That’s Not Kosher: How Four Jewish Butchers Brought Down the First New Deal

Jewish-Americans have a long history of finding role models who broke barriers, accomplished great things, or engaged in more mundane acts of heroism. Jewish religious schools are full of discussions of athletes like Hank Greenberg and Sandy Koufax, or the legions of Jewish entertainers and scholars, as ways to demonstrate the accomplishments of American Jews.

But in all those stories many of us heard growing up, one set of brave heroes was never mentioned: the Schechter brothers of New York City. The Schechters were kosher butchers operating in the 1930s who stood fast to their commitment to the dietary laws of kashrut in the face of ferocious pressure and prosecution by a powerful government. They eventually took their case to the highest court in the land—and won—defeating one of the most popular and powerful administrations in American history.

One would think this story of Jewish heroism and commitment to Jewish values would be inspirational for generations of young American Jews. But the Schechter brothers were up against Franklin Delano Roosevelt.

It was the Roosevelt administration’s prosecution of the Schechters for violating the National Industrial Recovery Act, one of the pillars of the New Deal, that led the Supreme Court to declare the act unconstitutional in 1935. FDR was, and remains, so beloved by American Jews that the heroism of the Schechters has been lost as a story of Jewish moral commitment in the face of power. In her history of the Great Depression, The Forgotten Man, Amity Shlaes begins the process of rescuing the Schechter brothers from obscurity by spending an entire chapter on their challenge to the New Deal. In this article I build on Shlaes’s account to provide some broader context for their story and draw some implications for Jewish Americans.

To understand the Schechters’ story one needs to understand how the Roosevelt administration understood the causes of the Great Depression and thus developed its policy solutions. The dominant theory at the time was that the Great Depression was caused by “underconsumptionism.” Capitalism was supposedly incapable of creating enough purchasing power to buy all that was being produced, and this claim was often tied to concerns about income inequality. The rich were thought to save too much and spend too little. Some argued this was due to excessive monopoly, others to excessive competition. We now know that these arguments are confused and incorrect, but at the time many saw the Great Depression as a fundamental failure of the coordinative features of market-based production, requiring a significant role for government to fix. The problems were seen not as “macroeconomic” but as much more fundamental structural failures of the market economy.

The advisers around Roosevelt, many of whom were academics familiar with these arguments, accepted that explanation and favored a radical reform of the economic system. They had in mind a much more extensive role for government in planning and organizing production, as opposed to relying (largely) on independent decision-making coordinated by prices and profits. Both agriculture and industry were to be fundamentally restructured by government.

The two pillars of FDR’s first hundred days—the Agricultural Adjustment Act (AAA) and the National Industrial Recovery Act (NIRA)—came from this thinking. Each was designed to impose order on the market through government-mandated cooperation among producers and labor. It wasn’t socialism, but it wasn’t capitalism either. It was much closer to the economic institutions of fascism then in place in Italy. As Shlaes and others have documented, Roosevelt’s advisers had been explicitly influenced by Mussolini, and he and Roosevelt had something of a mutual admiration society.

Roosevelt created the National Recovery Administration (NRA) to enforce the NIRA’s provisions. It wrote or helped industries and labor write “codes” that governed production, prices, and labor relations. The AAA was a similar attempt to plan agricultural production. In the name of keeping prices up for farmers, millions of piglets were slaughtered and millions of acres of cotton were plowed under—while large numbers of Americans were hungry and cold.

Stores displayed the NRA “Blue Eagle” sign to show they were abiding by the codes, and consumers were encouraged to patronize only companies that did so. Thousands of inspectors checked for code compliance and initiated prosecutions against violators. Enter the Schechters. Central Casting

The four brothers were born in Hungary before their parents made their way to the United States. With heavily accented, broken English, they were right out of central casting for the oft-stereotyped immigrant Jewish rube—and the Roosevelt administration treated them that way. The Yiddish version of their last name, Shochet, is also the word for their profession: butcher. More specifically, they were poultry middlemen, buying chickens from across the country, then butchering and selling them to the New York City market, mostly to retailers who then sold directly to consumers. Middlemen of course were exactly the sort of “problem” the NRA was designed to deal with, because in the eyes of the FDR crowd they profited off consumers while providing little in return. Additionally, prejudice against middlemen has been historically difficult to disentangle from anti-Semitism, since Jews have long performed this role and borne the brunt of ignorance about how trade creates value.

