Financial History 152 Winter 2025 | Page 27

with employers to enhance the dignity and importance of workers while pursuing a social agenda like that formerly pursued by the NLU . Some local “ assemblies ” acted like traditional unions and organized strikes against certain employers ; others preferred to work cooperatively with businesses to achieve their goals . For a time , the KOL was more successful than any prior labor group in representing the interests of the American working class . By 1886 , membership certainly exceeded 730,000 and may have been closer to one million .
Focusing Only on Members ’ Interests
The diversity of membership and breadth of its objectives that had been responsible for the KOL ’ s success were also related to its downfall . As early as 1883 , it became apparent that the best organized craft unions , whose leaders wanted nothing more than higher wages and better working conditions , were beginning to grow disenchanted . Simultaneously , the leaders of assemblies interested in social reform were becoming annoyed with the strikes and sit-downs organized by many craft unions . Those craft locals believed they needed an umbrella organization of their own to protect and promote their interests . So , in 1881 , more than 100 delegates from eight national unions , 11 city labor federations , 42 local craft unions and 46 local assemblies of the KOL formed the Federation of Organized Trades and Labor Unions ( FOTLU ) to represent only the bread-and-butter workplace interests of its members . Within a year , most assemblies of the KOL and most national unions left this new organization . They thought it had neither the financial resources nor the leadership to be effective . During the next several years , the KOL and FOTLU raided each other ’ s locals , undercut each other ’ s efforts with employers and otherwise worked against each other ’ s interests within the organized labor community .
The internal divisions between local unions with differing objectives became more problematic in early 1886 . In New York City , a dispute between the FOTLUsupported Cigarmakers International Union and the breakaway KOL-supported Cigarmakers ’ Progressive Union of America was the last straw . The Progressive Cigarmakers ’ Socialist Party members were too radical and politically active for the Cigarmakers International ’ s members . In December , in Columbus , Ohio , delegates
Terence Powderly , grand master of the Noble and Holy Order of the Knights of Labor , 1890 .
from more than a dozen trade unions voted to form a new umbrella alliance with the single goal of furthering the interests of working people . It would be called the American Federation of Labor ( AFL ). Almost immediately , most craft unions of the still-struggling FOTLU agreed to become part of this new organization .
It is not necessary to go into the details of the Southwest railroad strike that occurred in March 1886 or the Haymarket Square riot that occurred several months later . Suffice it to say that each was accompanied by serious violence on the part of striking or demonstrating workers ; and , in each case , leaders and members of the KOL were linked to those troubles . That conduct led to an erosion of support for organized labor in general and the KOL in particular . Membership in the already fractured organization declined steadily and fell to less than 75,000 by 1893 . The Panic of 1893 did not totally kill the KOL , but it was never again the national powerhouse it had once been .
Paradoxically , as the once powerful KOL entered a period of decline , the fledgling AFL began to experience a period of growth . President Samuel Gompers emphasized this organization ’ s need to serve the interests of its local unions , not to agitate for social reforms . While the AFL initially included 138,000 members of the old FOTLU , it did not include another 117,000 members of unions representing iron and steel workers , railroad employees and other groups . But it grew faster than most of those non-FOTLU unions , particularly in the robust economic environment that characterized the early years
CIO President Walter Reuther , head of the United Auto Workers ( UAW ), led the charge to remove many communist sympathizers from the CIO .
of the 20th century . By 1904 , unions in the AFL included more than 80 % of the country ’ s 2.1 million union members .
Mixed Opportunities and Challenges
The first quarter of the 20th century was a turbulent time for organized labor in general and the AFL in particular .
• Corporations in many manufacturing industries persuaded both state and local courts to issue injunctions against striking in a labor dispute , thus restraining workers from engaging in an activity long since determined to be perfectly legal . From 1914 to 1916 , several congressional acts and Supreme Court decisions outlawed the use of such injunctions while both verifying and clarifying the legality of organized labor ’ s activities .
• Corporations in industries such as retailing and insurance worked to forestall the potential impact of the trade union movement by organizing “ company unions .” They were not platforms for negotiating wages or benefits but vehicles for handling employee grievances , establishing health and safety standards and developing social and recreational activities .
• During the war years of 1914 to 1918 , unions did their part to enhance the productivity of the economy by agreeing to minimize strikes . Corporations cooperated by voluntarily raising wages to recruit the necessary workforce to keep factories running smoothly . President Woodrow Wilson showed his respect and
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