On June 26 the railway strike began. It was a purely sympathetic strike as no demands were made. The union found itself pitted against the General Managers' Association, representing twenty-four roads centering or terminating in Chicago, which were bound by contracts with the Pullman Company. The association had been organized in 1886, its main business being to determine a common policy as to traffic and freight rates, but incidentally it dealt also with wages. The strike soon spread over an enormous territory. Many of the members of the brotherhoods joined in, although their organizations were opposed to the strike. The lawless element in Chicago took advantage of the opportunity to rob, burn, and plunder, so that the scenes of the great railway strike of 1877 were now repeated. The damages in losses of property and business to the country have been estimated at $80,000,000. On July 7, E.V. Debs, president, and other principal officers of the American Railway Union were indicted, arrested, and held under $10,000 bail. On July 13 they were charged with contempt of the United States Court in disobeying an injunction which enjoined them, among other things, from compelling or inducing by threats railway employes to strike. The strike had already been weakening for some days. On July 12, at the request of the American Railway Union, about twenty-five of the executive officers of national and international labor unions affiliated with the American Federation of Labor met in conference in Chicago to discuss the situation. Debs appeared and urged a general strike by all labor organizations. But the conference decided that "it would be unwise and disastrous to the interests of labor to extend the strike any further than it had already gone," and advised the strikers to return to work. On July 13, the American Railway Union, through the Mayor of Chicago, offered the General Managers' Association to declare the strike off, provided the men should be restored to their former positions without prejudice, except in cases where they had been convicted of crime. But the Association refused to deal with the union. The strike was already virtually beaten by the combined moral effect of the indictment of the leaders and of the arrival in Chicago of United States troops, which President Cleveland sent in spite of the protest of Governor Altgeld of Illinois.

The labor organizations were taught two important lessons. First, that nothing can be gained through revolutionary striking, for the government was sufficiently strong to cope with it; and second, that the employers had obtained a formidable ally in the courts.[28]

Defeats in strikes, depression in trade, a rapidly falling labor market and court prosecutions were powerful allies of those socialistic and radical leaders inside the Federation who aspired to convert it from a mere economic organization into an economic-political one and make it embark upon the sea of independent politics.

The convention of 1893 is memorable in that it submitted to the consideration of affiliated unions a "political programme." The preamble to the "programme" recited that the English trade unions had recently launched upon independent politics "as auxiliary to their economic action." The eleven planks of the program demanded: compulsory education; the right of popular initiative in legislation; a legal eight-hour work-day; governmental inspection of mines and workshops; abolition of the sweating system; employers' liability laws; abolition of the contract system upon public work; municipal ownership of electric light, gas, street railway, and water systems; the nationalization of telegraphs, telephones, railroads, and mines; "the collective ownership by the people of all means of production and distribution"; and the referendum upon all legislation.

Immediately after the convention of 1893 affiliated unions began to give their endorsement to the political program. Not until comparatively late did any opposition make itself manifest. Then it took the form of a demand by such conservative leaders as Gompers, McGuire, and Strasser, that plank 10, with its pledge in favor of "the collective ownership by the people of all means of production and distribution," be stricken out. Notwithstanding this, the majority of national trade unions endorsed the program.

During 1894 the trade unions were active participants in politics. In November, 1894, the Federationist gave a list of more than 300 union members candidates for some elective office. Only a half dozen of these, however, were elected. It was mainly to these local failures that Gompers pointed in his presidential address at the convention of 1894 as an argument against the adoption of the political program by the Federation. His attitude clearly foreshadowed the destiny of the program at the convention. The first attack was made upon the preamble, on the ground that the statement therein that the English trade unions had declared for independent political action was false. By a vote of 1345 to 861 the convention struck out the preamble. Upon motion of the typographical union, a substitute was adopted calling for the "abolition of the monopoly system of land holding and the substitution therefor of a title of occupancy and use only." Some of the delegates seem to have interpreted this substitute as a declaration for the single tax; but the majority of those who voted in its favor probably acted upon the principle "anything to beat socialism." Later the entire program was voted down. That sealed the fate of the move for an independent labor party.

The American Federation of Labor was almost drawn into the whirlpool of partisan politics during the Presidential campaign of 1896. Three successive conventions had declared in favor of the free coinage of silver; and now the Democratic party had come out for free coinage. In this situation very many prominent trade union leaders declared publicly for Bryan. President Gompers, however, issued a warning to all affiliated unions to keep out of partisan politics. Notwithstanding this Secretary McGraith, at the next convention of the Federation, charged President Gompers with acting in collusion with the Democratic headquarters throughout the campaign in aid of Bryan's candidacy. After a lengthy secret session the convention approved the conduct of Gompers. Free silver continued to be endorsed annually down to the convention of 1898, when the return of industrial prosperity and rising prices put an end to it as a demand advocated by labor.

The depressed nineties demonstrated conclusively that a new era had arrived. No longer was the labor movement a mere plaything of the alternating waves of prosperity and depression. Formerly, as we saw, it had centered on economic or trade-union action during prosperity only to change abruptly to "panaceas" and politics with the descent of depression. Now the movement, notwithstanding possible changes in membership, and persistent political leanings in some portions of it, as a whole for the first time became stable in purpose and action. Trade unionism has won over politics.

This victory was synchronous with the first successful working out of a national trade agreement and the institutionalization of trade unionism in a leading industry, namely stove molding. While one of the earliest stable trade agreements in a conspicuous trade covering a local field was a bricklayers' agreement in Chicago in 1887, the era of trade agreements really dates from the national system established in the stove foundry industry in 1891. It is true also that the iron and steel workers had worked under a national trade agreement since 1866. However, that trade was too exceptionally strong to be typical.

The stove industry had early reached a high degree of development and organization. There had existed since 1872 the National Association of Stove Manufacturers, an organization dealing with prices and embracing in its membership the largest stove manufacturers of the country. The stove foundrymen, therefore, unlike the manufacturers in practically all other industries at that time, controlled in a large measure their own market. Furthermore, the product had been completely standardized and reduced to a piecework basis, and machinery had not taken the place of the molders' skill. It consequently was no mere accident that the stove industry was the first to develop a system of permanent industrial peace. But, on the other hand, this was not automatically established as soon as the favorable external conditions were provided. In reality, only after years of struggle, of strikes and lockouts, and after the two sides had fought each other "to a standstill," was the system finally installed.