By Chip Deyerle
Note: The years leading up to the Transportation Act of 1920 set the stage for redefining labor management for the railroads. Owing to the politics of the day, the myriad labor issues facing the US rail services could not be dealt with successfully through any single piece of legislation, but required a more thorough approach to accommodate railroad management and labor demands through legislation to level the playing field. The keystone to get to such point is generally seen as the National Transportation Act of 1926.
Part I – Railroad Labor Legislation Prior to 1926
In the early 1920s, the Norfolk and Western Railroad Company experienced a sustained period of unrest and mismanagement as the role of the railroads had greatly expanded in national commerce. Consequently, the need for government intervention and legislation became more apparent to keep the trains running. For certain, railroading was big business of the day, requiring significant manpower and investment capital to maintain the many paths of commerce required by the railroads. This included delivery of energy, primarily coal, petroleum products, chemicals, ore, steel, to name only a few commodities.
The railroad’s ascendency to national and international commerce marks its start in the early 1830s, with twenty-three miles of operating track and by 1862, there was well over 32,000 miles. Control of the rail services was merely an issue for each state to contend with via various and widely differing regulations.[i]
While the railroads were a major force in uniting the country from the Atlantic to the Pacific oceans, the railroads saw profit as the primary motive for expansion of the rail lines. By 1869, there now almost 47,000 miles of railroad tracks supporting operating lines such as the Norfolk and Western.
In fact, the United States was now dependent on the railroads to supply wheat and produce, live stock, minerals and timber to the growing US economy.
“…by the 1880’s the interurban railroads encouraged the enlargement of urban centers and the growth of the suburbs. Middle and upper class city dwellers now began to escape the noise and dirt of the mill and factory.”
Throughout this period, the railroads worked to achieve significant and seemingly unlimited economic power and d anyone who might stand in the way of the railroads had no place to appeal their practices, like eminent domain, uncontrolled rate setting, unfair personnel practices, disabilities caused by unsafe operations related to the railroads. While Congress held hearings nationwide to hear public complaints, the railroads weren’t listening. This led to the formation of the ICC in 1887 under the Interstate Commerce Act.
Clashes between union workers and the railroads set the stage for a period of hostility where the workers were not paid adequate wages for the work required. Unsafe working conditions had taken many lives and caused irreparable harm to members of the workforce. The unions formed by the railroads were based on those formed under John L. Lewis for the United Mine Workers (UMW) during the same timeframe. But more legislation was needed as the problems of the railroads continued to grow.
Prior to 1926, the following legislation was generated by the Congress, realizing that by 1878, the state laws were admirable action for trying to deal with the big railroads. In Maryland, the state law allowed for the parties to submit unresolved disputes to tribunals composed of individuals appointed by a local judge and chaired by him. Though submission to such tribunals was voluntary, the award was to be binding and could be enforced by a judge. Costs were shared by the parties. A few other states followed suit, including New Jersey, Pennsylvania, Ohio, Iowa, and Kansas. These states were followed by Massachusetts and New York in 1886. It is no wonder that the Federal government sought to duplicate the successful outcomes at the national level by using these same models for the ICC.
But the problems of labor disputes still remained for the railroad industry. This led to the creation of the Arbitration Act of 1888. This was the first federal statute for dealing with the “railroad problem”, as it had been cited in the newspapers of the day. Under this act, two means for settling a dispute were recognized – voluntary arbitration or investigation. Now both the labor union and the railroad could voluntarily agree to submit a dispute to a three-member board of arbiters. It also allowed the President to appoint a three-member commission to investigate the causes of any labor dispute. It is here that e begin to see how politics could play an important part in returning a decision favoring one party over another.
