The DPA, first passed in 1950, seems an uncomplicated tool in an emergency, almost a deus ex machina to the scarcity and supply chain problems posed by the coronavirus. Review of the famous 1952 Supreme Court steel mill seizure case, in which steel mills challenged presidential power under the DPA, however, complicates that view; national mobilization, even in extreme moments like wartime, is not without controversy, and the authority of the Defense Production Act is not a cure-all.
The start of the Korean War in June 1950 was a logistical nightmare. General Walton Walker, head of the U.S. 8th Army (the bulk of U.S. forces headed to Korea), reported that only 40 percent of the force was ready for war. Equipment was old and uncared for. He asserted that 4,000 of the 8th Army’s 14,000 jeeps did not work, and fewer than half of its roughly 13,000 2½-ton trucks ran. Task Force Smith in July 1950, the first U.S. effort to counter the North Korean drive south, collapsed, in part because of these equipment issues.
In light of the risks of having ill-equipped troops in the field, leaders in Washington turned to a familiar idea: expanding the power of the federal government to intervene in the economy and lives of Americans to streamline production of the necessary goods to prosecute the war. Legislators looked to the War Powers Act of 1941 and 1942 when drawing up the Defense Production Act in September 1950. This wartime legislation had given President Franklin D. Roosevelt power to shape the economy by setting prices and wages.
Yet whether the American public would support such an expansion of federal power in 1950 was a gamble. On one hand, fresh memories of rationing, the draft and war bond drives during World War II primed Americans to accept the need for collective sacrifice during wartime. On the other hand, the effort to control wages and prices came under assault in the later stages of the war, eventually leading to substantial electoral defeat for the Democratic Party in 1946.
President Harry S. Truman’s framing of the war did not help matters. Truman dampened public support for the conflict by portraying it as a “limited” war in an effort to avoid World War III with the Soviet Union and Communist bloc. While perhaps wise diplomatically, describing the war as a “police action” in its early days would haunt Truman’s presidency and the historical memory of the war for years to come.
This portrayal of the war as a less serious matter undermined the commitment to collective sacrifices, and businesses and working people chafed under government wage and price control. Chinese intervention in the winter of 1950 and a stalled armistice process that lasted for years soured public opinion. Bloody, costly stalemate typified the fighting near the 38th parallel as the negotiators wrestled over terms at Panmunjom. As the war drew out, more and more Americans began to think intervention was a mistake.
This frustration and unwillingness to consent to heavy-handed measures came to a head in 1952. The United Steelworkers of America wanted a new contract that would increase wages for its workers. The steel companies unsurprisingly wanted to avoid paying such an increase and highlighted government price controls as a reason not to raise wages.
When the union threatened to strike, Truman acted quickly to seize the mills under the auspices of the DPA. The president believed a steel strike would harm the war effort and the wartime economy. Truman’s sense that the steel owners were trying to profit off the war and his domestic political alliance with organized labor motivated his choice to take the mills instead of forcing the workers to stay on site as he could have done under the antilabor Taft Hartley Act — which was anathema to organized labor, and passed over Truman’s veto.
Steel companies immediately filed a lawsuit claiming that Truman’s decision was unconstitutional because he had no congressional assent. Federal Judge David A. Pine ruled in the mill owners’ favor, calling the president’s move an act of “unlimited and unrestrained executive power” that outweighed the material harm of a strike in wartime.
The case rose to the Supreme Court, and in Youngstown Steel and Tube v. Sawyer, a 6 to 3 majority ruled in favor of the steel companies. Justice Hugo Black, writing for the majority, ruled that the president’s power to seize property “must stem either from an act of Congress or from the Constitution itself.” In this case, the DPA hadn’t explicitly granted Truman power to seize the mills. Congress had to act; the president’s powers were not total.
Soon after the steel mill owners regained control of their plants, steelworkers went on strike. Steep losses in production followed. Lasting 53 days, it was among the longest, costliest steel strikes in U.S. history. Truman finally used the powers of persuasion and mediation to end the strike when he summoned union leaders and mill owners to the White House to negotiate a deal.
In the years that followed, Truman remained unapologetic about his decision to take control of the mills, writing in his memoir, “There are no longer sharp distinctions between combatants and noncombatants, between military targets and the sanctuary of civilian areas. Nor can we separate the economic facts from the problems of defense and security.” In other words, total war in the 20th century gave the president wide power to act in crises.
Executive power has grown substantially in the years since the steel mill seizure case, and covid-19 presents an enormous challenge that most government officials, regardless of party, want to meet. But as pressure mounts to use the Defense Production Act more broadly, it would be wise to recall that the extent of its authority was challenged in an era when large government intervention was viewed far more positively and faith in free market solutions was not as high.
The law is not a cure all, nor are its powers unlimited; for better or worse, in the American system, even in moments of emergency, the ability of the president to act remains constrained — especially when he does not have explicit support from the citizenry or Congress.