Crisis and Command: A History of Executive Power from George Washington to George W. Bush (38 page)

Legislation enacted during FDR's first 100 days in office virtually dared the Justices to block the New Deal. The NIRA did not just attempt to ban a single product or manufacturing process -- it placed all industrial production in the nation under federal regulation. The AAA did the same with agriculture, and another law with coal mining. Laws passed later in FDR's term, such as the National Labor Relations Act (NLRA) and the Public Utility Holding Company Act (PUHCA), set nationwide rules on unions and utilities, while the Social Security Act (SSA) created a universal system of unemployment compensation and old age pension.

FDR was following in the footsteps of Presidents who dared to interpret the Constitution at odds with the other branches. FDR himself appears to have held few constitutional doubts. New Deal theorists believed, for example, that the Interstate Commerce Clause pertained to almost all economic activity in the nation because all goods manufactured or grown within a state traveled through the channels of interstate commerce to reach market. While the federal government might usually defer to the states on many matters, the Depression was so grave that the states were powerless to control a nationwide problem.
18

Roosevelt recognized early on that his program risked antagonizing the federal courts, which were filled with Republican judges.
19
He could count on the opposition of Justices James McReynolds, Willis Van Devanter, George Sutherland, and Pierce Butler, known as "The Four Horsemen" for their skepticism toward government regulation of the economy and their defense of individual economic rights. But FDR believed he could expect the general support of progressive Justices Louis Brandeis, Harlan Fiske Stone, and Benjamin Cardozo. Chief Justice Charles Evans Hughes and Justice Owen Roberts held the swing votes. FDR hoped that the Court would grant the political branches more constitutional leeway to respond to the national crisis of the Great Depression. In previous national security emergencies, the courts had allowed the federal government to mobilize the economy with little objection. FDR had reason for his hopes in early 1934, after 5-4 majorities of the Court upheld state laws setting milk prices and delaying mortgage payments.
20

Those hopes were dashed with the opening of the Court's business in January 1935. In its first case examining a New Deal law, an 8-1 majority of the Court invalidated the NIRA's "hot oil" provision, which allowed the executive branch to prohibit the interstate transportation of petroleum produced in violation of quotas. Chief Justice Hughes wrote that the provision unconstitutionally delegated legislative power to the President.
21
That decision was only a preview to May 27, 1935 -- known as "Black Monday" to New Dealers -- when the Court struck down three New Deal laws. The centerpiece was the Court's unanimous rejection of the NIRA in the "Sick Chicken" case,
Schechter Poultry v. United States
, in which the owners of a chicken slaughterhouse were prosecuted for violating industrial codes of conduct.
22

In finding the NIRA unconstitutional, the Justices threatened the two core features of the New Deal.
Schechter Poultry
held that the Constitution prohibited Congress from delegating legislative power to the President, especially when rule-making authority was then sub-delegated to private industry groups. The NIRA also violated the Constitution's limits on the reach of federal economic power. The owners of the slaughterhouse sold their chickens into a local market, which did not directly impact interstate commerce, even though a high percentage of chickens came from out of state. If the Court were to keep to its precedent that
intrastate
manufacturing and agriculture lay outside federal authority, more pillars of the New Deal -- perhaps even the whole program itself -- might collapse. In pointed language, the Court specifically rejected the Roosevelt administration's overarching approach to the Great Depression: "Extraordinary conditions do not create or enlarge constitutional power."
23

FDR responded with a political attack on the Court. In a 90-minute press conference, the President declared
Schechter Poultry
to be the most significant judicial decision since
Dred Scott
. While critical of the Court's ruling on executive power, he believed that those problems could be fixed by rewriting the statutes to give more direction and less delegation.
24
It was
Schechter's
narrow view of the Commerce Clause that posed the real threat to the New Deal. If Congress could not regulate the activities of the butchers because they were local in nature, it would be unable to police most other manufacturing or agricultural enterprises. "The whole tendency over these years has been to view the interstate commerce clause in the light of present-day civilization," Roosevelt told the press. "We are interdependent -- we are tied together." To Roosevelt, the Justices' way of thinking failed to take account of the national character of the economy. "We have been relegated to a horse-and-buggy definition of interstate commerce."
25

