FDR Press Conference. May 31, 1935
THE PRESIDENT: What is the news?
Q. (Francis Stephenson) That's what we want.
THE PRESIDENT: Have you any questions to ask?
Q. What did you do yesterday outside of seeing Mr. Richberg?
THE PRESIDENT: I saw lots of people. I telephoned to a lot more, and I am
continuing to do it.
Q. Do you care to comment any on the N.R.A.?
THE PRESIDENT: Well, Steve, if you insist. That s an awful thing to put up to
a fellow at this hour of the morning just out of bed. Suppose we make this background and
take some time because it is an awfully big subject to cover, and it is just possible that
one or two of you may not have read the whole twenty-eight or twenty-nine pages of the
Supreme Court decision.
I have been a good deal impressed bywhat shall I call it?the rather
pathetic appeals that I have had from all around the country to do something. They are
very sincere as showing faith in the Government. They are so sincere that you feel in
reading themand so far there have been somewhere between two and three thousand by
letter and telegram and I haven't seen this morning's mail yetso sincere that you
feel the country is beginning to realize that something in the long run has to be done.
And they are all hoping that something will be done right away.
I think probably the best way to illustrate it is to read you just a few telegrams
that came out of this huge pile. They are all from business men, every one. I took out
only the telegrams from business men. And they illustrate pretty well that the information
that they have received since Monday through the press and through the radio has failed to
explain to them the implications of the Supreme Court's decision. In other words, they are
groping, and they have not yet had information from either the press or the radio or from
me, which would put this situation in plain, lay language.
Well, for instance, here is one from Indiana. A State association of small-well,
they are drug-store people. They start off:
In other words, "Mr. President, do please get some constitutional legislation
that will save us."
Here is one from Jackson, Mississippi. This is another association of small business
- "We commend you for what you have done to protect the small business man from
ruthless destructive trade practices. We hope you will continue your sincere efforts to
the end that Constitutional legislation be enacted that will save the small business man
from eventual extinction."
Here is one from New York:
- "Stabilization of business through codes has been of untold value to America. We
cannot urge you too strongly to seek some plan to further the great work. Unless the use
of loss leaders by chain store vultures is prohibited the small independent merchants will
be the greatest sufferers."
I am just giving you this to show the state of mind of people in the country because
the situation has never been explained to them as yet.
Here is a man from Hastings. He says:
- "I respectfully appeal to you to issue a proclamation to uphold the N.R.A. and I
suggest that the same be brought to the people for a vote. A crisis exists. Congress
represents the electors and this will give you full power."
That is his solution. Here is a man from Westchester County. He says:
- "Suggest you get button out. 'I am for the N.R.A.'"
In other words, "Mr. President, please save me. Here is another man:
- "My business was well on the way to recovery under the N.R.A. cigarette and cigar
code. All indications point to conditions more chaotic than when you took office. Prices
are being ruthlessly slashed. I, like all other small retailers, am keeping my faith in
you to keep me from losing my business. Save the people."
In other words, "Please do something to reestablish the codes."
Here is one from Iowa:
- "Sincerely hope that you may be able to do something to replace the National
Recovery Act in a legal form. Gladly admit that before the birth of the Act our business
was very far below par and because of a code in our industry we made money in the past
year which under the new conditions we cannot in the future. It would be a shame at this
late date if the chiselers which you so properly dubbed them early in your Administration
won this great battle. I would hate ever again to see Wall Street and utilities in control
of the Government of the United States. I heard one hotel manager today remark now that
the Act has been temporarily voided he would not have to pay code prices. He would make
money in his business by paying his bell boys $3.oo a week and so on down the line."
Here is one from New York:
- "We urge constructive legislation for the protection of the small business man. We
feel such legislation is imperative if he is to survive."
Here is one from Georgia:
- "The battle is on. Retailers demanding their pound of flesh. Next step sweat shop
labor competitions. In the name of my hundred employees and our investment we beseech you
to restore N.R.A."
That's from a rather prominent lawyer in Atlanta who is also in business. That is
another angleanother suggestion.
Here is one from Galveston, Texas:
- "Respectfully call your attention to section of Constitution referring to appellate
power: 'The Supreme Court shall have appellate jurisdiction both as to law and fact, with
such exceptions and under such regulations as Congress shall make.' Suggest act
establishing compulsory standard of labor relations and fair trade practices for all
industries substantially affecting interstate commerce and creating special court with
exclusive jurisdiction thereover and excluding appellate jurisdiction of the Supreme
That is another suggestion. That is the forty-eight-States man. Here is one from
- "We feel that some law meeting the objections of the Supreme Court should be passed
immediately to take the place of N.R.A. If this cannot be done by Federal law then think
you should urge all States to pass laws to take care of this."
