Strikers, Octopi, and Visible Hands: The Railroad and American Capitalism

With a looming railroad strike in the news, one could be forgiven for thinking that we are in the 1890s and not the 2020s. The panicked involvement of the federal government to try to force a resolution to this crisis reminds us that now, just as during the nineteenth century, railroads are a critical component of the American economy. Still, the news of a crisis on the railroads likely struck most Americans as a bit anachronistic. We hike or bike on trails tracing abandoned rail lines, ride scenic steam routes, and live in towns with geographies shaped by the railroad, but outside of urban centers and the northeast corridor, passenger rail travel is virtually nonexistent. When Americans think about railroad companies today (if they even do) it is likely through the lens of nostalgia or ironic detachment. Perhaps they conjure up images of model train enthusiasts and old-timey steam railroads or they laugh at the viral exploits of British trainspotter and TikTok star Francis Bourgeois.

One can see the appeal of (and the historical reasons for) this nostalgic view of railroading, but this perspective is one that is decidedly detached and apolitical. When viewed as a joke or an anachronism, railroading is divorced from the history that shaped both railroads and the structure and form of American capitalism. The railroad strike cuts through this haze and reminds us that in both popular culture and American historiography, the railroad corporation has long been a site where Americans have grappled with larger questions of political economy.

The first railroads in the United States in the 1830s and 40s quickly became entangled in a larger argument about the nature and legality of the corporation. Many of America’s early “internal improvements” like the National Road or the Erie Canal were projects of state and federal governments so when railroads first appeared, it seemed natural to many Americans that the state continue to fund and operate these critical pieces of infrastructure. America’s early railroads were a mix of state-owned projects – like the Georgia Railroad and South Carolina Railroad – and private corporations such as the Baltimore & Ohio. In state after state, legislators debated whether to allow private investors to operate corporations. As South Carolina textile manufacturer argued in his state’s legislature, “did you ever know a State government to carry on a business right?”[1] To advocates of the private corporation, state-run railroads were a recipe for untrammeled waste and corruption. The private corporation won these debates, and by the middle of the nineteenth century, state control over corporate charters was fading. By the end of the century, these state-owned railroads had almost all been folded into large private corporations either through outright purchase or consolidation, or informally through a tactic like the Southern Railway’s 99-year lease of the North Carolina Railroad. 

As passenger trains began to chug across the American landscape, Americans vigorously debated access to this wondrous new form of transportation. In theory, paying for a ticket should give anyone equal access to rail travel and many rail boosters preached about the democratizing potential of the new technology. In reality, a combination of corporate policies and state legislation quickly segregated cars along the familiar American fault lines of race, class, and gender. In a world defined by a separate spheres ideology, railroad companies labored to ease anxieties about female travelers removed from the comforts of home.[2] Before the Civil War, northern states debated segregation on rail lines, but the efforts of African American activists forced railroads to end these policies.  Antebellum debates – in states like Massachusetts and New York – provided a preview of battles over segregation in the postwar South, in which activists like Ida B. Wells pressed railroad companies to stop relegating black travelers to segregated “smoking cars.” Again, the outcome of these debates reverberated across American economic and social life. Plessy v. Ferguson, a court case initiated on a Louisiana railroad, established the “separate but equal” precedent that was used to uphold segregation across the South. The term “Jim Crow,” which came to symbolize this regime, even had its origins with white railroad workers in the antebellum north, who used the slur to deny access to African American travelers.[3]

In the decades after the Civil War, railroads were the site of intense labor struggles that spilled into the broader economy and sparked new national anxieties about labor relations. The most famous of these were the Great Strikes of 1877, initiated when West Virginia railroad workers, confronted with a pay cut, quit their jobs and took to the tracks to stop all rail traffic. This spontaneous protest quickly spiraled out of control and spread through the veins of the national railroad network, touching off new work stoppages and mob actions where sympathetic workers joined the railroad men. Occupying key nodes in the national network, like the B&O corridor that carved through the Appalachian Mountains, crowds of strikers ground the nation’s commerce to a halt. Legions of unemployed “tramps” and sympathetic workers – such as anthracite miners in eastern Pennsylvania – joined in the strikes and swelled the size of urban mobs. Militias and strikers battled in cities like Pittsburgh and Chicago, and it only took the effort of the US Army to end the strikes and get the trains moving again.