FDR considered a variety of proposals if the Court were to continue ruling against the New Deal: increasing the number of Justices (giving the President enough new appointments to change the balance on the Court), reducing the Court's jurisdiction, or requiring a supermajority of Justices to declare a federal law unconstitutional. He rejected them all as premature, but he had been prepared to respond to a potential rejection of the prohibition on gold transactions with a declaration of national emergency, a fixed price for gold, and an attack on the Court for "imperil[ing] the economic and political security of this nation."
26
But the Court upheld the gold regulations, causing FDR to shelve his plans.
27

The administration continued to work with Congress to expand federal intervention in the economy. Known as the Second New Deal, these laws went beyond the simple, sweeping delegations of authority to the President in the NIRA or the AAA. New laws such as the National Labor Relations Act and the Social Security Act created specialized bureaucracies to handle discrete areas of economic regulation. While the First New Deal vested the President with emergency powers to handle the Depression, the Second New Deal of 1935-36 promised permanent government intervention in the economy. One of FDR's political achievements was to transform the social contract so that government benefits became understood as rights, rights just as real to many Americans as those in the Constitution itself. But they did nothing to avoid the constitutional problems of the First New Deal: their very success depended on their ability to regulate all economic activity, rather than just trade that crossed interstate borders.

Rather than recede before this second outburst of lawmaking, the Court stuck to its guns. In the spring of 1936, it declared unconstitutional more elements of the New Deal. In
United States v. Butler
, the Court held unconstitutional the AAA's use of taxes and grants to regulate agricultural production, which lay within the reserved powers of the states.
28
Butler
threatened the Social Security Act, which used a combination of taxes and spending to provide relief and pensions to the unemployed and elderly.

In
Carter v. Carter Coal Co.
, a 5-4 majority struck down a 1935 law that set prices, wages, hours, and collective bargaining rules for the coal industry.
29
The Court found that the production of coal did not amount to interstate commerce, but instead fell within the reserved powers of the states. "[T]he effect of the labor provisions...primarily falls upon production and not upon commerce," Justice Sutherland wrote for the majority. "Production is a purely local activity."
Carter
made clear that the sick chicken case was not a fluke; any federal regulation of intrastate industrial production or agriculture was now in constitutional doubt. In
Jones v. SEC
, the Justices attacked the proceedings of the Securities and Exchange Commission as "odious" and "pernicious" and compared them to the "intolerable abuses of the Star Chamber."
30
Morehead v. Tipaldo
found that New York's minimum wage law violated the Due Process Clause, just as it had earlier found that such laws interfered with the right to contract.
31
As the Court had already found a federal minimum wage in the District of Columbia unconstitutional in the 1920s, it had made the regulation of wages, in FDR's words, a "no-man's land" forbidden to both the federal and state governments.

In the space of just two years, the Court had ripped apart the central features of the First New Deal and was promising the same for the Second. Roosevelt stopped discussing the Court's decisions publicly, and did not make any proposals about the Court during his reelection campaign. He attacked business and the rich as "economic royalists" and the "privileged princes of these new economic dynasties." Roosevelt proposed a new economic order that would provide stability and security through new forms of government-provided rights. FDR reconceived rights from the negative -- preventing the state from intruding on an individual liberty -- to the positive -- a minimum wage, the right to organize, national working standards, and old-age pensions. Running against the lackluster Republican Alf Landon, FDR secured one of the great electoral victories in American history: 523 electoral votes to Landon's 8 (the largest advantage ever recorded in a contested two-party election in American history), every state but Maine and Vermont, more than 60 percent of the popular vote, and a Democratic Congress with two-thirds majorities in both Houses, including 75 of the 96 seats in the Senate. Observers could legitimately question whether the Republican Party would shortly disappear as a political force.

