The President's power, if any, to issue an order must stem either from an act of Congress or from the United States Constitution itself. There is no statute that expressly authorizes the President to take possession of property to settle a labor dispute. Nor is there any act of Congress from which such a power can fairly be implied.
A labor dispute between the steel industry and its employees was referred by the President to the Federal Wage Stabilization Board. The Board's recommendation resulted in no settlement. When the union gave notice of a nation-wide strike, an executive order was issued directing the Secretary of Commerce to take possession of most of the nation's steel mills. The steel companies obeyed the orders but brought proceedings against the government, charging that the seizure was not authorized by an act of Congress or by any constitutional provision. The district court granted a preliminary injunction restraining the government's continued seizure and possession of the mills, and the court of appeals stayed the injunction.
Is the presidential order directing the government to take possession of the plants within the President's constitutional authority?
The Court held that the presidential power exerted here could not be sustained as an exercise of the President's military power nor under the several constitutional provisions that granted executive power. The seizure could not stand because Congress had the exclusive constitutional authority to make laws necessary and proper to carry out the powers vested by the Constitution. Accordingly, the district court's judgment was affirmed.