CHAPTER 3



THE SUPREME COURT

AND THE NEW DEAL



"The honor and safety of our bleeding country, and every other motive that can influence the brave and heroic patriot, call loudly upon us, to acquit ourselves with spirit. In short, we must now determine to be enslaved or free. If we make freedom our choice, we must obtain it by the blessing of Heaven on our united and vigorous efforts" George Washington, August 8, 1776.





Having concluded that the Congress had full authority under the commerce clause to regulate all business activity, it is little wonder that on January 3, 1934, during his State of the Union address, Roosevelt told a jubilant Congress that the New Deal was here to stay. Roosevelt's message was greeted with enthusiasm both in Congress and in the public. Crowds eager to see and hear Roosevelt address Congress congregated inside and outside the Capitol early in the morning. By noon they had swelled to thousands, and when Roosevelt entered the gallery they cheered for two minutes. After the applause died down Roosevelt delivered his address to Congress:


"I come before you at the opening of the Regular session of the Seventy-third Congress, not to make requests for special or detailed items of legislation; I come, rather to counsel with you, who, like myself, have been selected to carry out a mandate of the whole people, in order that without partisanship you and I may cooperate to continue the restoration of our national well-being and, equally important, to build on the ruins of the past a new structure designed better to meet the present problems of modern civilization.

"Such a structure includes not only the relations of industry and agriculture and finance to each other, but also the effect which all of these have on our individual citizens and on the whole people as a nation.

"Now that we are definitely in the process of recovery, lines have been rightly drawn between those to whom this recovery means a return to old methods - and the number of these people is small - and those for whom recovery means a reform of many old methods, a permanent readjustment of many of our ways of thinking and therefore of many of our social and economic arrangements.

"Civilizations cannot go back; civilizations must not stand still. We have undertaken new methods. It is our task to perfect, to improve, to alter when necessary, but in all cases to go forward. To consolidate what we are doing, to make our economic and social structure capable of dealing with modern life is the joint task of the Legislative, the Judicial and the Executive Branches of the National Government.

"Without regard to party, the overwhelming majority of our people seek a greater opportunity for humanity to prosper and find happiness. They recognize that human welfare has not increased and does not increase through mere materialism and luxury, but that it does progress through integrity, unselfishness, responsibility and justice.

"In the past few months, as a result of our action, we have demanded of many citizens that they surrender certain licenses to do as they pleased in their business relationships; but we have asked this in exchange for the protection which the State can give against exploitation by their fellow-men or by combinations of their fellow-men.

"I congratulate this Congress upon the courage, the earnestness and the efficiency with which you met the crisis at the Special Session. It was your fine understanding of the national problem that furnished the example which the country has so splendidly followed. I venture to say that the task confronting the First Congress of 1789 was no greater than your own.

"I shall not attempt to set forth either the many phases of this crisis which we experienced last March, nor the many measures which you and I undertook during the Special Session that we might initiate recovery and reform.

"The credit of the government has been fortified by drastic reduction in the cost of its permanent agencies through the Economic Act.

"With the two-fold purpose of strengthening the whole financial structure and of arriving eventually at a medium of exchange which will have over the years less variable purchasing and debt paying power for our people than that of the past, I have used the authority granted me to purchase all American-produced gold and silver and to buy additional gold in the world markets.

"The overwhelming majority of the banks, both national and State, which reopened last Spring, are in sound condition and have been brought within the protection of Federal Insurance.

"We have made great strides toward the objectives of the National Industrial Recovery Act, for not only have several millions of our unemployed been restored to work, but industry is organizing itself with a greater understanding that reasonable profits can be earned while at the same time protection can be assured to guarantee to labor adequate pay and proper conditions of work. Child labor is abolished. Uniform standards of hours and wages apply today to 95 per cent of industrial employment within the field of the National Industrial Recovery Act. We seek the definite end of preventing combinations in furtherance of monopoly and in restraint of trade, while at the same time we seek to prevent ruinous rivalries within industrial groups which in many cases resemble the gang wars of the underworld and in which the real victim in every case is the public itself.

