by Amity Shlaes
But more important was the message they were sending to the White House. Later that day, Justice Brandeis collared the two lawyers who had advised the New Dealers so closely, Tommy Corcoran and Ben Cohen, in the justices’ robing room. Their teacher Frankfurter’s suspicion had been correct. The justice told Corcoran: “This is the end of this business of centralization, and I want you to go back and tell the president that we’re not going to let this government centralize everything. It’s come to an end.” Brandeis also added a second comment: “As for your young men, you call them together and tell them to get out of Washington—tell them to go home, back to the states. That is where they must do their work.” On the surface, it seemed a near irrelevant aside from an angry older man to a young one. In fact, though, Brandeis’s second comment fit in clearly with his first. There was something that he just couldn’t stand about the New Deal itself, with its new laws and offices. The country might heal itself better if it stayed at home, cultivating its own garden. Revolutions were dangerous, and the best way to prevent them was to deprive them of personnel. Later, Senator Borah, who knew Justice Van Devanter personally, delivered a defense of the Court from a different angle on the radio: “We live under a written Constitution…fortunate or unfortunate, it is a fact.”
The American papers seemed to draw their collective breath. They did not want to write too much, at least not until Roosevelt spoke. The UK press, with less at stake, blared its instant conclusion at the news of Schechter: “America Stunned! Roosevelt’s Work Killed in 20 Minutes,” read the headline on the London Express.
Photographic Insert
UNEASY IN OFFICE. Calvin Coolidge, the minimalist president, on holiday in July, 1927 in Rapid City, North Dakota. In the first quarter of the twentieth century, Samuel Insull, here speaking at a World War I rally, was the Windy City’s foremost innovator, proving that the private sector could light up great metropolises. Chicagoans rewarded him with adulation. [AP IMAGES]
“THREE PRESIDENTS SERVED UNDER HIM.” In addition to building an empire of venture capital, Andrew Mellon (above, center) held the office of treasury secretary for a decade, serving Harding, Coolidge (left), and Hoover (right). Coolidge preferred Mellon to Hoover, whom he would call “Wonder Boy.” [UNDERWOOD & UNDERWOOD, LIBRARY OF CONGRESS]
DREAMERS OF THE 1920s. Clockwise from top left: Ray Moley, Barnard College’s criminal justice expert; Wendell Willkie, World War I service strengthened his love of freedom and democracy; Marriner Eccles, a young Utah banker; and Irita Van Doren, a New York editor. [BETTMAN/CORBIS; THE WILLKIE FAMILY, LILLY LIBRARY; AP IMAGES; George Maillard Kesslere, Library of Congress]
A HISTORIC JUNKET. In the 1920s, a small group of academics and union men traveled to Russia to visit Stalin and Trotsky. The trip would change the men’s lives and help set the course of the New Deal. The travelers included Rex Tugwell of Columbia (upper left), a New Republic author and Moley’s colleague [THE GRANGER COLLECTION, NEW YORK]; Paul Douglas of the University of Chicago (upper right) [TIME & LIFE PICTURES/GETTY IMAGES]. Not pictured are fellow junketeers James Maurer, Stuart Chase, and John Brophy. Roosevelt, pictured here in his days as governor at the swearing in of Samuel Rosenman as a New York State judge, would shortly pull both dreamers and junketeers into his brain trust [AP IMAGES].
“WHAT’S THE MEANING OF THIS QUEUE?” asked the poetess Florence Converse. Children waiting for milk ration in Grand Rapids, Michigan. Hunger marchers converge on Washington in the winter of 1932 (below). The nation’s despair put the spotlight on reformers, including the left progressives. [AP IMAGES]
THE MONEY DROUGHT. In the 1930s Americans learned the meaning of deflation when money literally ran out. Scrip money produced in New Jersey to substitute for the missing cash (above, right) [BETTMANN/CORBIS]; Irving Fisher, the Yale professor who advised succeeding presidents to inflate (above, left) [THE GRANGER COLLECTION, NEW YORK]; Hoover and Roosevelt(below) at Roosevelt’s inauguration in 1933, a point when neither man fully understood the deflation problem [BETTMANN/CORBIS].
