Arbitration Act of 1888

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Arbitration Act of 1888

United States 1888


The United States federal government passed the Arbitration Act of 1888 on 1 October 1888 to legislate the government's role in railroad labor disputes, thus setting a precedent for federal arbitration between unions and railroad carriers. The act made provisions for two opportunities to settle issues: voluntary arbitration and a temporary investigative commission. The act states that it is intended "to create boards of arbitration or commission for settling controversies and differences between railroad corporations and other common carriers engaged in interstate and territorial transportation of property or passengers and their employees." The earliest legal sanction of federal mediation in labor relations, the act particularly affected subsequent labor legislation including the Railway Labor Act of 1926 and the National Labor Relations Act (Wagner Act) of 1935. Prompted by a decade of railway strikes, most markedly the Great Railroad Strike of 1877 and the 1885-1886 strike, the new law countered the pattern of escalating violence and disruption established by troops and striking workers. The Arbitration Act of 1888 was superseded by the Erdman Act (1898), Newlands Act (1913), and Adamson Act (1916).


  • 1868: Fourteenth Amendment to the U.S. Constitution, which grants civil rights to African Americans, is ratified.
  • 1873: Financial panic begins in Vienna, and soon spreads to other European financial centers, as well as to the United States.
  • 1878: First commercial telephone exchange opens, in New Haven, Connecticut.
  • 1881: U.S. President James A. Garfield is assassinated in a Washington, D.C., railway station by Charles J. Guiteau.
  • 1886: Bombing at Haymarket Square, Chicago, kills seven policemen and injures numerous others. Eight anarchists are accused and tried; three are imprisoned, one commits suicide, and four are hanged.
  • 1888: With a series of murders in London's seedy Whitechapel district, Jack the Ripper—whose identity remains a subject of debate—becomes the first known serial murder.
  • 1888: The Blizzard of 1888 in the United States kills hundreds, and causes more than $25 million in property damage.
  • 1888: American inventor George Eastman revolutionizes photography by introducing the Kodak camera, which makes it possible for amateur photographers to take satisfactory snapshots.
  • 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.
  • 1890: Alfred Thayer Mahan, a U.S. naval officer and historian, publishes The Influence of Sea Power upon History, 1660-1783, which demonstrates the decisive role that maritime forces have played in past conflicts. The book will have an enormous impact on world events by encouraging the major powers to develop powerful navies.
  • 1894: Thousands of unemployed American workers—a group named "Coxey's Army" for their leader, Jacob S. Coxey—march on Washington, D.C. A number of such marches on the capital occurred during this period of economic challenges, but Coxey's march was the only one to actually reach its destination.
  • 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.

Event and Its Context

When interceding in escalating strike activity that characterized labor at the end of the nineteenth century, the federal government's policy was to issue injunctions and deploy troops. Federal actions were effective in the National Railroad Strike of 1877 (also known as the Great Railroad Strike), when troops suppressed riots and restored order to suspended railway services and breached mail service, and ended interference with interstate commerce by strikers. Caused by economic depression, stagnant construction growth, and massive reduction of workers' wages, the 1877 strike set legal precedents for the use of force in railroad labor disputes and dictated this method of government intervention in strike resolution in the railroad industry until 1885. Beginning in West Virginia in July, labor disturbances erupted and moved westward, reaching Chicago, Illinois, where railroad yards shut down. Some observers attributed the upheaval to Marxist inspiration and to radical influence within the state. Rail traffic ceased throughout the state. The National Guard and federal troops arrived in Chicago to restore order to the volatile community and to railroad transportation. Once this approach proved unsuccessful as a means of resolving labor conflicts and preserving the continuity of commerce, Congress and President Grover Cleveland explored several legislative measures with the objective of introducing a series of laws aimed specifically at the railroad industry.

H.R. 7479 was introduced in 1886 and called for voluntary arbitration to be settled by a three-man board. When this proved unacceptable, another proposed bill provided either party of the conflict the right to demand arbitration and recommended penalties for noncompliance. Congress passed H.R. 7479, but President Cleveland vetoed it in favor of his plan to appoint a permanent commission with the capacity to settle labor disputes on its own terms, which in turn would be enforced by court injunctions. Congress did not agree to Cleveland's plan and so proposed several alternative bills, one of which, H.R. 8865, became the Arbitration Act. It was similar to Cleveland's proposal and also included stipulations for voluntary arbitration.

Dealing exclusively with railroad labor disputes, the Arbitration Act of 1888 was intended to reduce strike activity, which crippled the nation's commercial activities by stopping rail transportation and other allied industries. Initially opposed to the act, railroad management viewed it as federal intervention in the operation and management of workers. Organized labor favored the act because government intervention would force rail companies to recognize labor unions and negotiate with them regarding working conditions, benefits, and other areas of interest to laborers.

In the matter of voluntary arbitration, the act instructed railroad companies to select an arbitrator, who would then make the second selection. Together, these appointees would select the third member to serve on a board of arbitration. Each member had to be a U.S. citizen and "wholly impartial and disinterested in respect to such differences or controversies." Because arbitration worked only when the two parties were willing to submit to the process, this method of settling disputes was highly ineffective. Either party in a labor dispute (workers or management), the governor of the state in which the disagreement arose, or the president could convene the commission of inquiry.

The flaws of the Arbitration Act were realized immediately when it was first applied, six years after its implementation, to the Pullman Strike of 1894. In solidarity with the Pullman strikers, Eugene V. Debs, head of the American Railway Union (ARU), declared a strike in June that effectively paralyzed rail transport across the nation. Cleveland responded to this nationwide railroad strike by ordering Secretary of War David S. Lamont to deploy the U.S. Army based at Sheridan, Illinois, to Chicago to break the strike. On 12 July 1894 representatives of the Knights of Labor along with Senator James H. Kyle of South Dakota, who in 1894 authored the bill that created Labor Day, pressed Cleveland to invoke the act. Cleveland promised to use the act once the rioting and violence in Chicago ceased. On 26 July 1894 Cleveland appointed three men to the U.S. Strike Commission to investigate the matter. This move put the Arbitration Act to the test.