"Under the authority of this Congress, we have brought the component parts of each industry together around a common table, just as we have brought problems affecting labor to a common meeting ground. Though the machinery, hurriedly devised, may need readjustment from time to time, nevertheless I think you will agree with me that we have created a permanent feature of our modernized industrial structure and that it will continue under the supervision but not the arbitrary dictation of government itself.

"I shall continue to regard it as my duty to use whatever means may be necessary to supplement State, local and private agencies for the relief of suffering caused by unemployment. We shall, in the process of recovery, seek to move as rapidly as possible from direct relief to publicly supported work and from that to the rapid restoration of private employment.

"It is the eternal credit of the American people that this tremendous readjustment of our national life is being accomplished peacefully, without serious dislocation, with only a minimum of injustice and with a great, willing spirit of cooperation throughout the country.

"Disorder is not an American habit. Self-help and self-control are the essence of the American tradition-not of necessity the form of that tradition, but its spirit. The program itself comes from the American people.

"It is an integrated program, national in scope. Viewed in the large, it is designed to save from destruction and to keep for the future, the genuinely important values created by modern society. The vicious and wasteful parts of that society we could not save if we wished; they have chosen the way of self-destruction. We would save and encourage the slowly growing impulse among consumers to enter the industrial market place equipped with sufficient organization to insist upon fair prices and honest sales.

"We have ploughed the furrow and planted the good seed; the hard beginning is over. If we would reap the full harvest we must cultivate the soil where this good seed is sprouting and the plant is reaching up to mature growth.

"A final personal word. I know that each of you will appreciate that I am speaking no mere politeness when I assure you how much I value the fine relationship that we have shared during these months of hard and incessant work. Out of these friendly contacts we are, fortunately, building a strong and permanent tie between the legislative and executive branches of the government. The letter of the Constitution wisely declared a separation, but the impulse of common purpose declares a union. In this spirit we join once more in serving the American people."


It was apparent to both parties in Congress that Roosevelt's State of the Union address would greatly strengthen his prestige and his hold on Congress, allowing him to continue without question his so-called economic, social and monetary reforms.

The Democrats declared Roosevelt had won the country by his speech. The reaction of the people to Roosevelt's legislative programs to be presented later, leaders of the party asserted, would be most powerful, assuring quick congressional approval.

Across the Atlantic ocean, British press reaction to Roosevelt's message painted a somewhat different view of the events unfolding in America. Leading newspapers interpreted his message to Congress as proof of Roosevelt's desire to embark upon a long-term policy of reconstructing the American economic, social and industrial systems.

Some British papers expressed doubt as to whether Roosevelt could attain these objectives along the lines indicated in his speech. All agree, however, that Roosevelt still had a practically unanimous country backing him.

The Times of London closed their reaction to Roosevelt's message to Congress by concluding:


In short, can America, with its traditions of highly individualistic, not to say lawless, private enterprise in industry and its great lack of a trained and professional civil service, be induced to accept the degree of State control over the social and economic structure which President Roosevelt clearly proposes without the risk of paralyzing its capacity to achieve recovery on the existing capitalistic lines?

In the light of this message, his long-run policy seems likely to carry his administration much further in the direction of socialism than most Americans have yet begun to realize.


Before continuing, let's examine the object and purpose of civil government and see if it agrees with Roosevelt's interpretation of the purpose of government as indicated in his speech before Congress in January 1934.

The object of civil government, is to secure to the members of a community the free enjoyment of their rights. A right is the just claim or lawful title which we have to anything. Hence we say, a person has a right to what he has earned by his labor, or bought with his money. Having thus acquired it, it is lawfully and justly his own, and no other person has a right to it. We have also a right to do as we please, and to go where we please, if in so doing we do not trespass upon the rights of others: for all men in society have the same rights; and no one has a right to disturb others in the enjoyment of their rights.

Being free to enjoy what belongs to us, or to do as we please, is called liberty. The words right and liberty, however, do not have the same meaning. We may have a right to a thing when we have not the liberty of enjoying or using it. John has a pencil which is justly his own; but James takes it from him by force. John's liberty to enjoy the use of his pencil is lost, but his right to it remains. James has no right to the pencil, though he enjoys the use of it.

