Traitor to His Class: The Privileged Life and Radical Presidency of Franklin Delano Roosevelt (88 page)

Heller’s fellow counsel, Frederick Wood, seized the moment of levity to reiterate the defense’s contention that the poultry code pushed the commerce clause too far. If the government’s argument was upheld, Wood asserted, the commerce clause would become “destructive of our dual system of government and subversive of our political, social, and economic institutions under the Constitution.”

The justices weren’t laughing—and neither was the Roosevelt administration—when the court delivered its judgment in the Schechter case. By a unanimous vote the court struck down the poultry code and the NRA-supporting arguments on which it rested. Charles Evans Hughes, writing for the court, acknowledged that government authority might expand during emergencies. “Extraordinary conditions may call for extraordinary remedies,” the chief justice said. But the Constitution imposed limits on government, even in emergencies. “Extraordinary conditions do not create or enlarge constitutional power.” Hughes rejected the government’s contention that the poultry codes were intrinsically concerned with interstate commerce. He drew a distinction between activities directly related to interstate commerce and those, like the Schechters’, only indirectly related. If the commerce clause was stretched as far as the government proposed, the chief justice declared, there would be few constraints on federal power. “For all practical purposes we should have a completely centralized government.”

Hughes’s coup de grace against the NRA was a blow at the president himself. The primary complaint of Roosevelt’s opponents during the Hundred Days had been that he was gathering too much power to himself: that the executive branch was usurping the authority of the legislature, albeit with the legislature’s own approval. This was the fundamental finding of Hughes and the eight associate justices in the Schechter case. The Constitution vested federal legislative authority in Congress, and in Congress alone, Hughes said. “Congress is not permitted to abdicate or to transfer to others the essential legislative functions.” Congress had from time to time legitimately authorized the executive branch, working through the Federal Trade Commission and other agencies, to determine fair trade practices. But the NRA codes went far beyond the FTC rules and, in any event, explicitly superseded those rules. “The code-making authority thus conferred,” Hughes concluded for the court, “is an unconstitutional delegation of legislative power.”

T
HE COURT’S VERDICT
against the NRA, and especially the unanimity of the decision, dealt a mortal blow to the New Deal, at least as originally configured. Roosevelt had made industrial planning the centerpiece of his economic policy; the Schechter result negated the premises on which the planning rested. Conceivably Congress could have overseen code writing similar to that of the NRA. But only conceivably, for in the real world of politics, no code with any teeth could have passed muster with the legislature, which would have been lobbied to paralysis by the interested parties. If there were to be codes at all, they would have to be the work of the executive branch. And the Supreme Court now said this was unconstitutional.

Had the decision been close—by a vote of 5 to 4 or even 6 to 3—Roosevelt might have hoped for a reversal before he left office. Several of the justices were nearing retirement, or so he could reasonably expect. He would replace them with men more attuned to his philosophy of government, and all would be well. But the decisiveness of the defeat—even Louis Brandeis voted against the government—made clear that the problem ran deeper than the personnel of the court.

The rejection of the NRA cast the entire framework of American industrial relations into chaos. The seven hundred codes were presumptively illegitimate; the twenty million workers whose pay and conditions the codes covered were thrown back on the mercies of a capitalist marketplace that had treated them badly since the start of the depression. At the time of the Schechter decision, the Justice Department was prosecuting some four hundred cases of code violations. The court’s action compelled Roosevelt to drop the charges and abandon the prosecutions.

The Schechter decision was handed down on Monday, May 27. That same day the Supreme Court, by equally unanimous votes, demolished two other pillars of the New Deal. The decision in
Louisville Bank v. Radford
overturned the law that furnished mortgage relief to debt-strapped farmers. The verdict in
Humphrey’s Executor v. United States
disallowed Roosevelt’s removal of a member of the Federal Trade Commission and thereby severely constrained his ability to bring government agencies into line with his policies.

Black Monday, as Roosevelt’s supporters remembered the day of the conservative trifecta, seemed to halt the New Deal in its tracks. The conservatives had contended from the start that the extraordinary delegation of power to the president was not merely unwise but unconstitutional. They had lacked the votes in Congress to prevent it, but now they found the votes where they mattered more, in the Supreme Court. What made the anti–New Deal decisions so frustrating for Roosevelt was that they followed by mere months the New Deal’s ratification by the public, in the elections of 1934.

R
OOSEVELT’S FAVORITE
president was Andrew Jackson—an odd preference in one regard but natural in another. Jackson’s hard-luck boyhood and orphaned youth could scarcely have differed more from Roosevelt’s privileged upbringing, and the battlefield victories that made Jackson famous lacked any counterparts on Roosevelt’s résumé. Yet Jackson brought democracy to the White House and governed as the first truly popular president, beloved of the ordinary people of America and devoted to their defense and welfare; and Roosevelt could conceive of no higher goal for himself than confirming democracy and serving ordinary Americans.

