I’m not an historian, but here’s the gist.
In 1894 there was a recession in the US, and Chicago engineer, industrialist and developer George Pullman had to lay off a large chunk of his workforce (yet he kept about 2/3rds on the payroll).
Some of those laid off were anarchists, socialists and Marxists (the Progressive Movement was on the march) and they organized a strike, not only for the layoffs, but because Pullman wouldn’t reduce the rent for the housing he built and owned. But they did more than protest. They turned to violence and arson.
They burned the buildings and product of their employer (The Pullman Car Company) and others. The damage affected the rail commerce of 27 states, the US Postal Service, and thousands of workers and their families not directly affected by the layoffs. Dozens were killed during the riots.
Note that the arson and violence didn’t affect Pullman nearly as much as it did to the thousands of people who benefited from Pullman’s brilliance, including engineering underground sewage systems for the city of Chicago.
In that year, democrats controlled the House, the Senate AND the Presidency. What did President Cleveland do? He gave the “strikers” an Official Holiday. Then a few days later, he sent in the U.S. Military to kick ass on his own constituents.
Even as Pullman Company and railroad workers were striking, Congress passed legislation in June 1894 making the first Monday in September a federal legal holiday to recognize and celebrate labor. President Grover Cleveland signed the bill into law June 28, 1894, a few days before sending federal troops to Chicago.
“It was a way of being supportive of labor. Labor unions were a constituency of the Democrat Party at the time, and it didn’t look good for Cleveland, who was a Democrat, to be putting down this strike.”
[Richard Schneirov, professor of history, founder of the local chapter of the SDS, 1966, Grinnel University.]
Federal troops were recalled from Chicago on July 20, and the Pullman strike was declared over in early August. Eugene V. Debs, arrested at the height of the violence along with several other ARU leaders, was charged with violating the injunction and served six months in jail. Though the ARU disbanded, Debs would emerge as the leader of the nation’s growing socialist movement, running for president five times on the Socialist Party ticket.
And Karl Marx smiled.
[Sources: here, here and here. More Labor Day stuff here.]