A

SUPREME COURT

The 1930s was a period of transition and transformation for the United States Supreme Court. In 1930 the Court was comprised by the conservative "Four Horsemen": Willis Van Devanter, James Clark McReynolds, George Sutherland, and Pierce Butler; three constitutional liberals: Louis D. Brandeis, Harlan Fiske Stone, and Oliver Wendell Holmes (replaced in 1932 by the like-minded Benjamin Cardozo); and two constitutional moderates: Owen Roberts and Chief Justice Charles Evans Hughes. Of these, only Stone and Roberts would still be on the Court when the United States entered World War II in December 1941. Though Franklin Roosevelt would be frustrated by his lack of appointments to the Court during his first term, and by his inability to "pack" it early in his second, he would appoint seven New Dealers to the Court between 1937 and 1941: Hugo Black, Stanley Reed, Felix Frankfurter, William O. Douglas, Frank Murphy, James Byrnes, and Robert Jackson. Just as Roosevelt changed the face of the Court, his Court changed the face of American constitutional law.

This transformation took a variety of forms. By the end of the decade the Court had recognized significantly greater executive branch authority over domestic and foreign affairs, had upheld the massive regional power initiative embodied in the Tennessee Valley Authority, and had dramatically enhanced protections of civil rights and civil liberties, particularly concerning free speech and the rights of the accused. At the center of the Hughes Court's docket, however, were cases involving the constitutionality of the New Deal and related state attempts to confront the economic crisis that engulfed the nation. The key issues concerned the scope of the congressional powers to spend for the general welfare and to regulate interstate commerce, and the extent to which the provisions of the Fifth and Fourteenth amendments, most notably the due process clauses, limited state and federal regulatory authority. Many initiatives, particularly those involving spending, were comfortably accommodated by existing constitutional doctrine. Other programs were invalidated in their first incarnations, but survived challenge when reformulated to comply with constitutional requirements. Still others withstood challenge only due to transformations in constitutional doctrine brought about by changes in Court personnel. (Contentions that these doctrinal transformations and decisions sustaining New Deal legislation were caused by the pressure of Roosevelt's "court-packing plan" are more problematic.)

THE SPENDING POWER

The Roosevelt administration created the modern American welfare state, dramatically increasing both the number of federal programs designed to alleviate conditions of want and the amount of federal revenue devoted to that purpose. Yet no significant transformation of constitutional doctrine was necessary to accommodate this development. The Court did definitively settle a longstanding dispute in American constitutional discourse concerning the scope of the power to spend for the general welfare. Advocates of the Madisonian position had long maintained that the power to spend was confined to carrying into effect exercises of other powers enumerated in Article I, Section 8 of the Constitution, while advocates of the Hamiltonian position treated the power to spend as an independent grant of power not so limited. In United States v. Butler (1936) and the Social Security Cases (1937), the Court confirmed that the Hamiltonian interpretation was the correct one. Indeed, most of the justices do not appear to have regarded this conclusion as open to serious doubt: The old-age pension provisions of the Social Security Act, for instance, were upheld in Helvering v. Davis (1937) by a vote of seven to two. Moreover, it had long been recognized that congressional exercises of the spending power could be immunized from judicial review by designing them in light of the taxpayer standing doctrine. Frothingham v. Mellon (1923) had confirmed that so long as Congress appropriated the funds to be spent from general revenue rather than from a specified or "earmarked" tax, no one would have the right to question the constitutionality of the expenditure. The Supreme Court and the lower federal courts repeatedly invoked this doctrine, for example, in upholding grants and loans made by the Public Works Administration, one of the New Deal's most important and popular agencies. Furthermore, the formidable obstacle raised by the taxpayer standing doctrine appears to have successfully deterred any constitutional challenge to a wide variety of New Deal spending programs financed from general revenue. These included the Civilian Conservation Corps, the Farm Credit Act, the Reconstruction Finance Corporation, the Rural Electrification Administration, and the Emergency Relief Appropriation Act of 1936. Established constitutional doctrine assured the safety of the safety net.

