1952 Steel Strike - Ruling and Steel Mill Seizure

Ruling and Steel Mill Seizure

The union shop issue came to increasingly dominate the WSB's deliberations. Initially, Feinsinger refused to consider any issue other than wage increases. Feinsinger even refused to discuss the issue with his superior, Putnam. Feinsinger was under pressure to win support for a recommendation by a majority of the Board and issue a report before the union lost patience and struck. CIO and Steelworkers' counsel Arthur Goldberg persuaded the WSB's labor representatives to withheld their support for a recommendation until Feinsinger not only agreed to consider the union shop but recommend it to the president.

As the WSB's deliberations stretched into March, Murray agreed to delay the strike deadline until April 8—although he kept the public guessing about the union's plans until the day before the planned strike.

On March 20, 1952, the Wage Stabilization Board issued its recommendations. The report called for an 18 month long contract, with a pay increase of 12.5 cents retroactive to January 1, 1952, followed by a 2.5 cent an hour rise on June 30, 1952 and a 2.5 cent an hour rise on January 1, 1953. Various improvements to fringe benefits were also made. The board also recommended the union shop. In all, the cost of the pay hike ranged from 18 to 30 cents an hour, although 26 cents was the most quoted figure. The vote was 12 to 6, with all industry members of the WSB in the minority. The Board had not, however, included an automatic cost-of-living adjustment and only brought fringe benefits up to parity with other industries. And by front-loading the contract, the Board had practically ensured that inflation would outpace the wage increase, contributing to economic stabilization.

Reaction to the recommendations was overwhelmingly negative. Steel companies claimed they would need a $12 per ton increase in the price of steel in order to stay solvent. Nearly all Republicans in Congress denounced the recommendations, joined by a significant number of Democrats. The mass media portrayed the wage increase as political payback to the union for supporting Truman politically, and editorials accused the WSB of dereliction of duty in order to satisfy the union.

Unfortunately, President Truman's initial reaction to the WSB's recommendations was also negative. Based solely on press reports of the WSB report, Truman—vacationing in Key West, Florida—declared the recommendations to be economically destabilizing.

The union and employers immediately began bargaining over the terms of the wage recommendation and other, local issues. But negotiations proceeded slowly.

Defense mobilization chief Charles Wilson, however, determined to upend the Wage Stabilization Board's recommendations. Wilson was convinced by Truman's remarks at the Key West press conference that the president would reject the Board's report. On March 21, Wilson met with steel industry officials to learn their views. On March 22, he consulted with Putnam and Arnall. On March 23, Wilson flew to Key West to speak with the president. The two men met the next morning. Wilson flew back to Washington that afternoon, convinced he had won Truman's consent to settle the steel wage dispute at a level two-thirds lower than the recommendation of the WSB.

As Wilson departed Key West, he made an off-hand remark that he believed the WSB recommendations would seriously destabilize the economy. Murray was outraged by the statement, and declared that it was Wilson who had wrecked national economic stabilization policy. Although Murray said he remained committed to resuming bargaining on March 26, he refused to meet with Wilson. Murray, working with Goldberg, had initially prepared a much stronger statement, but Feinsinger successfully pleaded with him to moderate his tone and language.

Feinsinger, too, was deeply upset by Wilson's remarks. He had consulted with Wilson and Putnam on the proposed recommendations shortly before the release of the report, and Wilson had expressed no concerns then.

Meanwhile, Truman had changed his views on the recommendations. The White House staff had analyzed the WSB's report and concluded that the wage and benefit package did not violate stabilization guidelines. Truman's political advisors also worried that by repudiating the agency's recommendations, Truman was essentially repudiating his own economic policy.

On March 27, Wilson learned of the president's change of heart. Wilson met with Putnam, Arnall and Feinsinger, but was unable to win their assent to a large steel price increase. To convince them that the president had authorized the price increase, the four went to the White House that afternoon. At the meeting, Putnam and Arnall argued that the wage recommendations had not breached the stabilization guidelines, but Wilson's price increase would. Truman then stated that he had not given Wilson authority to negotiate higher steel prices.

Humiliated and declaring his integrity was called into question by the president, Wilson resigned late on the afternoon of March 27. The resignation was made public three days later. Most press reports interpreted the resignation as a sign that Truman was capitulating to union demands. Truman named John R. Steelman, Assistant to the President of the United States (a post which would later become White House Chief of Staff), acting director.

Steelman urged the employers and the union to begin negotiations again. The steel companies agreed to begin talks on March 30, but put them off until April 3. When talks did begin, the steel companies made the first economic offer to the union since negotiations began the previous November: A total wage and benefit package totaling 14.4 cents an hour, contingent on the companies receiving the maximum price increase allowed under the Capehart Amendment. The union rejected the offer. Arnall secretly offered the steel companies a price increase of $4.50 a ton on April 3, but the steel companies demanded at least $5.50 a ton.

Truman began to consider his options, and a seizure of the nation's steel mills seemed the most likely course. Truman was told that supplies of ammunition in Korea were low, and even a 10-day strike would endanger the war effort. Atomic weapons projects would be curtailed, 1,500 miles of highway would not be built, and U.S. commitments under the Mutual Defense Assistance Act could not be met—which might encourage Soviet aggression. Truman ruled out use of the Taft-Hartley Act, believing it was unfair and unlikely to ensure steel production. Consideration was given to using Section 18 of the Selective Training and Service Act. Section 18 permitted the government to seize and operate manufacturing facilities if the manufacturer was unable to fulfill defense orders made by the government. Justice Department lawyers worried, however, because the act did not specifically mention failures to fulfill orders due to strikes, and because the government did not order steel directly from manufacturers. Section 18's mechanisms were cumbersome and time-consuming, and Defense leaders argued against its use. Most of Truman's advisors favored seizure of the steel mills under the inherent powers of the President as commander-in-chief.

The steel talks collapsed on April 4, and the union notified the steel manufacturers that day that it planned to call a nationwide strike which would begin at 12:01 a.m. on April 9.

At 10:30 p.m. Eastern time, President Truman announced in a national television and radio address that he had issued Executive Order 10340 and he was ordering Secretary of Commerce Charles W. Sawyer to seize the nation's steel mills to ensure the continued production of steel. Truman attacked the steel companies' price demands, explained why he was not using the other legal options open to him, and called on the employers and union to meet in Washington the following day to negotiate a new collective bargaining agreement. The union immediately called off its strike, even though Sawyer announced he had no intention of giving them a wage increase.