Price levels began to turn in the other direction in the first years of the 1920s as increased wartime demands upon production were regularized and labor supply was expanded with the reintegration of millions of former soldiers into the employment market.

In response to the changing economic conditions, railway companies obtained approval from the Railroad Labor Board in 1921 for deep reductions in wage rates for workers across the industry.

[2] During the war, the various railway shop crafts (machinists, boilermakers, blacksmiths, electricians, sheet-metal workers, and laborers) had fully obtained the right to unionize, and they sought to maintain this economic clout.

Seven unions representing the railroad shopmen and maintenance of way workers voted to go on strike, however, and the date July 1, 1922, was set for the launch of a coordinated work stoppage.

[3] With the conductors, engineers, firemen, and brakemen who actually operated the trains unaffected by the strike, the railroad companies immediately began to replace the skilled and semi-skilled maintenance workers with strikebreakers.

[3] Commissaries and kitchens were established to provide for newly-hired workers, and newspaper advertising was published by a number of railway companies in an attempt to win public support for their strikebreaking efforts.

On July 3, head of the Railroad Labor Board Ben W. Hooper, a former Republican governor of Tennessee and political appointee of conservative President Warren G. Harding, pushed through a so-called "outlaw resolution" that declared that all strikers had forfeited their arbitration rights guaranteed under the Transportation Act of 1920.

[7] In the Eastern United States, a number of railroads attempted to bring pressure to end the strike by stripping strikers of seniority rights.

Union leaders condemned the spontaneous violence of strikers and the sometimes-brutal response of company guards and police officials but with little practical effect.

[7] While the railroad officials pledged to end the subcontracting of work to non-union shops, no retreat was to be made on the issue of restoring seniority to striking workers, and the impasse remained unsettled.

[7] While the US Army was not used to defend railroad company interests in the 1922 Shopmen's Strike, the US National Guard was called out, on a state-by-state basis, by various state governors.

[12] US Attorney General Harry M. Daugherty, an outspoken opponent of the labor movement, was instrumental in escalating the federal government's role in bringing about the defeat of the striking railway workers.

[13] Daugherty sensationally charged strikers with conducting "a conspiracy worthy of Lenin and Zinoviev" and sent US Marshals into the field to aid the railroads in their efforts to defend their property and defeat the strike.

[15] Harding proposed a settlement on July 28 that would have granted little to the labor unions, but the railroad companies still rejected the compromise, despite interest from the desperate workers.

Daugherty, who opposed the unions, pushed for national action against the strike, and on September 1, Judge James Herbert Wilkerson issued a sweeping injunction against striking, assembling, picketing, and a variety of other union activities; it was colloquially known as the "Daugherty Injunction": "One of the most extreme pronouncements in American history violating any number of constitutional guarantees of free speech and free assembly.