Freeman

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Truman's Attempt to Seize the Steel Industry

Private Property Rights Remain Vulnerable to Emergency Suspension

MARCH 01, 2004 by ROBERT HIGGS

Filed Under : Property Rights, Labor Unions

In U.S. history many of the most drastic incursions on private property rights have sprung from the conjunction of a threatened work stoppage, owing to a union-management dispute, and the government’s desire to expedite a war-production program. Such a conjunction underlay the government’s nationalization of the railroads, the telegraph lines, and the Smith & Wesson Company during World War I, and the railroads, the coal mines, the Midwest trucking operators, and many other companies during World War II. The conjunction occurred again during the Korean War, but on that occasion the government failed in its attempt to seize the steel industry.

During the Korean War the government imposed controls on raw materials, production, shipping, credit, wages, and prices. When the wage-price controls created a collective-bargaining impasse in the steel industry, threatening a nationwide strike, President Harry S. Truman ordered the secretary of commerce on April 8, 1952, to seize and operate most of the country’s steel mills for the ostensible purpose of maintaining production of critical munitions.

Owners of the seized properties obtained a court injunction against the seizure, and an appeal of that injunction to the U.S. Supreme Court gave rise to one of the “great cases” in constitutional law, Youngstown Sheet & Tube Co. et al. v. Sawyer.1 Although the Court found the President’s actions to be unconstitutional, its decision did not signify a triumph of private rights or a significant check on the government’s exercise of de facto emergency powers.

By 1952 Truman had become an unpopular president, even among Democrats, and his attempted seizure evinced a power struggle with a hostile Congress. He had alternative ways to proceed. Although no current statute authorized him to nationalize the steel industry, he had authority under the Taft-Hartley Act to order an 80-day “cooling- off period,” during which the union- management dispute might have been settled without a strike. The pro-union President chose not to issue such an order, however, because he opposed the Taft-Hartley Act, which Congress had passed over his veto in 1947. He did not ask Congress to authorize his seizure of the steel industry.

Instead, Truman rested his seizure order on legally vague national-emergency grounds, citing his inherent powers as president and as commander in chief of the armed forces.2 Afterward, he and his official spokesman sought clumsily “to transform the steel crisis from a particular labor dispute into a broader battle against ‘big business,’” a rendering that had little resonance.3

Why did Truman proceed on such flimsy legal grounds? Although historians have advanced various explanations related to the administration’s political calculations,4 few writers seem to have noted another possibility: The President had seized many industrial properties in labor disputes during past “national emergencies,” and therefore he probably did not worry about getting away with another seizure. Between April 17, 1945, and August 27, 1946, Truman had seized 28 other industrial properties—sometimes entire industries, such as the railroads and the meat packers—in labor disputes.5 High-handedness might have become second nature for Truman. Historian Maeva Marcus notes, “In view of the Supreme Court’s construction of presidential power during wartime, Truman and the White House staff were confident that the courts would uphold the seizure.”6

The composition of the Supreme Court might have encouraged such confidence. In a recent recollection of Youngstown, Chief Justice William H. Rehnquist observes that “all of the nine Justices who heard the case had been appointed by Democratic presidents—five by Roosevelt and four by Truman—and yet by a vote of six to three they ruled against Truman’s authority to seize the mills.”7 Roosevelt and Truman, however, had distinctly different followings. Four of the six majority votes came from Roosevelt appointees; two of the three dissents came from Truman appointees.

Justice Hugo Black’s majority opinion, which was really a ruling on constitutional separation of powers rather than on emergency or inherent presidential powers, found intolerable the president’s failure to cite specific legislative authority for his action. On emergency powers, however, the justices’ seven opinions—one for each for the six justices in the majority plus one for the three dissenters—spoke more in favor than in opposition. The three dissenters argued that “a [presidential] power of seizure has been accepted throughout our history” (p. 700). Justice Tom Clark, who supported the majority result but not the reasoning of Justice Black’s opinion, agreed (p. 662). Justice Robert Jackson, in a concurring opinion, emphasized “the ease, expedition and safety with which Congress can grant and has granted large emergency powers” (p. 653). Only two justices (Black and Douglas) explicitly rejected the claim of inherent presidential power to seize the industry in the absence of congressional authorization.8

The outcome: The steel seizure itself was forbidden, but in view of the justices’ reasoning and the fragmentation of their opinions, the vulnerability of private property rights to emergency suspension remained as great as before—which is to say, very vulnerable indeed, as subsequent events have demonstrated repeatedly.9 In Youngstown, as in many other cases, the Court read the Constitution not as a bulwark against government oppression of private citizens, but rather as the institutional ground rules according to which high officials in the three branches of government conduct their internecine struggles for supremacy over civil society.


Notes

  1. 343 U.S. 579 (1952). The defendant Charles Sawyer was the secretary of commerce.
  2. Executive Order 10340 is reproduced in the case decision, where Truman’s grounds for issuing the order appear on p. 591.
  3. Maeva Marcus, Truman and the Steel Seizure Case: The Limits of Presidential Power (New York: Columbia University Press, 1977), p. 99.
  4. On the political maneuvering, see Marcus, pp. 58–82.
  5. My count from the compilation in Youngstown, pp. 624–27.
  6. Marcus, p. 102. See also pp. 178–94, and Paul L. Murphy, The Constitution in Crisis Times, 1918–1969 (New York: Harper & Row, 1972), p. 289.
  7. Remarks of the Chief Justice, Dedication of the Robert H. Jackson Center, Jamestown, New York, May 16, 2003, at www.supremecourtus.gov/publicinfo/sp_05-16-03.html.
  8. Marcus, p. 216; and Alan I. Bigel, The Supreme Court on Emergency Powers, Foreign Affairs, and Protection of Civil Liberties, 1935–1975 (Lanham, Md.: University Press of America, 1986), pp. 135–50.
  9. For examples, see Robert Higgs and Charlotte Twight, “Economic Warfare and Private Property Rights: Recent Episodes and Their Constitutionality,” Journal of Private Enterprise, Fall 1987, pp. 9–14.

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March 2004

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ROBERT HIGGS

Robert Higgs is a Senior Fellow in Political Economy at The Independent Institute. He is also the Editor at Large for The Independent Review, the Institute's quarterly journal.

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