Most important to the story is that the Schechters ran a kosher butcher business. The Jewish laws of kashrut serve many purposes. Among them they specify how to safely kill and dispose of animals so as to avoid a variety of possible diseases. Also, they enforce a set of ethical obligations about how to treat animals that we kill and eat. The provisions about how to kill animals and what can and cannot be eaten helped the community avoid potentially unhealthy practices (and animals) and signaled that the animals sold had been inspected by recognized community authorities—namely rabbis trained to ensure that sellers followed the biblical rules. A certified kosher butcher has the equivalent of a Good Housekeeping Seal of Approval from the most respected members of the local community.

Tuberculosis was the major issue with chickens, making it crucial to inspect the lungs to make sure they were smooth and therefore healthy. The word glatt in the phrase glatt kosher means “smooth,” which assures buyers no signs of tuberculosis were found. Importantly, customers at kosher butcheries could choose the birds they bought, which gave them the ability to enforce kashrut through their buying choices. So even if the birds were certified kosher by a rabbinical authority, customers could still exercise their own judgment about the quality of the chickens. Kosher butchers allowed this as a way to attract customers. Straight Killing or Prison

The problem for the Schechters was that Section 2, Article 7 of the NRA’s Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and about the City of New York, which sounds like something out of Atlas Shrugged, mandated “straight killing,” which meant that customers could not select specific birds out of a coop. Instead they had to select a coop or half coop entirely. The code thus directly contradicted kashrut. This put the Schechters in an untenable position: Abide by the New Deal or abide by kashrut. Do the former and lose your customers. Do the latter and get arrested.

In June 1934 the Roosevelt administration expanded NRA inspections, and prosecutions began in earnest. The poultry industry was targeted because of alleged corruption. It is worth noting that corruption was not alleged to have caused the Great Depression, and the law said little about it. As is often the case, power assumed by the government for one purpose is very easy to use for other, more nefarious purposes. That summer federal agents swarmed the Schechters’ business. In July a grand jury delivered a 60-count indictment against them, including “threatening violence against agents and inspectors” and violating code rules about hours and pay. Most important: They were charged with violating code rules about the selection of chickens and knowingly selling a chicken unfit for consumption to a customer. They were also charged with conducting a “conspiracy to violate the NRA code.” As Shlaes notes, once they were charged with selling a sick chicken, they were tagged as not just law breakers but also bad Jews.

During the original criminal trial, at which the brothers were each found guilty and sentenced to several months in jail, the prosecutors tried to play them as rubes. When they appealed, the media used the usual anti-Semitic tropes to make them look silly for bucking the all-powerful federal government, including invoking standard anti-Semitic stereotypes against their lawyer, Joseph Heller. Shlaes offers additional details in her chapter; most of the attempts to make the Schechters look stupid backfired on the prosecutors since the attempts only served to demonstrate how much the brothers knew about their own market and how ignorant the NRA code enforcers were. The Schechters were hardly the only business targeted, but they were among the larger ones and had the most charges leveled against them.

At the same time, criticisms of the NRA grew, not the least from the African-American community, which correctly saw attempts to raise wages as a means of shutting black labor out of the market. Writers at the Chicago Defender, the local black paper, referred to the NRA as the “Negro Run Around” and the “Negro Removal Act.” The NRA’s harm of black workers fits into a longer story how of labor market regulation was used for racist purposes. (See Art Carden and my October 2011 Freeman article, “Eugenics: Progressivism’s Ultimate Social Engineering.”)

On May 2, 1935, the Supreme Court heard the oral arguments. The federal government’s case rested largely on emergency powers: There was a national crisis, and the government should have whatever powers it needed to fight it. At stake were competing interpretations of the Commerce Clause, which supposedly limited Congress’s power to regulate commerce to interstate transactions. The government argued that the Schechters’ business should be seen as interstate commerce in light of the Depression, while the Schechters’ lawyer countered both that the business was not interstate commerce and, more powerfully, that the Schechters had never agreed to the NRA code, which interfered with their ability to best serve their customers. As Shlaes points out, attorney Heller was careful to explain the kosher practices in a way that avoided making them sound Jewish, again for fear of anti-Semitic backlash.

