IN 1929 THE UNITED STATES entered into the most severe economic depression in the nation’s history. When Franklin Roosevelt took the oath of office as the nation’s thirty-second president in March 1933, he promised action to bring relief to a nation in which one-third of the people were ill-housed, ill-clothed, and ill-fed. Moreover, in words that struck terror into the hearts of conservatives, he promised that if one program did not work, he would try something else, and he believed the Constitution gave the national government adequate power to confront what he called an emergency as grave as war itself.
While Roosevelt had large Democratic majorities in both houses of Congress and enormous popular support for the New Deal, four of the nine justices on the Supreme Court stood unalterably opposed to such an extensive involvement of the federal government in the economy and in the labor market. The Four Horsemen, as they were called, after the four horsemen of the Apocalypse—James McReynolds, Willis Van Devanter, George Sutherland, and Pierce Butler—could usually pick up a fifth vote from one of the two moderate conservatives, Chief Justice Charles Evans Hughes and Owen Roberts. Three members of the Court did not necessarily support the New Deal programs, but Louis D. Brandeis, Harlan Fiske Stone, and Benjamin Cardozo believed in judicial restraint, and found nothing in the Constitution to bar the administration from enacting its program.
The majority struck down one New Deal measure after another until finally, in frustration, Roosevelt embarked on an ill-advised scheme to “pack” the Court with justices friendly to his program. In the midst of the battle over the plan, the Supreme Court suddenly seemed to reverse course in a suit brought by a chambermaid, Elsie Parrish, seeking back wages and overtime pay under a Washington State minimum wage statute. At the time, many people thought the Parrish decision helped sink the Court-packing bill, but the story of the greatest constitutional crisis since the Civil War is far more complex.
Facts can only tell us so much about the extent of the financial catastrophe that we know as the Great Depression. Between 1929 and 1932 factory production in the United States dropped more than 50 percent, while industrial construction fell from $949 million to a scant $74 million. Steel plants, the backbone of the economy, operated at 12 percent of capacity, and the stock market, which had stood at 452 on September 3, 1929, bottomed out at 52 in July 1932. Vast human suffering marked the real tragedy: thirteen million people unemployed; two million homeless, many of them riding the country in boxcars; people living in tarpaper shacks in clusters dubbed “Hoovervilles”; and families fighting outside the back doors of restaurants for garbage scraps. President Herbert Hoover tried to help, but could not transcend the limits of the laissez-faire ideology he held so dear, and he would not ask the government to interfere in the marketplace or provide relief—what he termed a “dole”—to those people out of work and starving. “The country needs,” declared Roosevelt, the Democratic candidate for president in 1932, “and, unless I mistake its temper, the country demands bold, persistent experimentation.”
Experimentation would be the hallmark of the New Deal. No other president had ever entered the White House committed to the idea of just trying something—anything—and if that did not work, trying something else. Some of the New Deal had been anticipated in Roosevelt’s campaign speeches and in earlier strains of Progressivism: a reforestation program to employ youth, public power development, regulation of utilities and the stock market, economic planning and cooperation with business, and repeal of Prohibition. Yet some of the most striking activities of the Roosevelt administration seemingly came out of the blue: deficit spending, federal works, agricultural relief, massive expenditures for housing and slum clearance, the Tennessee Valley Authority, heavily progressive tax schemes, a labor relations board, and Social Security. All of these resulted both from Roosevelt’s fertile mind and his willingness not only to listen to new ideas, but to act on them.
At the state level, people demanded action as well. Roosevelt, in fact, had come to national attention in part for his innovative use of state resources in New York to alleviate suffering. Governors such as C. Ben Ross in Idaho and Floyd Olsen in Minnesota personally intervened to prevent auctions of property when banks had foreclosed on mortgages. In a nation where farmers destroyed their unsalable crops while people went hungry, the sanctity of the marketplace—which conservatives had trumpeted as the keystone of American prosperity—no longer made sense, and state after state adopted measures regulating the market and the workplace that they hoped would do some good. The judicial response to state legislation proved far from consistent and anticipated the confused reaction of the courts to national New Deal legislation.
The first Supreme Court case set the pattern for many to follow. The Depression had caused chaos in the ice-making business, with cutthroat competition causing many firms to fail. In an effort to bring some stability to the industry, Oklahoma had enacted a law declaring the manufacture of ice to be a public utility, and therefore requiring a state certificate of convenience and necessity before entering the business. The conservative majority, speaking through Justice Sutherland, denied that ice manufacture could be in any way considered as affected with the public interest, and therefore could not legitimately be regulated by the state. In addition, he charged, the law fostered monopoly (New State Ice Co. v. Liebmann [1932]).