All laws ought to be so made as to secure to men the liberty to enjoy and exercise their natural rights. Natural rights are those to which we are entitled by nature; rights which we are born. Every individual is born with a right to live, and freely to enjoy the fruits of his labor, and whatsoever is justly his own. Hence liberty itself is a natural right; that is, it is ours by nature, or by birth, and can not be rightfully taken from us.

Some rights are called inalienable. The term is often applied to natural rights in general. But in its strict and proper sense, it means only rights which a person can not lawfully or justly alienate and transfer to another; that is, rights which can not be parted with and passed over to another, by one's own act. But natural and inalienable rights may be forfeited by crime. By stealing, a man loses his right to liberty, and is justly imprisoned. If he commits murder, he forfeits his right to life, and lawfully suffers death.

Rights and liberty are sometimes called civil rights and civil liberty. It may be asked, Wherein do these differ from natural rights and liberty? Rights and liberty may, at the same time, be both natural and civil. Speaking of them as being ours by nature, or by birth, we call them natural; when they are spoken of as being secured to us by civil government and laws, they are called civil. John's right to his pencil, being secured to him by the laws of civil society, is a civil right. It is at the same time a natural right, because, by the law of nature, he is born with a right to the free use of his property.

Some consider natural liberty to consist in the freedom to do in all things as we please, without regard to the interests of our fellow-men; and that, on entering into civil society, we agree to give up a portion of our natural rights to secure the remainder, and for the good of other members of the society. But if mankind are by nature fitted and designed for the social state, and are all entitled to equal rights, then natural liberty does not consist in being free to say or to do whatever our evil passions may prompt us to do. To rob and to plunder may be the natural right of a tiger; but it is not the natural right of men. Natural rights and natural liberty are such only as are conferred by the law of nature, which forbids our doing whatever is inconsistent with the rights of others.

The law of nature is the will of the Creator. It is called the law of nature, because it is a perfect rule of conduct for all moral and social beings; a rule which is right in itself, right in the nature of things, and which would be right and ought to be obeyed, if no other law or positive command had ever been given. It is right in itself that all men should have the liberty of enjoying the use of what is their own; and it would be right that we should give to every one his due, if we had never been commanded to do so.

The law of nature is the rule of conduct which we are bound to observe toward our Maker and our fellow-men, by reason of our natural relations to them. Mankind being dependent upon their Creator, they own him duties which they ought to perform, though he had never positively enjoined these duties. To serve our Creator is a duty which arises out of the relation we sustain to him. So the relation between parent and child renders it fit and proper that children obey their parents, on whom they are dependent for protection and support. And from our relations to our fellow-men, on whom also we are in a measure dependent, and who have the same rights as ourselves, it is our duty to promote their happiness as well as our own, by doing to them as we would that they should do to us. This is required by the law of nature.

But if the law of nature is the rule by which mankind ought to regulate their conduct, it may be asked, Of what use are written laws? Mankind are not capable of discovering, in all cases, what the law of nature requires. It has therefore pleased Divine Providence to reveal his will to mankind, to instruct them in their duties to himself and to each other. This will is revealed personally to us and in the Holy Scriptures, and is called the law of revelation, and the Divine law.

But although men have the Divine law for their guide, human laws are also necessary. The Divine law is broad, and comprehends rules to teach men their whole duty; but it does not specify every particular act of duty; much of it consists of general principles to which particular acts must be made to conform. God has commanded men to do right, and to deal justly with each other; but men do not always agree as to what is right: human laws are therefore necessary to regulate the conduct of men. And these laws are written that it may always be known what they are.

Again, it may be asked, What must be done when a human law does not agree with divine law? Must the human law be obeyed? A law clearly contrary to the law of God, we are not bound to obey. It is sometimes difficult to determine whether human laws and the Divine law agree. Hence the importance of having the laws made by wise and good men.

The posterity of a people depends as much upon a good form of government as upon its being administered by good men; and experience has proved, that the objects of civil government may be best secured by a written constitution, founded upon the will or consent of the people.

The form of the government in the United States is expressed in a written constitution. A constitution is a form of rules by which the members of a society agree to be governed. The persons forming an association, draft a set of rules setting forth the objects of the association, declaring what officers it shall have, and prescribing the powers and duties of each, and the manner of conducting its operations. So the rules adopted by the people of a state or nation for their government, are called the constitution. They are in the nature of articles of agreement by which the people mutually agree to be governed.

