Truman Orders Seizure of Steel Plants Summary

  • Last updated on November 10, 2022

President Harry S. Truman’s seizure of U.S. steel plants during the Korean War—in order to prevent a threatened wartime strike by the United Steelworkers of America—led to a landmark Supreme Court decision, Youngstown Sheet & Tube Co. v. Sawyer, which limited presidential authority.

Summary of Event

The North Korean invasion of South Korea in June, 1950, entangled the United States in a major land war Korean War (1950-1953);and steel industry[steel industry] on the Asian continent. At first, President Harry S. Truman hoped to avoid imposing World War II-type economic controls, but the intervention of the Chinese Communists at the end of November, 1950, radically altered the scale of the conflict. In mid-December, Truman created an Office of Defense Mobilization Office of Defense Mobilization, U.S. (ODM) to take charge of all mobilization and stabilization activities and agencies. He named as director of defense mobilization Charles E. Wilson, president of the General Electric Company and vice chairman of the War Production Board during World War II. Steel industry;United States Executive Order 10340 Nationalization of land and industries;United States [kw]Truman Orders Seizure of Steel Plants (Apr. 8, 1952) [kw]Seizure of Steel Plants, Truman Orders (Apr. 8, 1952) [kw]Steel Plants, Truman Orders Seizure of (Apr. 8, 1952) Steel industry;United States Executive Order 10340 Nationalization of land and industries;United States [g]North America;Apr. 8, 1952: Truman Orders Seizure of Steel Plants[03790] [g]United States;Apr. 8, 1952: Truman Orders Seizure of Steel Plants[03790] [c]Government and politics;Apr. 8, 1952: Truman Orders Seizure of Steel Plants[03790] [c]Manufacturing and industry;Apr. 8, 1952: Truman Orders Seizure of Steel Plants[03790] [c]Business and labor;Apr. 8, 1952: Truman Orders Seizure of Steel Plants[03790] Truman, Harry S. [p]Truman, Harry S.;and organized labor[organized labor] Truman, Harry S. [p]Truman, Harry S.;Korean War Truman, Harry S. [p]Truman, Harry S.;seizure of industries Murray, Philip Wilson, Charles E. (1886-1972) Clark, Tom C. Vinson, Fred M. Sawyer, Charles Pine, David A. Black, Hugo L. Jackson, Robert H.

In late January, 1951, the president imposed a general across-the-board freeze of wages and prices. The administration was sensitive to the injustices resulting from the freeze order. The Office of Price Stabilization (OPS) developed the Industry Earnings Standard as a guide for granting price increases. The Wage Stabilization Board Wage Stabilization Board, U.S. (WSB), a tripartite body made up of representatives of labor, industry, and the public, allowed an increase of up to 10 percent in wages over those paid on January 15, 1950, to workers who had not negotiated new contracts since the beginning of the Korean War.

The union Labor unions;Wage Stabilization Board representatives on the WSB attacked the 10 percent catch-up increase as insufficient and withdrew from the board. In late April, 1951, Truman reconstituted the WSB. The parties to a dispute were not bound by WSB recommendations. To gain labor cooperation, however, the WSB would report directly to the president, bypassing ODM director Wilson, who was regarded with suspicion by union leaders. The problem faced by the WSB in keeping a lid on wages was heightened when Congress, in the Defense Production Act Amendments Defense Production Act Amendments (1951) of 1951, weakened the government’s power to halt price increases.

The most formidable challenge to the stabilization program came with the scheduled expiration of the contract between the United Steelworkers of America United Steelworkers of America and the major steel companies on December 31, 1951. With the parties at an impasse over new terms, the union gave notice on December 18 of its intent to strike. The threatened strike put Truman in a difficult position. Steelworker union president Philip Murray, who was also the president of the Congress of Industrial Organizations Congress of Industrial Organizations , was a longtime Democratic Party ally. The steel companies warned that a wage increase would require an equivalent increase in steel prices. Most important, the Korean truce talks remained stalemated, and thus the fighting continued. The military effort of the United States could ill afford a shutdown of the steel industry as a result of a strike.

