Black Monday

Black Monday On “Black Monday,” 27 May 1935, the Supreme Court handed down three separate unanimous (9 to 0) opinions that struck down key provisions of the New Deal recovery plan. More importantly, these decisions appeared to signal the beginning of a Supreme Court attack on the reform measures President Franklin D. Roosevelt had devised to lead the country out of the Depression. In Louisville Bank v. Radford (1935), the Court declared unconstitutional the Frazier‐Lemke Act, which provided mortgage relief to bankrupt farmers. In Humphrey's Executor v. United States (1935), the Court denied the president the power to replace at will members of independent regulatory agencies thus thwarting his ability to bring the agencies in line with administration regulatory policies. In the most dramatic and famous case that day, Schechter Poultry Corp. v. United States (1935), the so‐called sick chicken case, the Court declared the National Recovery Act unconstitutional, holding that Congress could not delegate such sweeping powers to an executive body. It also held that the Schechters' poultry business was intrastate, not interstate, commerce and thus not subject to federal regulation. It was the latter that worried President Roosevelt because the three liberal justices—Louis D. Brandeis, Benjamin Cardozo and Harlan Fiske Stone—voted against the government's position. If the Court were to apply this approach across the board to regulatory issues, it would frustrate New Deal efforts. Roosevelt called a press conference the next day in which he vehemently denounced the Court for relegating the country to “the horse‐and‐buggy definition of interstate commerce.”

Black Monday had two major consequences. First, it forced President Roosevelt to abandon the corporatist approach of the NRA and caused the administration to pursue more radical reform measures such as income tax reform, which attacked business and the wealthy. Second, Roosevelt began to plan his attack on the Supreme Court that, following further Supreme Court defeats in 1936, led to the court‐packing plan of 1937. The controversy surrounding that proposal eventually led to the Supreme Court's reversal of its position on the scope of congressional power to regulate interstate commerce and thus allowed New Deal programs to pass constitutional muster, although FDR failed in his efforts to change the method of nominating federal judges.

Rayman L. Solomon