VII: The New Deal Era, 1930-60

Franklin D. Roosevelt had given little indication during the 1932 election campaign of what his agenda as president would be. The Democratic platform contained nothing provocative, and FDR added little to it apart from a speech to the Commonwealth Club in San Francisco, in which he spoke of the advent of “enlightened administration,” which would redistribute resources in accordance with an “economic declaration of rights.” But Roosevelt called for extraordinary efforts in his first inaugural address. He desired that the federal government provide employment in public works projects, “treating the task as we would treat the emergency of a war.” He continued the martial metaphor, saying that “if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline,” depicting the struggle ahead as requiring a “sacred obligation” and a “unity of duty hitherto evoked only in time of armed strife.” He suggested that it might be necessary to concentrate power in the executive branch, and to ask Congress for “broad executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.” He was undaunted by traditional constitutional limitations on federal power, for “Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form.”

Roosevelt immediately dealt with the nationwide banking crisis by closing all American banks, under the authority of the World War I “Trading with the Enemy Act.” Congress shortly enacted banking legislation, devalued the dollar by reducing its gold value in foreign exchange, as well as requiring all gold in domestic hands to be exchanged for devalued dollars, and canceling gold clauses in public and private debts. Employment and public works programs, most notably the Tennessee Valley Authority, were also quickly enacted.

Most ambitious of all were the Agricultural Adjustment Act and the National Industrial Recovery Act. Both of these were attempts to “cartelize” the American economy—that is, to give private producers government power to control production and prices. Farmers were permitted to reduce production of certain crops, and would be given benefit payments for doing so, paid for by a tax on processors of the crops. To emphasize the war-like circumstances behind the statute, Congress declared an “economic emergency,” and announced that the act provided for “extraordinary expenses” produced by it, and provided for “emergency relief” for farmers. The NIRA allowed industries to adopt “codes of fair competition,” and the government could fine or imprison firms that produced more or charge less than the codes provided. The act contained a provision that required employers to bargain collectively with their workers, but this was largely evaded by the establishment of employer-dominated “company unions.” The NIRA appeared to establish nothing less than an American-style corporate or fascist political economy, but the statute was limited to two years, and there was virtually no chance that it would succeed.

The Supreme Court initially showed considerable deference to the new state and federal economic regulations. It accepted a Minnesota law that placed a moratorium on mortgage foreclosures, although this was precisely the kind of debtor-relief legislation that was common during the 1780s and produced the Constitution’s prohibition on state laws “impairing the obligation of contracts.” It also upheld a New York statute that set minimum prices for milk, and sustained the federal government’s cancellation of gold obligations in contracts. Notably, all of these decisions were made by 5-4 majorities. The Court was composed of three liberals (Justices Brandeis, Stone, and Cardozo), four conservatives (Justices McReynolds, Butler, Van Devanter, and Sutherland, whom New Dealers christened “the Four Horsemen”) and two swing votes, Chief Justice Hughes and Associate Justice Roberts.

In 1935 and 1936, the Court struck down the Agricultural Adjustment Act, National Industrial Recovery Act, and similar acts regulating the petroleum and coal industries. The fundamental problem with these acts was that they exceeded Congress’ delegated powers, and usurped the reserved powers of the states to deal with industrial production and labor relations. They were further vitiated by the fact that Congress had delegated legislative power to the President, who in turn delegated that power to private parties. The decision striking down the NIRA was unanimous; even Justice Cardozo conceded, “This is delegation run riot.” The Court added to the impression of conservative reaction when it struck down a New York law that set minimum wages for women and minors. This decision was based on old substantive due process and liberty of contract grounds, long disdained by progressives. Justice Roberts similarly gave voice to traditional constitutional theory when he noted that the Court was not making law, but only “lay[ing] the Article of the Constitution which is invoked beside the statute which is challenged and [deciding] whether the latter squares with the former.”