With his well-known antipathy toward monopoly, Louis Brandeis might have been expected to vote against the regulation, but instead he entered a powerful dissent that would be cited time and again in the battles that followed. He criticized the majority for failing to take note of the conditions that had led Oklahoma to adopt this policy. It did not matter whether the members of the Court agreed with it, because that was not their prerogative: “The true principle is that the State’s power extends to every regulation of any business reasonably required and appropriate for the public protection.” A state might consider it necessary to limit certain types of business, and to regulate others in order to mitigate the effects of a depression. Whether such an approach would work he did not know, nor did it matter. The Court had the power to prevent experiments, ill-advised or otherwise, but it should use that power infrequently. “We must ever be on our guard,” he warned, “lest we erect our prejudices into legal principles.”
The Court seemed to respond to Brandeis’s plea when it upheld a Minnesota mortgage moratorium law in Home Building & Loan Assn. v. Blaisdell (1934). Clearly an emergency measure, it did not reduce creditors’ rights, but it did provide debtors with more leeway and time to pay their notes. Continuing the trend in Nebbia v. New York (1934), Justice Roberts—who often sided with the Four Horsemen—seemingly accepted the argument that the public need, especially in emergencies, overrode traditional property rights. In trying to aid dairy farmers, New York had established a system of minimum prices, and Leo Nebbia had been arrested for selling milk below that price in his Rochester market. Was there any constitutional principle that prevented the state from attempting to alleviate problems caused by an aberrant economy? In words that chilled the conservatives, Roberts declared, “We think there is no such principle.” The relation of a business to the public interest clearly depended on existing economic conditions, he claimed, and therefore any business might legitimately be deemed as affected with a public interest and regulated for its benefit—something the Four Horsemen strenuously opposed.
In his dissent, Justice McReynolds made it quite clear that he did not believe in judicial restraint. The Court had to look not only at whether constitutional provisions allowed or barred certain actions, but “this Court must have regard to the wisdom of the enactment” as well. The fact that the conservatives disagreed with much of the legislation coming out of the states and the New Deal meant that if the Four Horsemen could get just one more vote, they could strike down legislation they considered “unwise.” Franklin Roosevelt’s New Deal gave them a great deal of legislation they did not like.
Because today we are so used to big-scale governmental programs, we may have difficulty understanding how limited the federal government was in 1933. The Interstate Commerce Commission, the Federal Trade Commission, and the Food and Drug Commission existed, but they were small and relatively powerless, and the other commissions that would form the regulatory state had yet to be created. The strongest government agency was probably the Federal Reserve System, yet it had only a fraction of the power it exercises today, and the type of intervention it took in 2008 and 2009 to counter that economic downturn would have been inconceivable in 1929. Social Security, unemployment insurance, Medicaid, food stamps, and other types of federal or state “safety net” programs did not exist. Although both the Senate and the House of Representatives had standing committees, they had few staff, and there was no overall budgeting procedure in place. After the enormous increase in the military during the Great War, the army and the navy had shrunk to their prewar levels, and had yet to come to terms with the airplane as a military instrument. As for helping people in need, that was the business of private charity. Herbert Hoover strongly believed in Grover Cleveland’s aphorism that while the people should cheerfully support the government, the government should in no circumstances support the people.
Roosevelt’s first hundred days in office still stand as the epitome of energetic executive leadership and accomplishment. First, he had to deal with the banking crisis, since in the month leading up to his inaugural banks had closed everywhere, even in New York, and the New York Stock Exchange also announced it would not open. Roosevelt knew that most of the banks in the country were sound, but had lost the confidence of the people, who had lined up to draw out their savings. So he announced a “bank holiday” under the rather dubious authority of the old 1917 Trading with the Enemy Act. All banks would close until federal bank examiners could go over their books, and only sound banks would open, banks in which the people’s money would be safe.
The federal government lacked the people to carry out such a nationwide audit; at best it could make a rough assessment of banks in good health and those about to fail. But Roosevelt gave people the psychological assurances they so craved, and as banks began to reopen they found people queuing up to put money into their accounts. The gamble had worked, and people looked to Washington to see what the president would do next.
Unlike Abraham Lincoln, who kept Congress on the sidelines in the first months of the Civil War, Roosevelt had large Democratic majorities in both houses just waiting for the president to give them their marching orders. In addition to executive orders that took the U.S. dollar off the gold standard, Roosevelt sent fifteen major pieces of legislation to Congress, which enacted all of them in three months. Some of them would become cornerstones of a new administrative state and reconfigure certain aspects of the economy, such as agriculture. Others, like the Tennessee Valley Authority, still stand as monuments to how creative government can serve the people. These programs created jobs by building up an infrastructure of roads, dams, and other public works. For the first time the federal government exercised real regulatory control over the nation’s banking and securities markets. Some of these laws were temporary measures, such as the Civilian Conservation Corps, which put young men to work planting trees and building trails in national parks. One conspicuous failure, the National Industrial Recovery Act (NIRA), generated a lot of sound and fury but in the end did little to revive the economy. It made no difference, since Roosevelt had said he would try something, and if it worked, well and good; if it did not, then another experiment would take its place.
