Lecture 27 The Commerce Power

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Presentation transcript:

Lecture 27 The Commerce Power Part 4: The New Deal- I

This lecture We will cover the first half of the section on the New Deal cases Pages 439-452 Think about how these cases square with those in the Industrial Revolution

The New Deal The Stock Market crashes in 1929 Sends the country into the Great Depression FDR and Democrats win a massive landslide in 1932 FDR has an aggressive agenda to rescue the economy- largely through spending and programs at the federal level Many of the laws went after big business and sought greater regulation However, many of the old justices remained on the Supreme Court There was a 5-4 majority against regulation

The Court at the time However, many of the old justices remained on the Supreme Court There was a 5-4 majority against regulation However, Justice Owen Roberts was considered a swing vote But this meant that the swing vote on the Court was generally opposed to FDR The Three Musketeers Brandeis, Stone, Cardozo (usually joined by Hughes) The Four Horsemen Van Devanter, McReynolds, Sutherland and Butler

The Court rules against FDR With Democrats holding record margins in Congress, FDR was able to pass an extremely large number of new bills (see Box 7-2, page 441) One thing that didn’t change was the conservative makeup of the Court FDR does not get to have an appointment until Justice Van Devanter retires He is enticed to retire by a bill to give justices full pay after retirement Only some of the rulings were the 5-4 split Some were unanimous Many thought that the justices in the closer cases were writing opinions to justify their personal opposition to New Deal policies Not every ruling went against FDR The Gold Clause cases and Emergency Banking Act upheld 5-4

The Cases against FDR The Court starts striking down New Deal laws in 1935 Panama Refining Company v. Ryan (1935) Hot oil case- 9-0 ruling for improper delegation of powers (not enough specify) Railroad Retirement Board v. Alton Railroad Company (1935) Court throws out Railroad Retirement act- 5-4 ruling Exceeded commerce clause Humphrey’s Executor v. United States (1935) FTC removal case- 9-0 ruling FDR could not remove a member Louisville Bank v. Radford (1935) 9-0 ruling against FDR on property rights The last two rulings plus the sick chicken case were delivered the same day- Black Monday

A.L.A. Schechter Poultry Corporation v. United States (1935) Background Involved the National Industrial Recovery Act of 1933 (NIRA) It would regulate nearly every sector in American industry- trade practices, wages, hours, and other business activities The President was authorized to draft these codes himself Once in effect- the codes would be the law violators could go to jail or face fines We already read the first half- the law delegated too much power to the President without proper guidelines and rules Some said this regulated intrastate commerce

A.L.A. Schechter Poultry Corporation v. United States- II More Background This case involved poultry codes- focusing on New York  then the largest market 96% of the chickens sold in New York were out of state chickens There was bad health and sanitation conditions and it was corrupt The Live Poultry Code of FDR set maximum hours, a minimum wage, health inspections, compulsory record keeping, and regulations to slaughtering procedures The company here had bought chickens out of state, but had many violations Wage and hours, record keeping, slaughter non-compliance, and having conditions unfit for human consumption They were charged, tried, convicted and sentenced to short jail terms

A.L.A. Schechter Poultry Corporation v. United States- III Question: Were the NIRA provisions beyond Congress’ power under the Commerce Clause? Arguments For Schechter Poultry (overturn the law) Illegal and unprecedented illegal delegation of power It exceeds the commerce power- manufacture, mining, farming are not commerce

A.L.A. Schechter Poultry Corporation v. United States- IV Arguments For the United States (uphold the law) The slaughtering business is so closely related to interstate commerce it makes no differences which parts are more or less in This case is analogous to Stafford v. Wallace since the New York market dominates the live poultry market and could determine prices It would re-introduce unfit poultry into the market by 20% Congress must take uniform action even if there is only an indirect effect on interstate commerce

A.L.A. Schechter Poultry Corporation v. United States- V Chief Justice Hughes rules for a unanimous Court Remember the Court ruled against FDR on the delegation issue Were these transactions made “in” interstate commerce? While most of the poultry comes from out of state, this law does not have anything to do with the transportation of the chickens- once they got off the trains, it ended The slaughtering and sales took place intrastate It was not later sold in interstate commerce Did the transactions directly affect interstate commerce as to by subject to federal regulation? The power also allows regulation to protect commerce from injury Test is the effect of injury to get to regulate

A.L.A. Schechter Poultry Corporation v. United States- VI More from Chief Justice Hughes Think back to the Shreveport Doctrine- that was intrastate effecting interstate Not allowed if only indirect effects- these reserved to states Otherwise, we would have a completely centralized government He finds this case does not directly effect interstate commerce Wages and hours are of local effect like any other shops If it regulates here, it could regulate any shops Selling the bad chickens should be of local laws

A.L.A. Schechter Poultry Corporation v. United States- VII Justice Cardozo, concurring Joined by Justice Stone He preferred a spectrum approach over that of only direct vs. indirect But he also sees this as indirect

More actions against FDR by the Court More cases go against FDR and the New Deal Hopkins Savings Association v. Cleary (1935) Unanimous decision overturns the Home Owners Relief Act On 10th Amendment grounds United States v. Butler (1936) A 6-3 decision that strikes down the Agricultural Adjustment Act Deals with tax and spending provisions

Carter v. Carter Coal Company (1936) The Bituminous Coal Conservation act of 1935 replaces the NIRA It would have a commission regulate the coal industry made of all parties It was paid for by a 15% tax on coal Carter did not want the company to participate and sued to stop them One attack was violation of the Commerce Clause By a 5-4 vote by Justice Sutherland, it was struck down because they said the mining only took place in a single state- the movement of the coal had not yet begun Production of coal did not have a direct effect

More later cases against FDR More Cases Ashton v. Cameron County District Court (1936) 5-4 decision overturning the Municipal Bankruptcy Act On Due Process and 10th Amendment grounds Morehead v. New York ex rel. Tipaldo (1936) This was on other grounds- Due Process 14th Amendment Overturned a New York law establishing a minimum wage- a 5-3 decision (Brandeis recused) The was in some ways the last straw for FDR He spoke out publically against the Court after this decision

Court packing Plan FDR had enough of these cases He had won at the time the largest landslide in history Democrats had 3-1 Congressional majorities With no vacancies, his plan was to create new seats on the Court He would appoint an additional justice for any justice over the age of 70 This would mean the Court would expand to 15 members- a 10-5 majority for him This was always controversial- see the polls on page 452 The Chair of the House Judiciary Committee refused to give it a hearing and it went no where in the Senate When Roberts switched his votes, the need dissipated Hughes had privately criticized this

Next lecture We will finish up the New Deal Era The stitch in time that saved nine Consolidation of the gains Pages 449, 452-466