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BARRETT_JOHN Q<<<Professor John Q. Barrett

In 1937, seventy-five years ago today, May 24th was a Monday.

At the United States Supreme Court, many spectators, anticipating announcements of big decisions, walked into the courtroom throughout the morning.  By the time the Justices took the bench at noon, the room was very crowded.  The spectators included Justices’ wives, Senators, Cabinet wives, Solicitor General Stanley Reed, other New Deal officials and many lawyers.

After a few preliminaries, Chief Justice Charles Evans Hughes nodded to Justice Benjamin N. Cardozo.  He announced that he had been instructed to deliver the opinion in Steward Machine Co. v. Collector of Internal Revenue.  The case concerned the constitutionality of the Social Security Act’s unemployment compensation tax on employers.  Spectators leaned forward.  Their buzz was audible.  Reporters sent out flashes that the Court had upheld Social Security’s unemployment insurance system—Justice Cardozo announcing the decision could mean nothing else.

The reporters were correct.  Justice Cardozo, the Court’s junior justice who that day was celebrating his 67th birthday, announced the Court’s decision.  He spoke with more force, and more clearly, than he usually did.

The Court’s decision was 5-4.  Following Cardozo’s announcement of his opinion, which was joined by Chief Justice Hughes and Associate Justices Louis D. Brandeis, Harlan Fiske Stone and Owen J. Roberts, the dissenters had their say.  Justice James C. McReynolds, speaking extemporaneously, contended that “the Union was being destroyed” by the Court’s decision.  Justice George Sutherland then announced his dissent, joined by Justice Willis Van Devanter, which focused on Tenth Amendment and state sovereignty-invoking objections to Social Security’s requirement that States deposit unemployment insurance taxes they collect with the U.S. Secretary of Treasury.  Justice Pierce Butler, speaking last, then announced his much broader dissenting opinion.

Justice Cardozo then announced the Court’s next decision, Helvering v. Davis.  In this case, the Court, dividing 7-2, declared the constitutionality of Social Security’s old age benefit and employer tax.  After reading his opinion for the Court, Cardozo announced the dissenting votes of Justices McReynolds and Butler, who did not write opinions in the case.

The Justices announced eight more decisions, including one in a related, significant case upholding the constitutionality of Alabama’s unemployment compensation law.

They then adjourned for eight days.  They had, as the Court typically has in the springtime, more opinions to finish writing.

*          *          *

The U.S. government lawyers who argued and won the Social Security cases were, of course, Robert H. Jackson and Charles E. Wyzanski, Jr.

In early April 1937, the Court had heard five hours of oral argument in Steward Machine, the Social Security unemployment insurance tax case.  Wyzanski, then age 30 and working as a special assistant in the Office of the Solicitor General, had been the first advocate to speak in defense of the constitutionality of the law, which had been upheld in the Circuit Court of Appeals.  Jackson, then age 45 and Assistant Attorney General of the U.S. heading the Antitrust Division, argued second, during the second day of oral arguments in the case.

(An interesting inter-Justice exchange during Jackson’s argument:  When Justice Butler asked Jackson if the federal government could regulate schools, Justice Brandeis replied that it was very interesting “as an academic matter, where to draw the line,” but said that he had difficulty seeing how the question related to the case.  Butler responded, “I am sure you’re not inviting us to look at this through a keyhole,” which caused the audience to laugh.)

The second Social Security case, Helvering v. Davis, concerning the constitutionality of the old-age pension tax law, did not come to the Supreme Court until after it had heard the oral arguments in Steward Machine, the Social Security unemployment compensation case.  In mid-April, the U.S. Court of Appeals for the First Circuit held, by a vote of 2-1, that both parts of the Social Security Act were unconstitutional—Jackson argued and lost this appeal in Boston.  This decision created a split on the old-age pension issue with the Fifth Circuit’s decision in Steward Machine, which was already before the Supreme Court on the unemployment tax issue.  The government, concerned that U.S. District Courts would begin to grant injunctions against U.S. collections of Social Security taxes from employers, thus sought immediate Supreme Court review in Davis.

In late April 1937, the Court granted review in Davis, and in early May it heard oral arguments.  Jackson argued first, defending the constitutionality of the Social Security Act’s old-age benefits and the federal taxes on employers that pay for those benefits.  Following argument by opposing counsel, Wyzanski made the government’s rebuttal argument.

Now, on May 24, 1937, lawyers Jackson and Wyzanski—the United States—had won in the Supreme Court the legal arguments about the constitutionality of Social Security.  Of course they celebrated.  The next morning, the Washington Post published a photograph of Jackson and Wyzanski together, probably at the Department of Justice, smiling modestly.  The newspaper’s caption:  “Their Arguments Won.”

In the same paper, reporter Franklyn Waltman stated, in an opinion column, that the previous days’ decisions gave Jackson a perfect score in arguing constitutional questions before the Supreme Court.  Waltman noted that, in addition to Social Security, Jackson had won, earlier in the Supreme Court Term, decisions upholding the constitutionality of the federal silver profits tax and the Philippine cocoanut oil tax.

*          *          *

Some links—

                    Steward Machine Co. v. Collector of Internal Revenue, the Social Security Act unemployment tax decision, 301 U.S. 619 (1937);

                    Helvering v. Davis, the Social Security Act old-age pension benefit/tax decision, 301 U.S. 619 (1937).

Professor John Q. Barrett teaches at St. John’s University School of Law. Vist the Homepage.

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eHeziTHE JACKSON LIST: Social Security Upheld By PROF. JOHN Q. BARRETT

Comments 2

  1. you are so far off the wall that it is not worth
    discussing…no other nation in the world affords
    its citizens the liberties that the US does as inshrined in the bill of rights..those like you who
    want to go back to a time when there was no government
    are totally misguided…you and your libertarian ayn
    rand acolytes don’t want the FDA to check your medicines for poison, or the EPA or the department of
    education. You believe in sink or swim on your own..but the Supreme Court and the congress and the president were elected and all agreed that social security was a good’s not going to change because of Dr Rex Curry…and your feeble attempt to
    equate social security with what the Nazi’s did is insulting at best and irrelevant in any case

  2. In 1935 social security began as the USA followed in the steps of Stalin, Hitler (and eventually Mao) with Nazi numbering and the police state. Have you noticed how many Americans, including libertarians, miss the most important reason why social security must end?: It is part of the present police state and its continuing growth (see the work of the historian Dr. Rex Curry). It is a sad commentary on Americans that they can argue about the fraudulent/financial aspects and forget the most important part against Nazi numbering. No one should argue about the financial aspects of the SS system without first explaining matter-of-factly the main point: the government numbers infants to tax, track and control them for life in the socialist slave system. In fact why bother to discuss any other of the trite points? The common omission is more proof that government schools must end. It is probably more proof that Americans are a lost cause for liberty. Is it proof that Americans are a lost cause for liberty?

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