FDR and Congress were unfazed by these judicial setbacks, and embarked upon what is known as the “Second New Deal” in 1935. Though they abandoned the impossible task of comprehensive national economic coordination, they proceeded to promote cartels in an piecemeal, industry-by-industry fashion. Congress thus virtually reenacted the Agricultural Adjustment Act as a soil-conservation measure, without the tax on commodity processors. It took the section of the National Industrial Recovery Act meant to promote organized labor and enacted the National Labor Relations, or Wagner, Act. This act compelled employers to recognize and bargain with unions certified by the National Labor Relations Board as representing a majority of their employees. Many congressmen voted for the measure to head off more radical measures and to placate organized labor, assuming that the Court would strike it down. Congress also passed the Social Security Act, proving for old-age pensions and disability insurance. Though the President made passing objections to the Court’s obstruction of New Deal legislation, he and the Democrats largely ignored it as a campaign issue. In the 1936 election, FDR was re-elected by the greatest majority in American history, and the Democrats increased their control of Congress for the fourth consecutive term, with nearly three-fourths of both houses. The stage was set for a showdown between an overwhelmingly popular liberal president and a narrowly divided conservative court.

The President announced a judicial reform proposal in February, 1937. He identified the age of the justices as the chief problem, resulting in their inability to keep up with their workload or with new social and economic circumstances. “Little by little, new facts become blurred through old glasses fitted, as it were, for the needs of another generation,” Roosevelt claimed. He asked Congress to allow the president to appoint an additional federal judge for each judge who reached the age of seventy and did not retire, to a total of fifty, with the Supreme Court expandable to fifteen. This would give him power to appoint six new Supreme Court justices right away.

Roosevelt’s “court-packing plan” was an astonishing gambit. If the president was emboldened by his electoral triumph of 1936, he squandered his mandate with this bid for executive control of the judiciary. Combined with other efforts by the president to control the bureaucracy and the Democratic party, and the specter of totalitarianism in Europe, the plan shifted public opinion from concern about the abuse of judicial power to the abuse of executive power. Congressional resistance was immediate and intense, dooming the proposal from the start and marking the first significant legislative resistance to FDR’s leadership. The conflict marked the effective end of the New Deal, as Republicans and conservative Democrats began to block liberal legislation.

The reason for the plan faded as the Supreme Court appeared to back down and accept New Deal legislation in 1937. In fact, Justice Roberts, the fifth vote in recent conservative decisions, had “switched” before the unveiling of the court-packing scheme. In March, the Court upheld a Washington minimum wage law just a year after having struck down a nearly identical New York statute. Pro-New Deal decisions soon swelled into a torrent, with the Court upholding the National Labor Relations and Social Security Acts, preserving the principal legislation of the Second New Deal. In May, Justice Van Devanter announced his retirement, as did his conservative colleague George Sutherland in 1938. By the time of his death in 1945, Roosevelt had appointed every member of the Court except for Justice Roberts. In short, FDR packed the Court in the conventional way. But his bold plan to take it over effectively ended the momentum of the New Deal.

After 1937, there were virtually no judicial limits on federal or state economic regulation. The Court repudiated the two principal doctrines used to protect property rights, dual federalism and liberty of contract. Congress had nearly unlimited power to regulate business by the taxing, spending, and especially the interstate commerce powers. In 1942, the Court upheld a fine imposed upon an Ohio farmer who grew more wheat than he was permitted under the revised Agricultural Adjustment Act, although he sold no wheat in the open market and used the wheat for home consumption, livestock feed, and seed. Thus “interstate commerce” could be interpreted to include nearly any economic activity, including intrastate production that never entered into commerce at all.

The Court articulated its new deference to political regulation of property in the 1938 case of US v. Carolene Products, in which it upheld a congressional prohibition of interstate commerce in “filled milk.” The Court would from now on assume that legislatures had good reasons for regulating commerce. “The existence of facts supporting the legislative judgment is to be presumed,” Justice Stone said, in cases involving “ordinary commercial transactions.” In economic regulation, the Court would assume that legislation “rests upon some rational basis within the knowledge and experience of the legislators.” That is to say, the Court would accept any but the most wildly irrational basis for economic regulation.

