Saturday, March 27, 2010

Packing the Supreme Court

With Justices for All

Franklin Roosevelt vs. the Supreme Court

By Jeff Shesol

Illustrated. 644 pages. W. W. Norton & Company. $27.95

In 1937, a few months after his landslide re-election to a second term, Franklin Roosevelt set out on one of the boldest and most dangerous courses of his presidency. The conservative Supreme Court had already struck down a series of New Deal programs. Roosevelt feared that the mostly aged justices would go on to destroy the rest of his legislative achievements before he would have a chance to make any new appointments. As a result, he proposed a “reform” of the courts that would, among other things, have added an additional justice to the Supreme Court for every current justice over the age of 70. It became the most controversial proposal of his presidency — so much so that it nearly paralyzed his administration for over a year and destroyed much of the fragile unity of the Democratic coalition.

Jeff Shesol (the author of “Mutual Contempt,” an account of the relationship between Lyndon Johnson and Robert Kennedy) is not the first to chronicle what became known as the “court-packing” controversy, but “Supreme Power” is by far the most detailed — and most riveting — account of this extraordinary event. Shesol provides a revealing portrait of the “nine old men,” as opponents of the court described them. At the same time, he presents in great detail Roosevelt’s own anguish over what he considered the court’s reactionary views. Both sides of the controversy were the products of deep conviction. The court was on a mission to combat what the justices viewed as a great danger to the basic principles of American democracy. The White House was on its own mission to save not just the New Deal, but also its restoration of the nation.

Within the Roosevelt administration, the proposal to enlarge the court seemed eminently reasonable. There was no constitutional bar to expanding the number of justices. All other measures — constitutional amendments, legislative remedies, mandatory retirements and similar proposals — seemed far more radical and far less likely to succeed. Court packing seemed the most moderate and cautious of the paths available — but still, they realized, a tremendously risky one.

Both the court and the White House paid a considerable price for their insularity and secrecy. The justices, of course, were isolated by design. But the White House and the Justice Department created their own insularity, pursuing their goals with such surprisingly successful secrecy that they gave few people, even within the administration, the opportunity to warn Roosevelt of the dangers he faced. Shesol recounts these miscalculations on both sides with particular skill.

And the dangers, it quickly became clear, were much greater than Roosevelt and his advisers had imagined. It was not surprising that the court-packing controversy would arouse the rage of the right, which already detested Roosevelt and the New Deal and believed the White House was building a dictatorship. More startling to the president was the outrage from within his own party — even among many staunch progressives — and the lukewarm loyalty he received even from those who agreed to support him. Many opponents of the proposal shared Roosevelt’s dismay at the court’s conservatism, but tampering with the institution seemed even to many liberals to represent excessive presidential power and a threat to the Constitution.

The justices of the Supreme Court were as sharply divided in the 1930s as they often seem to have become in the 21st century. Five of them (George Sutherland, James McReynolds, Willis Van Devanter, Pierce Butler and Owen Roberts) were largely opposed to the New Deal measures they were asked to consider. Four others (Louis Brandeis, Harlan Fiske Stone, Benjamin Cardozo and, somewhat precariously, Chief Justice Charles Evans Hughes), mostly supported the New Deal. In 1937, when the court-packing fight began, most of the justices had been on the bench for well over a decade, and none had been appointed during Roosevelt’s first four years. Hence the president’s frustration, and his belief that the court had become out of touch with the realities of the time.

During the first months of controversy, the likelihood of success, given the huge Democratic majorities in Congress, seemed high, despite the ferocity of the opposition. But gradually the president’s position eroded — a response to growing opposition and to the resentment of what many considered Roosevelt’s duplicity in proposing what he claimed to be court “reform” rather than what many people considered naked political pressure. In July 1937, the court proposal died in the Senate, by now undefended even by the White House and unlamented by most of the public. It was widely described as the most devastating defeat Roosevelt had ever experienced.

But how devastating was the defeat? In West Coast Hotel Co. v. Parrish, a 1937 case contesting a minimum wage law in Washington State, Owen Roberts voted with the liberals to sustain the law. (Only one year earlier he had joined the conservatives in voting down another minimum wage law.) Over the following months, Roberts continued to vote mostly with the liberals. And beginning in mid-1937, a number of conservative justices retired, providing the president with the opportunity to appoint several new justices who transformed the ideological balance of the court.

