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122660107
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Memorandum, Seizure Authority in Section 18 of the Universal Military Training and Service Act
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122660107
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document
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Memorandum, Seizure Authority in Section 18 of the Universal Military Training and Service Act
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David H. Stowe Papers
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Labor disputes
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122660107
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1952-01-01
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1952
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Seizure Authority in Section 18 of the Universal
Military Training and Service Act
fite
Under the Act the President may provide for the placing of so-called
"mandatory orders" for defense material with plant operators. If the operators
"refuse or fail" to fill these specific orders, he may take possession of and
operate the plants to produce the needed material. The operators are guaranteed
fair and just compensation "as rental."
Reasons for not using this authority in the Steel Case
1.
Administrative difficulties. The Act applies to direct Government pur-
chases while the bulk of steel for defense needs is bought by "prime" and "sub"
contractors working on defense contracts. Much time would be required to switch
orders to a direct Government purchase basis and to notify each plant of the new
orders. Furthermore, thousands of military contracts for many thousands of defense-
end items are involved in the mobilization program. Orders for defense production
were deliberately placed with a view to spreading the contracts throughout the
entire steel industry on the broadest basis possible. It would take weeks to
identify each contract and the specific steel companies involved. In many cases
involving items used in both military and civilian production - such as electric
motors - it is practically impossible to determine the producers of the steel
components of these items. All of these factors rendered it impossible to use
Section 18 authority on the eve of April 8 to prevent an actual shutdown of steel
production the next day. They make resort to this authority now in the steel case
equally unsatisfactory in view of the time delays involved. This seizure authority
might work well in certain cases but not in the circumstances of the current steel
dispute.
2.
Legal
difficulties. The provision sets forth a number of specific con-
ditions which must be met if the authority is to be used. It is questionable
whether there could be seizure prior to an actual shutdown in production. It
is
questionable whether the Government would be justified in utilizing the entire
capacity of a steel mill to meet defense needs which were a small portion of the
total output of the mill On the other hand, in view of the requirement of just
compensation the Government may become liable for tremendous sums in failing to
utilize the facilities to the fullest extent possible. Furthermore, if only part
of the industry were seized, difficult questions would arise concerning the dis-
position by the Government of the steel products which are in excess of defense
needs, should complete utilization be made of plant capacity. Finally, resort to
'short-cuts" or fictitious devices to get around the specific requirements of the
Act would only invite complicated court actions tying up the whole operation.
3. Questionable availability of the authority for use in the steel case.
Many people have contended (including Senator Taft in debate in the Senate during
this steel dispute) that the seizure authority in the Universal Military Training
and Service Act was not available for use in a labor dispute but was meant to be
used in the case of a recalcitrant operator who refused to fill defense contracts.
The legislative history is far from clear on this point, and resort to this author-
ity in the steel case would certainly be subject to challenge in the courts on
this ground. Furthermore, the majority opinions in the recent Supreme Court decision
in the steel case have thrown serious doubt on the availability of this authority
to seize the entire steel industry under the current circumstances.