Black Monday

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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

Black Monday Oct. 19, 1987, in U.S. history, day of financial panic. The Dow Jones Average fell 508.32 points, a drop of 22.6%, the largest since 1914. The point decline as well as the volume, 604.33 million shares, exceeded previous records. Among the possible causes were investors' anxiety about U.S. international trade and federal deficits, U.S. criticism of West Germany's economic policies, the cascading effect of the automatic computerized selling of stocks, and the drop in stock-index futures triggered by computerized trading programs. Stocks throughout the world joined the slide. By mid-1988 the stock market had recovered, and the U.S. economy was largely unaffected by the crash.

Black Monday (19 Oct. 1987) The worst stock-market collapse since the Wall Street Crash, when the average share index (Dow Jones) on the New York Stock Exchange (Wall Street) fell by more than 20 per cent, leading to similar levels of decline in other stock markets around the world. It was caused mainly by overconfidence in the economy during the mid-1980s, which had led to a disproportionate inflation in share prices.