Fresh off his victory, FDR proposed a restructuring of the Court that would eliminate it as an opponent of the New Deal. On February 5, 1937, he sent Congress a judiciary "reform" bill that would add a new Justice to the Court for every one over the age of 70. Because of the advanced age of several Justices, Roosevelt's proposal would have allowed him to appoint six new Court members. Rather than criticize the Court for its opposition to the New Deal, Roosevelt disingenuously claimed that the elderly Justices were delaying the efficient administration of justice. In his message to Congress, FDR pointed out that the Court had denied review in 695 out of 803 cases. How can it be "that full justice is achieved when a court is forced by the sheer necessity of keeping up with its business to decline, without even an explanation, to hear 87 percent of the cases presented to it by private litigants?"
32

Only indirectly did FDR imply a link between the advanced age of the Justices and their opposition to the New Deal. "Modern complexities call also for a constant infusion of new blood in the courts," FDR wrote. "A lowered mental or physical vigor leads men to avoid an examination of complicated and changed conditions. Little by little, new facts become blurred through old glasses fitted, as it were, for the needs of another generation." FDR declared that the remedy would bring a "constant and systematic addition of younger blood" that would "vitalize the courts and better equip them to recognize and apply the essential concepts of justice in the light of the needs and the facts of an ever-changing world."
33
The President's purpose could not have been clearer. He submitted the plan on the Friday before the Court would hear Monday arguments challenging the constitutionality of the National Labor Relations Act, one of the pillars of the Second New Deal.

Despite his electoral success, FDR's court-packing plan -- the first domestic initiative of his second term -- suffered a humiliating defeat. Mail and telegrams to Congress went nine-to-one against the plan, and polling showed a majority of the country opposed.
34
Elements of the New Deal coalition, such as farmers and some unions, attacked the plan early. Senate Republicans unified in opposition shortly after the President announced his proposal, and conservative Senate Democrats came out against the plan within days. Several liberal supporters of the New Deal followed. Hatton Summers, the chairman of the House Judiciary Committee, organized a majority of his committee against the bill, saying "Boys,...here is where I cash in my chips."
35
Various college and university presidents, academics, and the American Bar Association opposed the plan. The coup de grace was delivered by none other than Chief Justice Hughes, in a letter made public during Senate Judiciary Committee hearings, who rebutted point by point FDR's claims that the Court was overworked and that the older Justices could not perform their duties. Both Brandeis and Van Devanter approved the letter, which most historians believe ended the court-packing plan for good. Upon its release, Vice President Garner called FDR in Georgia to tell him, "We're licked."
36

Historians and political scientists have argued ever since over whether FDR still won the war. On March 29, 1937, a week after the release of the Hughes letter, the Court handed down a 5-4 decision upholding a Washington State minimum wage law for women. In
West Coast Hotel v. Parrish
, the lineup of votes for and against New York's minimum wage, which had been struck down in
Tipaldo
the year before, remained the same -- except for Justice Roberts, who switched sides to uphold the law.
37
Overruling the earlier bans on minimum wage laws,
Parrish
made clear that the Due Process Clause would no longer stand in the way of government regulation of wages or hours.

Two weeks later, the Court upheld the National Labor Relations Act, which had been challenged on the same grounds raised in the Sick Chicken and
Carter
cases.
38
In
NLRB v. Jones &Laughlin Steel Corp.
, Chief Justice Hughes led a 5-4 majority in rejecting the doctrine that manufacturing did not constitute interstate commerce. Jones & Laughlin Steel was the fourth-largest steel company in the nation, with operations in multiple states. As the Court observed, "the stoppage of those operations by industrial strife would have a most serious effect upon interstate commerce." "It is obvious," the Court found, that the effect "would be immediate and might be catastrophic." Henceforth, the Court would allow federal regulation of the economy, even of wholly intrastate activity, because of the interconnectedness of the national market. To do otherwise would be to "shut our eyes to the plainest facts of our national life" and to judge questions of interstate commerce "in an intellectual vacuum."
39
Justice Roberts again switched positions to make the 5-4 majority possible.