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FORUM: COMMENT


Disaster Relief, "Do Anything" Spending Powers, and the New Deal

Howard Gillman


Less than two years after Justice Harlan Fiske Stone reportedly advised Franklin Roosevelt's secretary of labor that "You can do anything under the taxing power,"1 the U.S. Supreme Court ruled in U.S. v. Butler that Congress had no authority to create a system whereby farmers would receive subsidies for limiting production, with the funds coming from a tax on basic commodities.2 While Stone, along with Brandeis and Cardozo, voted to uphold this feature of the Agricultural Adjustment Act, a majority led by Justice Owen J. Roberts declared that this particular scheme of taxing and spending interfered with the reserve powers of the states to control local manufacturing and agriculture. Roberts cited the great nationalist Joseph Story for the proposition that "the Constitution was, from its very origin, contemplated to be a frame of a national government, of special and enumerated powers, and not of general and unlimited powers.... A power to lay taxes for the common defence and general welfare of the United States is not in common sense a general power. It is limited to those objects. It cannot constitutionally transcend them."3 The AAA was "a scheme for purchasing with federal funds submission to federal regulation of a subject reserved to the states.... If the Act before us is a proper exercise of the federal taxing power, evidently the regulation of all industry throughout the United States may be accomplished by similar exercise of the same power." 1
      Stone's dissent, written mostly on New Year's Day 1936, was so vehement in defense of Congress's taxing and spending power that its tone offended Justice Roberts.4 Still, it was a dissent. Thus, in early 1936, six justices did not agree that Congress could do anything under the taxing power. In fact, their position echoed the views of a nearly unanimous Court some fourteen years earlier, in Bailey v. Drexel Furniture Co., which struck down the Child Labor Tax Law passed in the wake of Hammer v. Dagenhart.5 2
      We need to be careful, therefore, when Michele Landis Dauber tells us that Stone's "do anything" view of Congress's (ostensibly unreviewable) taxing and spending power was shared by such nominally conservative justices as Hughes (who was in the Butler majority) and Taft (who authored the opinion in Bailey). Dauber is undoubtedly correct that "Stone turned out to be right" in the sense that the post-"switch in time" Supreme Court eventually upheld unemployment compensation and old age benefits under a broad theory of Congress's power to tax and spend.6 But her choice to tell her story without attention to these contrary decisions leaves a misleading impression, both about the nature of the jurisprudential consensus and about the extent to which the constitutional issues associated with disaster relief can be said to offer a significant foundation for the New Deal revolution in American politics. 3
      Dauber makes an important contribution to our understanding of constitutional history by bringing to light these periodic debates over the legitimacy of federal disaster relief. It is possible that she slightly overstates the degree of constitutional consensus about the practice in the early republic,7 and it might have been useful to contrast the constitutional debates over spending for disaster relief with related (yet more contentious) debates implicating the scope of Congress's power to tax and spend—such as federal support for a national university or for internal improvements.8 Still, there is no reason to doubt her claim that the antebellum Congress extended relief without much concern about the constitutionality of the practice. Her discussion of the references to this tradition during the political struggle over the Freedmen's Bureau illuminates an interesting and underappreciated feature of that historic debate. She is also right to point out how specific instances of disaster relief were often cited (albeit unsuccessfully) as precedents by others seeking to expand the scope of federal disaster assistance to include funds to address unemployment and education.9 4
      However, Dauber's most dramatic claim is that this is a story about how "disaster relief served as a precedent for the expansion of the welfare state in the 1930s." We are told that references to disaster relief "figured importantly in several Supreme Court cases" involving federal grants and that arguments developed in these cases helped establish the claim that congressional spending was "a question purely of legislative expediency and discretion" and thus "became a key legal underpinning of the New Deal." It is, essentially, an argument about state building as a form of reasoning by analogy: disaster relief led to the Freedmen's Bureau, which led to arguments about federal assistance for schools and for the unemployed, which led to some Supreme Court cases addressing the scope of Congress's taxing and spending power; and before we know it the New Deal response to the Great Depression can be seen as fitting neatly into this long-standing tradition of federal relief to the victims of disasters. 5
      While I find much of value and interest in Dauber's account of the rise of "the sympathetic state" it seems to me that the larger claims about the importance of these precedents for the New Deal are not demonstrated by her evidence. Let me set aside the observation that a number of the links in this apparent chain of causation—including the Blair Education Bill and the late nineteenth-century efforts to offer federal aid for the unemployed—were actually examples of federal officials rejecting the proffered analogies (and thus provide at least as much precedential support to those who would resist an expanded welfare state). Nor will I question whether the posturing of members of Congress during debates about disaster relief represents meaningful examples of "the Constitution outside the courts"—except to say that, in my judgment, the case for serious deliberation requires better evidence than the fact that many representatives were lawyers and that they occasionally cited favorable past actions of Congress in support of self-serving proposals.10 Many current members of the House and Senate are lawyers but very few people today would assume that this must make them care about consistency in taking positions or especially receptive to the power of reasoning by analogy. Some might assume that this professional training merely makes them glib and capable of arguing any side of an issue, depending on what position best served their political agenda. 6
      More central to Dauber's story is the claim that the tradition of disaster relief shaped the development of Supreme Court precedent in a way that was eventually useful to New Dealers seeking legal underpinnings for their political innovations. She acknowledges that the arguments about disaster relief got nowhere in Field v. Clark, where the Court simply sidestepped the question of the scope of Congress's authority to appropriate in the General Welfare.11 If there was a real case law payoff to the practice of disaster relief it would have to be in U.S. v. Realty Company, where even the conservative justices acknowledged some tradition of congressional grants that took the form of a "gratuity" or "pure charity." However, it would be misleading to characterize the central thrust of this opinion as embracing a proto-Stoneian "do anything" theory of the spending power. Instead, the overwhelming preoccupation of the justices in that opinion was to emphasize that the federal government had a moral obligation to pay off what amounted to a "debt" to certain industries. Like Marshall in Fletcher v. Peck,12 these conservative protectors of vested rights were willing to bracket the legitimacy of the original obligation in order to make a larger point about how it was salutary for the Congress to respond to the equities involved and authorize payouts to these corporations.13 In other words, these justices agreed to the payment because they believed it was "a moral and honorable claim upon the public treasury." 7