Truman could have invoked a provision of the Taft-Hartley Act Taft-Hartley Act (1947)[Taft Hartley Act] Labor-Management Relations Act (1947)[Labor Management Relations Act] of 1947 authorizing the government to obtain a court injunction to halt any strike threatening to cause a national emergency. The provision called for an eighty-day cooling-off period. Truman shied away from doing so. Given organized labor’s bitter hostility toward the Taft-Hartley Act, its invocation would probably have dashed any possibility of union cooperation with the administration’s anti-inflation program. Truman himself had loudly and repeatedly denounced the legislation, and it had passed over his veto. Most important, the union would be free to strike once the eighty-day cooling-off period was over.

Accordingly, on December 22, Truman referred the dispute to the Wage Stabilization Board and induced the union to continue working until the WSB made its report. Over the dissent of its industry representatives, the WSB recommended an increase in wages and fringe benefits amounting to what was variously estimated at from 18 to 30 cents an hour. Rejecting the WSB recommendation, the steel companies warned that the result would be to raise the cost of producing steel by $12 per ton.

Although most of the nation’s press echoed the steel companies’ attack on the WSB report as undermining the anti-inflation program, the Truman administration accepted the WSB recommendation as fair. Truman, his top advisers, and most stabilization agency officials were convinced that the steel companies could afford to absorb the recommended pay raise with a limited price increase and suspected that the companies were taking a hard line on the wage issue to pressure the government into allowing a larger price rise.

This view was not shared by ODM director Wilson. Wilson thought that the WSB recommendation was far too liberal and would necessitate an accompanying steel price increase that would wreck the stabilization program. Wilson met with Truman on March 24, 1952, and came away with the impression that they had agreed to a compromise—a reduced increase in wages and fringe benefits, to be paid for by a $4-$5 per ton increase in steel prices. After the meeting, Wilson publicly attacked the WSB recommendation as “a serious threat to our year-old effort to stabilize the economy.”

Wilson’s statement reinforced the attacks upon the WSB by the steel companies and most of the press. Organized labor and its supporters were up in arms against Wilson. At a March 28 conference of top stabilization officials, Truman and Wilson differed in their recollections about their earlier meeting. Convinced that Truman “had changed the plan we had agreed upon” and incensed at what he saw as the president calling him a liar, Wilson resigned. While this political fighting raged, negotiations between the steel companies and the union remained stalemated. With the administration willing to allow a steel price increase of only $4.50 a ton, the companies offered new contract terms far below the WSB recommendation. The union responded by calling a strike, to begin at 12:01 a.m. on April 9, 1952. Truman was thus back at the point where he had been four months earlier. He was furious with the steel companies, which he blamed for the impasse.

Truman was even more reluctant than before to invoke the Taft-Hartley Act because of the unfairness of requiring the steelworkers, who had worked for ninety-nine days without a pay increase in response to his appeal to stay on the job, to continue to work for another eighty days while the steel companies reaped large profits. Another possible alternative was to invoke section 18 of the Selective Service Act Selective Service Act (1948) of 1948, authorizing the president to seize plants that failed to deliver defense materials that they had contracted to supply. That provision, never intended to deal with labor disputes, could be applied only with difficulty to the steel situation. An even more formidable shortcoming was the time-consuming procedure required for implementation of section 18.

A third possibility was that Truman ask Congress for authorization to seize the steel industry. Given Truman’s unpopularity, however, congressional approval of such a request was unlikely. While debating on the Taft-Hartley Act prior to its passage, the House of Representatives had voted down a proposal to authorize government seizure of firms as a way of settling labor disputes. The bipartisan conservative coalition of Republicans and Southern Democrats controlling Congress was almost certain to insist that the president invoke the Taft-Hartley cooling-off provision.

