1939: Law And Legislation

Neutrality.

Undoubtedly the most significant single piece of legislation enacted during 1939 was the Neutrality Act. This was intended to preserve the neutrality and the peace of the United States and to secure the safety of its citizens and their interests. It provides that whenever the President shall find that there exists a state of war and when he names the states involved in a proclamation, it shall thereafter be unlawful (1) for any American vessel to carry any passengers or any articles or materials to any state named in the proclamation; (2) to export any articles to any such state until all right, title and interest therein shall have been transferred to a foreign purchaser*; (3) for any American citizen or vessel to go into or through combat areas named in the President's proclamation; (4) for American citizens to travel in the vessels of belligerents named in the proclamation; (5) for any person in the United States to buy, sell or exchange bonds or securities of belligerents or to make any loan or extend any credit to a belligerent government named in the proclamation; (6) to solicit funds for belligerent governments.

* This is the famous cash-and-carry provision which makes possible the avoidance of the American experience during the World War with respect to war credits and war debts. The Act further provides that the United States shall not make the loss of any articles purchased by belligerents or the payment of insurance by underwriters the basis of any diplomatic claim.

The Neutrality Act of 1939 (U.S.C.A. 221 See. 245-j et seq.) eliminated the absolute embargo against the export of arms or ammunition to belligerents contained in the Neutrality Act of 1937. This was found to work to the disadvantage of weak nations attacked by large and powerful aggressor nations. Under the new Act arms and ammunition, as well as any other articles of merchandise, may be exported, but they must be bought with cash and must not be transported in American ships.

The Neutrality Act of 1939 reflects the experience gained in the last World War, as well as the experience of the past few years of armed peace. If its terms are adhered to, there is little likelihood of American ships being sunk, of American lives being lost at sea and of American financial strength being used to supply the belligerents with the sinews of war.

Propaganda Control.

In order not to be mixed up with European quarrels, caution must be exercised on the home front as well as in zones where the war is being carried on. During the last war this country was flooded with propaganda from all the belligerent nations. In recent years considerable sums have been expended in this country in order to enlist American sympathies in the cause of warring ideologies. Bills passed at the last session of Congress and in 1938 which require the registration of certain persons employed by agencies to disseminate propaganda in the United States (U.S.C.A., T 22, Sec. 233a et seq.) make it possible at least to ascertain who the propagandists are, how much money they are receiving from their foreign principals and for what purposes the money is being spent. The 1938 and 1939 statutes require any person who acts as a public relations counsel publicity representative or attorney for a foreign principal to file with the Secretary of State data on the name of the foreign principal, the amount of compensation received, the character of the activities carried on, etc. These statements are public records and subject to public inspection. Failure to file reports is made punishable by fine and imprisonment.

Air Defense.

The preoccupation with the international situation and the increasing importance of the airplane in military operations dictated the passage of the Civilian Pilot Training Act (U.S.C.A., T. 49, sec. 751-7, 1939). This Act appropriated $5,675,000 for the fiscal year 1939-1940 to enable the Civil Aeronautics Authority (CAA) to train civilian pilots and to conduct programs for such training, including studies and research.** This statute will make it possible to build up a reserve of pilots to man airplanes necessary for this country's defense. Such an air force is envisaged by the statute entitled 'An Act to Provide More Effectively for the National Defense' (U.S.C.A., T. 10, sec. 292b), which appropriated $300,000,000 for the purchase of 6,000 airplanes.

** At least 5 per cent of the applicants selected for such training must be non-college students. None of the benefits of the training program can be denied a prospective student on account of race, color or creed.

Pernicious Political Activities of Office Holders.