CONSTITUTIONAL CONSULTATION AND CONGRESSIONAL ADAPTATION

The justices were less receptive to a number of federal regulatory programs of the early New Deal. Yet it would be a mistake to conclude that the decisions invalidating these congressional statutes were motivated simply by hostility to their objectives. The opinions in a number of these cases offered implicit or explicit suggestions on how the statute might be reformulated so as to achieve its aim in a constitutional manner. In several instances Congress took the hint and redrafted the statute, this time paying greater attention to the constraints imposed by contemporary constitutional doctrine. The justices uniformly upheld this second generation of statutes, just as the earlier opinions had suggested they would.

So, for example, in May 1935 Justice Brandeis wrote the unanimous opinion in Louisville Joint Stock Land Bank v. Radford invalidating the Frazier-Lemke Farm Debt Relief Act of 1934 on the ground that it took the property of creditors without due process of law in violation of the Fifth Amendment. His opinion painstakingly identified the statute's constitutional deficiencies, enabling Congress quickly to eliminate those flaws in a reformulated statute enacted that summer. The Court upheld the revised statute in Wright v. Vinton Branch Bank in 1937. The decision was again unanimous—even the Four Horsemen agreed that Congress had rectified the earlier statute's shortcomings.

In early 1935 the Court also heard a challenge to the New Deal's program to stabilize oil prices in the face of frenetic wildcat drilling in the East Texas oil fields. Section 9(c) of the National Industrial Recovery Act authorized the president to prohibit interstate shipments of so-called contraband or hot oil—oil produced in excess of that allowed by the law of the state of production. The Court invalidated Section 9(c) by a vote of eight to one, holding that Congress had not provided any standard to guide the president's implementation of congressional policy, and that this omission constituted an unlawful delegation of legislative authority to the executive. Hughes's opinion left little doubt that Congress could achieve its policy objective—it needed only to remedy the delegation problem. Congress promptly did so with the Connally Act, which was uniformly upheld in the lower courts and unanimously sustained by the Supreme Court in 1939.

The Guffey Coal Act of 1935 sought to bring order to cutthroat competition in the coal industry in two ways: first, by regulating the price at which coal moved in interstate commerce, and second, by regulating wages, hours, and labor relations at the mines. In Carter v. Carter Coal Co. (1936), the Court struck down the labor provisions of the Act on the ground that they regulated local production, a matter reserved to the states. The Court held that the price regulation provisions were inseparable from the labor provisions, and thus must fall with them. The majority did not, however, hold the price regulation provisions independently unconstitutional. Chief Justice Hughes wrote a concurring opinion explicitly stating his view that the price regulation provisions were constitutional. Justice Cardozo's dissent agreed with Hughes on this point, and suggested moreover that a statute regulating only the price of coal might nevertheless indirectly stabilize labor relations by enabling employers to pay higher wages. Observers in Congress construed the Carter opinions to indicate that a new statute containing only the price regulation provisions would be upheld by the Court. In 1937 Congress enacted such a statute, the Bituminous Coal Conservation Act of 1937. When the Act was upheld by the Court in Sunshine Anthracite Coal Co. v. Adkins (1940), only Justice McReynolds dissented.

In 1935 the Court held by a vote of five to four that the Railroad Retirement Act of 1934 was unconstitutional, on two grounds: because a number of its provisions violated the due process clause of the Fifth Amendment, and because creating a pension system for railroad workers lay beyond the power of Congress to regulate interstate commerce. Many observers, including Chief Justice Hughes, believed that this latter objection meant that no comparable pension legislation, even if revised to rectify the due process problems, could be sustained. Yet some in Congress recognized that a pension system financed out of general revenue rather than from a specific source would be insulated from constitutional challenge under the taxpayer standing doctrine. The revenue necessary to finance the payments could be raised by a separate tax on interstate carriers, with the proceeds of the tax paid into the treasury rather than earmarked for pension payments. At the urging of President Roosevelt, representatives of the major railroads and railway unions negotiated the terms of such a system, and by the summer of 1937 it had been embodied in the Carrier Taxing Act and the Railroad Retirement Act. Representatives of the railroads and the unions, moreover, honored their pledges not to contest the constitutionality of the legislation, and the pension system they negotiated survives in modified form today.