Railroad property burns in Pittsburgh, Pennsylvania during the Great Strikes of 1877.Harper’s Weekly, Journal of Civilization Vol XXL, No. 1076 (August 11, 1877): 624-25,

The smoke eventually settled, and most striking workers returned to their labors, but the discourse surrounding these dramatic events took longer to fade. Observers noticed how the strikes had clearly tapped into some larger grievances, and the events of summer 1877 touched off a national debate about the “labor problem.” Some commentators even wondered if the desires of labor and capital could ever be reconciled. While the nation did not slide into anarchy or socialism, the Great Strikes did inaugurate a tumultuous era of violence between workers, policemen, and private militias – both on railroads and throughout the economy – which made this question all the more relevant. In the 1880s, the Knights of Labor sought to form a cooperative commonwealth and unite all workingmen of America, and they targeted Jay Gould’s rail lines in the Southwest in 1886 strikes.  Eugene Debs’s American Railway Union would use similar tactics – halting the movement of rail cars – to battle the Pullman Car Company in the 1893 Pullman Strikes.

Just as railroad strikes invited this discussion of labor’s role in American political economy, waves of consolidation in the railroad industry – sparked by the crushing economic depression of the 1890s – inspired new debates about the size and regulation of corporations. Whether they be transcontinental routes like the Southern Pacific, massive entities like the Pennsylvania Railroad or regional conglomerates like the J.P. Morgan-backed Southern Railway, which a man writing to Tom Watson called “the mightiest corporate monopoly the South has ever known,” large railroad systems loomed over the economy at the turn of the century. Many Americans began to speak of the railroad corporation as an Octopus, invoking a monstrous metaphor to describe how railroad corporations seemed to strangle all they touched.[4]

The Southern Pacific Railroad portrayed as an Octopus strangling California. The Wasp, August 19, 1882, vol. 9. No. 316, pp. 520-521.

This metaphor reached its peak in Frank Norris’s 1901 muckraking novel The Octopus, which told the story of a group of rag-tag farmers who did battle with the pernicious Pacific and Southwestern Railroad. Norris’s novel was a fictionalized retelling of a real event, an 1880 armed standoff between squatters and Southern Pacific railroad agents known as the Mussel Slough incident. Though the novel was based in reality, Norris painted this event in melodramatic tones, exaggerating the misdeeds of the railroad and the dramatic downfall of his protagonists.[5] Even if Americans did not take the book’s message to heart, they could easily conjure up examples of how the railroad corporation meddled in the political system, strangled the economic fortunes of farmers, and stymied the growth and development of towns. Railroad lines even looked like the tentacles of an octopus as they sprawled over maps of states and regions.

The octopus metaphor applied to Standard Oil. Puck, v. 56, no. 1436 (1904 Sept. 7).

Sure, this was a simplistic metaphor, but the image of the octopus captured the key question of the era – what should be done about monopolies? The Octopus image also was applied to other large corporations like Standard Oil and by the time of Theodore Roosevelt’s presidency, cartoonists depicted the burly president physically pummeling or disciplining corporate monstrosities. The metaphor had come to speak to the ills of untrammeled capitalist consolidation across the economy but the idea had its origins in railroading, just as it seemed to fit best when applied to the railroad corporation. It became a potent political tool, as anti-monopoly politicians invoked the railway octopus to invite discussions of concentrated corporate power. While the Populists took a direct approach to remedy this ill – nationalization of railroads – Progressive politicians promoted new forms of regulation with state and federal level railroad commissions, chief among them the Interstate Commerce Committee. Even if the Octopus loomed as a danger, the threat of railroad strike-induced chaos remained for policymakers. The Railway Labor Act of 1926 and National Labor Relations Act treated railroad workers as separate from other workers and allowed the government to impose settlements and stave off strikes.