At the same time, the Court appended a prophetic footnote to its decision that suggested that the Court, while it was getting out of the business of protecting property rights, might get into the business of protecting non-property rights. “There may be narrower scope for operation of the presumption of constitutionality when legislation appears on its face to be within a specific prohibition of the Constitution, such as those of the first ten Amendments, which are deemed equally specific when held to be embraced within the Fourteenth,” Justice Stone wrote. “It is unnecessary to consider now whether legislation which restricts those political processes which can ordinarily be expected to bring about repeal of undesirable legislation, is to be subjected to more exacting judicial scrutiny under the general prohibitions of the Fourteenth Amendment than are most other types of legislation. The note also suggested that the Court would scrutinize “statutes directed at particular religious, or national, or racial minorities,” and also be alert to “prejudice against discrete and insular minorities [which] may be a special condition, which tends seriously to curtail the operation of those political processes ordinarily to be relied upon to protect minorities, and which may call for a correspondingly more searching judicial inquiry.”

The Court announced another apparent act of self-denial the next year. In the case of Erie Railroad v. Tompkins, the Court declared that federal courts must adhere to the common law of the states when they decide lawsuits between citizens of different states. Ever since 1842, the Court had held that federal judges could consult general principles of commercial law in such cases, and thus build up a federal common law. In this case, Justice Brandeis vehemently overturned that 1842 precedent, even declaring it unconstitutional. But at a deeper level, Erie Railroad could augment rather than limit judicial power. The disavowal of a federal common law was principally a legal positivist repudiation of the idea of natural law. If law was nothing more than the will of the sovereign, courts cold not claim to consult principles to thwart legislatures. But if this precept of legal positivism were combined with the legal realist argument that judges, like legislators, make law, it would provide a wide avenue for judicial power (or judge-made law), unrestrained by even the pretense of natural (or judge-discovered) law.

The demise of liberty-of-contract, and its closely related doctrine of substantive or economic due process, gave greater powers to the states to deal with socioeconomic problems. But the potential expansion of state police power was largely pre-empted by federal action. States might now be free to enact labor laws, but there was little need to do so after the Court upheld a federal Fair Labor Standards Act. Indeed, the greatest long-term constitutional result of the New deal was the concentration of power in the national government and the near end of federalism as a limit on government power.

Institutionally, the greatest effect of the New Deal was the development of a centralized bureaucratic state. The emergence of the administrative “fourth branch” of government, envisioned in progressive theory and gradually developing since 1887, shot into flower in the 1930s. The sheer proliferation of federal regulatory agencies would have necessitated some form of reorganization in any case, but the Supreme Court added urgency to the task when, in 1936, it ruled that the president could not remove members of independent regulatory agencies like the Federal Trade Commission. The president, stung by this judicial limitation on executive direction of the government, assembled the President’s Committee on Administrative Management. Congress took up a bill containing the recommendations of the Brownlow Committee in January, 1937: to expand the White House staff, to create new and reorganize existing branch agencies, and to give the president direct control over the independent agencies. The furor over the Court-packing plan, introduced the next month, produced an anti-executive reaction that effectively killed the Brownlow plan in 1938.

1938 produced an enormous political upheaval against the New Deal. In 1937, the country lapsed into a recession even sharper than that of 1929, and there was a widespread public backlash against labor union militancy in the “sit-down strikes” that followed the enactment of the National Labor Relations Act. The fear that Roosevelt aspired to dictatorial power, raised by the Court-packing and administrative reorganization plans, was reinforced by his efforts to defeat conservative Democrats in the 1938 primaries—this effort suggested that FDR was “purging” the party. In March, 1938, Roosevelt told the press, “I have no inclination to be a dictator. I have none of the qualifications which would make me a successful dictator.” The Republicans gained 75 seats in the House of Representatives and seven in the Senate, arresting the drift toward a one-party state. In 1939 the new Congress passed the Hatch Act, which limited partisan political activities by federal officeholders.

Arrested by the Supreme Court, Congress, and the electorate, executive power was checked and the US did not become a fully-fledged, European-style corporate, fascist, or socialist state. The New Deal produced what has been called a “mixed economy,” with a regulated system of private enterprise. The extent of government intervention in the economy would continue to be a matter of political wrangling, with extensions proposed and accomplished in subsequent decades, particularly in the 196070s.