The Jacksonian model gained even greater appeal for Roosevelt after Black Monday. Jackson was famous for treating Supreme Court decisions as advisory at best. Jackson vetoed as unconstitutional a bill rechartering the Bank of the United States, despite a previous decision by John Marshall’s court specifically affirming the bank’s constitutionality. The fight over the bank became a centerpiece of Jackson’s second administration, prompting Old Hickory to vow to his vice president: “The Bank, Mr. Van Buren, is trying to kill me.
But I will kill it!
” When the high court rejected Jackson’s Indian policy in a controversial case involving the Cherokees and Georgia, Jackson reportedly declared, “John Marshall has delivered his opinion; now let him enforce it.”

In each case Jackson believed that Marshall, the last holdout of the discredited Federalist party, was denying the American people their democratic right to discover new solutions to the problems that vexed them. Roosevelt felt the same way about Hughes and the conservative court of the 1930s. Roosevelt noted that the American people had upheld Jackson against the court, and he hoped the American people would do the same for him.

But he had to tread carefully. In Jackson’s day the doctrine of judicial supremacy had yet to take hold. Credible opinions differed as to whether the Supreme Court spoke for the government as a whole or simply for the judicial branch. By the 1930s the question had been fairly well settled, in favor of the former. The decisions of the Supreme Court were construed as the law of the broader view. Roosevelt couldn’t defy the court as openly as Jackson had done and expect to get away with it. He would have to move obliquely.

In a meeting of the cabinet in June 1935 he noted the advantages of lying low. “His theory is that we ought to accept the opinion of the Supreme Court,” Harold Ickes recorded in his diary after the meeting, “letting credit or blame rest where it belongs in that respect.” Roosevelt wanted Americans to know that he needed their cooperation, that he was not “a magician who can pull rabbit after rabbit out of the hat.” Roosevelt didn’t like the outcome of the recent cases, but he recognized the advantages of blaming the Supreme Court for frustrating the will of the people. “He is not at all averse to the Supreme Court declaring one New Deal statute after another unconstitutional,” Ickes noted after a subsequent cabinet session. “He believes that the Court will find itself pretty far out on a limb before it is through.”

M
EANWHILE
R
OOSEVELT
addressed a more imminent threat. Huey Long’s Share Our Wealth clubs continued to beguile millions of Americans, and the Kingfish was making convincing noises about running for president in 1936. The Social Security Act dealt with part of Roosevelt’s Long problem, but the insurance approach to old-age pensions that rendered Social Security politically palatable left unaddressed the class resentment that stoked much of the Long craze. Roosevelt sallied into the class war with a sweeping proposal to shift a much larger part of the tax burden onto the wealthy.

“Wealth in the modern world does not come merely from individual effort,” he explained in a message to Congress in June 1935. “The individual does not create the product of his industry with his own hands; he utilizes the many processes and forces of mass production to meet the demands of a national and international market.” If anyone in American history could be called self-made, it was Andrew Carnegie; yet even Carnegie had acknowledged his debt to his fellows. “Where wealth accrues honorably,” Roosevelt quoted the steelmaker, “the people are always silent partners.” The wealthy therefore had a particular obligation to contribute to the maintenance of society. Roosevelt explained how they might fulfill this obligation, in three government-assisted steps.

The first was a sharply progressive inheritance tax. The transfer of great wealth from generation to generation was “not consistent with the ideals and sentiments of the American people,” Roosevelt said. The inheritance tax he now proposed would enhance social equality even as it reduced the national debt.

Roosevelt’s second recommendation was a substantial increase in the marginal tax rates on high incomes. The principle of graduation currently stopped at $1 million, with the result that although a worker with an income of $6,000 paid a marginal rate twice that of a worker making $4,000, an investor making $5 million paid no greater rate than one making $1 million. This arrangement had negative consequences for federal revenues, and even worse results for American morale. To remedy the situation, Roosevelt advocated “very high taxes” on large incomes.

Roosevelt’s third recommendation paralleled his second but applied to corporations rather than individuals. Corporate profits, even more than individual incomes, owed much to government and to society at large, the president said. Government created corporations through charters; government protected corporations through systems of laws; society furnished corporations their labor and their customers. As with individuals, some corporations benefited more than others, and large corporations benefited most of all. Equity dictated that large corporations pay more than small ones. At present corporate profits were taxed at a uniform rate. Roosevelt recommended reducing the rate on smaller corporations by a quarter and increasing the rate on the largest by the same amount.