Taking Back Our Stolen History
Truman Authorizes the Seizure of United States Steel Mills
Truman Authorizes the Seizure of United States Steel Mills

Truman Authorizes the Seizure of United States Steel Mills

On June 24, 1950, North Korea invaded South Korea. The United Nations Council called on all U.N. members to help repel the invasion. Under his authority as commander in chief of the armed forces, President Harry S. Truman ordered American troops to help defend the beleaguered South Koreans. Believing that the Korean War would end quickly, Truman did not ask Congress for a formal declaration of war. However, in November of 1950, when China sent its soldiers to support the North Koreans, the war entered a new and uncertain phase. Again, Truman decided not to request a declaration of war from Congress. Instead, exercising his executive powers, he proclaimed a “limited” national emergency.

In the spring of 1952, while American combat troops were mired in the mud of Korea, the United States faced a major steel strike at home. On April 8, with the strike imminent, President Truman ordered his secretary of commerce to seize all the nation’s steel mills. Truman believed strongly that the steel industry had to keep operating if a “national catastrophe” was to be averted.

The power of the president has often expanded during wartime. In some instances, presidents have acted without any direct authority from either Congress or the Constitution. But just how much power should a president be allowed to have when the nation is at war, especially during an undeclared war? Did President Truman go too far by seizing the entire American steel industry?

The Steel Dispute

The labor contract between the steel industry and the United Steelworkers of America expired on December 31, 1951. Negotiations had failed to produce a new agreement. Among other things, the union demanded a major wage increase, which the steel industry said it could not pay.

Complicating this situation was the system of price and wage controls existing at the time. Runaway inflation and uncontrolled wage increases often occur during wartime, due to shortages in materials and labor. To avoid this problem, Congress passed the Defense Production Act of 1950. The law empowered the president to establish “price ceilings” for certain defense-related products, including steel. The act also allowed the president to set wage limits for workers in industries where price controls had been established.

According to the Defense Production Act, any labor-management dispute that could not be settled in the controlled industries would be turned over to a council made of representatives from business, labor and the public. This council would then attempt to work out an agreement. To accomplish this goal, President Truman set up the Wage Stabilization Board.

When the steel industry and the union failed to reach an agreement on a new contract at the end of 1951, the steelworkers announced their intention to call a nationwide steel strike. President Truman warned that, in the midst of the Korean War, such a strike would gravely threaten the national defense.

President Truman had two choices: He could refer the dispute to the Wage Stabilization Board or he could use the Taft-Hartley Act of 1946 to delay the strike. The Taft-Hartley law allowed, but did not require, the president to seek a court order stopping a strike for 80 days if it threatened the health or safety of the country. During the 80-day “cooling off” period the government would attempt to settle the dispute between labor and management. If no agreement was reached during the 80 days, the strike could proceed. The president would then submit his recommendations to Congress. During the debate over passage of this law, Congress voted down a proposal allowing the president to seize companies as a way of forcing an agreement.

President Truman decided not to activate the Taft-Hartley law to deal with the threatened steel strike. For one thing, he viewed Taft-Hartley as a peacetime labor law. Truman believed that because the U.S. was at war and the steel industry played such an important role in national defense, more direct government action was needed. Also, the nation’s unions bitterly opposed the Taft-Hartley Act, with its provision enabling the government to delay a strike. The Democratic Party had long enjoyed strong labor backing. As the leader of the Democrats, Truman did not want to antagonize the steelworkers and all of organized labor by going to court to block their strike.

President Truman referred the steel dispute to his Wage Stabilization Board. At the same time, he called upon the steelworkers to hold off their scheduled strike. They agreed to do so.

After meeting for more than two months, the Wage Stabilization Board sent its report to President Truman on March 20, 1952. Over the objections its business members, the board called for a wage increase of 26.4 cents an hour during an 18-month period. This figure was lower then that demanded by the union, but the steelworkers were prepared to accept it.

President Truman called the board’s recommendation “fair and workable.” But the steel companies opposed the proposed wage increase unless the government would allow them to raise steel prices. Truman angrily branded the steel company demands as “entirely out of reason.” He argued that since steel profits were rising due to wartime demands, the industry could easily afford wage increases and still not boost the price of steel. Why, Truman asked, should the steel companies make “extra profits” during a war emergency? In addition, he charged that unjustified price increases would fuel inflation throughout the entire American economy.

Last-minute attempts to negotiate an agreement between the steel companies and the steelworkers’ union failed. The steelworkers turned down an offer by the steel mill owners for a much lower wage increase than that recommended by the Wage Stabilization Board. Conversely, when the White House was willing to allow the price of steel to go up to $4.50 per ton, the steel companies rejected this price increase as too low. On April 9, the steelworkers voted to strike.

Truman Takes the Steel Mills

President Truman found himself in a bind. His attempt to resolve the steel dispute by going through the Wage Stabilization Board had failed. He could still delay the strike for 80 days under the provisions of the Taft-Hartley Act. However, since he had personally asked the steelworkers to keep working over the past three months, he thought it unfair to force them to stay on the job without a contract for another 80 days.

On April 8, 1952, the day before the steelworkers’ strike began, President Truman issued Executive Order No. 10340. It directed Secretary of Commerce Charles Sawyer to take possession of the nation’s privately owned steel mills and keep them running.