International crisis loomed as the domestic New Deal expired. At heart a Wilsonian internationalist, Roosevelt was cautious and deferential to popular and congressional isolationism in his first term. He treated the economic depression as a national problem and, when the threat of a new European war arose, signed neutrality legislation to prevent American trade from entangling the country in it. Meanwhile, the Supreme Court cleared a wide field for the vigorous use of executive power abroad. What the Court denied Roosevelt with regard to domestic bureaucratic control it supplied in foreign affairs. In the 1936 case of US v. Curtiss-Wright Export Co., the Court upheld the president’s imposition of an arms embargo on warring states in South America. The Court adopted the Hamiltonian view of plenary, unenumerated executive power. Though in this case the president acted after a congressional resolution, Justice Sutherland held that presidential power in foreign relations “does not require for its exercise an act of Congress.”

As isolation began to erode in American public opinion, particularly after the fall of France in 1940, Roosevelt became more bold. In September, 1940, he gave a number of destroyers to the British in exchange for leases on bases in the western hemisphere. There was no congressional resolution for this act, and it appeared to violate a 1917 statute, but FDR prevailed on the basis of public opinion that supported “all aid short of war” for Great Britain. The president used the US Navy to assist in the shipment of supplies to Britain, which sparked armed conflict with the Germans. Perhaps most remarkably, Roosevelt signed the “Atlantic Charter” with Prime Minister Winston Churchill in August, 1941. While technically neutral, the US pledged to work with the allies to promote international freedom, peace and order “after the final destruction of Nazi tyranny.” Ardent American pressure upon the Japanese to cease their depredations in China led them to attack the United States in December. Roosevelt’s principal concern was the European theater, and Germany was under no obligation to come to the aid of Japan. But, for some reason, Hitler did FDR the favor of declaring war on the US after Pearl Harbor.

As World War I extended progressive statism, so World War II acted as a nationalizing extension of the New Deal. War again brought conscription, high taxes, wage and price limits, industrial and labor controls. But, an overwhelmingly popular war, World War II did not produce many serious constitutional conflicts regarding opposition and civil liberties. The Supreme Court did overturn the military government imposed on Hawaii, but not until after the war was over. Even after the war, the Court did not overturn the most prominent abridgement of civil liberty since the Civil War, the evacuation and internment of over one hundred thousand Japanese-American citizens on the Pacific Coast. Though the Court technically avoided ruling on the most controversial aspects of the program, it seemed to provide a Hobbesian lesson that, in extremis, law, constitutions, and judges provide little protection to unpopular groups and individuals.

It was not until the 1950s and especially the 1960s, after the early, most dangerous phase of the Cold War abated, that the Supreme Court became a vigorous leader in expanding the rights of individuals and certain minority groups. But there was a long if desultory history of federal judicial protection of non-property rights since the Civil War. The Reconstruction amendments did impose some limits on deprivation of black civil rights. The Court struck down a West Virginia law that excluded blacks from jury service in 1880, as well as overturning the conviction of a black man in a Delaware case where, although no law discriminated against them, the judge excluded blacks from the jury. In 1886 it struck at de facto discrimination against Chinese Americans, when San Francisco officials administered an ordinance to prevent fire hazards--racially neutral on its face--in order to run the Chinese out of the laundry trade. The Court’s scrutiny of state socioeconomic regulation helped to prevent exercises of the police power that were actually pretexts for racial, ethnic, or religious discrimination.

Even after the Court upheld racial segregation in 1896 it drew the line at more outrageous methods of discrimination. It struck down debt peonage laws in the South that attempted to prevent black exit from the plantation labor force. When southern states tried to tailor disfranchisement to blacks, by allowing poor whites to vote if they had ancestors who could vote before Reconstruction (“grandfather clauses”), the Supreme Court overturned these schemes. The Court also struck down an Arizona statute that limited public employment to citizens. During World War One, border states attempted to control the influx of blacks in the early stages of the “Great Migration” with residential segregation ordinances. The Court struck these down on property rights grounds, thus preventing a formal system of apartheid.

As the Court usually upheld state socioeconomic regulation, it also usually validated state and local cultural norms. Its sensitivity to the constitutional principle of federalism, the chief limit to an energetic enforcement of the Reconstruction amendments, was the principal reason for this. The original reason for the Bill of Rights was not so much to protect individual liberty as it was to leave the regulation of these matters to the states. The states in turn often left these matters to counties, towns, churches, and families—the intricate network of intermediary associations today referred to as “civil society.” This reflected the older traditional of republicanism, in which liberty meant the power to define and enforce a community’s understanding of morality. Usually, unorthodox individuals or groups had either to conform to community norms or leave—and were sometimes compelled to leave, as in the case of the Mormons. But, America was a large enough country to accommodate a large number of communities. Thus, the United States has been described as “islands of intolerance in a sea of toleration,” a sprawling, pluralistic collection of communities. Even within this system the variety was limited, as nearly all communities assumed a traditional Judeo-Christian moral code that reached its climax in the Victorian era.