      Importantly, however, Peckham underscored that the justices were specifically not concluding that Congress alone could decide the legitimacy of these sorts of payoffs. "It is unnecessary to hold here that Congress has power to appropriate the public money in the treasury to any purpose whatever which it may choose to say is in payment of a debt or for purposes of the general welfare. A decision of that question may be postponed until it arises."14 Not surprisingly, this case is not cited later by the Supreme Court as authority for any sweeping statement about the unlimited or unreviewable scope of Congress's spending power. It plays no discernible role in any of the New Deal-era debates about the legitimacy of innovative spending plans. In the canon of constitutional law it merely stood for the proposition that Congress could spend "in recognition of a moral obligation to those who had put in their crop the previous year upon the faith of the bounty law then in existence. It was not so much a gift by the Government as a reward paid in consideration of expenses incurred by the planters upon the faith of the Government's promise to pay a bounty to the manufacturers and producers of sugar."15 8
      If there was a serious precedent for the claim that the judiciary would have a very small role to play in reviewing congressional spending decisions, it would be in a more well-known case that receives just passing attention in Dauber's footnotes, Massachusetts v. Mellon, aka, Frothingham v. Mellon (1923).16 We know that the case stands for the proposition that individual taxpayers have no standing to challenge the constitutionality of congressional spending. Thus, as a practical matter, if Congress passes a spending bill that imposes no special tax burdens or regulatory schemes (unlike the situation in Bailey v. Drexel Furniture, and later, U.S. v. Butler), then it is unlikely that any person will have standing to insist that courts evaluate whether the spending falls within Congress's constitutional authority. In that limited sense Frothingham implied that Congress's spending power is unreviewable under certain circumstances—not because of a broad consensus about the broad scope of Congress's powers to spend in the General Welfare, but because of Article III limits relating to standing. Moreover, the justices were also unanimous in support of the proposition that courts have no authority to adjudicate the state's "naked contention that Congress has usurped the reserved powers of the several States by the mere enactment of the statute, though nothing has been done and nothing is to be done without their consent." This "question, as it is thus presented, is political and not judicial in character"—again, not under a theory of Congress's spending power but because Article III requires that the judicial power be invoked only in response to some discernible injury (which was not apparent in a case involving a statute that "imposes no obligation but simply extends an option which the State is free to accept or reject"). In other words, "We have no power per se to review and annul acts of Congress on the ground that they are unconstitutional. That question may be considered only when the justification for some direct injury suffered or threatened, presenting a justiciable issue, is made to rest upon such an act." Consequently, the case "must be disposed of for want of jurisdiction without considering the merits of the constitutional questions" (emphasis added). It is a precedent of sorts, but not for the spending theory that is the subject of Dauber's discussion. 9
      If the expansion of the welfare state under the New Deal was really just a matter of the federal government offering extremely large handouts to the needy in response to a discrete disaster, then Dauber's tradition of the "sympathetic state" would have been relevant to the constitutional debates, and we might have lots of examples where these earlier precedents were central to contemporaneous discussions. Similarly, if the New Deal was essentially about no-strings-attached grants, then Frothingham would have been a useful precedent for the proposition that courts should stay out of the discussion.17 The problem is that the New Deal was not merely about the expansion of federal spending; it was a complete reconfiguration of structures of governance in the United States, including an unprecedented expansion of federal regulatory authority in areas that traditionally had been the province of state governments. There was no "broadly popular and well-elaborated" agreement within the legal community about the legitimacy of these reconfigurations, and there were certainly no precedents for judicial deference—quite the contrary. There is much of interest in the story of disaster relief, but to imply that nineteenth-century federal disaster relief laid important groundwork for the New Deal is, in my judgment, to misunderstand the nature of the political developments occurring in the 1930s. 10
      Admittedly, it is extremely difficult to establish that any given precedent (such as federal disaster relief) actually mattered for deliberations that take place in dramatically different historical-political contexts. We know that precedents are often referred to for instrumental or strategic reasons rather than for principled ones. Moreover, it is almost always possible for opponents to insulate themselves from the force of a precedent by pointing to relevant differences between cases. Ultimately, of course, one can always claim that the precedent is incorrect and therefore undeserving of one's allegiance. When making a causal claim for the importance of a precedent it would be best if one could show that decision makers who might otherwise be expected to oppose a particular proposal (e.g., conservatives who are hostile to the New Deal) nevertheless accept the proposal explicitly because of the force of the precedent. However, that sort of evidence does not seem to exist in this case. Dauber mentions that many conservative judges and scholars seemed to accept some notion of expanded federal powers over spending (as I have argued, there is some disagreement over exactly what their position might have been on that issue). But she provides no evidence that any conservative justice who might have been expected to oppose the New Deal nevertheless voted in favor of spending programs because he was convinced that the tradition of disaster relief was legitimate, well-established, and (unfortunately) applicable to the New Deal. We learn in a footnote that "lists of disaster relief precedents were often recited during Congressional debates, in Supreme Court briefs, and in political speeches in support of New Deal programs such as the AAA," but, as Justice Stone discovered, this did not stop his more conservative brethren from striking down the AAA as beyond Congress's legitimate powers. 11
      Dauber is undoubtedly correct that it is a mistake to assume that the pre-New Deal national government was constituted by a non-redistributive laissez-faire ethic and was aggressively supervised by an activist conservative Court that challenged any deviations from the minimalist state. As she notes, many others have offered useful correctives to this story, and the tradition of disaster relief is an important contribution to this revisionist effort. However, we should be careful not to substitute one set of overstated claims with another. There are a lot of things that made the New Deal possible. Dauber helps us remember that good New Deal lawyers used every idea at their disposal to make their case—sometimes citing useful precedents and sometimes arguing for the irrelevance of precedents in light of dramatic changes in the social and economic life of the country. It is possible to appreciate and acknowledge the role that disaster relief played in some lawyers' briefs and in some congressional testimony without necessarily accepting the larger claim that this tradition was a "key legal underpinning" for the expansion of the welfare state. 12