Roosevelt had been trained as a lawyer, and he knew that even as Congress rushed to enact the New Deal, at some point the legislation would wind up before the Supreme Court. He had, however, a politician’s pragmatic view of the Constitution, one akin to Lincoln’s belief that the document gave the government adequate powers to confront any crisis that arose. In his inaugural address, Roosevelt explained that “our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangements without loss of essential forms.” He knew that the document forbade certain things no matter what the circumstances, but he had also seen how flexible it had proven in the Great War. He believed the Depression posed just as great a threat to the country as war, and that the old economic beliefs no longer worked. The Constitution, he believed, allowed the government to try new remedies for the ailing economy.
From another point of view, much of the legislation of the first hundred days rested on constitutional assumptions as questionable as the economic theories that animated those laws. The administration also faced hurdles in the fact that most of the statutes had been drafted by enthusiastic but inexperienced young lawyers under difficult time constraints. For example, Roosevelt had given the committee drafting the National Industrial Recovery Act just one week to overhaul the nation’s business structure, and the defects in the bill it drafted later proved its undoing. The drafters claimed that the broad mandate of the commerce clause provided constitutional justification, but nothing in the history of commerce clause jurisprudence going back to John Marshall had ever been applied to such a massive program. When they did not know exactly how they wanted to structure a particular feature, the bill’s drafters indicated a general goal and delegated authority to the president to work it out, thus ignoring traditional separation of powers not only between the executive and legislative branches, but between the states and the federal government as well.
Even had there been no Four Horsemen on the bench, the difficulties of sloppy legislative drafting were compounded by the poor quality of lawyers in the Justice Department. Attorney General Homer Cummings, an old-line Democrat, saw the jobs under his control as patronage plums for deserving party hacks rather than career jobs for well-qualified candidates. To take one example, the solicitor general, J. Crawford Biggs, lost ten of the first seventeen cases he handled. Only those departments and agencies with political clout of their own could stand up to Cummings and use their own attorneys to defend New Deal programs.
It would be impossible to review every New Deal program and the judicial response to it in the space we have, but to understand the antagonism of the judicial conservatives on the high court we can look at three laws and the constitutional challenges they faced—the executive order and subsequent legislation to abandon the gold standard, the National Industrial Recovery Act, and the Agricultural Adjustment Act (AAA)—as well as state efforts to impose minimum wages.
The Depression caused a great deflation—that is, sharp drops in wages earned as well as prices paid for goods—and most economists believed that recovery depended at least in part on triggering a moderate inflation. Drive up wages so that people would have more money to spend, went the theory, and when they bought goods, manufacturers would hire more people to produce more goods. Most economists also believed that adherence to the gold standard as the basis for currency prevented inflation, and recommended that the country go off the gold standard, as many European nations had already done.
Shortly after taking office Roosevelt announced that the country would go off the gold standard, and Congress, by joint resolution, canceled clauses in both private and governmental bonds that called for repayment in gold. Even the House of Morgan agreed with this policy, and its head, Russell Leffingwell, praised Roosevelt for saving the country from “complete collapse.” Many people who held bonds, however, believed that their investments would lose value if payment came in a devalued paper money rather than in gold, and they went to court, claiming that the government could not abrogate a contract, especially its own pledged word.
The first case, Norman v. Baltimore & Ohio Railroad Company, addressed the question of private bonds. By a 5–4 vote the Court sustained the government’s power to define the value of the nation’s money. Chief Justice Hughes explained that the contracts did nothing but define gold as a method of payment, and Congress had the authority to abrogate private contracts if they ran counter to a legitimate exercise of the national power.
In Perry v. United States, the government secured a technical victory, but at the cost of a tongue-lashing not seen in the Court since John Marshall had chastised Thomas Jefferson and James Madison in Marbury v. Madison (1803). Hughes distinguished between private bonds, which always had to bend to the public good, and government obligations, which represented the pledged word of the government of the United States. An observer in the courtroom that day reported that the Jovian Hughes thundered as if he were still secretary of state lecturing a banana republic on the necessity of keeping its word. Congress, declared the chief justice, could not break its promises, even in carrying out legitimate powers, and the Court ruled Congress’s joint resolution unconstitutional insofar as it abrogated the gold clauses in government bonds. Recognizing that enforcement of that decision might well wreak havoc with the nation’s finances, and that the administration would probably ignore it, Hughes then did as Marshall had done 130 years earlier—he found a way out of the quandary. The government had done a terrible thing, but since the plaintiff had suffered no real damages, he had no standing to sue. Justice McReynolds spoke for the Four Horsemen in such vitriolic terms that some of his comments did not appear in the formal record. At one point he bitterly commented, “This is Nero at his worst. The Constitution as we know it is gone.”