A statute which, if enforced, would have a wide influence on the political mores in this country, is the so-called Hatch Bill (U.S.C.A., T. 18, sec. 61-61 K), which is entitled 'An Act to Prevent Pernicious Political Activities.' In certain states the charge had been made that WPA and Federal relief money and the power to employ and discharge WPA employees had been used to influence the results of Congressional primaries and elections. The Act, therefore, makes it unlawful to deprive a person, because of political support or opposition to a candidate, of a position financed by relief appropriations. It also makes unlawful the solicitation of campaign funds from relief workers.

The statute, however, goes far beyond the protection of relief recipients from political pressure, since it makes unlawful the time-honored practice of promising Federal positions as a reward for political activity. Sec. 61 (h) also prohibits any person employed in the Executive branch of the Federal Government from using his official authority or influence 'for the purpose of interfering with an election or affecting the result thereof.' This section further provides that no such official 'shall take any active part in political management or political campaigns.' This makes unlawful the holding of an office in any political organization, or political club, or the membership on any committee of a political organization by an officer or employee of the Executive branch of the Federal Government. Under the Hatch Act, therefore, Federal officials are required to resign either from such positions or from their offices in the Federal Government, since the Act authorizes the punishment of violations of sec. 61 (h) by immediate removal from official position.

Relief.

The prohibitions of the Hatch Bill against depriving relief employees of employment because of race, color, creed or political activity in support of, or in opposition to, any candidate are also included in the Work Relief Appropriation Resolution (Pub. Res. #1) which authorized the appropriation of an additional $725,000,000 'in order to continue to provide work relief on useful public projects.' Only $15,000,000 of this sum may be used for direct relief for needy persons. This resolution directs the Administration to make an investigation of the relief rolls and to eliminate those not in actual need. It also provides that no person in need who refuses a bona fide offer of employment under reasonable conditions at prevailing wage rates can be continued on work projects.

Governmental Reorganization.

Government, national, state and municipal, tends to develop in rather sprawling fashion. As the need for the performance of new functions arises, new agencies are created which frequently have little relation to other agencies or departments performing similar functions. At intervals it becomes necessary to reexamine the structure of governmental agencies so that they may be reorganized according to some logical scheme or plan. The Reorganization Act of 1939 directs the President to make such a reexamination of the Federal Governmental machinery and to determine the changes which may be necessary (1) to reduce expenditures, (2) to increase efficiency and (3) to group, coordinate and consolidate agencies, (4) to reduce the number of agencies and (5) to eliminate overlapping and duplication of effort. When the President finds that the transfer, consolidation or abolition of any agency is necessary to accomplish these purposes, he must prepare a reorganization plan which must be submitted to Congress. His plan shall become effective within sixty days after receipt by Congress, unless Congress passes a resolution stating that it does not favor the plan.

Under the authority of this statute, two reorganization plans were submitted to Congress and have become law. In a message accompanying Plan I, the President pointed out that 'to carry out the purposes of the Reorganization Act of 1939 (Pub. #19) to group, coordinate and consolidate the agencies of government . . . would require the provision of three general agencies in addition to the ten Executive departments.' Accordingly the President recommended the creation of (1) a Federal Security Agency, (2) a Federal Works Agency and (3) a Federal Loan Agency. The major independent agencies and establishments of the Government were to be distributed among the ten Executive departments and these three new agencies. In the Federal Security Agency are grouped those agencies of the Government 'the major purposes of which are to promote social and economic security, educational opportunity and the health of the citizens of the nation,' such as (1) the United States Employment Service of the Department of Labor; (2) The Office of Education of the Department of the Interior; (3) The Public Health Service of the Department of the Treasury; (4) The National Youth Administration of the WPA; (5) the Social Security Board, and (6) the Civilian Conservation Corps.

In the Federal Works Agency are included 'those agencies of the Federal Government dealing with public works not incidental to the normal work of other Departments and which administer federal grants or loans to state or local governments for the purpose of construction.' Included in this agency are the United States Housing Authority, The Works Progress Administration, The Bureau of Public Roads of the Department of Agriculture, the Public Buildings Branch of the Procurement Division of the Treasury, the Branch of Building Management of the National Park Service.

