Labor Day became a federal holiday in 1894 after the strike when President Grover Cleveland and Congress made appeasement of organized labor a top priority. Legislation for the holiday was pushed through Congress six days after the strike ended. Samuel Gompers, head of American Federation of Labor, which had sided with the government in its effort to end the strike by the American Railway Union, spoke out in favor of the holiday.HYPERLINK ..l "cite_note-10"
Perhaps the most violent and most famous railroad related strike,the Pullman Strike was a nationwide conflict between labor unions and railroads that occurred in the United States in 1894. The conflict began in the town of Pullman, Illinois on May 11 when approximately 3,000 employees of the Pullman Palace Car Company began a wildcat strike in response to recent reductions in wages, bringing traffic west of Chicago to a halt. The American Railway Union, the nation's first industry-wide union, led by Eugene V. Debs, subsequently became embroiled in what The New York Times described as "a struggle between the greatest and most important labor organization and the entire railroad capital" that involved some 250,000 workers in 27 states at its peak.
During the economic panic of 1893, the Pullman Palace Car Company cut wages as demands for their train cars plummeted and the company's revenue dropped. A delegation of workers complained of the low wages and sixteen hour workdays and the company's failure to decrease rents or the price of goods. Company owner George Pullman "loftily declined to talk with them."
Many of the workers were already members of the American Railway Union (ARU), led by Eugene V. Debs, which supported their strike by launching a boycott in which union members refused to run trains containing Pullman cars. The strike effectively shut down production in the Pullman factories and led to a lockout. Railroad workers across the nation refused to switch Pullman cars, and subsequently Wagner Palace cars, onto trains. The ARU declared that if switchmen were disciplined for the boycott, the entire ARU would strike in sympathy.
The boycott was launched on June 26, 1894. Within four days, 125,000 workers on twenty-nine railroads had quit work rather than handle Pullman cars. Adding fuel to the fire the railroad companies began hiring replacement workers (that is, strikebreakers), which only increased hostilities. Many African-Americans, fearful that the racism expressed by the American Railway Union would lock them out of another labor market, crossed the picket line, which added a racial division to the union's predicament.
The strike was broken up by United States Marshals and some 12,000 United States Army troops, commanded by Nelson Miles, sent in by President Grover Cleveland on the premise that the strike interfered with the delivery of U.S. Mail, violated the Sherman Antitrust Act and represented a threat to public safety. The arrival of the military and subsequent deaths of workers led to further outbreaks of violence. During the course of the strike, 13 strikers were killed and 57 were wounded. An estimated 6,000 rail workers did $340,000 worth of property damage (about $8,818,000 in 2010 dollars).