Stocked with philosophical and economic conservatives, the U.S. Supreme Court proved to be the most consistent opponent to President Franklin Roosevelt’s New Deal programs. In 1935 the Court struck down the National Recovery Administration (NRA) as an unconstitutional exercise of legislative authority by the executive branch. The NRA was supposed to work with labor and management to develop national wage, price, and production codes that would, theoretically, have systematized and rationalized prices and wages. The labor movement and large employers welcomed the NRA codes, but smaller companies resented the NRA’s interference in their business, the domination of big business, and the administrative complexity required by adherence to the NRA’s codes. In May 1935, the Supreme Court, in the case of Schechter Poultry Corp. v. United States, invalidated the NRA and the legislation that created it. The lengthy, unanimous opinion, excerpted here, demonstrated the U.S. Supreme Court’s complete unwillingness to endorse FDR’s argument that a national crisis demanded innovation.
First. Two preliminary points are stressed by the Government with respect to the appropriate approach to the important questions presented. We are told that the provision of the statute authorizing the adoption of codes must be viewed in the light of the grave national crisis with which Congress was confronted. Undoubtedly, the conditions to which power is addressed are always to be considered when the exercise of power is challenged. Extraordinary conditions may call for extraordinary remedies. But the argument necessarily stops short of an attempt to justify action which lies outside the sphere of constitutional authority. Extraordinary conditions do not create or enlarge constitutional power. The Constitution established a national government with powers deemed to be adequate, as they have proved to be both in war and peace, but these powers of the national government are limited by the constitutional grants. Those who act under these grants are not at liberty to transcend the imposed limits because they believe that more or different power is necessary. Such assertions of extra-constitutional authority were anticipated and precluded by the explicit terms of the Tenth-Amendment,—“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
The further point is urged that the national crisis demanded a broad and intensive cooperative effort by those engaged in trade and industry, and that this necessary cooperation was sought to be fostered by permitting them to initiate the adoption of codes. But the statutory plan is not simply one for voluntary effort. It does not seek merely to endow voluntary trade or industrial associations or groups with privileges or immunities. It involves the coercive exercise of the law-making power. The codes of fair competition which the statute attempts to authorize are codes of laws. If valid, they place all persons within their reach under the obligation of positive law, binding equally those who assent and those who do not assent. Violations of the provisions of the codes are punishable as crimes.
Source: "A.L.A. Schechter Poultry Corp. et al. v. United States." Argued May 2, 3, 1935—Decided May 27, 1935. (Together with No. 854 United States v. A.L.A. Schechter Poultry Corp et al. Certioran to the Circuit Court of Appeals for the Second Circuit), in United States Reports. Vol. 295. Cases adjudged in The Supreme Court in October Term 1934. From April 1 (concluded) to and including June 3, 1935. Ernest Knaebel Reporter. (Washington, D.C.: United States Government Printing Office, 1935).