If “laissez-faire” constitutionalism did not frequently vindicate non-property rights, progressive principles did even less so. Progressives for the most part were suspicious of the natural theories that underlay judicial activism, and favored legislative experimentation and governmental power. Justice Oliver Wendell Holmes was the most articulate advocate of the theory that judges should not thwart legislative innovation with natural law, which he derided as a “brooding omnipresence in the sky.” Thus, he nearly dissented when the Court struck down municipal segregation laws. In 1927, he upheld a Virginia statute that imposed compulsory sterilization on the mentally retarded. The state described Carrie Buck, a feeble-minded rape victim who had committed no offense against the laws, as part of the “shiftless, ignorant, and worthless class of antisocial whites.” Buck’s mother and daughter were similarly regarded. Holmes, renowned for his pithy aphorisms, was satisfied, concluding, “Three generations of imbeciles are enough.” Roughly twenty thousand Americans underwent compulsory sterilization in the twentieth century.

When Congress enacted the Espionage and Sedition Acts during World War One, the Court sustained them. It unanimously upheld the Espionage Act in Schenck v. US, in which Justice Holmes expressed the principle that freedom of speech was not absolute. People could rightly be punished for “falsely shouting ‘fire’ in a theater, and causing a panic,” he said. If words were used in a way that “create a clear and present danger that they will bring about… substantive evils,” they could be restricted. The Court also upheld the Sedition Act, but in these cases Justices Holmes and Brandeis dissented, denying that criticism of the war effort amounted to a clear and present danger. The dissents were the beginning of modern federal jurisprudence regarding free speech and press.

The Court in the 1920s continued its haphazard defense of civil rights and liberties. The nativism of the postwar decade led Oregon to outlaw private education (aimed primarily at Catholics) and Nebraska to prohibit the teaching of modern foreign languages (Germans). The Court struck down these laws on essentially substantive due process grounds—the property rights of the schools and the right of parents to decide how to educate their children. More important the Court took the first steps toward what is known as the “incorporation” of the Bill of Rights. The traditional understanding of the Bill of Rights was that it limited only the federal government. Though there is some evidence that the framers of the Fourteenth Amendment intended to apply the first eight amendments of the Bill of Rights to the states, the courts did not so interpret it. The Supreme Court did in 1897 hold that the Fifth Amendment’s prohibition on taking private property for public use without just compensation applied to the states, but did not develop the principle. Instead, it held that, for example, while federal courts could not impose double jeopardy, state courts remained free to do so.

Incorporation of the free speech provision of the Bill of Rights began in the 1925 case of Gitlow v. New York. In this case, the court upheld a state law criminalizing the advocacy of violent revolution. But in the course of doing so it held that free speech was a liberty protected against state infringement by the due process clause of the Fourteenth Amendment. The Court similarly upheld a California law against syndicalism in a unanimous 1927 decision. In 1931 the Court for the first time overturned a conviction, striking down a California law that prohibited the display of the red (anarchist) flag. This was an especially remarkable extension of civil libertarianism since “symbolic speech” or “expression,” rather than conventional speech or writing, was at issue. The next month, the Court voided a Minnesota statute that imposed censorship on newspapers that had a reputation for obnoxious publication.

The Court would never be entirely clear about what it was doing as it incorporated the Bill of Rights. In Powell v. Alabama (1932), the Court overturned the hasty convictions of eight young black men (the “Scottsboro Boys”) sentenced to death for raping a white woman, because they had not been given “assistance of counsel for [their] defense.” But the Court did not, strictly speaking, apply the Sixth Amendment to the states. Rather, it held that the due process clause required a “fair trial,” and that this involved the right to counsel in capital cases. In 1938 the Court upheld a Connecticut case in which the state attorney, not satisfied with a conviction for second-degree murder, re-prosecuted a bank robber and won a first-degree charge and execution. Imposition of double jeopardy, Justice Cardozo held, does not “shock the conscience.” Nor was this Fifth Amendment right part of “the very essence of a scheme of ordered liberty.”