In a radio address to the American people, President Truman explained his extraordinary action: “Our national security and our chances for peace depend on our defense production. Our defense production depends on steel.” Truman reminded his listeners that American troops were, at that moment, “facing the enemy on the field of battle.” He went on to say, “I would not be living up to my oath of office if I failed to do whatever is required to provide them with the weapons and ammunitions they need for their survival.”

Later in his speech, Truman angrily blamed the steel companies for the crisis because they insisted on holding out for intolerable steel price increases before agreeing to raise the wages of the workers. “If we knuckled under to the steel industry, the lid would be off,” he warned. “Prices would start jumping all around us—not just prices of things using steel, but prices of many other things we buy, including milk and groceries and meat.”

The reaction of the country was instant. While the steelworkers praised Truman and postponed their strike, the steel companies vigorously attacked the president. Some members of Congress called him “an American Hitler.” Newspaper editorials almost unanimously opposed the steel mill seizures. Truman, in his usual crusty manner, said to reporters, “Tell ‘em to read the Constitution . . . the president has the power to keep the country from going to hell.”

President Truman did attempt to cooperate with Congress. He asked for legislation to regulate the operation of the steel mills. He would also be willing to cancel his seizure order if Congress would come up with another solution to the crisis. Congress, almost equally divided between Democrats and Republicans, did not act. Negotiations between the steel companies and the union continued, but with little progress. Finally, the federal courts entered the fray.

The Steel Seizure Case

On April 29, only weeks after President Truman issued his executive order, U.S. District Court Judge David A. Pine ruled that the steel mill seizures were “illegal and without authority of law.” He ordered the mills returned to the owners. Truman was shocked that precedents of earlier presidents, including Franklin D. Roosevelt, failed to convince the judge that his executive order was valid. Pending an appeal before the U.S. Supreme Court, the government got a delay of Judge Pine’s order, keeping the steel mills temporarily under the control of the government. A constitutional crisis loomed: What if the Supreme Court ruled against Truman, but he insisted on keeping the steel mills in government hands anyway?

The Supreme Court heard oral arguments concerning the steel seizure case on May 12 and 13. The crucial issue to be decided by the nine justices was whether the president had the legal power under the Constitution to seize the steel mills.

Solicitor General Philip B. Perlman, representing the government, first argued that the circumstances of the war required that the steel mills remain in operation. He claimed that a steel industry strike would endanger America’s national safety and the lives of American soldiers. He admitted that the Constitution did not specifically grant the president the power to seize private property. Nevertheless, Perlman maintained the president could legally do this in a national emergency under his executive power and powers as commander in chief of the military.

The steel companies were represented by John W. Davis, the Democratic candidate for president in 1924. Davis told the justices that the president did not have the power to seize private property without authorization from Congress. Davis further argued that Congress had provided President Truman with another way to settle the steel dispute: the Taft-Hartley Act. Moreover, in passing this law, Congress had deliberately rejected the idea of seizure. When the president issued his executive order seizing the steel mills, Davis told the justices, he was, in effect, making law, which only Congress has the power to do under the Constitution.

On June 2, 1952, the Supreme Court, by a 6–3 margin, ruled that President Truman’s seizure order was unconstitutional (Youngstown, Sheet & Tube Co. v. Sawyer, 343 U.S. 579). Justice Hugo Black, writing the majority opinion, concluded: “The Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times.” Justices Black and Douglas took the position that under no circumstances could a president alone constitutionally “make laws” as Truman had attempted to do with his executive order. The other four justices making up the majority did not go so far. Evidently, they believed that the national emergency in the spring of 1952 was not severe enough to justify the government takeover of privately owned steel companies. However, these justices implied that under more extreme circumstances, such an action by a president may be constitutional.

The steel companies, most of Congress, and probably a majority of the American people welcomed the Supreme Court decision. The New York Times editorialized, “Under this opinion the trend toward and indefinite expansion of the Chief Executive’s authority is deliberately checked.” Even the steelworkers felt relieved; they could now finally go on strike.

President Truman took the decision as a personal blow. He was particularly upset because five of the Supreme Court justices had been appointed by Franklin Roosevelt, while the remaining four were his own appointees. “I don’t see how a court made up of so-called ‘Liberals’ could do what that court did to me,” he later said.

Only a few hours after the Supreme Court issued its ruling, President Truman ordered Secretary of Commerce Sawyer to return control of the steel companies to the owners. Truman tried once more to prevent a steel strike, this time by asking Congress for authority to seize the mills. Congress ignored his request, and the strike began. About 600,000 striking steelworkers shut down the steel industry in the United States for more than seven weeks.

As it turned out, the strike did not seriously hinder the war effort. Steel inventories proved adequate to meet defense needs, at least for a while.

President Truman again refused to use the Taft-Hartley Act to interfere with the steel strike. “The Court and the Congress got us into the fix we’re now in,” he said. “Let Congress do something about getting us out of it.” Truman did bring the leader of the union and the president of U.S. Steel to Washington to pressure them for a settlement. On July 24, the union agreed to a 21.5 cent-an-hour wage and fringe benefit increase while the government permitted the steel companies to raise their prices by $5.65 a ton.

President Truman was outraged by the $5.65 figure, but he approved it to get an agreement and an end to the strike. Bitter over what he considered blackmail by the steel industry, Truman later wrote in his Memoirs, “If we wanted steel—we wanted it very badly—it would have to be on the industry’s terms.” He never forgave the steel mill owners or the Supreme Court.

Source: https://www.crf-usa.org/bill-of-rights-in-action/bria-4-4-b-seizure-truman-takes-the-steel-mills.html