It Is Happening Here

April 21, 1952

Mr. Truman’s attempt to justify his illegal act in seizing the steel industry was demagogic, intemperate, and full of distortions. Under his Wage Stabilization Board’s “fair and impartial” recommendations, he contended, “the steel workers would simply be catching up with what workers in other major industries are already receiving.” Well, according to government statistics, the workers in all manufacturing industries are earning an average of $1.64 an hour and the steel workers an average of $1.88 an hour. The workers in all manufacturing industries are earning an average of $67 a week and the steelworkers an average of $78 a week. How much more do the steelworkers have to get above the average in order to “catch up”?

Mr. Truman can’t be referring to living costs, because the earnings of the steelworkers have already gone up 13½ percent since the outbreak of war in Korea, whereas living costs have gone up only 11 percent. What is Mr. Truman’s catch-up formula? How does he let everybody catch up with everybody else and still pretend to hold wages down?

The moment Mr. Truman turns to prices and profits; he considers all talk of catch-up formula outrageous. He never tires of denouncing the Capehart amendment, which is only a limited catch-up formula for price ceilings.

The President’s discussion of steel industry profits is a statistical nightmare. “The steel companies,” he says indignantly, “are now making a profit of about $19.50 on every ton of steel they produce.” This is double nonsense. After taxes and other costs, as Clarence B. Randall, the president of the Inland Steel Co., has estimated, the steel companies in 1951 made less than one-third of this amount. And neither Mr. Truman’s $19.50 nor the steel industry’s estimate of about $6.50 was made on every ton of steel. Either figure is an average. Marginal companies have been making considerably less, and they would have to halt production if their narrower margins were wiped out.

The most glaring omission from Mr. Truman’s speech was of course his complete failure to mention the fact that his board’s order would establish compulsory unionism throughout the steel industry, compelling every worker in it to knuckle down to Philip Murray to hold his job

Let us glance back over the last twenty years and reexamine the economic ideology that has dominated the government, and the policies to which it has led. The New Deal began with the assumption that the unions—all unions—were so weak that they needed the paternalistic help of the government. It also assumed that unions could do no wrong. It compelled an employer, however small, to “recognize” and “bargain” with the union, however large, that once succeeded in getting the votes of more than 50 percent of his workers. No matter how unreasonable the demands made by a union leader, the employer was forced by law to “bargain” with him and him alone. This union leader was in effect granted a Federal certificate of monopoly.

But this is not all. The employer had to bargain “in good faith.” How does one bargain in good faith? Obviously, by making concessions. Even this is not enough. The employer must concede all the union’s final demands, whatever they are. For if he does not, the union will strike. And then, of course, it is not the union but the employer who, in Mr. Truman’s phrase, is guilty of being “willing to stop production.”

This is the baneful logic that has led Mr. Truman to his present course. Industrywide unions are Frankenstein monsters created by Federal law. They have the power to bring the whole industry of the country to a halt unless their demands are met. For there is no longer any way to combat a strike. The government has legally deprived the employer of whatever effective way he formerly had of combating a strike. He is not allowed to break off negotiations with the union—or threaten to discharge strikers and hire other permanent workers in their place. The strike must succeed. If the employer will not himself yield to the union demands, the next step is for the government to appoint an “impartial” wage board to recommend that this is the only “fair and reasonable” thing for him to do.

Of course, if you are a New Deal President, you do not stop there. You know that if the companies are permitted to charge higher prices to pay the higher wages, the public will blame you for the higher prices. So your next step is to forbid the companies to ask higher prices while compelling them to pay higher wages. If the companies say no, then you seize and denounce the companies and blandly argue that no other course was ever possible. You contemptuously ignore the legal procedure prescribed by Congress. You seize private property without a shadow of legal authority on the contention that this is the only way to prevent a strike.

You pretend that this course is bold, though it is really pusillanimous. You take it because you have legally deprived yourself of all power to combat a strike, because you don’t know how to stop it except by buying it off, by forcing employers to pay the ransom demanded and because, for political reasons, you have made the government completely subservient to union policy. Of course by buying off one strike threat, you reward it and buy yourself a hundred others. You leave yourself no way to solve these in turn except by seizing each industry successively until you have brought on some form of fascist-socialism.

The minimum legal lessons for Congress are plain. It must allow the President’s price-and-wage-fixing powers to expire on June 30. No government can be trusted to use such powers wisely or impartially, and least of all the present one. Congress should also repeal altogether the Wagner-Taft-Hartley Act; but if it lacks the clarity and courage to do that, then it must at the very least withdraw the present legal compulsion on employers to recognize and bargain with industrywide unions.

There is only one alternative: Either we make it legally possible once more for a strike to be broken, or we yield completely to constantly mounting union demands. There is no other alternative and no longer any excuse for believing that there is one.