Under the Federal Loan Agency are grouped 'those independent lending agencies of the government which have been established from time to time for the purpose of stimulating and stabilizing the financial, commercial and industrial enterprises of the nation.' Included within this agency are the Reconstruction Finance Corporation, the Federal Housing Authority, The Home Owners Loan Corporation, the Electric Home and Farm Authority, the Federal Home Loan Bank Board, etc.

Reorganization Plan II submitted by the President did not create any new agency but was 'concerned with the sole purpose of improving the administrative management of the Executive branch by a more logical grouping of existing units and functions and by a further reduction in the number of independent agencies.' Accordingly, the Plan provided for the transfer of the Foreign Commerce Service and the Foreign Agricultural Service to the State Department; the Bureau of Lighthouses to the Coast Guard of the Treasury Department; the Federal Prisons Industries, Inc. to the Department of Justice; the Bureaus of Fisheries, Biological Survey and Insular Affairs to the Department of the Interior, etc. In addition, such agencies as the National Bituminous Coal Commission, the Office of the Director General of Railroads, and the War Finance Corporation were abolished.

The President stated that additional reorganization plans will be laid before Congress in the near future.

Supreme Court Decisions.

Within the past two years there has been a considerable change in the composition of the Supreme Court through the death and retirement of old members and the appointment of new ones. During this period the President has made five appointments to the Court — Justice Black for Van Devanter, Justice Reed for Sutherland, Justice Frankfurter for Cardozo, Justice Douglas for Brandeis and Justice Murphy for Butler. The President has thus appointed a majority of the Justices of the Court. Without any change in existing institutions, President Roosevelt has obtained a Court sympathetic to his views, for which he fought so desperately in the so-called Court Packing Bill.

The change in the composition of the Court and the pressure on the Court to rule in a way favorable to the President's program are reflected in a number of decisions which make significant departures from traditional constitutional doctrines. One such is the case of NLRB v. Fainblatt (306 U. S. 601).

NLRB v. Fainblatt.

The defendant Fainblatt operated what is known as a 'contract shop' converting into women's wearing apparel material supplied him by a New York company. The finished garments were delivered to the New York company's representative, who shipped them back to New York or to the company's customers. The National Labor Relations Board claimed jurisdiction over the defendant's factory although the defendant himself was not engaged in interstate commerce upon the theory that the material and garments moved in interstate commerce. The jurisdiction of the Board was upheld by the Supreme Court. In 1935 in the Schechter Case (295 U. S. 498) which involved the constitutionality of the NRA, the Court had held that Congress could not constitutionally regulate the wages and hours in Schechter's poultry slaughterhouse since he did an intrastate business, although most of the poultry received at his slaughterhouse came from interstate sources. The Court stated in that decision 'If the commerce clause were construed to reach all enterprises and transactions which could be said to have an indirect effect upon interstate commerce, the Federal authority would embrace practically all the activities of the people, and the authority of the State over its domestic concerns would exist only by sufferance of the Federal Government.' In the Fainblatt Case, however, the Court found a sufficient basis for national regulation in the fact that materials were transported in interstate commerce and the finished products were shipped into interstate commerce. Mr. Justice M. Reynolds in his dissent in the Fainblatt Case pointed out that the power over interstate commerce so construed 'brings within the ambit of Federal control most if not all activities of the Nation; subjects states to the will of Congress; and permits disruption of our federated system.' (p. 610).

Mulford v. Smith.

A similar extension of the power of Congress over activities which were formerly deemed subject only to state control may be seen in the case of Mulford v. Smith (307 U. S. 38). This case brought in question the constitutionality of Title III of the Agricultural Adjustment Act of 1938. Under this Act the Secretary of Agriculture was empowered to prescribe the amount of flue-cured tobacco that could be raised in 1938 in each state and on each farm. If more than a farmer's quota was sold, the warehouseman was required to pay a penalty equal to one-half the price of the excess which he could deduct from the amount payable to the farmer. If sales are made in any other manner than through the warehouseman, penalties are also imposed which are ultimately borne by the farmer.

