New Deal agencies and constitutional challenges
Background: The New Deal and Constitutional Challenges
During the Great Depression, President Franklin D. Roosevelt introduced the New Deal—a series of programs, public work projects, financial reforms, and regulations aimed at economic recovery and social reform. Many New Deal agencies were created to regulate commerce, provide relief, and reform economic sectors.
However, these agencies faced constitutional challenges, primarily focusing on:
The scope of Congress’s power under the Commerce Clause
The non-delegation doctrine (whether Congress improperly delegated legislative power to executive agencies)
Due process under the Fifth Amendment
The balance of powers among branches of government
The Supreme Court initially struck down several New Deal laws as unconstitutional but later softened its stance.
1. Schechter Poultry Corp. v. United States (1935)
Background: The National Industrial Recovery Act (NIRA) authorized the President to regulate industry by creating "codes of fair competition," setting wages, hours, and production limits. Schechter Poultry was accused of violating these codes.
Issue: Did Congress delegate legislative power unconstitutionally to the President? Did the regulations exceed the federal government’s power under the Commerce Clause?
Decision: The Court unanimously struck down the NIRA.
The Court held that the law improperly delegated legislative power to the executive branch without clear standards (violating the non-delegation doctrine).
It also ruled that the poultry slaughtered by Schechter was local commerce, not interstate commerce, so Congress couldn’t regulate it under the Commerce Clause.
Significance: This case severely limited Congress’s regulatory power and blocked many New Deal economic controls.
2. United States v. Butler (1936)
Background: The Agricultural Adjustment Act (AAA) imposed a tax on processors of agricultural products, using the funds to pay farmers to reduce crop production.
Issue: Was the tax and subsidy program a constitutional use of Congress’s power to tax and spend?
Decision: The Court struck down the AAA.
The Court ruled that Congress’s tax was aimed at regulating agriculture, which was a local matter and outside federal power.
The Court said that the Act attempted to regulate and control agricultural production, a power reserved to the states (violating the Tenth Amendment).
Significance: It reaffirmed limits on Congress’s power over agriculture and states’ rights.
3. National Labor Relations Board v. Jones & Laughlin Steel Corp. (1937)
Background: The National Labor Relations Act (Wagner Act) protected workers’ rights to unionize and bargain collectively.
Issue: Did Congress exceed its Commerce Clause power by regulating labor relations in a manufacturing plant?
Decision: The Court upheld the Act.
It marked a turning point, recognizing that labor relations had a “close and substantial relation” to interstate commerce.
The decision expanded the scope of the Commerce Clause to include activities that, while local, affected interstate commerce.
Significance: This case signaled the Court’s acceptance of broader federal regulatory power, supporting many New Deal laws.
4. West Coast Hotel Co. v. Parrish (1937)
Background: Washington state enacted a minimum wage law for women and minors. The hotel challenged it as violating freedom of contract under the Due Process Clause.
Issue: Could the state regulate wages under its police powers without violating the Due Process Clause?
Decision: The Court upheld the minimum wage law.
The ruling overturned earlier decisions (like Lochner v. New York) that struck down economic regulations.
It recognized that states could impose regulations to protect workers’ health and welfare.
Significance: This case marked the end of the "Lochner era" and gave states and the federal government greater leeway in regulating the economy.
5. NLRB v. Mackay Radio & Telegraph Co. (1938)
Background: This case concerned labor rights and employer retaliation during strikes.
Issue: The Court interpreted the National Labor Relations Act’s protections for workers.
Decision: The Court upheld the NLRB’s power but allowed employers to hire permanent replacements during strikes, balancing labor rights and business interests.
Significance: It reflected the Court’s nuanced approach to labor law, confirming New Deal protections while allowing some employer flexibility.
6. Helvering v. Davis (1937)
Background: This case dealt with the Social Security Act, which established old-age benefits funded by payroll taxes.
Issue: Was the Social Security Act a valid exercise of Congress’s power to tax and spend?
Decision: The Court upheld the Act.
It accepted a broad interpretation of Congress’s power to tax and spend for the general welfare.
The decision recognized social welfare programs as constitutional federal functions.
Significance: It confirmed the federal government’s ability to enact large-scale social programs.
Summary of Constitutional Themes
| Case | Doctrine/Issue | Result | Significance |
|---|---|---|---|
| Schechter Poultry | Non-delegation & Commerce Clause | Invalidated NIRA | Limited federal power over local commerce |
| United States v. Butler | Tax & Spend power; Tenth Amendment | Struck down AAA | Limited federal control of agriculture |
| NLRB v. Jones & Laughlin | Commerce Clause expansion | Upheld Wagner Act | Broadened federal regulatory power |
| West Coast Hotel | Due Process & economic regulation | Upheld minimum wage | Ended Lochner-era limits on regulation |
| NLRB v. Mackay | Labor rights & employer power | Balanced NLRB authority | Affirmed New Deal labor protections |
| Helvering v. Davis | Tax & Spend for general welfare | Upheld Social Security | Federal social welfare constitutional |
Final Notes:
Early New Deal programs often failed due to the Court’s narrow interpretation of federal powers.
The famous "switch in time that saved nine" (1937) involved the Court shifting to uphold New Deal laws, avoiding Roosevelt’s court-packing plan.
After 1937, the Supreme Court broadly upheld federal regulation under the Commerce Clause and taxation/spending powers, enabling the modern administrative state.
RELATED Blog
0 comments