Government: Nationalization - American Style

When Brian Lawler became mayor of New Bedford, Mass. (pop. 97,250), in 1983, he knew he would be in charge of schools, parks and garbage pickup, but he never thought about running a factory. Until now. Lawler announced last week that the city stood ready to make unprecedented use of its power of eminent domain to take over Morse Cutting Tools, a 120-year-old New Bedford manufacturer that employs about 450 workers. Gulf & Western Industries, the New York-based conglomerate that owns Morse Cutting Tools, has been shedding divisions and has set a tentative July 31 deadline for selling the New Bedford company. The city fears that Gulf & Western will close Morse if no buyer can be found.

Eminent domain, a legal right of governments that originated in the Middle Ages, has traditionally been used to take over land for public works like highways. New Bedford obtained a 45-page legal opinion that says a city can also use eminent domain to assume ownership of the buildings and equipment of a private company "for the purpose of maintaining a healthy economy." New Bedford would have to pay Gulf & Western a fair price for Morse, estimated to be $10 million to $20 million.