The appellant in Mulford v. Smith contended that Title III was unconstitutional since it was a statutory plan to control agricultural production, which is beyond the power of Congress. This contention was rejected by the Court which stated, 'The statute does not purport to control production. It sets no limit upon the acreage which may be planted or produced and imposes no penalty for the planting and producing of tobacco in excess of the marketing quota. It purports to be solely a regulation of interstate commerce, which it reaches and affects at the throat where tobacco enters the stream of commerce — the marketing warehouse.' (p. 47). Here again there was a dissent by Justices Butler and McReynolds, the former's opinion pointing out that the enactment does operate to control the quantity raised by each farmer and hence to control production; and that in U. S. v. Butler (297 U. S. 1), which declared the AAA Act of 1933 unconstitutional, the Supreme Court had held 'the Federal Government without power to control farm production.' Again the warning was raised by the opinion of the majority of the Court that dire consequences would follow: 'If Congress can thus regulate matters entrusted to local authority by prohibition of the movement of commodities in interstate commerce, all freedom of commerce will be at an end, and the power of the states over local matters may be eliminated, and thus our system of government be practically destroyed.' (p. 56)

O'Malley v. Woodrough; Graves v. O'Keefe.

Significant departures by the Supreme Court from traditional constitutional doctrines were also made in the field of taxation. In Evans v. Gore (253 U. S. 245), decided in 1920, the Court had held that a tax which included his official salary upon the net income of a United States district judge under an Act passed since he took office operates to diminish his compensation in violation of the constitutional provision that the compensation of judges shall not be diminished during their continuance in office. The Constitution, stated the Court, 'expressly forbids diminution of the judge's compensation, meaning, as we have shown, diminution by taxation as well as otherwise.' (p. 264) In Miles v. Graham (268 U. S. 501), a case decided five years later, the Court reaffirmed this doctrine stating in the course of its opinion, 'It is equally clear, we think, that there is no power to tax a judge of a court of the United States on account of the salary prescribed for him by law.' (p. 509) In the case of O'Malley v. Woodrough (307 U. S. 277), however, the provisions of the Revenue Act of 1936, which required the inclusion in gross income for the purposes of taxation of the compensation of 'judges of courts of the United States taking office after June 6, 1932,' the Court upheld as constitutional, stating in the course of its opinion, 'To suggest that it (the tax) makes inroads upon the independence of judges who took office after Congress had thus charged them with the common duties of citizenship, by making them bear their aliquot share of the cost of maintaining the Government, is to trivialize the great historic experience on which the framers based the safeguards of article III, Sec. 1 (of the Constitution, p. 282).'

A similar evolution in the attitude of the Court took place in regard to the taxation by states of the salaries of Federal officials and the taxation by the Federal Government of the salaries of state officials. In Rogers v. Graves (299 U. S. 401) decided in 1937, the Supreme Court had held that the State of New York was without power to tax the salary of the general counsel of the Panama Railroad Co., which was an instrumentality of the United States Government. In Graves v. O'Keefe (306 U. S. 466), however, two years later, the Court ruled that the salary of O'Keefe, who was an attorney for the Home Owners Loan Corporation, a Federal Government instrumentality, could be taxed by the State of New York. The exercise of the right of the Federal Government to tax incomes derived from salaries received as employees of state instrumentalities was upheld by the Court in Helvering v. Gerhardt (304 U. S. 405); although in Brush v. Commissioner (300 U. S. 352), decided a year previously, the Court had invalidated the taxation by the United States of the salary of the Chief Engineer of New York's Bureau of Water Supply, Gas and Electricity. Congress at its last session passed the Public Salary Tax Act (Pub. 32) which provided for the taxation of the salaries of Federal judges taking office prior to June 6, 1932. The Federal Government also consented to state taxation of the salaries of Federal employees, provided that no discrimination is made because of the source of compensation.

