At the beginning of 1935, AAA counsel Jerome Frank, leader of the department’s reformers, acting while Davis was away in Iowa, put out a regulation prohibiting eviction of unneeded sharecroppers and tenants. He persuaded Davis’s second in command, Victor Christgau, to send a form telegram announcing the change to AAA local offices under the signature of Secretary Henry Wallace. Frank and his associates saw themselves as attempting to impose simple justice on an oppressive neofeudal system. The landowners, and likely most ordinary farmers, perceived a challenge to long-recognized rights of employers and property owners. The flabbergasted Wallace resented being blindsided. Davis returned to Washington livid and threatened to resign unless allowed to purge the radicals in his agency. Wallace, practical enough to understand the firestorm of criticism gathering among southern Democrats on Capitol Hill, acquiesced. In short order, Davis demoted Christgau, dismissed Frank, and sent three others packing with him.
Asked about the “purge” in a press conference, Roosevelt professed not to know about it and called it “purely an internal matter of law.” Rexford Tugwell, who had been unaware of Frank’s order but surely favored it, left a few months later to head the newly established Resettlement Administration (RA). Designed to foster a better life for the agrarian underclass, the RA received only scorn from most conservatives, for whom Tugwell remained a lightning rod. Nor was it a priority for a liberalism increasingly centered in labor unions and the urban intelligentsia. Tugwell would resign in 1937.15
With the agricultural program in disarray and the industrial recovery program staggering toward either internal collapse or a court-imposed shutdown, Roosevelt’s reform agenda inched its way through Congress with little prospect of producing an economic recovery. Only the jobs bill, the Emergency Relief Act of 1935, proceeded on a fast track. Its political benefits were obvious to every Democrat on Capitol Hill; almost all would vote for it, then scramble to gain control over the jobs it would create. The legislation appropriated $4.88 billion, a sum that exceeded the entire federal budget during the last year of the Hoover administration, to be spent over the next two years. The president signed it into law on April 8 and became, in the words of columnist Raymond Clapper, the Santa Claus of American politics.16
At first glance, the new program seemed to vindicate a fairly widespread view that the president was greatly influenced by the British economist John Maynard Keynes, who had long advocated vigorous public spending as the best remedy for bringing his own country out of its economic malaise. Keynes, perhaps the most eminent policy intellectual in the English-speaking world, had met with Roosevelt on May 28, 1934. The conversation was pleasant, the communication less than complete. Roosevelt told Felix Frankfurter that it had been a “grand talk” but complained to Frances Perkins that Keynes presented him with “a whole rigamarole of figures.” Keynes privately remarked that he had found the president economically illiterate. (Keynes regularly observed the hands of men he met. He later described Roosevelt’s as “firm and fairly strong, but not clever or with finesse.”)17
A week after their meeting, Keynes received an honorary degree at Columbia University. In his acceptance speech, he praised the New Deal effusively. Shortly after that, he published an “agenda for the president.” Its key recommendation was extraordinary public spending at a rate of $400 million a month. He surely had said as much to Roosevelt in plain English. The Emergency Relief Appropriation a year later authorized spending at about half that pace but did not require the disbursement of funds in equal monthly installments. Perhaps Keynes had achieved more than he realized.18
The rest of the president’s “must list”—the labor bill, social security, holding company restriction, and banking regulation—lingered in Congress. All in one way or another affected powerful interests and posed genuinely complex issues of public policy. Moreover, they presented no obvious political dividend for most representatives and senators. On April 28, Roosevelt attempted to give them some momentum with a fireside chat, delivered from the White House.
Only the seventh such address of his administration, the talk was technically pitch-perfect. The voice was masterful, the delivery flawless. Numerous ad-libs smoothly made a somewhat formal prepared text more conversational. Proclaiming his pursuit of “the general good” over “individual self-interest and group selfishness,” Roosevelt declared that the administration had initiated an “already unmistakable march toward recovery.” The new work-relief program would provide employment for many. Social security would allow the elderly to withdraw from the labor force; its provisions for unemployment insurance would sustain workers’ purchasing power in tough times. The elimination of unnecessary public utility holding companies would do away with inefficient, capital-draining structures in the electric utility industry and bring the operating companies closer to their customers. A major transportation bill would create a coherent national policy for the regulation of buses, trucks, river barges, and railways. A strengthened Federal Reserve System would stabilize banking and credit in the public interest rather than in the narrow interests of large financial institutions. In sum, these measures would enrich the nation’s life with “a sound and rational ordering of its various elements and wise provisions for the protection of the weak against the strong.”19
The speech was notable for failing to endorse the labor relations bill, sponsored by Senator Robert F. Wagner, with whom Roosevelt continued to have rather distant relations. Hoping for congressional renewal of the National Recovery Administration, the president was less interested in empowering labor as an independent force than in establishing the federal government as the arbiter, perhaps the ultimate organizer, of the economy. He was confident that he and his agents understood the public welfare better than either business or labor. Legislators on Capitol Hill found these forces less easy to discount.