The object of a constitution is two-fold. It is intended, first to guard the rights and liberties of the people against infringement by those entrusted with the powers of government. It points out the rights and privileges of the people, and prescribes the powers and duties of the principal officers of the government; so that it may be known when they transcend their powers, or neglect their duties: and, by limiting their terms of office, it secures to the people the right of displacing, at stated periods, those who are unfaithful to their trust, by electing others in their stead.

Keeping with the true purpose of civil government and its protection of natural and civil rights, on January 8, 1934, the Supreme Court had before it its first test of New Deal legislation for consideration in the form of the Minnesota Moratorium Law. Footnote1 True, it was a state enactment, but it embodied the spirit of the New Deal as heretofore defined. This case presented a challenge to a law where the right of foreclosure of mortgages was suspended for a period of the emergency, not to exceed 2 years. The Court received the commendation of all "New Dealers" when it sustained the act, and Chief Justice Hughes, who wrote the opinion for the Court, was acclaimed the humanitarian jurist par excellence. The Supreme Court held that the State, in entering the Union, or Federal State, did so with the implied reservation of the power of self-preservation; that although it surrendered the power to impair the obligation of a contract, yet it reserved the power to suspend the remedies thereunder during the period of the emergency. But such reserved power was held to abate as the emergency disappeared, and that contractual rights could not under the act be arbitrarily suspended for any period of time, not even for a day.

Then on March 5, 1934, the popularity of the Supreme Court was further enhanced by the decision in the Nebbia case, Footnote2 better known as the New York Milk case. Mr. Justice Roberts wrote the opinion for the Court, and he held that the phrase "affected with a public interest" can, in the nature of things, mean no more than that an industry, for adequate reason, is subject to control for the public good.

The "New Dealers" confidence in the Court was enhanced further by the decision of April 2, 1934, Footnote3 upholding the State of Washington statute imposing an excise tax of 15 cents per pound on all sales of butter substitutes by distributors, which the State had enacted for the benefit of the dairying industry of the State; and the decision of December 3, 1934, Footnote4 upholding an emergency statute of Maryland limiting and charging the rights of mortgages with respect to foreclosure proceedings, was regarded as further evidence that the Court had gone decidedly pro New Deal.

To many observers, it appeared that the Supreme Court was willing to validate Roosevelt's New Deal programs and because of this stamp of approval, Roosevelt's public popularity soared, giving him more and more power to continue on this path toward his new socio-economic order.

On June 8, 1934, Roosevelt delivered to Congress a message outlining his threefold attack on the problems of human security. In this speech to Congress Roosevelt said:


"You are completing a work begun in March, 1933, which will be regarded for a long time as a splendid justification of the vitality of representative government. I greet you and express once more my appreciation of the cooperation which has proved so effective.

"Only a small number of the items of our program remain to be enacted and I am confident that you will pass on them before adjournment. Many other pending measures are sound in conception, but must, for lack of time or of adequate information, be deferred to the session of the next Congress. In the meantime, we can well seek to adjust many of these measures into certain larger plans of government policy for the future of the nation.

"On the side of relief we have extended material aid to millions of our fellow citizens.

"On the side of recovery we have helped to lift agriculture and industry from a condition of utter prostration.

"But, in addition to these immediate tasks of relief and recovery we have properly, necessarily and with overwhelming approval determined to safeguard these tasks by rebuilding many of the structures of our economic life and of reorganizing it in order to prevent a recurrence of collapse.

"It is childish to speak of recovery first and reconstruction afterward. In the very nature of the processes of recovery we must avoid the destructive influences of the past. We have shown the world that democracy has within it the elements necessary to its own salvation.

"Less hopeful countries where the ways of democracy are very new may revert to the autocracy of yesterday. The American people can be trusted to decide wisely upon the measures to be taken by the government to eliminate the abuses of the past and to proceed in the direction of the greater good for the greater number.

"Our task of reconstruction does not require the creation of new and strange values. It is rather the finding of the way once more to known, but to some degree forgotten, ideals and values. If the means and details are in some instances new, the objectives are as permanent as human nature.