Tennessee Electric Power Company v. TVA.

While the Supreme Court has not hesitated to expand the power of Congress over interstate commerce and over farm production, it has refused to limit the powers exercised by the TVA in the production, sale and distribution of electric power. The question of whether the TVA had the right to generate, distribute and sell the electricity resulting from its water power development and its system of flood control came before the Court in the case of Tennessee Electric Power Company v. TVA (306 U. S. 118). Fourteen electric power companies appealed the dismissal of a bill in equity seeking to restrain the TVA from generating and selling electric power from the Authority's dams on the ground that water power cannot constitutionally be created. The appellants contended 'that the statutory plan is a plain attempt, in the guise of exerting granted powers, to exercise a power not granted to the United States.' The Court did not pass upon these contentions since it decided that the complainants had no standing to challenge the validity of the TVA Act. This position of the Court was challenged by Mr. Justice Butler in a dissenting opinion. 'If, because of conflict with the Constitution,' stated Justice Butler, 'the Act does not authorize the enterprise formulated and being executed by defendants, then their conduct is unlawful and inflicts upon complainants direct and special injury of great consequence. Therefore, they are entitled to have this Court decide upon the constitutional questions they have brought here.' (p. 152)

Hague v. Congress for Industrial Organizations.

In the field of civil rights the outstanding decision of the year was in the case of Hague v. Committee for Industrial Organization (307 U. S. 496). In a suit brought in the United States District Court the complainants alleged that the defendant, Mayor Hague of Jersey City, the Director of Public Safety, and Chief of Police and the Board of Commissioners, had deprived them of their right to hold public meetings, to distribute printed matter discussing the rights of citizens under the National Labor Relations Act and to have free access to the city. The injunction against the defendants granted in the lower court was upheld in the Supreme Court although it was modified in certain particulars. Mr. Justice Roberts pointed out that the Jersey City ordinance which prohibited public meetings without their holders' previously obtaining a permit from the Director of Public Safety, who could refuse said permit for the purpose of preventing 'riots, disturbances or disorderly assemblage,' was void upon its face. He lays down the principle that although the right of assembly must be exercised in subordination to the general welfare, it must not be abridged or denied in the guise of regulation. The ordinance, wrote Justice Roberts, 'does not make comfort or convenience in the use of streets or parks the standard of official action. It enables the Director of Safety to refuse a permit on his mere opinion that such refusal will prevent 'riots, disturbances or disorderly assemblage.' It can thus, as the record discloses, be made the instrument of arbitrary suppression of free expression of views on national affairs.'

Schneider v. Irvington; Young v. California; Snyder v. Milwaukee; Nichols v. Massachusetts.

(60 S. Ct. 146). The decision in the Hague case above also invalidated the Jersey City ordinance which forbade persons to distribute handbills, circulars, pamphlets, periodicals, and such in public streets. The issue of whether cities could prohibit such distribution came before the Court again in the above series of cases. The defendants in these cases had been convicted of violating city ordinances prohibiting the distribution of handbills, pamphlets, circulars, etc. The Court stated in the above cases that 'Although a municipality may enact regulations in the interest of the public safety, health, welfare or convenience, these may not abridge the individual liberties secured by the Constitution to those who wish to speak, write, print or circulate information of opinion.' The Court stated that although the purpose of these ordinances may have been to prevent the littering of streets, it was insufficient to justify prohibiting one person from handing literature to another who is willing to receive it. 'Any burden imposed on city authorities in cleaning and caring for the streets . . . results from the constitutional protection of the freedom of speech and press.'

Nardone v. United States.