Under this law, the Pullman Coach Company strike in 1894 became a lightning rod for an injunction against the strikers in their company homes located in Pullman, Illinois, with Federal troops called in at the first sign of a minor infraction by the strikers.[ii]
With the Erdman Act of 1898, the inadequacy of the Arbitration Act was re-written to omit the investigatory requirements altogether, but did not change the arbitration process of the Act. In fact, it included the possibility of mediation with regard to railroad labor disputes. It also brought together the US Commissioner of Labor and the chairman of the Interstate Commerce Commission when requested by either party of the dispute involving operating workers. Indeed, the Act supported every effort to settle the dispute by mediation and conciliation. While this was great news for the Unions involved, the railroads felt otherwise and thus the act was never applied in the period of 1898 through 1906.1913.
In 1906, mediation was recognized as of great importance in settling labor disputes. Thus the Congress adopted measures to strengthen the Erdman act with amendments to become the Newlands Act of 1913. Under this act, a permanent board of mediation and conciliation for railway labor disputes was established. Under this Board, negotiation of agreements and innovations, such as those arising out of the interpretation of agreements, were progressive in reaching a much more meaningful conclusion.
As the “railroad Problem” became more defined, the railroad labor organization began a push for an 8-hour work day, preferring not to arbitrate or permit mediation of the issue. With some disappointment over recently failed arbitration, the unions felt that there was sufficient economic strength to press the railroads successfully for the 8-hour day. Therefore a strike date was proposed, but the unions agreed to forego the strike action if the 8-hour day was enacted into Federal law. Congress responded with the Adamson Act of 1916 which legislated the 8-hour day for the railroads.
As things were heating up in Europe about this time, talk of war was spreading across the news papers of the day, worldwide at times. Under President Woodrow Wilson, the prospect of a world war affecting the US was unpopular, to say the least. No one wanted the US involved in a War that seemingly did not affect the US as a Nation. Thus isolation was the basic response from the American public.
As time passed, it became apparent that the US could become drawn into the war if its key allies were defeated by Germany. Wilson was left with little choice to prepare for the inevitability of war in Europe. By 1917, President Wilson “drafted’ the railroads into the Federal Government and placed them under the control of the Rail Road Administration. This served to strengthen the unions instead of the carriers and led to a number of important national agreements with standard labor organizations and the first system-wide agreements in the industry. This led to a number of years of relative labor management harmony in the railroad industry.[iii]
One of the most important aspects of federalization during the WWI period was the fact that the railroads were given carte blanche to train movements with less emphasis on equipment maintenance. The trains must get through and on time to meet the demands of the military at war.
By the end of the war in 1918, the rail yards began to back up with equipment awaiting repairs of all sorts. Nationwide, roadbeds were deteriorating and bridges needed replacing. Shop facilities were having difficulty finding employees as the workforces had dwindled due to the draft to fight the war. The federalization of the railroads had proven beneficial in many ways and the Senate wished to retain some of the governmental controls it has created while returning the railroads to their private status. This led to the development of the Transportation Act of 1920 to carry forward unresolved disputes remaining from the WWI experience and to resolve those disputes to the new U.S. Railroad Labor Board for hearing and decision. This Board would be responsible for carrying out mediation and arbitration functions, a feature which pleased neither the railroad unions nor the railroad owners.
“In failing to rely primarily on voluntary collective bargaining assisted…by mediation to resolve interest disputes, the Transportation Act of 1920 was not a attuned to the basic ethos of employee-management relations as it was developing in the United States.”[iv]
While for a time it seemed to be working, the Railroad Labor Board was not able to keep things peaceful with the railroad industry. The Board was repudiated by the unions when the shop crafters walked out in July of 1922. The Pennsy ignored the Act and refused to eliminate its company-dominated unions. Even the Supreme Court rejected the Railroad labor Board’s applications for enforcement of a decision directing the carriers to cease dealing with their dominated organizations.[v]
During 1923-24, the secretary of labor and both presidents Harding and Coolidge asked for changes in the National Transportation Act. The platform of the Republican Party for 1924 provided that the 1920 law should be amended, stating:
“Collective bargaining, mediation, and voluntary arbitration are the most important steps in the maintaining of peaceful labor relations and should be encouraged. We do not believe in compulsory action….Therefore the interests of the public require the maintenance of an impartial tribunal which can in an emergency make an investigation of the facts and publish its conclusions.”[vi]
On the other hand, there was bi-partisan support from the Democrats, but not as specific. The Democratic Party platform agreed that the Transportation Act of 1920 had proven unsatisfactory and needed to be rewritten.