The heart of the First New Deal, as the 1933 measures came to be known, was the National Industrial Recovery Act, its most ambitious and also most ill-conceived act. The preamble read like a lawyer’s brief, justifying the law as a legitimate method of removing the burdens on interstate commerce caused by the Depression. Everybody got something. Industries could draft business-wide codes regulating fair competition that would be exempt from antitrust prohibitions, although a later section declared that nothing in the bill should be construed as suspending the antitrust laws. Labor got section 7(a) guaranteeing the right to organize into unions and to bargain collectively, and ensuring this provision would appear in every one of the industrial codes, which also had to have provisions for maximum hours and minimum wages. Congress appropriated the then-unheard-of sum of $3.3 billion for public works with the clear aim of hiring the unemployed. A National Recovery Administration (NRA) would oversee the industrial codes and compliance. The bill was clearly modeled on the experience of the Great War, when labor, management, and government had worked in close and fruitful cooperation. If, however, businesses balked at signing the industrial codes, the NRA had the power, in the name of the president, to draft and impose codes on the recalcitrants. All codes, once approved by the president, had the force of law. As even those who supported the general ideas embodied in the bill admitted, it had been poorly drafted, the procedures were sloppy at best, and there were numerous internal contradictions.
The first case involving federal legislation to come before the Court—Panama Refining Co. v. Ryan—focused on one portion of the NRA that actually made good sense but which had all the defects of the larger measure. Several oil-producing states, in an effort to raise oil prices, had imposed maximum production limits on wells within their borders, but they had no power to control excess illegal production—so-called hot oil—from being sold in interstate commerce. Much to the satisfaction of these states, the NRA gave the president authority to bar interstate shipment of oil produced in excess of state laws. This idea seemed to have a sound constitutional basis, since the policy resembled that of the 1913 Webb-Kenyon Act, in which federal power had been used to keep liquor from being transported into states that had adopted Prohibition.
Whatever merits the idea may have had, the administration of the measure could not be justified. An amazed Court heard counsel for the oil producers relate how they had been unable to obtain copies of the regulations, and then how the rules, which had the force of law, had been promulgated in a careless and casual way. At one point Justice Brandeis asked the government attorney defending the law, “Is there any way by which to find out what is in these executive orders when they are issued?” The embarrassed lawyer admitted it would be difficult.
An 8–1 Court, with only Cardozo dissenting, invalidated the hot oil clause. Chief Justice Hughes did not deny that Congress had the power to regulate hot oil, but the Court just could not overlook the slipshod way it had gone about the job. Moreover, while agreeing that Congress could delegate power to the president, it had the responsibility of providing policy and standards to guide him. The ruling returned the oil industry to a condition of unregulated, cutthroat competition, which need not have happened had the bill been more carefully crafted. One positive result of Panama Refining Co. is that the government soon afterward began publishing the Federal Register, which has made government regulations available in an orderly and easily ascertainable form.
Although the decision did not touch upon the rest of the Recovery Act, the administration realized that the delegation of powers to the president in other programs could not measure up any better than had the hot oil arrangement, and it waited for the other shoe to drop. On so-called Black Monday, May 27, 1935, it did. The Supreme Court unanimously invalidated the National Recovery Act as well as the Frazier-Lemke Act that provided mortgage relief, and ruled that the president could not remove members of independent regulatory commissions.
Normally when multiple cases challenge the constitutionality of a federal statute, the Court allows the solicitor general to recommend which case should come up to the high court, and the government, naturally, will select that case in which it can make the strongest argument. In arguing the NRA, the government had originally planned on using the Lumber Code as its test case. A few large manufacturers dominated the industry, and so a code drawn by and then agreed to by the leaders would control the practices of the smaller companies as well—exactly how the NRA wanted the codes to function. The lumber code, however, had a number of anomalies relevant to the business that in the end would have prevented a resolution of the major constitutional questions, and the high court dismissed that suit in United States v. Belcher (1935). In looking for another test case, the solicitor general chose poorly in deciding to defend the poultry code.
Unlike lumber, the poultry business in the United States was heavily fragmented. Chickens were raised on thousands of farms, and then sold either to middlemen or directly to local butchers, depending on geography and the local market. There were no industry leaders, no large wholesale processors (such as the Perdue Company today), and thousands of local butcher shops. As a result, the government could look to no single company or even a group of them to act as industry leaders, and in 1934 the NRA itself drafted and then promulgated the Live Poultry Code. The code fixed the maximum number of hours employees could work, imposed a minimum wage, and banned certain methods of “unfair” competition.
