Two timely clarion calls – one for robust federal action, the other (from a notably conservative Supreme Court) on the limits of executive power – are messages conveyed by today’s #stampoftheday, a 3-cent stamp issued on August 15, 1933 to spread the word about the newly created National Recovery Administration (NRA).
A centerpiece of recently elected President Franklin Delano Roosevelt’s New Deal, the NRA was based on the premise that the Great Depression was being caused by excessive competition among firms and workers. This, in turn, suggested that the government could get the economy started if it eliminated “cut throat competition” by bringing industry, labor, and government together to create codes of “fair practices” and set prices, much as it had done during World War I. As Roosevelt explained just before the law passed, “if all employers in each trade now band themselves faithfully in…modern guilds…and agree to act together and at once, none will be hurt and millions of workers, so long deprived of the right to earn their bread in the sweat of their labor, can raise their heads again. The challenge of this law is whether we can sink selfish interest and present a solid front against a common peril.”
To put the law into practice, Hugh S. Johnson, a former general and businessmen appointed to head new NRA, immediately called on every business establishment in the nation to accept a stopgap “blanket code”: a minimum wage of between 20 and 45 cents per hour, a maximum workweek of 35 to 45 hours, and the abolition of child labor.
To gain support for this effort, Roosevelt requested the creation of a new stamp, which he emphasized must be “issued at once to be most effective.” Thirteen working days later, the Post Office issued this stamp, which Roosevelt thought was “grand.” Others were less enamored by it design. Some critics asserted that actual farmers would never carry their scythes on their left shoulder (as the farmer is doing on the stamp). Others noticed that the businessman doesn’t seem to be in-step with the farmer, worker, and woman on the stamp. And still others pointed out that while four people were portrayed, the stamp only shows 7 legs. (Random aside: the eagle on the NRA logo supposedly inspired the name of the Philadelphia Eagles, who joined the National Football League in the fall of 1933).
More importantly, the NRA, which had only a two year mandate before it had to be reauthorized, ran into growing criticism as it began to carry out its extraordinary mandate by negotiating codes with leaders of the nation’s major industries. The most important provisions were anti-deflationary floors below which no company would lower prices or wages, and agreements on maintaining employment and production. While critics contended that the law was making monopolies legal, Donald Richberg, who replaced Johnson as the head of the NRA, countered, “there is no choice presented to American business between intelligently planned and uncontrolled industrial operations and a return to the gold-plated anarchy that masqueraded as ‘rugged individualism.’…Unless industry is sufficiently socialized by its private owners and managers so that great essential industries are operated under public obligation appropriate to the public interest in them, the advance of political control over private industry is inevitable.”
In less than two years, the NRA prohibited about 4,000-to- 5,000 business practices in industries that together employed about 23 million people. Documenting these regulations required issuing over 3,000 administrative orders that reportedly ran to over 10 million pages. Not surprisingly these rules led to growing political and legal challenges to the NRA. Somewhat surprisingly, the key legal challenge came from the Schechter Poultry, Corp., which provided chickens to kosher slaughterhouses in New York City. In 1934, the brothers were indicted for 60 violations of the “Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and about the City of New York” approved by the president in April 1934. The brothers were convicted on 19 of these counts, including one for selling a diseased chicken.
The Schechter brothers’ case went all the way to the U.S. Supreme Court, which in May 1935, unanimously ruled that for three reasons, the NRA was unconstitutional. First, the critical term “fair competition” was nowhere defined in the Act. Second, the Act’s delegation of authority to the executive branch unconstitutionally overbroad. Finally, in a very restrictive reading of what constituted interstate commerce, Chief Justice Charles Evan Hughes, who wrote the majority opinion, held that selling chickens, even if they crossed state lines was simply too minute an activity to constitute “interstate commerce,” which meant that Congress had no power to regulate it. (A few years later, the generally conservative court, which was coming under increased criticism from Roosevelt for overturning several other New Deal laws, began to move away from this narrow interpretation of the Constitution’s Commerce Clause. However, in recent years, the court has begun to again put limits on this power, as it did in a 2011 decision that cited the Schechter case as a precedent.)
From our current perspective, it’s also notable that Hughes explicitly rejected the Roosevelt Administration’s argument that the national economic emergency required special consideration. “Extraordinary conditions may call for extraordinary remedies,” he wrote. “But the argument necessarily stops short of an attempt to justify action which lies outside the sphere of constitutional authority. Extraordinary conditions do not create or enlarge constitutional power.”
With the court decision, the NRA – which lacked the political support it needed to be reauthorized – ceased operations. The decision, however, did not stop the work of the Public Works Administration, an entity created by the same law that ultimately funded more than 30,000 projects, including the Triborough Bridge and the Hoover Dam.
So this relatively small stamp conveys at least two important messages. First, during times of crisis – like the Great Depression and like today’s crises – we need concerted, robust, and coordinated federal action led by people who are competent, empathic, and trustworthy. Second, while a Supreme Court dominated by conservatives can greatly limit those efforts, it also can, and hopefully will again, limit excessive overreach by the executive branch.
Be well, stay safe, fight for justice and work for peace.
