Throughout the 1930s, the United States’ economic and legal spheres were in a state of change. Adopted by the administration of President Franklin Roosevelt, the New Deal program was aimed at rebuilding the country after the Great Depression. The complex of legal acts included structural reforms in different areas: industry, agriculture, and labor. In addition to the changes, the Commerce Clause’s interpretation, the National Industrial Restoration Act (NIRA), and the Agricultural Regulation Act (AAA), were later declared unconstitutional by the Supreme Court.
In the history of U.S. development, the court has interpreted the Commerce Clause in several different ways. From about 1905 to 1937, the Supreme Court used a narrow version of the clause. Starting with NLRB v. Jones & Laughlin Steel Corp (1937), the court recognized the broader grounds on which the Commerce Clause could be laid for state activity. In the post-1937 period, Congress’s use of trade clauses to authorize federal control over economic affairs became virtually unlimited.
The laws of the New Deal were adopted under duress, with a curtailed enactment procedure, so the Supreme Court judges had arguments for recognizing them not as federal regulations. The NIRA was declared unconstitutional in May 1935 when the U.S. Supreme Court unanimously ruled in Schechter Poultry Corp. v. the United States. The court ruled that the NIRA had vested the NRA with legislative powers to violate the constitutional provision for granting such powers to Congress. However, many of the labor laws in NIRA were found in later legislation. On January 6, 1936, the Supreme Court ruled in the United States against Butler that this law was an unconstitutional tax on processors only to return it to farmers (Patel & Goodman, 2020). Agricultural regulation was considered state jurisdiction, and thus, the federal government did not enforce the Agricultural Regulation Act due to the system’s impossibility. However, by a court decision, they were replaced by analogs.
During the Roosevelt New Deal era, new legal acts were introduced in the United States to restore the economy, many of which were later repealed. Beginning in 1937, the court expanded the use of the field of commerce. The NIRA and AAA were ruled unconstitutional because they held that these laws were contrary to the U.S. system’s main provisions.
References
Patel, R., & Goodman, J. (2020). The long New Deal. The Journal of Peasant Studies, 47(3), 431-463.
NLRB v. Jones & Laughlin Steel Corp, 301 U.S. 1 (1937)
Schechter Poultry Corp. v. the United States, 295 U.S. 495 (1935)