The case of Nardone v. United States (60 S. Ct. 266) brought before the Court the troublesome wiretapping problem. Two years earlier in the same prosecution (Nardone v. United States 302 U. S. 379) the Court had decided that evidence of telephone conversations obtained through the tapping of wires by Federal agents was inadmissible in the Federal courts because of the provisions of Sec. 605 of the Communications Act which provided that 'no person not being authorized by the sender shall intercept any communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person.' In the present case, testimony as to the intercepted telephone conversations was not introduced. The prosecution attorneys, however, used these conversations as leads to obtaining independent evidence of guilt. The accused requested the right to examine the prosecution as to the use to which it had put the intercepted conversations with a view to obtaining the exclusion of evidence so obtained. This was denied by the trial court. This denial was held to be error by the Supreme Court, which stated through Justice Frankfurter: 'The result of the holding below is to reduce the scope of Section 605 to exclusion of the exact words heard through forbidden interceptions, allowing these interceptions every derivative use that they may serve. Such a reading of Section 605 would largely stultify the policy which compelled our decision in Nardone v. United States supra. That decision was not the product of a merely meticulous reading of technical language. It was the translation into practicality of broad considerations of morality and public well-being . . . knowledge gained by the Government's own wrong cannot be used by it simply because it is used derivatively.'

NLRB v. Fansteel Corp.

The Nardone case compels Government agents who are attempting to detect smugglers and other criminals to use legal methods in their apprehension on penalty of seeing their efforts upset by the Court. In the case of NLRB v. Fansteel Metallurgical Corporation (306 U. S. 240), the Court laid down certain standards of conduct for workers who use the strike as a means of enforcing their demands upon employers. The workers of the Fansteel Corporation had seized its plants in the course of a sit-down strike and were discharged by the superintendent when they refused to surrender the plants. They were later evicted from the plants by the sheriff, and later many were fined or sent to jail. The NLRB, which found that the Fansteel Corporation had been engaged in unfair labor practices against its employees, required the Corporation to reinstate the men who had been discharged. The Court held that the NLRB was without authority to compel this reinstatement, stating in the course of its opinion: 'Nor is it questioned that the seizure and retention of respondent's property were unlawful. It was a high-handed proceeding without shadow of legal right. . . . When the employees resorted to that sort of compulsion they took a position outside the protection of the statute and accepted the risk of the termination of their employment.' (See also LABOR LEGISLATION; TRADE UNIONS.)

Pierre v. Louisiana; Missouri ex rel Gaines v. Canada.

In two cases involving discrimination against Negroes, the Court gave full force and effect to the Constitutional guarantees of equal protection of the laws. In Pierre v. Louisiana (306 U. S. 54), the defendant had been indicted and convicted of the murder of a white man, and this conviction was upheld in the highest state court. He was able to show that Negroes had been systematically excluded from the Grand Jury panels of the parish in which he was convicted although one third of its population was Negro. This the Court held to be a denial of equal protection of the laws, which required the quashing of the indictment. In Missouri ex rel Gaines v. Canada (305 U. S. 337), Gaines, a Negro, was refused admission to the Law course of the University of Missouri, although he had met its entrance requirements. Missouri statutes provided that pending the development of a law course at Lincoln University, the Negro university, its curators could arrange for equal instruction for Negro students in law schools of neighboring states which accepted Negroes. The tuition of these students would be paid for by the state. The Court held that the action of Missouri in furnishing legal education in the State to whites while not furnishing it to Negroes was a denial of equal protection of the laws and repugnant to the Fourteenth Amendment. Chief Justice Hughes in his opinion stated that the fact that opportunities were afforded Missouri Negroes in other states was beside the point. When Missouri provides legal training it must 'furnish it to the residents of the State upon the basis of an equality of right. By the operation of the laws of Missouri a privilege has been created for white law students which is denied to Negroes by reason of their race. The white resident is afforded legal education within the State; the Negro resident having the same qualifications is refused it there and must go outside the State to obtain it. That is a denial of the equality of legal right to the enjoyment of the privilege which the State has set up.' (p. 349)