Authorized as a temporary body, the organizational structure of the U.S. Strike Commission was designed to prevent partisan control by alternating its appointments. When unions and companies could not agree upon appointees, the president could select two commissioners who would serve along with the commissioner of labor in the matter of railroad arbitration. The commission reported their decision to the president. Their recommendations were enforced through public opinion, as the act did not govern awards or penalties. This remains the model for public protection from railway strikes.

The chairman of the U.S. Strike Commission was the U.S. commissioner of labor, Carroll D. Wright. Along with John D. Kernan of New York and Nicholas E. Worthington of Illinois, who also served during the investigation, Wright's report, sent to Cleveland on 14 November 1894, concentrated on the inadequacies of the Arbitration Act rather than on the problems of the Pullman Strike. Favoring the appointment of a permanent railway labor commission modeled after the Interstate Commerce Commission (ICC), the report also called for company compliance with the arbitrators' decisions, protection for workers during investigations, and a law that would persuade unions to unite.

In the course of their investigation, Wright, Kernan, and Worthington heard testimony from 107 subpoenaed witnesses at a U.S. post office in Chicago. Their inquiry began 15 August 1894 and lasted 13 days. They moved to Washington, D.C., on 26 September where they heard testimony from two more witnesses. The commission was relentless in its inquiries and showed impartiality by subjecting George Pullman, Everett St. John, Eugene Debs, and George W. Howard to equally intense questioning.

Although the response to Wright's report did not promote any specific changes in legislation, it revived congressional awareness of the ineffective measures specified in the Arbitration Act. Numerous bills again passed through Congress. The House Committee on Labor advocated H.R. 8556 in 1895. This bill gave equal importance to mediation and conciliation along with arbitration and investigation and was supported by the railroad brotherhoods as well as Commissioner Wright. The House approved the bill, but it failed to pass the Senate. Later in the year another bill, H.R. 268, was approved by the House but not the Senate. A revised version of the bill, which came to be known as the Erdman Act, was eventually passed by both houses and approved by President William McKinley in 1898.

Key Players

Cleveland, Grover: (1837-1908): Born in New Jersey, Cleveland became a lawyer, was elected mayor of Buffalo, New York in 1881, and later became governor of the state. Elected president of the United State twice, Cleveland served from 1885 to 1889 and 1893 to 1897. He tried to regulate railroads by signing the Interstate Commerce Act, vetoed early versions of the Arbitration Act, and sent federal troops to Chicago during the Pullman Strike of 1894.

Debs, Eugene V. (1855-1926): Born in Terre Haute, Indiana, Debs left school at age 15 to work in a railroad engine house and later became a locomotive fireman. He traveled through Oneonta, New York, in 1883 and encouraged local brakemen to form a union, the Brotherhood of Railway Brakemen. Debs served the Brotherhood of Locomotive Firemen in several roles, organized the American Railway Union (ARU) in 1892, and was instrumental in forming the Social Democratic Party, Socialist Labor Party, and Socialist Party of America.

Kernan, John Devereaux (1844-1922): Born in Utica, New York, Kernan studied law in the office of his father, Senator Francis Kernan, after graduating from Seton Hall College in New Jersey. John Kernan was appointed to the first Board of Railroad Commissioners of the state of New York in 1883 and served until 1887. After Kernan left that position, Cleveland appointed him to investigate the Pullman and ARU strike of 1894.

Worthington, Nicholas Ellsworth (1836-1916): Born in Brooke County, Virginia, which is now located in West Virginia, Worthington was elected to the 48th and 49th Congress as a Democrat. He practiced law and was the circuit judge of the 10th judicial district of Illinois in 1891 and was reelected to that role in 1897. He was appointed by Cleveland as a commissioner to investigate the Pullman and ARU strike of 1894.

Wright, Carroll Davidson (1840-1909): Born in New Hampshire, Wright studied law, quickly ascended the ranks in the U.S. Army during the Civil War. After his admission to the New Hampshire bar in 1865, he passed the Massachusetts bar in 1867 and settled in Reading, Massachusetts. He was appointed chief of the Massachusetts Bureau of Labor and Statistics in 1873. Appointed by President Chester Arthur in 1885, Wright served as the first U.S. commissioner of labor from 1895 to 1905. He was the chairman of the U.S. Strike Commission that investigated and reported on the causes of the Pullman Strike of 1894.

See also: Erdman Act; Pullman Strike; Railroad Strike; Railway Labor Act; Wagner Act.



Gotkin, Joshua Abraham. The Legislated Adjustment of Labor Disputes: An Empirical Analysis, 1880 to 1894.Ann Arbor, MI: University Microfilms, 1995.

Lecht, Leonard A. Experience under Railway Labor Legislation. New York: Columbia University Press, 1955.

Lindsey, Almont. The Pullman Strike: The Story of a Unique Experiment and of a Great Labor Upheaval. Chicago: University of Chicago Press, 1942.

Richardson, William A. Supplement to the Revised Statutes of the United States, 2nd ed. Vol. 1, 1874-1891, 43rd-51st Congress, inclusive. Washington, DC: Government Printing Office, 1891.

U.S. Strike Commission. Report on the Chicago Strike of June-July, 1894, with Appendices Containing Testimony Proceedings, and Recommendations. Washington, DC: Government Printing Office, 1895.

—Rebecca Tolley-Stokes