Forgotten Man, The (27 page)

Still, the New Dealers were not downcast, for sentiments such as those of the Chicago jurors toward Insull were not hurting the Democratic Party. On the contrary, the November election of a few weeks before had been a Democratic sweep, strengthening the number of Roosevelt’s party allies in Congress. The days after the election found Democrats claiming 9 new senate seats, giving them a 69-seat majority. The crucial two-thirds majority was in Democratic hands. In the House, the early returns showed Democrats holding 318 seats compared with the Republicans’ 99, and later it would emerge that the Democrats had done even better. In Illinois, the land of Insull and Lincoln, Democrats had gained several con
gressional seats. Congressman Oscar De Priest, the sole black member of Congress and a Republican, was defeated. Voters selected to replace him with another black man, the Democrat and Harvard graduate Arthur Mitchell. The switch reflected a national trend: African Americans were becoming Democrats in great numbers for the first time since the Civil War. Pennsylvania elected a strong advocate of organized labor, Democrat Joseph Guffey, to the Senate, displacing Mellon’s old spokesman, the pro-tariff Senator Reed. Where the New Deal was faltering economically, it was gaining politically. Roosevelt’s radio voice was succeeding.

Relieved, the prosecutors regrouped. They noted that in the lower courts, NRA lawyers were winning some victories. The point at which the Supreme Court must affirm the NRA’s constitutionality was drawing near. That month, just before the election, a federal jury at the courthouse in downtown Brooklyn had convicted the four Schechters. It was the first felony case that the Justice Department won under the NRA, and Walter Rice, the special federal prosecutor, was triumphant, calling it “a sweeping victory of immense importance.” The brothers faced two-year sentences.
Schechter
was in the running to become the Supreme Court test case.

Tugwell relaxed with the president in Warm Springs, writing in his diary on November 23, “I spent nearly the whole day with FDR yesterday. Went to the pool and swam, he driving his own car. Went back and had lunch with him and talked until five in the afternoon.” He was just back from a trip to Italy, and had got the chance with Mussolini that he had missed with Stalin. Like other Americans before him—Thomas W. Lamont, for example—Tugwell was impressed. Their meeting had been in a large rectangular room in which Mussolini sat at one end, positioned to intimidate. But, Tugwell noted to himself, the dictator had got up to meet him halfway. Now Tugwell and Roosevelt talked about international economics, both concluding that the United States could not be too optimistic about foreign trade.

“I felt again,” Tugwell wrote of Roosevelt in his diary, “as I have before that my mind runs with him as with almost no one I ever
knew before,” adding: “I wish I had more wisdom…. I think he overestimates my intelligence; he couldn’t overestimate my loyalty and affection.” Even the small jokes that Roosevelt made at his expense only made him feel closer. Just before Christmas, cabinet members dining at the White House would comment on the poor quality of the champagne; the president later asked Harold Ickes whether he had “ever tasted worse champagne,” then pointed out, laughing, that it was domestic champagne from New York, recommended to Mrs. Roosevelt by Rex.

In Washington several hundred social workers, labor leaders, and economists gathered at a conference on economic security. Frances Perkins declared that the country was being swept “by a wave of enthusiasm for the President’s promised program of social security.” Among those attending was Paul Douglas of Chicago, who presented a program for unemployment insurance that would pay benefits for twenty to twenty-six weeks. Roosevelt threw some cold water on the meeting when he rejected “fantastic” schemes and focused narrowly on plans for unemployment insurance such as Douglas was proposing. Still, the mood was more hopeful than it had been even in 1932.

On November 10, Roosevelt appointed Marriner Eccles, the Utah banker, as governor of the Federal Reserve Board, the top Washington position at the Fed. Accepting the job, Eccles, like so many Republican progressives before him, declared allegiance to Roosevelt and his party. “Previous to the last national election, I had always supported the Republican national ticket,” Eccles said, “but I was not satisfied with their policies, which were not sufficiently liberal and progressive to meet changed conditions.” “Governor Eccles will run the Fed as the White House wants it run,” wrote
Time
’s editors, always to the point.

“Americans are following Roosevelt…as the Israelites followed Moses,” concluded the London
Morning Post,
abashed to see such behavior in the world’s most independent people. Eccles envisioned new Federal Reserve legislation, which indeed would become law the following year. Under the new Federal Reserve Act, monetary offi
cials in Washington would control the money, supplanting New York. The law would give the Washington Fed the power to buy and sell bonds and therefore to control the quantity of money and credit in a more formal way. As chief in Washington, Eccles would also get a new title: he and subsequent Federal Reserve heads would not be governor. They would be chairman.

