad System, but Gould broke the strike and blacklisted the union's leaders.

Arbitration Act of 1888

In response to this decade of unrest, Congress passed the Arbitration Act of 1888, the first federal labor relations law. The act called for voluntary arbitration of railway labor disputes and for presidential boards to investigate their causes. However, the arbitration provision of this act was never used, and only once—after the famous Pullman strike of 1894—was a board convened to investigate the causes of a dispute.

In 1893 a financial panic shook the world economy. In response, George Pullman, who had invented the railroad sleeper car, fired a third of his workers and cut the wages of those who remained—without, however, lowering prices for food and homes in Pullman, his company town outside of Chicago, where most of his employees lived. Eugene V. Debs, president of the recently formed American Railway Union, tried to negotiate with Pullman, but Pullman rebuffed his efforts, so Debs called for a strike against any railroad that hauled Pullman sleeper cars. The other rail owners backed Pullman by providing replacement workers during the strike, and the administration of President Grover Cleveland sought and won a court injunction against Debs's union. When Debs defied the injunction, he was arrested and sentenced to six months in prison. The U.S. Supreme Court, in In re Debs (1895), upheld the injunction. Writing for a unanimous Court, Justice David J. Brewer stated, "The strong arm of the national government may be put forth to brush aside all obstructions to the freedom of interstate commerce of the transportation of the mails." The case demonstrated that injunctions could be used against labor unions and foreshadowed the application of the Sherman Antitrust Act's prohibition of combinations in restraint of trade to thwart the unions.

Under the provisions of the Arbitration Act, President Cleveland appointed a board to investigate the causes of the Pullman strike. In its report, the board upbraided Pullman and the railroad companies: "The policy of both the Pullman Company and the Railway Managers' Association in reference to application to arbitrate, closed the door to all attempts at conciliation and settlement of differences." The board recommended a more sweeping arbitration and conciliation system and urged that the rail lines be forced, if necessary, to recognize organized labor and deal with it. It also recommended the outlawing of "yellow dog contracts," or labor contracts that forced workers to agree not to join a labor union. Cleveland turned over the report to Jacob Erdman, a Democratic congressman from Pennsylvania, who introduced a bill based on the board's recommendations.

The Erdman Act

The Erdman Act of 1898, which in effect repealed the Arbitration Act of 1888, mandated that in any case involving wages, hours, or working conditions in the rail industry, the chair of the recently formed Interstate Commerce Commission and the commissioner of labor were to communicate with the parties to try to settle the dispute. If they failed, the case would be turned over to a permanent arbitration board consisting of a railroad company representative, an employee representative, and a third person named jointly by the company and the workers; this was an improvement over the Arbitration Act, which established temporary boards on a case-by-case basis. No employer could discharge an employee pending settlement of a case or for three months thereafter without 30 days' notice; employees could not strike except under the same conditions. The law further called for the expulsion of union members who used force in any labor dispute.

Adair v. United States

In the meantime, Section 10 of the Erdman Act protected the rights of rail workers to organize into unions by prohibiting the signing of yellow dog contracts, blacklisting of union members, and firing of employees solely for membership in a union. A 1908 U.S. Supreme Court case, Adair v. United States, challenged the constitutionality of Section 10. Adair, who managed a rail carrier, discharged an employee because the employee was a union member. Adair was subsequently found guilty of violating Section 10 of the Erdman Act. On appeal to the Supreme Court, however, his conviction was overturned, and by a 6-2 vote the Court ruled that Section 10 was unconstitutional for two reasons: (1) it violated the Fifth Amendment's due process clause, and (2) Congress, in passing Section 10, had overstepped its powers under the Constitution's commerce clause. Writing for the majority, Justice John Harlan stated that the Court could find "no legal or logical connection" between interstate commerce and a worker's membership in a labor union. Section 10, he wrote, was "an invasion of the personal liberty, as well as the right to property" protected by the Fifth Amendment. Constitutional guarantees of freedom of contract gave the government no authority to "compel any person, in the course of his business and against his will, to accept or retain the personal services of another." An employee has the right to quit, and that right "is the same as the right of the employer, for whatever reason, to dispense with the services of such employee." The Court overruled Adair in 1949.

Key Players

Cleveland, Grover (1837-1908): Cleveland was the 22nd and24th president of the United States (1885-1889 and 1893-1897). After being admitted to the New York bar in 1859, he worked his way up in politics and won election as mayor of Buffalo in 1881 and the governorship of New York the next year. Cleveland is principally remembered both for his nonconsecutive terms, his honesty and efficiency, and for reforming the U.S. civil service.

Debs, Eugene V. (1855-1926): Debs, who grew up in Terre Haute, Indiana, was a leading labor organizer in the late nineteenth century. In 1875 he became secretary of the local lodge of the Brotherhood of Locomotive Firemen and rose to national secretary in 1881. He resigned his position in 1893 to organize the American Railway Union. From 1900 to 1920 he ran five times for president as the Socialist Party candidate—the last while serving 10 years in a Georgia prison for his opposition to World War I.

Erdman, Constantine Jacob (1846-1911): After graduating from Pennsylvania College, Erdman studied law and was admitted to the state bar in 1867. In 1874 he was elected district attorney in Allentown, Pennsylvania. He served in the Fourth Regiment of the Pennsylvania National Guard during the rail strike of 1877. He later was elected as a Democrat to Congress, serving two terms from 1893 to 1897. After leaving Congress he was a successful businessman.

Gould, Jay (1836-1892): Born in Roxbury, New York, Gould was a surveyor by training. In the 1860s he began speculating on shares of small railroad companies, and eventually he gained control of the Erie Railroad. His effort to corner the gold market led to the Black Friday panic of 24 September 1869. In the 1870s he gained control of several western railroads; he also owned the New York World, most of New York City's elevated railroads, and a large share of Western Union. When he died, he left an estate valued at over $100 million.

Harlan, John Marshall (1833-1911): Harlan was born in Kentucky, where he was active in politics, serving as state attorney general from 1863 to 1867. After two unsuccessful runs for governor in the 1870s, he was active in Rutherford B. Hayes's successful bid for the presidency and was rewarded with an appointment to the U.S. Supreme Court, on which he served from 1877 to 1911.