Detail - 1952

April 8, 1952 - President Truman authorizes the seizure of United States steel mills in order to avert a strike, but his action is ruled illegal by the U.S. Supreme Court on June 2.

It was a problem caused by many things, hinged on McCarthyism, the Korean War, and wage controls. In the end, it was a battle of presidential powers and the constitution, which the Supreme Court would rule in favor of. On April 8, 1952, President Harry S. Truman nationalized the nation's steel industry. Yes, in the United States, not South America or Russia or North Korea. He did it, in essence, to show muscle, as well as to avert a strike by the nation's steel workers that might jeopardize national security if steel supply were compromized. Executive Order 10340, issued at 10:30 p.m. at night in a radio address to the nation, mandated that Secretary of Commerce Charles W. Sawyer sieze the steel mills and continue production. The strike was called off.

Executive Order 10340

DIRECTING THE SECRETARY OF COMMERCE TO TAKE POSSESSION OF AND OPERATE THE PLANTS AND FACILITIES OF CERTAIN STEEL COMPANIES WHEREAS on December 16, 1950, I proclaimed (2) the existence of a national emergency which requires that the military, naval, air, and civilian defenses of this country be strengthened as speedily as possible to the end that we may be able to repel any and all threats against our national security and to fulfill our responsibilities in the efforts being made throughout the United Nations and otherwise to bring about a lasting peace; and

WHEREAS American fighting men and fighting men of other nations of the United Nations are now engaged in deadly combat with the forces of aggression in Korea, and forces of the United States are stationed elsewhere overseas for the purpose of participating in the defense of the Atlantic Community against aggression; and

WHEREAS the weapons and other materials needed by our armed forces and by those joined with us in the defense of the free world are produced to a great extent in this country, and steel is an indispensable component of substantially all of such weapons and materials; and

WHEREAS steel is likewise indispensable to the carrying out of programs of the Atomic Energy Commission of vital importance to our defense efforts; and

WHEREAS a continuing and uninterrupted supply of steel is also indispensable to the maintenance of the economy of the United States, upon which our military strength depends; and

WHEREAS a controversy has arisen between certain companies in the United States producing and fabricating steel and the elements thereof and certain of their workers represented by the United Steel Workers of America, CIO, regarding terms and conditions of employment; and WHEREAS the controversy has not been settled through the processes of collective bargaining or through the efforts of the Government, including those of the Wage Stabilization Board, to which the controversy was referred on December 22, 1951, pursuant to Executive Order No. 10233, (2) and a strike has been called for 12:01 A.M., April 9, 1952; and

WHEREAS a work stoppage would immediately jeopardize and imperil our national defense and the defense of those joined with us in resisting aggression, and would add to the continuing danger of our soldiers, sailors, and airmen engaged in combat in the field; and

WHEREAS in order to assure the continued availability of steel and steel products during the existing emergency, it is necessary that the United States take possession of and operate the plants, facilities, and other property of the said companies as hereinafter provided:

NOW, THEREFORE, by virtue of the authority vested in me by the Constitution and laws of the United States, and as President of the United States and Commander in Chief of the armed forces of the United States, it is hereby ordered as follows:

1. The Secretary of Commerce is hereby authorized and directed to take possession of all or such of the plants, facilities, and other property of the companies named in the list attached hereto, or any part thereof, as he may deem necessary in the interests of national defense; and to operate or to arrange for the operation thereof and to do all things necessary for, or incidental to, such operation.

2. In carrying out this order the Secretary of Commerce may act through or with the aid of such public or private instrumentalities or persons as he may designate; and all Federal agencies shall cooperate with the Secretary of Commerce to the fullest extent possible in carrying out the purposes of this order.

3. The Secretary of Commerce shall determine and prescribe terms and conditions of employment under which the plants, facilities, and other properties possession of which is taken pursuant to this order shall be operated. The Secretary of Commerce shall recognize the rights of workers to bargain collectively through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining, adjustment of grievances, or other mutual aid or protection, provided that such activities do not interfere with the operation of such plants, facilities, and other properties.

4. Except so far as the Secretary of Commerce shall otherwise provide from time to time, the managements of the plants, facilities, and other properties possession of which is taken pursuant to this order shall continue their functions, including the collection and disbursement of funds in the usual and ordinary course of business in the names of their respective companies and by means of any instrumentalities used by such companies.