“AS WE WOULD TREAT THE EMERGENCY OF WAR…” The New Deal emphasized the value of experimentation. Its centerpiece was the National Recovery Administration. Above: Frances Perkins, now labor secretary, sewing the first dress produced under NRA codes [AP IMAGES]. Below: Prime Minister Ramsay MacDonald of Britain, President Roosevelt, Ray Moley (second row, second from right), and others on April 24, 1933, setting the course of America’s monetary future [BETTMANN/CORBIS].
“TENNESSEE’S GONE WILD… ” The Tennessee Valley Authority gave unprecedented political and economic power to public officials such as David Lilienthal (above, right) [AP IMAGES]. New laws pitted public utilities and their private counterparts against one another. Wendell Willkie (above, left) of Commonwealth and Southern, a holding company, soon realized his firm must fight to survive [AP [OSCAR WHITE/CORBIS]. Public projects such as the TVA enjoyed enormous support. Below: Roosevelt, his secretary of the interior, Harold Ickes, and Rexford Tugwell (seated right) celebrating the establishment of the Civilian Conservation Corps at Camp Fechner in Virginia in the summer of 1933 [AP IMAGES].
In 1934, with the economy still floundering, the Roosevelt administration sought to distract the nation through flamboyant prosecutions. The prosecutors targeted emblems of 1920s success, such as Insull of Chicago, or Mellon, the former treasury secretary. Above: Documents marshaled by the Justice Department and others in the case against Insull [BETTMANN/CORBIS]. Below: Insull behind bars in Turkey in the spring of 1934 [AP IMAGES]. Below, right: Mellon consulting with his chief counsel, Frank Hogan , in 1935 [AP IMAGES].
“PROUD AGAIN TO BE JOSEPH SCHECHTER’S WIFE.” Below: the Schechter brothers and their lawyer, Joseph Heller, celebrate (Heller on brothers’ shoulders) [THE GRANGER COLLECTION, NEW YORK]. Above: Felix Frankfurter [AP IMAGES]. Shortly after FDR’s Schechter defeat, Frankfurter moved into the White House for the summer to help FDR strategize a legislative comeback. Roosevelt later named him Supreme Court justice.
“THANKS.” In 1936, Roosevelt wagered that by spending enough cash and creating enough new laws, he could at least give the impression of recovery. That year Washington supplanted the states as Americans’ most important government when federal spending outpaced state and local spending. Voters rewarded FDR for his generosity and goodwill with a landslide, just as Clarence Batchelor had predicted they would with this cartoon. The opposition, from the Liberty League to Father Coughlin, proved shrill and marginal. [THE GRANGER COLLECTION, NEW YORK]
INCONSISTENT. Justice Department attorneys and Treasury Secretary Henry Morgenthau refused to accept good intentions as an excuse from a target when it came to tax return accuracy. In this letter, which accompanied the president’s 1937 return, Roosevelt suggests that good intentions suffice in his own case. [FDR LIBRARY]
“WE ARE FASHIONING AN INSTRUMENT OF UNIMAGINED POWER.” Roosevelt’s administration grew bold and mounted a second revolution in the second term. Above: Tom Corcoran, attorney for the Reconstruction Finance Corporation, appearing in 1935 before a congressional committee to defend tactics promoting the radical “death sentence” act. Later he would be yet bolder. Below: John Brophy (left) of the old Russia trip, now point man on “K” Street for the CIO, with Homer Martin of the young United Auto Workers and John L. Lewis. The Wagner Act opened a new world for labor organizers. [AP IMAGES]
As head of the Resettlement Administration, Rex Tugwell (above, with child) became godfather to the rural poor [FARM SECURITY ADMINISTRATION—OFFICE OF WAR INFORMATION PHOTOGRAPH COLLECTION]. The poverty was real, but so was the RA’s effort to propagandize for itself.Below: the New Dealers’ most famous photograph, “Migrant Mother,” and Dorothea Lange, the photographer who took it [THE GRANGER COLLLECTION, NEW YORK]. Tugwell recruited his old Columbia colleague Roy Stryker to document the need for government work; Stryker, in turn, employed Lange.