Accordingly, Truman on April 8 issued Executive Order 10340, directing Secretary of Commerce Charles Sawyer to take possession of American steel plants and operate them. Truman based the order solely upon his inherent authority as president and commander in chief of the armed forces—the same authority under which he had sent troops to Korea without consulting Congress. In taking this approach, Truman relied heavily upon a memorandum that had been prepared in February, 1949, by Attorney General Tom C. Clark upholding the “inherent powers of the President” to take “unusual steps, such as seizure,” to “prevent paralysis of the national economy” by labor disputes. Even more important to Truman’s decision was private advice given by his longtime friend, Chief Justice Fred M. Vinson, in support of the legality of a seizure. In his radio address announcing the seizure, Truman accused the steel companies of “recklessly forcing a shutdown of the steel mills.” Despite the torrent of abuse that greeted the seizure, he remained convinced of the rightness of his action. “The President,” he insisted, “has the power to keep the country from going to hell.”

Significance

The union promptly called off its strike, but the steel companies asked the United States District Court for the District of Columbia for an injunction against the seizure. The crux of the companies’ argument was that the president lacked any inherent authority to seize the steel plants. In response, Assistant Attorney General Holmes Baldridge Baldridge, Holmes defended in sweeping terms the power of the president “to step in and protect the national security and the national interests . . . when an emergency situation . . . arises that is of such importance to the entire welfare of the country that something has to be done about it.”

When Judge David A. Pine asked if the president had unlimited power in time of an emergency, Baldridge replied, “He has the power to take such action as is necessary to meet the emergency.” When the judge then queried whether the executive branch could determine what constituted an emergency and whether the courts could review that decision, Baldridge answered that the decision was that of the executive branch without judicial review. On April 29, Judge Pine, in equally sweeping language, ruled that the president had “no undefined residuum of power which he can exercise because it seems to him to be in the public interest.” Calling the seizure order “illegal and without authority of law,” he granted a preliminary injunction restraining the secretary of commerce from continuing the seizure.

Pending appeal, the government obtained a stay of the injunction from the court of appeals. Thus, the steel plants remained under the control of the secretary of commerce until the Supreme Court handed down its decision in Youngstown Sheet & Tube Co. v. Sawyer Youngstown Sheet & Tube Co. v. Sawyer (1952)[Youngstown Sheet and Tube Company v. Sawyer] on June 2, 1952. A six-to-three majority held the seizure unconstitutional. Chief Justice Vinson, joined by justices Stanley Reed Reed, Stanley and Sherman Minton Minton, Sherman , dissented, pointing to the many precedents in which “Presidents have taken prompt action to . . . protect the country whether or not Congress happened to provide in advance for the particular method of execution.”

Although the opinion written by Justice Hugo L. Black was labeled the opinion of the Court, each of the five concurring justices filed a separate opinion expressing a different position regarding the president’s emergency powers. Black, along with Justice William O. Douglas Douglas, William O. , drew a sharp and rigid line between legislative and executive functions. “In the framework of our Constitution,” Black explained, “the President’s power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. . . . And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute.”

The other four justices in the majority acknowledged the existence of an inherent power of the president to act in emergencies but concluded that its exercise was not justified in the present circumstances. Justices Felix Frankfurter Frankfurter, Felix and Harold H. Burton Burton, Harold H. rested their opinions upon the narrow ground that Congress, in adopting the Taft-Hartley Act, had decided against granting the chief executive the authority to seize plants to avert a strike threatening the national health or safety. Former attorney general Tom C. Clark faulted the president for failing to use the statutorily defined procedures in the Taft-Hartley Act and the Selective Service Act.

Although joining against the president on similar reasoning, Justice Robert H. Jackson wrote the most sophisticated analysis of the larger issue. He argued that the powers of the chief executive were not fixed but flexible, depending upon whether the president was acting “pursuant to an express or implied authorization of Congress,” was acting “in absence of either a congressional grant or denial of authority,” or was taking “measures incompatible with the expressed or implied will of Congress.” Most important, he underlined that “any actual test of power is likely to depend on the imperatives of events and contemporary imponderables rather than on abstract theories of law.”