Part of the exchange between the Justices and Heller was over what “straight killing” meant for customers, leading to a discussion of reaching into chicken coops. The reaction in court was mostly amusement at the absurdity of the code, in both its level of detail and what it required of producers and consumers. Unanimous Decision

On May 27 a unanimous Court ruled that the NIRA did indeed violate the Commerce Clause and that even in “extraordinary conditions” Congress may not exceed its constitutional limits. Specifically, Congress had no legitimate power to delegate what amounted to law-making power to the NRA.

This case and a related one that struck down the AAA ended the more radical provisions of what is often called the “First New Deal.” FDR’s reaction to the decision was his famous line about the Court taking the country “back to the horse and buggy age.” That sentiment was one reason Roosevelt later proposed his “court packing” plan to expand the Court. This case was one of the last Supreme Court decisions to uphold this narrow reading of the Commerce Clause. The same set of issues is at stake in the case against the Obama administration’s health care act.

There are many lessons one could draw from the story of the Schechter brothers, not the least of which is how much the Supreme Court’s jurisprudence has evolved over the years. Back then Congress had to prove it constitutionally possessed the powers it exercised; the Court did not place the burden of proof on those who claimed the exercise of some power is unconstitutional.

The Schechters’ story, however, raises other interesting questions. Why is it not better known, particularly among American Jews, that underdog immigrant small-business owners triumphed over a government that denied them the right to run their business according to their long-standing ethical-religious code? After all, this is the classic story of Jewish heroism: a group of Jews under siege by the State demonstrating grace under pressure by standing up for their beliefs.

It would seem that the overwhelming love that American Jews have had for FDR is likely one explanation. It might be difficult to hold up as heroes the men who helped bring down the First New Deal. The American Jews’ love for FDR is also something of a mystery when one considers his administration’s refusal to help Jews escape Nazi Germany as the Holocaust began to unfold.

The story of the Schechter brothers raises important questions about the power of the State. It’s a story still waiting to be told in its entirety.

A.L.A. Schechter Poultry Corp. v. United States would not be decided this way today. Still, Dems are discussing court packing, quietly.

You might find a Justice or two who would say This is the end of this business of centralization, and I want you to go back and tell the president that we're not going to let this government centralize everything

The dominant theory at the time was that the Great Depression was caused by “underconsumptionism.”

Anyone notice the advertisement for reverse mortgage ad with what’s his name talking about all the untapped wealth in home equity...…………………………….

The dominant theory at the time was that the Great Depression was caused by “underconsumptionism.”

I am doing my part to help the cause, sending money to FR, Donald Trump and others.

Spend your money folks but spend it well. The libs will spend it if you don’t...…………………………………...

. As is often the case, power assumed by the government for one purpose is very easy to use for other, more nefarious purposes.

For those who so willingly think another conservative law will solve the problem. Remember the above...…………….

Now knowing the above, how do apply it?

At the same time, criticisms of the NRA grew, not the least from the African-American community, which correctly saw attempts to raise wages as a means of shutting black labor out of the market.

So why is minimum wage increase not frowned upon today?

“It was much closer to the economic institutions of fascism then in place in Italy. As Shlaes and others have documented, Roosevelt’s advisers had been explicitly influenced by Mussolini, and he and Roosevelt had something of a mutual admiration society.”

I’ve always agreed with the view that the New Deal was the American version of the centralization and collectivism going on at the time in Italy, Germany, and Russia.

the classic story of Jewish heroism: a group of Jews under siege by the State demonstrating grace under pressure by standing up for their beliefs.

Folks if anyone has actually read the article, what is to be learned?

For one, it reminded me of the Founding Fathers. Our Founding Fathers had nothing left to lose. Nothing to protect as the British were in the process of destroying them. The guys that signed were targets BEFORE signing, the signing did not make them the targets.

The four guys above had nothing left to lose either.

FREEDOM IS JUST ANOTHER WORD FOR NOTHING LEFT TO LOSE

So application? We aren’t going to fight until it becomes more real to us. As long as there is a chance that we can keep our stuff, we will be docile.