Here is another firm:
- "I beg to submit following suggestion for making N.R.A. constitutional. Congress
has unlimited power regarding income taxes. Make N.R.A. technically voluntary under
Government sponsorship. Increase corporation income tax rate say 25 percent. Allow N.R.A.
cooperating corporations 25 percent deduction on ground adherence reduces Federal relief
Q. Do you mind telling us the city from which that came?
THE PRESIDENT: I had better not because you might locate the store. (Laughter)
Here is one from Pennsylvania:
- "All good citizens are looking to you to exercise whatever power is at your command
to prevent business chaos which seems inevitable following Supreme Court decision. Already
[and then mentioning the name of a very large store] and many smaller people are rashly
That is from a printing company. Here is another one:
- "I hope your Congress is intelligent enough to quickly come through with a new
program that will definitely make your efforts a success and sustain all the good that has
been brought about."
Here is another one from a Massachusetts small operator in the candy business:
- "Our business crippled by the decision. Chiselers already at our throats and have
begun choking us. Need immediate action."
And so forth and so on.
I suppose there are several thousand along the same line, mainly from business men.
Now, coming down to the decision itself. What are the implications? For the benefit
of those of you who haven't read it through I think I can put it this way: the
implications of this decision are much more important than almost certainly any decision
of my lifetime or yours, more important than any decision probably since the Dred Scott
case, because they bring the country as a whole up against a very practical question. That
is in spite of what one gentleman said in the paper this morning, that I resented the
decision. Nobody resents a Supreme Court decision. You can deplore a Supreme Court
decision, and you can point out the effect of it. You can call the attention of the
country to what the implications are as to the future, what the results of that decision
are if future decisions follow this decision.
Now take the decision itself. In the Schechter case the first part of it states the
facts in the case, which you all know. Then it takes up the code itself and it points out
that the code was the result of an Act of Congress. It mentions in passing that the Act of
Congress was passed in a great emergency and that it sought to improve conditions
immediately through the establishing of fair practices, through the prevention of unfair
practices. It then goes on in general and says that even though it was an emergency, it
did not make any difference whether it was an emergency or not, it was unconstitutional
because it did not set forth very clearly, in detail, definitions of the broad language
which was used in the Act. In fact, it says that it makes no difference what kind of
emergency this country ever gets into, an Act has to be constitutional. Of course, it
might take a month or two of delay to make an Act constitutional and then you wouldn't
know whether it was constitutional or notyou would have to do the best you could.
Now, they have pointed out in regard to this particular Act that it was
unconstitutional because it delegated certain powers which should have been written into
the Act itself. And then there is this interesting language that bears that out. It is on
- "Price cutting tactics have returned. We in this business require protection."
Of course, that is a very interesting implication. Some of us are old enough to
remember the war daysthe legislation that was passed in April, May and June of 1917.
Being a war, that legislation was never brought before the Supreme Court. Of course, as a
matter of fact, a great deal of that legislation was far more violative of the strict
interpretation of the Constitution than any legislation that was passed in 1933. All one
has to do is to go back and read those war acts which conferred upon the Executive far
greater power over human beings and over property than anything that was done in 1933. But
the Supreme Court has finally ruled that extraordinary conditions do not create or enlarge
constitutional power! It is a very interesting statement on the part of the Court.
However, the question of the delegation of legislative power is not so very
important in this particular case because the Supreme Court has at least intimated that in
so far as the delegation of power was concerned, the language of the Act could have been
so improved as to give definite directions to administrative or quasi-judicial bodies and
in that respect it refers to the methods already used in the case of the Federal Trade
Commission and cites that with approval.
In other words, for the future the delegation of power is not an unsurmountable
object, and undoubtedly an Act could be written which would in general conform to this
opinion of the Supreme Court as to delegated powersget that! So that is not the most
serious implication yet.
However, you come down to something else which is the most important implication,
and that relates to interstate commerce.
Before I go on to the other point there is one interesting paragraph on page
eighteen in regard to the delegation of powers.
- "We are told that the provisions of the statute authorizing the adoption of the
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."