"Among our objectives I place the security of the men, women and children of our nation first.

"This security for the individual and for the family concerns itself primarily with three factors. People want decent homes to live in; they want to locate them where they can engage in productive work; and they want some safeguard against the misfortunes which cannot be wholly eliminated in this man-made world of ours.

"In a simple and primitive civilization, homes were to be had for the building. The bounties of nature in a new land provided crude but adequate food and shelter. When the land failed, our ancestors moved on to better land. It was always possible to push back the frontier, but the frontier has now disappeared. Our task involves the making of a better living out of the lands that we have.

"So also, security was attained in the earlier days through the interdependence of members of families upon each other and of the families within a small community upon each other. The complexities of great communities and of organized industry make less real these simple means of security. Therefore, we are compelled to employ the active interest of the nation as a whole through government in order to encourage a greater security for each individual who composes it.

"With the full cooperation of the Congress we have already made a serious attack upon the problem of housing in our great cities. Millions of dollars have been appropriated for housing projects by Federal and local authorities, often with the generous assistance of private owners. The task thus begun must be pursued for many years to come. There is ample private money for sound housing projects; and the Congress, in a measure now before you, can stimulate the lending of money for the modernization of existing homes and the building of new homes. In pursuing this policy we are working toward the ultimate objective of making it possible for American families to live as Americans should.

"In regard to the second factor, economic circumstances and the forces of nature themselves dictate the need of constant thought as to the means by which a wise government may help the necessary readjustment of the population. We cannot fail to act when hundreds of thousands of families live where there is no reasonable prospect of a living in the years to come. This is especially a national problem. Unlike most of the leading nations of the world, we have failed to create a national policy for the development of our land and water resources and for their better use by those people who cannot make a living in their present positions. Only thus can we permanently eliminate many millions of people from the relief rolls on which their names are now found.

"The third factor relates to security against the hazards and vicissitudes of life. Fear and worry based on unknown danger contribute to social unrest and economic demoralization. If, as our Constitution tells us, our Federal Government was established among other things "to promote the general welfare," it is our plain duty to provide for that security upon which welfare depends.

"Next Winter we may well undertake the great task of furthering the security of the citizen and his family through social insurance.

"This is not an untried experiment. Lessons of experience are available from States, from industries and from many nations of the civilized world. The various types of social insurance are interrelated; and I think it is difficult to attempt to solve them piecemeal. Hence, I am looking for a sound means which I can recommend to provide at once security against several of the great disturbing factors in life - especially those which relate to unemployment and old age. I believe there should be a maximum of cooperation between States and the Federal Government. I believe that the funds necessary to provide this insurance should be raised by contribution rather than by an increase in general taxation. Above all, I am convinced that social insurance should be national in scope, although the several States should meet at least a large portion of the cost of management, leaving to the Federal Government the responsibility of investing, maintaining and safeguarding the funds constituting the necessary insurance reserves.

"I have commenced to make, with the greatest care, the necessary actuarial and other studies for the formulation of plans for the consideration of the Seventy-fourth Congress.

"These three great objectives - the security of the home; the security of livelihood and the security of social insurance - are, it seems to me, a minimum of the promise that we can offer to the American people. They constitute a right which belongs to every individual and every family willing to work. They are the essential fulfillment of measures already taken toward relief, recovery and reconstruction.

"This seeking for a greater measure of welfare and happiness does not indicate a change in values. It is rather a return to the values lost in the course of our economic development and expansion.

"Ample scope is left for the exercise of private initiative. In fact, in the process of recovery, I am greatly hoping that repeated promises that private investment and private initiative to relieve the government in the immediate future of much of the burden it has assumed will be fulfilled. We have not imposed undue restrictions upon business. We have not opposed the incentive of reasonable and legitimate private profit. We have sought rather to enable certain aspects of business to regain the confidence of the public. We have sought to put forward the rule of fair play in finance and industry.

"It is true that there are a few among us who would still go back. These few offer no substitute for the gains already made, nor any hope for making future gains for human happiness. They loudly assert that individual liberty is being restricted by government, but when they are asked what individual liberties they have lost, they are put to it to answer.

