Steel mill seizure of 1952 - History of Business in the U.S.The Event: Federal government’s takeover of American steel mills that were about to strike during the Korean War
Date: April-June, 1952
Place: Washington, D.C.
Significance: The Supreme Court ruled that the U.S. president’s seizure of the steel mills was unconstitutional, thus giving support to the most basic premises of a free-market economy devoid of government intrusion.
During the Korean War, the U.S. military depended on American manufacturing and technology to provide highly advanced, superior quality war materiel. A major component of many of the products used by the military—including bullets, armor plating, tanks, and airplanes—was steel, processed and sold by privately owned mills. Consequently, keeping the steel mills open and running smoothly was essential for the war effort.
During times of war, wages tend to rise, and prices often go up in a spiral of inflation caused by panic buying and resource scarcity. During World War II, President Franklin D. Roosevelt dealt with these dual economic issues by establishing central authority over both prices and wages. He did this by extending the power of his office into the marketplace.
However, the American public was not as convinced of the need for the Korean War as they had been of the importance of World War II. President Harry S. Truman was under political stress, having received a record-low public approval rating for a sitting president. His plans for central control of the economy produced no similar public support. Recognizing this, Truman began the Korean War with the clear intention of not fixing prices and wages by decree. He was a friend of labor politically and was confident that he could negotiate agreements between industry executives and labor leaders to ameliorate any economic hardships. However, he found that he was unable to solve labor and management wage disputes in the militarily essential steel industry.
President Harry S. Truman announces the government seizure of the steel industry on April 8, 1952. (AP/Wide World Photos)
When large labor unions made it clear that they were going to strike on April 9, 1952, President Truman ordered his secretary of commerce, Charles Sawyer, to both seize and operate the nation’s steel mills. The president felt this action was necessary to continue the war efforts uninterrupted. It is hard to tell who was more upset at the chief executive for this heavily studied use of presidential powers. The strikers did not like being drafted to work at low wages any more than the steel giants enjoyed having their profits ruined by government intervention.
Not surprisingly, the steel industry filed suit, and the case reached the Supreme Court. In Youngstown Sheet and Tube Co. v. Sawyer (1952), the justices ruled that the president may not seize private property without specific legal authority. This case is one of the most significant Supreme Court decisions defining the limits of presidential power. One result of the seizure and subsequent judgment was a clearer picture of the role of the president. After this ruling, it was clear that even in times of national emergency, the U.S. market is hardly amenable to unilateral power grabs, even by the president himself.
R. Matthew Beverlin
Dallek, Robert. Harry S. Truman. New York: Times Books, 2008.
Marcus, Maeva. Truman and the Steel Seizure Case. 1977. Reprint. Durham, N.C.: Duke University Press, 1994.
Schlesinger, Arthur M., Jr., ed. The Election of 1948 and the Administration of Harry S. Truman. Philadelphia: Mason Crest, 2003.
See also: American Federation of Labor and Congress of Industrial Organizations; Air traffic controllers’ strike; labor history; labor strikes; Sit-down strike of 1936-1937.