A similar story of congressional adaptation unfolded in the domain of agricultural policy. The Agricultural Adjustment Act of 1933 sought to lift farm commodity prices by reducing output. The mechanism for doing so was the acreage reduction contract, under which a farmer would agree to reduce production in exchange for a payment from the secretary of agriculture. These payments were to be financed by a special excise tax on food processors rather than from general revenue, which enabled a taxpayer challenging the validity of the excise to question the constitutionality of expenditures underwritten by his tax payments. In United States v. Butler (1936), the Court invalidated the tax, holding that it was a step in a plan to regulate agricultural production in violation of the Tenth Amendment.

Though Butler held that the excise tax could no longer be collected, the administration continued to pay farmers holding acreage reduction contracts out of general revenue. Congress effectively reenacted the program two months after the Butler decision with the Soil Conservation and Domestic Allotment Act of 1936, which paid farmers to shift acreage from "soil-depleting" to "soil-conserving" crops. This time the payments were to be made from general revenue, effectively immunizing them from constitutional challenge. In 1938 Congress enacted a second Agricultural Adjustment Act, which sought not to regulate the production of farm commodities, but instead authorized the secretary of agriculture to establish marketing quotas for such crops. The Act's congressional sponsors read a passage from Roberts's opinion in Butler to suggest that such a regulation of interstate commerce in agricultural produce might pass muster where the earlier Agricultural Adjustment Act had fallen short. This judgment was vindicated the following year by Roberts's opinion upholding the Act in Mulford v. Smith.

The unemployment compensation provisions of the Social Security Act provide a final illustration of this phenomenon. Justice Brandeis was himself intimately involved in conceptualizing, drafting, and even lobbying for the program. Brandeis's advice on framing the statute to withstand constitutional challenge was vindicated when the Court upheld the Act's provisions in Steward Machine Co. v. Davis (1937). And while two of the dissenting justices believed that certain provisions of the statute as ultimately enacted were unconstitutional, their opinion made it clear how Congress could easily remedy those deficiencies, thereby bringing the statute into conformity with constitutional requirements. At the same time, the Court upheld Alabama's state unemployment compensation statute by a vote of five to four. Yet three of the four dissenting justices indicated that, while the statute under review was plagued by constitutional defects, the relief of unemployment was an objective within the constitutional power of the states. The dissent identified the deficiencies in the statute and suggested the manner in which they might be rectified, specifically holding up as an exemplary constitutional statute the unemployment compensation act of Wisconsin. That Wisconsin statute had been drafted by Paul Raushenbush, Justice Brandeis's son-in-law, based on a memorandum written by the justice himself.

