In 1937 when Elsie Parrish, a maid for the West Coast Hotels in Washington State, sued for back wages based upon the state minimum wage, her employer argued for “liberty of contract.” With the economic challenges of the Depression as a factor and in a true reversal from previous trends, the Supreme Court abandoned strict ideas regarding “free market” protectionism at the expense of individual workers and ruled on the side of Parrish. This video explores the Court’s evolution to accepting President Roosevelt’s New Deal and considering fair labor practices.
President Franklin D. Roosevelt and the justices of the Supreme Court were locked in a philosophical, Constitution-based war of ideas through much of his presidency. Roosevelt initiated many aggressive economic policies to reverse Depression-era conditions. His New Deal initiatives were continuously blocked by the “Nine Old Men” seated on the Supreme Court, who adhered to the “liberty of contract” theory – the idea that the federal government should not interfere in free markets or the liberty of people to enter into contracts.
After the Court declared unconstitutional a centerpiece of the New Deal, the National Industrial Recovery Act, Roosevelt was livid. The Act had tried to force industries to establish minimum prices, no-compete rules, and production restrictions.
In his Fireside Chat on March 9, 1937 Roosevelt made an impassioned plea to the American people. The speech, intended to reassert the basic intentions of the founding fathers, invoked the language of the Constitution (“to form a more perfect union ... for ourselves and our posterity”). The President accused the Supreme Court justices of overstepping their boundaries by becoming a policy-making body. Roosevelt quoted the ruling of one justice:
“…Justice Stone said that the majority were actually reading into the Constitution their own ‘personal economic predilections,’ and that if the legislative power is not left free to choose the methods of solving the problems of poverty, subsistence, and health of large numbers in the community, then ‘government is to be rendered impotent.’ And two other justices agreed with him.”
Frustrated by the Court's persistent rulings against his policies, Roosevelt attempted to “pack the court” – restructuring the court by adding a justice for every justice over the age of seventy. His plan faced intense opposition, even from within his own party. Critics claimed he was upsetting the balance of powers and attempting to take over control of the Court by appointing justices more suitable to his point of view. Roosevelt withdrew his plan.
By the end of 1937, the Court in the case of West Coast Hotel v. Parrish showed it was changing course. Abandoning the “liberty of contract” theory it had held to for years, the Court sided with the petitioner Elsie Parrish, a hotel maid suing for minimum wages due to her by Washington State minimum wage law. Chief Justice Charles Evans Hughes went as far as to say, “The Constitution does not speak of freedom of contract” and “The economic conditions make it … imperative that … the subject should receive fresh consideration.”
The majority opinion in West Coast Hotels drew upon the earlier dissenting opinions of Justices John Marshall Harlan and Oliver Wendell Holmes who had claimed that sometimes the government needs to intercede on behalf of workers in the marketplace and democratically-elected legislatures had the power and authority to pass laws regulating business and the economy -- including contracts.
WEINBERG: By the early '30s, the Court, the nine old men, found itself sitting at the top of a situation in which an unregulated economy lay in ruins at its feet.
POWE: When Franklin Roosevelt is inaugurated, there's 25 percent unemployment in the United States. In his inaugural address, the chief applause line is when he says he may be forced to assume powers ordinarily taken only in time of war.
SIMON: He envisioned a much more muscular federal government and legislation that would practically grab the economy by its ears and pull it out of the depression.
FRANKLIN D. ROOSEVELT: This nation is asking for action, and action now.
NARRATOR: From the beginning of his first term, Franklin Roosevelt rolled up his sleeves and stuck his hands where no president ever had: in the whirring mechanisms of the national economy. With the help of Congress, the Roosevelt administration undertook to increase farm income and wages, to push down prices, and to create jobs. Nobody would argue that things were great, but the federal government had put its shoulder to the wheel.
KLEIN: Citizens saw what the federal government could do in the early years in the New Deal. And so people's expectations about what government could do began to rise.
POWE: The Court had to know that the New Deal had extraordinarily popular support. Congress would do anything Roosevelt wanted. He's got the presidency. He's got the support of the people. And the government was exercising powers that had never been exercised in American history. And the justices can see Hitler has taken over in Germany and centralizing things. Mussolini is running Italy and centralizing things. Stalin is running Russia and centralizing things, and now we have a government where the president has suggested that maybe the Constitution isn't all that it should be. And I want to have wartime powers. And the justices were worried about this. Are we seeing a constitutional revolution without a change in the Constitution? The only conceivable check on Roosevelt is the judiciary. In 1935 and 1936, the Supreme Court invalidates 10 recent federal statutes. They have never done that before. They have never done that since in a two-year period.
NARRATOR: At the end of that run, in 1936, the Court narrowly struck down a New York State minimum wage law. The Supreme Court, led by the Four Horsemen, held that neither the federal government nor state legislatures had the right to meddle in the free market economy, emergency or no.
LAW: The rest of the county is widely being affected, feeling the effects of the Great Depression, and the Four Horsemen are hanging on for dear life to this liberty of contract idea.
FRANKLIN D. ROOSEVELT: I defy anyone to read the opinions concerning the Triple A, the Railroad Retirement Act, the National Recovery Act, the Guffey Coal Act, and the New York minimum wage law and tell us exactly what, if anything, we can do for the industrial worker in this session of the Congress with any reasonable certainty that what we do will not be nullified as unconstitutional.
NARRATOR: Franklin Roosevelt had big new things to try. And five votes on the Court could put a stop to any of them. So after the president was reelected in a landslide in 1936, he went after the conservative old justices. He threatened to create six new seats on the bench, fill them with his own men, and thereby give himself a certain majority.
POWE: What Roosevelt was indicating to the Court was, if you stand in the way I'm simply going to finish you as an institution. And I think the justices understood that.
NARRATOR: By 1937, when the case of a hotel maid from Wenatchee, Washington made it to the splendid new courthouse, Roosevelt's assault had focused the nation's attention on nine men in black robes.
The chambermaid, Elsie Parrish, wasn't asking for the moon. She just wanted the Court to award her back pay of $216.19 -- the difference between the wage the hotel had paid her and the state-mandated minimum.
The West Coast Hotels attorneys were unapologetic. Of course the corporation had been paying the maid less than the minimum of $14.50 a week. It had the right to do so under the "liberty of contract" doctrine. The Four Horsemen all but nodded in agreement.
But when the West Coast decision came down on March 29, 1937, Chief Justice Charles Evans Hughes's preamble caught the attention of everyone listening in. "The economic conditions," he said, "make it not only appropriate, but we think imperative, that in deciding the present case the subject should receive fresh consideration."
Hughes announced that the Supreme Court, by a 5-to-4 vote, was upholding the Washington state minimum wage law. The working woman, Elsie Parrish, would get her due.
POWE: West Coast Hotel versus Parrish was the Court's surrender to the New Deal. Chief Justice Hughes, in that opinion, says people have to live. They have to have the necessities of life. And the public doesn't have to subsidize an unscrupulous employer who is exploiting his employees.
GILLMAN: That case has sometimes been referred to as ushering in what is known as the Constitutional Revolution of 1937. The Court was acknowledging the legitimate role that government would play in helping people who were not competing successfully in the market.
KOBYLKA: When the Court switches in 1937, they basically say, we will get out of the way and let the train come through. Government can regulate as it chooses.
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