As the election issues shaped up, a number of bills fell out of the Congress to amend the 1920 Act. But the railroads stepped in and sought the Railroad Labor Board to try to work out the problems with labor, which was certainly within the RLB charter of oversight. The Transportation Act would not pass until January, 1926.
When finally passed in 1926, the National Transportation Act established five basic purposes under Section II:
1. Prevent the interruption of service.
2. Ensure the right of employees to organize.
3. Provide complete independence of organization by both parties.
4. Assist in prompt settlement of disputes over rates of pay, work rules, or working conditions.
5. Assist in prompt settlement of disputes or grievances over interpretation or application of existing contracts.
The Transportation Act of 1926 would not be amended again until 1936.
The Great Railroad Problem of the 1920s – PART 2
The period of 1920-1922 became a defining moment for the railroads and organized labor. The enactment of the national Transportation Act, in retrospect, carried forward unresolved disputes remaining from the WWI federalization but did not resolve the disputes now confronting the new U.S. Railroad Labor Board (RLB) for hearing and decision. The RLB now had responsibility for carrying out mediation and arbitration functions, a feature which pleased neither the railroad unions nor the railroad owners.[vii]
“The major section of the Railroad Labor Board Act…stipulated that owners (of railroads) and workers seek to resolve any dispute among them before applying to the newly established RLB for redress. Adjustment Boards would be set up to handle grievances regarding working conditions. Unfortunately for labor, decisions of the RLB were not legally binding; instead, the RLB’s power rested in “enlightened public opinion.” The ambiguous nature of this enforcement clause soon became a problem for the shopmen, as some railroads ignored RLB decisions.”[viii]
Part of the problem with the RLB is the makeup and membership of the Board. With its nine members respectively representing the railroads, the workers and the public, there was extreme concern that the unions would be blocked by the public members voting with the railroads against the workers. However, in July, 1920, the RLB announced a decision for a wage increase for all railroad workers. The average increase was 20% which was appreciated by the railroad shopmen.[ix]
Following this victory for railroad workers, a railroad management and labor were heading to an inevitable clash over the shopcrafts, as management saw the need to reduce and eliminate shop crafts else the shopcrafts would ultimately become unaffordable. Dismantling the shopcrafts would provide greater control over manpower costs, facilities and benefits thereby decreasing the red ink of the railroads. Thus, railroad management expanded the practice of contracting out for certain shopcraft support, preferring to forego the pension and benefits provided for railroad employees and workers. On some railroads, there was now a decided effort to contract out virtually all shopcraft by setting up small “shell” companies. With the election of Warren G. Harding, elected on a platform of a “return to normalcy”, which included elimination of “minimal labor strife,“ experienced during the pre-war period. Harding would not be the friend to labor that President Wilson had been.
Throughout 1921, the shopmen began to lose ground with the railroads. There were now efforts begun to destroy union representation. The biggest tool that the railroads had in reducing shopmen and other personnel was the layoff. Union officials were threatened by some railroads that there would be massive lay-offs and threatened sanctions against union members including boards of adjustments remaining from the WWI period. The unions were now in a difficult position vis-a-vis the railroads. It would require the unions to accept the terms of management or fight management on a larger scale.
Following RLB deliberations concerning the New York Central Railroad, a decision favorable to the NYCRR was issued which reduced railroad worker’s pay by 12.5%.[x] This prompted the unions to circulate a strike ballot and setting the stage for a national strike. President Harding added to the frustration of the Unions by making sure that the RLB was not to remain the fair and impartial board established under Wilson. Harding appointed a new public Board member, sympathetic with railroad management, and ostensibly ensuring that the Unions would not enjoy any advantage with its grievances.
