Special Message to the Congress on the Steel Strike

[As delivered in person before a joint session]

Mr. Speaker, Mr. President, Members of the Congress:

I should like to report to the Congress on certain events that have happened in connection with the current dispute in the steel industry since I last communicated with the Congress on that subject.

On April 9, I informed the Congress that I had taken action to provide for temporary operation of the steel mills by the Government. At that time, I indicated the reasons that had impelled me to take that action. I pointed out that the Congress might wish to take action providing for a different solution of the grave problem confronting the Nation as a result of the steel dispute. I also said that, if the Congress did not act, I would continue to do everything in my power to keep the steel industry operating and to bring about a settlement of the dispute.

The Congress took no action.

Accordingly, Government operation of the mills continued and intensive efforts were made to bring the parties into agreement. Meetings between the parties were held from April 9 to April 15, and on May 3 and 4. But their differences on a number of issues were so great that no settlement could be reached.

Meanwhile, some of the steel companies had instituted court proceedings for the purpose of challenging the President's power to keep the steel mills in operation. This case reached the Supreme Court, and on Monday, June 2, a majority of that Court decided that the President did not have the power, in this instance, to operate the mills. I immediately ordered that Government possession of the mills be relinquished.

On the same day, a strike was called and most of the steel industry was shut down. Thus, the situation that I had sought to avoid was brought about. I had managed to keep steel production going from the end of December to the 2d of June--a period of more than 150 days--even though the companies and the union had no collective bargaining contract. Now it had been made impossible for me to prevent a break in production.

Very shortly thereafter, I was informed there was a reasonable prospect that the parties might be able to reach a settlement of their dispute if they could be brought together again to negotiate.

I have said repeatedly that the ultimate and proper settlement of this matter can be achieved only by agreement between the parties. Consequently, I have sought at every opportunity to help bring about such an agreement. That, obviously, was the step that was called for in the circumstances prevailing last week. Moreover, it seemed essential that the negotiations be given every possible chance to succeed--that no other action be taken which would be likely to make either party unwilling or unable to negotiate in good faith.

That is the course that was followed. The parties were called back into negotiations. They met from Thursday, June 5, until Monday, June 9. Although they made some progress, they were not able to reach a final agreement. We are now, therefore, faced with the necessity of using some other means for getting the steel mills back into production.

When the negotiations were broken off, last night, representatives of the parties indicated that they would "cooperate in assuring production of military requirements essential to our forces engaged in combatting Communist aggressors." This morning, I have instructed Dr. Steelman, Acting Director of Defense Mobilization, and Mr. Lovett, the Secretary of Defense, to arrange with the companies and the union to meet as many of our urgent military requirements as possible under this pledge.

It is impossible to determine at this time just how much steel can be obtained in this manner. We should be able to meet our most critical military needs. But, at the same time, we cannot expect to get enough steel in this way to meet all the essential needs of the defense program.

The fact is that we need steel, not just for immediate combat requirements, but also for equipping all our Armed forces--and to help equip those of our allies. We need steel for constructing defense plants and new atomic energy installations. There are vital industrial requirements for steel--for such items as power generating equipment, freight cars, and oil producing equipment. These needs are very urgent and must not be indefinitely delayed by a steel shutdown.

Our national security depends upon our total economic strength, and steel is a basic element in that strength.

Consequently, we are faced with the imperative need for getting most, if not all, of the Nation's steel mills back into production very promptly.

There are several possible courses of action that might be followed. However, I believe there are two main possibilities. One of these is Government operation of the steel mills. The other is the use of a labor injunction of the type authorized by the Taft-Hartley law. The Congress can choose either of these two courses. I cannot. I could only use the Taft-Hartley approach. In my judgment, that is by far the worse of the two approaches.

Consequently, I feel that I should put the facts before the Congress, recommend the course of action I deem best, and call upon the Congress--which has the power to do so--to make the choice.

I believe the Congress should make its choice with a view of bringing about three objectives: first, to secure essential steel production; second, to assure fair treatment to both parties, in accordance with sound price and wage stabilization policies; third, to encourage the parties to settle their differences through collective bargaining. Each of these objectives is important to the national interest, and the Congress should act to serve all of them.

I believe the course which is most likely to achieve these objectives is to enact legislation authorizing the Government to take over the steel plants and to operate them temporarily until the parties reach a settlement. This is the course I recommend.

A seizure law, if properly drafted, can achieve the objectives of assuring steel production, treating both parties fairly, and encouraging collective bargaining. The key requirement of such a law, if it is to accomplish these ends, is to provide for fair and just compensation to the owners for the use of their property during a seizure, and fair and just compensation for the work of the employees.

The Constitution protects the owners of property during a period of Government operation by requiring that they be given just compensation--and they can appeal to the courts to enforce that requirement. The law should give similar protection to wage earners. This means that changes in wages and working conditions during seizure should not be prevented by law. If they were, the seizure would mean that workers would be compelled to work indefinitely without a change in wages, no matter how much a change might be justified. This is obviously not equal justice under the law.

In order to be fair, the law must provide for a method of determining just compensation for the owners and the workers during the period of Government operation. This can be done by the establishment of special boards to work out specific proposals for the purpose, within the general framework of the Government's stabilization policies. In this way, the legislation can assure continued steel production, and fair treatment for both parties during Government operation.
Seizure should not, of course, be regarded as a means of determining the issues in dispute between management and the union. Those issues will have to be settled by the parties through their own collective bargaining. Legislation providing for Government operation will not prevent collective bargaining. As a matter of fact, the type of legislation I have described will undoubtedly increase the incentives for the parties to settle their differences through bargaining. The companies will face the possibility of receiving something less than their normal profits as just compensation. And the workers will face the prospect of getting less than they think they are entitled to. Indeed, I made this plain on May 3, when I informed the parties that Government changes in wages and working conditions would not be satisfactory to either side.

