In July 1894, President Grover Cleveland appointed a Commission to Investigate the Chicago (Pullman) Strike. Although the Cleveland administration played a major role in ending the strike to the detriment of the American Railway Union, the president selected Carroll D. Wright, the U.S. commissioner of labor, to chair the commission. Wright had significant experience investigating labor conditions and collecting statistical data, and he was sympathetic to the plight of workers. George Pullman appeared before the commission to explain his position on the strike.
COMMISSIONER WRIGHT . . . State generally what the idea was of establishing the town [of Pullman] in connection with your manufacturing plant. . . .
PULLMAN [reading from a statement] The object in building Pullman was the establishment of a great manufacturing business on the most substantial basis possible, recognizing, as we did, and do now, that the working people are the most important element which enters into the successful operation of any manufacturing enterprise. We decided to build, in close proximity to the shops, homes for workingmen of such character and surroundings as would prove so attractive as to cause the best class of mechanics to seek that place for employment in preference to others. We also desired to establish the place on such a basis as would exclude all baneful [harmful] influences, believing that such a policy would result in the greatest measure of success, both from a commercial point of view, and also, what was equally important, or perhaps of greater importance, in a tendency toward continued elevation and improvement of the conditions not only of the working people themselves, but of their children growing up about them. . . .
If any lots had been sold in Pullman it would have permitted the introduction of the baneful elements which it was the chief purpose to exclude from the immediate neighborhood of the shops, and from the homes to be erected about them. The plan was to provide homes in the first place for all people who should desire to work in the shops, at reasonable rentals, with the expectation that as they became able and should desire to do so, they would purchase lots and erect homes for themselves within convenient distances, or avail themselves of the opportunity to rent homes from other people who should build in that vicinity. As a matter of fact, at the time of the strike 563 of the shop employees owned their homes, and 461 of that number are now employed in the shops; 560 others at the time of the strike lived outside; and, in addition, an estimated number from 200 to 300 others employed at Pullman were owners of their homes. . . .
Due attention was paid to the convenience and general well-being of the residents by the erection of stores and markets, a church, public schools, a library, and public halls for lectures and amusements; also a hotel and boarding houses. The basis on which rents were fixed was to make a return of 6 percent on the actual investment, which at that time, 1881, was a reasonable return to be expected from such an investment; and in calculating what, for such a purpose, was the actual investment in the dwellings on the one hand and the other buildings on the other, an allowance was made for the cost of the streets and other public improvements, just as it has to be considered in the valuation of any property for renting anywhere, all public improvements having to be paid for by the owner of a lot, either directly or by special assessment, and by him considered in the valuation. The actual operations have never shown a net return of 6 percent, the amount originally contemplated. The investment for several years returned a net revenue of about 4½ percent, but during the last two years additional taxes and heavier repairs have brought the net revenue down to 3.82 percent. . . .
COMMISSIONER NICOLAS WORTHINGTON I wanted to know what you had in mind at the time you made the statement that “it was very clear that no prudent man could submit to arbitration in this matter” when you were referring to your daily losses as a reason why any prudent man could not submit to arbitration?
PULLMAN The amount of the losses would not cut any figure; it was the principle involved, not the amount that would affect my views as to arbitration.
WORTHINGTON Then it was not the amount of losses that the company was then sustaining, but it was the fact that a continuance of the business at the rates that had been paid would entail loss upon the company?
PULLMAN It was the principle that that should not be submitted to a third party. That was a matter that the company should decide for itself. . . .
WORTHINGTON Now, let me ask you if, taking all the revenues of the Pullman company for the last year, so far as you are advised, if the company has lost money or made money during the last year?
PULLMAN The company has made money during the last year.
Source: Executive Documents of the Senate of the United States, 53rd Cong. (1894–1895), 529–30, 553.