The fireside chat heartened Roosevelt’s supporters and confirmed his stature as a master communicator, but it failed to rally a Congress that dragged its feet as it deliberated.
As the president tried to mobilize wary senators and representatives, he found himself presented with a major challenge from the Supreme Court. Whether in dictatorships or in democracies, judicial systems are, to one degree or another, extensions of politics. Roosevelt, just the second Democratic president since Grover Cleveland left office in 1897, faced a federal judiciary well stocked with Republicans, only a few of whom could be called political progressives. Moreover, the New Deal’s unprecedented measures raised genuine, serious questions of constitutionality. By the spring of 1935, decisions issued by lower federal courts against many New Deal programs were making their way to final judgment by the Supreme Court.
The Court that Roosevelt inherited had no ideological cohesion but leaned toward the status quo. Its personal dynamics were tenuous. Until the completion of a freestanding Supreme Court building in the fall of 1935, the justices and their clerks worked from their own offices, scattered all over Washington, meeting only for regular conferences, formal arguments, and issuance of decisions. These arrangements encouraged neither congeniality nor mutual respect. Willis Van Devanter, James McReynolds, George Sutherland, and Pierce Butler, bedrock conservatives all, became known as “the Four Horsemen.” Louis Brandeis, Harlan Fiske Stone, and Benjamin Cardozo took a fluid view of the law and harbored varying degrees of sympathy for the New Deal; liberals would come to think of them as “the Three Musketeers” fighting for the just cause. Chief Justice Charles Evans Hughes and Owen Roberts possessed ability and moderation but lacked direction.
In January 1935, the Court, by an 8–1 vote, had voided the NRA petroleum code as the product of an unconstitutional delegation of legislative power to the executive branch. The ruling, it seemed, could apply to all of the several hundred NRA codes. But able to enact individual codes directly, Congress had promptly done just that for petroleum and likely would do so in many other such cases.
Two weeks later, the Court ruled 5
to 4 against challenges to the administration’s revaluation of the gold content of the dollar. The plaintiffs, holders of private contracts that provided for payment at the old ratio of gold to the dollar and holders of government bonds issued at that ratio, had sued for compensation at $1.69 in revalued dollars. The Constitution clearly allowed the government to establish and regulate a national currency; it also prohibited impairing the obligation of contracts. Emotions ran high on both sides. The Court’s majority ruled that the government could change the gold content of the dollar and cited a failure to demonstrate loss of purchasing power. Chief Justice Hughes’s majority opinion walked a fine line between conservative and liberal factions. The most vocal dissenter, Justice McReynolds, compared Roosevelt’s monetary policies to the excesses of the Roman emperor Nero.20
On May 6, 1935, the Supreme Court declared the Railroad Retirement Act of 1934 unconstitutional in a 5–4 decision. Roberts, joining the Four Horsemen, wrote the majority opinion. Hughes, siding with the Three Musketeers, crafted the dissent. The emotional emphasis with which both Roberts and Hughes read their opinions revealed a fundamental split over basic issues of constitutional interpretation. The conservative majority sweepingly rejected the contention that the congressional power to regulate interstate commerce extended to the provision of a pension system for workers’ welfare. Moreover, it asserted that the law violated constitutional guarantees of due process by taking mandatory contributions from one group (owners and active workers) for the benefit of another (retired workers). Hughes castigated the majority for its narrow definition of the interstate commerce powers and disregard of legal and political precedent. The case indicated strong differences of opinion on the Court itself and likely foreshadowed difficulties ahead for the New Deal.21
Just three days earlier, the Court had heard arguments in a long-awaited test case on the NRA, Schechter v. United States. The Schechter brothers owned a live poultry and butcher shop operation in New York City and seem to have done no selling outside Brooklyn. Their clientele consisted exclusively of Orthodox Jews who kept kosher. The enterprise, which appears to have been the largest of its kind in the borough, secured many of its chickens from neighboring states. All the same, it was a relatively small business with a strictly local clientele.22
The Schechters were appealing a conviction for violating several provisions of the NRA live-poultry code, including submission of false records and the sale of diseased chickens. Despite tenuous evidence for the last charge, the government and much of the press labeled the proceedings the “sick chicken case.” The Schechters admitted to clearly violating only one code provision: the prohibition against customers picking out their chickens. The code mandated “straight killing”—the sale of the nearest fowls at hand. Kosher rules required customer choice.
From the government’s perspective the case seemed promising. Poultry slaughtering was at best a shabby business, and the Schechters were recent immigrants who spoke broken English and displayed little couth. In an era of white, Anglo-Saxon ascendancy, they seemed easy marks. Nonetheless, they also appeared to vindicate the argument that the NRA existed to protect big operators and persecute little guys.
