Featured facts
Image: Public Domain; Design: Kent Harris
Written by Gary A. Seidman
SwitchYard Media, Inc. - contact | website
Designed and produced by Kent Harris
Tin Can Rocket, LLC. - contact | website
A production of SwitchYard Media, Inc.
Photo Credit: Alfred T. Palmer
Guns, steel and Harry S. Truman
In April 1952, facing a imminent strike by 600,000 steel workers, President Harry Truman issued Executive Order 10340 directing the Secretary of Commerce to seize control of the nation’s steel mills.
Truman’s justification was national defense -- a walkout by steelworkers could disrupt arms production for the Korean War.
The steel companies obeyed the order but filed suit, and in June, 1952, the Supreme Court smacked down Truman with a 6-3 ruling. The Constitution, the Court said, does not support the president taking possession of private property to keep labor disputes from stopping production. An eight week strike ensued and the episode proved to be another setback for Truman, who left office the next year with a dismal 23 percent approval rating.
WAGES: The average steel worker's wage in 1952, including overtime, was $1.88 an hour.
THE STRIKE: The walkout impacted Armco Steel, Bethlehem Steel, Great Lakes Steel, Inland Steel, Jones and Laughlin Steel, Republic Steel, Sharon Steel, U.S. Steel, Wheeling Steel and Youngstown Sheet and Tube.
Photo Credit: Public Domain
A clash of titans
Powerful personalities played a big role in this next nationalization. For nine months during 1945 the U.S. Army occupied and operated seven facilities owned by department store Montgomery Ward & Co., which supplied clothing and equipment for the war effort.
Fed up with Ward's blustering chairman, Sewell Avery, who refused to comply with collective bargaining agreements and was a vocal opponent of The New Deal, President Franklin Roosevelt issued Executive Order 9508 on Dec. 27, 1944, directing the Secretary of War to seize facilities in New York, Oregon, California and elsewhere.
The government, FDR said, would "not tolerate any interference with war production in this critical hour." In an earlier labor dispute, National Guardsmen forcibly removed a recalcitrant Sewell from his Chicago headquarters.
RE-PRIVATIZED: The government relinquished control of Montgomery Ward in October 1945.
COMPANY PROFILE: In the 1940s, Montgomery Ward was one of the biggest retailers in the world, with sales of about $600 million a year to about 30 million customers. It operated 640 department stores and 190 catalogue mail-order offices.
Photo Credit: Ron Reiring
Rails in the red
In each of the nearly 40 years since the government created Amtrak to assume control of the nation's passenger rail service, the government-run company has lost money -- billions and billions of dollars.
Amtrak was created by Congress in 1970 with the notion that passenger rail was essential for the country. The purpose was to relieve the financial burden that private railroads were bearing for the cost of operating passenger service in an era when cars and airlines were preferred. By 1970 only 7 percent of intercity passenger traffic was provided by trains -- compared with 50 percent in 1950.
During the past six years Amtrak's revenues and ridership has grown as gas prices rose, but it's still in the red.
RIDERSHIP: During fiscal year 2007, Amtrak carried more than 25.8 million passengers.
REVENUES: Amtrak earned $2.15 billion in revenues and incurred $3.18 billion in expenses during FY 2007.
RAILS: Amtrak serves more than 500 destinations in 46 states on 21,000 miles of routes with nearly 19,000 employees.
Photo Credit: Bain News Service
Woodrow Wilson waylays the wires
In 1918, after the World War I armistice had already been signed, the government assumed control of the nation's entire cable, marine and telegraph system, including the Western Union Telegraph Co. "Postmaster General Albert Burleson today took control of the cables operating between the United States and foreign countries, acting under an order signed Nov. 2 by President [Woodrow] Wilson," The New York Times reported.
"I cannot understand why the government takes over the cables as a war measure, notwithstanding the war being now practically ended," said Clarence Mackay, the president of the Postal Telegraph-Cable Co. The cable companies, he added, had "rendered splendid service" during the war.
The government claimed that it could better control congestion of the telegraph lines, which had become a serious problem. Many Republicans characterized the move as "state socialism."
RE-PRIVATIZED: Western Union was returned to private ownership by June 1919.
BOTTOM LINE: Western Union was compensated with more than $900,000, at which time it called the government's control "constructive and eminently fair."
Photo Credit: Jack Delano
FDR's draft threat
"A stopping of the coal supply, even for a short time, would involve a gamble with the lives of American soldiers and sailors and the future security of our whole people," Franklin Roosevelt told the nation in his Fireside Chat on May 2, 1943. Wildcat strikes by 100,000 miners in 3,000 mines were a threat FDR would not put up with.
In response, he seized the mines and forced talks. "Tonight, I am speaking to the essential patriotism of the miners ... You have sons who at this very minute -- this split second -- may be fighting in New Guinea, or in the Aleutian Islands, or Guadalcanal, or Tunisia, or China."
The negotiations failed and a second walkout began in June. This time Roosevelt threatened to draft the miners, which brought them back until a third strike in October.
In a Gallop poll that year, United Mine Workers president John Lewis proved to be one of the most unpopular men in the country.