"We must dedicate ourselves anew to a recovery of the old and sacred possessive rights for which mankind has constantly struggled - homes, livelihood and individual security. The road to these values is the way of progress. Neither you nor I will rest content until we have done our utmost to move further on that road."


During the latter part of 1934, the Roosevelt administration worked diligently to enlarge the social and economic order which these three great objectives sought to bring to pass. With the blessing and approval of the people behind every proposal which came out of the Roosevelt administration and with a willing Congress passing these proposals with little or no debate, it was little wonder that the administration embarked on the next step in their New Deal legislation in 1935 with renewed confidence and zeal. This confidence was expressed by Roosevelt in his State of the Union address delivered January 4, 1935, which he declared:


"Throughout the world change is the order of the day. In every nation economic problems, long in the making, have brought crises of many kinds for which the masters of old practice and theory were unprepared. In most nations social justice, no longer a distant ideal, has become a definite goal, and ancient governments are beginning to heed the call.

"Thus, the American people do not stand alone in the world in their desire for change. We seek it through tested liberal traditions, through processes which retain all of the deep essentials of that republican form of representative government first given to a troubled world by the United States.

"As the various parts in the program began in the extraordinary session of the seventy-third Congress shape themselves in practical administration, the unity of our program reveals itself to the nation. The outlines of the new economic order, raising from the disintegration of the old, are apparent. We test what we have done as our measures take root in the living texture of life. We see where we have built wisely and where we can do still better.

"The attempt to make a distinction between recovery and reform is a narrowly conceived effort to substitute the appearance of reality for reality itself. When a man is convalescing from illness wisdom dictates not only cure of the symptoms but also removal of their causes.

"We find our population suffering from old inequalities, little changed by past sporadic remedies. In spite of our efforts and in spite of our talk, we have not weeded out the over privileged and we have not effectively lifted up the under privileged. Both of these manifestations of injustice have retarded happiness. No wise man has any intention of destroying what is known as the profit motive: because by the profit motive we mean the rights by work to earn a decent livelihood for ourselves and for our families.

"We have , however, a clear mandate from the people, that Americans, must forswear that conception of the acquisition of wealth which, through excessive profits, creates undue private power over private affairs and, to our misfortune, over public affairs as well. In building toward this end we do not destroy the ambition nor do we seek to divide our wealth into equal shares on stated occasions. We continue to recognize the greater ability of some to earn more than others. But we do assert that the ambition of the individual to obtain for him and his a proper security, a reasonable leisure, and a decent living throughout life, is an ambition to be preferred to the appetite for great wealth and great power.

"I recall to your attention my message to the Congress last June in which I said: "Among our objectives I place the security of the men, women and children of the nation first." That remains our first and continuing task; and in a very real sense every major legislative enactment of this Congress should be a component part of it.

"In defining immediate factors which enter into our quest, I have spoken to the Congress and the people of three great divisions:

1. The security of a livelihood through the better use of the natural resources of the land in which we live. 2. The security against the major hazards and vicissitudes of life. 3. The security of decent homes.

"I am now ready to submit to the Congress a broad program designed ultimately to establish all three of these factors of security - a program which because of many lost years will take many future years to fulfill. "


In the years 1933 and 1934 Congress and the people rallied around Roosevelt's New Deal legislation. They were willing participants with him in his efforts to completely destroy and overthrow the system of Government which our forefathers established under divine authority of God. The Supreme Court declared the early new deal legislation as valid; as within the power of Congress. Fortunately, when the main parts of Roosevelt's New Deal legislation came before the Supreme Court, the Court could see that many of the acts did not protect the natural and civil rights of the people of the nation, therefore, the Judicial Branch was not willing to quietly surrender under the great weight of Roosevelt's power and popularity. It would take more than the President of the United States or the Congress to force them to relinquish their power to the executive branch, it would take the increasing anger and hostility of the people against the Supreme Court, to finally achieve the "great surrender" of our Judicial Branch.


Footnote1

Home Building & Loan Association v. Blaisdell, 290 U.S. 398 (1934).

Footnote2

Nebbia v. New York, 291 U.S. 502 (1934).

Footnote3

Magnano Company v. Hamilton, 292 U.S. 40 (1934).

Footnote4

United States Mortgage Company v. Matthews, 293 U.S. 232 (1934).