As for Willkie, he was now not sure whether to fight publicly. His company’s stock was dropping at 1¼. On the one hand Roosevelt was making his threats more explicit than before. On November 18 the president traveled to Tupelo—the TVA’s first municipal customer—to announce that what was being done here was “going to be copied in every state of the Union before we get through.” Where was Roosevelt’s mention of the fact that TVA was heavily subsidized? On the other hand the president was trying to reassure industry. After the election—only days after—Roosevelt wrote to Newton Baker, “One of my principal tasks is to prevent bankers and businessmen from committing suicide!” The president issued a round of invitations to power executives, and there was one for Willkie.

The Commonwealth and Southern president duly attended his meeting, greeting the president with a reminder that Commonwealth and Southern was the president’s power provider in Warm Springs: “We give you good service, don’t we?” Roosevelt announced that his talks with the industry had been “entirely amicable.” There was an element of satisfaction there. Now that Roosevelt had two more years, it was just as well that Willkie was dealing not only with Lilienthal but also the ultimate arbiter of utilities’ future in the United States.

After his meeting, Willkie wired Edith, who was an old critic of FDR’s:
CHARM EXAGGERATED STOP I DIDN’T TELL HIM WHAT YOU THINK OF HIM.

As 1934 moved toward a close, Willkie confronted two realities. The first was that as much as he wanted to fight back more openly, he could not. It would be irresponsible toward his shareholders to
declare war against Lilienthal; he would then have “blood on his hands,” as he had told Lilienthal. Both Willkie and Commonwealth and Southern simply had too much to lose. They had to work out more deals.

The second reality was that in the battle between David and Goliath in this particular industry—utilities—he was not, in the end, going to find a way to ally himself with the Davids. Uncomfortable as it made him feel, Willkie had to admit that he was finding himself siding with the monster.

November 1, 1934
Unemployment (November): 23.2 percent
Dow Jones Industrial Average: 93

THERE WAS ONE MAN WHO HAD NOTHING
left to lose. He was Martin Schechter of the Brooklyn Schechters, the chicken butchers whom the Justice Department was prosecuting for violating the NRA. On November 1, the day they lost the first time in court, Martin and his brothers decided that they, the chicken, would fight back against the Blue Eagle. Within a year, their story would move from obscurity to the center of the debate about the New Deal.

More unlikely heroes than the Schechter brothers of East Fifty-second Street and Rockaway would have been hard to find. Unlike Willkie, they had neither a legal education nor corporate money behind them. Unlike Insull, they were unknown and unable to purchase city officials. Unlike the wealthy East Siders of their city, they had no social status to fall back on. Unlike their opponents in the Justice Department, the Schechters were inconsistent, almost comically ambivalent, about their case. These were not board members, not stock market players, but rather slaughterhouse men
who served a market as humble as they were. Their English was laughable.

The name Schechter actually means “ritual butcher” in Yiddish. It derives from the Hebrew word for the same thing,
shochet.
Centuries before Martin and his brothers opened their business, both terms were used to describe those qualified to perform ritual slaughter of animals as required under Jewish dietary law. The brothers’ parents, David and Molly, had brought them over from Europe. The 1930 census, by Herbert Hoover’s old Commerce Department, says they were from Poland. Sam, Alex, and Aaron, who was also known as Abe, are on the list. The children were born in Hungary, while the family was in transit to the United States. There was also another brother, Martin, though he was not listed with the family in the census. David, the father, gave his profession as “rabbi” to the census worker, who in turn described his workplace as a “church”—this was the period when Americanization meant Christianization. In those years the term “rabbi” had a looser meaning than it does today; the fact that David was a rabbi could have meant that he was ordained, and it could have meant that he was merely a pious scholar. Still, the label meant that David Schechter ran a religious household.

For several years the brothers operated two firms: ALA Schechter Poultry Corp. and the Schechter Live Poultry Market. Their product spanned the range of poultry: leghorn fowl, colored fowl, heavy “fancy Indianas,” and broilers that could cost as much as 27 cents a pound. Chickens were shipped to New York markets from across the country. There the Schechters bought them, then slaughtered and sold them, mostly to retailers. In short, the Schechters were middlemen who took their cut. This was just the sort of economic activity of which Tugwell disapproved and against which the Agricultural Adjustment Act tax had been directed.