I therefore recommend that the Congress promptly enact seizure legislation such as I have described, which will restore full-scale steel production, provide fair treatment for all concerned, and maintain incentives for both parties to reach agreement on the disputed issues through collective bargaining.

There is another course which the Congress could follow. That would be to enact legislation authorizing and directing the President to seek an injunction of the type authorized under the Taft-Hartley Act, but without going through the formality of appointing a board of inquiry and waiting for its report.

I do not recommend that the Congress adopt the Taft-Hartley approach. I think it would be unwise, unfair, and quite possibly ineffective.

The Nation has already had the benefit of whatever could be gained by action under the Taft-Hartley Act. That act provides for two main things. It provides for a fact-finding board to investigate and report on the issues in dispute. In the steel case, we have already had the facts fully determined and reported by the Wage Stabilization Board. The Taft-Hartley Act also provides for injunctions against a shutdown for a total of 80 days. In the steel case, the union already, even before April 8, had voluntarily postponed strike action for 99 days. Insofar as fact-finding and delay are concerned, therefore, the practical effects of the Taft-Hartley Act were achieved in this case some time ago.

Over and above these facts, however, there are other compelling reasons for not using an injunction of the Taft-Hartley type in the steel case. Its effect would be to require the workers to continue working for another long period without change in their wages and working conditions. This would be grossly unfair. The Wage Stabilization Board, the Government agency charged with the responsibility in these matters, has found--and the companies have admitted-that the workers are entitled to improvements in wages and working conditions. The union members stayed at work, at the Government's request, during the period the case was being considered by the wage board, and later during the period of Government operation from April 8 to June 2. In these respects, the union and its members have cooperated fully with the Government in the public interest. And yet the effect of a Taft-Hartley labor injunction would be to penalize the workers and to give the advantage to the steel companies. I want to make it very plain to the Congress that the result of using a Taft-Hartley type injunction in this dispute would be to take sides with the companies and against the workers.

Furthermore, a Taft-Hartley injunction would take away management's incentive to bargain and to work out the issues in dispute. The companies would have nothing to lose and everything to gain by delaying an agreement for as long as the injunction was in effect. Thus a Taft-Hartley injunction in this case would not only be unfair, it would hamper, rather than help, the collective bargaining negotiations.

Moreover, use of the Taft-Hartley law would not guarantee a restoration of full-scale steel production, which should be our primary objective. Nothing in the act can restore steel production immediately or automatically. As the Congress knows, the first step that must be taken under the act is to appoint a board of inquiry to investigate and report the facts of the matter. Previous experience indicates that it could take as much as a week or 10 days for such a board to complete its task. If such a board were appointed and made its report, and the Attorney General were directed to seek an injunction against a strike, the question would arise whether a court of equity would grant the Attorney General's request, in view of the union's previous voluntary 99-day postponement. Furthermore, even if an injunction were granted, there is no assurance that it would get the steel mills back in operation. I call the attention of the Congress to the fact that such an injunction did not get the coal mines back in operation in 1950.

If, however, the judgment of the Congress, contrary to mine, is that an injunction of the Taft-Hartley type should be used, there is a quicker way to do so than by appointing a board of inquiry under the Taft-Hartley Act. That would be for the Congress to enact legislation authorizing and directing the President to seek such an injunction, without waiting for any board to be appointed and to report.

I do not want to be misunderstood. I believe the Taft-Hartley procedure would be unfair, harmful, and futile--futile at least in helping to bring about a settlement, and perhaps also in restoring production. I hope very much that the Congress will decide that the Taft-Hartley type of injunction should not be used at all and that seizure legislation should be enacted instead.

In any event, I hope the Congress will act quickly. The issue of peace or war hangs in the balance, and steel is a vital element in that outcome.

We are engaged, with other free countries, in a mighty effort to build up the military defenses of the free world. We must build up this military strength if we are to have a reasonable chance of preventing world war Ill. But we cannot do it without steel, for steel is the backbone of our defense production, and, indeed, of our whole industrial society.

Every action I have taken in the dispute in the steel industry, beginning last December, has been based on the paramount necessity for maintaining the production of essential steel products in the present defense emergency. When I took the extraordinary step of seizure in the absence of specific statutory authority, I pointed out that "with American troops facing the enemy on the field of battle, I would not be living up to my oath of office if I failed to do whatever is required to provide them with the weapons and ammunition they need for their survival." Now a majority of the Supreme Court have declared that I cannot take the action I believe necessary. But they have said very clearly that the Congress can take that action.

Whatever may have been the intention of the Court's majority in setting limits on the President's powers, there can be no question of their view that the Congress can enact legislation to avoid a crippling work stoppage in the steel industry. Mr. Justice Black said the Congress "can authorize the taking of private property for public use. It can make laws regulating the relationships between employers and employees, prescribing rules designed to settle labor disputes, and fixing wages and working conditions." Mr. Justice frankfurter said that by enacting the Taft-Hartley Act, the Congress in effect decided "the only recourse for preventing a shutdown in any basic industry, after failure of mediation, is the Congress." Mr. Justice Jackson referred to "the ease, the expedition, the safety with which Congress can grant" emergency powers of the type needed to handle this crisis.

The issue is squarely up to you gentlemen of the Congress. I hope the Congress will meet it by enacting fair and effective legislation.