Steward Machine Co. v. Davis
"Steward Machine Co. v. Davis" is a significant Supreme Court case from 1937 that upheld the constitutionality of a provision of the Social Security Act related to unemployment compensation. The ruling marked a pivotal shift in the Court's interpretation of the federal government's taxing and spending powers, contrasting sharply with its earlier decision in "United States v. Butler." In a narrow 5-4 decision, the majority opinion penned by Justice Benjamin N. Cardozo emphasized the federal government’s authority to levy taxes and allocate funds for social welfare programs, thereby reinforcing the framework of the Social Security Act. Dissenting justices argued that the Tenth Amendment imposed limits on this power, reflecting a more conservative perspective on federalism. This case is notable for signaling a change in the Court's approach to economic and social regulation during a time of great economic distress in the United States. As such, "Steward Machine Co. v. Davis" plays a crucial role in the ongoing discussion about the balance of power between state and federal authorities in America.
Steward Machine Co. v. Davis
Date: May 24, 1937
Citation: 301 U.S. 548
Issue: Taxing and spending clause
Significance: The Supreme Court upheld the portion of the 1935 Social Security Act that established unemployment compensation.
Justice Benjamin N. Cardozo wrote the opinion for the 5-4 majority sustaining the 1935 Social Security Act’s provision for unemployment compensation. The Supreme Court clearly departed from its earlier decision in United States v. Butler (1936), which was decided before Justice Owen J. Roberts switched to a more liberal position. Justices Pierce Butler, James C. McReynolds, George Sutherland, and Willis Van Devanter dissented, asserting that the Tenth Amendment limited the federal government’s taxing and spending power a position clearly rejected by the Court’s new majority.