If a market needed stability, the poultry business certainly qualified. The New York City area comprised one of the largest poultry markets in the nation, with sales of 190 million pounds in 1933. Farmers considered chickens as good as cash, since unlike seasonal crops such as corn—which could only be sold after a harvest—chickens could be sold any day of the year. Moreover, farmers could sell one or two chickens, or a dozen or more, whenever they needed cash. But the price per pound that farmers received had fallen by more than half from 1929 to 1933, from 30 cents to 14 cents. The Live Poultry Code for the New York area aimed at imposing controls on the market and raising the price that both farmers and butchers received for their product.
The Schechter brothers ran a kosher butcher shop in Brooklyn, New York. They purchased live poultry from wholesalers in New York and Philadelphia, slaughtered the chickens, and then sold the processed chickens to retail stores and to other butchers. The Schechters were charged with sixty counts of violating the code by selling “unfit” chickens, illegally selling chickens on an individual basis, avoiding inspections by local poultry regulators, falsifying records of sales, and selling chickens to nonlicensed purchasers. A federal district court jury found them guilty of nineteen counts, and the Court of Appeals for the Second Circuit affirmed the conviction.
Chicken markets, even fairly good-sized ones such as the Schechters operated, were primarily local stores, and catered not only to retail food outlets but also to neighbors who came in wanting a chicken. Although the code forbade it, the Schechters allowed their longtime customers to pick out which chicken they wanted, and then slaughtered it for them. They understood that there was no way a housewife in the straightened circumstances of the Depression was going to just take whatever chicken the butcher offered; it ran against the centuries-old customs of local markets in Europe as well as the United States. (Even now, consider going to the grocery store or a fruit market to buy apples or grapefruit. People examine the produce, handling individual pieces of fruit before deciding what they want to buy, and would not patronize a store or a fruit stand that would not let them make their own choices.)
The high court accepted the appeal, heard oral argument on May 2 and 3, and handed the decision down a little over three weeks later. Normally the Court tries to decide cases on as narrow a basis as possible. If there are two reasons to either approve or strike down a law, the Court will use the narrower one and not even discuss the other. But in Schechter v. United States, Chief Justice Hughes posed three broad questions, and then proceeded to answer them all. Did the economic crisis create extraordinary governmental powers? Had Congress lawfully delegated its powers to the president? Did the act exceed the government’s authority under the commerce clause? This radical de parture from the Court’s customary procedures made it quite clear to many observers that not only Hughes, but the entire bench, wanted to make sure that after the Court invalidated the National Industrial Recovery Act it would stay dead.
In his earlier opinion in Blaisdell upholding the Minnesota mortgage moratorium, Hughes had clearly said that emergencies could call forth latent powers; he now reversed himself and declared that “extraordinary conditions do not create or enlarge constitutional power.” The elaborate rationale in the Recovery Act’s preamble tying the remedy to the Depression made no impression on the Court. As for the delegation of power, the chief justice reiterated the Court’s objections in Panama Refining Co. Congress clearly could delegate power to the president, but it had to establish clear guidelines and standards. Here it had given the president a blank check to create and enforce codes or, worse yet, to enforce as the law of the land codes that were drafted by private parties. Justice Cardozo added a concurring opinion that captured the sense of the Court when he described the problem as “delegation running riot.”
Had the delegation problem been the only difficulty with the Recovery Act, it could easily have been remedied. The ruling that emergencies did not create new or enlarge existing powers might have cramped the administration but would have been acceptable if the Court had conceded the government’s power to regulate these industries. But Hughes—joined by all of his colleagues—answered the third question, dealing with the reach of governmental authority under the commerce clause, in as narrow a manner as possible. He revived the old distinction that most scholars considered obsolete and discarded, between the direct and indirect effects of local activity on interstate commerce. Only those activities that directly affected interstate commerce could be regulated by the federal government. The Schechters’ business had no direct effect—and in fact very little indirect effect—on interstate commerce and therefore could not be regulated by Congress. Even Justice Cardozo, who in his concurrence differed with Hughes over how one could determine the distinction between direct and indirect effect, could not find any connection between selling sick chickens in Brooklyn and interstate commerce.
Roosevelt received the news of Black Monday in astonishment, and could hardly believe that even the liberal members of the Court had gone against him: “Where was Ben Cardozo? And what about old Isaiah [Brandeis]?” To reporters he complained that the decision relegated the country to “the horse-and-buggy definition of interstate commerce.” The president did not understand that even many of his liberal supporters thought the Recovery Act unconstitutional and in fact detested the emphasis of the early New Deal on large-scale planning.