Howard Gillman is Professor of Political Science and Law, University of Southern California.


Notes

1. See Michele Landis Dauber, "The Sympathetic State," Law and History Review 23 (2005): 388. Alpheus Thomas Mason, in Harlan Fiske Stone: Pillar of the Law (New York: Viking Press, 1956), 408, reports that Stone said, "The taxing power of the Federal Government, my dear, is sufficient for everything you want and need."

2. U.S. v. Butler, 297 U.S. 1 (1936).

3. Citing Joseph Story, Commentaries on the Constitution of the United States (Boston: Hilliard, Gray, 1833), sections 909, 922.

4. See Mason, Harlan Fiske Stone, 408.

5. Bailey v. Drexel Furniture Co., 259 U.S. 20 (1922), with Justice Clarke as the lone dissenter. Chief Justice Taft wrote: "Grant the validity of this law, and all that Congress would need to do, hereafter, in seeking to take over to its control and one of the great number of subjects of public interest, jurisdiction of which the States have never parted with, and which are reserved to them by the Tenth Amendment, would be to enact a detailed measure of complete regulation of the subject and enforce it by a so-called tax upon departures from it. To give such magic to the word 'tax' would be to break down all constitutional limitation of the powers of Congress and completely wipe out the sovereignty of the States."

6. See Steward Machine Co. v. Davis, 301 U.S. 548 (1937) and Helvering v. Davis, 301 U.S. 619 (1937).

7. David P. Currie, in "The Constitution in the Supreme Court: The New Deal, 1931–1940," University of Chicago Law Review 54 (1987): 504, at n.136, reports that "the refusal of an early Congress to provide disaster relief for a single community after debate had raised serious constitutional doubts tends to support Hamilton's insistence that 'the object to which an appropriation of money is ... made [must] be General and not local; its operation extending in fact, or by possibility, throughout the Union, and not being confined to a particular spot."