Secretary of Commerce Sawyer immediately turned back the steel plants to private management, and the steelworkers went out on strike. On June 10, Truman told a joint session of Congress that given the Supreme Court’s decision, “The issue is squarely up to you gentlemen of the Congress.” He challenged the lawmakers to pass legislation either authorizing him to seize the plants or directing him to invoke the Taft-Hartley Act. The lawmakers were hostile to the first alternative and shied away from the second. Congress did no more than vote to request, not direct, Truman to invoke Taft-Hartley. Truman continued his refusal to do so.

When the strike reached its fifty-first day, a steel shortage forced the Army to shut down the nation’s largest shell-making plant. The next day, July 23, Truman called Murray and United States Steel Corporation president Benjamin Fairless Fairless, Benjamin to the White House for an arm-twisting session. On July 24, the president announced a settlement involving an increase in wages and fringe benefits of 21.4 cents per hour, with the companies receiving an accompanying price increase of $5.20 per ton—the same $4.50 per ton that the government had offered in April plus 70 cents to cover increased freight rates.

Given the multiplicity of opinions in Youngstown Sheet & Tube Co. v. Sawyer, commentators have debated the long-term significance of the decision. One point was definitively settled—presidential actions, including those to deal with an “emergency,” were subject to judicial review. Seven of the justices conceded the existence of inherent presidential powers but failed to define their exact scope. The Court has preferred to leave such definition to case-by-case adjudication. Steel industry;United States Executive Order 10340 Nationalization of land and industries;United States

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Donovan, Robert J. Tumultuous Years: The Presidency of Harry S. Truman, 1949-1953. New York: W. W. Norton, 1982. This history of Truman’s second term as president is illuminating on his motivations in the steel strike crisis and his reaction to the adverse court rulings on his seizure order.
  • citation-type="booksimple"

    xlink:type="simple">Fisher, Louis. Constitutional Conflicts Between Congress and the President. Princeton, N.J.: Princeton University Press, 1985. A judicious and balanced analysis of the conflicts between the president and Congress over the scope of their respective powers.
  • citation-type="booksimple"

    xlink:type="simple">Marcus, Maeva. Truman and the Steel Seizure Case: The Limits of Presidential Power. New York: Columbia University Press, 1977. The most thoroughly researched account of the background, unfolding, and resolution of the steel strike crisis. The major focus is upon the legal issues involved and the resulting court rulings.
  • citation-type="booksimple"

    xlink:type="simple">Rockoff, Hugh. Drastic Measures: A History of Wage and Price Controls in the United States. New York: Cambridge University Press, 1984. Places the steel strike crisis within the larger context of the struggle to stabilize wages and prices in the face of inflationary pressures resulting from the Korean War.
  • citation-type="booksimple"

    xlink:type="simple">Stuckey, Mary E. Strategic Failures in the Modern Presidency. Cresskill, N.J.: Hampton Press, 1997. Compares Truman’s steel seizure with Franklin D. Roosevelt’s court-packing controversy and Lyndon B. Johnson’s handling of the Vietnam War. Bibliographic references and index.
  • citation-type="booksimple"

    xlink:type="simple">Truman, Harry S. Years of Trial and Hope. Vol. 2 in Memoirs. Garden City, N.Y.: Doubleday, 1956. Gives Truman’s recollections and appraisal of the steel seizure controversy.
  • citation-type="booksimple"

    xlink:type="simple">Westin, Alan. The Anatomy of a Constitutional Law Case: “Youngstown Sheet and Tube Co. v. Sawyer”—the Steel Seizure Decision. Special ed. New York: Legal Classics Library, 1996. A comprehensive documentary history that reprints the most significant primary sources on both the political and the legal aspects of the steel seizure story.

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