These cases suggested that the Court was incorporating the Bill of Rights in an ad hoc fashion, relying on intuition and responding to social and political developments. Thus, when the political power of organized labor was at its apex, the Court asserted in 1940 that picketing was an exercise of free speech, and struck down an Alabama statute prohibiting it. This policy soon became untenable and the Court abandoned it by the end of the decade, paralleling legislative restrictions on union privileges. In 1940 the Court sustained a Pennsylvania law that required public school students to salute the flag. When widespread violence ensued against Jehovah’s Witnesses, who refused on religious grounds to pledge allegiance, the Court reversed the decision three years later. Justice Hugo Black was especially agitated about the latitude that this “selective incorporation” of the Bill of Rights gave the justices, which seemed to be another version of the substantive or economic due process and natural law theories that the progressives disdained. In 1947, the Court reversed a forty-year old precedent that allowed state juries to regard a defendant’s refusal to testify as tantamount to an admission of guilt, notwithstanding the Fifth Amendment’s guarantee that no one “shall be compelled in any criminal case to be a witness against himself.” But the Court still maintained that the Fourteenth Amendment did not impose all of the Bill of Rights upon the states, nor did such rights as were incorporated bind the states in precisely the same way that they bound the federal government. Justice Black, reviewing the legislative history of the Fourteenth Amendment, insisted that it did, and argued strenuously for “total incorporation” of the Bill of Rights. For Black, every one of the Bill of Rights applied to the states exactly as it applied to the federal government--no more and no less. But “selective incorporation” proceeded. Today, the Second and Seventh Amendments, and some provisions of the Fifth Amendment, remain unincorporated.

The Cold War also evoked shifting standards regarding civil liberties. Facing foreign threats of fascism and communism, federal and state governments redoubled their efforts to guard against domestic subversion. In 1940 Congress enacted the SmithAct, prohibiting conscious membership in an organization advocating violent revolution. Ten years later, the McCarran Act required subversive organizations to register with the Attorney General—thus inviting Smith Act prosecutions. In the 1951 Dennis case, the Supreme Court sustained such prosecutions under the “clear and present danger” standard, which helped to cripple the Communist Party of the United States. Later in the decade, as the Cold War cooled after the Korean War, the Court applied a more libertarian standard. In the 1957 Yates case, it required that the government prove a closer proximity between speech or advocacy and threatening action. In the late 1960s, a similar standard effectively made state sedition laws unenforceable. While the Court never held sedition laws per se unconstitutional, it interpreted “clear and present danger” in such a way as to deter prosecution of the offense.

Federal power, particularly that of the executive, continued to expand as a result of the foreign policy commitments of the Cold War. The US became involved in treaty obligations with many nations, and maintained an unprecedented military establishment in peacetime. Congress virtually conceded to the president the power to declare war with the Korean conflict. Despite the influence of the philosophy of “legal realism” that denied any distinction between law and politics, the Supreme Court maintained its traditional deference to the political branches in foreign affairs. But in 1952, when President Truman seized the nation’s steel mills, to ensure their continued operation in anticipation of a strike by the United Steelworkers, the Court declared his action unconstitutional. By a 6-3 vote, with a variety of concurring opinions, the Court discerned an executive usurpation of legislative power that could not be excused by the exigencies of an “emergency” quasi-war.

The effect of foreign policy on constitutional government is among the most persistent and difficult problems in human history, one that the United States was able to avoid due to its relative isolation from world affairs before World War II. The survival of a lawful nation in a Hobbesian world of usually lawless sovereign states poses a profound dilemma. Americans had to conjure with the argument that foreign policy must be unified, discretionary, unlimited—essentially lawless. American constitutionalism grew as a denial of the doctrine of “sovereignty” in the English imperial system, and sought to establish an effective but limited government—or a limited over a sovereign people. Yet the conflicts of the twentieth century raised again the problem that Lincoln expressed at the beginning of the Civil War: “Must a government, of necessity, be too strong for the liberties of its own people, or too weak to maintain its existence?”

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