- "Section 3 of the Recovery Act is without precedent. It supplies no standards for
any trade, industry or activity. It does not undertake to prescribe rules of conduct to be
applied to particular states of fact determined by appropriate administrative procedure.
Instead of prescribing rules of conduct,"
it only prescribed, if you remember, objectives to be sought
Of course, there is a good deal said in the opinion about the imposing of codes. As
I remember it there was only one code imposed and that was the alcohol code. I don't think
there was any other code imposed by Executive Order.
Now we come down to this big thing. The implication of the provisions as applied to
intrastate transactions. Why is itlet me put it this waywhy is it that so many
of these telegrams are futile? Why is it that so many of these letters and telegrams show
that the senders do not realize what the rest of this decision means?
Let's put the decision in plain lay language in regard to at least the dictum of the
Court and never mind this particular sick chicken or whatever they call it. That was a
question of fact, but of course the Court in ruling on the question of fact about these
particular chickens said they were killed in New York and sold and probably eaten in New
York, and therefore it was probably intrastate commerce. But of course the Court does not
stop there. In fact the Court in this decision, at least by dictumand remember that
dictum is not always followed in the futurehas gone back to the old Knight case in
1885, which in fact limited any application of interstate commerce to goods in
Since 1885 the Court in various decisions has enlarged on the definition of
interstate commercerailroad cases, coal cases and so forth and so on. It was clearly
the opinion of the Congress before this decision and the opinion of various
attorneys-general, regardless of party, that the words "interstate commerce"
applied not only to an actual shipment of goods but also to a great many other things that
affected interstate commerce....
The whole tendency over these years has been to view the interstate commerce clause
in the light of present-day civilization. The country was in the horse-and-buggy age when
that clause was written and if you go back to the debates on the Federal Constitution you
will find in 1787 that one of the impelling motives for putting in that clause was this:
There wasn't much interstate commerce at allprobably 80 or 90 percent of the human
beings in the thirteen original States were completely self-supporting within their own
They got their own food, their own clothes; they swapped or bought with any old kind
of currency, because we had thirteen different kinds of currency. They bought from their
neighbors and sold to their neighbors. However, there was quite a fear that each of the
thirteen States could impose tariff barriers against each other and they ruled that out.
They would not let the States impose tariff barriers, but they were afraid that the
lawyers of that day would find some other method by which a State could discriminate
against its neighbors on one side or the other, or discriminate in favor of its neighbors
on one side or the other. Therefore, the interstate commerce clause was put into the
Constitution with the general objective of preventing discrimination by one of these
Sovereign States against another Sovereign State.
They had in those days no problems relating to employment. They had no problems
relating to the earning capacity of peoplewhat the man in Massachusetts earned, what
his buying power was. Nobody had ever thought of what the wages were or the buying
capacity in the slave-holding States of the South. There were no social questions in those
days. The question of health on a national basis had never been discussed. The question of
fair business practices had never been discussed. The word was unknown in the vocabulary
of the Founding Fathers. The ethics of the period were very different from what they are
today. If one man could skin a fellow and get away with it, why, that was all right.
In other words, the whole picture was a different one when the interstate commerce
clause was put into the Constitution from what it is now. Since that time, because of the
improvement in transportation, because of the fact that, as we know, what happens in one
State has a good deal of influence on the people in another State, we have developed an
entirely different philosophy.
The prosperity of the farmer does have an effect today on the manufacturer in
Pittsburgh. The prosperity of the clothing worker in the city of New York has an effect on
the prosperity of the farmer in Wisconsin, and so it goes. We are interdependent-we are
tied in together. And the hope has been that we could, through a period of years,
interpret the interstate commerce clause of the Constitution in the light of these new
things that have come to the country. It has been our hope that under the interstate
commerce clause we could recognize by legislation and by judicial decision that a harmful
practice in one section of the country could be prevented on the theory that it was doing
harm to another section of the country. That was why the Congress for a good many years,
and most lawyers, have had the thought that in drafting legislation we could depend on an
interpretation that would enlarge the Constitutional meaning of interstate commerce to
include not only those matters of direct interstate commerce, but also those matters which
indirectly affect interstate commerce.
The implication, largely because of what we call obiter dicta in this opinion, the
implication of this opinion is that we have gone back, that the Supreme Court will no
longer take into consideration anything that indirectly may affect interstate commerce.
That hereafter they will decide the only thing in interstate commerce over which they can
permit the exercise of Federal jurisdiction is goods in transit plus, perhaps, a very
small number of transactions which would directly affect goods in transit.