5. Except so far as the Secretary of Commerce may otherwise direct, existing rights and obligations of such companies shall remain in full force and effect, and there may be made, in due course, payments of dividends on stock, and of principal, interest, sinking funds, and all other distributions upon bonds, debentures, and other obligations, and expenditures may be made for other ordinary corporate or business purposes.

6. Whenever in the judgment of the Secretary of Commerce further possession and operation by him of any plant, facility, or other property is no longer necessary or expedient in the interest of national defense, and the Secretary has reason to believe that effective future operation is assured, he shall return the possession and operation of such plant, facility or other property to the company in possession and control thereof at the time possession was taken under this order.

7. The Secretary of Commerce is authorized to prescribe and issue such regulations and orders not inconsistent herewith as he may deem necessary or desirable for carrying out the purposes of this order; and he may delegate and authorize subdelegation of such of his functions under this order as he may deem desirable.

Who did he nationalize?

American Bridge Company, Pittsburgh, Pennsylvania
American Steel & Wire Company of New Jersey, Cleveland, Ohio
Columbia Steel Company, San Francisco, California
Consolidated Western Steel Corporation, Los Angeles, California
Geneva Steel Company, Salt Lake City, Utah
Gerrard Steel Strapping Company, Chicago, Illinois
National Tube Company, Pittsburgh, Pennsylvania
Oil Well Supply Company, Dallas, Texas
Tennessee Coal, Iron & Railroad Company, Fairfield, Alabama
United States Steel Company, Pittsburgh, Pennsylvania
United States Steel Corporation, New York, New York
United States Steel Products Company, New York, New York
United States Steel Supply Company, Chicago, Illinois
Virginia Bridge Company, Roanoke, Virginia
Alan Wood Steel Company and Subsidiaries, Conshohocken, Pennsylvania
American Chain and Cable Company, Incorporated, Bridgeport, Connecticut
American Chain and Cable Company, Monessen, Pennsylvania
Armco Steel Corporation, Middletown, Ohio
Armco Drainage & Metal Products, Incorporated, Middletown, Ohio
Atlantic Steel Company, Atlanta, Georgia
Babcock and Wilcox Tube Company, Beaver Falls, Pennsylvania
Borg-Warner Corporation, Chicago, Illinois
Continental Copper and Steel Industries, Inc., Braeburn, Pennsylvania
Continental Steel Corporation, Kokomo, Indiana
Copperweld Steel Company, Glassport, Pennsylvania
Detroit Steel Corporation, Detroit, Michigan
Eastern Stainless Steel Corporation, Baltimore, Maryland
Firth Sterling Steel and Carbide Corporation, McKeesport, Pennsylvania
Follansbee Steel Corporation, Pittsburgh, Pennsylvania
Granite City Steel Company, Granite City, Illinois
Great Lakes Steel Corporation Ecorse, Detroit, Michigan
Hanna Furnace Corporation Ecorse, Detroit, Michigan
Harrisburg Steel Corporation, Harrisburg, Pennsylvania
Boiardi Steel Company, Milton, Pennsylvania
Heppenstall Company, Pittsburgh, Pennsylvania
Inland Steel Company, Chicago, Illinois
Joseph T. Ryerson & Son, Incorporated, Chicago, Illinois
Interlake Iron Corporation, Cleveland, Ohio
Pacific States Steel Corporation, Oakland, California
Pittsburgh Coke & Chemical Company, Pittsburgh, Pennsylvania
H. I. Porter Company, Incorporated, Pittsburgh, Pennsylvania
Buffalo Steel Division, H. K. Porter Company, Inc., Tonawanda, New York
Joslyn Manufacturing & Supply Company, Chicago, Illinois
Joslyn Pacific Company, Los Angeles, California
Latrobe Electric Steel Company, Latrobe, Pennsylvania
E. J. Lavino & Company, Philadelphia, Pennsylvania
Lukens Steel Company, Coatesville Pennsylvania
McLouth Steel Corporation, Detroit, Michigan
Newport Steel Corporation, Newport, Kentucky
Northwest Steel Rolling Mills, Inc., Seattle, Washington
Northwestern Steel & Wire Company, Sterling, Illinois
Reeves Steel Manufacturing Company, Dover, Ohio
John A. Roebling's Sons Company, Trenton, New Jersey
Rotary Electric Steel Company, Detroit, Michigan
Sheffield Steel Corporation, Kansas City, Missouri
Shenango-Penn Mold Company, Pittsburgh, Pennsylvania
Shenango Furnace Company, Pittsburgh, Pennsylvania
Stanley Works, New Britain, Connecticut
Universal Cyclops Steel Corporation, Bridgeville, Pennsylvania
Vanadium-Alloys Steel Company, Latrobe, Pennsylvania
Vulcan Crucible Steel Company, Aliquippa, Pennsylvania
Wheeling Steel Corporation, Wheeling, West Virginia
Woodward Iron Company, Woodward, Alabama
Allegheny Ludlum Steel Corporation, Pittsburgh, Pennsylvania
Bethlehem Steel Company, Bethlehem, Pennsylvania
Bethlehem Pacific Coast Steel Corporation, San Francisco, California
Bethlehem Supply Company of California, Los Angeles, California
Bethlehem Supply Company, Tulsa, Oklahoma
Buffalo Tank Corporation, Lackawanna, New York, Charlotte, North Carolina, Dunellen, New Jersey
Dundalk Company, Sparrows Point, Maryland
A. M. Byers Company, Pittsburgh, Pennsylvania
Colorado Fuel & Iron Corporation, New York, New York
Claymont Steel Corporation, Claymont, Delaware
Crucible Steel Company, Pittsburgh Pennsylvania
Jones & Laughlin Steel Corporation, Pittsburgh, Pennsylvania
J. & L. Steel Barrel Company, Philadelphia, Pennsylvania
National Supply Company, Pittsburgh, Pennsylvania
Pittsburgh Steel Company, Pittsburgh, Pennsylvania
Johnson Steel & Wire Company, Incorporated, Worcester, Massachusetts
Republic Steel Corporation, Cleveland, Ohio
Truscon Steel Company, Youngstown, Ohio
Rheem Manufacturing Company, San Francisco, California
Sharon Steel Corporation, Sharon, Pennsylvania
Valley Mould & Iron Corporation, Hubbard, Ohio
Youngstown Sheet & Tube Company, Youngstown, Ohio
Emsco Derrick & Equipment Company, Los Angeles, California