Perhaps it was due to the declining significance of the railroad in post-World War II American life, or due to the ways in which the Cold War tended to clarify and strengthen defenses of American capitalism, but by the 1950s and 60s, the railroad corporation came to represent the perils of regulation and the virtues of free market capitalism. Our greatest sin, according to commenters on the political right, was the excessive regulation of the railroads, which either propped up a failing and uncompetitive industry or strangled the innovation that railroads needed to adapt and survive. Ayn Rand’s novels perhaps most clearly present this idea of the railroad corporation as a paragon of free market capitalism. Atlas Shrugged’s protagonist Dagny Taggart is a railroad vice-president who leads the fictional Taggart Transcontinental Railroad and a corporate leader who prizes profit, efficiency, and the free market above all else.

Railroad presidents of the nineteenth century would have certainly welcomed these arguments on the evils of regulation, but the reality was that these corporations could not exist without federal and state government funding and charters. Military force, supplied by the US Army, was critical in ensuring the success of transcontinental routes to the west and busting up national rail strikes in the late nineteenth century.  In the conservative reimagining of railroad history, the railroads represented a key part of America’s corporate heritage, a glorious example of American capitalism’s accomplishments, now prostrated and laid low by government bureaucrats. The golden age of American railroading in the late nineteenth century was refashioned as a chief accomplishment of an era of laissez-faire political economy. In a political project that saw much success after the 1970s, arguments in Atlas Shrugged would be used by conservative and libertarian politicians to push for deregulation and financialization across the American economy.

Business historians, while taking a more critical look at free market mythologies, also have fixated on the importance of the railroad in the emergence of the modern corporation. Alfred Chandler, writing in the 1970s, posited the railroad as America’s “first big business” and as the “visible hand” that shaped the development of American capitalism. He argued that the size and scope of railroading compelled railroad corporations to pioneer organizational structures and managerial techniques that would be replicated across the American economy. In Chandler’s retelling, the expanding operations and growing bureaucracy of a company as lines expand, again gives a clearly digestible story of corporate development.[6] Chandler continues to loom large over business history, but a new generation of scholars assessing the origins of modern capitalism have shifted emphasis away from railroads and have located the origins of modern managerial, accounting, and labor management practices in the plantation or steamship. In a post-Great Recession era marked by more ambivalence towards American capitalism, and by more awareness of the carnage corporations can cause, historians have given us revisionist takes on the railroad that further challenge the idea of the “visible hand” ordering and structuring American capitalism.[7]

Workers and executives celebrate the completion of the final spike in the first transcontinental route across America (1869). The completion of the Union Pacific route was a momentous moment that continues to loom large in American historiography. From the Yale Collection of Western Americana, Beinecke Rare Book and Manuscript Library, Yale University, New Haven, Connecticut.

Since the end of the Cold War, aggressive defenses of American capitalism may have slightly faded but the meaning of the railroad corporation became more muddled in an era of globalization and neoliberalism. Since the 1980s, the American economy has shifted further away from manufacturing and politicians from both major parties have largely hewed to neoliberal policies that are pro-globalization, anti-regulation, and ambivalent to the interests of organized labor. The last major American railroad strike, in 1992, lasted less than two days after Congress voted. Ironically enough (given his stance on the current strikes) Joe Biden was one of six congressmen to vote against this measure. Due to anti-union policies – seen most visibly in Ronald Reagan’s busting of an air traffic controller strike in 1981 – labor has faded in relevance and union membership declined across the economy. Globalization, propelled forward by policies like NAFTA and the WTO, has given new commodities for American railroads to haul, just as these same policies have encouraged the movement of capital and further muddled the provenance of Americans’ historic rail corporations. For example, the Illinois Central Railroad, home of the iconic “City of New Orleans,” now is owned by the Canadian Pacific.

With railroad strikes in the news in 2022, the potential exists for the railroad corporation to again connect to and invite a broader structural conversation about American capitalism. The negotiations are fluid and the news ongoing but much of the conflict hinges on whether companies will provide sick leave for railroad workers. Congress has forced the unions to accept an agreement providing one day of sick leave, while the unions still want five days. The Railway Labor Act of 1926 bars further strike actions on the part of the unions, but the potential remains for a wildcat strike initiated by the disgusted rank-and-file. It remains to be seen whether the crisis is over or not, but even if so, weeks of news coverage on the strikes and settlement has again reminded the nation of the centrality of the railroad to American capitalism. 