However, even those of Roosevelt’s supporters who opposed the NRA believed that the New Deal’s agricultural program not only justified, but in fact was working effectively to cure the ills plaguing the nation’s farmers. They were to be sorely disappointed by the Court’s next New Deal ruling. The agricultural sector had been depressed since 1921, and poverty on the nation’s farms contrasted sharply with the general prosperity of the nation in the 1920s. Farming may have been the last “true” market in America—one in which the laws of supply and demand operated, and with no single buyer or seller, or even groups of buyers or sellers, able to influence prices. But as prices fell, farmers tried to make up the loss in their income by growing more, and this additional supply, without a corresponding rise in demand, only further depressed prices for farm goods. What needed to be done was to somehow limit farm production, and the New Deal embarked on this course in the Agricultural Adjustment Act (AAA) of 1933.
The AAA rested on the notion of “parity.” The market would be regulated so as to ensure farmers the same purchasing power for their crops as they had in the base period of 1909–1914. Farmers accepting voluntary restrictions on production and the amount of acreage planted could participate in a government plan of price supports, and the entire scheme would be financed by a tax on food processors, such as the miller who converted wheat to flour. During Roosevelt’s first term, farmers’ gross income rose more than 50 percent, while rural debt fell sharply, although the droughts of 1934 and 1935 may deserve as much credit as the AAA for limiting production.
The constitutionality of the AAA was argued on December 9, 1935, and the Court handed down its decision in United States v. Butler on January 6, 1936. This time, however, the justices were far from unified.
Drafters of the bill had felt confident that in the food processing tax they could rely on a recognized federal power. Officials of the Hoosac Mills Corporation attacked the levy, which they characterized not as a true tax but as an integral part of an unconstitutional plan to regulate agricultural production. The government challenged their right to sue since the Court had, in several cases, held that taxpayers had no standing to question in court how the federal government spent its tax revenues. The conservatives on the Court brushed this argument aside, and according to Justice Roberts, the plaintiffs had challenged not just the tax and its uses, but the whole regulatory plan of which the tax “is a mere incident.”
Roberts’s majority opinion is tortured and confusing. He had to dismiss a long line of precedents to make out that the processing tax was not a “true” tax, merely because none of the proceeds went into the general coffers; instead, it purchased compliance with a program that exceeded congressional power. He ignored the nature of a modern economy by characterizing agriculture as purely a local enterprise, and therefore not subject to the commerce clause. Even if the sum of many local conditions had created a national problem, Congress could not “ignore constitutional limitations” imposed by the Tenth Amendment, which gave the states any powers not specifically granted to the national government.
The ruling brought forth strong protests from within and outside the Court. Harlan Fiske Stone, considered the most knowledgeable person on the bench regarding taxation, dissented sharply from what he considered Roberts’s myopic view of the taxing power. Joined by Brandeis and Cardozo, Stone pointed out that the processing tax did nothing more than raise revenue; the regulatory part came through the appropriations process. He condemned Roberts’s “tortured construction of the Constitution,” and the majority’s resort to the argument that if it allowed this program to stand then the government could regulate any area of the nation’s economic life. Finally, he dismissed Roberts’s claim that there was no personal judgment in his opinion, and attacked the majority for their hypocrisy in substituting their own judgment for that of Congress.
The attack by the Court’s conservatives on the New Deal and on efforts by the states to address the Depression seemed relentless. After the Schechter decision Congress had tried to salvage part of the Recovery Act in the Guffy-Snyder Coal Conservation Act of 1935. The NRA coal code had brought a desperately needed stability to the mining industry, and the new law tried to reestablish that stability. Declaring coal production part of interstate commerce and “affected with a national public interest,” Congress asserted that regulation was not only necessary but constitutionally justified. The conservative majority on the Court would have none of it, however.
In Carter v. Carter Coal Company (1936), Justice Sutherland declared the entire bill unconstitutional in a 5–4 ruling. He relied on Schechter for an extremely restrictive view of interstate commerce; while the transportation of coal might be interstate commerce, mining was local and therefore not subject to congressional control. Despite the clear intention of Congress to have the different parts of the bill treated separately through the use of a severability clause, Sutherland invalidated them all, including the labor provisions that had not even been at issue. All the provisions, he declared, were intertwined, all were terrible, and all were unconstitutional.
Even Chief Justice Hughes could not stomach this. In a separate opinion he agreed that even though the labor provisions were invalid, the Court should not ignore the congressional severability clause. Cardozo, speaking also for Brandeis and Stone, charged that the majority had turned its back on the realities outside the courtroom. If an industry as disrupted as coal, and so central to the nation’s economic well-being, could not be federally regulated, then little hope remained for solving the country’s economic woes.