Furthermore, they say on page 19 [295 US 495, 542],
"(1) Were these transactions 'in' interstate commerce? Much is made of the fact that
almost all the poultry coming to New York is sent there from other States" . . .
"When defendants had made their purchases, whether at the West Washington Market in
New York City or at the railroad terminals serving the City, or elsewhere, the poultry was
trucked to their slaughter houses in Brooklyn for local disposition. The interstate
transactions in relation to that poultry then ended."
Then to come to the next point, they take one very interesting stand; first they
talk about necessary and well-established distinctions between the direct and indirect
effects. They quote a number of cases and finally come down to the quotation from Industrial
Association vs. United States at the top of page 23 [295 US
- "it authorizes the making of codes to prescribe them. For that legislative
undertaking, Section 3 sets up no standards, aside from the statement of the general aims
of rehabilitation, correction and expansion described in Section 1. In view of the scope
of that broad declaration, and of the nature of the few restrictions that are imposed, the
discretion of the President in approving or prescribing codes, and thus enacting laws for
the government of trade and industry throughout the country, is virtually unfettered. We
think that the code-making authority thus conferred is an unconstitutional delegation of
Now that is interesting because the implication is this: We have in this country
about five major human activities. One is transportation and that is not listed here.
The other four are: first, construction. I suppose the theory is that the building,
even though the materials come from other States and none of the materials come from the
locality of the building, that the building is part of the land and therefore that nothing
entering into the erection of that building can have anything to do with the interstate
commerce clause of the Constitution.
The next, the third large occupation, is miningthat is to say the taking of
coal, oil or copper or anything else out of the ground. The implication there is that no
matter where the coal or oil or copper goes it cannot be considered to have any
relationship to interstate commerce because it came out of one place. It was a part of a
place or locus.
Another great occupation is manufacturing. The implication is that if I manufacture
at Hyde Park, New York, let us say, a national article such as a national brand of tooth
paste or a national brand of automobiles while I only sell a few tubes of tooth paste or
four or five cars in the place of manufacture at Hyde Park, and sell the rest in
interstate commerce, the actual manufacturing itself seems to be so closely tied to the
actual factory, that it does not make any difference where the goods go and therefore the
interstate commerce clause of the Constitution cannot apply to any of the elements of the
manufacturing at that place, either to materials that may come from other States, to the
working conditions that obtain in the factory, to the wages paid or to the unfair
practices that I as a manufacturer may be engaged in.
And then finally you have a fifth great occupation of human lifethe growing of
crops. It evidently does not make any difference, after I grow my wheat, whether it is put
in an elevator in a different State, perhaps to be commingled with other wheat and sold in
Liverpool, or New York or Germany or in any other State of the Union-it does not make any
difference. The fact is that the wheat was grown in one place, and therefore the growing
of crops cannot be considered in any shape, manner or form as coming under the interstate
commerce clause of the Constitution. Perhaps wheat actually in transit under this decision
may come under it. But it could not if it were in storage, for example in a bin, because
there it would be tied to a definite locality.
And so it does bring us up rather squarely as to the big issue in the country and as
to how we are going to solve it. The big issue is this: Does this decision mean that the
United States Government has no control over any national economic problem?
The simple example is crop adjustment. Are we going to take the hands of the Federal
Government completely off any effort to adjust the growing of national crops, and go right
straight back to the old principle that every farmer is a lord of his own farm and can do
anything he wants, raise anything, any old time, in any quantity, and sell any time he
wants? You and I know perfectly well that if we completely abandon crop controlI
don't care whether it is the present method or, let us say, the McNary-Haugen method,
because, after all, that is a Federal method, tooif we are to abandon Federal
relationship to any national crop, we shall again have thirty-six-cent wheat. You can't
stop it. Under present world conditions we will have five-cent cotton. That is obvious.
And then you come down to the next series of thingsmanufacturing. We have
tried to improve the economic conditions of certain forms of manufacturing. I am not
talking about the social conditions now. I am talking about the economic conditions,
giving to manufacturers a chance to eliminate things that we have nationally concluded are
not fair. For example, the chain stores going into little communities or big communities
all over the country and starting a system of loss leaders. Of course anybody who does his
own marketing, and all you ladies of the press will appreciate this, knows perfectly well
that where there is the loss-leader system and you are trying to get along on a budget,
you are going to look into the chain-store window and see what the loss leader is each
day. You may get a can of peas for fourteen cents instead of eighteen cents; naturally you
wait and buy the loss leader. The chain store can afford to put out loss leaders; but the
independent grocery store cannot.