HARRY S. TRUMAN, THE WHITE HOUSE, April 8th, 1952, 9:50 p.m. e.s.t.

How Did Steel Respond?

Workers, despite the lack of any indication of a wage increase, continued to work, but the steel companies were not going to take this, even for one day. Within twenty-seven minutes of the speech to the nation, Republic Steel and Youngstown Sheet and Tube had a temporary restraining order in front of a district judge, who refused to rule that night. The next day, April 9, the temporary restraining order was denied. The steel mills were siezed by the United States Government.

On April 10, Bethlehem Steel, Jones and Laughlin Steel, Republic Steel, and Youngstown Sheet and Tube had a permanent restraining order ready to go while the U.S. Government tried to mitigate a wage settlement. On April 29, the District Court ruled that the President had acted illegally. On April 30, the Appelite Court disagreed, staying the lower court's ruling. The Supreme Court would be up next.

Oral arguments began on May 12; a ruling came down on June 2, 6-3 in favor of the Steel companies, the President had acted illegally, there was no rationale in the constitution that allowed the President to sieze private property for national secruity purposes without Congress authorizing.

The United States returned the mills to their owners; workers began their strike immediately. Collective bargaining sessions began three days later. Impact of the strike took effect, including the stopping of manufacture of defense tanks, and consumer autos. On July 23, President Truman ushered both sides into the White House armed with statistics showing the strike was hindering efforts in the Korean War. They reached an agreement that day.

Justice Black Opinion of the Supreme Court in Youngstown Sheet & Tube Co. v. Sawyer 343 U.S. 579 (1952)

We are asked to decide whether the President was acting within his constitutional power when he issued an order directing the Secretary of Commerce to take possession of and operate most of the Nation's steel mills. The mill owners argue that the President's order amounts to lawmaking, a legislative function which the Constitution has expressly confided to the Congress, and not to the President. The Government's position is that the order was made on findings of the President that his action was necessary to avert a national catastrophe which would inevitably result from a stoppage of steel production, and that, in meeting this grave emergency, the President was acting within the aggregate of his constitutional powers as the Nation's Chief Executive and the Commander in Chief of the Armed Forces of the United States. The issue emerges here from the following series of events:

In the latter part of 1951, a dispute arose between the steel companies and their employees over terms and conditions that should be included in new collective bargaining agreements. Long-continued conferences failed to resolve the dispute. On December 18, 1951, the employees' representative, United Steelworkers of America, CIO, gave notice of an intention to strike when the existing bargaining agreements expired on December 31. The Federal Mediation and Conciliation Service then intervened in an effort to get labor and management to agree. This failing, the President on December 22, 1951, referred the dispute to the Federal Wage Stabilization Board to investigate and make recommendations for fair and equitable terms of settlement. This Board's report resulted in no settlement. On April 4, 1952, the Union gave notice of a nationwide strike called to begin at 12:01 a.m. April 9. The indispensability of steel as a component of substantially all weapons and other war materials led the President to believe that the proposed work stoppage would immediately jeopardize our national defense and that governmental seizure of the steel mills was necessary in order to assure the continued availability of steel. Reciting these considerations for his action, the President, a few hours before the strike was to begin, issued Executive Order 10340, a copy of which is attached as an appendix, post, p. 343 U. S. 589. The order directed the Secretary of Commerce to take possession of most of the steel mills and keep them running. The Secretary immediately issued his own possessory orders, calling upon the presidents of the various seized companies to serve as operating managers for the United States. They were directed to carry on their activities in accordance with regulations and directions of the Secretary. The next morning the President sent a message to Congress reporting his action. Cong.Rec. April 9, 1952, p. 3962. Twelve days later, he sent a second message. Cong.Rec. April 21, 1952, p. 4192. Congress has taken no action.

Obeying the Secretary's orders under protest, the companies brought proceedings against him in the District Court. Their complaints charged that the seizure was not authorized by an act of Congress or by any constitutional provisions. The District Court was asked to declare the orders of the President and the Secretary invalid and to issue preliminary and permanent injunctions restraining their enforcement. Opposing the motion for preliminary injunction, the United States asserted that a strike disrupting steel production for even a brief period would so endanger the wellbeing and safety of the Nation that the President had "inherent power" to do what he had done -- power "supported by the Constitution, by historical precedent, and by court decisions." The Government also contended that, in any event, no preliminary injunction should be issued, because the companies had made no showing that their available legal remedies were inadequate or that their injuries from seizure would be irreparable. Holding against the Government on all points, the District Court, on April 30, issued a preliminary injunction restraining the Secretary from "continuing the seizure and possession of the plants . . . and from acting under the purported authority of Executive Order No. 10340." 103 F.Supp. 569. On the same day, the Court of Appeals stayed the District Court's injunction. 90 U.S.App.D.C. ___, 197 F.2d 582. Deeming it best that the issues raised be promptly decided by this Court, we granted certiorari on May 3 and set the cause for argument on May 12. 343 U. S. 937.

Two crucial issues have developed: First. Should final determination of the constitutional validity of the President's order be made in this case which has proceeded no further than the preliminary injunction stage? Second. If so, is the seizure order within the constitutional power of the President?

I - It is urged that there were nonconstitutional grounds upon which the District Court could have denied the preliminary injunction, and thus have followed the customary judicial practice of declining to reach and decide constitutional questions until compelled to do so. On this basis, it is argued that equity's extraordinary injunctive relief should have been denied because (a) seizure of the companies' properties did not inflict irreparable damages, and (b) there were available legal remedies adequate to afford compensation for any possible damages which they might suffer. While separately argued by the Government, these two contentions are here closely related, if not identical. Arguments as to both rest in large part on the Government's claim that, should the seizure ultimately be held unlawful, the companies could recover full compensation in the Court of Claims for the unlawful taking. Prior cases in this Court have cast doubt on the right to recover in the Court of Claims on account of properties unlawfully taken by government officials for public use as these properties were alleged to have been. See e.g., Hooe v. United States, 218 U. S. 322, 218 U. S. 335-336; United States v. North American Co., 253 U. S. 330, 253 U. S. 333. But see Larson v. Domestic & Foreign Corp., 337 U. S. 682, 337 U. S. 701-702. Moreover, seizure and governmental operation of these going businesses were bound to result in many present and future damages of such nature as to be difficult, if not incapable, of measurement. Viewing the case this way, and in the light of the facts presented, the District Court saw no reason for delaying decision of the constitutional validity of the orders. We agree with the District Court, and can see no reason why that question was not ripe for determination on the record presented. We shall therefore consider and determine that question now.

