The Strike Spreading

This July 24, 1877 article from the Pittsburgh Daily Post notes the strike's spread throughout the country.

THE STRIKE SPREADING.

The news from most of the Middle and Western States show that the railroad strike is progressing, and that in addition there are signs of a general strike by mill hands for an advance on their present wages. The railroad movement is against the reduction recently made, and therefore has elements of strength not in the movement of the other strikers. The strike does not appear to have extended to the New England or the Southern railroads. In some instances railroads have escaped all trouble by announcing to their employes [sic] the withdrawal of the proposition to reduce wages.

The business of the country is embarrassed as it never has been before by this interruption of railroad communication. Trade and commerce are paralyzed, while there must have been a frightful shrinkage in the value of railroad property. It may send companies into bankruptcy, and hasten that revolution in railroad ownership, which many believe to be the only legitimate adjustment of the embarrassed financial condition of the railroad interest. We mean the absorbtion of the roads by the bondholders, and their reorganization on a reduced capital stock.

It is a fact that should not be lost sight of, when the railroad strikers are criticised for their refusal to accept the situation, which is declared to be the legitimate outgrowth of hard times and shrinkage in values, that the railroad companies—or at least many of them—are conducting their business so as to force inflation dividends. They are endeavoring to extract interest on a capital stock increased three or four fold by the process of watering, or pay dividends largely in excess of the current rates at which money can be loaned. The Baltimore & Ohio pay ten per cent. dividends, and the Pennsylvania Railroad has increased its capital stock from twelve to eighty millions of dollars. Is there not a hugging of the delusions of the inflation era here far ahead of anything charged on the workmen clamorous about a ten per cent. reduction.

If we are to get a hard-pan, and if this is to be the conclusive argument on all questions of wages, let it apply as well to all financial bubbles, the struggling reminders of flush times. The capital stock of railroad companies should be scaled down so they would bear a just relation to the reduction on other values, and not kept at the high water mark of speculative times.