The Record · Chapter Four, the deep dig

Pullman, Morgan and the Money Behind the Money

Pullman owned a town by hand. Morgan owned the country through paper. The money they answered to never made the papers.

By Jason C. Wandel and Claude for Chicago Register · Monday, October 19, 2026

Start on the floor, because that’s where the bill landed.

In 1906 Upton Sinclair published The Jungle, about a Lithuanian family working the killing floors in Armour’s Chicago. Early in the book they buy a house on an installment deal. Miss a payment and it’s gone, with everything they paid into it. Fifty years later Chicago would call that contract buying and run it on whole neighborhoods. Sinclair wanted readers to see the family. They saw the meat instead. The country got food laws in 1906 and the workers stayed right where they were.

Sinclair had a line for why people miss it. It’s hard to get a man to understand something when his salary depends on him not understanding it.

Philip Armour lived on Prairie Avenue. So did George Pullman, and so did Marshall Field. Keep that street in your head. We’re coming back to it.

Chapter Four told you about the model town. Act Three told you how Pullman bought 4,000 acres from people who didn’t know it was him. This is the dig underneath both of them. Who held the money, who held the guns, and who the money answered to.

Three floors

Floor one is Pullman. He owns a whole town by hand.

Floor two is J.P. Morgan and the houses that underwrote the railroads. They hold the country through paper.

Floor three is the buyers behind Morgan. London and European houses and families, plus American insurance companies, savings banks and trusts. They bought the bonds Morgan sold, and they had to be paid first. Their names almost never made the papers.

Pullman kicked up to the railroads. The railroads kicked up to Morgan. Morgan kicked up to the money overseas. Morgan was the captain, maybe. The real money was twice removed.

Climb high enough and the boss stops being a person. It’s a pile of bonds that has to get paid first. That’s why we follow the money and not one man.

Fifty years in the room

Pullman didn’t walk in off the street. The Palace Car Company was formed on February 22, 1867, with $1 million in stock sold privately to railroad leaders and Chicago businessmen. The first money was Chicago money, and the railroads were in the room from day one. A year later Pullman Pacific was set up in New York for the Union Pacific, and Andrew Carnegie was a big stockholder.

When it came time to build the town, the land went into the Pullman Land Association. It had 16,042 shares. Pullman held 15,542 of them, about 97 percent. Marshall Field held the other 500.

The rent was set to bring back 6 percent a year. It never got above about 4 to 4.5 percent. That’s not charity. That’s a long game. You don’t need this year’s rent when you own the ground, the houses, the gas, the water, the store and the job.

Every seat in one town

Our History runs on seven positions. Most people in The Record hold two or three. Inside his town, Pullman held all seven.

He owned the crossing, the sleeping cars the railroads had to run. He held the debt, because the rent came out of the paycheck before the worker ever saw it. He held the pen, because he wrote every lease and could end one at will. He owned the room, the only chair in town where anything got decided. He held the clock, because he could wait and his workers couldn’t. He ran the split, so the workers took the cost and the company kept the money. And he wrote the story, the model town for the whole country to admire. Behind all seven, he had his own spies.

Morgan held all seven too, one floor up and across the whole country, mostly through other people. Here’s the difference. Pullman had to hire his own spies. Morgan never had to hire a gun, because the courts and the badge came with the paper.

Count by hand and Pullman wins. Count by reach and Morgan wins.

Who paid for the guns

Very few people taking from very many only holds when somebody is holding a gun. Force isn’t a side story here. It’s the beam the whole house sits on. So the question isn’t whether there was force. It’s who paid for it, who put a badge on it and who it answered to.

In 1877, during the railroad strike, Chicago businessmen armed themselves at City Hall and swore in their own employees as police. The Board of Trade swore in 100 of its own men. The room that set the price of the country’s wheat put guns on the street.

In 1889 the First Regiment Armory went up, designed by Burnham and Root and paid for by the most powerful people on Prairie Avenue to protect their neighborhood. Pullman, Field and Armour all lived on Prairie.

In 1886 the railroads with Chicago terminals formed the General Managers’ Association. Twenty four lines. A historian who studied it later said it was born in a strike.

In 1894, when the Pullman workers walked out and the railroad men walked out with them, the deputy marshals who broke the strike were paid by the railroads. That’s not our read. The federal government’s own Strike Commission report lists the hire of United States deputy marshals among the railroads’ costs. Railroad losses in its count came to at least $685,308.

The man running the Justice Department that summer was Attorney General Richard Olney. He had a $10,000 retainer from the Burlington railroad. His government salary was $8,000.

Same playbook four times in seventeen years. 1877 builds the arsenal. 1886 and 1888 test it. 1892 and 1894 use it. Private money paid for public force.

The boot

The men who worked Pullman’s cars weren’t just shorted in the wallet. The Black porters had to answer to the name George, after George Pullman, a custom carried over from slavery. They worked for tips instead of real wages, around 400 hours a month, and hundreds were fired for trying to organize. By the 1920s the Pullman Company was the largest private employer of Black Americans in the country.

That boot stayed on for thirty years after the strike. In 1925 A. Philip Randolph started the Brotherhood of Sleeping Car Porters. It took them twelve more years to win a contract.