The men operated a kosher business: the value in their product was that it conformed to Jewish dietary law. They employed rabbis and Jewish ritual slaughterers,
shochtim.
As was appropriate, these workers observed the Sabbath, halting work on Friday afternoon and returning only after sundown on Saturday.
Kashruth,
the principle of
keeping kosher, was about religion, but it had an earthly purpose as well. It had long served as a primitive but effective health code—one of the first health codes. Sorting out dangerously unhealthy animals of any sort was a core principle of
kashruth
; the Jewish proscription against eating pork probably came out of caution about trichinosis, a disease that often affected pigs in Europe and here.

The main fears were simple infection and tuberculosis. Everyone knew someone who had died of TB—from the children on the streets of Brownsville to Benjamin Strong, the New York Federal Reserve head whom the disease felled in the late 1920s. The word
glatt
in the phrase “glatt kosher” meant “smooth,” referring to the desirable smoothness of the lung of the nontubercular animal. Tuberculosis was mainly passed through meat and milk, but businesses like the Schechters’ were also cautious about poultry, which could pass along infection. Part of the value of their product was the health guarantee of the
shochtim.
Unhealthy birds the
shochtim
ceremoniously discarded. Customers, whether they were retailers or families, also had the right to choose their birds, and this in turn ensured that everyone involved had a chance to determine whether the product was as healthy as possible.
Kashruth
was not a modern health code, but it was a health code, a ghetto version of the Good Housekeeping Seal so angrily defended at the White House lunch by Tugwell’s table neighbor.

Much in the Schechters’ culture would have made it easier for them to sympathize with the New Deal than with its opponents. The Schechters were first-generation immigrants: in America, but not yet entirely of America. They were the kind of newcomers who had invested their money in the Bank of United States, the one that had failed. Their vocabulary was profane. Their intonation and syntax were the sort we today associate with a stand-up comic from the Catskills. It was the sort of speech high school teachers banned from their classrooms and judges banned in courtrooms.

To people like the Schechters, the New Deal sounded good, for the old deal was problematic: their industry had declined steadily since the crash of 1929; by 1933, nearly a thousand of the 2,000 or
so jobs in their field in the New York area had evaporated. There were people in Brooklyn who would have gone straight over to the Soviet model, given the choice. One of the areas served by the Schechters, Brownsville, had elected Socialists to the State Assembly in the past. A Hebrew Butcher Workers Union Local 234 had existed in Brownsville since 1909; there was even, at the time of the NRA creation, or soon after, a group that proudly called itself the New Deal Kosher Butchers Association, Inc.

But this confidence in progressive thought antedated any New York experience. European immigrants as a collective had experienced life under a random ruler—a czar, a sadistic regional governor, a Hapsburg emperor. This left people like the Schechters with a natural sympathy for the underdog, and the New Deal was a project undertaken in the name of the underdog. One of the first New York projects to win PWA funding was the Triborough Bridge, whose construction the Schechters or their fellow tradesman witnessed as they carted their fowl about New York.

The NRA code that applied to the Schechters was the Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and About the City of New York, a lengthy and forbidding document. Section 2 of article 7 declared it was prohibited “knowingly to purchase or sell for human consumption culls or other produce that is unfit for that purpose.” Businesses could not sell unfit animals. Nor could they exchange in “destructive price cutting.” The code prohibited “straight killing,” defined it as “killing on the basis of official grade.” The rule meant that customers might select a coop or a half coop of chickens for purchase, but they did not “have the right to make any selection of particular birds.” This went directly against the old marketplace rule of customer choice.

Yet all these rules, the letter of transmittal assured, were “not designed to promote monopolies or eliminate or oppress small enterprises.” The argument was that they would help small business by eliminating competition. FDR had personally signed this code into law by executive order just a few months before the first inspectors appeared at the Schechters’ door. As for the Schechters, they had not
signed on to it personally, but were bound to comply as members of the trade.

Even finding themselves under inspection over the summer of 1934, the Schechters had at first been inclined to go along. They knew of Walter Lyman Rice, the special federal prosecutor, and probably feared him. The young federal prosecutor had earlier pulled them in as witnesses—not necessarily willing ones—in his poultry corruption case of the late 1920s. Earlier in 1934 he had been in the news looking into poultry violations of the Sherman Anti-Trust Act. They had escaped that first case mostly unscathed, and sought to get through this action by keeping their heads low as well. They had tried to ingratiate themselves with investigators over the summer. Aaron Schechter reported later that he and an inspector, Philip Alampi, had gotten along “swell” except when Alampi was “insulting” the customers.