A number of Statesand here we come down to the last questionhave
attempted to take away the privileges or the advantages that come to very large nationwide
businesses, by imposing special taxes on chain stores, but only a few States have
succeeded in doing it. And that is a very good illustration of the difficulty of
correcting economic conditions by forty-eight separate actions.
We attempted to do it in the codes by getting industry itself to formulate codes
that would eliminate loss leaders. They did, and as a result the wave of bankruptcies of
small stores which was under way throughout the country two years ago was stopped. And the
volume of telegrams that has come in today leads one to believe that they again face, a
great many of them, bankruptcies, or at least they think they do.
The other example is that of a department store which puts in a book department and
sells all the latest detective stories that retail ordinarily at $1.50I ought to
know because I read themfor ninety cents. Up to the time that their code went
through, bankruptcies of small book stores throughout the country where these practices
were engaged in were increasing. They were being put out of business because they could
not afford to sell $1.50 books for ninety cents. The big department stores could afford to
do it, because people who went into that department to save sixty cents on a detective
story undoubtedly bought a good many other things in that department store, and the store
was able to make up the loss.
Now all that seems to be "out of the window." We made a very sincere
effort to eliminate things that were called unfair trade practices not only because they
were hurting little fellows, but also because they were giving advantages to people with
lots of capital or with nationwide systemsadvantages over smaller men or local men.
It seemed to be going pretty well. It was done under the general theory that, because
these goods came from every part of the United States, there was a rather direct
implication that they affected the internal commerce of the United States as a whole, and
therefore came under the interstate commerce clause.
Then we come down to the mines. There have been a number of cases about mines, but
the implication in this quotation is that mines and mining do not come under interstate
commerce. It is purely a local thing no matter where the copper or the oil or coal goes.
It is rather interesting, I think, that there are former decisions of the Supreme Court
which have held much more liberally in labor cases, in mining cases where people were
trying to get an injunction against labor. In those cases the Supreme Court has tended to
approve mining injunctions on the ground that the coal was going to go into interstate
This case, however, seems to be a direct reversal in saying that where you try to
improve the wages and hours of miners, the coal suddenly becomes a purely local intrastate
matter and you can't do anything about it. Of course, here the shoe is on the other foot.
Those are the important human occupations affected by this decision, the mining and
manufacturing and growing of cropsthe important ones.
Well, what does it do? It seems to me it bringsoh, I suppose you will want to
say an issue. I accept the word "issue" on one condition; and that is that you
make it very clear that it is not a partisan issue. It is infinitely deeper than any
partisan issue; it is a national issue. Yes, and the issue is thisgoing back to
these telegrams that I have been reading to you: Is the United States going to decide, are
the people of this country going to decide that their Federal Government shall in the
future have no right under any implied power or any court-approved power to enter into a
solution of a national economic problem, but that that national economic problem must be
decided only by the States?
The other part of it is this: Shall we view our social problemsand in that I
include employment of all kindsshall we view them from the same point of view or
not; that the Federal Government has no right under this or following opinions to take any
part in trying to better national social conditions? Now that is flat and that is simple!
If we accept the point of view that under no interpretation of the Constitution can
the Federal Government deal with construction matters, mining matters (which means
everything that comes out of the ground), manufacturing matters or agricultural matters,
but that they must be left wholly to the States, the Federal Government must abandon any
legislation. Thus we go back automatically to the fact that there will be not merely
thirteen Governments as there were in 1789 at a time where none of these questions existed
in the countrybut we will go back to a Government of forty-eight States.
Or we can go ahead with every possible effort to make national decisions based on
the fact that forty-eight sovereignties cannot agree quickly enough or practically enough
on any solution for a national economic problem or a national social problem.
When I was in Albany I had the desire of getting through the Legislature on two or
three occasions certain bills relating to the improvement of factory conditions and the
improvement of labor conditions, and people came to me and said, "If those bills go
through we are going to move into Pennsylvania."