SUBSTANTIVE DUE PROCESS

Yet the fact that many of the objectives of the New Deal could be and ultimately were accommodated within the framework of existing constitutional doctrine should not obscure the real and significant changes in constitutional law that occurred between the onset of the Depression and the early years of World War II. Among the most important of these was a weakening of the constraints imposed upon federal and state economic regulation by the Fifth and Fourteenth amendments. The extent to which the Court deployed those amendments to obstruct regulatory reform in the decades preceding the Depression has often been significantly overstated. Nevertheless, there can be no disputing the fact that those constitutional constraints were far more substantial in 1930 than they were in 1940. Between 1921 and 1927, the Court had invalidated approximately 28 percent of the economic regulations alleged to violate the due process clause, often because the entity regulated was not a business "affected with a public interest." By the end of the 1930s, that percentage would drop to zero, and that legal category would have disappeared from the constitutional lexicon. It became clear early in the decade that President Herbert Hoover's appointments of Hughes and Roberts in 1930 had made a significant difference. In 1931, a narrowly divided Court issued an opinion upholding state regulation of commissions paid to fire insurance agents, in language indicating considerable deference to legislative judgment. That signal would be amplified in dramatic fashion in 1934, when the Court upheld a New York statute regulating the price of milk in Nebbia v. New York. "There is no closed class or category of business affected with a public interest," wrote Justice Roberts for a five to four majority. The guarantee of due process required only that the regulation be reasonable. Earlier that year the Court had surprised many observers by upholding the Minnesota Mortgage Moratorium in Home Building & Loan Association v. Blaisdell (1934). After Nebbia was decided, Justice McReynolds wrote despairingly to a friend that these two cases marked "the end of the constitution as you and I regarded it. An alien influence has prevailed." (McReynolds would similarly announce in open court that "The Constitution is gone" when, in early 1935, the Court upheld the administration's historic reorientation of monetary policy in the Gold Clause Cases). Meanwhile, New Dealers saw Nebbia's sweeping approval of price regulation as a signal that the justices were prepared to sustain a variety of regulatory reforms, first among them the minimum wage. The Court did uphold the Washington minimum wage statute in West Coast Hotel v. Parrish (1937), though only after invalidating a similar New York statute the preceding year for what appear to have been technical reasons.

Yet neither Nebbia nor Parrish constituted a total repudiation of substantive due process. Hughes and Roberts had struck down a regulation designed to exclude new entrants to the ice business in Oklahoma in New State Ice v. Liebmann (1932); they would similarly join the majority invalidating provisions of a New York regulation raising a barrier to entry in Mayflower v. Ten Eyck (1936), and would dissent from the decision upholding a federal regulation disadvantaging small milk handlers in United States v. Rock Royal Cooperative (1939). Roberts would vote to invalidate a discriminatory state tax under the privileges or immunities clause in Colgate v. Harvey (1935), and would dissent from the opinion upholding a comparable tax in Madden v. Kentucky (1940). And when the Court effectively overruled Roberts's 1935 railway pension decision in United States v. Lowden (1939), Roberts suppressed the dissent he had voiced in conference. "Regulatory legislation affecting ordinary commercial transactions," as the Court put it in United States v. Carolene Products (1938), would come to enjoy a virtually irrebuttable presumption of constitutionality, but only once Roosevelt appointments had begun to replace the retiring Four Horsemen, thereby depriving Hughes and Roberts of control over the Court's center.

THE COMMERCE POWER

Nebbia did, however, enable Congress to regulate the price at which such items as coal and agricultural produce moved in interstate commerce. The Shreveport Rate Cases (1914) permitted federal regulation of intrastate railroad rates where it was shown that such regulation was necessary to effective control of interstate rates. The Shreveport doctrine had always been confined to businesses affected with a public interest, because only such businesses were amenable to rate regulation. But with Nebbia's abolition of that limitation, Congress could draw upon Shreveport in regulating intrastate sales of a broad range of commodities. The Court relied on Shreveport in sustaining congressional regulation of intrastate sales of tobacco in Currin v. Wallace (1939) and Mulford v. Smith (1939), and of milk in United States v. Wrightwood Dairy Co. (1942).