In 1894 Pullman cut wages 20 to 30 percent and didn’t cut the rent or the store prices. The government’s own commission called the town un-American and faulted Pullman for refusing to talk to his workers. He died three years later and was buried under tons of concrete and steel rails so nobody could dig him up.

Whoever can wait collects

Here’s the whole game in one line. Whoever can wait collects. Whoever can’t pays.

America was young. Barings had been in business since 1762. The Bank of England since 1694. The Rothschilds for generations. On the other side of the table sat a country with no central bank from 1836 to 1913 and a panic about every decade.

The young country was the risky bet. The old money sold it protection. Every panic was the young country paying the bill. When the Treasury ran low on gold in 1895, the syndicate that bailed it out was Drexel, Morgan, August Belmont, J.S. Morgan and Co. of London and N.M. Rothschild and Sons. By February 2, 1895 the Treasury was down to about $42 million in gold. There was no central bank to call, so Morgan got to be one, in 1895 and again in 1907. The hole in the system was the business.

In 1893 a quarter of the country’s railroad miles went into receivership. A railroad in receivership was federal court property. So when the strikers stopped the trains a year later, they weren’t just defying Pullman. They were defying a federal judge. The bankruptcies built the federal muscle before the strike even started.

Look at 1893 from 30,000 feet and it stops looking like a crash. It looks like a collection. Whoever held the senior bonds and the cash at the bottom bought the rest cheap, and the court and the badge made it final.

By 1907 Pullman’s town didn’t matter much anymore. The money had moved up a floor and was writing the rules for money itself.

Where the price got set

Chicago set the price of what the land grew. New York set the price of what was owed. Both sat on the same railroads. A farmer in 1893 had the same problem as a Pullman worker. A fixed debt against a falling price.

The Board of Trade could still get rough. In 1897 and 1898 Joseph Leiter tried to corner the wheat market. Armour broke him, not with a bet but with a warehouse. He filled storage on Goose Island and ran tugboats to keep the ice open at Duluth so his wheat could come down. Leiter lost somewhere between $5 million and $10 million. His father’s account book shows checks to the Pullman Palace Car Company and to Marshall Field.

Prairie Avenue again.

The mob movie, legal

You’ve seen this movie. Morgan is the man people come to for favors. Pullman is the capo running his own territory. The deputies, the spies and the Pinkertons are the crew. Rent is the street tax. The injunction is the judge on the payroll, except nobody needed an envelope. London is the family overseas that gets paid first.

Nobody’s evil in this one. Everybody signed.

The movie ends in handcuffs. The real one ended with Pullman under concrete, Morgan in a library and the town a national park.

The loop

The computers get upgraded, but a Mac is still a Mac. And it’s still Apple.

The House of Morgan sold U.S. Steel with South Works inside in 1901. Congress split the bank in the 1930s. Morgan’s grandson Henry helped open Morgan Stanley in 1935. In 2008 that firm’s funds took half of Chicago’s parking meters. Same house, same ground, more than a century apart.

The telegraph became fiber. The deputies became lawyers. The bonds became funds. Same machine underneath.

The loop runs at least six more times on the same ground after 1907. Insull’s tower of borrowed money over Chicago’s power, until 1932. The red lines drawn around Black neighborhoods in the 1930s and 1940. Contract buying in the 1950s and 1960s, two miles from Pullman. The steel leaving, 1970s to 1992. The city leasing the Skyway for 99 years and the meters for 75. The worst subprime loans landing on the same blocks the red lines drew, and after the crash, private money buying the foreclosures and renting them back.

Then the Hotel Florence, the hotel Pullman named for his daughter. Today it’s public money first, a private operator, and a contract that runs for decades.

Every round runs the same way. Borrowed money builds the boom. The debt comes due. Whoever holds the cash and the senior paper buys at the bottom. The law or the badge makes it final. And the story calls it a rescue.

The boot lands on the same blocks each round. The names change. The floors stay.

What we got wrong along the way

We print our corrections. These are from our own working notes on this entry, fixed before anything went to print.

The Whole Foods in Pullman is a distribution center, not a store. The 6 percent rent target isn’t a point in Pullman’s favor. It’s a long game formula that favored investors. The Land Association had 16,042 shares, not 16,286. The share of railroad miles in receivership in 1893 is one fourth, not one third. The Strike Commission faulted Pullman for refusing to negotiate, and we can’t confirm it called for arbitration. Olney’s tie we can source is a Burlington retainer, not a board seat. Armour broke the Leiter corner with storage and tugboats at Duluth, not by shipping grain through the ice. And we first undersold the force. It’s the beam, not a side row.

Still digging

Here’s what we haven’t nailed down yet, so we don’t print it as fact. Who bought the Pullman houses when the court made the company sell them. Where Pullman’s money went when he died. Who exactly paid for the armory, by name. Which railroad receiverships in 1893 were friendly ones, and which judges ran them. Who bought the 1895 gold bonds and what they sold them for. The full terms of the Hotel Florence deal. When we get them, they go up here.

So here are our questions for you.

Who has the deadline in your life today, and who has the calendar?

Who pays for the guns, and who gets to point them?

Everybody remembers Morgan’s name. Who’s ever heard of the people he was working for?

And who are the buyers behind the private equity firms now? Pension funds. Which means teachers, cops and firefighters.

The scoreboard

Read it yourself

Sources