That gave to the Chief Executive of one State serious concern. Should he force the
legislation and let these factories move out of this State into a State that didn't have
any restrictions and didn't have nearly as advanced social legislation; or should he go in
and leave certain evils just as they were? In other words, by the returning of all these
powers exclusively to the States you will unavoidably develop sectionalism. Just imagine
what will happen in the case of the cotton textile industrythe problem of the
differential in wage between New England and the South. Less than two years ago that
differential was more than five dollars a week in favor of the South. Under the code
system it has been cut to two and a half dollars; and in all human probability if we had
gone on under code methods, the differential would gradually have been cut still further.
They were actually working on an additional cut in the labor differential in the cotton
textile industry. That, of course, we have had to stop.
We come down, in passing, to the question of whether they can now live up to these
codes. We hope sosurely. Everybody hones that the wage agreements and codes will be
lived up to, and every effort should be made to have people in every industry live up to
the codes. I sincerely hope that everybody will live up to them.
On the other hand, as President, naturally, I have to think of what is going to
happen to the country if people, some people, do not live up to them. You go back to the
same old 90 percent and 10 percent we have talked about so often. There are, let's say,
100 of us in this room who are making cotton textiles. Each one owns a mill and out of the
100 there are three or four, that is all, who see an advantage to be gainedan
immediate advantage of quick profit. So they cut their wages, and increase their hours,
and go ahead with the stretch-out system beyond the code allowance. What is going to
happen to us?
Let us say that it happens to be a mill right next to Charlie Hurd's [one of the
reporters] mill. Charlie Hurd, making the same kind of goods, is naturally going to call a
meeting and he is going to say, "This fellow over here, Bill Smith, is cutting his
wages and increasing his hours and increasing his stretch-out. And I am going broke."
Well, we are going to have an awful lot of sympathy for Charlie Hurd, and what are we
going to do about it? Probably he would say, "Do you think I ought to go broke?"
and probably most of us would say, "Why, no; you came 100 percent right straight
through, and we will release you from any obligation to keep on with these code
Being human and in order to keep his head above water, he will probably try to meet
the competition of the other fellow; and we wouldn't blame him one bit. So it is not a
question of fighting industry. The great bulk of industry is perfectly sincere and honest
in wanting to maintain good wages and fair hours, but the problem is going to be: Can they
do it by agreement? That is the thing of course we cannot tell between Monday and Friday
of this week.
You and I know human nature. Fundamentally it comes down to this. In the long run
can voluntary processes on the part of business bring about the same practical results
that were attained under N.R.A.? I mean the good results. Of course there have been some
bad ones. But I mean the good results. Can it be done by voluntary action on the part of
business? Can we go ahead as a Nation with the beautiful theory, let us say, of some of
the press, "At last the rule of Christ is restored. Business can do anything it wants
and business is going to live up to the golden rule so marvelously that all of our
troubles are ended." It is a school of thought that is so delightful in its
And so we are facing a very, very great national non-partisan issue. We have got to
decide one way or the other. I don't mean this summer or winter or next fall, but over a
period, perhaps, of five years or ten years we have got to decide: whether we are going to
relegate to the forty-eight States practically all control over economic
conditionsnot only State economic conditions but national economic conditions; and
along with that whether we are going to relegate to the States all control over social and
working conditions throughout the country regardless of whether those conditions have a
very definite significance and effect in other States outside of the individual States.
That is one side of the picture. The other side of the picture is whether in some way we
are going to turn over or restore towhichever way you choose to put itturn
over or restore to the Federal Government the powers which exist in the national
Governments of every other Nation in the world to enact and administer laws that have a
bearing on, and general control over, national economic problems and national social
That actually is the biggest question that has come before this country outside of
time of war, and it has to be decided. And, as I say, it may take five years or ten years.
This N.R.A. decisionif you accept the obiter dicta and all the phraseology of
itseems to be squarely on the side of restoring to the States forty-eight different
controls over national economic and social problems. This is not a criticism of the
Supreme Court's decision; it is merely pointing out the implications of it.
In some ways it may be the best thing that has happened to this country for a long
time that such a decision has come from the Supreme Court, because it clarifies the issue.
If the press and the radio of this country can make that issue perfectly clear, it will be
doing a very great service. The telegrams that I have been reading to you, suggesting
every kind of method of overcoming the decision, will not continue to come in, because all
except a very few of them suggest remedies which are wholly outside of the opinion of the
Supreme Court. In other words, they are in violation of that opinion-nine suggested
remedies out of ten are in violation of the strict interpretation of that opinion.