Shesol does not engage directly with the scholarly debate over whether the court-packing controversy was responsible for the shift in the court’s behavior. The traditional story, supported by some of the leading historians of the New Deal, maintains that the pressure from Roosevelt persuaded Roberts, and perhaps others, to shift positions. Other historians — mostly legal scholars — argue that the court-packing fight had little or nothing to do with the court’s shift, that it represented instead a slow and steady evolution of constitutional law that long preceded the controversy. But even without taking an explicit stand, Shesol suggests a plausible argument that falls somewhere between these two interpretations.

One of Shesol’s many important contributions to an understanding of this controversy is his powerful description of the extraordinary opprobrium the court confronted as it began to overturn New Deal measures in 1935. Indeed, it was the deep unpopularity of the court that helped embolden Roosevelt to challenge it in 1937. In those first years of the New Deal, Shesol suggests, the conservative justices were stunned by the boldness and, they thought, radicalism of the New Deal; their opinions seemed to reflect their alarm and caused them to take positions even more conservative than they had in the recent past. Two years later, similarly stunned by the criticism they were receiving, the justices began to slowly back away from their most conservative views. Roberts’s shift occurred even before Roosevelt announced his court-packing plan; but that does not mean that the political furor played no role in his decision.

Shesol also draws attention to a more mundane but nevertheless considerable factor in the shift of the court. In 1937 Roosevelt supported, and Congress approved, a bill to assure retired justices that they would continue to receive their judicial salaries even after retirement. The absence of such benefits had deterred some aged justices from retiring; once the pensions were assured, several of them resigned.

“Supreme Power” is an impressive and engaging book — an excellent work of narrative history. It is deeply researched and beautifully written. Even readers who already know the outcome will find it hard not to feel the suspense that surrounded the battle, so successfully does Shesol recreate the atmosphere of this great controversy. There are many ways to explain what become known as the “Constitutional revolution of 1937,” but Shesol’s book is — at least for now — the most thorough account of this dramatic and still contested event.

Alan Brinkley, the Allan Nevins professor of history at Columbia University, is the author of “The Publisher: Henry Luce and His American Century.”

Wednesday, March 24, 2010

Monopoly--Amazing History !!!

(You'll never look at the game the same way again!)
Starting in 1941, an increasing number of British Airmen found themselves as the involuntary guests of the Third Reich, and the Crown was casting about for ways and means to facilitate their escape...

Now obviously, one of the most helpful aids to that end is a useful and accurate map, one showing not only where stuff was, but also showing the locations of 'safe houses' where a POW on-the-lam could go for food and shelter.

Paper maps had some real drawbacks -- they make a lot of noise when you open and fold them, they wear out rapidly, and if they get wet, they turn into mush.
Someone in MI-5 (similar to America 's OSS ) got the idea of printing escape maps on silk. It's durable, can be scrunched-up into tiny wads, and unfolded as many times as needed, and makes no noise whatsoever.

At that time, there was only one manufacturer in Great Britain that had perfected the technology of printing on silk, and that was John Waddington, Ltd. When approached by the government, the firm was only too happy to do its bit for the war effort.

By pure coincidence, Waddington was also the U.K. Licensee for the popular American board game, Monopoly. As it happened, 'games and pastimes' was a category of item qualified for insertion into 'CARE packages', dispatched by the International Red Cross to prisoners of war.

Under the strictest of secrecy, in a securely guarded and inaccessible old workshop on the grounds of Waddington's, a group of sworn-to-secrecy employees began mass-producing escape maps, keyed to each region of Germany or Italy where Allied POW camps were regional system). When processed, these maps could be folded into such tiny dots that they would actually fit inside a Monopoly playing piece.

As long as they were at it, the clever workmen at Waddington's also managed to add:
1. A playing token, containing a small magnetic compass
2. A two-part metal file that could easily be screwed together
3. Useful amounts of genuine high-denomination German, Italian, and French currency, hidden within the piles of Monopoly money!

British and American air crews were advised, before taking off on their first mission, how to identify a 'rigged' Monopoly set -- by means of a tiny red dot, one cleverly rigged to look like an ordinary printing glitch, located in the corner of the Free Parking square.

Of the estimated 35,000 Allied POWS who successfully escaped, an estimated one-third were aided in their flight by the rigged Monopoly sets.. Everyone who did so was sworn to secrecy indefinitely, since the British Government might want to use this highly successful ruse in still another, future war.

The story wasn't declassified until 2007, when the surviving craftsmen from Waddington's, as well as the firm itself, were finally honored in a public ceremony.

