Buildup To The Steel Mill Seizure
The Capehart Amendment put intense pressure on the Truman administration's inflation program. On August 8, the federal government imposed stricter economic controls on the economy. In the steel industry, production quotas and procurement orders were extended to all civilian steelmakers, not just large manufacturers. Steel companies had reported record and near-record profits in the summer, but by mid-fall net revenues were down as defense needs consumed larger and larger quantities of raw and finished steel and steelmakers were unable to sell steel to the higher-margin civilian market. On September 4, DPA again increased the amount of steel needed for defense use, sharply scaling down allotments for the civilian economy. When steelmakers balked at expanding plant and equipment in order to meet new defense quotas, ODM officials ordered the chief executives of the nation's largest steel manufacturers to attend a meeting in Washington where they were threatened with additional government regulation and oversight. The steelmakers quickly acceded to the government's demands.
Stabilization officials were so upset by the Capehart Amendment that many resigned, leaving the agency almost leaderless at critical times. ESA Administrator Johnston announced his retirement on September 2 and quit on November 30. The job remained open until Truman persuaded Roger Putnam, a Massachusetts businessman and former Democratic mayor of Springfield, to accept the position on November 27.
Tensions also ruptured labor's united front on the Wage Stabilization Board. The ULPC dissolved on August 14 when the AFL pulled out of the joint committee. AFL officials appeared to be upset that the ULPC had not led to additional unity talks between the two labor groups and that CIO officials were obtaining more than their fair share of federal appointments. By October, organized labor's influence throughout the defense mobilization bureaucracy had significantly waned.
Read more about this topic: 1952 Steel Strike
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