BLACK TUESDAY, AGAIN. So severe was the downturn in the late 1930s that two in ten men were again une
mployed. The new demand by organized labor for higher pay was one of the causes of this depression within the Depression. Another was the administration’s continued insistence on the perpetual right to experiment. Left: New Dealer Stuart Chase (seated on right) debates a representative of the Lake Carriers Association [AP IMAGES]. The latter criticized the “trend of centralization of power.” Right: Union man John Brophy leads picketers [AP IMAGES]. Below: Willkie and Irita Van Doren [LIBRARY OF CONGRESS]. She helped him to lay out a classically liberal vision—and to show where FDR was illiberal.
“THIS IS A LOT OF MONEY FOR A COUPLE OF INDIANA FARMERS TO BE KICKING AROUND,” Willkie joked as he finally gave up and signed over Tennessee Power to David Lilienthal and the TVA (below) [BETTMANN/CORBIS]. Meanwhile, Americans turned away from Roosevelt and toward other leaders to uplift them: one was Father Divine, a charismatic preacher who tilted with Roosevelt over lynching law (above) [AP IMAGES]. The puttering alcoholic Bill Wilson (right) created an intriguing new kind of therapy—the self-help group [AP IMAGES].
“WHOSE FORGOTTEN MAN?” “Is it enough for the free and able-bodied man to be given a few scraps of cash… is that what the forgotten man wanted us to remember?” asked Wendell Willkie in his acceptance speech after the Republican nomination in 1940. Americans crowded the streets of Elwood, Indiana. [THE GRANGER COLLECTION, NEW YORK]
The tabloid was correct. The case did indeed mean death for the NRA. By mid-June, thousands of employees in Washington received their last pay. The codes began to fade, even though there were some vehement protestors, mostly among larger firms. David Lilienthal’s appliance sales arm, the EHFA, could no longer operate under Lilienthal at the TVA; the executive order was null. For Lilienthal, Schechter was a signal of a tough road ahead. The TVA was already beset by dozens of lawsuits and injunctions; more were to come, and Lilienthal was not sure how he could handle them all. Willkie and his fellow power executives hoped that now they might manage to kill the dread utilities legislation, or at least alter it so that it was no longer a death sentence.
Roosevelt, who knew Brandeis less well than Frankfurter did, was surprised that the justice had gone along: “What about old Isaiah?” he asked, using his nickname for Brandeis. The president was furious. In a press conference a few days later at Hyde Park, he and Eleanor sat together before reporters. Eleanor was knitting a blue sock. Marion Frankfurter, Felix’s wife, was also in the room. Roosevelt castigated the press and the court. The NRA and the Humphrey case, as well as Frazier-Lemke’s repudiation, were all getting in the way of a change that must happen in the United States. What were the justices thinking, interpreting the Commerce Clause this way? They were, he told the reporters, going back to “the horse and buggy age.”
Still, the hour was that of the victors, who now knew that while Roosevelt’s voice mattered, theirs did too. At 15 Broad Street in New York, Frederick Wood celebrated—his wife had given him a miniature chicken coop housing two cotton hens and six chicks, which stood on his desk. Wood declared that with this case the justices had finally been “going at the fundamentals” of New Deal law. Heller celebrated too. He told the papers that Schechter showed that “the humblest individual receives the utmost protection under our form of government.” “Nine to nothing,” the Schechter brothers were heard to be repeating to the media at Heller’s offices at 51 Chambers Street. “We always claimed that the code authority attempted to make us the ‘goat,’” they announced in a statement to the press. Meanwhile, the papers reported that some 500 cases against people charged with breaking NRA codes were now to be dropped.
The Schechters were concerned about the cost of the suit. But gratification was also theirs. Mrs. Joseph Schechter of 257 Brighton Beach Avenue displayed to the press a poem, titled “Now That It’s Over.”
No More excuses
To hide our disgrace
With pride and satisfaction
I’m showing my face.
For a long long time
To be kept in suspense
Sarcastic remarks made
At our expense.
I’m through with that experience
I hope for all my life,
And proud again to be,
Joseph Schechter’s wife.
Her cheerful mood accorded with that of the country. The Dow now staged its longest rally since Hoover had first lifted the beneficent hand.
roosevelt’s wager
July 1935
Unemployment (July): 21.3 percent
Dow Jones Industrial Average: 119
SHORTLY AFTER SCHECHTER, around the time of the “horse and buggy” press conference, a little-noticed event took place at the White House. Felix Frankfurter moved in.