It's always nice when you can play that 'Get Out of Jail' Free' card!
I realize most of you are (probably) too young to have any personal connection to WWII (Dec. '41 to Aug. '45), but this is still interesting.

Thursday, March 11, 2010

The Golden Touch

Banker J. P. Morgan rescued the dollar and bailed out the nation
By John Steele Gordon

On February 5, 1895, the Jupiter of American banking, J. P. Morgan, took the train from New York to Washington to see the president. He had no appointment but came to discuss matters of grave national interest. The crash of 1893 had thrown the country into deep depression, exposed a schizophrenic monetary policy, and now the nation’s gold standard stood on the brink of collapse.

The origin of the crisis lay more than two decades earlier, when Congress had decreed a return to the gold standard, which had been abandoned during the Civil War. (The gold standard effectively restrains inflation by requiring that a nation anchors its currency to gold at a set price.) In 1878 Congress passed the Bland-Allison Act, which ordered the Treasury to buy the silver then pouring out of Western mines in ever increasing amounts, at market price and to coin it at a ratio to gold of 16 to 1.

In 1878 the market price of silver was indeed close to the 16-to-1 ratio. But as silver output continued to swell, it dropped to about 20 to 1 by 1890. In that year Congress passed the Sherman Silver Act, requiring the government to buy even more bullion, 4.5 million ounces a month, and coin it, still at 16 to 1. This policy guaranteed inflation, favored by the poorer areas of the country, such as the South and, of course, the silver-rich West.

Anyone who knew Gresham’s law (“bad money drives out good”) could have predicted what happened next. With silver worth one-twentieth the price of gold in the marketplace but declared to be 25 percent more when coined into money, people began to spend the silver and hoard the gold.

With the government running big surpluses in the prosperous late 1880s and early 1890s, the effect of this monetary policy was masked. But when the crash of 1893 rolled in, bringing deep depression, the trickle of gold out of the Treasury became a flood. By early 1895 bets were being taken on Wall Street as to exactly when the Treasury would run out of gold and default. Two bond issues were sold to replenish the Treasury’s gold supply, but the gold just cycled out again. Congress, with many free-coinage-of-silver members, refused to authorize another issue. That’s when the deeply alarmed Morgan traveled to Washington in early February.

President Grover Cleveland at first refused to see him, but Morgan replied, in his best imperial manner, “I have come down to see the president, and I am going to stay here until I see him.” Cleveland saw him the next morning.
By early 1895 bets were being taken on Wall Street as to exactly when the Treasury would run out of gold and default

Cleveland, his attorney general, and the secretary of the Treasury all still hoped that they could persuade Congress to float another bond issue and thus avoid the embarrassment of having the gold standard rescued by the very symbol of Wall Street. A telephone call from New York informed them that the New York Subtreasury had only $9 million worth of gold left in its vaults. Morgan informed them that he knew of $12 million in drafts that might be presented at any moment. Cleveland’s back was up against the wall.

“What suggestions have you to make, Mr. Morgan?” he asked.

Whereupon Morgan made an extraordinary offer: he and the Rothschilds, the two most powerful forces in international banking at that time, would purchase 3.5 million ounces of gold in Europe in exchange for 30-year gold bonds. (Morgan had uncovered a forgotten Civil War-era statute that allowed the Treasury to issue bonds in exchange for coin.) He also guaranteed that the gold would not flow back out of the Treasury, at least for a while.

In effect, Morgan was offering to act as the nation’s (otherwise nonexistent) central bank, insulating the Treasury from market forces. And it worked. The bonds sold easily in both Wall Street and London, and Morgan and the Rothschilds, using a full battery of foreign exchange techniques, bolstered the dollar, keeping the gold in the Treasury.

Morgan’s rescue of the dollar, despite intense criticism from the Left, changed the country’s economic mood, and a strong recovery from the depression began. The next year the 36-year-old William Jennings Bryan would win the Democratic nomination with a promise that the moneyed classes “shall not crucify mankind upon a cross of gold.” It was one of the most famous speeches in American history, but his far less eloquent opponent, William McKinley, trounced him by running on a slogan of “sound money, protection, and prosperity.”

The election proved to be the start of the revival of Republican dominance in American politics that would last until 1932.

—John Steele Gordon, author of An Empire of Wealth: The Epic History of American Economic Power (HarperCollins 2004), writes about economic history for the Wall Street Journal.