I think it is perfectly proper to say further that the implications of this decision
could, if carried to their logical conclusion, strip the Federal Government of a great
many other powers. Federal alcohol controlwell, that is gonewe know that is
gone. This decision did it. Federal alcohol control was put in with an objective. At the
end of Prohibition, when spirits and beer came back, I think everybody, whether on the
Prohibition side or the anti-Prohibition side, believed that the Federal Government should
do everything in its power to see that pure liquor and good liquor was offered to the
American people. However, that is not, apparently, a Federal power. We have forty-eight
Nations from now on under a strict interpretation of this decisionforty-eight
Nations, each of which will prescribe a different standard for its own liquor, and will be
completely powerless to prevent liquor from the next-door State, or ten States away, from
coming into its borders.
It is a perfectly ridiculous and impossible situation. But it is a very good example
of what forty-eight-independent-Nation-control means.
Your next implication relates to certain things that we believe are within the
Federal power. They have not been definitely outlawed by this decision; but the decision
raises a very great question about them. The Securities Act of 1933, for example, was
intended to prevent nationally the issuing of securities to the investing or speculating
public under false pretenses. The Act required that, through a central Federal
organization, securities that were proposed to be issued should have the full truth stated
about them. That is all there was to itit was a Truth in Securities Act and it has
been working very well. However, securities, I suppose, like a crop or like manufactured
goods, can be held to be issued in one place and bought by the public in one place, and
are therefore wholly intrastate.
It does not make any difference whether the securities afterward go into forty-eight
States or not. The issuance and buying in one State, like a crop or a factory product,
have no character of interstate commerce about them under this decision.
In the same way the decision raises a question with respect to the Stock Exchange
Act. After all, a stock exchange is just a building in one placein one city. There
are a good many of them scattered throughout the country. They sell various forms of
securities, but each one is attached to the ground like wheat or cottonlike coal or
anything else. The decision raises a question about that.
Then you come down to the A.A.A. itself. I have discussed that. The question is
raised by this decision as to whether the Federal Government has any constitutional right
to do anything about any crop in the United States; and it suggests by implication that
forty-eight States should each have their own crop laws.
You see the implications of the decision. That is why I say it is one of the most
important decisions ever rendered in this country. And the issue is not going to be a
partisan issue for a minute. The issue is going to be whether we go one way or the other.
Don't call it right or left; that is just first-year high-school language, just about. It
is not right or leftit is a question for national decision on a very important
problem of Government. We are the only Nation in the world that has not solved that
problem. We thought we were solving it, and now it has been thrown right straight in our
faces. We have been relegated to the horse-and-buggy definition of interstate commerce.
Now, as to the way outI suppose you will want to know something about what I
am going to do. I am going to tell you very, very little on that. There will be this
afternoon or tomorrow morning an announcement in regard to pending cases. And there will
be on Sunday or Monday a further announcement of another step. Probably in the next few
days there will be a number of announcements which will be along that line. This is only
for the next four or five days, along the line of clarifying certain existing situations.
Let the bigger things sink in for the next four or five days. So many suggestions have
come that I have asked all of the suggestors to send their suggestions to a central
sourcethe Solicitor General and the Attorney Generalin order that they might
be digested. Nobody is writing out anything for me. And Steve says it is one o'clock
daylight time and we have been talking an awful lot. Have you any other questions?
Q. (Mr. Stephenson) Can we use the direct quotation on that horse-and-buggy
THE PRESIDENT: I think so.
MR. EAREY: Just the phrase.
Q. You referred to the Dred Scott decision. That was followed by the Civil
War and by at least two amendments to the Constitution.
THE PRESIDENT: Well, the reason for that, of course, was the fact that the
generation of 1856 did not take action during the next four years.
Q. You made a reference to the necessity of the people deciding within the
next five or ten years. Is there any way of deciding that question without voting on a
constitutional amendment or the passing of one?
THE PRESIDENT: Oh, yes; I think so. But it has got to come in the final
Q. Any suggestion as to how it might be made, except by a Constitutional
THE PRESIDENT: No; we haven't got to that yet.
Q. Or a war? (Laughter)
THE PRESIDENT: Just qualifying the issue, that is all.
- "The alleged conspiracy and the acts here complained of, spent their intended and
direct force upon a local situationfor building is as essentially local as mining,
manufacturing or growing cropsand if, by a resulting diminution of the commercial
demand, interstate trade was curtailed either generally or in specific instances, that was
a fortuitous consequence so remote and indirectly as plainly to cause it to fall outside
the reach of the Sherman Act."