Commentators have been quick to point out that sick leave is an issue across the American economy. As the nation reels from wave after wave of COVID-19 sickness, the disease has exposed vast inequities in health care access and sick leave policies. Companies compelling sick workers to remain in their offices (aided by the CDC cutting quarantine time down to five days) and not offering days off for vaccination-induced side effects surely have exacerbated the spread of the virus. Moreover, the pandemic took a disproportionate toll on so-called “essential workers” who had to drive busses, check-out groceries, process meat, and serve fast food while professional-class workers could Zoom into work. Why does Congress not, some have asked, solve this issue by securing sick leave for railroad workers and all Americans? Others have pointed fingers at Biden, wondering if he could use an executive order to extend sick leave protections for rail workers, or if he could use his bully pulpit to push for sick leave for all.

Beyond the sick leave issue, railroad workers have voiced complaints about recent cuts to the workforce, and a move to PSR, a Precision-scheduled railroading system which pushes the logic of efficiency to the max. Simply put, workers are being, to use an older term, “stretched out” and asked to do more with less. As railroad workers tell and retell their stories to reporters and on social media, they are giving a tangible example of how the logic of efficiency and neoliberalism has ground down the American worker. Surely this sounds familiar to workers who are part of a growing wave of unionization and labor militancy. Starbucks baristas, California adjuncts and graduate students, and Amazon warehouse workers who have been fighting similar battles in their workplaces could take solace and inspiration from a railroad union fighting battles against similar forces. Even the Gilded Age discourse of the robber baron has returned. Labelling a railroad executive a robber baron or greedy boss is both a throwback and an echo of a more recent Occupy Wall Street discourse pitting the 1% against the 99%.

In short, the railroad company remains a site for Americans to grapple with key questions about the nature of American capitalism. Since the earliest days of railroading, Americans have used the railroad to sort through questions about the nature of the corporation, labor relations, corporate consolidation, the free market, and the organizational forms of American businesses. Even as historians reassess the role of the railroad in American history, they continue to emphasize its importance. As the strike news reminds us, we depoliticize the railroad corporation at our own peril. While it is certainly too soon to predict the results of these discussions with any level of confidence, history suggests that the railroad again will be a site for Americans to reckon with these weighty questions.

Featured Image: “The Rioters’ Railroad to Ruin,” Puck, August 1, 1877, accessed on

[1] John Majewski, Modernizing a Slave Economy: The Economic Vision of the Confederate Nation (Chapel Hill: University of North Carolina Press, 2009),102. The argument that railroads helped end state-funded internal improvements is best laid out in John Lauritz Larson, Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States (Chapel Hill: University of North Carolina Press, 2001), ch. 7.

[2] Amy Richter, Home on the Rails: Women, the Railroad, and the Rise of Public Domesticity (Chapel Hill: University of North Carolina Press, 2005).

[3] These ante- and post-bellum fights are best detailed in Elizabeth Stordeur Pryor, Colored Travelers: Mobility and the Fight for Citizenship Before the Civil War (Chapel Hill: University of North Carolina Press, 2016),and Blair M. Kelly, Right to Ride: Streetcar Boycotts and African American Citizenship in the Era of Plessy v Ferguson (Chapel Hill: University of North Carolina Press, 2010).

[4] R. Scott Huffard Jr., Engines of Redemption: Railroads and the Reconstruction of Capitalism in the New South, (Chapel Hill: University of North Carolina Press, 2019),ch. 7, details the use of the octopus metaphor as applied to the Southern Railway.

[5] Richard J. Orsi, Sunset Limited: The Southern Pacific Railroad and the Development of the American West, 1850-1930 (Berkeley: University of California Press, 2007), ch. 4 provides the best rebuttal of Frank Norris’s novel, as well as a more clear-eyed retelling of the Mussel Slough incident.

[6] Alfred D. Chandler Jr., The Visible Hand: The Managerial Revolution in American Capitalism (Cambridge: Belknap Press, 1977).

[7] Three recent books that exemplify this revisionist perspective on American railroads include Richard White, Railroaded: The Transcontinentals and the Making of Modern America (New York: W.W. Norton, 2011), Manu Karuka, Empire’s Tracks: Indigenous Nations, Chinese Workers, and the Transcontinental Railroad (Berkeley: University of California Press, 2019) and Huffard, Engines of Redemption.

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