Conventional history of the Great Depression will paint Hoover as the do-nothing guy, and FDR as the bold experimenter. In fact, Engineer Hoover couldn’t stop tweaking with the economy, and even signed the Smoot-Hawley bill, that drastically increased tariffs in 1930. Of course, other countries retaliated, and America’s international trade went down by about 50%. Some commentators argue that Smoot-Hawley alone exacerbated, and might have even caused the Great Depression. Ironically, Hoover had wanted tariff rates to decrease, but signed the bill anyway—supposedly as payback to farmers.
Hoover also tried to jawbone suffering companies that it was morally wrong to lay off employees, and his Reconstruction Finance Corporation was one of the very few government programs that actually did help to alleviate some of what the Depression had wrought. Of course, most people—not without justification—blamed the Depression on him, and this combined with his lackluster campaign style, assured Hoover of a landslide loss in the 1932 election.
Not that Roosevelt helped the situation very much. The linchpin of his New Deal strategy was the National Recovery Administration, an incredibly complicated and contradictory set of thousands of rules to micromanage every business. Six months after the NRA went into effect, industrial production dropped twenty-five percent. According to some economists, the NRA increased the cost of doing business by forty percent. It didn’t help that the architects of this policy were ardent admirers of the planned economies of Stalin and Mussolini.
Many people were arrested for not complying with NRA regulations. Jack Magid of New Jersey, for example, was jailed for violating the “Tailor’s Code” by pressing a suit for 35 rather than the NRA required 40 cents. The NRA was symbolized by a blue eagle, and its flag flew outside all complying businesses. Historian John T. Flynn remembers:
The NRA was discovering it could not enforce its rules. Black markets grew up. Only the most violent police methods could procure enforcement. In Sidney Hillman’s garment industry the code authority employed enforcement police. They roamed through the garment district like storm troopers. They could enter a man’s factory, send him out, line up his employees, subject them to minute interrogation, take over his books on the instant.
Night work was forbidden. Flying squadrons of these private coat-and-suit police went through the district at night, battering down doors with axes looking for men who were committing the crime of sewing together a pair of pants at night. But without these harsh methods many code authorities said there could be no compliance because the public was not back of it.
The case that was to finally break the back of the NRA was A. L. A. Schechter Poultry Corp. v. United States (1935). Immigrants Joseph, Martin, Alex, and Aaron Schechter ran a wholesale kosher poultry business in Brooklyn. They would procure the birds from some primary source, truck it to their slaughterhouse markets in Brooklyn, for resale to retail poultry dealers and butchers who sell directly to consumers. As such, the Schechters did not engage in interstate commerce.
Since a hallmark of NRA codes was efficiency, a specific regulation actually provided that their customers could not pick out specific birds for slaughter. Rather, entire coops had to be taken at large, or on smaller orders, the birds were to be accepted as drawn from the cage. Bear in mind that chickens are prodigious carriers of disease, and this was well before antibiotics. Thus, the customers wanted to be able to observe and pick out the healthy birds.
As the Schechters’ operation was large and visible, it did not take long for federal agents to cite them for 60-odd violations of NRA codes, subjecting them to significant fines and even jail time. The Schechters, though, were to fight back—all the way to the Supreme Court.
It is difficult to adequately portray the arrogance of the pathologically self-assured New Deal brain trust, including the attorneys who would argue the case against young lead counsel Joseph Heller, along with Frederick Wood, of the prestigious firm Cravath, de Gersdorff, Swaine, and Wood. Some donations came in to help defray the Schechters’ legal expenses from dozens of businesses that would be only too happy to see the NRA fall.
And fall it did in a unanimous decision on May 27, 1935. Governor Huey Long of Louisiana said, “I raise my hand in reverence to the Supreme Court that saved this nation from fascism.”
As to the Schechters, it would be a Pyrrhic victory. Even before the case, Joseph Schechter remarked that the New Deal had all but ruined him, closing most of his facilities, and leaving him with one-tenth of the business he had enjoyed in 1934. In an interview with the New York Times, sister Sarah Schechter Seligman said that the A. L. A. Schechter Corporation was out of business. Aaron and Alex were running a small poultry store nearby, and Martin worked in another. Patriarch Joseph was unemployed.
“None of them has any money,” she told the reporter. “Although a lot of people felt sorry for them afterward and promised to help them out, all they got was a few ten-dollar bills and letters of congratulation.”
During the case, elements of the pro-New Deal media such as Drew Pearson were not above anti-Semitic remarks in their columns—views that were certainly shared by FDR and his wife. Yet, history records that the Schechters were unwavering in their support of the tyrant who persecuted them, and voted for FDR in every election.