While the Norfolk and Western Railroad Company shops were not listed as part of the Shopmen’s strike on July1, 1922, it is certain that that there were sympathies for the shopmen who did go on strike elsewhere and that the problems of other railroads were well known among the N&W shopcraft members. Yet the unions faced the problems of solidarity and support for the strikers across the country. Those shopcraft members who were content with their working conditions and pay were not inclined to join with their counterparts on a national level walk-out.
With the strike vote, the N&W railroad added to its internal fully-armed police force taking the number to 750 personnel for a ratio of one police officer for every 10 employees.[xi] Anticipating the need for a response force and additional security available on company property of at least 250 police officers on three eight hour shifts, the expansion of the police force was envisioned to protect the N&W Railway property from violence, vandalism or sabotage by strikers, or others.
As the N&W Railway contributed significantly to the prosperity of the Roanoke Valley and especially through its employees, the Roanoke merchants were less inclined to interfere with local commerce to have railroad employees denied services or shopping. Other railroads requested communities to “outlaw” railroad shopcraft strikers to prohibit sales to strikers by local merchants. Efforts such as this provided little if any impact as most folks supported the strikers. Meanwhile violence toward strikers mounted in other parts of the country, taking its toll on union organizers and strikers.
For the railroad management, each region established its own “permanent strike organization” and “all of the supervisory officers…immediately assume their respective strike duties—some looking after the commissary, some after sanitary arrangements, others seeing to it that necessary work is taken care of,” etc.[xii]
The strike finally took place July 1, 1922, in which the shop crafters went on strike nationwide, but with fear that other unions would not honor the picket lines in solidarity.
After a review of the legislative history concerning the railroads and labor relations, there exists a special niche for both labor and the railroads in the US. It wasn’t until 1959 with the Labor –Management Reporting and Disclosure Act of 1959, known as the Landrum-Griffin Act, US labor laws were never applied to the railroads. It would be 1974 before the Railroad Retirement act of 1935 was partially bound with the general Social Security system.
Unlike the Transportation Act of 1926, there followed the establishment of the Railroad Labor Unemployment Insurance Act of 1933 which provided unemployment insurance for railroad workers. Following WWII, this act was amended to include death, disability and sickness insurance programs, but independent of social welfare legislation.
Hence, we find that there are two special characteristics of the railroad industry today: the railroad workforce is national in scope, and represents about the same percentage of population of each state. Since the industry carries freight in every state, except for Hawaii, the unions speak with equal strength and receive equal attention.
Of equal or greater consequence is the historic and pervasive belief that the national welfare requires uninterrupted railroad service –what would the US do without the railroads?[xiii]
As time has long since brought further changes to the National Transportation Act with the additions and growth of the US Department of Transportation mission, the US economy remains as dependent today on the railroads as it has for the past 150 years, and this trend will continue to be a part of the American fabric.
[i] THE RAILWAY LABOR ACT AT FIFTY- By Charles M. Rehmus. Page 3. GPO, Washington DC. 1977
[ii] Ibid, Page 4
[iii] Ibid, Page 6
[iv] Ibid Page 7
[v] Ibid page 7
[vi] Taken from the Republican Party Platform of 1924
[vii] Power at Odds: The 1922 Railroad Shopmen’s Strike. By Collin J. Davis. P48. 1997 University of Illinois.
[viii] Analysis of Labor provisions of the new Transportation act,” MLR 10 (April 1920, 50-55).
[ix] Power at Odds: The 1922 Railroad Shopmen’s Strike. By Collin J. Davis. P49. 1997 University of Illinois.
[x] “Decision Number 2-july 20, 1920” – Decisions of the Railroad Labor Board with Addenda and Interpretations, 1920 (GPO, Washington, DC, 1921).
[xi] Decision No. 147-NY Central Railroad et al Vs Brotherhood of Railway and Steamship Clerks, Freight Handlers, Station Employees et al, June 1, 1921 U.S.R.L.B. 1921 133-51.
[xii] Power at Odds: The 1922 Railroad Shopmen’s Strike. By Collin J. Davis. P-71. 1997 University of Illinois.
[xiii] Ibid, Page 75.