The brothers had also followed the rules involving “straight killing” as best they could. Aaron later told stories of customers who had asked to select their birds, and his own rule-abiding response: “I am sorry, but we are under the code, and that is straight killing.” This, Aaron would point out, had caused him to lose customers. Brother Alexander offered to help an investigator interpret the company books, as he would later report. “Well, I helped him. In case he needed me or the bookkeeper, I always helped. If he does not know what is what, and I knew something about it, I would help him and show him and the other gentlemen would, too.”

Joseph Schechter would later recall an inspector who had appeared “by the name of Bob.” The inspector had been a “very nice boy…. He don’t know from a chicken. And I started in to teach him what a chicken is, and my man and myself teach him what a chicken is, what a rooster is, and what a spring is.”

But what the Schechters had kept coming back to in that first trial was that the inspectors from the government had been too hard to deal with. Aaron had recalled that Alampi had started arguing with customers and had also insulted one of them. “He told the customer that he is full of shit, and ‘I am the Code Authority, and I got
a right to do anything I want, and if you don’t like it, get out.’” As Aaron had noted, this had seemed wrong: “Well, that hurted me a little bit, to hear that, so I called him aside and I said, ‘Mr. Alampi; please try to restrain yourself from using language like that, because I will lose my trade, and the result will be that you will chase me out of business.’” Later, at another point, Aaron sent Alampi away. Alampi had returned with police. “Well, why don’t you let him in? He is the Code Authority,” Aaron remembered the police saying. “I said, ‘I will not. I am not going to let anybody in here to ruin my business.’”

This little exchange, between a local man with a local policeman over an intruder from some distant office, had been a sort of parable of the offense to traditional federalism that the NRA and the codes represented. A local policeman was the locals’ own guy. Washington’s representative, or even an industry representative, was a trade enemy or an intrusive foreigner. In other words, the code inspectors had now indeed been doing something that did oppress small business, to repeat the language of the poultry code. They were busting in on an intimate private relationship: that of the small businessman with his customer. When the documents arrived, the Schechters’ sense of resentment had only grown. The brothers had known that code authorities were after them, but learning of the sixty-count indictment, they realized the elaborate nature of the setup. They had been charged with selling unfit chickens to two men, Sam Tanowitz and Harry Strauber. This time, Walter Rice was not using them; he was targeting them. What’s more, “the indictment was lengthy and vague, making it impossible to understand the nature and cause of the accusation against them,” their attorney complained. The Schechters had trouble keeping up with their business while on trial; they realized they would have to spend the autumn downtown at the courthouse; they might go to jail. Their larger competitors could only profit from their misfortune.

The jury trial was presided over by the Honorable Marcus B. Campbell and took place in the District Court for the Eastern District of New York—just on the Brooklyn side of the Brooklyn Bridge. The scene in the courtroom was a culture clash. On the one side
were the Schechters, clearly working people and clearly foreign born. Their lawyer was Joseph Heller, a fellow Jew who had attended Brooklyn Law School. On the other side were the gentlemen—gentlemen of the New Deal, and gentlemen of the New York legal establishment. The prosecutor was Rice. Judge Campbell was a Mason, a member of the fancy Brooklyn Club on Remsen Street, and a member of the Union League Club. He had been appointed to the federal bench by President Harding, and had been an active Republican in the Sheepshead Bay section of Brooklyn before that. He was of Brooklyn, like the Schechters and Heller, but his Brooklyn might have been the Brooklyn on another planet, it was so different.

The Schechters were especially frustrated that the government did not understand the consequences of its own “sick chicken” allegation. To sell a sick chicken broke the NRA code, and that was all the government lawyers understood. But to suggest, as they had, that Schechter chickens were unfit was also to suggest something that the Schechters viewed as far worse: that they were not good Jews. It was to suggest that their kosher slaughterhouse was not really kosher, and so unworthy of customers. In other words, the poultry code officers had done something worse than anger the Schechters. They had offended their dignity. These were things worth fighting over. The idea that a government regulation was higher than a religious precept was not something the Schechters were entirely ready to accept. Felix Frankfurter’s quasi-religious feeling about Harvard Law School neither the Schechters nor their
shochtim
would have understood.

Because of their trade, the Schechters were also able to see something clearly, something that FDR had not seen. It was that the NRA code did not make sense. The clash came in several areas. The first was prices. The code forbade setting prices too low, in part to combat a general “low price problem”—deflation. But one could not drive all prices up generally by ordering a specific business to charge more. Something larger about the currency had to change.