The arrival of Frankfurter signaled a shift in Roosevelt’s outlook. He was tired of utopias, he now decided. They had not necessarily helped the economy. The hope that experiments like the NRA would bring full recovery had not proven valid. Roosevelt had played around with economics, and economics hadn’t served him very well. He would therefore give up on the discipline and concentrate on an area he knew better, politics.
The president formulated a bet. If he followed his political instincts, furiously converting ephemeral bits of legislation into solid law for specific groups of voters, then he would win reelection. He would focus on farmers, big labor, pensioners, veterans, perhaps women and blacks. He would get through a law for pensioners, and one for organized labor, with the aid of Frances Perkins and Robert Wagner. Rex Tugwell would take care of the poor and homeless of the countryside—Tugwell was to have a staff of more than 6,000, $91 million, and options on ten million acres of land, all to try out suburban and rural resettlement. There was also $2.75 million for Dutch elm disease in New York, New Jersey, and Connecticut.
If the politics was right, the wager said, the economy would follow suit and he could take credit for the rally himself. Indeed, he would deserve the credit. This attitude was the sort that William James, the philosopher at Roosevelt’s own Harvard, had written about in his famous essay “The Will to Believe”—if you had faith in an outcome, you could help to make that outcome occur. Frankfurter made a good audience, and suddenly, with Frankfurter as his partner, he had a surer sense of the way to go. The next two years would yield the results of the first part of that bet. The outcome in the second question would emerge definitively only later in the 1930s.
For a man eighteen months away from an election, the plan made sense. Roosevelt had Congress behind him, and he had his agencies, even if he did not have the courts. He could use his authority to win the votes—or lose the authority. After all, he had challengers advocating more radical programs than his. Huey Long in the Senate had his evangelizer, Gerald L. K. Smith. Long’s “Share Our Wealth” program promised senior pensions, free higher education, and employment for all. Francis Townsend, a doctor, had built a national movement with his own pension blueprint, the Townsend Plan. And Father Coughlin, the radio voice, had turned against the president. On May 22, just before the Schechter opinion came down, Roosevelt received what must have seemed a nearly equal blow in the news that Coughlin pulled 23,000 into Madison Square Garden to attack FDR. Coughlin assailed the “Morgans, Baruchs and Warburgs,” little caring—perhaps it didn’t matter—for Warburg’s battle with Roosevelt. Coughlin argued that capitalism should now be “constitutionally voted out of existence.” Roosevelt thought a lot about Coughlin, for Coughlin, with ten million listeners, was the superstar of Roosevelt’s own medium, the airwaves: Fortune in 1934 had said that Coughlin was “just about the biggest thing that ever happened to radio.”
To preempt the demagogues, Roosevelt had to prepare his new legislation so that it pleased the same force that sealed the fate of the NRA: Brandeis. This was one place where Frankfurter came in. Frankfurter knew how to craft a law that could please Old Isaiah. Through the summer months, Frankfurter would see the president nearly daily, recording in a letter to Marion: “FD wants me really around—so that I’ve not dined out of
the White House once.” The new White House policy became that the president must not repeat his angry press conference about the Supreme Court, or even mention it. Rage must wait.
Tommy Corcoran and Ben Cohen were also helping. The president had David Lilienthal at the TVA, another Frankfurter “hot dog.” With the legal talent Roosevelt was now marshalling, the shift he sought became feasible.
To be sure, there were economic justifications for the new policy. Helping the worker with his pension made his family happier and more productive. Bringing down big enterprises and wealthy families liberated smaller companies and strivers to thrive—this was Brandeis’s thesis. Giving cash to new constituents meant that they would spend and strengthen the economy—that was what Marriner Eccles, now governor at the Federal Reserve Board, was still telling the president. Taxing big business might also balance the budget, just as Roosevelt had learned as a young man. The president relished squeezing cash for the poor out of the well-to-do, especially after Tommy Corcoran and Ben Cohen or Robert Jackson had worked him up, regaling him with tales of wrongdoing by the rich.