Nebbia also enlarged the category of local activities that could be regulated by Congress because they occurred in a "stream" of interstate commerce. Application of the stream of commerce doctrine had always been limited to businesses affected with a public interest, such as public stockyards and grain exchanges. After Nebbia, however, virtually any business located in such a flow was arguably subject to federal regulation. This development was of no consequence in the "Sick Chicken Case," United States v. Schechter Poultry Co. (1935), which struck down a conviction under the Live Poultry Code of the National Industrial Recovery Act on the ground that the code regulated a "local" activity (butchering) that affected interstate commerce only "indirectly." (The decision prompted Roosevelt to accuse the justices of having a "horse and buggy" conception of interstate commerce.) Schechter's slaughterhouse was not in a stream of commerce because interstate transportation had come to an end—the butchered chickens were sold locally rather than in interstate trade. The Guffey Coal Act invalidated in Carter Coal suffered from the same problem, but at the other end: The coal mine lay at the source of the stream rather than amidst its interstate flow. When defending the collective bargaining provisions of the National Labor Relations Act, therefore, attorneys for the government carefully selected test cases involving factories that brought in raw materials from outside the state of production and then shipped their products for sale across state lines. They argued that these businesses were located in a stream of interstate commerce, and that a strike at the plants could disrupt the interstate flow of that stream. The Court upheld application of the Act to those business in the Labor Board Cases (1937). Throughout the late 1930s, decisions in which the Court upheld application of the Wagner Act hesitated to suggest that the commerce power had been significantly enlarged. Uncertainty about the scope of the commerce power would not be resolved until the early 1940s, long after the court-packing plan was dead and buried, when Roosevelt appointees dominated the Court.

In United States v. Darby (1941), the Court upheld the Fair Labor Standards Act, which banned child labor and prescribed maximum hours and minimum ages for businesses selling goods in interstate commerce. And in Wickard v. Filburn (1942), the Court upheld a penalty imposed on a farmer for planting more wheat than he was allotted under the terms of the Agricultural Adjustment Act. Roscoe Filburn argued that he did not intend to sell the wheat, but only to keep it for use and consumption on his farm. Justice Jackson's opinion responded that if many farmers emulated Filburn, they would reduce the overall demand for those crops and thus the price at which those crops moved in interstate commerce. Congress could therefore reach Filburn's activity as a means of regulating the interstate price of wheat. Internal Court records show that not all of the justices were comfortable with such expansive interpretations of the commerce power. By the end of the Depression, however, no one could doubt that there had been a dramatic increase in the federal government's power to regulate the nation's economy.

See Also: LEGAL PROFESSION; SUPREME COURT "PACKING" CONTROVERSY.

BIBLIOGRAPHY

Cushman, Barry. "The Secret Lives of the Four Horsemen." Virginia Law Review 83 (1997): 559-645.

Cushman, Barry. "The Hughes Court and Constitutional Consultation." Journal of Supreme Court History 1998 (1998): 79-111.

Cushman, Barry. Rethinking the New Deal Court: The Structure of a Constitutional Revolution. 1998.

Cushman, Barry. "Lost Fidelities." William & Mary Law Review 41 (1999): 95-145.

Cushman, Barry. "Formalism and Realism in Commerce Clause Jurisprudence." 67 University of Chicago Law Review 67 (2000): 1089-1150.

Cushman, Barry. "Mr. Dooley and Mr. Gallup: Public Opinion and Constitutional Change in the 1930s." Buffalo Law Review 50 (2002): 7-101.

Friedman, Richard D. "Switching Time and Other Thought Experiments: The Hughes Court and Constitutional Transformation." University of Pennsylvania Law Review 142 (1994): 1891-1984.

Irons, Peter H. The New Deal Lawyers. 1982.

Leuchtenburg, William E. The Supreme Court Reborn: The Constitutional Revolution in the Age of Roosevelt. 1995.

Mason, Alpheus Thomas. Harlan Fiske Stone: Pillar of the Law. 1956.

Parrish, Michael E. "The Hughes Court, the Great Depression, and the Historians." The Historian 40 (1978): 286-308.

Parrish, Michael E. "The Great Depression, the New Deal, and the American Legal Order." Washington Law Review 59 (1984): 723-50.

Pusey, Merlo J. Charles Evans Hughes. 1951.

White, G. Edward. The Constitution and the New Deal. 2000.

BARRY CUSHMAN