In May 1933, Peterson settled a contentious labor strike in Manchester between the Amoskeag Company and its 7,400 unionized mill workers. The union called a walkout when company management tried to lower wages by 40%. The New Hampshire National Guard had been deployed to the city and had clashed with the strikers. After canvassing many union members, Peterson went to the company management and successfully negotiated a 15 cent per hour wage increase, settling the strike.
