Black Monday and the Supreme Court
Black Monday refers to May 27, 1935, a pivotal day in U.S. history when the Supreme Court delivered three unanimous decisions that struck down significant components of President Franklin D. Roosevelt's New Deal economic recovery plan. The New Deal aimed to stabilize the economy during the Great Depression through federal regulation, including the National Industrial Recovery Act (NIRA) and the Frazier-Lemke Farm Bankruptcy Act. The Court ruled against the NIRA, declaring that it overstepped constitutional boundaries by attempting to regulate intrastate commerce, which was not permissible under federal authority. Additionally, the Court invalidated the Frazier-Lemke Act, emphasizing property rights protections under the Fifth Amendment. In a separate ruling, the Court reinforced the independence of regulatory commissions, limiting presidential power to remove their members without congressional approval. The backlash against these decisions sparked criticism from New Deal supporters who argued for the necessity of innovative approaches to address the economic crisis. In response to the setbacks on Black Monday, Roosevelt sought alternative strategies for economic recovery, including attempts at judicial reform. This moment illustrates the complex interaction between presidential initiatives and judicial oversight during a time of national crisis.
Black Monday and the Supreme Court
Date: May 27, 1935
Description: The day the Supreme Court struck down three pieces of New Deal legislation, signaling to President Franklin D. Roosevelt that his programs to cope with the Great Depression faced legal jeopardy.
Significance: The Court’s decision that economic emergencies did not enlarge governmental powers meant that many of the New Deal programs would probably not pass Court scrutiny. The ruling led the Roosevelt administration to craft programs more closely tailored to the Constitution and helped set the stage for the president’s Court-packing plan in 1937.
In an attempt to bring order to the chaotic economy, President Franklin D. Roosevelt developed an economic recovery plan called the New Deal, which relied heavily on federal regulation and legislation. He signed numerous statutes, including the National Industrial Recovery Act (NIRA) in 1933 and the Frazier-Lemke Farm Bankruptcy Act in 1934. The NIRA set minimum wages and maximum hours and established a host of fair practice standards for business, created by business and labor leaders with the assistance of government lawyers. These standards, which were to be enforced by the government, affected even intrastate business concerns. The Frazier-Lemke act provided debt relief to bankrupt farmers. In addition, Roosevelt enlarged the role of economic regulatory commissions and sought to control independent commissions by removing members opposed to his New Deal.
Although the Supreme Court initially accepted some New Deal programs, on Monday, May 27, 1935, known as Black Monday, it handed down three unanimous decisions striking down major aspects of Roosevelt’s plan.
In Schechter Poultry Corp. v. United States (1935), the Court held that poultry codes of the NIRA were unenforceable because the Constitution gave the federal government power to regulate only interstate commerce, not commerce within a state. The facts of the case involved local production of kosher chickens, and the government could not demonstrate a reasonable connection of this intrastate activity to interstate commerce. Many similar NIRA codes were thus invalidated. The Roosevelt administration claimed that the Court had too narrowly defined commerce, much as it had in its decision in United States v. E. C. Knight Co. (1895).
In Louisville Joint Stock Land Bank v. Radford (1935), the Court invalidated the Frazier-Lemke act. The Court ruled that the act, which limited the power of owners to foreclose on debtors, transferred the property rights of the owner to the buyer, violating the takings clause of the Fifth Amendment.
In Humphrey’s Executor v. United States (1935), the Court placed limits on presidential power to remove and appoint members of independent regulatory commissions. The court held that Congress had created such commissions to be independent of the executive branch. For the president to interfere with their independence by removing those members who hold opposing views, without congressional warrant, violated the separation of powers.
Supporters of the New Deal roundly criticized the Court for failing to recognize the need for flexibility and experimentation in dealing with the Great Depression. A report by the Brookings Institution at the time, and subsequent scholarly opinion, has suggested that some New Deal programs such as the NIRA were, in fact, seriously flawed. Black Monday caused Roosevelt to try other approaches to bring about economic recovery, including income tax reform, and in 1937 to attempt to pack the Court with justices who favored New Deal programs.
Bibliography
Irons, Peter. The New Deal Lawyers. Princeton, N.J.: Princeton University Press, 1983.
Leuchtenburg, William E. The Supreme Court Reborn: The Constitutional Revolution in the Age of Roosevelt. New York: Oxford University Press, 1995.