A dispute between the textile mill-owners and the labourers at Ahmedabad arose in 1918, about the grant of bonus and dearness allowance. The labourers wanted 50% increase allowance due to steep rise in prices. The mill-owners were ready to give only 20% increase. Gandhi was approached to find a solution. He persuaded both the parties to agree to arbitration. But after a few days, some misunderstanding led to a strike. The mill-owners seized the opportunity and declared lock-out. Gandhi studied the case. He thought that 35% increase would be reasonable. He advised the labourers to demand the same. Regular strike began on the 26th February 1918. Thousands of labourers struck work. They took a pledge not to resume work till their demand was met or arbitration was agreed upon. They also decided to observe non-violence and maintain peace.
Gandhi had friends in both the camps. The mill-owners being led by Shri Ambalal Sarabhai. His sister Ansuyaben was leading the labourers. During the struggle, Gandhis co-workers regularly visited the labourers quarters to solve their problems and to keep high their morale. Daily meetings and prayers were held. Bulletins were issued. Gandhi did not like charity. Efforts were made to find alternative employments for the workers. However, after a fortnight, the workers started getting tired. It was difficult to face starvation. It was unbearable for Gandhi that they should break the vow. He then decided to undertake an indefinite fast. This strengthened the workers. It brought moral pressure on the mill-owners. They consented to arbitration after three days. Gandhi broke his fast. The Satyagraha was successful. The arbitrator studied the case for three months and recommended 35% increase in dearness allowance. The workers demand was thus fully met. However, Gandhis fast did involve in an element of coercion. But it was a spontaneous decision. The situation demanded some drastic action. The Satyagraha was significant in many respects. It was the first Satyagraha by industrial workers. It was wholly peaceful. It showed how workers could fight non-violently. It also gave rise to a strong Gandhian Labour Union.