For his latest novel, the versatile Jess Walter drew on his grandfather’s stories of hopping freight trains to find farm jobs during the Depression. In The Cold Millions, he offers us a cast drawn from the downtrodden masses roaming the North West of America in the squalid first decades of the 20th century. But the background he creates manages to convey the romance and adventure of a Western — and of those cherished family tales.

Fans of 2012’s Beautiful Ruins will recognise Walter’s taste for weaving factual characters into his novels — although the icy waters rushing through the city of Spokane (the author’s hometown) in Washington state could not feel farther from the seedy glamour of Hollywood or the light of the Italian Riviera that suffuses his earlier hit. Instead of Richard Burton in his pomp, the reader gets a crash course in some of the key figures behind the era’s confrontation between American labour and capital.

Real life firebrand socialist campaigner Elizabeth Gurley Flynn is here as the “pretty young martyr” of the labour cause. But the narrative centres on Walter’s creations: the Dolans, two homeless young brothers “tramping” while they look for work.

A milling mass of the urban poor looms up behind these characters, conjured with lists reminiscent of the stylistic tricks of F Scott Fitzgerald: “bums, tramps, hobos, stiffs . . . itinerants, vagrants, floaters, Americans.” The uncut books in the lavish library in a mansion on the hill are presumably a nod to Jay Gatsby too — Walter is mining the same seam as Fitzgerald in his examination of the gulf between rich and poor.

Spokane in 1909 is “the last rush town”; it was built at warp speed by wiping out the Indian tribe that gave the city its name, and its swelling population sat at “the intersection between Frontier and Civilized”.

Jostling downtown with the Dolan brothers we meet club-wielding cops; showgirls and ruthless robber barons; reporters crowding a courthouse in a “sea of fedoras”; shadowy private detectives in cahoots with exploitative businessmen. And the “Wobblies” — the nickname for members of the Industrial Workers of the World, the activist union behind the Spokane Free Speech riots of 1909.

Older brother Gig Dolan takes part in the union’s demonstration for the right to protest against exploitation, and faces six months in jail. His “waif” sibling Rye gets arrested too but is released when his age is revealed. When Flynn — pregnant and 19, bowls into town spoiling for a fight with the corrupt authorities — Rye is spellbound, and torn between his role as her sidekick at labour movement rallies and other, desperate alliances that might save his brother. The deceptions multiply, the risks become deadly, and the plot moves to its explosive conclusion.

Walter has given himself an ambitious task, not least in knitting together an origin story for his city from fragments and inventions. But the most joyful storytelling hits you in the form of first person accounts that are inserted into the main narrative. Ursula the Great, an actress “fallen low in the theatre,” is the most vivid. Compelled to take a job singing in her undies in a cage with a live cougar, she must sew raw offal into her corset and then throw it to the animal — in time to avoid a mauling.

Such wit is reminiscent of Walter’s back catalogue (The Financial Lives of the Poets could collect a prize for funniest opening chapter). But Jules, a lanky descendent of the Spokane tribe in the ranks of the degraded workers, could have been the quiet tragic hero of a different novel. He encourages his daughter to “pass for Italian” so that she can blend in with the immigrant communities.

With its rebellion against inequality and debates about capitalism, there are clear echoes from 1909 to the US today. Incitement to riot, dreadfully topical since the assault on the Capitol last month, also gets a look in. But The Cold Millions offers more: a study of individuals living, willingly or unwillingly, through tumult. It’s a theme in line with our times, and one on which Rye (who borrows the volumes of Tolstoy’s War and Peace from Spokane’s Carnegie Library) also muses:

“Rye thought that history was like a parade. When you were inside it nothing else mattered. You could hardly believe the noise . . . But most people were not in the parade. They experienced it from the sidewalk . . . watched it pass, and when it was on to the next place, they had nothing to do but go back to their quiet lives.”

The Cold Millions, by Jess Walter, Viking, RRP£16.99, 352 pages

Miranda Green is the FT’s deputy opinion editor

Join our online book group on Facebook at FT Books Café