A YEAR OF STRIKES: In March 1943 shipyard machinists struck in San Francisco; in April, 55,000 rubber workers walked out in Ohio; in May, 30,000 workers struck Chrysler in Detroit.
FOUR COAL STRIKES: Mine workers walked out four times in 1943.
Photo Credit: Springsun
Too big to fail, chapter one
The only "difference between Continental and the Titanic is that the Titanic had a band," Fortune Magazine wrote when Chicago-based Continental Illinois foundered in 1984.
Characterized as "too big to fail," the Federal Deposit Insurance Corporation assembled a $4.5 billion rescue that gave the government an 80 percent stake in Continental until it was acquired a decade later by BankAmerica.
Continental's undoing began in July 1982 when Penn Square Bank went belly up. Penn had made billions of dollars in bad oil patch loans and Continental participated in about a billion dollars worth. By May 1984 a high-speed electronic run on Continental had begun and the Feds, fearing an epidemic, stepped in.
SIZE MATTERS: At the time of its failure, Continental was the seventh biggest bank in the country.
AN EARLIER BAILOUT: During the Depression, Continental received a $50 million loan from Reconstruction Finance Corp. to remain solvent.
Photo Credit: National Photo Company Collection
Hoover's ode to the New Deal
The nearest thing to the Treasury's current $700 billion rescue plan for the financial industry is the Reconstruction Finance Corporation, created in 1932 by President Herbert Hoover.
During its first year, the RFC's primary objective was to restore confidence in the banking system by providing emergency loans. The RFC's authority was expanded in 1933 when President Franklin Roosevelt took office and introduced the New Deal to combat the Great Depression. Under FDR, the RFC made agricultural, housing, export and business loans, and purchased preferred stock in thousands of banks.
The RFC was finally retired in 1953, though Congress originally intended it to last only 10 years.
FUNDING: The Treasury initially provided $500 million in capital and authorized the RFC to borrow an additional $1.5 billion.
ORIGINS: On Dec. 7, 1931, a bill was introduced to establish the RFC. Legislation was approved on Jan. 22, 1932 and the RFC opened for business in February.
Photo Credit: Alfred T. Palmer
Tenacity and the TVA
The Tennessee Valley Authority was launched at the height of the Great Depression as a massive job-creating, infrastructure-building venture under the New Deal. FDR asked Congress to create “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.”
In May 1933, Congress passed the TVA Act to provide for the agricultural and industrial development to this rural, particularly poverty-stricken southern region. The TVA's most celebrated successes were its hydroelectric dams that brought power to the valley and allowed for construction of energy-intensive aluminum plants during World War II.
If electricity could not be provided to rural areas by private companies, FDR was adamant that the government would do the job. The TVA joined with local municipalities to buy privately owned utility companies to supply electricity, a tactic that led to lawsuits from the private sector.
ELECTRICITY: The TVA supplies electricity to about 9 million people in seven states today.
REVENUES: The TVA generates more than $9 billion a year and receives no public tax dollars.
FACILITIES: 11 coal plants, 3 nuclear plants, 29 hydroelectric dams and several renewable energy facilities.
Photo Credit: Mike Warot
Fear of a freight freeze
Like Amtrak a few years earlier, Conrail was another government railroad corporation created by Congress and authorized by President Richard Nixon amid the backdrop of bankruptcy.
During the 1970s, the six railroads that became Conrail -- some of which had origins as far back at the 1820s -- staggered under financial burdens that were amplified by truck competition and antiquated regulations. Fearing that the insolvent railroads would disrupt both freight and passenger transportation, the government took control in 1974.
Despite billions of dollars of government funds, Conrail reported operating losses in excess of $2 billion during its first six years of existence before registering modest taxable gains in the early 80s. Under a law signed by President Ronald Reagan, Conrail was privatized in 1987 in what was to-date the country's biggest initial public offering -- $1.9 billion.
INCORPORATION: Conrail was incorporated on Oct. 24, 1974 and began operating in 1976.
RAILROADS: Conrail was comprised of Central Railroad of New Jersey, Erie Lackawanna, Lehigh & Hudson River, Lehigh Valley, Penn Central, and Reading.
Photo Credit: Historic American Buildings Survey
The first national bank
Strictly speaking, the First Bank of the United States was not a nationalization of a previously existing private enterprise. It was instead Alexander Hamilton's audacious vision of a bank in which the United States government was a shareholder alongside private investors
Hamilton, the nation's first treasury secretary, proposed funding the bank through the sale of $10 million of stock, the first $2 million provided by the government. The bank served as the financial arm of the U.S. Treasury and helped fund the public debt that was left from the Revolutionary War.
But Hamilton's bank -- chartered by Congress in 1791 -- proved to be a controversial endeavor with no less than Thomas Jefferson adamantly opposing it. The opposition (Whigs supported it, Democrats opposed) argued that the bank restrained private, state-chartered institutions.
CHARTER: Opposition to the bank was so great that it could no be re-chartered in 1811. A second bank was chartered in 1816.
BANK'S DEMISE: Democratic President Andrew Jackson withdrew government funds for the bank, and in 1841 it ceased to exist.