The Carter decision that fanned the growing public protest against the Court was on the New Deal, and in the next few weeks the Four Horsemen—determined to kill what they considered radical governmental interference in business matters—added fuel to the flames. First, by a 5–4 majority, the Court struck down the Municipal Bankruptcy Act of 1934 as an infringement on states’ rights. The act allowed local governments and agencies, with the permission of the states, to file for voluntary bankruptcy (bankruptcy being governed by national law). Justice McReynolds condemned the act as infringing on state sovereignty; Cardozo’s dissent, joined by Hughes, Brandeis, and Stone, pointed out that since the states had to approve before a municipality could act, they lost nothing. Then in June, again by a 5–4 vote, the Court invalidated a New York State minimum wage statute as a violation of freedom of contract in Morehead v. New York ex rel. Tipaldo. Justice Butler’s opinion emphasized that the doctrine of Adkins v. Children’s Hospital (1923) still governed.
The New Deal’s only victory in 1935 and 1936 came in Chief Justice Hughes’s narrow ruling upholding the Tennessee Valley Authority. In Ashwander v. Tennessee Valley Authority (1936), the Court approved the sale of electrical power generated by a federal dam to a private power company on the grounds that the federal government had undisputed power to sell off not only the lands it owned, but also any byproducts of those lands such as minerals or power. At least for the time being the Court did not look into the extensive planning aspects of the TVA.
By the fall of 1936 the Four Horsemen, joined by Roberts, stood at the head of opposition to the New Deal and its programs. While liberals naturally protested the Court’s failure to restrain itself and to stop meddling into the policymaking prerogatives of the legislature, even many conservatives felt the Court had gone too far. After the Morehead decision, former president Herbert Hoover complained that the Court had taken away powers from the states that they legitimately had. The Republican candidate for president in 1936, Alf Landon of Kansas, did as much as he could to distance himself from the Court. Members of both parties supported a constitutional amendment to affirm the states’ authority to regulate working conditions.
In the election Franklin Roosevelt did not mention the Court; he did not have to, since everyone recognized that popular programs to put people back to work stood endangered by five men. Roosevelt promised to expand the New Deal and to heal America. In 1935 and 1936 Congress had enacted a whole series of measures, the so-called Second New Deal that included, among other bills, the Social Security program. All of these would come before the Court after the election, a fact everyone understood. That fall, the American people signaled their approval of the New Deal by giving Roosevelt the most sweeping margin of victory since James Monroe had run unopposed more than a century earlier. All but two states, Maine and Vermont, voted for Roosevelt, and he enjoyed strong Democratic majorities in both houses of Congress. With such a mandate, Roosevelt could not allow five old men, even justices of the Supreme Court, to stop the New Deal. Everyone knew he would have to do something, but the president gave no clue as to what he was considering.
Two weeks after his second inaugural, Roosevelt, who had been mulling over several plans, decided to pack the Court with justices who would be friendly to New Deal measures. The number of justices is not spelled out in the Constitution, and over the years it had varied; but it had been nine since the 1870s. Roosevelt claimed that the Court had fallen behind its work because the aging justices no longer could keep up with the demands of their jobs. Six members of the Court were over seventy, and Brandeis—arguably the justice most accepting of the New Deal—was over eighty. Roosevelt proposed that for each member of the judiciary over seventy the president could appoint an additional member of the Court, with a maximum of six to the high court and forty-four to the district and appellate benches. The whole plan, he claimed, was designed to make the judiciary more efficient. Only later did he admit the true reason: “We cannot yield our constitutional destiny to the personal judgment of a few men who, fearful of the future, would deny us the necessary means of dealing with the present.”
For once Roosevelt’s famed political sagacity deserted him, and he totally misjudged both the sentiments of the country and of Congress. Had he come out and said from the beginning that a handful of old men should not be allowed to thwart the nation’s will, there would have been opposition but he might have won; in fact, he almost did. But Roosevelt appeared too crafty, not trustworthy on this issue, and the longer the debate went on the less support he enjoyed. The famed editor of the Emporia (Kan.) Gazette, William Allen White, asked what would stop a future reactionary president “as charming, as eloquent and as irresistible as Roosevelt” from packing the Court to abridge the Bill of Rights.
The death blow to the Roosevelt plan came in a series of decisions beginning in late March 1937, starting with West Coast Hotel v. Parrish. Between 1933 and 1935 Elsie Parrish, a grandmother, had worked periodically as a chambermaid at the Cascadian Hotel in Wenatchee, Washington, a facility owned by the West Coast Hotel Company. The hotel paid her $12 per week, less than the minimum wage of $14.50 per week for a forty-eight-hour week as established by the state’s Industrial Welfare Committee. When the hotel let her go she asked for both the back wages due on her regular hours as well as the time-and-a-half the law required for overtime, a total of $216. The hotel offered her $17, and she went to court.
