Youngstown Sheet & Tube Co. V. Sawyer - Background

Background

The United States was involved in the Korean War in 1950 when troops from North Korea invaded the Republic of Korea. President Harry Truman sent troops to South Korea without asking for a Congressional declaration of war on North Korea — albeit with a United Nations resolution.

President Truman chose not to impose price controls, as the federal government had done during World War II. Instead, the administration attempted to avoid inflationary pressures through creation of a Wage Stabilization Board that sought to keep down the inflation of consumer prices and wages while avoiding labor disputes whenever possible. Those efforts failed, however, to avoid a threatened strike of all of the major steel producers by the United Steel Workers of America when the steel industry rejected the board's proposed wage increases unless they were allowed greater price increases than the government was prepared to approve.

The Truman administration believed that a strike of any length would cause severe dislocations for defense contractors and for the domestic economy as a whole. Unable to mediate the differences between the union and the industry, Truman decided to seize their production facilities, while he kept the current operating management of the companies in place to run the plants under federal direction.

Truman might have, rather than seizing the plants, invoked the national emergency provisions of the Taft-Hartley Act to prevent the union from striking. The administration rejected that option, however, both from a distaste for the Act, which had been passed over Truman's veto five years earlier, and because the administration saw the industry, rather than the union, as the cause of the crisis.

The administration also rejected use of the statutory procedure provided under Section 18 of the Selective Service Act of 1948 that might have permitted seizure of the industry's steel plants on the ground that compliance with this procedure was too time-consuming and the outcome of compliance too uncertain. Truman chose not to go to Congress to obtain additional statutory authorization for a seizure of the steel industry for the same reasons. That left invocation of the President's inherent authority to act in response to a national emergency.

The Steelworkers favored government seizure of the plants under any available theory to a Taft-Hartley injunction against it; Arthur Goldberg, General Counsel for the Steelworkers and the Congress of Industrial Organizations, argued that the President had the inherent power to seize the plants, as well as the statutory authority under the Selective Service Act and the Defense Production Act.

The steel industry, on the other hand, appears to have been taken by surprise, as it had apparently assumed until shortly before Truman made his April 8, 1952 announcement that he would take the less risky step of seeking a national emergency injunction under the Taft-Hartley Act instead. However, the industry was, as events showed, ready to act once he announced the seizure by a national television and radio broadcast.