II - The President's power, if any, to issue the order must stem either from an act of Congress or from the Constitution itself. There is no statute that expressly authorizes the President to take possession of property as he did here. Nor is there any act of Congress to which our attention has been directed from which such a power can fairly be implied. Indeed, we do not understand the Government to rely on statutory authorization for this seizure. There are two statutes which do authorize the President to take both personal and real property under certain conditions. However, the Government admits that these conditions were not met, and that the President's order was not rooted in either of the statutes. The Government refers to the seizure provisions of one of these statutes (S 201(b) of the Defense Production Act) as "much too cumbersome, involved, and time-consuming for the crisis which was at hand."

Moreover, the use of the seizure technique to solve labor disputes in order to prevent work stoppages was not only unauthorized by any congressional enactment; prior to this controversy, Congress had refused to adopt that method of settling labor disputes. When the Taft-Hartley Act was under consideration in 1947, Congress rejected an amendment which would have authorized such governmental seizures in cases of emergency. Apparently it was thought that the technique of seizure, like that of compulsory arbitration, would interfere with the process of collective bargaining. Consequently, the plan Congress adopted in that Act did not provide for seizure under any circumstances. Instead, the plan sought to bring about settlements by use of the customary devices of mediation, conciliation, investigation by boards of inquiry, and public reports. In some instances, temporary injunctions were authorized to provide cooling-off periods. All this failing, unions were left free to strike after a secret vote by employees as to whether they wished to accept their employers' final settlement offer.

It is clear that, if the President had authority to issue the order he did, it must be found in some provision of the Constitution. And it is not claimed that express constitutional language grants this power to the President. The contention is that presidential power should be implied from the aggregate of his powers under the Constitution. Particular reliance is placed on provisions in Article II which say that "The executive Power shall be vested in a President . . ."; that "he shall take Care that the Laws be faithfully executed", and that he "shall be Commander in Chief of the Army and Navy of the United States."

The order cannot properly be sustained as an exercise of the President's military power as Commander in Chief of the Armed Forces. The Government attempts to do so by citing a number of cases upholding broad powers in military commanders engaged in day-to-day fighting in a theater of war. Such cases need not concern us here. Even though "theater of war" be an expanding concept, we cannot with faithfulness to our constitutional system hold that the Commander in Chief of the Armed Forces has the ultimate power as such to take possession of private property in order to keep labor disputes from stopping production. This is a job for the Nation's lawmakers, not for its military authorities.

Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. In the framework of our Constitution, the President's power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The first section of the first article says that "All legislative Powers herein granted shall be vested in a Congress of the United States. . . ." After granting many powers to the Congress, Article I goes on to provide that Congress may "make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

The President's order does not direct that a congressional policy be executed in a manner prescribed by Congress -- it directs that a presidential policy be executed in a manner prescribed by the President. The preamble of the order itself, like that of many statutes, sets out reasons why the President believes certain policies should be adopted, proclaims these policies as rules of conduct to be followed, and again, like a statute, authorizes a government official to promulgate additional rules and regulations consistent with the policy proclaimed and needed to carry that policy into execution. The power of Congress to adopt such public policies as those proclaimed by the order is beyond question. It can authorize the taking of private property for public use. It can make laws regulating the relationships between employers and employees, prescribing rules designed to settle labor disputes, and fixing wages and working conditions in certain fields of our economy. The Constitution does not subject this lawmaking power of Congress to presidential or military supervision or control.

It is said that other Presidents, without congressional authority, have taken possession of private business enterprises in order to settle labor disputes. But even if this be true, Congress has not thereby lost its exclusive constitutional authority to make laws necessary and proper to carry out the powers vested by the Constitution "in the Government of the United States, or any Department or Officer thereof."

The Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times. It would do no good to recall the historical events, the fears of power, and the hopes for freedom that lay behind their choice. Such a review would but confirm our holding that this seizure order cannot stand.

The judgment of the District Court is Affirmed.

Image above: Allegheny Ludlum Steel Company, Pennsylania, 1940-1946, U.S. Office of War Information. Courtesy Library of Congress. Image below: Steel Workers, Ambridge Bridge Company, 1941. U.S. Office of War Information. Courtesy Library of Congress. Source Info: Wikipedia Commons; Harry Truman Library; Supreme.Justia.com.

History Photo Bomb

President Franklin D. Roosevelt, General Eisenhower, and General Patton in Castelvetrano, Sicily, December 8, 1943. By 1952, Eisenhower would become president. Courtesy National Archives.

Korean War bombing raid. Courtesy National Archives.

Astronaut John Glenn and others around capsule, October 1958. Courtesy NASA.