Solicitor General Stanley Reed and NRA administrator Donald Richberg, given a temporary appointment as an assistant attorney general, argued for the government. Conservatives provided the Schechters with the services of an esteemed white-shoe law firm, but their personal lawyer, one Joseph Heller, stole the show with his discussion, delivered in a tone appropriate to a Shakespearean tragedy, of the “straight killing” rule: “A customer came into the store and asked for eleven chickens. Ten chickens were taken from the coop. The rabbi’s assistant stood there and killed them as they were taken out. Then we came to the eleventh. The customer said he didn’t want that one, but another one. My client said, ‘The code says you’ve got to take that one. . . . They’ve got inspectors watching me. . . . Well, the customer said ‘All right, if I’ve got to take that chicken then I don’t want any of them.’ He walked out on us.” The justices suppressed broad smiles. The room, according to a Washington Post reporter, “rang with laughter.” Justice Sutherland added to the fun by asking, “What if the chickens are all at one end of the coop?” No good could come of this for the administration.
On May 27, just three and a half weeks later, the Court convened to announce three rulings. The first was on Roosevelt’s summary removal of William Humphrey, a die-hard right-wing Republican, from the Federal Trade Commission. Humphrey had died, but his executors pressed the case to secure his back pay and score a legal point. Just nine years earlier the Court had held that presidents could summarily dismiss postmasters, but it now ruled unanimously that the same authority did not apply to members of quasi-independent regulatory bodies. Justice Sutherland articulated the opinion in strong language that all but accused the president of a lawless attitude. A second decision also unanimously held unconstitutional the Frazer-Lemke Mortgage Relief Act of 1934, which allowed farmers to reclaim already foreclosed property. Brandeis wrote the Court’s opinion. Both decisions were blows to the administration, but not very serious ones.
Justice Hughes then announced that he would read the unanimous decision in Schechter. He was blunt and categorical. The National Recovery Act was unconstitutional on two counts: Congress could not delegate to the executive branch the power to write codes that had the force of law; moreover, while Congress could get around that objection by itself enacting codes, it could not use the interstate commerce power to control businesses that were fundamentally local in their scope, such as the Schechter operation. Cardozo joined in with a concurring opinion that declared the NRA code mechanism a case of “delegation running riot” and asserted that Congress could give neither the president nor private trade groups “a roving commission” to legislate. These opinions killed the NRA beyond resuscitation.23
With three decisions in which liberals, conservatives, and moderates joined, the Court sent Roosevelt a clear message that his agenda exceeded the bounds of a wide constitutional consensus. As if to underscore the point, Brandeis sent a page to summon Ben Cohen and Tom Corcoran after the session had adjourned. The two men found the great liberal hero, arms up as an attendant removed his robe, looking like an avenging angel in the service of a style of liberalism that abhorred concentrated power and stressed the virtues of localism. The president, he told them, had been living in a fool’s paradise. They had to get Felix Frankfurter to tell Roosevelt that the Court would not let the government centralize everything, he said. The young New Dealers should go back to the states and do their work there. After they left, the justice turned to his former law clerk, Paul Freund, and said with evident satisfaction, “This was the Black Monday of the New Deal.”24
Roosevelt received the news with dismay, shock, and anger. On May 31, 1935, at his next press conference, he read from telegrams and letters, all from small enterprisers who asserted that the NRA had saved their livelihoods and that they now faced ruin: “Unless the use of loss leaders by chain store vultures is prohibited the small independent merchants will be the biggest sufferers. . . . All good citizens are looking to you to exercise whatever power is at your command to prevent business chaos. . . . Chiselers already at our throats and have begun choking us. Need immediate action.”25
Nobody should resent a Supreme Court decision, he told the newsmen, but it was fair enough to deplore one and to point out its negative consequences. The Court had held that extraordinary emergency conditions could not enlarge executive power. What did it think had happened during the emergency of World War I, when the executive branch had taken control of the nation’s life? The Court held that while the Schechters had imported their chickens from out of state, their customers were all local. Thus the “stream of interstate commerce” had ended. This was a concept from “the horse and buggy age” that made no sense. If the Court applied its strict interpretation rigorously, most economic activity would be immune fr
om federal regulation. The nation would “go back to a government of 48 states.” Enterprisers would find themselves in a competitive race to the bottom over wages, working conditions, and prices.26
Whatever the Court might have expected, Franklin Roosevelt was not about to retreat passively. He was more determined than ever to get his legislative agenda enacted—even if Congress had to fight it out through a Washington summer that promised to be steamier and more intense than ever.
Chapter 17
Rendezvous with Destiny
The Second New Deal and the Triumph of 1936
On June 7, 1935, a week after his angry monologue to the press on the Schechter decision, Roosevelt met again with reporters. What, asked one, was the social objective of his administration? His response was expansive:
To do just what any honest government of any country would do; to try to increase the security and the happiness of a larger number of people in all occupations of life and in all parts of the country; to give them more of the good things of life; to give them a greater distribution, not only of wealth in the narrow terms but of wealth in the wider terms; to give them places to go in the summertime—recreation; to give them assurance that they are not going to starve in their old age; to give honest business a chance to go ahead and make a reasonable profit.1
“Places to go in the summertime”: while perhaps too revealing of his privileged background, the phrase expressed concern for ordinary people and a determination to make their lives better. A sense that the New Deal was not exhausted, that indeed it had hardly begun, lurked behind the declaration.
Man of Destiny: FDR and the Making of the American Century Page 32