Parrish lost in the trial court, which on the basis of Adkins v. Children’s Hospital (1923) ruled the state minimum wage law unconstitutional. The Washington Supreme Court, however, distinguished the state law from the federal minimum wage law that had been struck down in Adkins, since it applied only to the District of Columbia. In citing that case, Judge Millard skipped over the majority holding and cited at length the dissents by William Howard Taft and Oliver Wendell Holmes arguing for the constitutionality of a minimum wage. Millard also noted that Adkins had not disturbed the decision in Stettler v. O’Hara (1917), which upheld an Oregon minimum wage law. The court found for Elsie Parrish, and the case went on appeal to the U.S. Supreme Court.
To nearly everyone’s surprise, on March 29, 1937, the high court by a 5–4 vote upheld the Washington statute. Owen Roberts, who had written the decision invalidating a similar New York law a year earlier in Morehead, joined with Hughes and the liberals in an opinion that Adkins had been wrong and should be overruled. Hughes dismissed the Morehead case by asserting that at the time the Court had not been asked to reexamine Adkins, and therefore had used it as a determining precedent.
Roberts’s change of heart led to a great deal of speculation, as well as the claim that the Court had reversed course to save itself from the Roosevelt reorganization and a loss of power. “A switch in time,” contemporary wits chuckled, “saves nine.” But in fact it appears fairly certain that Roosevelt’s plan did not affect the Court’s decision. Roberts had been unhappy with his Morehead opinion, but since New York had not challenged Adkins, Roberts, the least creative member of the bench, felt he could not raise it. When Parrish had been argued in December 1936, counsel for Washington had asked for a reversal of Adkins, and Roberts voted to sustain the law. Because of illness, Justice Stone had not voted and, wanting to avoid a 4–4 decision that would have left the Washington court decision in place but would not have struck down Adkins, Chief Justice Hughes postponed the vote. Had Stone not been ill, the opinion would have come down in January, before Roosevelt announced his plan, and in fact might have forestalled it.
After Parrish the Court moved back to the path it had been following prior to 1935, sustaining state regulations to bolster the economy under the broad rubric of the police power, and upholding New Deal measures through a liberal reading of the commerce clause and the taxing power. All of the important measures of the Second New Deal—Social Security, the Wagner Labor Relations Act, debtor relief, progressive taxation, unemployment insurance—received the Court’s blessing, although usually with a strong dissent by the Four Horsemen. Then they began to retire, and by 1943 Roosevelt had appointed eight of the nine members of the Court. The Court-packing plan had failed, but Roosevelt claimed that while he might have lost that battle, he had won the war.
Adkins v. Children’s Hospital, 261 U.S. 525 (1923)
Ashwander v. Tennessee Valley Authority, 297 U.S. 288 (1936)
Carter v. Carter Coal Company, 298 U.S. 238 (1936)
Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398 (1934)
Marbury v. Madison, 1 Cr. 137 (1803)
Morehead v. New York ex rel. Tipaldo, 298 U.S. 587 (1936)
Nebbia v. New York, 291 U.S. 502 (1934)
New State Ice Co. v. Liebmann, 285 U.S. 262 (1932)
Norman v. Baltimore & Ohio Railroad Co., 294 U.S. 240 (1935)
Panama Refining Co. v. Ryan, 292 U.S. 388 (1935)
Parrish v. West Coast Hotel Co., 185 Wash. 581 (1936)
Perry v. United States, 294 U.S. 330 (1935)
Schechter v. United States, 295 U.S. 495 (1935)
United States v. Belcher, 294 U.S. 736 (1935)
United States v. Butler, 297 U.S. 1 (1936)
West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937)
Good general overviews of the New Deal court cases and the constitutional crisis they provoked are Marian McKenna, Franklin Roosevelt and the Great Constitutional War: The Court-Packing Crisis of 1937 (2002), and Burt Solomon, FDR v. the Constitution: The Court-Packing Fight and the Triumph of Democracy (2009). The best political interpretations can be found in the essays in William E. Leuchtenburg, The Supreme Court Reborn: The Constitutional Revolution in the Age of Roosevelt (1995). Alternative interpretations are Barry Cushman, Rethinking the New Deal Court: The Structure of a Constitutional Revolution (1998), and Edward G. White, The Constitution and the New Deal (2000). Justice Roberts and his nonjurisprudence remain a puzzle to historians, and are examined in Charles A. Leonard, A Search for a Judicial Philosophy: Mr. Justice Roberts and the Constitutional Revolution of 1937 (1971).