The article ends by referring to the Roosevelt Administration’s refusal to allow Jews fleeing the Nazis to find refuge in the US. The voyage of the “St. Louis” and the ultimate murder by the Nazis of some of its refugee passengers still haunts. In fact some of the current US asylum laws and the concept of a “well founded fear of persecution” were inspired by the voyage of the “St. Louis” and the fate of its passengers. ( that is not to say that the asylum laws and the concept of “well founded fear” has not and is not being currently abused.) However have a question to someone who may know. Why didn’t the “St. Louis” dock in the Dominican Republic which at the time was welcoming Jewsish refugees from Europe especially Germany?

Never heard of a request to dock in the Dominican Republic, but they did attempt to dock in Cuba, who was pressured by the Roosevelt administration to deny the attempt. A couple dozen who had valid visas were disembarked in Havana. But it was too close to the US to have a wave of Jews establishing a bridgehead.

The dominant theory at the time was that the Great Depression was caused by “underconsumptionism.”

This is directly contrary to Say’s Law, which states that supply creates its own demand - that the cost of producing a product is money in the hands of people, adequate to buy the product.
That assumes, of course, that the product in question is not buggy whips which no one wants, the cost of production of which will bankrupt the producer. Unless of course the producer is the government, in which case the “bankruptcy” takes the form of decline in the credit-worthiness of the government, thus a decline in the value of the government’s paper. And since “government paper" includes paper dollars, the result is inflation - decline in purchasing power of the dollar.

Same reason government control of commerce via regulation isn’t. Concentrates voting power politically via a trickle down of government provided benefits. No, those who don’t get jobs, or lose them, don’t seem to understand the reason. Not to mention near minimum wage benefit packages from said government programs.

The Dominican Republic was a less than perfect but functional safety valve for many. Most who landed there eventually found their way into the US or Cuba. They did leave an interesting legacy in the Dominican Republic. Whatever the reason that the Dominican dictator at the time allowed the refugees access, it was crucial for some but of course too few were able to benefit. Still many today trace their lineage and existence to this historical fact. Pity the “St. Louis” did not try to dock there. However it was a German ship and the German government by that time probably ordered the owners to return the ship to Europe without any further attempts to lad its passengers.

“It wasn’t socialism, but it wasn’t capitalism either. It was much closer to the economic institutions of fascism then in place in Italy. As Shlaes and others have documented, Roosevelt’s advisers had been explicitly influenced by Mussolini, and he and Roosevelt had something of a mutual admiration society.”

Also similar to China today, and VERY SIMILAR to what Obama was pushing. Sure, most of corporate America would remain ‘private’, but they would always answer to Washington. And this is where today’s Democrat Party pretty much lies. However, AOC, Talib, and Omar want NO PART OF THAT, since that arrangement means still having super-rich people who are not achieving their wealth by being in government, particularly bankers and CEOs.

Hence the split in the Democrat Party. The new gals, and Bernie for that matter, are pushing for outright Communism, and are forcing the Democrat Party to go there.

“Never heard of a request to dock in the Dominican Republic, but they did attempt to dock in Cuba, who was pressured by the Roosevelt administration to deny the attempt. A couple dozen who had valid visas were disembarked in Havana. But it was too close to the US to have a wave of Jews establishing a bridgehead.”

Canada would’t let them in, either. It was an immigration law thingy.

At the same time, criticisms of the NRA grew, not the least from the African-American community, which correctly saw attempts to raise wages as a means of shutting black labor out of the market.
Hard as it is to believe, Thomas Sowell was a Marxist coming out of college (which is why, when asked what literature was influential on his early development, he declined to make recommendations - his early development was, he realized later, kaka).

So why is minimum wage increase not frowned upon today?

Sowell took a job for the gooberment, and was asked to analyze (read, promote) the value of the Minimum Wage for poor people. Being the outstanding analyst that he was, Sowell analyzed the effect of the Minimum Wage law correctly - and it was only then that he saw the light.
If Thomas Sowell, could (initially) believe the Minimum Wage was beneficial, you just have to recognize the profundity of Adam Smith’s point that
The natural disposition is always to believe. It is acquired wisdom and experience only that teach incredulity, and they very seldom teach it enough.
The wisest and most cautious of us all frequently gives credit to stories which he himself is afterwards both ashamed and astonished that he could possibly think of believing. - Theory of Moral Sentiments (1759)

Someone should inform the EPA of this decision, this news from the 1930s seems to have not have made it to them yet.

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