8. For more on the debates over a national university and internal improvement, see Edward Corwin, "The Spending Power of Congress—Apropos the Maternity Act," Harvard Law Review 36 (1922): 548–82. Dauber claims that Corwin argued "that the Court had no power to strike down the Sheppard-Towner Maternity Act because history demonstrated that Congress had always had plenary and unreviewable power over appropriations," but that characterization probably overstates Corwin's position. Corwin was well aware that there were long-standing arguments over whether Congress was using its powers of appropriation only to promote legitimate "national" ends and not to act in ways that challenged traditional spheres of state authority.

9. It is a bit surprising that Dauber does not cite Susan Sterett's discussion of constitutional debates over "social spending" at the turn of that century; see "Serving the State: Constitutionalism and Social Spending, 1860s–1920s," Law and Social Inquiry 22 (1997): 311. It is true that Sterett was looking mostly at constitutional debates governing the scope of state powers rather than federal authority, but her topic is relevant to the question of constitutional precedents for the emergent welfare state, and it would have been helpful for Dauber to explain how her discussion relates to this earlier work.

10. Dauber provides plenty of evidence to support a (predictable and unsurprising) portrait of these representatives as self-serving and grandstanding politicians rather than lawyers who took seriously the principled application of precedent. Among the quotes peppered in her account: "If you want to know where the constitutional power to do this is, and where the law is, I answer it is in that common humanity that belongs to every man"; "necessity knows neither law nor constitution"; "I cannot stop to argue literal construction of the Constitution"; "I do not know whether this bill is constitutional or not"; "humanity is greater than any constitution"; "now in the name of Heaven—not in the name of the Constitution, but in the name of that sweet rainbow-robed charity which would make us better and brighter and more generous men—let us make this appropriation"; etc. Needless to say, if members of Congress could have established these statements as legitimate precedents they would not have needed courts to broadly interpret the scope of Congress's spending powers.

11. Dauber believes it is important that, during this litigation, Solicitor General William Howard Taft advocated in favor of a broader reading of Congress's authority to spend for the General Welfare. It is undoubtedly true that many conservatives understood, along with Cooley, that the scope of the federal government's spending power was broader than the authority of states, whose spending was limited by the familiar "public purpose" feature of police powers jurisprudence. But (a) this does not establish that there was a consensus among progressive and conservative thinkers about the actual scope of Congress's authority and (b) Taft's advocacy as solicitor general provides no real evidence of his personal views on this question.

12. Fletcher v. Peck, 10 U.S. 87 (1810). The difference between that case and Realty was that Marshall was recognizing an enforceable vested legal right whereas Peckham was merely recognizing the legitimacy of paying off an essentially "moral" debt.

13. Justice Peckham wrote at one point: "We are of the opinion that the parties, situated as were the plaintiffs in these actions, acquired claims upon the government of an equitable, moral or honorary nature. Could Congress legally recognize and pay them although the act of 1890 as to its bounty provisions might be unconstitutional? It is true that in general an unconstitutional act of Congress is the same as if there were no act. That is regarding its purely legal aspect.... [These claims] were nevertheless of so meritorious and equitable a nature as to authorize the nation through its Congress to appropriate money to pay them." U.S. v. Realty Co., 163 U.S. 427, 439 (1896).

14. Ibid., 440.

15. Allen v. Smith, 173 U.S. 389, 402 (1899). Dauber (392, n. 15) cites Corwin's 1922 article on the spending power as evidence that this earlier case really did stand for a broad reading of the spending power (Corwin, "The Spending Power of Congress"). However, Corwin's passing reference to the case in his footnote 77 is hardly a careful analysis. Moreover, Corwin also wrote that "he would be a bold man who would assert dogmatically that legitimate occasion might never arise for judicial interposition within this field" (576). Even if we acknowledge that Corwin was advocating for a broader interpretation (see especially p. 580) it would be important to keep in mind his reputation as a propagandist (in the best sense) of progressive constitutionalism. Among other things, during the New Deal battles, Corwin was an active public spokesperson for a theory of the "living Constitution" that was central to Roosevelt's vision. See Howard Gillman, "The Collapse of Constitutional Originalism and the Rise of the Notion of the 'Living Constitution' in the Course of American State-Building," Studies in American Political Development 11 (Fall 1997): 191–247.

16. Frothingham v. Mellon, 262 U.S. 447 (1923), mentioned in Dauber's notes 9 and 217.

17. Even then, we should never assume that justices feel obligated to follow precedents with which they disagree; in fact, the evidence is pretty overwhelming that justices feel no such obligation, especially when an inherited precedent would require them to decide a case in a way that was inconsistent with their broader ideological commitments. See Harold J. Spaeth and Jeffrey A. Segal, Majority Rule or Minority Will: Adherence to Precedent on the U.S. Supreme Court (Cambridge: Cambridge University Press, 2001).

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