In 1882 the Texas legislature contracted with Mathias Schnell of Rock Island, Illinois, for construction of a state Capitol, promising as compensation more than three million acres of public land. Twelve days later three-quarters interest in the project was transferred to the Illinois firm of Taylor, Babcock, and Company, and five months later Schnell transferred his remaining interest to the same company. Principals in the company, which became known as the Capitol Syndicate, were Charles B. Farwell, United States senator from Illinois; his brother, John Villiers Farwell; Abner Taylor, a United States Representative from Illinois; and Amos Babcock. Initially, the Capitol was to be built of Texas limestone, but when limestone proved unsatisfactory, granite from the Burnet area was substituted. Since a fall in land prices from 1883 to 1885 made it difficult to meet the expenses of the syndicate, Taylor, who acted as chief contractor, asked the legislature to help by furnishing convict labor for quarrying the granite and for building the needed rail line from Burnet to Austin. Taylor agreed to pay sixty-five cents a day to house, feed, and guard the convicts. Owners of the quarries at Marble Falls agreed to furnish the granite free of charge. Shortly after this, construction of the building was subcontracted by Gustav Wilke.
The use of convict labor in competition with free labor was strongly opposed by all organized labor groups. Moreover, Wilke had already aroused the antagonism of the International Association of Granite Cutters by using nonunion labor on other jobs. He placed an ad in the Journal of the International Association of Granite Cutters for thirty cutters to work "on red granite, steady work, climate good and healthy, union wages." The following month, referring to this ad, the local union in Austin placed a notice that no union men had been hired, there was little work to be done, and workers should not be "gulled" by the description of the climate. Wilke wrote the union headquarters stating he would hire whomever he chose and would not allow the union to dictate to him. The union, by a vote of 500 to 1, declared a boycott against the job and warned all granite cutters to stay away from Austin. Wilke sent a telegram to the union stating that if the union would accept Quincy, Massachusetts, wages, he would guarantee that no convicts would cut granite for the capitol. These wages were $2.75 to $3.00 a day. The custom, however, was that wages on new quarries were set at the level of the nearest competitive quarry, in this case Graniteville, Missouri, where the wages were $3.50 a day. According to the national office of the granite cutters, the official wage for Austin was $4.00 per day, so the offer was refused.
The contractor sent a personal representative, George Berry, to Aberdeen, Scotland, to secure cutters. Berry promised eighteen months' steady work at four to six dollars a day. Eighty-eight Scottish workers came to the United States under contract to work on the building. Transportation expenses were to be deducted from their first two months' wages. At New York they were met by representatives of the union and a United States marshal, who held the bringing in of the workers a clear violation of the Alien Contract Labor Law, passed in February 1885. Twenty-four workers refused to scab, but sixty-four continued on the way to Texas.
As a consequence, charges were filed in the federal district court at Austin against the members of the Capitol Syndicate. All were indicted in March 1886, but the hearing was postponed until August 1887. Aberdeen recruits who left employment with Wilke gave depositions against the syndicate in March 1887, and in July those who remained were asked to sign a statement that they had no contract. Some later admitted signing knowing that the claim was false. Before the case was heard, two years later, members of the syndicate were removed from the suit, leaving only Wilke, who admitted the charges and was fined $1,000 for each Aberdeen man, a total of $64,000. He was given eighteen months to appeal for executive clemency and finally in 1893 paid $8,000 plus costs. The union claimed Wilke pled guilty to shield syndicate members, who then used their influence to reduce the fine. Considering the status of unions in the United States at that time, the fact that the federal prosecutor left town the day of the hearing, leaving prosecution to attorneys hired by the Knights of Labor, and the fact that two syndicate members were also members of the United States Congress, the claim was probably correct.
Many of the Scottish workers did not remain long in Texas. Anger over the expense of the seven-day train trip from New York and the unpleasant surprise that wages were not as promised left only fifteen working on the Capitol by May 1887. It was estimated that more than one-half had no granite-cutting experience and were unable to earn even a dollar a day. Vouchers from May 1886 through May 1887 indicate that the average wage was twenty-seven cents an hour, although individual wages ranged from four to fifty cents an hour. Wilke had promised to reduce the number of convicts working, but from July to October 1886 the number increased from 300 to 350. From the standpoint of preventing the use of convict labor and use of scabs, the boycott was a failure. In 1890 Wilke and Berry paid a penalty of $500 each and agreed to use union cutters on future jobs. See also XIT RANCH.